##### 



TRENCH ELECTRIC B.V.

FORM 20-F
Equivalent


SECURITIES AND EXCHANGE
COMMISSION


WASHINGTON, DC 20549


(Mark One)

|   |  |                                                                                                  
|-- |  | -------------------------------------------------------------------------------------------------
|o  |  | Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934.
|   |  |                                                                                                  
|OR |  |                                                                                                  
|   |  |                                                                                                  
|o  |  | Annual report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.           
|   |  |                                                                                                  
|   |  | For the fiscal year ended December 31, 2002                                                      
|   |  |                                                                                                  
|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 333-8334-02

Trench Electric B.V.
(Exact Name of Registrant as Specified in Its Charter)

The Netherlands
(Jurisdiction of Incorporation or Organization)

Strawinskylaan 3105, 1077ZX, Amsterdam, The Netherlands
(Address of Principal Executive Offices)

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

|                    |  |                       |   | 
|------------------- |  | --------------------- | - | 
|                    |  | Name of Each Exchange
|Title of Each Class |  | On Which Registered  
|                    |  |                      
|None                |  |                       |  | 

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

None(Title of Class)

Securities in respect of which this annual report is furnished:

Trench Electric SA/Trench Inc. 10 1/4% Senior Subordinated Notes due 2007
(Title of Class)

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

40,000 Common Shares, 1 Dutch Guilder (0.45 ) par value per share

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

Yes  No X

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

Item 17 X Item 18

* This Form 20-F Equivalent is furnished pursuant to an indenture agreement.





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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

TABLE OF CONTENTS

|                                                |  |  |   |         |  |  |  |  |    |                                                       |  |                                                         |    |  |    | 
|----------------------------------------------- |  |  | - | ------- |  |  |  |  | -- | ----------------------------------------------------- |  | ------------------------------------------------------- | -- |  | -- | 
|Presentation of Financial and Other Information |  |  | 4 |        
|PART I                                         
|                                                |  |  |   | Item 1  |  |  |  |  |    | Identity of Directors, Senior Management and Advisers |  |                                                         | 4  | 
|                                                |  |  |   | Item 2  |  |  |  |  |    | Offer Statistics and Expected Timetable               |  |                                                         | 4  | 
|                                                |  |  |   | Item 3  |  |  |  |  |    | Key Information                                       |  |                                                         | 5  | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | Selected financial data                                 |    |  | 5  | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Capitalization and indebtedness                         |    |  | 6  | 
|                                                |  |  |   |         |  |  |  |  | C. |                                                       |  | Reasons for the offer and use of proceeds               |    |  | 6  | 
|                                                |  |  |   |         |  |  |  |  | D. |                                                       |  | Risk Factors                                            |    |  | 6  | 
|                                                |  |  |   | Item 4  |  |  |  |  |    | Information on the Company                            |  |                                                         | 9  | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | History and development of the Company                  |    |  | 9  | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Business overview                                       |    |  | 11 | 
|                                                |  |  |   |         |  |  |  |  | C. |                                                       |  | Organizational structure                                |    |  | 17 | 
|                                                |  |  |   |         |  |  |  |  | D. |                                                       |  | Property, plant and equipment                           |    |  | 18 | 
|                                                |  |  |   | Item 5  |  |  |  |  |    | Operating and Financial Review and Prospects          |  |                                                         | 19 | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | Operating results                                       |    |  | 19 | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Liquidity and capital resources                         |    |  | 23 | 
|                                                |  |  |   |         |  |  |  |  | C. |                                                       |  | Research and development, patents and licenses, etc     |    |  | 24 | 
|                                                |  |  |   |         |  |  |  |  | D. |                                                       |  | Trend information                                       |    |  | 24 | 
|                                                |  |  |   |         |  |  |  |  | E. |                                                       |  | Critical Accounting Policies                            |    |  | 24 | 
|                                                |  |  |   | Item 6  |  |  |  |  |    | Directors, Senior Management and Employees            |  |                                                         | 27 | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | Directors and Senior Management                         |    |  | 27 | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Compensation                                            |    |  | 28 | 
|                                                |  |  |   |         |  |  |  |  | C. |                                                       |  | Board practices                                         |    |  | 28 | 
|                                                |  |  |   |         |  |  |  |  | D. |                                                       |  | Employees                                               |    |  | 29 | 
|                                                |  |  |   |         |  |  |  |  | E. |                                                       |  | Share ownership                                         |    |  | 29 | 
|                                                |  |  |   | Item 7  |  |  |  |  |    | Major Shareholders and Related Party Transactions     |  |                                                         | 30 | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | Major shareholders                                      |    |  | 30 | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Related party transactions                              |    |  | 30 | 
|                                                |  |  |   |         |  |  |  |  | C. |                                                       |  | Interests of experts and counsel                        |    |  | 31 | 
|                                                |  |  |   | Item 8  |  |  |  |  |    | Financial Information                                 |  |                                                         | 32 | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | Consolidated Statements and Other Financial Information |    |  | 32 | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Significant Changes                                     |    |  | 32 | 
|                                                |  |  |   | Item 9  |  |  |  |  |    | The Offer and Listing                                 |  |                                                         | 32 | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | Offer and listing details                               |    |  | 32 | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Plan of distribution                                    |    |  | 33 | 
|                                                |  |  |   |         |  |  |  |  | C. |                                                       |  | Markets                                                 |    |  | 33 | 
|                                                |  |  |   |         |  |  |  |  | D. |                                                       |  | Selling shareholders                                    |    |  | 33 | 
|                                                |  |  |   |         |  |  |  |  | E. |                                                       |  | Dilution                                                |    |  | 33 | 
|                                                |  |  |   |         |  |  |  |  | F. |                                                       |  | Expenses of the issue                                   |    |  | 33 | 
|                                                |  |  |   | Item 10 |  |  |  |  |    | Additional Information                                |  |                                                         | 34 | 
|                                                |  |  |   |         |  |  |  |  | A. |                                                       |  | Share capital                                           |    |  | 34 | 
|                                                |  |  |   |         |  |  |  |  | B. |                                                       |  | Memorandum and articles of association                  |    |  | 34 | 
|                                                |  |  |   |         |  |  |  |  | C. |                                                       |  | Material contracts                                      |    |  | 35 | 
|                                                |  |  |   |         |  |  |  |  | D. |                                                       |  | Exchange controls                                       |    |  | 35 | 
|                                                |  |  |   |         |  |  |  |  | E. |                                                       |  | Taxation                                                |    |  | 36 | 
|                                                |  |  |   |         |  |  |  |  | F. |                                                       |  | Dividends and Paying Agents                             |    |  | 36 | 
|                                                |  |  |   |         |  |  |  |  | G. |                                                       |  | Statement by Experts                                    |    |  | 36 | 
|                                                |  |  |   |         |  |  |  |  | H. |                                                       |  | Documents on display                                    |    |  | 37 | 
|                                                |  |  |   |         |  |  |  |  | I. |                                                       |  | Subsidiary Information                                  |    |  | 37 | 

2



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|         |  |  |  |          |  |  |  |  |  |                                                                              |  |  |    |  |  | 
|-------- |  |  |  | -------- |  |  |  |  |  | ---------------------------------------------------------------------------- |  |  | -- |  |  | 
|         |  |  |  | Item 11  |  |  |  |  |  | Quantitative and Qualitative Disclosures About Market Risk                   |  |  | 37 | 
|         |  |  |  | Item 12  |  |  |  |  |  | Description of Securities Other than Equity Securities                       |  |  | 38 | 
|PART II 
|         |  |  |  | Item 13  |  |  |  |  |  | Defaults, Dividend Arrearages and Delinquencies                              |  |  | 38 | 
|         |  |  |  | Item 14  |  |  |  |  |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  |  | 38 | 
|         |  |  |  | Item 15  |  |  |  |  |  | Controls and Procedures                                                      |  |  | 38 | 
|         |  |  |  | Item 16A |  |  |  |  |  | Audit Committee Financial Expert Disclosure                                  |  |  | 39 | 
|         |  |  |  | Item 16B |  |  |  |  |  | Code of Ethics Disclosure                                                    |  |  | 39 | 
|PART III
|         |  |  |  | Item 17  |  |  |  |  |  | Financial Statements                                                         |  |  | 39 | 
|         |  |  |  | Item 18  |  |  |  |  |  | Financial Statements                                                         |  |  | 39 | 
|         |  |  |  | Item 19  |  |  |  |  |  | Exhibits                                                                     |  |  | 39 | 

3



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

PRESENTATION OF FINANCIAL INFORMATION

In this Form 20-F Equivalent, unless the context otherwise requires, we have
used Group, Trench, We or Our to mean Trench Electric B.V. (Trench
Electric) together with its direct or indirect subsidiaries and their
predecessor companies. Company refers to the stand-alone Trench Electric B.V.

Unless otherwise indicated, we have prepared all historical financial
statements included in this Form 20-F Equivalent in accordance with U.S.
generally accepted accounting principles and these are set forth in U.S.
dollars.

Note:THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS AS ENCOURAGED BY THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL STATEMENTS CONTAINED IN
THIS DOCUMENT, OTHER THAN HISTORICAL INFORMATION, ARE FORWARD-LOOKING
STATEMENTS. IN ADDITION, WE OR OUR REPRESENTATIVES MAY FROM TIME TO TIME MAKE
ORAL OR WRITTEN STATEMENTS, WHICH SHOULD ALSO BE CONSIDERED FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS REPRESENT MANAGEMENTS CURRENT EXPECTATION AND
BELIEFS CONCERNING FUTURE EVENTS IMPACTING US AND THEREFORE INVOLVE A NUMBER OF
RISKS AND UNCERTAINTIES. MANAGEMENT ACKNOWLEDGES THAT FORWARD-LOOKING
STATEMENTS ARE NOT GUARANTEES AND THAT ACTUAL RESULTS COULD BE MATERIALLY
DIFFERENT FROM THOSE EXPRESSED OR IMPLIED. A VARIETY OF FACTORS COULD CAUSE
BUSINESS CONDITIONS AND OUR RESULTS TO DIFFER MATERIALLY FROM THOSE EXPECTED BY
US OR EXPRESSED IN OUR FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE
WITHOUT LIMITATION, CHANGES IN MARKET PRICE OR MARKET DEMAND; CHANGES IN RAW
MATERIAL COSTS OR AVAILABILITY; LOSS OF BUSINESS FROM CUSTOMERS; UNANTICIPATED
EXPENSES; CHANGES IN FINANCIAL MARKETS; FOREIGN CURRENCY CHANGES; POTENTIAL
EQUIPMENT MALFUNCTIONS AND THE OTHER FACTORS DISCUSSED IN OUR FORM 20-F
EQUIVALENT.

WHILE WE PERIODICALLY REASSESS MATERIAL TRENDS AND UNCERTAINTIES AFFECTING OUR
RESULTS OF OPERATIONS AND FINANCIAL CONDITION IN CONNECTION WITH THE
PREPARATION OF MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS,
FINANCIAL PROSPECTS AND FINANCIAL CONDITION AND CERTAIN OTHER SECTIONS
CONTAINED IN OUR QUARTERLY, ANNUAL OR OTHER REPORTS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, WE DO NOT INTEND TO REVIEW OR REVISE ANY PARTICULAR
FORWARD-LOOKING STATEMENT IN THE LIGHT OF FUTURE EVENTS.

PART I

Item 1. Identity of Directors, Senior Management and Advisors

Not applicable  Annual Report on Form 20-F Equivalent

Item 2. Offer Statistics and Expected Timetable

Not applicable  Annual Report on Form 20-F Equivalent

4



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Item 3. Key Information:

A.     Selected Financial Data:

The financial data as set forth below at December 31, 2002 and 2001 and for
each of the years in the three-year period ended December 31, 2002 have been
derived from our consolidated financial statements included in Item 17 of this
Form 20-F Equivalent. Financial data at December 31, 1998, 1999 and 2000 and
for each of the years in the two-year period ended December 31, 1999 have been
derived from Trenchs previously published audited consolidated financial
statements not included in this document.

The financial data at December 31, 2002 and 2001 and for each of the three
years in the three-year period ended December 31, 2002 should be read in
conjunction with, and are qualified in their entirety by reference to, our
audited consolidated financial statements.

|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|-------------------------------------------------------------------- |  | ------------------------------------------------------ | ------ | ------- |  | ------- | ------- | ------- |  | ------- | ------- | - |  | - | ------ | - |  | - | ------ | -
|                                                                     |  | Years Ended                                           
|                                                                     |  |                                                       
|                                                                     |  | Dec. 31                                                |        | Dec. 31 |  | Dec. 31 |         | Dec. 31 |  | Dec. 31
|                                                                     |  | 2002                                                   |        | 2001    |  | 2000    |         | 1999    |  | 1998   
|                                                                     |  |                                                        |        |         |  |         |         |         |  |        
|                                                                     |  | (in millions of U.S. dollars, unless stated otherwise)
|Statements of Operations Data:                                       |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Sales                                                                |  | $                                                      | 255.9  |         |  | $       | 224.3   |         |  | $       | 200.8   |   |  | $ | 211.7  |   |  | $ | 240.8  |  
|Cost of sales                                                        |  |                                                        | 178.2  |         |  |         | 160.8   |         |  |         | 141.2   |   |  |   | 146.9  |   |  |   | 167.8  |  
|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Gross profit                                                         |  |                                                        | 77.7   |         |  |         | 63.5    |         |  |         | 59.6    |   |  |   | 64.8   |   |  |   | 73.0   |  
|Contract termination                                                 |  |                                                        |       |         |  |         |        |         |  |         | 0.6     |   |  |   |       |   |  |   |       |  
|Selling, general and
administrative expenses (1)                     |  |                                                        | 45.1   |         |  |         | 46.4    |         |  |         | 44.4    |   |  |   | 42.9   |   |  |   | 49.5   |  
|Restructuring provision                                              |  |                                                        |       |         |  |         |        |         |  |         |        |   |  |   | 1.6    |   |  |   |       |  
|Gain on sale of assets                                               |  |                                                        | (0.7   | )       |  |         |        |         |  |         |        |   |  |   | (1.8   | ) |  |   |       |  
|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Operating income (2)                                                 |  |                                                        | 33.3   |         |  |         | 17.1    |         |  |         | 14.6    |   |  |   | 22.1   |   |  |   | 23.5   |  
|Foreign exchange losses (gains) (3)                                  |  |                                                        | (2.3   | )       |  |         | 9.1     |         |  |         | 7.7     |   |  |   | 2.4    |   |  |   | 0.7    |  
|Gain on extinguishment of debt                                       |  |                                                        |       |         |  |         |        |         |  |         | (2.2    | ) |  |   |       |   |  |   |       |  
|Interest expense and other (4)                                       |  |                                                        | 19.6   |         |  |         | 19.9    |         |  |         | 23.7    |   |  |   | 21.2   |   |  |   | 21.8   |  
|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Income (loss) before income taxes
and minority interest              |  |                                                        | 16.0   |         |  |         | (11.9   | )       |  |         | (14.6   | ) |  |   | (1.5   | ) |  |   | 1.0    |  
|Provision for income taxes                                           |  |                                                        | 6.8    |         |  |         | 2.1     |         |  |         | 3.0     |   |  |   | 0.8    |   |  |   | 3.0    |  
|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Net income (loss) before minority interest                           |  |                                                        | 9.2    |         |  |         | (14.0   | )       |  |         | (17.6   | ) |  |   | (2.3   | ) |  |   | (2.0   | )
|Minority interest                                                    |  |                                                        | 2.8    |         |  |         | 1.2     |         |  |         | 0.3     |   |  |   |       |   |  |   |       |  
|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Net income (loss)                                                    |  | $                                                      | 6.4    |         |  | $       | (15.2   | )       |  | $       | (17.9   | ) |  | $ | (2.3   | ) |  | $ | (2.0   | )
|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Balance Sheet Data (End of Period):                                  |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Total assets                                                         |  | $                                                      | 345.7  |         |  | $       | 317.0   |         |  | $       | 328.6   |   |  | $ | 307.2  |   |  | $ | 381.1  |  
|Total debt                                                           |  |                                                        | 185.1  |         |  |         | 192.3   |         |  |         | 194.3   |   |  |   | 181.6  |   |  |   | 233.8  |  
|Share capital (in thousands of U.S. dollars)                         |  |                                                        | 20.0   |         |  |         | 20.0    |         |  |         | 20.0    |   |  |   | 20.0   |   |  |   | 20.0   |  
|Shareholders equity                                                  |  |                                                        | 41.8   |         |  |         | 23.4    |         |  |         | 39.1    |   |  |   | 61.0   |   |  |   | 76.7   |  
|Other Financial Data:                                                |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Depreciation and goodwill amortization                               |  |                                                        | 7.0    |         |  |         | 10.4    |         |  |         | 12.1    |   |  |   | 9.1    |   |  |   | 9.8    |  
|Capital expenditures                                                 |  |                                                        | 5.2    |         |  |         | 7.7     |         |  |         | 3.7     |   |  |   | 3.7    |   |  |   | 3.6    |  
|Number of common shares
outstanding (in thousands)                   |  |                                                        | 40.0   |         |  |         | 40.0    |         |  |         | 40.0    |   |  |   | 40.0   |   |  |   | 40.0   |  
|Basic and diluted earnings (loss)
per common share (in U.S. dollars) |  |                                                        | 162.05 |         |  |         | (380.68 | )       |  |         | (447.95 | ) |  |   | (56.63 | ) |  |   | (51.13 | )
|Cash flows provided by (used in):                                    |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  
|Operating activities                                                 |  |                                                        | 13.8   |         |  |         | 2.8     |         |  |         | 8.4     |   |  |   | 6.4    |   |  |   | 15.9   |  
|Investing activities                                                 |  |                                                        | (0.3   | )       |  |         | (9.5    | )       |  |         | (11.6   | ) |  |   | 19.2   |   |  |   | (2.2   | )
|Financing activities                                                 |  |                                                        | (10.4  | )       |  |         | (2.1    | )       |  |         | 6.4     |   |  |   | (47.9  | ) |  |   | 6.2    |  
|                                                                     |  |                                                        |        |         |  |         |         |         |  |         |         |   |  |   |        |   |  |   |        |  



|(1) |  | Starting in 2002, under FAS 142 Goodwill and Other Intangible Assets,
we are no longer required nor permitted to record goodwill amortization.
Goodwill now has an indefinite useful life and will not be amortized but
rather will be tested at least annually for impairment. Accordingly, we
did not incur goodwill amortization expense this year, whereas, in 2001,
we incurred goodwill amortization expense of $3.5 million, which is
included in selling, administrative and general expense. The other
information provided on goodwill amortization is intended to enable the
user to understand the effect of this accounting change on net income from
2001 to 2002. Please refer to the accompanying Item 17, notes 2 and 6 for
more information.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Operating income for the year ended December 31, 2002 includes $0.1
million (2001  $4.2 million) in costs associated with inventory
provisions, fixed asset impairments and other restructuring costs relating
to Trench Switzerland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(3) |  | Foreign exchange gains/losses include a gain of $5.8 million (2001 
loss of $8.9 million, 2000  loss of $6.9 million) relating to the
10 1/4 Senior Notes due 2007,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

5



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent



|    |  | being the year to year revaluation of the debt using exchange rates as of
December 31, 2000 and 2001 and December 31, 2002. There is no immediate cash
benefit as a result of this gain.                   
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(4) |  | Interest expense includes amortization of deferred financing costs and
writeoffs of deferred financing costs associated with our outstanding
senior subordinated notes and the senior facilities agreement.

B.     Capitalization and indebtedness.

Not applicable  Annual Report on Form 20-F Equivalent

C.     Reasons for the offer and use of proceeds.

Not applicable  Annual Report on Form 20-F Equivalent

D.     Risk Factors

Substantial Leverage

We have incurred significant indebtedness. In addition, we may incur
additional indebtedness in the future, subject to limitations imposed by
existing indebtedness.

In 1997, we issued 10 1/4 percent Senior Notes due 2007 (the Notes) in the
aggregate amount of $160,000,000, which are listed on the Luxembourg Stock
Exchange. The Notes will mature on December 15, 2007. In connection with the
issuance of the Notes, we entered into a certain Indenture (Indenture) that
places certain limitations on our operations. The Indenture outlines certain
limitations that restrict our ability to, including without limitation, assume
indebtedness, make payments of certain types, grant liens, enter into certain
types of transactions with subsidiaries, sell assets, enter into mergers or
consolidations, issue preferred and capital stock, and enter into
sale/leaseback transactions. These covenants may restrict our ability to enter
into future transactions as easily as other entities because of these
limitations.

Our ability to improve our operating performance and financial results depends
upon economic, financial, competitive and other factors beyond our control,
including fluctuations in interest rates and general economic conditions.
There can be no assurance that we will generate sufficient cash flow from our
operations in the future to service our debt, to make necessary capital
expenditures and initiate acquisitions.

We incurred significant indebtedness in connection with the 1997 acquisition of
the shares of five companies representing the Trench group, all wholly owned
subsidiaries of BBA Group plc and have consolidated indebtedness that is
substantial in relation to our shareholders equity. As at December 31, 2002,
our consolidated total debt and shareholders equity were $185.1 million and
$41.8 million, respectively. The consolidated debt net of cash was $169.7
million at December 31, 2002. At December 31, 2002, $27.7 million, excluding
letters of credit and bank guarantees, was available to us for borrowings under
a revolving credit facility governed by the Facilities Agreement dated April
18, 2000 (Facilities Agreement) with our Senior Lenders, arranged by CIBC
World Markets Plc, providing for Term Loan Facilities and Revolving Credit
Facilities. Of the $27.7 million available, $6.3 million is restricted, and we
would require the consent of the Senior Lenders to access this
portion (2001  $7.2 million). If CIBC letters of credit and bank guarantees are factored in,
the net available revolving credit facility was $7.5 million compared to $2.0
million in 2001. There are other guarantees in another subsidiary that do not
affect the available revolving credit facility. The change in the net
available revolving credit facility year over year is mainly due to cash
generated from operations during 2002. Any borrowings under the Revolving
Credit Facility are guaranteed by the Group and other subsidiary guarantors.
In addition, we may incur additional indebtedness in the future, subject to
limitations imposed by the Facilities Agreement and the Indenture. Please
refer to Item 17, Note 22 for more information.

There can be no assurance that Trench will generate sufficient cash flow from
our operations in the future to service our debt and to allow us to make
necessary capital expenditures. If we are unable to generate sufficient cash
flow in the future we may be required to refinance all or a portion of our
existing debt, including the Notes, to sell assets or to obtain additional
financing. There can be no assurance that any such refinancing would be
possible or that any such sales of assets or additional financing could be
achieved. For additional information, see Item 5.B.  Liquidity and capital
resources and Item 17, note 8.

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Debt Service

Our high level of debt will have several important effects on future
operations, including the following: (a) we will have significant cash
requirements to service debt, reducing funds available for operations and
future business opportunities and increasing the vulnerability of Trench to
adverse general economic and industry conditions; (b) we may be restricted in
the future from obtaining additional financing, whether for acquisitions,
working capital or other purposes; (c) we will be required to comply with
certain financial covenants and other restrictions contained in the Facilities
Agreement and the Indenture, certain of which become more restrictive with the
passage of time or the achievement of certain targets; and (d) due to the fact
that borrowings under the Facilities Agreement bear interest at floating rates,
increases in interest rates under the Facilities Agreement will reduce amounts
available for acquisitions, working capital, capital expenditures and general
corporate purposes. For additional information, see Item 5.B.  Liquidity and
capital resources.

Restrictions Imposed by the Facilities Agreement and the Indenture

The Facilities Agreement requires Trench Electric
Holding BV (the Parent) and
the Group to maintain specified financial ratios and tests, among other
obligations, including a minimum interest coverage ratio, a minimum fixed
charge coverage ratio and a maximum leverage ratio. In addition, the
Facilities Agreement restricts, among other things, our ability to incur
additional indebtedness, make certain payments or dividends, merge, consolidate
or make acquisitions. A failure to comply with the restrictions contained in
the Facilities Agreement could lead to an event of default which would result
in the acceleration of such indebtedness. Such an acceleration would
constitute an event of default under the Indenture relating to our Notes. In
addition, the Indenture restricts, among other things, the incurrence of
additional indebtedness by subsidiaries of the Company (Subsidiaries), the
payment of dividends and other restricted payments by Subsidiaries,
transactions with affiliates, the sale or issuance of Subsidiaries capital
stock and preferred stock, the creation of restrictions on distributions from
Subsidiaries, asset sales, other senior subordinated indebtedness, the
incurrence of liens and sale/leaseback transactions, and mergers,
consolidations or sales of assets and other matters customarily restricted in
such agreements. A failure to comply with the restrictions in the Indenture
could result in an event of default under the Indenture.

Risk of Growth Strategy

A significant component of our business strategy is the growth of our product
and customer base through the acquisition of companies in similar lines of
business. Although the Group believes that opportunities currently exist for
such acquisitions, there can be no assurance that we will be able to
successfully exploit any such opportunities (due to, among other things, an
inability to obtain sufficient financing) or that such opportunities will be
available in the future. In order to capitalize on any such acquisition
opportunities, we may need to obtain additional capital. To raise such
capital, we may elect to undertake additional debt financing, which would
result in additional leverage. The issuance of additional debt securities or
borrowings are restricted by the terms of the Indenture and the Facilities
Agreement. Also, growth through acquisition, as well as internal expansion,
will place demands on our management, employees, operations and physical and
financial resources.

Exchange Rate Fluctuations

Our operations are conducted by operating subsidiaries in many countries, and
accordingly our results of operations are subject to currency translation risk
and currency transaction risk. With respect to currency translation risk, the
financial condition and results of operations of each of these entities is
reported in the relevant local currency and then translated into U.S. dollars
at the applicable currency exchange rate for inclusion in the financial
statements. Fluctuations in the U.S. dollar against certain currencies,
particularly the Euro, the Brasilian real, the Canadian dollar, the Chinese
renminbi, the Swiss franc and the British pound could have a positive or
negative impact on our reported sales and operating income.

Significant changes in the value of the U.S. dollar relative to other
currencies in which we conduct our operations could also have an adverse effect
on our ability to meet interest and principal payments on debt in U.S. dollar
denominations, including the Notes. Because our indebtedness may be
denominated in different currencies, changes in the values of such currencies
relative to other currencies in which we conduct our operations could have an
adverse effect on our ability to meet principal and interest obligations on
such indebtedness.

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

In addition to currency translation risks, we incur currency transaction risk
whenever one of our Subsidiaries enters into either a purchase or a sales
transaction using a different currency than its functional currency, which is
generally the local currency of the operating company. Currency transaction
risk is reduced by matching sales revenues and manufacturing costs in the same
currency. Given the volatility of exchange rates, there can be no assurance
that we will be able to effectively manage our currency transaction risks or
that any volatility in currency exchange rates will not have a material adverse
effect on our financial condition or results of operations.

Dependence on Key Customers

A substantial portion of our business relationships are informal and certain of
our contractual arrangements may be terminated at will. Although we believe
that our business relationships with our major customers are currently mutually
satisfactory, there can be no assurance that sales to our major customers will
continue at the same level of volume or pricing or that one or more major
customers will not terminate or seek to materially alter the terms of their
relationship with us. There can be no assurance that any of our major
customers will not shift their sourcing to other suppliers, develop in-house
manufacturing capabilities for our products or take other actions which could
adversely affect us. The loss of any of our major customers or a substantial
decrease in any of such customers purchases from us, or a material
deterioration in our ability to obtain orders, could have a material adverse
effect on our financial condition and results of operations.

Several of our customers, including many of our largest customers, have strict
manufacturing and quality standards (some of which are imposed by government
regulation) with which we must comply. In many cases, our compliance with such
standards must be demonstrated prior to supplying the product. Failure by us
to maintain compliance or to obtain approvals for new products could result in
a material loss of sales to such customers. Such opportunities would be lost
by any failure to maintain product approvals. The occurrence of any of the
foregoing events could have a material adverse effect on our financial
condition and results of operations.

Competition

The market for high voltage transmission products in which Trench operates is
relatively fragmented in terms of both geographical location and product line.
Segments of the power transmission equipment industry are subject to intense
competition, on a price, quality and customer service basis. We face
competition from other manufacturers, many of which are diversified
manufacturing companies that have significantly greater financial and other
resources than ourselves. We continually experience price pressures from
competitors in certain product lines and geographic markets. As a result, our
ability to increase prices in certain product lines is limited.

Dependence on Certain Raw Materials

Aluminium, copper, insulating paper, oils, gases, resin, porcelain and silicone
are each key raw materials for our products. Because changes in the prices of
such raw materials may be passed through to our customers, increases or
decreases in such prices generally cause corresponding increases and decreases
in reported net sales, causing fluctuations in reported revenues that are
unrelated to the level of business activity. However, if we are unable to pass
through such changes in raw material prices to our customers in the future, we
could be materially adversely affected. Any major dislocation in the supply
and/or price of such raw materials could have a material adverse effect on our
business and financial condition.

Dependence on Key Personnel

We are dependent on the continued services of our senior management team and
certain key engineers. Although we believe that we could replace key employees
in an orderly fashion should the need arise, the loss of such key personnel
could have a material adverse effect on Trench. We do not have key man
insurance to insure against the loss of key personnel.

Electric Utility Deregulation

Government deregulation of the electric utility industry in North America and
Europe, and to a lesser extent in Southeast Asia, Latin America, Australia and
New Zealand, has impacted current and potential customers in such markets to
limit their long-term capital expenditures on power transmission products.
Until the impact of deregulation becomes more apparent, electric utilities and Independent Power Producers

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

are reluctant to commit resources for capital
expenditures because they are uncertain as to which aspects of the transmission
and distribution processes they will ultimately be able to own or manage.
While management believes that capital expenditures on power transmission
products will increase once the effects of deregulation in such regions become
apparent, it remains unclear how the market for such products will be affected
as such deregulation progresses.

Operating Performance

Our ability to improve our operating performance and financial results depends
upon financial, competitive and other factors beyond our control, fluctuations
in foreign currency vis-à-vis the U.S. dollar, interest rates, material costs
and general economic conditions. For additional information, please see Item
4.B.  Business Overview.

Environmental, Health and Safety Matters

Our facilities, like similar manufacturing facilities, are subject to a range
of federal, state, local and foreign environmental and occupational health and
safety laws including those laws relating to air emissions, wastewater
discharges, the handling and disposal of solid and hazardous waste, and the
remediation of contamination associated with the current and historic use of
hazardous substances or materials. If a release of hazardous substances or
materials occurs on or from our properties or any offsite disposal location
used by Trench, or if contamination from prior activities is discovered at any
of our properties, we may be held liable for the costs of remediation
(including any response costs), natural resource damages and associated
transaction costs. While the amount of such liability could be material, we
devote resources to ensure that our current operations are conducted in a
manner that reduces such risks.

We believe that we are currently in compliance with, and not subject to
liability under, any environmental laws, except where such non-compliance or
liability would not reasonably be expected to have a material adverse effect on
our consolidated financial position, results of operations or liquidity.

Item 4. Information on the Company:

A.     History and development of the company

|                              |  |                                                                                                                        
|----------------------------- |  | -----------------------------------------------------------------------------------------------------------------------
|Corporate Information:        |  |                                                                                                                        
|Name:                         |  | Trench Electric B.V.                                                                                                   
|Date Incorporated:            |  | December 3, 1997 formally approved. Process began September 6, 1997.                                                   
|Country of Incorporation:     |  | The Netherlands                                                                                                        
|Address of registered office: |  | Strawinskylaan 3105, 1077ZX Amsterdam, The Netherlands. Telephone number + 31 2040 64400.                              
|Key investor contact:         |  | Michael Bissell, Southfield, York Place, Station Parade, Harrogate, England, HG1 1HL
Telephone number + 44 1423 531000.

History

In 1962, Anthony Trench founded Trench Electric (Canada) in Toronto to
manufacture an innovative high voltage coil product (the air-core reactor) used
to smooth current fluctuations in high voltage systems. Since then, we have
expanded our business to include a variety of other high voltage transmission
products.

Beginning in the 1980s, our principal competitors began to consolidate, with
many smaller competitors exiting the market and several large, diversified
companies selling or outsourcing their high voltage equipment businesses  in
many cases to Trench. As a result, we have continued to build our presence in
the market for high voltage equipment with the following strategic add-on
acquisitions and divestitures listed below:

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|---- |  | ------------------------------------------------------------------------------------- |  | --------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date |  | Acquisition                                                                           |  | Location                                            |  | Strategic Benefits                                                                                                                                                                                                   
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|1990 |  | Spezielektra GmbH                                                                     |  | Austria                                             |  | Established a European
manufacturing base for coil
products.                                                                                                                                                         
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|1990 |  | The reactor equipment
unit of ABB, USA                                                |  | Assets purchased and
transferred to Canada          |  | Consolidated our position
as the only major producer of
air-core reactors in North
America.                                                                                                                          
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|1991 |  | The line trap equipment
unit of ABB, USA                                              |  | Assets purchased and
transferred to Canada          |  | Consolidated our position
as the only major producer of
line traps in North America.                                                                                                                                 
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|1993 |  | Haefely Holdings AG                                                                   |  | Switzerland and France                              |  | Established our position as the
largest independent producer
of instrument transformers in
the world & as a global leader
in high voltage test equipment.                                                            
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|1993 |  | Messwandlerbau
GmbH                                                                   |  | Bamberg
Germany                                     |  | Established Trench as a world
leader in explosion-proof gas-
insulated instrument
transformers.                                                                                                                      
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|1996 |  | Instrument transformer
business of Square D
Company, a subsidiary
of Groupe Schneider |  | Assets purchased and
transferred to Canada          |  | Enhanced our market
position and broadened its
range of metering instrument
transformers in North America.                                                                                                           
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|1999 |  | Power Line Carrier
(PLC) business
from GE                                             |  | Assets purchased and
transferred to Canada          |  | Enhanced our market
position and broadened its
range of communications
products.                                                                                                                                     
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|2000 |  | Bushing Division of VA
Tech Reyrolle, a
subsidiary of VA Tech
Elin                    |  | Hebburn, England                                    |  | Enhanced our market position
and broadened our range of
bushing products.                                                                                                                                            
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|2000 |  | Coil business                                                                         |  | Belo Horizonte,
Brasil 
New Manufacturing Facility |  | Enhanced our market position in
South America.                                                                                                                                                                       
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|2000 |  | Instrument transformer
business                                                       |  | Shanghai, China                                     |  | Increased ownership to 65%
from 40% and broadened our
range of instrument
transformer products in China
as well as start up of bushing
manufacturing. As a result of
this SITW ownership was
reduced from 60% to 35%.
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|2001 |  | Bushing business                                                                      |  | Fushun, China                                       |  | 50.4% joint venture ownership
of bushings manufacturer.
Enhanced our market position
in China.                                                                                                                       
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|2002 |  | Bushing business                                                                      |  | Fushun, China                                       |  | Increased ownership to 65%
with SITW taking 33% and
leaving 2% to the original joint
venture partner (FEPW).                                                                                                         
|     |  |                                                                                       |  |                                                     |  |                                                                                                                                                                                                                      
|2002 |  | Coil business                                                                         |  | Shanghai, China                                     |  | Expanded the scope and size of
the current joint venture to
add Coil technology to Trenchs
Shanghai operations.                                                                                                     

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

In July 1999, we announced the completion of the sale of the test equipment
business in Switzerland and the USA to Hubbell Incorporated. The sale of the
test business allowed us to concentrate on our core business areas of coil
products and transmission products.

Our capital expenditures for the years ending December 31, 2002, 2001 and 2000
were $5.2 million, $7.7 million and $3.7 million, respectively. For details on
acquisitions in 2002, please refer to Item 10.C., Material Contracts.

Purchase of property, plant and equipment

|                               |  |      |       |      |  |      |       |  |  |   |       | 
|------------------------------ |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|(in thousands of U.S. dollars) |  | 2002 |       | 2001 |  | 2000
|                               |  |      |       |      |  |     
|American operations            |  | $    | 1,429 |      |  | $    | 867   |  |  | $ | 1,603 | 
|European operations            |  |      | 2,098 |      |  |      | 3,520 |  |  |   | 2,041 | 
|International operations       |  |      | 1,663 |      |  |      | 3,338 |  |  |   | 72    | 
|                               |  |      |       |      |  |      |       |  |  |   |       | 
|                               |  | $    | 5,190 |      |  | $    | 7,725 |  |  | $ | 3,716 | 
|                               |  |      |       |      |  |      |       |  |  |   |       | 

B.     Business Overview

Trench is an industry leader in the design and production of electrical
equipment for high current/high voltage substation environments, for outdoor
use under severe environmental and climatic conditions, for improving power
quality, and for the measurement of electrical properties and characteristics.
Trenchs highly integrated manufacturing capability allows us to respond
quickly and efficiently to the demand for the custom products that form a
significant part of our sales.

Throughout the world, the demand for high voltage transmission and distribution
products is growing  spurred by deregulation, privatization and power industry
restructuring. Trench has built a diversified presence in the industry with
various strategic acquisitions over the past several years (refer to Item 4A
above-History and Development of the Company). Today, we serve our customers
from our plants in Austria, Brasil, Canada, China, England, France, Germany and
Switzerland.

Trench hopes to continue its strategy for growth with particular emphasis on
expanding international markets. We will also focus on developing and
marketing an extended range of technologically advanced, specialized electrical
products for the utility and industrial markets worldwide.

In an era of deregulation, the global utility and industrial markets are
becoming much more active and accessible. Our manufacturing presence in eight
countries on four continents is one of our main competitive strengths. The
rapid evolution from markets proscribed by political borders to an open, global
marketplace, brings with it a much wider range of opportunities.

Trench operates in one market segment, Transmission and Distribution. Our
sales by year and by geographical area are as follows:

Main Category of Activity

|                              |  |      |       |      |  |      |       |  |  |   |       | 
|----------------------------- |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|(dollars in millions):        |  | 2002 |       | 2001 |  | 2000
|                              |  |      |       |      |  |     
|Transmission and Distribution |  | $    | 255.9 |      |  | $    | 224.3 |  |  | $ | 200.8 | 
|                              |  |      |       |      |  |      |       |  |  |   |       | 

Sales by Customer Location

|                                 |  |      |       |      |  |      |       |  |  |   |       | 
|-------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|(dollars in millions):           |  | 2002 |       | 2001 |  | 2000
|                                 |  |      |       |      |  |     
|Americas                         |  | $    | 94.7  |      |  | $    | 92.6  |  |  | $ | 88.1  | 
|Europe                           |  |      | 88.0  |      |  |      | 86.1  |  |  |   | 79.7  | 
|Asia                             |  |      | 61.1  |      |  |      | 38.9  |  |  |   | 23.4  | 
|Other                            |  |      | 12.1  |      |  |      | 6.7   |  |  |   | 9.6   | 
|                                 |  |      |       |      |  |      |       |  |  |   |       | 
|Total Sales by Customer location |  | $    | 255.9 |      |  | $    | 224.3 |  |  | $ | 200.8 | 
|                                 |  |      |       |      |  |      |       |  |  |   |       | 

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Markets and Review of Business Performance

Corporate Strategy and Market Trends

As the worlds utility companies continue to undergo different degrees of
transformation in the wake of deregulation and market liberalization, we will
continue to pursue our vision of being the leading supplier of specialist
products and services to the global power industry. We now have operations in
both North America and Europe that are capable of producing all of our main
products, and we hope to continue to build or acquire facilities in those
geographic areas that reflect both low costs of manufacture and a high
indigenous market potential. We are currently focused on China and South
America in this regard. We have now initiated the construction of a new
facility in Shanghai to expand our current business to include Coil
manufacturing. This will essentially complete the transfer of our core
know-how to China.

We have market-leading positions in high voltage instrument transformers,
bushings and a number of coil-based products. We continue to seek expansion of
our product offerings to the utility companies and the prime turnkey
contractors, and to this end we hope to continue to build on our communications
products.

American Operations

North American Operations

The Trench facilities based in Canada include specialist factories producing
instrument transformers, bushings, coil products as well as communication
equipment for electric utility applications.

Our operations enjoyed another successful year, with year over year volume
remaining relatively flat. The overall order book also remained the same
however the mix of business has changed somewhat. The overall strong demand
for high accuracy instrument transformers as well as bushings began to drop
mid-way through the year as a result of the developing uncertainties
surrounding deregulation and the Independent Power Producers markets in the
United States.

The coil business showed signs of recovery offsetting the above market
weakness. Our management believes this will be the trend for the next 12 to 18
months until market conditions stabilize.

The Utility Communication market experienced another strong year and the Power
Line Carrier product line acquired from GE in 1999 continues to be our main
offering. In addition, Trench introduced a new check back system with on-line
diagnostics which is being well received. We will continue to invest in this
area in 2003 and expect to introduce a new generation of transmitter by the
year end.

For some time now our management has been reviewing the business of Power
Quality which includes the Adaptive Var Compensator. For a variety of market
reasons we decided to exit this product line and concluded the sale of this
know-how in 2002.

Brasil

The Trench Brasil coil facility located in Belo Horizonte showed improvement in
2002 with increased sales and a small profit. The establishment of Trench
Brasil has had a positive impact on our ability to do business in a market that
is otherwise difficult to access.

The Brasilian market is in a period of uncertainty due to economic issues in
the region as well as the political situation in Brasil. The latter seems to
be stabilizing and the demand for our type of product is expected to be very
strong through the mid to latter part of the decade. We have recently
pioneered new applications in Brasil for coils and our management feels
confident in the creation of this new market over the long term.

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

European Operations

We have transmission product facilities in Switzerland, France, Germany and
England and a coil facility in Austria. Towards the end of 1999, we started to
integrate the French and Swiss operations into a single management unit in
order to bring the overhead of the units more in line with expected sales
volume. The combined business is referred to as Trench Suisse-France (TSF).
We decided early in 2001 that the Group should close all main production
operations on the Swiss site. This process is now complete. The Swiss site
continues to be our main centre of engineering for instrument transformers and
will also be the base for R&D activities in new designs and measurement
technologies, in addition to the production of specialized measurement
transformers. In order to further reduce costs at TSF a restructuring was
announced on January 13, 2003, which will reduce our administrative headcount
by 34 and reduce the number of temporary jobs in the production area.

The Western European market continued to be sluggish throughout 2002. The
strong demand from North America in 2001 through mid 2002 provided
opportunities that enabled Trench Germany and Trench UK to increase sales year
over year. The re-structured TSF had improved operating results in spite of a
lower turnover. Trench Austria enjoyed another good year with a growth in
sales resulting from strong demand in new European markets for our specialized
coil product line.

Our entering order book for 2003 is down somewhat from 2002 in transmission
products resulting from the drop off in new orders from North America. As in
Canada, however, the coil order book has improved due to continued demand in
Europe for specialty coils as well as global demand for High Voltage DC & AC
projects.

Many Eastern European countries are now in the process of modernizing their
electrical grids and we expect this increasing demand to continue throughout
2003.

International Operations

China

Trench Shanghai completed its first full year of production in its new
facility. The demand for transmission and distribution products in China
continues to show strong growth of 7 to 10% per annum. Trench Shanghai, with
its newly introduced products, experienced greater than 35% year over year
overall growth in sales. In late 2002, Trench (65%) and SITW (Shanghai
Instrument Transformers Works  35%) agreed to further expand the Trench
operation in Shanghai through the introduction of coil technology. A new
production facility for the coil business will be constructed adjacent to the
Transmission facility and we expect this to be completed and in production by
the end of 2003.

The technology transfer transaction will result in Trench receiving
approximately $10 million in proceeds. We received $5 million of the proceeds
in late 2002 and the balance will be received over the next four years. The
income arising from the sale of technology is recognized over 10 years in the
Group accounts as required by U.S. GAAP.

In late 2002 we further increased our ownership of the Fushun Reyrolle Bushing
Co. in North East China from 50.4% to 65% for a consideration of $0.8 million.

In addition, SITW acquired 33% of the shares of the Fushun Reyrolle Bushing Co.
leaving the original partner with the remaining 2%. Fushun is a specialized
manufacturer of bushings with some overlap in product with Trench Shanghai.
This ownership change has allowed a common Board structure and an integration
of the business management of the businesses in Shanghai and Fushun. The
Fushun company has been re-named and approval has been received to change the
name to the Trench Fushun Bushing Co. Ltd.

In 2002, the first full year of Trench ownership, the Fushun company generated
good operating results with increased sales.

The outlook for China remains strong and our management feels it has a solid
position, with a state-of-the-art facility in Shanghai and a capable management
team able to capitalize on the opportunity.

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Outlook

The 2003 business outlook is rather mixed. We expect the North American demand
for Instrument Transformers and Bushings to remain soft. Fortunately, even in
North America, the demand for Coil products is increasing as more utilities are
trying to increase the power handling capabilities of the existing transmission
grid. This is evident in the demand for high voltage AC coils as well as
upgrades in the major DC interconnections.

The uncertainties of deregulation along with the reduction of the Independent
Power Producers (IPP) market will continue throughout 2003 and increased
capital spending in North America is not expected before 2004. Mexico enters a
new phase of integration into NAFTA (North American Free Trade Agreement) in
2003 and demand for transmission construction remains strong combined with
greater market access. Parts of South America are expected to be active in
2003; however, a number of the larger projects in Brasil are not expected to
materialize until 2004.

Parts of Western Europe are experiencing increased demand for specialty coils
which we expect to continue throughout 2003. In addition, German demand for
Instrument Transformers is also showing an increase. The real opportunities
for Instrument Transformers in Europe are in the former Union of Soviet
Socialist Republics as the Western fringe companies upgrade their electrical
grids. Although much of this demand is for oil insulated equipment as produced
in France and Canada, it is also expected there will be opportunities for the
newer gas products manufactured in Germany. We expect that this demand will
help offset the drop in North America.

Due to the overall dependence of transformer manufacturers on the North
American market, we expect 2003 to result in somewhat lower Bushing sales from
the European facilities in France and England as well as Canada. Our Canadian
business has increased its capabilities in Bushing design and production and
demand in China remains strong. As a result, we expect the Groups overall
Bushing turnover to be similar to 2002.

The market in China is not showing any signs of slow down and we expect growth
in the Trench operations to continue throughout 2003.

Products

We manufacture products primarily for high voltage applications in the
transmission and distribution of electricity. Electric transmission systems
carry electric power from a generating plant into a high voltage utility grid,
which ultimately distributes power to customers. Typically, electricity is
generated at high currents (generally between 8,000 and 20,000 amps) and medium
voltages (approximately 15,000 or 27,000 volts) but can be transmitted
efficiently over long distances only at substantially lower currents (typically
800 to 3,000 amps) and higher voltages (ranging from approximately 69,000 to
800,000 volts) that minimize the loss of power in the transmission process. To
facilitate such high voltage transmission, the voltage leaving a generating
plant must be increased substantially, transmitted over high voltage lines and
then reduced to customer utilization levels through the use of substations that
require large capacity power transformers, high voltage switchgear, and other
network measurement, control, protection and correction products.

Seismic specifications for electrical equipment are becoming increasingly
demanding as utilities throughout the world seek better earthquake protection.
Our products are recognized worldwide for their seismic design capabilities.

Trench is the worlds largest independent producer of specialty high-voltage
technology products and we believe that we have attained a worldwide reputation
for the quality, reliability and cost-effectiveness of our engineered products
which include:

Instrument Transformers.Instrument transformers consist of specialized
windings of conductors and foils insulated with paper and oil or gas, housed in
either a hollow porcelain bushing or a fibreglass tube with silicone rubber
skirts. Our transformers have two basic functions: (i) to decrease voltages
from the high transmission and distribution levels to a common secondary
voltage (120 volts and one to five amps) to permit the measurement of voltage
(voltage transformer) or current (current transformer) on high voltage
transmission lines through the use of meters, relays and other secondary
control devices and (ii) to provide insulation between primary and secondary
circuits to protect meters from exposure to high voltages and to increase
safety for personnel. Our instrument transformers are used mainly in high
voltage substations, although some products are used at the beginning of the
transmission line at the power plant site. Generally, oil-soaked paper or a

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

non-conducting gas
(such as SF6, sulfur hexafluoride gas) is used as the insulating medium to
insulate high voltage components from low voltage components. We produce a
broad range of transformers, including inductive voltage transformers,
capacitive voltage transformers, current transformers, and combined instrument
transformers. Low Power Instrument Transformers (LOPO) are a next generation
product and open up a new business area for Trench. Based on our many years of
experience with high voltage products, our LOPO line of instrument transformers
is designed for Air & Gas Insulated Systems and HV Gas Insulated Systems. The
initial applications are for medium voltage switchgear.

Bushings.In many power systems, high voltage cables must be routed through
different mediums. Bushings are connectors that both conduct and insulate an
electric current whenever a high voltage conductor passes from one medium to
another (for example, through a wall or from inside to outside a substation).
A bushing consists of a transformer stem with a conductive core and can be oil,
resin or gas-insulated. Trench manufactures a complete line of bushing
products, including transformer bushings (for outdoor applications and indoor
gas-insulated substations), generator bushings, wall bushings, railway power
distribution system bushings and special bushings designed to customer
specifications. Bushing Product Line improvements include advanced insulation
and winding techniques for enhanced performance of our high current line. Our
high voltage designs have been tested successfully to the extreme 765 kV
transmission voltage level.

Composite Insulators.Composite (silicone rubber) insulators are increasingly
replacing porcelain or glass insulators in utility markets worldwide. They
weigh less and provide improved electrical properties in polluted environments.
Trench is a leader in the application of composite (silicone rubber)
insulators and we now offer an entire bushing and instrument transformer line
with composite insulator shells incorporating a unique design and backed by
more than 10 years of installed experience.

Reactors.Reactors consist of circumferentially wound coils of aluminum
separated by insulating materials. The core or centre of the winding may be
iron, but our main market is for air-core reactors. Air-core reactors are used
to smooth current fluctuations in high voltage systems and to limit current
loads for safety.

Line Traps.Line traps are smaller aluminum coils designed to facilitate
communication along a high voltage transmission line by blocking and limiting
signals at certain frequencies without affecting other frequencies. Effective
management of power generation and distribution systems depends on rapid and
reliable communication. The frequencies carrying the data to be transmitted
are superimposed on the high voltage line via a coupling capacitor, where the
direction and destination of those frequencies are controlled by line traps and
line tuners.

Power Line Carrier (PLC).The use of high voltage transmission lines for the
transmission of communication signals is a global utility practice, utilizing
technology called power line carrier transmission. PLC equipment uses the high
voltage line as the transmission medium for high frequency signals of
supervisory control, relay and voice communications. PLC products offer an
exciting area for future growth as well as complementing our line trap products
in similar applications.

Reactor and Electronic Control Systems. Another specialty power quality
product manufactured by Trench includes a reactor and electronic control system
to minimize the fault current that can flow through the system when underground
cable is damaged. Manufactured exclusively in our Austrian factory, this
product is growing in usage in Europe as utilities continue to develop higher
levels of operating quality and reliability in the electrical network.

Sales and Marketing

Our global sales network is centrally coordinated. This structure
is designed to provide accessible and responsive support to our customers. It
also allows us to bundle products and services for enhanced customer value.

Trenchs Executive Vice President of Sales and Marketing, based in Toronto,
coordinates our sales efforts, via General Sales Managers (GSMs) located at
each of our manufacturing plants. The GSMs manage a number of Regional Sales
Managers (RSMs) who have a geographical or direct customer responsibility for
all of our products. The RSMs receive support at each plant from a marketing
department responsible for the products manufactured at the particular plant as
well as the order handling of products sold from remote plants. Responsibility
for the preparation of all the documentation related to the sale rests with the
marketing department, including preparation of price quotations, contract
negotiations, the gathering of data from the sales force, literature on the
plants products and interfacing with operations.

15



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Trenchs international sales network is strongly represented in each of the
worlds major markets and is complemented by over 150 independent
representatives in strategic locations worldwide. The unique combination of
quality, low-cost products, geographically diversified manufacturing, close
customer contact, and an intimate knowledge of local conditions gives our
professional sales and marketing staff a powerful competitive advantage that
translates into a strong market position.

For information on sales by customer location, refer to Item 4.B. For
information on total sales and operating income by geographical areas in which
we operate, refer to note 17 in Item 17.

Seasonality of Trenchs Main Business

There is no specific pattern of seasonality in our main business. However,
lower production and revenues typically occur in our third quarter, due to
scheduled plant shutdowns, mainly as a result of the summer vacation period.
In addition, some products experience higher fourth quarter sales as utility
construction and maintenance departments utilize their current year budgets.

Sources and Availability of Raw Materials

Aluminium, copper, insulating paper, oils, gases, resin, porcelain and silicone
are all key raw materials for our products. There is no centralized purchasing
for raw materials and it is up to each individual sub-unit to do its own
procurement. Many raw materials are purchased on short-term and long-term
contracts in the normal course of business and are subject to price
fluctuations.

Competitive Position

Trench is the largest independent producer of specialized electrical products
serving customers worldwide in the utility and industrial markets. We believe
that the Group is ideally positioned to capitalize on the ongoing industry
realignment and further enhance our market positions around the globe.



| |  | Products.Our areas of specialization include: air core reactors,
line traps, high voltage measurement transformers, and bushings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Market Position.There are no available industry statistics
regarding these specific product lines. We maintain our own database
of statistics, based on actual market requirements, won orders and
lost orders. We also maintain a database on competitors in the various
product categories. In addition, with the electrical utility business
being a global business, we have extensive geographical
representation, which ensures that we are invited to tender on almost
all requirements in commercially open markets. This would include the
Americas, Western Europe, parts of Eastern Europe, Asian countries as
well as Australia and New Zealand. In addition, given that the
countries where we have activities are members of the World Trade
Organization, Trench is invited to participate in closed markets on
all internationally financed projects. We also enjoy a preferred
supplier status with several utility and turnkey system suppliers and
in many cases we have been the supplier of choice for more than six
consecutive years.
| 
| |  | Industry Realignment.Industry realignment has been ongoing on both
the supply side and the customer side. We have demonstrated the
capability and the resources to capitalize on the supply side
restructuring through the acquisition of companies or assets of
companies producing these types of products for a period in excess of
20 years. Trench Austria, Trench Germany, Trench France, Trench UK,
Trench Switzerland and Trench Fushun are all examples of previous
acquisitions. In addition to these acquisitions of on-going concerns
we have also made asset acquisitions whereby the assets were
transferred to existing operations and integrated within the existing
facilities. Some examples of these include Square D instrument
transformer assets, GE CVT and line trap assets, WEC line trap assets,
and GE PLC product lines.                                                                                                                                                                                                        
| 
| |  | Customer Base Realignment.Given our reputation for quality and
technical capabilities, we are well positioned to achieve a prominent
supplier position as well-established utilities expand their business
globally and implement common design practices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Material Effects of Government Regulations

Recent government deregulation of the electric utility industry in North
America and Europe, and to a lesser extent in Southeast Asia, Latin America,
Australia and New Zealand, have had the immediate effect of leading many
current and potential customers in such markets to limit their capital
expenditures on power transmission products. Until the impact of deregulation
becomes more apparent, electric utilities and independent power producers are
reluctant to commit resources for capital expenditures because they are uncertain as to which aspects of

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

the transmission and distribution processes
they will ultimately be able to own or manage. While we believe that capital
expenditures on power transmission products will increase once the effects of
deregulation in such regions become apparent, it remains unclear how the market
for such products will be affected as such deregulation progresses. In certain
markets the demand for higher accuracy instrument transformers led to an up
swing in demand. Trench management views this buoyancy as a step function that
may or may not be repeated in other states or countries.

C. Organizational Structure

Control of Registrant  Trench Electric

The following table sets forth certain information with respect to the Parents
equity interest in Trench Electric.

|               |  |                                      |  |                                  |  |              |        |                  |  |  |     |  
|-------------- |  | ------------------------------------ |  | -------------------------------- |  | ------------ | ------ | ---------------- |  |  | --- | -
|               |  | Identity of                          |  | Par Value                        |  | Number of    |        |                  |  | 
|Title of Class |  | Person or Group                      |  | of Share                         |  | Shares Owned |        | Percent of Class
|               |  |                                      |  |                                  |  |              |        |                 
|Common shares  |  | Parent  Trench ElectricHolding B.V. |  | One DutchGuilder (0.45 )/ share |  |              | 40,000 |                  |  |  | 100 | %

The Parent

The principal shareholders of the Parent, Trench Electric Holding B.V., are
four entities which are managed or advised by CVC Capital Partners Limited:
Citicorp Capital Investors Europe Limited, CVC European Equity Partners
(Jersey) L.P., CVC European Equity Partners L.P. and Capital Ventures Nominees
Limited (collectively CVC).

Organization Chart of the Company.

An organization chart for Trench Electric B.V. is shown below, identifying the
position of the Company within the structure. Ownership of each entity by its
parent is 100%, except where indicated otherwise.

(TRENCH CORPORATE STRUCTURE CHART)

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

D. Property, plant and equipment

Description of Property

We have fourteen facilities: one in Belo Horizonte, Brasil, two in Shanghai,
China, one in Fushun, China, four in North America and five in Europe. Our
North American facilities are located in Toronto, Ontario. Our European
facilities are located in Linz (Austria), Basel (Switzerland), St. Louis (in
France, across the border from Basel), Bamberg (Germany) and Harrogate and
Hebburn (England). All our manufacturing facilities are ISO 9001 certified,
with the exception of Fushun, which is currently undergoing certification and
anticipates achieving the award in 2003. The following table provides an
overview of our manufacturing facilities.

|               |  |                                                 |  |                       |         |               |  |              |  |              
|-------------- |  | ----------------------------------------------- |  | --------------------- | ------- | ------------- |  | ------------ |  | -------------
|Facility       |  | Products                                        |  | Production
Space (m2) |         | Owned/
Leased |  | Lease
Expiry
|               |  |                                                 |  |                       |         |               |  |             
|Toronto        |  | Oil-insulated instrument transformers           |  |                       | 3,902   |               |  | Leased       |  | Jul. 1, 2012 
|Toronto        |  | Bushings                                        |  |                       | 2,792   |               |  | Leased       |  | Apr. 30, 2012
|Toronto        |  | Reactors, line traps                            |  |                       | 10,277  |               |  | Leased       |  | Jun. 30, 2012
|Toronto        |  | PLC                                             |  |                       | 739     |               |  | Leased       |  | Apr. 30, 2005
|Basel (Note 1) |  | Low power instrument transformers               |  |                       | 15,515  |               |  | Owned        |  | N/A          
|St. Louis      |  | Oil-insulated instrument transformers, bushings |  |                       | 22,260  |               |  | Owned        |  | N/A          
|Bamberg        |  | Gas-insulated current and voltage transformers  |  |                       | 8,449   |               |  | Owned        |  | N/A          
|Linz           |  | Reactors, arc suppression coils, line traps     |  |                       | 7,296   |               |  | Leased       |  | Nov. 31, 2015
|Belo Horizonte |  | Reactors, line traps                            |  |                       | 3,500   |               |  | Leased       |  | Sep. 30, 2005
|Hebburn        |  | Bushings                                        |  |                       | 11,560  |               |  | Owned        |  | N/A          
|Shanghai       |  | None  Property for sale                        |  |                       | 8,345   |               |  | Owned        |  | N/A          
|Shanghai       |  | Gas-insulated current and voltage transformers  |  |                       | 13,812  |               |  | Leased       |  | Mar. 31, 2026
|Fushun         |  | Bushings                                        |  |                       | 4,115   |               |  | Owned        |  | N/A          
|               |  |                                                 |  |                       |         |               |  |              |  |              
|               |  | TOTAL                                           |  |                       | 112,562 |               |  |              |  |              
|               |  |                                                 |  |                       |         |               |  |              |  |              

Note 1  The Test Equipment business sold to a third party in mid July 1999,
continues to function on the Basel site under a series of lease and service
agreements. On January 24, 2001, the Board of Directors approved and the
Company announced the closure of all main production operations for Trench
Switzerland. This was completely finished by the end of 2001. The Swiss site
continues to be our main centre of engineering for instrument transformers and
is the base for our R&D activities in new designs and measurement technologies,
in addition to the production of specialized measurement transformers. For
information on the year end balance sheet value of property, plant and
equipment, refer to Item 17, note 5 to the financial statements.

The assets of Trench are distributed geographically as shown in the following
table:

|                               |  |                    |         |      |  |   |         | 
|------------------------------ |  | ------------------ | ------- | ---- |  | - | ------- | 
|(in thousands of U.S. dollars) |  | As at December 31,
|                               |  |                   
|                               |  | 2002               |         | 2001
|                               |  |                    |         |     
|Total assets                   |  |                    |         |      |  |   |         | 
|American operations            |  | $                  | 119,492 |      |  | $ | 116,238 | 
|European operations            |  |                    | 177,105 |      |  |   | 158,263 | 
|International operations       |  |                    | 49,123  |      |  |   | 42,536  | 
|                               |  |                    |         |      |  |   |         | 
|                               |  | $                  | 345,720 |      |  | $ | 317,037 | 
|                               |  |                    |         |      |  |   |         | 

Manufacturing

Technical and manufacturing leadership are critical to maintaining our
competitive edge. Our global scope, integrated structure, extensive
engineering expertise and demonstrated manufacturing efficiencies allow us to
respond quickly and effectively to market opportunities and customer needs for
custom products. We strive to be a one stop source for a variety of our
customers requirements. Our product lines share similar high voltage
insulation technology and manufacturing requirements and are keyed to the
specific needs of individual markets around the world.

Through our subsidiaries, we are an active participant in international
standards associations for electrical products and requirements. Trench has
also established strategic alliances with many customers, universities, test
laboratories and suppliers around the globe. As a result, we

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

believe that Trench is always at the leading edge of emerging
world market regulations, technical developments and trends. This advanced
intelligence allows us to focus research, development and manufacturing on
product areas with the most potential for global success.

Trench is at the forefront of manufacturing expertise for air-core reactors.
Anthony Trench invented the fibreglass encapsulated air-core reactor in 1962
and since that time, we have remained a world leader in these products. Trench
manufactures all the components necessary for most coil products and only needs
to purchase the raw materials. In addition, we have the technical capabilities
and manufacturing expertise to build our coil products to customer
specifications.

Environmental, Health and Safety Matters

Our facilities, like similar manufacturing facilities, are subject to a range
of federal, state, local and foreign environmental and occupational health and
safety laws including those laws relating to air emissions, wastewater
discharges, the handling and disposal of solid and hazardous waste, and the
remediation of contamination associated with the current and historic use of
hazardous substances or materials. If a release of hazardous substances or
materials occurs on or from our properties or any offsite disposal location
used by us, or if contamination from prior activities is discovered at any of
our properties, we may be held liable for the costs of remediation (including
any response costs), natural resource damages and associated transaction costs.
While the amount of such liability could be material, we devote resources to
ensure that our current operations are conducted in a manner that reduces such
risks.

We believe that we are currently in compliance with, and not subject to
liability under, any environmental laws, except where such noncompliance or
liability would not reasonably be expected to have a material adverse effect on
the consolidated financial position, results of operations or liquidity of the
Group.

We have also completed the implementation of ISO 14001 environmental protection
standards at some of our manufacturing locations.

Item 5. Operating and Financial Review and Prospects

A. Operating Results

The following discussion generally relates to the historical consolidated
results of operations and financial position of the Trench group of companies
and our consolidated results of operations and financial position and should be
read in conjunction with the audited consolidated financial statements in Item
17 included elsewhere herein. Operating results in the three years ended
December 31, 2002 have been impacted by the following significant events:

In December 2002, we increased our ownership of Trench Fushun Bushing Co. Ltd
by an additional 14.6% to 65.0%

During the year our operating income has benefited by a net gain of $755
arising from the sale of assets.

In November 2001 we completed the acquisition of 50.4% of the Fushun Reyrolle
Bushing Company Ltd (Fushun), based in North East China. This new business
will further expand our participation in the Chinese market. This business has
since been renamed as the Trench Fushun Bushing Co. Ltd.

In April 2000, we bought the U.K. based bushing operations of VA Tech that has
since been renamed as Trench (UK) Limited (Trench UK). Shortly afterwards we
completed negotiations to add a much wider range of products to our existing
joint venture in Shanghai, China, and as a result we obtained approximately
$5.5 million of technology fee income. We increased our investment in the
joint venture to raise our shareholding from 40% to 65%.

Towards the end of 1999 we started to integrate our French and Swiss operations
into a single management unit in order to bring the overhead of the units more
in line with expected sales volumes. The combined business is referred to as
Trench Suisse-France (TSF). The personnel reductions that were announced in
late 1999 were completed in the first quarter of 2000. However as the Group
progressed through 2000 it became apparent that this would not be enough to
restore the business to full profitability and it was decided early in 2001 that we should

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

close all main production operations on
the Swiss site. This phase of reorganization is now complete. The Swiss site
continues to be our main centre of engineering for instrument transformers and
is the base for R&D activities in new designs and measurement technologies, in
addition to the production of specialized measurement transformers. In early
2003, we have decided to conduct a further restructuring in TSF, albeit on a
much smaller scale.

Effect of Currency Fluctuations on Results of Operations

Trench conducts its business internationally, although our principal
manufacturing operations are located in Austria, Brasil, Canada, China,
England, France, Germany and Switzerland. For financial reporting purposes,
Trench has chosen the U.S. dollar as its reporting currency. Therefore,
changes in the rate of exchange between the U.S. dollar and the local
currencies in which the financial statements of its international operations
are maintained affect our results of operations and financial position as
reported in our financial statements. We have translated the assets and
liabilities into U.S. dollars at the exchange rate prevailing at the balance
sheet date. Income statement items are translated at the average exchange rates
for the periods. Given this broad geographical spread of its business,
variations in exchange rates against the U.S. dollar have a major impact on our
reported results. Refer to Item 11 for further details.

Results of Operations

For purposes of comparison, the following table includes our consolidated
results of operations from January 1, 2000 to December 31, 2002.

|                                                        |  |                               |       |               |  |               |       |   |  |   |       |  
|------------------------------------------------------- |  | ----------------------------- | ----- | ------------- |  | ------------- | ----- | - |  | - | ----- | -
|                                                        |  | Year Ended                    |       | Year Ended    |  | Year Ended   
|Consolidated                                            |  | Dec. 31, 2002                 |       | Dec. 31, 2001 |  | Dec. 31, 2000
|                                                        |  |                               |       |               |  |              
|                                                        |  | (in millions of U.S. dollars)
|Sales                                                   |  | $                             | 255.9 |               |  | $             | 224.3 |   |  | $ | 200.8 |  
|Cost of sales                                           |  |                               | 178.2 |               |  |               | 160.8 |   |  |   | 141.2 |  
|                                                        |  |                               |       |               |  |               |       |   |  |   |       |  
|Gross profit                                            |  |                               | 77.7  |               |  |               | 63.5  |   |  |   | 59.6  |  
|Contract termination                                    |  |                               |      |               |  |               |      |   |  |   | 0.6   |  
|Selling, general and administrative expenses (1)        |  |                               | 45.1  |               |  |               | 46.4  |   |  |   | 44.4  |  
|Gain on sale of assets                                  |  |                               | (0.7  | )             |  |               |      |   |  |   |      |  
|                                                        |  |                               |       |               |  |               |       |   |  |   |       |  
|Operating income (2)                                    |  |                               | 33.3  |               |  |               | 17.1  |   |  |   | 14.6  |  
|Foreign exchange losses (gains) (3)                     |  |                               | (2.3  | )             |  |               | 9.1   |   |  |   | 7.7   |  
|Gain on extinguishment of debt                          |  |                               |      |               |  |               |      |   |  |   | (2.2  | )
|Interest expense and other (4)                          |  |                               | 19.6  |               |  |               | 19.9  |   |  |   | 23.7  |  
|                                                        |  |                               |       |               |  |               |       |   |  |   |       |  
|Income (loss) before income taxes
and minority interest |  |                               | 16.0  |               |  |               | (11.9 | ) |  |   | (14.6 | )
|Provision for income taxes                              |  |                               | 6.8   |               |  |               | 2.1   |   |  |   | 3.0   |  
|                                                        |  |                               |       |               |  |               |       |   |  |   |       |  
|Income (loss) before minority interest                  |  |                               | 9.2   |               |  |               | (14.0 | ) |  |   | (17.6 | )
|Minority interest                                       |  |                               | 2.8   |               |  |               | 1.2   |   |  |   | 0.3   |  
|                                                        |  |                               |       |               |  |               |       |   |  |   |       |  
|Net income (loss)                                       |  | $                             | 6.4   |               |  | $             | (15.2 | ) |  | $ | (17.9 | )
|                                                        |  |                               |       |               |  |               |       |   |  |   |       |  



|(1) |  | Starting in 2002, under FAS 142 Goodwill and Other Intangible Assets,
we are no longer required nor permitted to record goodwill amortization.
Goodwill now has an indefinite useful life and will not be amortized but
rather will be tested at least annually for impairment. Accordingly, we
did not incur goodwill amortization expense this year, whereas, in 2001,
we incurred goodwill amortization expense of $3.5 million, which is
included in selling, administrative and general expense. The other
information provided on goodwill amortization is intended to enable the
user to understand the effect of this accounting change on net income from
2001 to 2002. Please refer to the accompanying Item 17, notes 2 and 6 for
more information.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Operating income for the year ended December 31, 2002 includes $0.1
million (2001  $4.2 million) in costs associated with inventory
provisions, fixed asset impairments and other restructuring costs relating
to Trench Switzerland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(3) |  | Foreign exchange gains/losses include a gain of $5.8 million (2001 
loss of $8.9 million, 2000  loss of $6.9 million) relating to the
10 1/4 Senior Notes due 2007, being the year to year revaluation of the
debt using exchange rates as of December 31, 2000 and 2001 and December
31, 2002. There is no immediate cash benefit as a result of this gain.                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(4) |  | Interest expense includes amortization of deferred financing costs and
writeoffs of deferred financing costs associated with our outstanding
senior subordinated notes and the senior facilities agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

The following table sets forth, for the periods indicated, percentage
relationships for certain items in our consolidated financial statements:

|                                             |  |                      |       |      |  |      |       |  |  |  |       | 
|-------------------------------------------- |  | -------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                             |  | Percentage of Sales 
|                                             |  | Year Ended December,
|                                             |  |                     
|                                             |  | 2002                 |       | 2001 |  | 2000
|                                             |  |                      |       |      |  |     
|                                             |  | %                    |       | %    |  | %   
|Sales                                        |  |                      | 100.0 |      |  |      | 100.0 |  |  |  | 100.0 | 
|Cost of sales                                |  |                      | 69.6  |      |  |      | 71.7  |  |  |  | 70.3  | 
|Gross profit                                 |  |                      | 30.4  |      |  |      | 28.3  |  |  |  | 29.7  | 
|Selling, general and administrative expenses |  |                      | 17.6  |      |  |      | 20.7  |  |  |  | 22.2  | 
|Operating income                             |  |                      | 13.0  |      |  |      | 7.6   |  |  |  | 7.3   | 

2002 Compared to 2001

Results of Operations

|      |                               |      |       |      |  |        |       |  |  |  |      |  
|----- | ----------------------------- | ---- | ----- | ---- |  | ------ | ----- |  |  |  | ---- | -
|      | (in millions of U.S. dollars) |      |       |     
|      |                               | 2002 |       | 2001 |  | Change |      
|      |                               |      |       |      |  |        |      
|Sales |                               | $    | 255.9 |      |  | $      | 224.3 |  |  |  | 14.1 | %

Salesin 2002 were $255.9 million, an increase of 14.1% from 2001. Excluding
the effect of currency fluctuations, sales in 2002 increased 12.2% from 2001
due to an increase in the sales of the core product lines, but primarily the
transmission products. There were increases in sales in the Americas, Europe
and Asia. The increased sales in China accounted for nearly half of the 14.1%
sales increase from the prior year, due to an increase in sales of $15.7
million. Trench Fushun only became a part of Trench at the end of November
2001, whereas in 2002 it operated for the entire year.

|                        |                               |      |      |      |  |        |      |   |  |  |      |  
|----------------------- | ----------------------------- | ---- | ---- | ---- |  | ------ | ---- | - |  |  | ---- | -
|                        | (in millions of U.S. dollars) |      |      |     
|                        |                               | 2002 |      | 2001 |  | Change
|                        |                               |      |      |      |  |       
|Gross Profit            |                               | $    | 77.7 |      |  | $      | 63.5 |   |  |  | 22.4 | %
|Percentage of net sales |                               |      | 30.4 | %    |  |        | 28.3 | % |  |  |      |  

Gross Profitin 2002 was $77.7 million, an increase of $14.2 million from 2001.
Excluding the effect of currency fluctuations, gross profit increased by $12.8
million or 20.2% from 2001. Gross profit as a percentage of sales in 2002 was
30.4% compared with 28.3% in 2001. A large part of the increase in gross
profit was due to the units in China. Trench Fushun became a part of the Group
at the end of November, 2001.

|                                                                                                                                     |                         |                               |      |      |      |   |        |      |   |  |      |    | 
|------------------------------------------------------------------------------------------------------------------------------------ | ----------------------- | ----------------------------- | ---- | ---- | ---- | - | ------ | ---- | - |  | ---- | -- | 
|                                                                                                                                     |                         | (in millions of U.S. dollars) |      |      |     
|                                                                                                                                     |                         |                               | 2002 |      | 2001 |   | Change
|                                                                                                                                     |                         |                               |      |      |      |   |       
|Selling, general and administrative
expenses (including TSF integration)                                                             |                         | $                             | 45.1 |      |      | $ | 46.4   |      |   |  | (2.7 | )%
|Percentage of net sales                                                                                                              |                         |                               | 17.6 | %    |      |   | 20.7   | %    |   |  |      |   
|Selling, general and administrative
expenses (excluding goodwill amortization
in 2001 and including TSF integration
charges in 2001) |                         | $                             | 45.1 |      |      | $ | 42.8   |      |   |  | 5.3  | % 
|                                                                                                                                     | Percentage of net sales |                               |      | 17.6 | %    |   |        | 19.1 | % |  |      |    | 
|Selling, general and administrative
expenses (excluding TSF integration
charges and excluding
goodwill amortization in 2001)         |                         | $                             | 45.1 |      |      | $ | 39.4   |      |   |  | 14.5 | % 
|                                                                                                                                     | Percentage of net sales |                               |      | 17.6 | %    |   |        | 17.6 | % |  |      |    | 

21



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Selling, general and administrative expensesin 2002 were $45.1 million, a
decrease of $1.3 million from 2001. Excluding the effect of currency
fluctuations, selling, general and administrative expenses in 2002 decreased by
$2.4 million. Selling, general and administrative expenses as a percentage of
sales for 2002 at 17.6% are lower than the percentage achieved in 2001 of
20.7%. The major reason for this decrease in selling, general and
administrative expenses in 2002 is that the 2001 result includes $3.4 million
in restructuring charges (none in 2002). Excluding the 2001 restructuring
charges, selling, general and administrative expenses as a percentage of sales
in 2001 was 19.1%. Also as explained in Note 6, in 2002, the selling, general
and administrative expenses no longer includes a charge for amortization of
goodwill. If the goodwill amortization charge and TSF integration charges were
not included in 2001 results, then the selling, general and administrative
expenses as a percentage in 2001 would have been 17.6%, the same as the 2002
percentage.

|                 |                         |                               |      |      |      |   |        |     |   |  |      |   | 
|---------------- | ----------------------- | ----------------------------- | ---- | ---- | ---- | - | ------ | --- | - |  | ---- | - | 
|                 |                         | (in millions of U.S. dollars) |      |      |     
|                 |                         |                               | 2002 |      | 2001 |   | Change
|                 |                         |                               |      |      |      |   |       
|Operating Income |                         | $                             | 33.3 |      |      | $ | 17.1   |     |   |  | 94.5 | %
|                 | Percentage of net sales |                               |      | 13.0 | %    |   |        | 7.6 | % |  |      |   | 

Operating Incomein 2002 was $33.3 million, an increase of $16.2 million from
2001. Excluding the effect of currency fluctuations, in 2002 operating income
increased by $16.0 million or 93.5%. The operating income in 2001 included a
restructuring charge of $4.2 million and goodwill amortization of $3.5 million.
Excluding the effect of the restructuring in 2001 and the goodwill
amortization, the 2001 operating income as a percentage of net sales would have
been 10.7%, which is closer to the 2002 operating income as a percentage of net
sales of 13.0%. Refer to the gross profit, restructuring expenses, and the
selling, general and administrative expenses sections above for more details.

2001 Compared to 2000

Salesfor 2001 were $224.3 million, an increase of 11.7% over 2000. Excluding
the effect of currency fluctuations, sales in 2001 increased 15.4% over 2000.
The increase in revenues is due to strong overall sales of transmission
products. In addition to the solid demand for transmission products, Trench
China and Trench UK benefited from their first full year of operation and
posted a year-on-year increase of $22.9 million. The joint venture in Fushun
China, added to the Group at the end of November 2001, contributed another $0.7
million in sales. The main sub-units contributing to the sales increase were
Canada, Germany, China (Shanghai) and the UK. Austria and TSF did not generate
strong sales growth. In 2000, both China (Shanghai) and the UK operated for
part of the year from the date of acquisition. If China (Shanghai) and the UK
had operated for a full year in 2000, the pro forma year over year increase in
sales for China and the UK would be 23.8% and 11.9%, respectively. Excluding
the effect of currency fluctuations, sales of transmission and coil products
increased 23.0% and 1.4%, respectively in 2001.

Gross Profitfor 2001 was $63.5 million, an increase of $3.9 million from 2000.
Excluding the effect of currency fluctuations, gross profit was $65.6 million
in 2001, an increase of $6.0 million from 2000. Gross profit as a percentage
of sales, in 2001, was 28.3%, compared with 29.7% in 2000. One reason for the
year on year decline in gross profit is the change in the sales mix as there
was higher IT product sales and lower coil sales. The main sub-units
contributing to the gross profit increase were Canada, Germany, China
(Shanghai) and the UK.

Selling, General and Administrative Expenses(including the integration and/or
reorganization costs of TSF), in 2001 were $46.4 million, an increase of $1.3
million over 2000. Excluding the effect of currency fluctuations, selling,
general and administrative expenses (including the integration and/or
reorganization costs of TSF) in 2001 were $47.6 million, an increase of $2.6
million over 2000. Trench Brasil, Trench China and Trench UK completed their
first full year of operation and posted a year-on-year increase of $4.2
million. The joint venture in Fushun, China added another $0.1 million in
selling, general and administrative expenses. In addition, the higher sales in 2001 also increased sales commissions by 15%
compared to the prior year.

22



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Operating Incomein 2001 was $17.1 million, an increase of $2.5 million from
2000 due to increased sales, mentioned above.

Contractual Commitments

The following represents contractual commitments associated with operating
leases, capital leases and royalty and licensing agreements and debt.

|                             |  |          |        |           |  |           |        |       |  |   |         |         |  |   |        | 
|---------------------------- |  | -------- | ------ | --------- |  | --------- | ------ | ----- |  | - | ------- | ------- |  | - | ------ | 
|                             |  | Within 1 |        |           |  |           |        |       |  |   |         | After 5
|In 000s of U.S. Dollars     |  | Year     |        | 2-3 Years |  | 4-5 Years |        | Years
|                             |  |          |        |           |  |           |        |      
|Operating leases             |  | $        | 2,168  |           |  | $         | 4,141  |       |  | $ | 3,672   |         |  | $ | 14,329 | 
|Capital leases               |  |          | 613    |           |  |           | 131    |       |  |   |        |         |  |   |       | 
|Royalty/licensing
agreements |  |          | 340    |           |  |           | 654    |       |  |   | 805     |         |  |   |       | 
|Debt                         |  |          | 13,286 |           |  |           | 11,203 |       |  |   | 154,847 |         |  |   |       | 
|                             |  |          |        |           |  |           |        |       |  |   |         |         |  |   |        | 
|                             |  | $        | 16,407 |           |  | $         | 16,129 |       |  | $ | 159,324 |         |  | $ | 14,329 | 
|                             |  |          |        |           |  |           |        |       |  |   |         |         |  |   |        | 

B.     Liquidity and capital resources

At December 31, 2002 the Group had total debt of $185.1 million and accumulated
cash of $15.4 million, compared to $192.3 million and $11.7 million,
respectively, at the end of 2001. Our cash and cash equivalents are held in
the following currencies: Brasilian real, British pound, Canadian dollar,
Chinese renminbi, Euro, Swiss franc and the U.S. dollar. There exists an
annual cash interest expense of approximately $19 million associated with
borrowings under the Facilities Agreement and the Notes, as well as anticipated
principal payments of term and other loans of $13.3 million, $5.6 million, $5.6
million, $3.8 million, and $151.0 million in 2003, 2004, 2005, 2006 and 2007,
respectively, which will increase our liquidity requirements. The scheduled
repayment in 2003 of $13.3 million includes $8.7 million in China, consisting
of two loans, which are renewed annually. Thus, only about $4.6 million will
be actually paid in cash and will be funded from cash flows from our
operations. Please refer to Item 4A, for a listing of capital expenditures.

Trench has complied with the various financial covenants in our Facilities
Agreement. Having taken account of amendment letters received from our Senior
Lenders, we anticipate remaining in compliance with those covenants. The
amendments permitted us to take the entire gain of approximately $5.5 million
over the six quarters ending March 2002 (for covenant calculation purposes
only) on the 2000 sale of certain instrument transformer and bushings
technologies in connection with our Shanghai operation. This amendment was
consented to on the basis that substantially all of the gain has already been
realized in cash. Under U.S. GAAP the gain will be recognized over a 10-year
period. Similarly, we have obtained an amendment letter from our Senior
Lenders to allow us to recognize (for covenant purposes only) the $10 million
gain from the sale of certain coil technologies in 2002 in connection with our
Shanghai operation on an accelerated basis to the end of December 31, 2006.
Under U.S. GAAP the gain will be recognized over a 10-year period.

In addition, our Senior Lenders have agreed to increase the headroom available
to us within the financial covenants for the interest coverage and the leverage
ratios from 31st March 2003 to 31st December 2005. For the avoidance of doubt
no changes have been made to the Net Worth covenant or the Cash Flow to Debt
Service covenant.

Also, our Senior Lenders agreed that both the cash costs and the profit and
loss write-offs associated with the reorganization in Switzerland in 2000 and
2001 can be excluded from all covenant calculations as originally defined.
Items associated with the reorganization in Switzerland have been subject to
separate additional covenant tests.

The amendments also create additional flexibility under our capital
expenditures covenant in connection with the capital expenditures in China.
The original capital expenditure covenant was set prior to Trench China, in
Shanghai being consolidated into the Group results.

For the year 2001 only, our Senior Lenders agreed that the usage of fixed
foreign exchange rates as applied in calculating the Net Worth covenant could
be extended to include the interest coverage and leverage ratios. For the
avoidance of doubt the affected covenants did not include the cash flow to debt
service covenant, which remained unchanged.

Notwithstanding the foregoing, there can be no guarantee that we will remain in
compliance with our financial covenants. Failure to remain in compliance, or to obtain additional amendments, would have a material
adverse effect on our liquidity.

23



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Our primary sources of liquidity are cash flows from operations and borrowings
under the revolving credit facility of our Facilities Agreement. At December
31, 2002, $27.7 million was available to us for borrowings under the revolving
credit facility compared to $23.7 million in 2001, with both amounts calculated
without the effect of letters of credit and bank guarantees. Of the amount
available, $6.3 million (2001  $7.2 million) is a restricted revolving credit
facility, the use of which is not anticipated by Trench and is subject to the
consent of our Senior Lenders. If CIBC letters of credit and bank guarantees
are factored in, the net available revolving credit facility was $7.5 million
compared to $2.0 million in 2001. There are other guarantees in another
subsidiary that do not affect the available revolving credit facility. In
addition, we are forecasting positive cash flows from operations in 2003,
although there can be no assurances that our cash flows in 2003 will be
positive or sufficient to meet our requirements. Our management believes that
cash generated from operations, together with borrowings under the revolving
credit facility, will be sufficient to meet our working capital, capital
expenditure and debt servicing needs for the foreseeable future. Please refer
to Item 17, Note 22 for more information.

Off-Balance Sheet Arrangements

We do not have transactions, arrangements or other relationships with
unconsolidated entities or persons that are reasonably likely to materially
affect our liquidity or the availability of or requirements for capital
resources. Unconsolidated entities are often referred to as structured finance
or special purpose entities and we do not engage in activities with such
entities.

C.     Research and development, patents and licenses, etc.

Trench conducts research and development (R&D) mainly on a decentralized
basis (at the manufacturing units) with our primary focus on design and process
engineering in order to continuously improve our manufacturing efficiency to
maintain our cost advantage in our product lines. At each of our manufacturing
locations, several engineers are partly or fully dedicated to R&D activities
and our R&D expense consists of an allocation of the engineers time spent on
product development as well as the cost of building prototypes. In 2001,
Trench Switzerland was designated to be our base for R&D activities in new
designs and measurement technologies. In addition, we collaborate with leading
research institutes on the development of new products and new technologies.
Trench also collaborates with certain primary contractors for the development
of new products and applications. These initiatives, as well as our
customer-oriented approach to our R&D work, have positioned us as a leader in
high voltage technology products. Our R&D expenses for the years ended
December 31, 2002, 2001, and 2000 were $4.5 million, $3.5 million, and $2.8
million, respectively.

D.     Trend information   For Trend information responsive to this item, refer to Items 3.A. and 4.B. above

E.     Critical Accounting Policies

Our significant accounting policies are more fully described in Note 2 to the
consolidated financial statements in Item 17. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires that we make estimates and assumptions in certain
circumstances that affect amounts reported in the accompanying consolidated
financial statements and related footnotes. In preparing these financial
statements, we have made our best estimates and judgments of certain amounts
included in the financial statements, giving due consideration to materiality.
We do not believe there is a great likelihood that materially different amounts
would be reported related to the accounting policies described below. However,
application of these accounting policies involves the exercise of judgment and
use of assumptions as to future uncertainties and, as a result, our actual
results could differ from these estimates.

Revenue Recognition:

The Securities and Exchange Commissions Staff Accounting Bulletin (SAB) No.
101, Revenue Recognition provides guidance on the application of generally
accepted accounting principles to selected revenue recognition issues. We have
concluded that our revenue recognition policy is appropriate and in accordance
with generally accepted accounting principles and SAB No. 101.

We perform ongoing credit evaluations of our customers financial condition and
generally do not require collateral. We maintain provisions for potential
credit losses and historically such losses have been within expectations.

24



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Allowance for Doubtful Accounts Receivable:

Accounts receivable are reduced by an allowance for amounts that may prove not
to be collectable in the future. Substantially all of our receivables are due
from the utility and industrial markets worldwide. The estimated allowance for
doubtful accounts is based primarily on our evaluation of the financial
condition of the customer.

Goodwill, Intangible and Other Long-Lived Assets:

Property, plant and equipment, intangible and certain other long-lived assets
are amortized over their useful lives. Useful lives are based on our
managements estimates of the period that the assets will generate revenue.
Our management periodically reviews the carrying value of the long-lived assets
and investments for continued appropriateness. This review is based upon
projections of anticipated future cash flows. While we believe that estimates
of future cash flows are reasonable, different assumptions regarding such cash
flows could materially affect our evaluations.

Trench assesses the impairment of identifiable intangibles, long-lived assets
and related goodwill and enterprise level goodwill whenever events or changes
in circumstances indicate that the carrying value may not be recoverable.
Factors that we consider to be important which could trigger an impairment
review include the following:



| |  | significant underperformance relative to expected historical or projected future operating results;          
|- |  | -------------------------------------------------------------------------------------------------------------
| 
| |  | significant changes in the manner of the use of the acquired assets or the strategy for the overall business;
| 
| |  | significant negative industry or economic trends;                                                            

When we determine that the carrying value of intangibles, long-lived assets and
related goodwill and enterprise level goodwill may not be recoverable based
upon the existence of one or more of the above indicators of impairment, a
writedown may be required. In January, 2002, Statement of Financial Accounting
Standards (FAS) No. 142, Goodwill and Other Intangible Assets became
effective and we were required to perform an initial impairment review of
goodwill in 2002 and an annual impairment review thereafter. We completed the
initial review by the second quarter of 2002. We did not record an impairment
charge upon completion of the initial impairment review as our initial
impairment testing of goodwill did not indicate any impairment.

Deferred income taxes:

As part of the process of preparing our consolidated financial statements, we
are required to estimate the income taxes in each of the jurisdictions in which
we operate. This process involves estimating actual current tax exposure
together with assessing temporary differences resulting from differing
treatment of items, such as deferred revenue, for tax and accounting purposes.
These differences result in deferred tax assets and liabilities, which are
included within the consolidated balance sheet. Trench must then assess the
likelihood that deferred tax assets will be recovered from future taxable
income and to the extent we believe that recovery is not likely, a valuation
allowance must be recorded. To the extent a valuation allowance is established
or this allowance is increased in a period, there must be an expense within the
tax provision in our statement of profit and loss.

Income taxes have been provided using the full liability method whereby current
tax liabilities or assets are recognized for the estimated taxes payable or
refundable tax for the current year and deferred tax liabilities or assets are
recognized for the estimated future tax effects attributable to temporary
differences and carry forwards. Current and deferred tax liabilities and
assets are measured based on provisions of the enacted tax laws. Trench
records valuation allowances against deferred tax assets where management does
not expect such assets to be realized based upon current forecasts. In the
event that actual results differ from these estimates or management adjusts
these estimates in future periods, we may need to establish an additional
valuation allowance that could materially impact financial our position and the
results of operations

The net deferred tax asset as of December 31, 2002 was $12,071, net of a
valuation allowance of $7,852.

Provisions for warranties and inventory obsolescence:

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires our management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent

25



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Trench
records provisions for warranties based upon historical trends and any known
warranty issues and is our managements best estimate of the amounts necessary
to settle future and existing claims on products sold as of the balance sheet
date. The inventory obsolescence provision is based upon a thorough analysis
by our management of inventory, especially slow moving inventory, and taking
into account estimated future usage and sales. While our management believes
that the provisions for warranties and inventory obsolescence are adequate and
the judgment applied is appropriate, the estimated amounts could differ
materially from what will actually transpire in the future.

Pension and other post retirement benefits:

The determination of our obligations and expenses for pension and other post
retirement benefits is dependent on the selection of certain assumptions used
by actuaries in calculating such amounts. Those assumptions are described in
Notes 10 and 11 to the consolidated financial statements and include, among
others, the discount rate, expected long-term rate of return on plan assets and
rates of increase in compensation and healthcare costs. In accordance with
generally accepted accounting principles, actual results that differ from the
assumptions are accumulated and amortized over future periods and therefore,
generally affect the recognized expense and recorded obligation in such future
periods. While we believe that the assumptions are appropriate, significant
differences in the actual experience or significant changes in the assumptions
may materially affect the pension and other post retirement obligations and the
future expense.

Accounting policies

In July 2001, FAS 143, Accounting for Asset Retirement Obligations, was
issued. This requires recording the fair value of a liability for an asset
retirement obligation in the period incurred. The amount recorded as a
liability is capitalized by increasing the carrying amount of the related
long-lived asset, which is then depreciated over its useful life. If the
liability is settled for an amount other than the recorded balance, either a
gain or loss will be recognized at settlement. The standard is effective for
fiscal years beginning after June 15, 2002, with earlier application permitted.
We are presently evaluating the impact of this standard on our financial
position and results of operations but we do not expect the adoption of FAS 143
to have a material impact on our operating results or financial position.

In April 2002, FAS 145, Rescission of FAS 4, 44 and 64, Amendment to FAS 13,
and Technical Corrections, was issued. This standard updates, clarifies and
simplifies existing accounting pronouncements. It rescinds FAS 4, which
required all gains and losses from extinguishment of debt to be aggregated and,
if material, classified as an extraordinary item, net of related taxes. Upon
adoption, the criteria in APB 30 will be used to classify such gains and
losses. Gains or losses on extinguishments of debt that were classified as
extraordinary in prior periods presented that do not meet APB 30 criteria for
classification as extraordinary must be reclassified into earnings from
operations. FAS 145 also rescinds FAS 64, which amended FAS 4 and FAS 44,
which established accounting requirements for the transition of the Motor
Carrier Act of 1980. FAS 145 amends FAS 13 to require that certain lease
modifications that have economic effects similar to sale-leaseback transactions
be accounted for in the same manner as sale-leaseback transactions. We have
early adopted this new standard. We believe that this standard does not have a
material impact on our financial position and results of operations.

In July 2002, FAS 146, Accounting for Costs Associated with Exit or Disposal
Activities was issued. This addresses financial accounting and reporting for
costs associated with exit or disposal activities and nullifies Emerging Issues
Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). FAS 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized when the
liability is incurred and that an entitys commitment to a plan, by itself,
does not create a present obligation to others. We must adopt this standard
for exit or disposal activities that are initiated after December 31, 2002. We
do not expect the adoption of FAS 146 to have a material impact on our
operating results or financial position.

In November 2002, FASB issued Interpretation No. 45, Guarantors Accounting
and Disclosure requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. The Interpretation expands on the accounting guidance
of Statements No. 5, 57, and 107 and incorporates without change the provisions
of FASB Interpretation No. 34, which is being superseded. The Interpretation
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees such as standby letters of credit. It also clarifies
that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair value, or market value, of the obligations it
assumes under that guarantee and must disclose that information in its interim
and annual financial statements. The initial recognition and initial

26



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

measurement
provisions apply on a prospective basis to guarantees issued or modified after
December 31, 2002, regardless of the guarantors fiscal year-end. The
disclosure requirements in the Interpretation are effective for financial
statements of interim or annual periods ending after December 15, 2002 and we
have complied with the disclosure requirements. We do not expect the future
adoption of other parts of this standard to have a material impact on our
operating results or financial position.

In December 2002, FASB issued Statement 148, Accounting for Stock-Based
Compensation  Transition and Disclosure. This Statement amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The transition guidance and annual disclosure
provisions of Statement 148 are effective for fiscal years ending after
December 15, 2002, with earlier application permitted in certain circumstances.
The interim disclosure provisions are effective for financial reports
containing financial statements for interim periods beginning after December
15, 2002. Under the provisions of Statement 123 that remain unaffected by
Statement 148, companies may either recognize expenses on a fair value based
method in the income statement or disclose the pro forma effects of that method
in the footnotes to the financial statements. We are still assessing this new
standard but do not believe that it will have a material effect on our results
of operation or financial condition upon adoption.

In January 2003, FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities. Many variable interest entities have commonly been referred
to as special-purpose entities or off-balance sheet structures, but the
guidance applies to a larger population of entities. The interpretation applies
immediately to variable interest entities created after January 31, 2003, and
to variable interest entities in which an enterprise obtains an interest after
that date. It applies in the first fiscal year or interim period beginning
after June 15, 2003, to variable interest entities in which an enterprise holds
a variable interest that is acquired before February 1, 2003. In general, a
variable interest entity is a corporation, partnership, trust, or any other
legal structure used for business purposes that either (a) does not have equity
investors with voting rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its activities. A
variable interest entity often holds financial assets, including loans or
receivables, real estate or other property. A variable interest entity may be
essentially passive or it may engage in research and development or other
activities on behalf of another company. Some disclosures apply to financial
statements issued after January 31, 2003. We have assessed this new standard
and do not believe that it has a material effect on our results of operations
or financial condition.

Item 6. Directors, Senior Management and Employees

A.     Directors and Senior Management

As at December 31, 2002, the sole director of Trench Electric BV was Trench
Electric Holding BV.

Executive Officers

The following table sets forth certain information regarding the executive
officers of Trench Electric (ages as of December 31, 2002):

|                   |  |     |    |          |  |                                                         |  |               
|------------------ |  | --- | -- | -------- |  | ------------------------------------------------------- |  | --------------
|                   |  |     |    |          |  |                                                         |  | Date appointed
|Name               |  | Age |    | Position |  | to current position                                    
|                   |  |     |    |          |  |                                                        
|Howard Poulson     |  |     | 59 |          |  | Chairman and Chief Executive Officer                    |  | June 1999     
|John H.G. Finlay   |  |     | 63 |          |  | Executive Vice President, North America & International |  | April 2000    
|Allan Finn         |  |     | 51 |          |  | Executive Vice President, Sales and Marketing           |  | July 1999     
|Michael Bissell    |  |     | 51 |          |  | Group Finance Director                                  |  | April 2000    
|Alfred Wittenhofer |  |     | 62 |          |  | Chief Executive  European Operations                   |  | April 2001    

Mr. Howard Poulsonwas appointed Chairman of Trench Electric in March 1998 at
the request of the main investor CVC. On June 1st 1999 Mr. Poulson took over
the post of Chief Executive following the retirement of Ron Montgomery from
that office. Prior to joining Trench, Mr. Poulson has had a long career as a
director and Chief Executive of a number of public companies largely operating
in the electronics industry and is currently the Chairman of Aramis Ltd.

Mr. John H.G. Finlaybecame Executive Vice President and Chief Financial
Officer of Trench Electric at the time of its formation in

27



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

September 1997. Mr. Finlay joined Trench Limited in Canada in 1988 as Chief
Financial Officer. He was Chief Financial Officer and Executive Vice President
of Trench and its predecessors from its formation in 1993. In 2000 he was made
Executive Vice President, North America and International of Trench Electric.

Mr. Allan Finnbecame Vice President, Sales and Marketing of Trench Electric at
the time of its formation in September 1997. He joined Trench Electric Canada
in 1970 and has held the senior sales executive position at Trench since 1993.
Mr. Finn has been with Trench and its predecessors for 30 years and has held a
number of management positions including manufacturing throughout his tenure.
In July 1999 he became Executive Vice President, Sales and Marketing.

Mr. Michael J. Bisselljoined the Group in April 2000, as Group Finance
Director. Prior to joining Trench, Mr. Bissell held various senior financial
positions with multi-site, international manufacturing businesses and spent a
period of time based in the U.S.A. His experience included being Group Finance
Director of GEI International PLC, a public traded British company, Finance
Director of one of Britains pre-eminent private engineering companies and also
various substantial divisions of global contracting and capital goods
businesses.

Mr. Alfred Wittenhoferwas appointed Chief Executive of Trench European
Operations in 2001. Mr. Wittenhofer has been Managing Director of Trench
Austria GmbH and its predecessor Group-member Spezielektra since 1976.

Non-executive Officers

Mr. Marc Boughton,39, joined CVC in 1995, having worked previously for Electra
Fleming Ltd. and PricewaterhouseCoopers (London) where he qualified as a
Chartered Accountant and worked as a manager in the Corporate Finance Division.
He joined the Board on September 3, 1997. Mr. Boughton is a
director of CVC Capital Partners Ltd, Amatek Holdings, Acordis BV and
Herbspring (December 2000 Sale) Ltd.

Mr. James F. Joy,65, is Managing Director, European Business Development for
CVC Capital Partners Limited. Mr. Joy is a non-executive director for Metzeler
Automotive Profile Systems and a director of First Republic Bank (US). Mr. Joy
was appointed to the Board on February 16, 2000.

Mr. Gijsbert Vuursteen, 29, was appointed to the Board on August 14, 2000 as one of
the CVC board members. He joined CVC in 2000 and is Investment Director of CVC
Capital Partners Ltd and a member of the supervisory board of Verdugt Holding
BV.

B.     Compensation

The aggregate compensation paid to executive officers of the Group including
benefits in kind for the year ended December 31, 2002 was approximately $1.5
million (2001  $1.8 million).

For the year ended December 31, 2002 the highest executive officer received
approximately $0.5 million (2001  $0.6 million) including benefits in kind.
All executive officers of the Company take part in bonus schemes that pay
according to profit targets set by the non-executive officers. The amount that
was paid in 2002 is included in the above paragraph.

C.     Board Practices

Officers of Trench are appointed on a continuing basis and are not required to
retire by rotation.

The Company has established an Audit Committee and a Remuneration Committee.
The members of both committees comprise Mr. Marc Boughton and Mr. James Joy who
are both non-executive officers of Trench.

The Audit Committee will meet at least four times per year or more frequently
as circumstances dictate. In addition, the Audit Committee will meet at least
annually with management and the independent auditor in separate sessions to
discuss any matters that the Audit Committee or either of these groups believes
should be discussed privately.

28



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

The Audit Committees responsibilities are to monitor the integrity of our
financial reporting process and systems of internal controls regarding
accounting, finance and legal compliance and to monitor the independence and
performance of Trenchs independent auditors. The Audit Committee has to
approve any non-audit work performed by Trenchs auditors.

The Remuneration Committees responsibilities include ensuring that the
remuneration and service contract terms of the executive officers and senior
management are appropriate.

Service contracts for officers of Trench do not provide for any benefits upon
termination of employment other than the right to notice.

D.     Employees

As of December 31, 2002, 2001 and 2000 respectively Trench employed 1,832,
1,839, and 1,770 employees worldwide. The increase from 2000 to 2001 was
mainly due to obtaining a majority position in Fushun, at the end of November
2001.

|                         |  |                         |       |      |  |      |       |  |  |  |       | 
|------------------------ |  | ----------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                         |  | Number of Employees    
|                         |  | Year Ended December 31,
|                         |  |                        
|                         |  | 2002                    |       | 2001 |  | 2000
|                         |  |                         |       |      |  |     
|American operations      |  |                         | 571   |      |  |      | 559   |  |  |  | 558   | 
|European operations      |  |                         | 852   |      |  |      | 895   |  |  |  | 915   | 
|International operations |  |                         | 409   |      |  |      | 385   |  |  |  | 297   | 
|                         |  |                         |       |      |  |      |       |  |  |  |       | 
|Total                    |  |                         | 1,832 |      |  |      | 1,839 |  |  |  | 1,770 | 
|                         |  |                         |       |      |  |      |       |  |  |  |       | 

Historically, we have had very good relations with our workforce. There are no
independent unions at the Canadian coil and bushing facilities, or at the
Brasilian, Chinese, English and Swiss operations. Workers at our Canadian
instrument transformer facility are unionized with the Canadian Auto Workers
union, and those at our French, Austrian and German facilities are unionized
with national or local work councils. All of our manufacturing sites have good
health and safety records, with no significant employee accidents reported at
any of the facilities since they became a part of the Group.

E.     Share Ownership

Although no shares in Trench Electric B.V. have been issued to persons listed
in subsection 6A above, there are arrangements to grant stock options in the
Parent that would increase the issued shares of the Parent by a maximum of 12%.
During the year, the Parent did not grant any stock options. No stock options
had been exercised as at December 31, 2002. For more information on stock
options, please refer to Item 17, note 21. Shares were issued on January 24,
2002 that increased the number of issued Ordinary A shares by 10,749 and the
Ordinary B Shares by 2,096. On the same date the par value of the shares was
converted from Dutch Guilders to Euros at the official exchange rate of NLG
2.20371 to one Euro ().

The share capital of Trench Electric Holding B.V., the parent of the Company is
as follows:

|                                    |  |                                                 |  |               |           | 
|----------------------------------- |  | ----------------------------------------------- |  | ------------- | --------- | 
|Authorized                          |  |                                                 |  | No. of Shares
|                                    |  |                                                 |  |              
|Ordinary shares A ten votes/share |  | 4.54 Euro / share par value                     |  |               | 27,285    | 
|Ordinary shares B one vote/share  |  | 0.45 Euro / share par value & 4.09 Euro premium |  |               | 4,986     | 
|Preference shares A (non-voting)  |  | 4.54 Euro / share par value                     |  |               | 1,700,000 | 
|Preference shares B (non-voting)  |  | 0.45 Euro / share par value & 4.09 Euro premium |  |               | 5,700,000 | 

|                                                                                  |  |               |           |      |  |              |            |              |  |  |           | 
|--------------------------------------------------------------------------------- |  | ------------- | --------- | ---- |  | ------------ | ---------- | ------------ |  |  | --------- | 
|                                                                                  |  |               |           |      |  | Stated value |            | Stated value
|Issued                                                                            |  | No. of Shares |           | Euro |  | US$         
|                                                                                  |  |               |           |      |  |             
|Ordinary shares A ten votes/share   Issued by January 24, 2002 and outstanding |  |               | 24,317    |      |  |              | 110,399    |              |  |  | 98,321    | 
|Ordinary shares B one vote/share  Issued January 24, 2002 and outstanding      |  |               | 4,984     |      |  |              | 2,263      |              |  |  | 2,015     | 
|Preference shares A  Issued on December 31, 1997 and outstanding               |  |               | 1,682,413 |      |  |              | 7,638,155  |              |  |  | 6,802,541 | 
|Preference shares B  Issued on December 31, 1997 and outstanding               |  |               | 560,804   |      |  |              | 254,605    |              |  |  | 226,751   | 
|                                                                                  |  |               |           |      |  |              |            |              |  |  |           | 
|Share premium on ordinary shares B (4.09 Euro / share)                          |  |               |           |      |  |              | 8,005,422  |              |  |  | 7,129,628 | 
|Share premium on ordinary shares B (4.09 Euro / share)                          |  |               |           |      |  |              | 20,365     |              |  |  | 18,137    | 
|Share premium on Preference shares B (4.09 Euro / share)                        |  |               |           |      |  |              | 2,291,445  |              |  |  | 2,040,761 | 
|                                                                                  |  |               |           |      |  |              |            |              |  |  |           | 
|Total shareholders equity                                                        |  |               |           |      |  |              | 10,317,232 |              |  |  | 9,188,526 | 
|                                                                                  |  |               |           |      |  |              |            |              |  |  |           | 

29



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

There are four principal shareholders, namely, CVC European Equity Partners
L.P., CVC European Equity Partners (Jersey) L.P., Citicorp Capital Investors
Europe Limited and Capital Ventures Nominees Limited. For additional
information, see Item 7.A.  Major shareholders.

Item 7. Major Shareholders and Related Party Transactions

A.     Major shareholders

The parent company of Trench Electric B.V. is Trench Electric Holding B.V.,
which owns all the outstanding shares of the Company.

There are nine shareholders of the Parent, namely, CVC European Equity Partners
L.P., CVC European Equity Partners (Jersey) L.P., Citicorp Capital Investors
Europe Limited, Capital Ventures Nominees Limited, Mr. Ronald Montgomery, Mr.
Howard Poulson, Mr. John Henry George Finlay, Mr. Allan Michael Finn and Mr.
Alfred Wittenhofer. There was an issue of shares on 24 January 2002. The
total number of shares owned by each shareholder and the value in Euros is as
follows.

|                                           |  |              |        |              |  |             |       |             |  |       |           |               |  |  |         |  |  |  |            |  |  |  |         | 
|------------------------------------------ |  | ------------ | ------ | ------------ |  | ----------- | ----- | ----------- |  | ----- | --------- | ------------- |  |  | ------- |  |  |  | ---------- |  |  |  | ------- | 
|                                           |  | A Ordinary |        | B Ordinary |  | A Prefer. |       | B Prefer. |  | Total |           | Proportion of
|                                           |  | # of shares  |        | # of shares  |  | # of shares |       | # of shares |  | Euro  |           | voting rights
|                                           |  |              |        |              |  |             |       |             |  |       |           |              
|CVC European Equity Partners L.P.          |  |              | 19,009 |              |  |             |      |             |  |       | 1,501,609 |               |  |  |        |  |  |  | 6,903,606  |  |  |  | 76.60%  | 
|CVC European Equity Partners (Jersey) L.P. |  |              | 2,289  |              |  |             |      |             |  |       | 180,804   |               |  |  |        |  |  |  | 831,242    |  |  |  | 9.22%   | 
|Citicorp Capital Investors Europe Limited  |  |              | 695    |              |  |             | 4,984 |             |  |       |          |               |  |  | 560,804 |  |  |  | 2,571,833  |  |  |  | 4.81%   | 
|Capital Ventures Nominees Limited          |  |              | 1,420  |              |  |             |      |             |  |       |          |               |  |  |        |  |  |  | 6,447      |  |  |  | 5.72%   | 
|Mr. Ronald Montgomery                      |  |              | 300    |              |  |             |      |             |  |       |          |               |  |  |        |  |  |  | 1,362      |  |  |  | 1.21%   | 
|Mr. Howard Poulson                         |  |              | 242    |              |  |             |      |             |  |       |          |               |  |  |        |  |  |  | 1,099      |  |  |  | 0.98%   | 
|Mr. John Henry George Finlay               |  |              | 130    |              |  |             |      |             |  |       |          |               |  |  |        |  |  |  | 590        |  |  |  | 0.52%   | 
|Mr. Allan Michael Finn                     |  |              | 116    |              |  |             |      |             |  |       |          |               |  |  |        |  |  |  | 527        |  |  |  | 0.47%   | 
|Mr. Alfred Wittenhofer                     |  |              | 116    |              |  |             |      |             |  |       |          |               |  |  |        |  |  |  | 527        |  |  |  | 0.47%   | 
|                                           |  |              |        |              |  |             |       |             |  |       |           |              
|                                           |  |              | 24,317 |              |  |             | 4,984 |             |  |       | 1,682,413 |               |  |  | 560,804 |  |  |  | 10,317,233 |  |  |  | 100.00% | 
|                                           |  |              |        |              |  |             |       |             |  |       |           |              

The voting rights associated with each class of share are indicated in Item
6.E.   Share ownership.

B.     Related Party transactions

During the year, the CVC group of companies charged the Company a monitoring
fee in the amount of $0.6 million (2001  $0.6 million, 2000  $0.4 million).

There are various loans between the Trench group companies that are mainly
related to financing the original acquisition from BBA in 1997.

The loans between Trench group members as of December 31, 2002 consist of the
following:

Trench Limited (Canada): loans from Trench Inc. related to financing the original acquisition from BBA



| |  |  | Cdn$29,546K loan from Trench Inc. (Rate 10.0625%)         
| | - |  | ----------------------------------------------------------
|
| |  |  | US$129,171K loan from Trench Inc. (Rate 10.3125%  11.73%)

Trench Inc. (Canadian Holding Co.): loan related to financing the original acquisition from BBA



| |  |  | Cdn$29,546K loan to Trench Limited (Rate 10.0625%)         
| | - |  | -----------------------------------------------------------
|
| |  |  | US$129,171K loan to Trench Limited (Rate 10.3125%  11.73%)
|
| |  |  | Cdn$28,283K loan from TEBV (Company) (Rate 10.00%)         
|
| |  |  | US$1,427K loan from TEBV (Company) (Rate 11.667%)          

30



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Finatrench (France): loan related to financing the original acquisition from BBA



| |  |  | Euro 32,799K loan from Valtimon (Rate 8.75%)
| | - |  | --------------------------------------------

Valtimon: loan related to financing the original acquisition from BBA



| |  |  | Euro 32,623K loan from TEBV (Rate 8.625%)   
| | - |  | --------------------------------------------
| |  |  | Euro 32,799K loan to Finatrench (Rate 8.75%)

TEBV: loan related to financing the original acquisition from BBA



| |  |  | Euro 32,623K loan to Valtimon (Rate 8.625%)    
| | - |  | -----------------------------------------------
| |  |  | Cdn$28,283K loan to Trench Inc. (Rate 10.00%)  
| |  |  | US$1,427K loan to Trench Inc. (Rate 11.667%)   
| |  |  | Euro 700K loan to Trench UK (Rate 5.0%)        
| |  |  | Euro 1.6 m loan from Trench Germany (Rate 5.0%)
| |  |  | Euro 4.6 m loan to Trench France (Rate 5.0%)   

Trench Electric SA (TESA)



| |  |  | US$24 m investment in 10.5% Trench Austria bonds
| | - |  | ------------------------------------------------
| |  |  | US$275K loan to Trench Switzerland (Rate 5.5%)  

Trench Switzerland



| |  |  | US$275K loan from TESA (Rate 5.5%)
| | - |  | ----------------------------------

Trench UK



| |  |  | Euro 700K loan from TEBV (Rate 5.0%)
| | - |  | ------------------------------------

Trench Germany



| |  |  | Euro 1.6 m loan to TEBV (Rate 5.0%)
| | - |  | -----------------------------------

Trench France



| |  |  | Euro 4.6 m loan from TEBV (Rate 5.0%)
| | - |  | -------------------------------------

Dividends were paid by Trench China (Shanghai) to various members of our group
as well as to our joint venture partner, SITW. Trench China paid RMB 15,474 ($1,870) to SITW, of which $1,176 related to an equalization dividend payment
in respect of the increase in ownership by Trench from 40% to 65% in 2000. At the time of closing, Trench agreed to adjust the payment of a dividend in
favour of SITW to properly reflect SITWs entitlement to the profits of the joint venture, which had accrued before the transfer of equity. It was not
until 2002 that we were able to obtain clear legal advice that it was legal
under Chinese company law to pay an equalization dividend to only one party.
Due to the unusual nature of this dividend and because too long a time had
elapsed to allow this item to be charged to goodwill, this amount was expensed
in the selling, general and administrative expenses. The remaining $694
relates to SITWs 35% share of a dividend paid to all of Trench Chinas
shareholders. In 2002, Trench China paid RMB 10,658K ($1,287K) to Trench
companies (Trench Canada, Trench Germany and Trench Switzerland) according to
their ownership levels. The following table summarizes the dividends paid by
Trench China:

|                         |  |         |       |           |  |         |       | 
|------------------------ |  | ------- | ----- | --------- |  | ------- | ----- | 
|                         |  |         |       |           |  | Paid to
|                         |  | Paid to |       | Trench   
|In 000s of U.S. Dollars |  | SITW    |       | Companies
|                         |  |         |       |          
|Equalization dividend    |  | $       | 1,176 |           |  | $       |      | 
|Regular dividends        |  |         | 694   |           |  |         | 1,287 | 
|                         |  |         |       |           |  |         |       | 
|Total                    |  | $       | 1,870 |           |  | $       | 1,287 | 
|                         |  |         |       |           |  |         |       | 

C.     Interest of experts and counsel

Not applicable  Annual Report on Form 20-F Equivalent

31



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Item 8. Financial Information

A.     Consolidated Statements and Other Financial Information

Refer to Item 17  Financial Statements.

Export Sales

Trench is incorporated in The Netherlands and we export all of our sales by way
of our manufacturing facilities located elsewhere in the world.

Legal Proceedings

Neither Trench Electric nor any of its subsidiaries is currently a party to any
pending legal proceedings other than such proceedings incidental to its
business. Management believes that such proceedings would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
the consolidated financial position, results of operations or liquidity of the
Company.

Dividend Distribution Policy

We are required under the articles of the joint venture agreements with our
Chinese joint venture partners to declare and pay dividends upon the approval
of the Board of Directors. Of the total dividends paid by Trench China in
Shanghai, 35% will accrue to our joint venture partner, SITW and of the total
dividends paid by Trench Fushun, 33% will accrue to SITW and 2% to FEPW.

B.     Significant Changes

On January 13, 2003, we announced a restructuring plan for Trench Suisse-France
(TSF). This restructuring plan aims to improve the long-term competitiveness
of TSF in the market. The restructuring includes the termination of 34 jobs in
the administrative area and in the production area the number of temporary jobs
will be reduced. The estimated costs associated with this restructuring is
approximately $1 million.

Item 9. The Offer and Listing

A.     Offer and listing details

Five Year History

The Notes were originally issued on December 15, 1997.

|                         |  |      |       |      |  |      |       |      |  |   |       |  |  |   |        | 
|------------------------ |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ------ | 
|Par = $100.00            |  | 2002 |       | 2001 |  | 2000 |       | 1999
|                         |  |      |       |      |  |      |       |     
|Annual High Market Price |  | $    | 82.00 |      |  | $    | 71.00 |      |  | $ | 74.00 |  |  | $ | 101.00 | 
|Annual Low Market Price  |  | $    | 71.00 |      |  | $    | 54.00 |      |  | $ | 58.00 |  |  | $ | 70.00  | 

Quarterly History

The high and low sell prices by quarter for 2002 and 2001 are as follows:

|      |  |                 |       |     |  |   |       | 
|----- |  | --------------- | ----- | --- |  | - | ----- | 
|2002  |  | High            |       | Low
|      |  |                 |       |    
|      |  | (Par = $100.00)
|Qtr 1 |  | $               | 75.00 |     |  | $ | 74.00 | 
|Qtr 2 |  |                 | 80.00 |     |  |   | 78.00 | 
|Qtr 3 |  |                 | 82.00 |     |  |   | 79.00 | 
|Qtr 4 |  |                 | 76.00 |     |  |   | 71.00 | 

32



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|      |  |      |       |     |  |   |       | 
|----- |  | ---- | ----- | --- |  | - | ----- | 
|2001  |  | High |       | Low
|      |  |      |       |    
|Qtr 1 |  | $    | 60.00 |     |  | $ | 54.00 | 
|Qtr 2 |  |      | 71.00 |     |  |   | 64.00 | 
|Qtr 3 |  |      | 71.00 |     |  |   | 69.00 | 
|Qtr 4 |  |      | 70.00 |     |  |   | 69.00 | 

Monthly History

The high and low sell prices for the last six months are as follows:

|          |  |                 |       |     |  |  |       | 
|--------- |  | --------------- | ----- | --- |  |  | ----- | 
|          |  | High            |       | Low
|          |  |                 |       |    
|          |  | (Par = $100.00)
|2003      |  |                 |       |     |  |  |       | 
|          |  |                 |       |     |  |  |       | 
|February  |  |                 | 75.00 |     |  |  | 74.00 | 
|January   |  |                 | 75.00 |     |  |  | 74.00 | 
|         
|2002      |  |                 |       |     |  |  |       | 
|          |  |                 |       |     |  |  |       | 
|December  |  |                 | 76.00 |     |  |  | 75.00 | 
|November  |  |                 | 72.00 |     |  |  | 71.00 | 
|October   |  |                 | 72.00 |     |  |  | 71.00 | 
|September |  |                 | 82.00 |     |  |  | 81.00 | 

B.     Plan of distribution

Not applicable  Annual Report on Form 20-F Equivalent

C.     Markets

The Notes are listed on the Luxembourg Stock Exchange.

We do not intend to list the Notes on any national securities exchange other
than the Luxembourg Stock Exchange or to seek the admission thereof to trading
in the National Association of Securities Dealers Automated Quotation System.
Accordingly, no assurance can be given that an active market will develop for
any of the Notes or as to the liquidity of the trading market for any of the
Notes. If a trading market does not develop or is not maintained, holders of
the Notes may experience difficulty in reselling such Notes or may be unable to
sell them at all. If a market for the Notes develops, any such market may be
discontinued at any time. If a trading market develops for the Notes, future
trading prices of such Notes will depend on many factors, including among other
things, prevailing interest rates, our results of operations and the market for
similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Group, the notes may trade at a discount from their principal amount.

D.     Selling shareholders

Not applicable  Annual Report on Form 20-F Equivalent

E.     Dilution

Not applicable  Annual Report on Form 20-F Equivalent

F.     Expenses of the issue

Not applicable  Annual Report on Form 20-F Equivalent

33



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Item 10. Additional Information

A.     Share Capital

Not applicable  Annual Report on Form 20-F Equivalent

B.     Memorandum and Articles of Association

The Articles of Association (Articles of Association) have been filed as an
exhibit to the report (see Item 19). The highlights of the Articles of
Association are as follows:

Company and Objects

The registered office of Trench Electric B.V. is in Amsterdam, The Netherlands
at Strawinskylaan 3105, 1077ZX. As per Article 2 of the Articles of
Association, the objects for which the Group is established are:



| | (a) |  | to finance companies and other enterprises, to borrow, to lend and to
raise funds, to participate in all types of financial transactions,
including the issue of bonds, promissory notes or other securities or
evidences of indebtedness, to bind the company and to grant security
over its assets for obligations of companies and other enterprises with
which it forms a group and of third parties;
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | to incorporate and to participate in any way whatsoever in, to
manage, to supervise and to cooperate with companies and other
enterprises, to acquire, to keep, to divest or in any other manner to
manage all sorts of participations and interests in other companies and
other enterprises, to enter into joint ventures with other companies and
enterprises;                                        
|
| | (c) |  | to acquire, to manage, to operate, to encumber and to divest personal
and real property and any right to or interest in personal and real
property;                                                                                                                                                                                                                                                      
|
| | (d) |  | to obtain, to exploit and to sell patents and other intellectual
property rights, to acquire and to grant licences, sub-licences and
similar rights of whatever name and description and if necessary, to
protect rights derived from patents and other intellectual property
rights, licences and similar rights against infringement by third
parties; and                                             
|
| | (e) |  | to engage, in any way whatsoever, in trading activities, including
the import, export, purchase, sale, distribution and marketing of
products and raw materials.                                                                                                                                                                                                                                         

Directors Role and Decision-Making Power

The Company shall be managed by a Board of Management consisting of
one or more members, who shall be appointed by the General Meeting of
Shareholders and may be suspended or removed from office by meeting at any
time. A legal entity may be a member of the Board of Management. The
remuneration of the members of the Board of Management, any rights to bonuses
and the further terms of appointment shall be determined by the General Meeting
of Shareholders for each member of the Board of Management individually.

If the Board of Management has more than one member, then the following
provisions will take place with respect to decision making. Resolutions of the
Board of Management are adopted by absolute majority of the votes validly cast.
Meetings of the Board of Management can be convened by any member giving
notice to all other members of the Board in writing, at least three days prior
to the date of the meeting.

The Board of Management shall be responsible for the management and
administration of the Company. The General Meeting of Shareholders may give
instructions to the Board of Management regarding the general directions of the
financial, social, economic and personnel policies to be pursued. The Board of
Management shall act in accordance with such instructions.

Loans for the purpose of acquiring shares in its capital may be granted by the
Company up to the amount of its distributable reserves, provided that the
Company shall maintain a non-distributable reserve equal to the amount
outstanding on such loans.

34



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Share Description

The authorized capital of the Company is two hundred thousand Dutch Guilders
(NLG 200,000 =  90,756) divided into two hundred thousand (200,000) common shares of one Dutch Guilder (NLG 1.00 =  0.45) each.
There is no other class of shares. The shares shall be indivisible, shall be
registered shares, and shall be numbered consecutively from one onwards. No
share certificates shall be issued. Shares not yet issued shall be issued at
such price, upon such conditions and at such times as the General Meeting of
Shareholders, or another body to which the General Meeting of Shareholders has
transferred its power in relation thereto, shall determine, provided that the
shares shall not be issued at a price below par value. In the event of new
shares being issued, each existing shareholder shall have a preferential right
to subscribe to them in proportion to his existing shareholding.

Each share carries the right to one vote, subject to the following two conditions.



| |  |  | Shares held by the Company or by a subsidiary carry no right to vote in a General Meeting.                                                                                                                                                                            
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In determining what proportion of shareholders exercise their votes,
are present or represented, or what proportion of the share capital is
provided or represented, the shares in respect of which no voting rights
can be exercised shall not be taken into account.

The transfer of shares requires a written instrument, taking into account the
provisions of Article 196 of the Dutch Civil Code, Book 2.

There are no limitations on the rights to own securities.

Meeting for Annual Accounts

Within five months after the end of the financial year, except for an extension
of a maximum of six months on account of special circumstances, the Board of
Management shall draw up the annual accounts, which shall be available at the
office of the Company for inspection by shareholders. General Meetings of
Shareholders shall be convened by means of notices sent not later than fifteen
days prior to the meeting by a Managing Director to the shareholders at the
address specified in the shareholders Register.

Distribution of Profit and Dividends

A portion of the profits as determined by the approved profit and loss account
shall be reserved by the Company at the General Meeting of Shareholders on a
proposal of the Board of Management. The remainder shall be the distributable
profits, the appropriation of which shall be determined by the General Meeting
of Shareholders.

The Company may only make distributions to its shareholders and to others
entitled to receive part of its distributable profits, if and to the extent
that the Companys shareholders equity exceeds the aggregate of its paid up
share capital (including calls made) and the amount of such reserves as it is
required by statute or by the Articles of Association to maintain. Insofar as
the Company has a profit, the General Meeting of Shareholders, on the proposal
of the Board of Management, may decide to pay an interim dividend, provided
that it complies with paragraph 3 of the Article dealing with distribution of
profit and dividends. Dividends (including interim dividends) shall be made
payable at the Companys offices from the date the dividend is declared, unless
the resolution concerned shall provide for a different date or place.
Dividends which have not been claimed within five years of being payable shall
be forfeited and shall accrue to the benefit of the Company.

C.     Material Contracts

On December 12, 2002, we completed the acquisition of an additional 14.6% share
in the Trench Fushun Bushing Co. Ltd (Fushun), previously known as Fushun
Reyrolle Bushing Co. Ltd, by Trench Limited in Canada. This brings our total
investment in the Fushun joint venture to 65%.

Our Canadian subsidiary, Trench Limited, has sold certain coil technology to
SITW for proceeds of approximately $10,000 to be received between 2002 and 2006.
Of the total proceeds, $5,000 was received in December 2002.

D.     Exchange Controls

Exchange Controls and Other Limitations Affecting Security Holders

(a) There are currently no governmental laws, decrees or regulations in The
Netherlands, Canada or Luxembourg that restrict the export or import of
capital, including, but not limited to, foreign exchange controls, or that
affect the remittance of interest or other payments to non-resident holders of the Notes.

35



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

(b)  There are no limitations under Dutch, Canadian or Luxembourg law or Trench
Electrics Articles of Association on the right of non-resident or foreign
owners to hold Trench Electrics Notes.

E.     Taxation

Material Non-U.S. Income Tax Considerations

This summary is of a general nature and is included herein solely for
informational purposes. It is not intended to be, nor should it be construed
to be, legal or tax advice. No representation with respect to the consequences
to any particular holder of the Notes is made. Prospective purchasers should
consult their own tax advisors with respect to their particular circumstances
and the effects of local, state, federal and foreign (including Luxembourg and
Canadian) tax laws to which they may be subject. Non-United States holders
should consult their own tax advisors with respect to both their local tax
considerations and non-local tax considerations.

Canada

The following describes the material Canadian federal income tax consequences
generally applicable to a holder of a Note who for the purposes of the Income
Tax Act (Canada) (the Canadian Tax Act), and at all relevant times, is a
non-resident of Canada, deals at arms length with Trench Canada and does not
use or hold and is not deemed to use or hold the Note in the course of carrying
on business in Canada and is not an insurer that carries on an insurance
business in Canada and elsewhere. This summary is based on the current
provisions of the Canadian Tax Act and the regulations there under (the
Regulations) in force on the date hereof, counsels understanding of the
current administrative and assessing practices and policies published by Canada
Customs and Revenue Agency, and all specific proposals to amend the Canadian
Tax Act and the Regulations publicly announced by the Canadian Minister of
Finance prior to the date hereof (the Proposed Amendments). This summary is
not exhaustive of all possible Canadian federal income tax consequences and,
except for the Proposed Amendments, does not take into account or anticipate
changes in the law or the administrative or assessing practices of Canada
Customs and Revenue Agency, whether by judicial, governmental or legislative
action or interpretation, nor does it take into account provincial, territorial
or foreign tax legislation or considerations.

This summary is of a general nature only and is not intended to be, and should
not be interpreted as, legal or tax advice to any particular holder of a Note.
Accordingly, prospective purchasers are urged to consult their own tax advisors
with respect to their particular circumstances.

The payment by Trench Canada (under or with respect to its Guarantee) of
interest, principal or premium (if any) on the Notes will be exempt from
Canadian withholding tax. No other tax on income (including taxable capital
gains) will be payable under the Canadian Tax Act in respect of the holding,
redemption or disposition of the Notes or the receipt of interest, principal or
premium (if any) thereon.

Luxembourg

Payments of interest on the Notes will not be subject to withholding taxes in
Luxembourg. A holder of Notes who is not a resident of Luxembourg, does not
have a permanent establishment in Luxembourg and does not hold Notes in
connection with the conduct of a business in Luxembourg, will not be subject to
income or withholding taxes imposed by jurisdictions in respect of gains
realized on the sale, exchange or other disposition of Notes.

Transfers of interests in the Notes outside Luxembourg will not be subject to
any stamp duties or other transfer taxes imposed by Luxembourg.

F.     Dividends and Paying Agents

Not applicable  Annual Report on Form 20-F Equivalent

G.     Statement by Experts

Not applicable  Annual Report on Form 20-F Equivalent

36



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

H.     Documents on display

Certain documents concerning the Group which are referred to in the document
will be either on file with the SEC or available for inspection at the
Companys principal place of business as shown in Item 4.A.

I.     Subsidiary Information

Not applicable  Annual Report on Form 20-F Equivalent

Item 11. Quantitative and Qualitative Disclosure about Market Risks

The following discussion of our financial risk management activities includes
forward-looking statements that involve risks and uncertainties. Actual
results could differ materially from those projected in the forward looking
statements.

As a result of its global operating and financial activities, we are exposed to
market risk by way of changes in interest rates and foreign currency exchange
rates. Theses changes may adversely affect our consolidated financial position
and results of operations. We seek to manage market risk by using various
financial instruments to manage its primary market exposures associated with
our underlying assets and liabilities as well as anticipated transactions.
These financial instruments are used to reduce risk by essentially creating
offsetting market exposures. These contracts are entered into with financial
institutions in accordance with Group treasury policies and procedures, thereby
reducing the risk of credit loss. Derivative financial instruments are used
only for purposes other than trading.

The following discussion contains sensitivity analyses which present the
hypothetical loss in cash flows or fair values of the financial instruments and
derivative financial instruments held by our Group as of December 31, 2002 that
were subject to changes in interest rates and foreign currency exchange rates.
The range of sensitivities chosen for these analyses reflects our view of
changes that are reasonably possible over a one-year period.

In the normal course of business, we also face risks that are either
non-financial or non-quantifiable. These risks principally include country,
commodity, credit and legal risks and are not represented in the following
analyses.

Interest Rate Risk

Our exposure to changes in interest rates result from our borrowing activities
used to meet our liquidity needs. Long-term debt is generally used to finance
long-term investments, while short-term debt is used to meet our working
capital requirements.

The majority of our long-term borrowings are in fixed-rate instruments that are
not exposed to changes in interest rates. Other long-term and short-term
borrowings have floating interest rates (e.g. LIBOR (London Interbank Offering
Rate) plus 2.0% to 2.5%). There is inherent rollover risk for short-term
borrowings as they mature and are renewed at current market rates. The extent
of this risk is not quantifiable or predictable because of the variability of
future interest rates and business financing requirements. Assuming an
interest rate increase of 1% on the outstanding term loan facility and
revolving credit facility, as at December 31, 2002, our additional annualized
interest costs would be approximately $0.243 million (2001  $0.357 million).

Foreign Currency Exchange Rates

We conduct our business internationally, and our principal manufacturing and
sales operations are located in Austria, Brasil, Canada, China, England,
France, Germany, Malaysia, Switzerland and the United States. For financial
reporting purposes, we have chosen the U.S. dollar as our reporting currency.
Therefore, changes in the rate of exchange between the U.S. dollar and the
local currencies in which the financial statements of our international
operations are maintained affect our results of operations and financial
position as reported in our financial statements.

Our long term debt is denominated in U.S. dollars, Euros, Chinese renminbis and
British pounds while our subsidiary operations account for their businesses in local
currencies; namely, Brasilian reals, British pounds, Canadian dollars, Chinese
renminbis, Swiss francs and U.S. dollars. Only as payments are made against
long term debt over the next several years will an actual loss or gain
crystallize. We also utilize

37



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

U.S. denominated commercial paper and borrowings as well as
foreign currency denominated borrowings to fund our working capital and
investment needs.

We occasionally enter into foreign currency forward contracts to manage foreign
currency exposures related to sales to foreign customers. These contracts are
designed to hedge firm commitments to pay European, Asian, Australian and North
American currencies within a one-year period. The maturities of these
contracts are planned to coincide with the receipts of the foreign funds.
As at December 31, 2002, the Company had incurred net foreign currency gain of
$2.3 million (2001  loss of $9.1 million). The Company would be subject to a
foreign currency exchange loss of approximately $15.1 million
(2001  $15.1 million), on the senior subordinated notes, assuming a 10% foreign
currency exchange devaluation from the December 31, 2002 spot rates of the
issuers, vis-à-vis the U.S. dollar. Foreign exchange gains include $5.8
million (2001  loss of $8.9 million) relating to the Senior Notes, being the
difference between the US dollar exchange rate at December 31, 2001 and the
rate at December 31, 2002. There is no immediate cash receipt as a result of
this gain.

Counterparty Risk from the Use of Derivative Financial Instruments

We are exposed to credit (or repayment) risk and market risk through the use of
derivative instruments. If the counterparty fails to fulfill its performance
obligations under a derivative contract, our credit risk will equal the fair
value gain in a derivative. Currently, when the fair value of a derivative
contract is positive, this indicates that the counterparty owes us, thus
creating a repayment risk. When the fair value of a derivative contract is
negative, we owe the counterparty and, therefore, assume no repayment risk.

In order to minimize the credit risk in derivative instruments, we enter into
transactions with high quality counterparties, which include financial
institutions that satisfy our established credit approval criteria. Derivative
transactions are generally executed on the basis of standard agreements that
allow all outstanding transactions with contracting partners to be offset.

The following table presents, by counterparty risk, our derivative positions as
of December 31, 2002:

|                 |  |              |  |            |    |  |  | 
|---------------- |  | ------------ |  | ---------- | -- |  |  | 
|Long-term Rating |  | Counterparty |  | Fair value
|                 |  |              |  |           
|A -              |  | Commerzbank  |  | $          | 45 | 

Item 12. Description of Securities Other than Equity Securities

Not applicable  Annual Report on Form 20-F Equivalent

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None

Item 15. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Companys Chief
Executive Officer and Chief Financial Officer, after evaluating the
effectiveness of the Companys disclosure controls and procedures (as defined
in Exchange Act Rules 13a  14(c) and 15d  14(c)) as of a date within 90
days of the filing date of the annual report, have concluded that the Companys
disclosure controls and procedures are adequate and effective to ensure that
material information relating to the Company and its consolidated subsidiaries
would be made known to them by others within those entities, particularly
during the period in which this annual report is being prepared.

38



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Changes in Internal Controls. There were no significant changes in the
Companys internal controls or in other factors that could significantly affect
the Companys disclosure controls and procedures subsequent to the evaluation
date, nor any significant deficiencies or material weaknesses in such
disclosure controls and procedures requiring corrective actions.

Item 16A.

Audit Committee Financial Expert Disclosure

On February 4, 2003 the Board of Directors of our Parent determined that Marc
Boughton, who was appointed as a member of the Audit Committee on the same
date, meets the standard of audit committee financial expert as defined by
the Sarbanes  Oxley Act.

Item 16B.

Code of Ethics Disclosure

The Board of Directors of our Parent approved a Code of Ethics on February 4,
2003, which is provided as an exhibit to this report. Any amendments or
waivers will be disclosed in future annual reports on Form 20-F Equivalent and
quarterly reports on Form 6-K Equivalent.

PART III

Item 17. Financial Statements

See pages F-1 to F-35.

Item 18. Financial Statements

Not applicable (see Item 17)

Item 19. Exhibits

|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                      |    |  
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | -- | -
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  | Location of Document
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  | in Sequential       
|Item No. |  |                                                                                                                                                                                                                                                                                                                                                                                          |  | Numbering System    
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                     
|1.1      |  | Articles of Association of Trench Electric B.V.                                                                                                                                                                                                                                                                                                                                          |  |                      | (1 | )
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                      |    |  
|2.1      |  | Indenture dated as of December 16, 1997 among Trench Electric B.V.,
Trench Inc., Trench Electric S.A., Trench Limited, Haefely Trench
AG, Haefely Trench Austria GmbH, Haefely Trench MWB GmbH, and The
Chase Manhattan Bank, as trustee                                                                                                                                                 |  |                      | (1 | )
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                      |    |  
|2.2      |  | Form of 10 1/4% Senior Subordinated Note                                                                                                                                                                                                                                                                                                                                                 |  |                      | (1 | )
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                      |    |  
|2.3      |  | Registration Rights Agreement dated as of December 11, 1997 among
Trench Electric B.V., Trench Inc., Trench Electric S.A., Trench
Limited, Haefely Trench AG, Haefely Trench Austria GmbH, Haefely
Trench MWB GmbH and Credit Suisse First Boston Corporation                                                                                                                            |  |                      | (1 | )
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                      |    |  
|2.4      |  | Purchase Agreement dated as of December 11, 1997 among the Issuers,
the Guarantors, and Credit Suisse First Boston Corporation                                                                                                                                                                                                                                                           |  |                      | (1 | )
|         |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                      |    |  
|2.5      |  | Facilities Agreement dated 15 September 1997, between Valiant
Investments B.V., Finatrench (France) S.A., Haefely Trench S.A.,
Trench Holding A.G., Haefely Holding A.G., Haefely Trench A.G.,
Haefely Trench MWB GmbH, Haefely Trench Austria A.G., Trench GmbH,
Trench Corporation, BBA Canada Limited, Trench Inc., Credit Suisse
First Boston, and Credit Suisse First Boston Canada |  |                      | (1 | )

39



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | -- | -
|2.6 |  | Supplemental Agreement relating to the Facilities Agreement dated
15 September 1997, dated 16 December 1997, between Valiant
Investments B.V., Finatrench (France) S.A., Haefely Trench S.A.,
Trench Holding A.G., Haefely Holding A.G., Haefely Trench A.G.,
Haefely Trench MWB GmbH, Haefely Trench Austria GmbH, Trench
Limited, Trench Inc., Trench Electric B.V., Valtimon Holdings B.V.,
Trench Electric S.A., Credit Suisse First Boston, and Credit Suisse
First Boston Canada                                                                                       |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|2.7 |  | Intercreditor Agreement dated 15 September 1997, between Credit
Suisse First Boston, Credit Suisse First Boston Corporation, BBA
Properties Limited, CVC European Equity Partners L.P., CVC European
Equity Partners (Jersey) L.P., Capital Ventures Nominees Limited,
Citicorp Capital Investors Europe Limited, Valiant Investments
B.V., Finatrench (France) S.A., Haefely Trench S.A., Trench Holding
A.G., Haefely Holding A.G., Haefely Trench A.G., Haefely Trench MWB
GmbH, Haefely Trench A.G., Trench GmbH, Trench Inc., Trench
Corporation and BBA Canada Limited |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|3.1 |  | Agreement for the Sale and Purchase of the issued share capital of
the Haefely Trench group of companies, dated 15 September 1997,
between BBA Group PLC, BBA Properties Limited, BBA Overseas
Holdings Limited, BBA France S.A., The Guthrie Corporation Limited,
Valiant Investments B.V., Trench GmbH, Finatrench France S.A. and
Trench Holding AG                                                                                                                                                                                                                       |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|3.2 |  | Environmental Deed of Indemnity, dated 15 September 1997, between
BBA Group PLC, BBA Properties Limited, BBA Overseas Holdings
Limited, BBA France S.A., The Guthrie Corporation Limited, Valiant
Investments B.V., Trench GmbH, Finatrench France S.A. and Trench
Holding AG                                                                                                                                                                                                                                                                                                |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|3.3 |  | Letter of Employment, dated 15 September 1997, from Trench Inc. to
Ron Montgomery                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|3.4 |  | Letter of Employment, dated 15 September 1997, from Trench Inc. to
Allan Finn                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|3.5 |  | Letter of Employment, dated 15 September 1997, from Trench Inc. to
John Finlay                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|3.6 |  | Asset Purchase Agreement dated July 1, 1999 by and between Haefely
Test AG, a Swiss Corporation and Trench Switzerland AG, a Swiss
Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|4.1 |  | Facilities Agreement in relation to a US$25,000,000 Term Facility
and a US$25,000,000 Revolving Credit Facility between Trench
Electric Holding BV as parent along with Original Borrowers and
Guarantors and Charging Companies and CIBC World Markets Plc.,
dated April 18, 2000.                                                                                                                                                                                                                                                                                          |  |  | (1 | )
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|4.2 |  | Asset Sale and Purchase Agreement dated April 18, 2000 by and
between VA Tech Reyrolle Limited, VA Tech Properties (UK) Limited,
VA Tech Elin Service B.V., Trench (UK) Limited and Trench Limited.                                                                                                                                                                                                                                                                                                                                                                          |  |  |    |  
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |    |  
|4.3 |  | CVT Base Box Technology Head-Licence Agreement dated March 3, 2000
by and between Trench Limited, Shanghai Instrument Transformer
Works and Shanghai Sitico International Trading Company                                                                                                                                                                                                                                                                                                                                                                                    |  |  |    |  

40



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|     |  |                                                                                                                                                                                                                                     
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.4  |  | Bushing Technology Head-Licence Agreement dated March 3, 2000 by
and between Trench Switzerland AG, Shanghai Instrument Transformer
Works and Shanghai Sitico International Trading Company                                         
|     |  |                                                                                                                                                                                                                                     
|4.5  |  | Restated Articles of Association for MWB (Shanghai) Co., Ltd. to
be renamed Trench China Ltd. dated March 3, 2000.                                                                                                                  
|     |  |                                                                                                                                                                                                                                     
|4.6  |  | Restated Equity Joint Venture Contract for MWB (Shanghai) Co.,
Ltd. to be renamed Trench China Ltd. dated March 3, 2000 among
Shanghai Instrument Transformer Works, Trench Germany GmbH, Trench
Switzerland AG, and Trench Limited.
|     |  |                                                                                                                                                                                                                                     
|4.7  |  | Agreement to amend the Joint Venture Contract, Articles of
Association and Related Agreement of Fushun Reyrolle Bushing
Company Limited dated 21 April 2001.                                                                        
|     |  |                                                                                                                                                                                                                                     
|4.8  |  | Equity Transfer Agreement to increase the shareholding in Trench
Fushun Bushing Co. Ltd dated December 12, 2002                                                                                                                     
|     |  |                                                                                                                                                                                                                                     
|4.9  |  | Shunt Reactor Technology Head Licence Agreement dated April 16,
2002 by and between Trench Limited, Shanghai Instrument
Transformer Works Co. Ltd., and MWB (Shanghai) Co. Ltd.                                                     
|     |  |                                                                                                                                                                                                                                     
|4.10 |  | Series Reactor Technology Head Licence Agreement dated April 16,
2002 by and between Trench Limited, Shanghai Instrument
Transformer Works Co. Ltd., and MWB (Shanghai) Co. Ltd.                                                    
|     |  |                                                                                                                                                                                                                                     
|4.11 |  | Line Trap Technology Head Licence Agreement dated April 16, 2002
by and between Trench Limited, Shanghai Instrument Transformer
Works Co. Ltd., and MWB (Shanghai) Co. Ltd.                                                         
|     |  |                                                                                                                                                                                                                                     
|99.1 |  | Code of Ethics dated February 4, 2003                                                                                                                                                                                               



---

|(1) |  | Incorporated by reference to the Companys Form F-4 Registration Statement
No. 333-8334
|--- |  | ---------------------------------------------------------------------------------------

41



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|                                                                                     |  |             
|------------------------------------------------------------------------------------ |  | ------------
|Index to Financial Statements                                                        |  |             
| Report of Independent Accountants                                                  |  | F-2         
| Consolidated Balance Sheets                                                        |  | F-3         
| Consolidated Statements of Income (Loss) and Comprehensive
Income (Loss)           |  | F-4         
| Consolidated Statements of Shareholders Equity                                    |  | F-5         
| Consolidated Statements of Cash Flows                                              |  | F-6         
| Notes to Consolidated Financial Statements                                         |  | F-7 to F-25 
| Supplemental Combining Balance Sheets                                              |  | F-26 to F-27
| Supplemental Combining Statements of Income (Loss)
and Comprehensive Income (Loss) |  | F-28 to F-29
| Supplemental Combining Statements of Shareholders Equity                          |  | F-30        
| Supplemental Combining Statements of Cash Flows                                    |  | F-31 to F-33
|                                                                                     |  |             
|Other information                                                                    |  |             
| Analysis of provisions                                                             |  | F-34        
| Subsidiary information                                                             |  | F-35        

F-1



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##### 



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
TRENCH ELECTRIC B.V.

We have audited the consolidated balance sheets of Trench Electric B.V. and its
subsidiaries (the Group) as of December 31, 2002 and 2001 and related
consolidated statements of income (loss) and comprehensive income (loss), of
shareholders equity and of cash flows for each of the years then ended. These
financial statements are the responsibility of the Groups management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

The Groups financial statements do not disclose certain segment information
required by FAS 131, including information about countries in which the Group
earns revenues and holds assets, and information on income before taxes,
extraordinary items and minority interests. In our opinion, disclosure of this
information is required by accounting principles generally accepted in the
United States of America.

In our opinion, except for the omission of the information discussed in the
preceding paragraph, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of the Group as at December 31, 2002 and 2001, and the consolidated results of
its operations and its cash flows for each of the three years ended December
31, 2002 in conformity with accounting principles generally accepted in the
United States of America.

(PRICEWATERHOUSE COPPERS LLP SIG)

PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Leeds, United Kingdom
March 24, 2003

F-2



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

CONSOLIDATED BALANCE SHEETS

(expressed in thousands of U.S. dollars, except for share information)

|                                                                                                                                                      |  |          |         |          |  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ------- | -------- |  | - | ------- | -
|                                                                                                                                                      |  | Dec. 31, |         | Dec. 31,
|                                                                                                                                                      |  | 2002     |         | 2001    
|                                                                                                                                                      |  |          |         |         
|ASSETS                                                                                                                                                |  |          |         |          |  |   |         |  
|Current assets                                                                                                                                        |  |          |         |          |  |   |         |  
|Cash and cash equivalents                                                                                                                             |  | $        | 15,422  |          |  | $ | 11,729  |  
|Trade accounts receivable  net of allowance of $1,751
(2001 - $843)                                                                                  |  |          | 67,266  |          |  |   | 64,400  |  
|Inventories, net (note 4)                                                                                                                             |  |          | 39,888  |          |  |   | 35,944  |  
|Prepayments                                                                                                                                           |  |          | 643     |          |  |   | 433     |  
|Deferred income tax (note 7)                                                                                                                          |  |          | 362     |          |  |   | 431     |  
|Other current assets                                                                                                                                  |  |          | 4,518   |          |  |   | 4,188   |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|Total current assets                                                                                                                                  |  |          | 128,099 |          |  |   | 117,125 |  
|Property, plant and equipment (note 5)                                                                                                                |  |          | 71,215  |          |  |   | 65,037  |  
|Goodwill (notes 3 and 6)                                                                                                                              |  |          | 123,910 |          |  |   | 115,382 |  
|Prepaid pension (note 10)                                                                                                                             |  |          | 252     |          |  |   | 1,006   |  
|Deferred financing costs  net of accumulated
amortization of $9,615 (2001  $7,163 )                                                                 |  |          | 4,720   |          |  |   | 5,575   |  
|Deferred income tax (note 7)                                                                                                                          |  |          | 11,709  |          |  |   | 11,077  |  
|Long-term receivables                                                                                                                                 |  |          | 5,735   |          |  |   | 1,766   |  
|Other assets                                                                                                                                          |  |          | 80      |          |  |   | 69      |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|Total assets                                                                                                                                          |  | $        | 345,720 |          |  | $ | 317,037 |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|LIABILITIES                                                                                                                                           |  |          |         |          |  |   |         |  
|Current liabilities                                                                                                                                   |  |          |         |          |  |   |         |  
|Bank indebtedness (note 8)                                                                                                                            |  | $        | 5,808   |          |  | $ | 10,699  |  
|Trade accounts payable                                                                                                                                |  |          | 27,355  |          |  |   | 33,138  |  
|Accrued liabilities (note 9)                                                                                                                          |  |          | 25,602  |          |  |   | 21,466  |  
|Advance billings                                                                                                                                      |  |          | 6,082   |          |  |   | 2,571   |  
|Due to parent (note 7)                                                                                                                                |  |          | 6,103   |          |  |   | 3,696   |  
|Income tax payable                                                                                                                                    |  |          | 3,307   |          |  |   | 4,527   |  
|Deferred income tax (note 7)                                                                                                                          |  |          | 180     |          |  |   | 136     |  
|Current portion of obligation under capital lease (note 12)                                                                                           |  |          | 557     |          |  |   | 503     |  
|Current portion of long-term debt (note 8)                                                                                                            |  |          | 13,286  |          |  |   | 10,885  |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|Total current liabilities                                                                                                                             |  |          | 88,280  |          |  |   | 87,621  |  
|Long-term portion of obligation under capital lease (note 12)                                                                                         |  |          | 119     |          |  |   | 577     |  
|Long-term debt (note 8)                                                                                                                               |  |          | 166,050 |          |  |   | 170,692 |  
|Pension and post-retirement benefits (notes 10 and 11)                                                                                                |  |          | 16,587  |          |  |   | 13,956  |  
|Deferred income tax (note 7)                                                                                                                          |  |          | 12,087  |          |  |   | 10,332  |  
|Other liabilities (note 13)                                                                                                                           |  |          | 12,090  |          |  |   | 3,509   |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|Total liabilities                                                                                                                                     |  |          | 295,213 |          |  |   | 286,687 |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|Contingencies and commitments (note 12)                                                                                                               |  |          |         |          |  |   |         |  
|Minority interest                                                                                                                                     |  |          | 8,698   |          |  |   | 6,933   |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|SHAREHOLDERS EQUITY                                                                                                                                  |  |          |         |          |  |   |         |  
|Share capital                                                                                                                                         |  |          |         |          |  |   |         |  
|Authorized (200,000 common shares of one Dutch Guilder (0.45
) each, Issued and outstanding 40,000 common shares of one
Dutch Guilder (0.45 ) each) |  |          | 20      |          |  |   | 20      |  
|Additional paid in capital                                                                                                                            |  |          | 75,694  |          |  |   | 75,694  |  
|Accumulated other comprehensive loss                                                                                                                  |  |          | (2,922  | )        |  |   | (15,526 | )
|Accumulated deficit                                                                                                                                   |  |          | (30,983 | )        |  |   | (36,771 | )
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|Total shareholders equity                                                                                                                            |  |          | 41,809  |          |  |   | 23,417  |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  
|Total liabilities and shareholders equity                                                                                                            |  | $        | 345,720 |          |  | $ | 317,037 |  
|                                                                                                                                                      |  |          |         |          |  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.

F-3



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(expressed in thousands of U.S. dollars except per share data)

|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|------------------------------------------------------- |  | ------------ | ------- | ------------ |  | ------------ | ------- | - |  | - | ------- | -
|                                                        |  | Year ended   |         | Year ended   |  | Year ended  
|                                                        |  | December 31, |         | December 31, |  | December 31,
|                                                        |  | 2002         |         | 2001         |  | 2000        
|                                                        |  |              |         |              |  |             
|Sales                                                   |  | $            | 255,886 |              |  | $            | 224,256 |   |  | $ | 200,814 |  
|Cost of sales                                           |  |              | 178,197 |              |  |              | 160,781 |   |  |   | 141,228 |  
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|Gross profit                                            |  |              | 77,689  |              |  |              | 63,475  |   |  |   | 59,586  |  
|Contract termination                                    |  |              |        |              |  |              |        |   |  |   | 644     |  
|Selling, general and administrative
expenses            |  |              | 45,093  |              |  |              | 46,328  |   |  |   | 44,379  |  
|Gain on sale of assets                                  |  |              | (755    | )            |  |              |        |   |  |   |        |  
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|Operating income                                        |  |              | 33,351  |              |  |              | 17,147  |   |  |   | 14,563  |  
|Foreign exchange (gains) losses                         |  |              | (2,293  | )            |  |              | 9,102   |   |  |   | 7,665   |  
|Gain on extinguishment of debt                          |  |              |        |              |  |              |        |   |  |   | (2,170  | )
|Interest expense and other                              |  |              | 19,638  |              |  |              | 19,918  |   |  |   | 23,729  |  
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|Income (loss) before income taxes
and minority interest |  |              | 16,006  |              |  |              | (11,873 | ) |  |   | (14,661 | )
|Provision for income taxes (note 7)                     |  |              | 6,765   |              |  |              | 2,162   |   |  |   | 2,985   |  
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|Income (loss) before minority interest                  |  |              | 9,241   |              |  |              | (14,035 | ) |  |   | (17,646 | )
|Minority interest                                       |  |              | 2,759   |              |  |              | 1,192   |   |  |   | 272     |  
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|Net income (loss) for the period                        |  |              | 6,482   |              |  |              | (15,227 | ) |  |   | (17,918 | )
|Minimum pension liability adjustment, net of tax        |  |              | (285    | )            |  |              | 114     |   |  |   | (912    | )
|Foreign currency translation adjustment                 |  |              | 12,889  |              |  |              | (614    | ) |  |   | (3,073  | )
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|Comprehensive income (loss) for the
period              |  | $            | 19,086  |              |  | $            | (15,727 | ) |  | $ | (21,903 | )
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  
|Basic and diluted earnings per share:                   |  |              |         |              |  |              |         |   |  |   |         |  
|Earnings (loss) per common share                        |  | $            | 162.05  |              |  | $            | (380.68 | ) |  | $ | (447.95 | )
|                                                        |  |              |         |              |  |              |         |   |  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.

F-4



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

(expressed in thousands of U.S. dollars except for issued shares)

|                                                   |  |        |        |         |  |         |    |                  |  |             |        |               |  |             |         |   |  |       |         |   |  |   |         |  
|-------------------------------------------------- |  | ------ | ------ | ------- |  | ------- | -- | ---------------- |  | ----------- | ------ | ------------- |  | ----------- | ------- | - |  | ----- | ------- | - |  | - | ------- | -
|                                                   |  |        |        |         |  |         |    |                  |  |             |        |               |  | Accumulated |         |   |  |       |         |   |  |  
|                                                   |  |        |        |         |  |         |    |                  |  | Additional  |        | other         |  |             |         |   |  | Total
|                                                   |  | Issued |        | Share   |  | paid in |    | comprehensive    |  | Accumulated |        | shareholder's
|                                                   |  | shares |        | capital |  | capital |    | income (expense) |  | deficit     |        | equity       
|                                                   |  |        |        |         |  |         |    |                  |  |             |        |              
|Balance   December 31, 1999                       |  |        | 40,000 |         |  | $       | 20 |                  |  | $           | 75,694 |               |  | $           | (11,041 | ) |  | $     | (3,626  | ) |  | $ | 61,047  |  
|Net loss for the year                              |  |        |       |         |  |         |   |                  |  |             |       |               |  |             |        |   |  |       | (17,918 | ) |  |   | (17,918 | )
|Minimum pension liability adjustment               |  |        |       |         |  |         |   |                  |  |             |       |               |  |             | (912    | ) |  |       |        |   |  |   | (912    | )
|Foreign currency cumulative
translation adjustment |  |        |       |         |  |         |   |                  |  |             |       |               |  |             | (3,073  | ) |  |       |        |   |  |   | (3,073  | )
|                                                   |  |        |        |         |  |         |    |                  |  |             |        |               |  |             |         |   |  |       |         |   |  |   |         |  
|Balance   December 31, 2000                       |  |        | 40,000 |         |  | $       | 20 |                  |  | $           | 75,694 |               |  | $           | (15,026 | ) |  | $     | (21,544 | ) |  | $ | 39,144  |  
|Net loss for the year                              |  |        |       |         |  |         |   |                  |  |             |       |               |  |             |        |   |  |       | (15,227 | ) |  |   | (15,227 | )
|Minimum pension liability adjustment               |  |        |       |         |  |         |   |                  |  |             |       |               |  |             | 114     |   |  |       |        |   |  |   | 114     |  
|Foreign currency cumulative
translation adjustment |  |        |       |         |  |         |   |                  |  |             |       |               |  |             | (614    | ) |  |       |        |   |  |   | (614    | )
|                                                   |  |        |        |         |  |         |    |                  |  |             |        |               |  |             |         |   |  |       |         |   |  |   |         |  
|Balance   December 31, 2001                       |  |        | 40,000 |         |  | $       | 20 |                  |  | $           | 75,694 |               |  | $           | (15,526 | ) |  | $     | (36,771 | ) |  | $ | 23,417  |  
|Net income for the year                            |  |        |       |         |  |         |   |                  |  |             |       |               |  |             |        |   |  |       | 6,482   |   |  |   | 6,482   |  
|Dividends paid out to minority interests           |  |        |       |         |  |         |   |                  |  |             |       |               |  |             |        |   |  |       | (694    | ) |  |   | (694    | )
|Minimum pension liability adjustment               |  |        |       |         |  |         |   |                  |  |             |       |               |  |             | (285    | ) |  |       |        |   |  |   | (285    | )
|Foreign currency cumulative
translation adjustment |  |        |       |         |  |         |   |                  |  |             |       |               |  |             | 12,889  |   |  |       |        |   |  |   | 12,889  |  
|                                                   |  |        |        |         |  |         |    |                  |  |             |        |               |  |             |         |   |  |       |         |   |  |   |         |  
|Balance   December 31, 2002                       |  |        | 40,000 |         |  | $       | 20 |                  |  | $           | 75,694 |               |  | $           | (2,922  | ) |  | $     | (30,983 | ) |  | $ | 41,809  |  
|                                                   |  |        |        |         |  |         |    |                  |  |             |        |               |  |             |         |   |  |       |         |   |  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.

F-5



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

CONSOLIDATED STATEMENTS OF CASH FLOWS

(expressed in thousands of U.S. dollars)

|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |        |  
|--------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | - | ------------ | ------ | ------------ | - | ------------ | ----- | - | - | ------- | ------ | -
|                                                                                  |                                                                         |   | Year ended   |        | Year ended   |   | Year ended  
|                                                                                  |                                                                         |   | December 31, |        | December 31, |   | December 31,
|                                                                                  |                                                                         |   | 2002         |        | 2001         |   | 2000        
|                                                                                  |                                                                         |   |              |        |              |   |             
|Cash (used in) provided by                                                        |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|OPERATING ACTIVITIES                                                              |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Net income (loss) for the period                                                  |                                                                         | $ | 6,482        |        |              | $ | (15,227      | )     |   | $ | (17,918 | )     
|Adjustments to reconcile net income to net cash
provided by operating activities: |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|                                                                                  | Gain on extinguishment of debt                                          |   |              |       |              |   |              |      |   |   |         | (2,170 | )
|                                                                                  | Minority interest                                                       |   |              | 2,759  |              |   |              | 1,192 |   |   |         | 272    |  
|                                                                                  | Depreciation of property, plant and equipment                           |   |              | 6,990  |              |   |              | 6,925 |   |   |         | 8,560  |  
|                                                                                  | Amortization of goodwill                                                |   |              |       |              |   |              | 3,487 |   |   |         | 3,569  |  
|                                                                                  | Loss on disposal of property, plant and
equipment                       |   |              | 263    |              |   |              |      |   |   |         |       |  
|                                                                                  | Gain on sale of assets                                                  |   |              | (781   | )            |   |              | (58   | ) |   |         | (580   | )
|                                                                                  | Amortization of deferred financing costs
and other non-cash interest    |   |              | 1,455  |              |   |              | 1,197 |   |   |         | 4,980  |  
|                                                                                  | Unrealized exchange (gain) loss on long-term debt
and bank indebtedness |   |              | (3,665 | )            |   |              | 9,302 |   |   |         | 7,804  |  
|Changes in non-cash working capital
and other non-cash items (note 15)            |                                                                         |   | 324          |        |              |   | (4,035       | )     |   |   | 3,901   |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|                                                                                  |                                                                         | $ | 13,827       |        |              | $ | 2,783        |       |   | $ | 8,418   |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|INVESTING ACTIVITIES                                                              |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Acquisitions, net of acquired cash (note 3)                                       |                                                                         | $ | (952         | )      |              | $ | (2,232       | )     |   | $ | (8,022  | )     
|Purchase of property, plant and equipment                                         |                                                                         |   | (5,190       | )      |              |   | (7,725       | )     |   |   | (3,716  | )     
|Net investment in Trench China                                                    |                                                                         |   |             |        |              |   |             |       |   |   | (1,408  | )     
|Proceeds on sale of assets                                                        |                                                                         |   | 850          |        |              |   |             |       |   |   |        |       
|Proceeds on sale of technology                                                    |                                                                         |   | 5,000        |        |              |   |             |       |   |   |        |       
|Proceeds on disposal of property, plant and
equipment                             |                                                                         |   | 1            |        |              |   | 452          |       |   |   | 1,531   |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|                                                                                  |                                                                         | $ | (291         | )      |              | $ | (9,505       | )     |   | $ | (11,615 | )     
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|FINANCING ACTIVITIES                                                              |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Payments on revolving credit
facility with CIBC   net                            |                                                                         | $ | (5,840       | )      |              | $ |             |       |   | $ |        |       
|Payments on revolving credit
facility with CSFB   net                            |                                                                         |   |             |        |              |   |             |       |   |   | (12,584 | )     
|Proceeds from revolving credit
facility with CIBC   net                          |                                                                         |   |             |        |              |   | 557          |       |   |   | 10,045  |       
|Proceeds from long-term debt                                                      |                                                                         |   |             |        |              |   |             |       |   |   | 25,000  |       
|Proceeds from short-term debt                                                     |                                                                         |   | 362          |        |              |   |             |       |   |   |        |       
|Payments on long-term debt                                                        |                                                                         |   | (3,769       | )      |              |   | (3,603       | )     |   |   | (7,411  | )     
|Net (payments on) proceeds from capital leases                                    |                                                                         |   | (532         | )      |              |   | 967          |       |   |   |        |       
|Dividends paid to joint venture partner                                           |                                                                         |   | (694         | )      |              |   |             |       |   |   |        |       
|Financing costs                                                                   |                                                                         |   |             |        |              |   |             |       |   |   | (1,664  | )     
|Bond purchase                                                                     |                                                                         |   |             |        |              |   |             |       |   |   | (6,986  | )     
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|                                                                                  |                                                                         | $ | (10,473      | )      |              | $ | (2,079       | )     |   | $ | 6,400   |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Effect of exchange rate changes on cash                                           |                                                                         | $ | 630          |        |              | $ | 11           |       |   | $ | (684    | )     
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|(Decrease) increase in cash and
cash equivalents during the period                |                                                                         |   | 3,693        |        |              |   | (8,790       | )     |   |   | 2,519   |       
|Cash and cash equivalents  Beginning of
period                                   |                                                                         |   | 11,729       |        |              |   | 20,519       |       |   |   | 18,000  |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Cash and cash equivalents  End of period                                         |                                                                         | $ | 15,422       |        |              | $ | 11,729       |       |   | $ | 20,519  |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Supplemental disclosures:                                                         |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Cash paid during the period for:                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Income taxes                                                                      |                                                                         | $ | 6,032        |        |              | $ | 1,337        |       |   | $ | 2,027   |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       
|Interest                                                                          |                                                                         | $ | 18,183       |        |              | $ | 18,640       |       |   | $ | 18,759  |       
|                                                                                  |                                                                         |   |              |        |              |   |              |       |   |   |         |       

The accompanying notes are an integral part of these consolidated financial statements.

F-6



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(expressed in thousands of U.S. dollars unless stated otherwise)

1. FORMATION AND BASIS OF PRESENTATION

Trench Electric B.V. (the Company), incorporated in the Netherlands, is a
multinational manufacturing and engineering group with our major operations in
Austria, Brasil, Canada, China, England, France, Germany and Switzerland.
Trench Electric B.V. and its subsidiary companies (collectively the Group)
manufacture electrical transmission and distribution equipment that transforms,
regulates, conditions and measures electricity for utilities and industrial
customers.

In this Form 20-F Equivalent, unless the context otherwise requires, we have
used Group, Trench, We or Our to mean Trench Electric B.V. (Trench
Electric) together with its direct or indirect subsidiaries and their
predecessor companies. Company refers to the stand-alone Trench Electric B.V.

In 2002, after the early adoption of FAS145, Rescission of FAS 4, 44, and 64,
amendment to FAS13, and Technical Corrections, we changed our disclosure policy
relating to gains or losses on extinguishment of debt. These changes resulted
in an extraordinary item of $2,170 in 2000 being reclassified to earnings from
operations. This reclassification related to a gain on extinguishment of debt
and the reclassification had no impact on earnings and cash flows for the
period.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of Trench Electric
B.V. and all of our subsidiaries (together the Group). All significant
inter-company items are eliminated in consolidation. Entities which are not
controlled but over which we have the ability to exercise significant influence
are accounted for using the equity method. Businesses acquired during the
financial period have been fully consolidated using the purchase method from
the date the responsibility for the operations was transferred to us.

Accounting estimates

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Foreign currency

Translation gains and losses result from the effect of exchange rate changes on
transactions denominated in currencies other than the operating entities local
currencies. Gains and losses on those transactions are included in the income
statement for the period in which exchange rates change.

For operations with functional currencies other than the U.S. dollar, all
assets and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the balance sheet date, equity at historical rates and all income
and expenses are translated at the average exchange rates prevailing during the
period. The resulting translation adjustments are recorded as a component of
other comprehensive income (loss).

Revenue recognition

The timing of our revenue recognition for sales of electrical equipment depends
on the nature of each sales contract. When sales contracts include substantive
customer acceptance clauses, we recognize revenue when customers have
acknowledged acceptance of the equipment. When sales contracts do not include
substantive customer acceptance clauses, we recognize revenue when the terms of
the contract with the customer have been substantially met (i.e. when control
is transferred to the customer).

We also engage in certain bill-and-hold sales arrangements with our customers.
Such arrangements are requested in writing by our customers, and include a
fixed delivery date. Equipment held for customers is segregated from other
inventory, cannot be used to fill other customer

F-7



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

orders and is complete and ready for shipment. The transfer of
control and the risk of loss for such equipment pass to the customer prior to
delivery. We do not retain any specific performance obligations related to
this equipment such that the earnings process is not complete. We and others
in our industry normally engage in this practice when certain larger
installations may not be ready to accept goods as initially scheduled due to
construction delays.

Shipping costs are expensed in the cost of sales line in the income
statement.

Cash and cash equivalents

Cash and cash equivalents include bank deposits and term deposits at varying
rates of interest and with original maturities less than ninety days.

Inventories

Inventories include materials, labor and an allocation of overhead.
Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, and either replacement cost for raw materials or net
realizable value for work-in-process and finished goods.

Property, plant and equipment

Property, plant and equipment are stated at cost net of accumulated
depreciation. Depreciation is provided over the estimated useful lives of the
assets on a straight-line basis, using the following annual rates:

|                        |  |  |             |  
|----------------------- |  |  | ----------- | -
|Buildings               |  |  | 2.5% - 10   | %
|Machinery and equipment |  |  | 6.5% - 33.3 | %

Goodwill

Up to 2001, goodwill arising from purchase business combinations was amortized
over a range of ten to forty years on a straight-line basis. The estimated
useful life of goodwill varied depending on the nature of each acquisition.

Effective January 1, 2002, we have followed the requirements of FAS 142,
Goodwill and Other Intangible Assets, which requires that goodwill not be
amortized but tested at least annually for impairment. Please refer to note 6
for more information.

Deferred financing costs

Deferred financing costs are amortized over the expected life of the related
debt on a straight-line basis and form part of total interest expense.

Impairment of long-lived assets

We regularly evaluate whether events or circumstances have occurred that
indicate that the carrying amount of long-lived assets may not be recoverable.
When factors indicate possible impairment, we recognize an impairment loss if
the sum of the expected future undiscounted and without interest charges cash
flow is less than the carrying amount of the asset. The amount of the
impairment loss would be the difference between the fair value of the
respective asset and our carrying amount.

We regularly evaluate the realizability of long-lived assets based on projected
undiscounted cash flows and operating income. Effective January 1, 2002, we
have followed the requirements of FAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (Note 19).

Research and development

Research and development expenses, comprising employee costs and overheads, are
charged to the statement of income as incurred. Research and development
expenses for the years ended December 31, 2002, 2001 and 2000 were $4,474,
$3,538 and $2,807, respectively.

F-8



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Income taxes

Income taxes have been provided using the full liability method whereby current
tax liabilities or assets are recognized for the estimated taxes payable or
refundable tax for the current year and deferred tax liabilities or assets are
recognized for the estimated future tax effects attributable to temporary
differences and carry forwards. Current and deferred tax liabilities and assets
are measured based on provisions of the enacted tax laws. We record valuation
allowances against deferred tax assets where we do not expect such assets to be
realized.

Financial instruments

Our financial instruments recorded on the consolidated balance sheet include
cash, accounts receivable, accounts payable, accrued liabilities and debt
obligations. The book values of cash, accounts receivable and payable, advance
billings, accrued liabilities, due to parent and bank indebtedness are
considered to be representative of fair values because of the short-term to
maturity of these instruments. The fair values of the long-term debt are based
on rates available to us for debt with similar terms and maturities.

Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (SFAS 133) as amended by FAS 137 and FAS
138 and as interpreted by the Derivatives Implementation Group, was adopted by
us effective as of January 1, 2001. FAS 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities. FAS 133 requires that an entity
recognize all derivatives as either assets or liabilities in the consolidated
balance sheet and measure those instruments at fair value. FAS 133 prescribes
requirements for designation and documentation of hedging relationships and
ongoing assessments of effectiveness in order to qualify for hedge accounting.

Certain contracts that meet the definition of a derivative under FAS 133 may
qualify as a normal purchase or a normal sale. A normal purchase or a normal
sale is excluded from the scope of FAS 133. Specific criteria must be met and
documented in order for a contract that would otherwise be regarded as a
derivative to qualify as a normal purchase or normal sale. We have evaluated
all commodity contracts to determine if they meet the definition of a
derivative and qualify as a normal purchase or normal sale.

We did not designate any of our derivatives as qualifying hedge instruments
under FAS 133 and accordingly recorded the cumulative effect of adopting FAS
133 at January 1, 2001. We have not subsequently designated any of our
derivatives as qualifying hedge instruments under FAS 133. Gains and losses
related to the fair value adjustment of all derivative instruments are
classified in the consolidated statement of income under currency gains and
cash flows in the net income (loss) figure in accordance with the earnings
treatment of the hedged transaction.

We evaluated our contracts for embedded derivatives, and considered whether
any embedded derivatives would have to be bifurcated, or separated, from the
host contracts in accordance with FAS 133 requirements.

We occasionally enter into foreign currency forward contracts to manage foreign
currency exposures related to sales to foreign customers. These contracts are
designed to hedge firm commitments to pay European, Asian and North American
currencies within a two-year period. The maturities of these contracts are
planned to coincide with the receipts of the foreign funds. Recognition of
gains and losses on the foreign exchange contracts were deferred until
settlement of the particular transaction being hedged. The gains and losses on
the contracts offset losses and gains of the transactions being hedged,
resulting in protection from the risks of foreign exchange movements for those
transactions and the avoidance of losses affecting results of operations.
Gains and losses related to the derivative financial instruments for the year
ended December 31, 2002 were included within the respective line items within
the consolidated statement of income and cash flows to which the item being
hedged relates. See Note 16 for discussion of our strategy and objectives for
the use of derivative instruments.

Concentration of credit risk

Financial instruments that potentially subject us to credit risk are trade
accounts receivable and foreign exchange contracts. Concentration of credit
risk with respect to trade accounts receivable is limited due to the large
number of customers comprising our customer base and the breakdown of the
customer base among geographical areas. We are exposed to credit risk with
respect to foreign exchange contracts in the event of non-performance by the
counterparties to these financial instruments, which are major financial
institutions. Management believes the likelihood of incurring material losses
related to this credit risk is remote.

F-9



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Other comprehensive income

Other comprehensive income refers to revenues, expenses, gains and losses that
under generally accepted accounting principles in the United States of America
are included in comprehensive income but are excluded from net income as these
amounts are recorded directly as an adjustment to shareholders equity. Our
other comprehensive income is comprised of foreign currency translation
adjustments and minimum pension liabilities adjustments.

Prior year comparatives

Where necessary, comparative figures have been reclassified to conform with
changes in presentation in the current year, including the reclassification to
long-term receivables of amounts previously shown as trade accounts receivable
of $784 and other current assets of $982.

3. ACQUISITIONS

On December 12, 2002, we completed the acquisition of an additional 14.6% share
in the Trench Fushun Bushing Co. Ltd (Fushun), previously known as Fushun
Reyrolle Bushing Co. Ltd, by Trench Limited in Canada. This brings our total
investment in the Fushun joint venture to 65%. The excess of the purchase
price over the fair value of identifiable net assets was $339 and represents
goodwill.

Effective November 26, 2001, we completed the acquisition, which began in April
2000, of the 50.4% voting equity interests consisting of 1,699 common shares in
the Fushun Reyrolle Bushing Co. Ltd joint venture from VA Tech. On April 21,
2001, Trench UK signed agreements with VA Tech and Fushun Electric Porcelain
Works (Fushun Electric), pursuant to which Trench UK would acquire VA Techs
50.4% equity interest in Fushun Reyrolle Bushing Co. Ltd, a joint venture
company organized under the laws of the Peoples Republic of China and owned
jointly by VA Tech and Fushun Electric, for a purchase price of approximately
£1 million ($1,454). The excess of the purchase price over the fair value of
identifiable fixed assets is $69 and represents goodwill.

|                                              |                                                |   |       |        |  
|--------------------------------------------- | ---------------------------------------------- | - | ----- | ------ | -
|Net assets acquired
Cash and cash equivalents |                                                | $ | 321   |       
|                                              | Accounts receivable                            |   |       | 3,362  |  
|                                              | Inventories                                    |   |       | 1,241  |  
|                                              | Property, plant and equipment                  |   |       | 2,887  |  
|                                              | Goodwill (including transaction costs of $40)  |   |       | 69     |  
|                                              | Accounts payable and other current liabilities |   |       | (3,560 | )
|                                              | Term loans                                     |   |       | (1,502 | )
|                                              | Minority interest of JV partner                |   |       | (1,364 | )
|                                              |                                                |   |       |       
|Net assets acquired                           |                                                | $ | 1,454 |       
|                                              |                                                |   |       |       
|Consideration
Cash                            |                                                | $ | 1,454 |       
|                                              |                                                |   |       |       

The main objective of the purchase was to expand the Trench presence in the
growing Chinese market. The Fushun joint ventures results are consolidated
with our groups results.

The following unaudited pro forma consolidated financial data has been prepared
to give effect to the above-noted transaction as if it had occurred on January
1, 2000:

|                                                   |  |             |         |             |  |   |         |  
|-------------------------------------------------- |  | ----------- | ------- | ----------- |  | - | ------- | -
|                                                   |  | 2001        |         | 2000       
|                                                   |  |             |         |            
|                                                   |  | (Unaudited) |         | (Unaudited)
|Sales                                              |  | $           | 229,982 |             |  | $ | 204,924 |  
|Operating income                                   |  |             | 18,025  |             |  |   | 14,795  |  
|Net loss for the year                              |  |             | (14,822 | )           |  |   | (17,845 | )
|Basic and diluted
loss per common share
in dollars |  | $           | (370.55 | )           |  | $ | (446.13 | )

In April 2000, we acquired the assets and related technology of a manufacturer
of bushings, The Bushing Company, a division of VATech in the UK for
consideration of $11,483. The excess of the purchase price over the fair value
of the identifiable net assets was $5,808 and represents goodwill to be
amortized straight-line over 20 years. As a result of the FASB approved
statement FAS No. 142 Goodwill and Other Intangible Assets as discussed under
the heading Accounting Developments, amortization of goodwill has ceased on the
first of January 2002. Please refer to note 6 for more information.

F-10



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

The following unaudited pro forma consolidated financial data has been prepared
to give effect to the above-noted transaction as if it had occurred on January
1, 1999:

|                                                   |  |             |         |             |  |   |         |  
|-------------------------------------------------- |  | ----------- | ------- | ----------- |  | - | ------- | -
|                                                   |  | 2000        |         | 1999       
|                                                   |  |             |         |            
|                                                   |  | (Unaudited) |         | (Unaudited)
|Sales                                              |  | $           | 205,610 |             |  | $ | 224,589 |  
|Operating income                                   |  |             | 14,823  |             |  |   | 22,793  |  
|Net loss for the year                              |  |             | (18,272 | )           |  |   | (1,721  | )
|Basic and diluted
loss per common share
in dollars |  | $           | (456.80 | )           |  | $ | (43.03  | )

In August 2000, we increased our shareholding in the existing Chinese joint
venture, MWB Shanghai Co. Ltd. (Trench China), from 40% to 65%. Trench China
produces instrument transformers. This purchase was recorded as a component of
a step acquisition. Accordingly, the excess of the purchase price over 25% of
the fair value of the identifiable net assets is $226 and represents goodwill
to be amortized straight-line over 10 years. As a result of FAS No. 142
Goodwill and Other Intangible Assets amortization of goodwill has ceased on
the first of January 2002. Please refer to note 6 for more information.

The following unaudited pro forma consolidated financial data has been prepared
to give effect to the above-noted transaction as if it had occurred on January
1, 1999:

|                                                   |  |             |         |             |  |   |         |  
|-------------------------------------------------- |  | ----------- | ------- | ----------- |  | - | ------- | -
|                                                   |  | 2000        |         | 1999       
|                                                   |  |             |         |            
|                                                   |  | (Unaudited) |         | (Unaudited)
|Sales                                              |  | $           | 213,327 |             |  | $ | 227,650 |  
|Operating income                                   |  |             | 16,519  |             |  |   | 23,623  |  
|Net loss for the year                              |  |             | (17,595 | )           |  |   | (1,973  | )
|Basic and diluted
loss per common share
in dollars |  | $           | (439.88 | )           |  | $ | (49.33  | )

The businesses acquired during the 2002 and 2001 financial periods have been
fully consolidated using the purchase method from the dates that the
responsibilities for operations were transferred to us.

The unaudited pro forma amounts for the above acquisitions do not consider
synergies resulting from acquisition and do not purport to be indicative of the
results of operations which actually would have resulted had the acquisitions
occurred on the dates indicated, or which may result in the future.

4. INVENTORIES

Inventories by major category were as follows at:

|                |  |         |        |         |  |   |        | 
|--------------- |  | ------- | ------ | ------- |  | - | ------ | 
|                |  | Dec. 31 |        | Dec. 31
|                |  | 2002    |        | 2001   
|                |  |         |        |        
|Raw materials   |  | $       | 23,202 |         |  | $ | 22,932 | 
|Work-in-process |  |         | 11,881 |         |  |   | 11,326 | 
|Finished goods  |  |         | 6,696  |         |  |   | 3,874  | 
|                |  |         |        |         |  |   |        | 
|                |  |         | 41,779 |         |  |   | 38,132 | 
|Less: provision |  |         | 1,891  |         |  |   | 2,188  | 
|                |  |         |        |         |  |   |        | 
|                |  | $       | 39,888 |         |  | $ | 35,944 | 
|                |  |         |        |         |  |   |        | 

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment was as follows at:

|                               |  |         |         |         |  |   |        | 
|------------------------------ |  | ------- | ------- | ------- |  | - | ------ | 
|                               |  | Dec. 31 |         | Dec. 31
|                               |  | 2002    |         | 2001   
|                               |  |         |         |        
|Land                           |  | $       | 22,279  |         |  | $ | 18,771 | 
|Buildings                      |  |         | 33,547  |         |  |   | 28,822 | 
|Machinery and equipment        |  |         | 47,003  |         |  |   | 39,427 | 
|                               |  |         |         |         |  |   |        | 
|                               |  |         | 102,829 |         |  |   | 87,020 | 
|Less: accumulated depreciation |  |         | 31,614  |         |  |   | 21,983 | 
|                               |  |         |         |         |  |   |        | 
|                               |  | $       | 71,215  |         |  | $ | 65,037 | 
|                               |  |         |         |         |  |   |        | 

F-11



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|                                                  |  |              |        |  
|------------------------------------------------- |  | ------------ | ------ | -
|Continuity:                                       |  | Dec. 31
2002
|                                                  |  |             
|Opening net book value                            |  | $            | 65,037 |  
|Exchange on opening book value                    |  |              | 8,584  |  
|                                                  |  |              |        |  
|Adjusted opening balance                          |  |              | 73,621 |  
|Additions                                         |  |              | 5,190  |  
|Disposals                                         |  |              | (851   | )
|Depreciation                                      |  |              | (6,990 | )
|Exchange on depreciation,
additions and disposals |  |              | 245    |  
|                                                  |  |              |        |  
|Ending net book value                             |  | $            | 71,215 |  
|                                                  |  |              |        |  

6. GOODWILL

Goodwill was as follows at:

|                               |  |         |         |         |  |   |         | 
|------------------------------ |  | ------- | ------- | ------- |  | - | ------- | 
|                               |  | Dec. 31 |         | Dec. 31
|                               |  | 2002    |         | 2001   
|                               |  |         |         |        
|Goodwill                       |  | $       | 139,252 |         |  | $ | 129,510 | 
|Less: accumulated amortization |  |         | 15,342  |         |  |   | 14,128  | 
|                               |  |         |         |         |  |   |         | 
|                               |  | $       | 123,910 |         |  | $ | 115,382 | 
|                               |  |         |         |         |  |   |         | 

The addition goodwill of $339 in 2002 arose on acquisition of an additional
14.6% share in Fushun (see note 3).

During 2001, the cost of goodwill was adjusted to reflect the final purchase
price allocation in connection with the acquisition of Trench UK. In addition
the cost was increased in 2001 by $69 to reflect the acquisition of Fushun.
Goodwill of Fushun was not amortized as the purchase was not completed until
the period after June 30, 2001.

|                                      |  |              |         | 
|------------------------------------- |  | ------------ | ------- | 
|Continuity:                           |  | Dec. 31
2002
|                                      |  |             
|Opening book value                    |  | $            | 115,382 | 
|Exchange on opening book value        |  |              | 8,173   | 
|                                      |  |              |         | 
|Adjusted opening balance              |  |              | 123,555 | 
|Additions                             |  |              | 339     | 
|Exchange on additions and adjustments |  |              | 16      | 
|                                      |  |              |         | 
|Ending net book value                 |  | $            | 123,910 | 
|                                      |  |              |         | 

According to FAS 142, goodwill and intangible assets with indefinite lives are
no longer subject to amortization, but rather an annual assessment of
impairment by applying a fair-value-based test. The statement requires a test
for impairment to be performed annually, or immediately if conditions indicate
that such an impairment could exist.

We adopted the statement effective January 1, 2002. As a result of adopting
FAS 142 we no longer record goodwill amortization. We have completed the
transitional and annual goodwill impairment tests as required under FAS 142 and
no impairment was identified.

The following table provides the comparable effects of the adoption of FAS 142
for the period ended December 31, 2002, 2001 and 2000. In 2002, the reported
net income figure is without any goodwill amortization, whereas in 2001 and
2000 the reported net income figure is net of goodwill amortization.

F-12



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

|                                                                                     |  |      |        |      |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------- | - |  | - | ------- | -
|(in thousands, except per share data)                                                |  |      |        |      |  |      |         |   |  |   |         |  
|                                                                                     |  | 2002 |        | 2001 |  | 2000
|                                                                                     |  |      |        |      |  |     
|Net income (loss), after goodwill amortization
as presented                          |  | $    | 6,482  |      |  | $    | (15,227 | ) |  | $ | (17,918 | )
|Add back: goodwill amortization (none in 2002)                                       |  |      |       |      |  |      | 3,487   |   |  |   | 3,569   |  
|                                                                                     |  |      |        |      |  |      |         |   |  |   |         |  
|Adjusted net income (loss) before goodwill amortization                              |  | $    | 6,482  |      |  | $    | (11,740 | ) |  | $ | (14,349 | )
|                                                                                     |  |      |        |      |  |      |         |   |  |   |         |  
|Basic and diluted earnings (loss) per share:                                         |  |      |        |      |  |      |         |   |  |   |         |  
|Income (loss) per common share before
minority interest, after goodwill amortization |  | $    | 231.03 |      |  | $    | (350.88 | ) |  | $ | (441.15 | )
|Add back: goodwill amortization                                                      |  |      |       |      |  |      | 87.18   |   |  |   | 89.23   |  
|                                                                                     |  |      |        |      |  |      |         |   |  |   |         |  
|Adjusted income (loss) per share before minority interest                            |  | $    | 231.03 |      |  | $    | (263.70 | ) |  | $ | (351.92 | )
|                                                                                     |  |      |        |      |  |      |         |   |  |   |         |  
|Net income (loss) per common share,
before change in accounting principle            |  | $    | 162.05 |      |  | $    | (380.68 | ) |  | $ | (447.95 | )
|Add back: goodwill amortization                                                      |  |      |       |      |  |      | 87.18   |   |  |   | 89.23   |  
|                                                                                     |  |      |        |      |  |      |         |   |  |   |         |  
|Adjusted net income (loss) per common share before
goodwill amortization             |  | $    | 162.05 |      |  | $    | (293.50 | ) |  | $ | (358.72 | )
|                                                                                     |  |      |        |      |  |      |         |   |  |   |         |  

7. INCOME TAXES

|                                 |  |              |       |              |  |              |        |   |  |   |       |  
|-------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | - |  | - | ----- | -
|                                 |  | Year ended   |       | Year ended   |  | Year ended  
|                                 |  | December 31, |       | December 31, |  | December 31,
|                                 |  | 2002         |       | 2001         |  | 2000        
|                                 |  |              |       |              |  |             
|Current                          |  | $            | 5,529 |              |  | $            | 4,519  |   |  | $ | 3,621 |  
|Deferred                         |  |              | 1,236 |              |  |              | (2,357 | ) |  |   | (636  | )
|                                 |  |              |       |              |  |              |        |   |  |   |       |  
|Total provision for income taxes |  | $            | 6,765 |              |  | $            | 2,162  |   |  | $ | 2,985 |  
|                                 |  |              |       |              |  |              |        |   |  |   |       |  

Substantially all of our results of operations are generated outside of the
Netherlands. Trench Electric B.V. (TEBV) and our parent company file a
consolidated tax return in The Netherlands. Included in the tax provision is
$1,477 (2001  $1,432) in respect of TEBV, which has been computed as if TEBV
were a separate taxpayer (the separate return method). Of the total current
provision of $5,529 (2001  $4,519), current income taxes in the amount of
$1,477 (2001- $1,432) have been reflected as a component of due to parent on
the balance sheet as TEBVs profits are shielded by the parent companys losses
for tax purposes.

The following summarizes the recognition of income tax expense using a weighted
average income tax rate (as a reference point only in that there is no single
jurisdiction in which we operate that is predominant or for which there is a
more appropriate rate) compared with our actual income tax expense. The
weighted average rate has been determined based on the proportion of the
statutory rate in each jurisdiction to the income before tax attributable to
each jurisdiction.

|                                                                                               |  |              |       |              |  |              |        |   |  |   |        |  
|---------------------------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | - |  | - | ------ | -
|                                                                                               |  | Year ended   |       | Year ended   |  | Year ended  
|                                                                                               |  | December 31, |       | December 31, |  | December 31,
|                                                                                               |  | 2002         |       | 2001         |  | 2000        
|                                                                                               |  |              |       |              |  |             
|Tax provision at weighted average
statutory rate
(2002  26.08%,2001   29.51%,
2000  31.10%) |  | $            | 4,174 |              |  | $            | (3,856 | ) |  | $ | (5,234 | )
|Effects of specific rate differences
from weighted average
statutory rate                      |  |              | (670  | )            |  |              | (625   | ) |  |   | 308    |  
|Non-deductible goodwill                                                                        |  |              |      |              |  |              | 1,503  |   |  |   | 1,631  |  
|Non taxable portion of foreign
exchange gains and losses                                       |  |              | (230  | )            |  |              | 2,648  |   |  |   | 1,989  |  
|Valuation allowance for loss
carryforward                                                      |  |              | 1,990 |              |  |              | 17     |   |  |   | 3,639  |  
|Other                                                                                          |  |              | 1,501 |              |  |              | 2,475  |   |  |   | 652    |  
|                                                                                               |  |              |       |              |  |              |        |   |  |   |        |  
|Total provision for income taxes                                                               |  | $            | 6,765 |              |  | $            | 2,162  |   |  | $ | 2,985  |  
|                                                                                               |  |              |       |              |  |              |        |   |  |   |        |  
|Effective tax rate                                                                             |  |              | 42%   |              |  |              | 18%    |   |  |   | 20%    |  
|                                                                                               |  |              |       |              |  |              |        |   |  |   |        |  

F-13



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

The significant components of deferred income tax are as follows at:

|                                          |                                        |   |         |        |         |   |         |        |  
|----------------------------------------- | -------------------------------------- | - | ------- | ------ | ------- | - | ------- | ------ | -
|                                          |                                        |   | Dec. 31 |        | Dec. 31
|                                          |                                        |   | 2002    |        | 2001   
|                                          |                                        |   |         |        |        
|Current deferred income tax asset         |                                        |   |         |        |         |   |         |       
|                                          | Warranty                               |   | $       | 362    |         |   | $       | 365    |  
|                                          | Other                                  |   |         |       |         |   |         | 66     |  
|                                          |                                        |   |         |        |         |   |         |       
|                                          |                                        |   | 362     |        |         |   | 431     |       
|Non-current deferred income tax asset     |                                        |   |         |        |         |   |         |       
|                                          | Loss carryforwards                     |   |         | 15,654 |         |   |         | 12,667 |  
|                                          | Pension and post-retirement benefits   |   |         | 2,152  |         |   |         | 2,129  |  
|                                          | Unrealized foreign exchange adjustment |   |         |       |         |   |         | 2,648  |  
|                                          | Other                                  |   |         | 1,755  |         |   |         | 562    |  
|                                          |                                        |   |         |        |         |   |         |       
|                                          |                                        |   | 19,923  |        |         |   | 18,437  |       
|Less: valuation allowance                 |                                        |   | (7,852  | )      |         |   | (6,929  | )     
|                                          |                                        |   |         |        |         |   |         |       
|Total deferred income tax asset           |                                        | $ | 12,071  |        |         | $ | 11,508  |       
|                                          |                                        |   |         |        |         |   |         |       
|Current deferred income tax liability     |                                        |   |         |        |         |   |         |       
|                                          | Accounts receivable                    |   | $       | (33    | )       |   | $       | (72    | )
|                                          | Warranty                               |   |         | (147   | )       |   |         | (17    | )
|                                          | Other                                  |   |         |       |         |   |         | (47    | )
|                                          |                                        |   |         |        |         |   |         |       
|                                          |                                        |   | (180    | )      |         |   | (136    | )     
|Non-current deferred income tax liability |                                        |   |         |        |         |   |         |       
|                                          | Fixed assets and goodwill              |   |         | (8,847 | )       |   |         | (8,401 | )
|                                          | Pensions and post retirement benefits  |   |         |       |         |   |         | (343   | )
|                                          | Other                                  |   |         | (3,240 | )       |   |         | (1,588 | )
|                                          |                                        |   |         |        |         |   |         |       
|Total deferred income tax liability       |                                        | $ | (12,267 | )      |         | $ | (10,468 | )     
|                                          |                                        |   |         |        |         |   |         |       
|Net deferred income tax asset/(liability) |                                        | $ | (196    | )      |         | $ | 1,040   |       
|                                          |                                        |   |         |        |         |   |         |       

The loss carry forwards relate primarily to our French, German and Swiss
subsidiaries. These loss carry forwards are available to reduce taxes
otherwise payable. We have net operating loss carry forwards of approximately
$45,953 (2001  $35,346) at December 31, 2002 which expire as follows:

|           |  |   |        | 
|---------- |  | - | ------ | 
|2003       |  | $ | 737    | 
|2004       |  |   | 1,530  | 
|2005       |  |   | 5,800  | 
|2006       |  |   | 6,773  | 
|2007       |  |   | 19,845 | 
|2008       |  |   | 1,377  | 
|2009       |  |   |       | 
|Indefinite |  |   | 9,891  | 
|           |  |   |        | 
|Total      |  | $ | 45,953 | 
|           |  |   |        | 

FAS 109 requires that deferred income tax assets be reduced by a valuation
allowance if it is more likely than not that some portion or all of the
deferred income tax asset will not be realized. The net valuation allowance
against the deferred income tax asset increased by $2,943 in 2002 (2001 
increase by $2,700). The valuation allowance recorded by us is in respect of
the loss carry forwards after giving consideration to the uncertainty
associated with our ability to realize the benefit of the loss carry forwards
in future years.

Cumulative undistributed earnings of foreign subsidiaries approximated $32,796
at December 31, 2002 (2001  $19,980). Such earnings are expected to be
reinvested indefinitely. Determination of the amount of unrecognized deferred
tax liability with respect to such earnings is not practicable. While there are
no specific plans to remit the undistributed earnings in the immediate future,
where economically appropriate to do so, such earnings may be remitted.

F-14



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

8. LONG-TERM DEBT AND BANK INDEBTEDNESS

Long-term debt consists of the following at:

|                                        |                     |   |         |        |         |   |              |        |  |                   |                                    |  | 
|--------------------------------------- | ------------------- | - | ------- | ------ | ------- | - | ------------ | ------ |  | ----------------- | ---------------------------------- |  | 
|                                        |                     |   | Dec. 31 |        | Dec. 31 |   | Currency    
|                                        |                     |   | 2002    |        | 2001    |   | Denomination
|                                        |                     |   |         |        |         |   |             
|10 1/4% Senior subordinated notes       |                     | $ | 150,915 |        |         | $ | 150,915      |        |  | U.S. dollars     
|CIBC World Markets Plc                  |                     |   |         |        |         |   |              |        |  |                  
|                                        | Term Facility       |   |         | 18,537 |         |   |              | 21,121 |  |                   | U.S. dollars/Euros/Pounds Sterling
|Other
ICBC Bank Shanghai Branch         |                     |   | 7,207   |        |         |   | 7,207        |        |  | Chinese renminbis
|                                        | Bank of China       |   |         | 1,864  |         |   |              | 1,502  |  |                   | Chinese renminbis                 
|                                        | Agence Rhin Meuse   |   |         | 692    |         |   |              | 711    |  |                   | Euros                             
|                                        | SEC Finance Company |   |         | 121    |         |   |              | 121    |  |                   | Chinese renminbis                 
|                                        |                     |   |         |        |         |   |              |        |  |                   |                                    | 
|Total long-term debt                    |                     |   | 179,336 |        |         |   | 181,577      |        |  |                   |                                    | 
|Less: current portion of long-term debt |                     |   | 13,286  |        |         |   | 10,885       |        |  |                   |                                    | 
|                                        |                     |   |         |        |         |   |              |        |  |                   |                                    | 
|Non-current portion of long-term debt   |                     | $ | 166,050 |        |         | $ | 170,692      |        |  |                   |                                    | 
|                                        |                     |   |         |        |         |   |              |        |  |                   |                                    | 

Interest payments on the senior subordinated notes, which are repayable on
December 15, 2007, are due on June 15 and December 15 of each year. The notes
are redeemable at the option of the issuers, Trench Electric S.A. (Luxembourg)
and Trench Inc. (Canada), in whole or in part upon the occurrence of certain
events. The notes are subordinated in right of payment to existing and future
senior indebtedness of the issuers and the Group, including the term facilities
noted above. The notes are fully and unconditionally guaranteed by us and our
subsidiaries other than our French subsidiary, Trench France S.A. its parent,
Finatrench (France) S.A., the Chinese joint ventures, Valtimon Holding BV and
Trench Brasil Ltda. The bond indenture includes certain covenants that, among
other things, limit or otherwise affect the incurrence of additional
indebtedness by us and certain of our subsidiaries; the payment of dividends
and other restricted payments; transactions with affiliates; the sale or
issuance of certain subsidiaries capital stock and preferred stock; the
creation of restrictions on distributions from certain subsidiaries; asset
sales; other senior subordinated indebtedness; the incurrence of liens and
sale/leaseback transactions; and mergers, or consolidations.

Trench has complied with the various financial covenants in our Facilities
Agreement. Having taken account of amendment letters received from our Senior
Lenders, we anticipate remaining in compliance with those covenants. The
amendments permitted us to take the entire gain of approximately $5.5 million
over the six quarters ending March 2002 (for covenant calculation purposes
only) on the 2000 sale of certain instrument transformer and bushings
technologies in connection with our Shanghai operation. This amendment was
consented to on the basis that substantially all of the gain has already been
realized in cash. Under U.S. GAAP the gain will be recognized over a 10-year
period. Similarly, we have obtained an amendment letter from our Senior
Lenders to allow us to recognize (for covenant purposes only) the $10 million
gain from the sale of certain coil technologies in 2002 in connection with our
Shanghai operation on an accelerated basis to the end of December 31, 2006.
Under U.S. GAAP the gain will be recognized over a 10-year period.

In addition, our Senior Lenders have agreed to increase the headroom available
to us within the financial covenants for the interest coverage and the leverage
ratios from 31st March 2003 to 31st December 2005. For the avoidance of doubt
no changes have been made to the Net Worth covenant or the Cash Flow to Debt
Service covenant.

Also, our Senior Lenders have agreed that both the cash costs and the profit and
loss write-offs associated with the reorganization in Switzerland in 2000 and
2001 can be excluded from all covenant calculations as originally defined.
Items associated with the reorganization in Switzerland have been subject to
separate additional covenant tests.

The amendments also create additional flexibility under our capital
expenditures covenant in connection with the capital expenditures in China.
The original capital expenditure covenant was set prior to Trench China, in
Shanghai being consolidated into the Group results.

For the year 2001 only our Senior Lenders agreed that the usage of fixed
foreign exchange rates as applied in calculating the Net Worth covenant could
be extended to include the interest coverage and leverage ratios. For the
avoidance of doubt the affected covenants did not include the cash flow to debt
service covenant , which remained unchanged.

Notwithstanding the foregoing, there can be no guarantee that we will remain in
compliance with our financial covenants. Failure to

F-15



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

remain in compliance, or to obtain additional amendments, would have a material
adverse effect on our liquidity.

In April, 2000, our debt was refinanced by means of senior debt arranged by
CIBC World Markets plc (CIBC). The senior facilities are collateralized by
fixed and floating charges on all our assets and shares and upstream, cross and
downstream guarantees.

The CIBC Term loan is denominated in U.S. dollars, Euros and British pounds and bears interest at LIBOR
plus 2%. If certain financial ratios are met, the margin can be reduced to as
low as 1.5%.

The loans from ICBC Bank Shanghai Branch bear interest at a rate of 5.85%.

The loans from Bank of China bear interest at a rate of 5.54 to 5.58%.

The loan from Agence Rhin Meuse bears interest at a rate of 0%.

Long-term debt is repayable as follows:

|           |  |   |         | 
|---------- |  | - | ------- | 
|2003       |  | $ | 13,286  | 
|2004       |  |   | 5,582   | 
|2005       |  |   | 5,621   | 
|2006       |  |   | 3,802   | 
|2007       |  |   | 151,045 | 
|thereafter |  |   |        | 
|           |  |   |         | 
|           |  | $ | 179,336 | 
|           |  |   |         | 

In 2000, CIBC World Markets plc made available a revolving credit facility by
way of cash advances at a rate of LIBOR plus 2% and letters of credit not to
exceed a maximum of $35,000. In 1999, Credit Suisse First Boston Canada had
made available a revolving credit facility by way of cash advances at a rate of
LIBOR plus 2% and letters of credit not to exceed a maximum of $55,000, which
was replaced by the CIBC facility. The shares of our operating companies, with
the exception of Austria, Brasil and the Chinese joint ventures, have been
pledged as collateral for the Term Loan and the revolving credit facility. A
non-utilization fee of 0.75% per annum (2001  0.75%) on the daily unused
facility is payable.

As at December 31, 2002, $5,808 (2001  $10,699) had been drawn against this
facility and is recorded as bank indebtedness on the balance sheet. The average
weighted interest rate on bank indebtedness was 4.9% at December 31, 2002 (2001
 6.2%).

9. ACCRUED LIABILITIES AND OTHER LIABILITIES

Accrued liabilities and other liabilities were as follows at:

|                                             |  |         |        |         |  |   |        | 
|-------------------------------------------- |  | ------- | ------ | ------- |  | - | ------ | 
|                                             |  | Dec. 31 |        | Dec. 31
|                                             |  | 2002    |        | 2001   
|                                             |  |         |        |        
|Accrued payroll costs                        |  | $       | 5,285  |         |  | $ | 3,865  | 
|Accrued employee benefits                    |  |         | 3,543  |         |  |   | 3,359  | 
|Deferred income                              |  |         | 1,851  |         |  |   | 269    | 
|Warranty (note 22)                           |  |         | 2,729  |         |  |   | 2,027  | 
|Accrued interest                             |  |         | 1,290  |         |  |   | 767    | 
|Reorganization accrual
in Trench Switzerland |  |         |       |         |  |   | 565    | 
|Head office cost accruals                    |  |         | 3,462  |         |  |   | 2,254  | 
|Accrued commissions                          |  |         | 3,287  |         |  |   | 1,404  | 
|Payments received on account                 |  |         | 467    |         |  |   | 609    | 
|Other liabilities                            |  |         | 3,688  |         |  |   | 6,347  | 
|                                             |  |         |        |         |  |   |        | 
|                                             |  | $       | 25,602 |         |  | $ | 21,466 | 
|                                             |  |         |        |         |  |   |        | 

F-16



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##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

10. PENSION ASSETS AND LIABILITIES

Certain subsidiaries sponsor, for substantially all employees, defined benefit
pension plans. The assets for some of these plans are kept externally,
however, in Germany, no independent assets exist for the pension obligations.
Where plan assets exist, these have been measured at market value. The
benefits under these plans are based primarily on years of service and either
final average salary or fixed amounts for each year of service. Plan assets
consist principally of publicly traded equity and fixed-income securities.

The funded status of our defined benefit pension plans was as follows at :

|                                                                  |  |         |         |         |  |   |         |  
|----------------------------------------------------------------- |  | ------- | ------- | ------- |  | - | ------- | -
|                                                                  |  | Dec. 31 |         | Dec. 31
|                                                                  |  | 2002    |         | 2001   
|                                                                  |  |         |         |        
|Change in benefit obligation                                      |  |         |         |         |  |   |         |  
|Benefit obligation  Beginning of year                            |  | $       | 32,531  |         |  | $ | 32,487  |  
|Service costs                                                     |  |         | 964     |         |  |   | 970     |  
|Interest costs                                                    |  |         | 2,207   |         |  |   | 2,096   |  
|Settlements                                                       |  |         |        |         |  |   | (1,242  | )
|Net actuarial loss (gain)                                         |  |         | (809    | )       |  |   | 778     |  
|Employee contributions                                            |  |         |        |         |  |   |        |  
|Benefits paid                                                     |  |         | (1,052  | )       |  |   | (1,115  | )
|Exchange effect                                                   |  |         | 1,951   |         |  |   | (1,443  | )
|                                                                  |  |         |         |         |  |   |         |  
|Benefit obligation  End of year                                  |  | $       | 35,792  |         |  | $ | 32,531  |  
|                                                                  |  |         |         |         |  |   |         |  
|Change in plan assets                                             |  |         |         |         |  |   |         |  
|Fair value of plan assets  Beginning of year                     |  | $       | 21,056  |         |  | $ | 23,321  |  
|Actual return on plan assets                                      |  |         | (2,167  | )       |  |   | (281    | )
|Employer contribution                                             |  |         | 234     |         |  |   | 919     |  
|Employee contribution                                             |  |         | 476     |         |  |   | 484     |  
|Benefits paid                                                     |  |         | (611    | )       |  |   | (2,040  | )
|Exchange effect                                                   |  |         | 326     |         |  |   | (1,347  | )
|                                                                  |  |         |         |         |  |   |         |  
|Fair value of plan assets  End of year                           |  | $       | 19,314  |         |  | $ | 21,056  |  
|                                                                  |  |         |         |         |  |   |         |  
|Funded status                                                     |  | $       | (16,478 | )       |  | $ | (11,475 | )
|Unrecognized actuarial loss                                       |  |         | 6,790   |         |  |   | 3,865   |  
|Unrecognized prior service cost                                   |  |         | 118     |         |  |   | 152     |  
|                                                                  |  |         |         |         |  |   |         |  
|Net amount recognized                                             |  | $       | (9,570  | )       |  | $ | (7,458  | )
|                                                                  |  |         |         |         |  |   |         |  
|Amounts recognized in the consolidated balance sheet consists of: |  |         |         |         |  |   |         |  
|Prepaid benefits cost                                             |  | $       | 252     |         |  | $ | 1,006   |  
|Accrued benefits liability                                        |  |         | (9,822  | )       |  |   | (9,229  | )
|Minimum pension liability adjustment                              |  |         | (1,050  | )       |  |   |        |  
|Accumulated other comprehensive income                            |  |         | 1,050   |         |  |   | 765     |  
|                                                                  |  |         |         |         |  |   |         |  
|Net amount recognized                                             |  | $       | (9,570  | )       |  | $ | (7,458  | )
|                                                                  |  |         |         |         |  |   |         |  

The projected benefit obligation and fair value of plan assets for the pension
plans with projected benefit obligations in excess of plan assets were $44,522
and $30,293, respectively, as at December 31, 2002 (2001  $31,531 and $19,857,
respectively). The projected benefit obligation, accumulated benefit
obligation and fair value of plan assets for the pension plans with accumulated
benefit obligations in excess of plan assets were $6,757, $6,744 and $1,573 as
at December 31, 2002 (2001  $9,377, $9,377 and $nil respectively).

Assumptions used to develop the net periodic benefits cost for the defined
benefit plans were as follows for the years ended:

|                               |  |         |     |         |  |         |     |   |  |  |     |  
|------------------------------ |  | ------- | --- | ------- |  | ------- | --- | - |  |  | --- | -
|                               |  | Dec. 31 |     | Dec. 31 |  | Dec. 31
|                               |  | 2002    |     | 2001    |  | 2000   
|                               |  |         |     |         |  |        
|Discount rate                  |  |         | 6.4 | %       |  |         | 6.6 | % |  |  | 7.0 | %
|Expected return on plan assets |  |         | 7.5 | %       |  |         | 8.5 | % |  |  | 8.3 | %
|Rate of compensation increase  |  |         | 3.2 | %       |  |         | 3.9 | % |  |  | 4.3 | %

Prior service costs are amortized over the estimated average remaining service
lives of employees.

F-17



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

The components of net periodic benefits cost for the defined benefit plans were
as follows for the years ended:

|                                                      |                                    |   |         |        |         |   |         |        |   |   |       |        |  
|----------------------------------------------------- | ---------------------------------- | - | ------- | ------ | ------- | - | ------- | ------ | - | - | ----- | ------ | -
|                                                      |                                    |   | Dec. 31 |        | Dec. 31 |   | Dec. 31
|                                                      |                                    |   | 2002    |        | 2001    |   | 2000   
|                                                      |                                    |   |         |        |         |   |        
|Components of net periodic benefits cost
Service cost |                                    | $ | 964     |        |         | $ | 970     |        |   | $ | 1,041 |       
|                                                      | Interest cost                      |   |         | 2,207  |         |   |         | 2,091  |   |   |       | 2,091  |  
|                                                      | Expected return on plan assets     |   |         | (1,606 | )       |   |         | (1,852 | ) |   |       | (1,823 | )
|                                                      | Recognized actuarial loss          |   |         | 207    |         |   |         | 7      |   |   |       | 94     |  
|                                                      | Amortization of prior service cost |   |         | 10     |         |   |         |       |   |   |       | (60    | )
|                                                      |                                    |   |         |        |         |   |         |        |   |   |       |       
|Net periodic benefits cost                            |                                    | $ | 1,782   |        |         | $ | 1,216   |        |   | $ | 1,343 |       
|                                                      |                                    |   |         |        |         |   |         |        |   |   |       |       

In addition, we sponsor defined contribution pension plans covering
substantially all of the employees of the Swiss subsidiary and French
subsidiary. Contributions are determined by matching a percentage of employee
contributions. The pension expense for these defined contribution plans for
the years ended December 31, 2002, 2001 and 2000 were $859, $970 and $679,
respectively.

11.     POST-RETIREMENT LIABILITIES

Our Canadian subsidiary provides health care and life insurance benefits to
their eligible retired employees, with some of these retirees paying a portion
of the related costs. The funded status of the plan was as follows at

|                                                        |  |         |        |         |  |   |        |   |  |  |  | 
|------------------------------------------------------- |  | ------- | ------ | ------- |  | - | ------ | - |  |  |  | 
|                                                        |  | Dec. 31 |        | Dec. 31 |  |   |        |  
|                                                        |  | 2002    |        | 2001    |  |   |        |  
|                                                        |  |         |        |         |  |   |        |  
|Change in benefit obligation                            |  |         |        |         |  |   |        |   |  |  |  | 
|Benefit obligation  Beginning of year                  |  | $       | 2,278  |         |  | $ | 2,177  |   |  |  |  | 
|Service costs                                           |  |         | 116    |         |  |   | 95     |   |  |  |  | 
|Interest costs                                          |  |         | 182    |         |  |   | 159    |   |  |  |  | 
|Actuarial loss                                          |  |         | 278    |         |  |   |       |   |  |  |  | 
|Benefits paid                                           |  |         | (19    | )       |  |   | (19    | ) |  |  |  | 
|Exchange effect                                         |  |         | 36     |         |  |   | (134   | ) |  |  |  | 
|                                                        |  |         |        |         |  |   |        |   |  |  |  | 
|Benefit obligation  End of year                        |  | $       | 2,871  |         |  | $ | 2,278  |   |  |  |  | 
|                                                        |  |         |        |         |  |   |        |   |  |  |  | 
|Funded status                                           |  | $       | (2,871 | )       |  | $ | (2,278 | ) |  |  |  | 
|Unrecognized actuarial loss                             |  |         | 330    |         |  |   |       |   |  |  |  | 
|                                                        |  |         |        |         |  |   |        |   |  |  |  | 
|Net amount recognized in the consolidated balance sheet |  | $       | (2,541 | )       |  | $ | (2,278 | ) |  |  |  | 
|                                                        |  |         |        |         |  |   |        |   |  |  |  | 

All of our post-retirement plans have a projected benefit obligation in excess
of plan assets.

Assumptions used to develop the net periodic benefits cost for the
post-retirement plans were as follows for the years ended:

|                                             |  |      |      |      |      |      |      |      |  |   |      |  
|-------------------------------------------- |  | ---- | ---- | ---- | ---- | ---- | ---- | ---- |  | - | ---- | -
|                                             |  | 2002 |      | 2001 |      | 2000
|                                             |  |      |      |      |      |     
|Discount rate                                |  |      | 6.8  | %    |      |      | 7.3  | %    |  |   | 7.3  | %
|Rate of compensation increase                |  |      | 4.3  | %    |      |      | 4.8  | %    |  |   | 4.8  | %
|Medical  initial                            |  |      | 8.0  | %    |      |      | 3.2  | %    |  |   | 4.8  | %
|Medical  ultimate                           |  |      | 5.0  | %    |      |      | 3.2  | %    |  |   | 3.8  | %
|Years to ultimate                            |  | 6 yr |      |      | 0 yr |      |      | 1 yr | 
|Dental                                       |  |      | 4.0  | %    |      |      | 3.3  | %    |  |   | 3.8  | %
|Sensitivities                                |  |      |      |      |      |      |      |      |  |   |      |  
|Effect
of 1% increase in trend rate          |  |      |      |      |      |      |      |      |  |   |      |  
| Service cost and interest cost             |  | $    | 50   |      |      | $    | 75   |      |  | $ | 71   |  
|
Accrued post-retirement
benefit obligation |  |      | 402  |      |      |      | 562  |      |  |   | 528  |  
|Effect
of 1% decrease in trend rate          |  |      |      |      |      |      |      |      |  |   |      |  
| Service cost and interest cost             |  |      | (47  | )    |      |      | (67  | )    |  |   | (64  | )
|
Accrued post-retirement
benefit obligation |  |      | (352 | )    |      |      | (454 | )    |  |   | (426 | )

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

The medical and dental assumptions and sensitivities are applicable only to the
Canadian obligation.

|                                         |  |         |     |         |  |         |     |  |  |   |     | 
|---------------------------------------- |  | ------- | --- | ------- |  | ------- | --- |  |  | - | --- | 
|                                         |  | Dec. 31 |     | Dec. 31 |  | Dec. 31
|                                         |  | 2002    |     | 2001    |  | 2000   
|                                         |  |         |     |         |  |        
|Components of net periodic benefits cost |  |         |     |         |  |         |     |  |  |   |     | 
|Service cost                             |  | $       | 116 |         |  | $       | 95  |  |  | $ | 95  | 
|Interest cost                            |  |         | 182 |         |  |         | 159 |  |  |   | 150 | 
|Recognized actuarial cost                |  |         | 4   |         |  |         |    |  |  |   |    | 
|                                         |  |         |     |         |  |         |     |  |  |   |     | 
|Net periodic benefits cost               |  | $       | 302 |         |  | $       | 254 |  |  | $ | 245 | 
|                                         |  |         |     |         |  |         |     |  |  |   |     | 

In addition to the above, our Austrian subsidiary provides severance benefits
and jubilee payments to eligible employees. The accrued liability in respect
of these benefits was $3,174 as at December 31, 2002 (2001  $2,449). The
charge to income for 2002 was $325 (2001  $472, 2000  $281).

12. COMMITMENTS AND CONTINGENCIES

Operating leases

We are committed under various operating leases for buildings, machinery and
equipment. The minimum annual payments under these contracts are approximately
as follows:

|                |  |   |        | 
|--------------- |  | - | ------ | 
|2003            |  | $ | 2,168  | 
|2004            |  |   | 2,112  | 
|2005            |  |   | 2,029  | 
|2006            |  |   | 1,843  | 
|2007            |  |   | 1,829  | 
|2008            |  |   | 1,784  | 
|2009 and beyond |  |   | 12,545 | 
|                |  |   |        | 
|                |  | $ | 24,310 | 
|                |  |   |        | 

Operating lease expense for the years ended December 31, 2002, 2001 and 2000
were $2,185, $1,755 and $2,837, respectively. Included in the item 2009 and
beyond is a 12-year land lease commitment for Fushun and a 17.5-year land and
building lease commitment for Trench China in Shanghai.

Capital leases

We are committed under various capital leases for plant and equipment. In
2002, the portion of the machinery and equipment financed by capital leases is
cost of $1,523 (2001  $1,301), accumulated depreciation of $694 (2001 
$166) and a net book value of $829 (2001  $1,135). The minimum annual payments under capital leases are approximately as follows:

|                 |  |   |     | 
|---------------- |  | - | --- | 
|2003             |  | $ | 613 | 
|2004             |  |   | 131 | 
|                 |  |   |     | 
|                 |  |   | 744 | 
|Imputed interest |  |   | 68  | 
|                 |  |   |     | 
|                 |  | $ | 676 | 
|                 |  |   |     | 

Litigation

In the ordinary course of business, we are the subject of or party to pending
or threatened litigation and claims. While it is not possible to predict with
certainty the outcome of such matters individually or in the aggregate,
management believes that the ultimate results will not have a material adverse
effect on our consolidated financial position, results of operations, or
liquidity.

Environmental matters

Our facilities are subject to a range of federal, state, local and foreign
environmental and occupational health and safety laws, including those laws
relating to air emissions, wastewater discharges, the handling and disposal of
solid and hazardous waste and the remediation of contamination associated with
the current and historic use of hazardous substances or materials. If a
release of hazardous substances or materials occurs on or from our properties
or any off-site disposal location used by us, or if contamination from prior
activities is discovered at any of its properties, we may be held liable for
the costs of remediation, natural resource damages and associated transaction
costs. While the amount of such liability could be material, we devote
resources to ensure that our current operations are conducted in a manner that reduces such risks.

F-19



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

We believe that we are currently in compliance with, and not subject to
liability under, any environmental laws, except where such non-compliance or
liability would not reasonably be expected to have a material adverse effect on
our consolidated financial position or results of operations.

13. OTHER NON-CURRENT LIABILITIES

Other non-current liabilities at December 31, 2002 and 2001 include the
non-current portion of proceeds received from the joint venture partner, SITW,
in Shanghai, China relating to sale of coil, bushing and instrument transformer
technology. The amount is net of certain expenses and is being recognized into
income on a straight-line basis over a ten-year period.

14. OTHER MATTERS

Restructuring and Integration
Provisions

On January 24, 2001, our Board of Management approved and announced the closure
of all main production operations for Trench Switzerland. Closure procedures were
completely finished by the end of 2001. The Swiss site continues to be our
main centre of engineering for instrument transformers and is the base for R&D
activities in new designs and measurement technologies.

At December 31, 2001, $1,317 of the liability had been paid out. The cash paid
for integration costs in 2001 was $3,356 (2000  $373). In 2002, we wrote off
$99 in inventory. Refer to Note 20 for 2003 developments.

Sale of AVC Product Line

Trench Limited completed the sale of its Adaptive VAR Compensative Product Line
to the S&C Electric Company for $850 on June 12, 2002.

15. CHANGES IN NON-CASH WORKING CAPITAL AND OTHER NON-CASH ITEMS

Changes in non-cash working capital are as follows:

|                                                                                       |  |              |        |              |  |              |        |   |  |   |        |  
|-------------------------------------------------------------------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ------ | - |  | - | ------ | -
|                                                                                       |  | Year ended   |        | Year ended   |  | Year ended  
|                                                                                       |  | December 31, |        | December 31, |  | December 31,
|                                                                                       |  | 2002         |        | 2001         |  | 2000        
|                                                                                       |  |              |        |              |  |             
|Decrease/(increase) in trade
accounts receivable,
prepayments and other
current assets |  | $            | 3,415  |              |  | $            | (6,337 | ) |  | $ | (1,359 | )
|Decrease (increase) in inventories                                                     |  |              | (353   | )            |  |              | 253    |   |  |   | (5,398 | )
|(Decrease) Increase in accounts
payable, accrued liabilities
and advance billings      |  |              | (5,598 | )            |  |              | 1,728  |   |  |   | 5,590  |  
|Increase in income tax payable                                                         |  |              | 382    |              |  |              | 1,114  |   |  |   | 1,589  |  
|Increase in due to parent                                                              |  |              | 1,782  |              |  |              | 1,309  |   |  |   | 1,237  |  
|(Decrease) increase in
restructuring provision                                         |  |              |       |              |  |              |       |   |  |   | (1,364 | )
|Decrease (increase) in
pension assets                                                  |  |              | 769    |              |  |              | 170    |   |  |   | (28    | )
|Increase in pension
and post-retirement benefits                                       |  |              | 898    |              |  |              | 78     |   |  |   | 422    |  
|Decrease in
deferred income tax                                                        |  |              | (971   | )            |  |              | (2,350 | ) |  |   | (517   | )
|Increase in
other liabilities                                                          |  |              |       |              |  |              |       |   |  |   | 3,729  |  
|                                                                                       |  |              |        |              |  |              |        |   |  |   |        |  
|                                                                                       |  | $            | 324    |              |  | $            | (4,035 | ) |  | $ | 3,901  |  
|                                                                                       |  |              |        |              |  |              |        |   |  |   |        |  

F-20



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

16. FINANCIAL INSTRUMENTS

During the normal course of business, we are exposed to foreign currency risk.
These risks create volatility in earnings and cash flows from period to period.
We occasionally make use of derivative instruments to eliminate or limit these
risks. Our objective is to reduce the volatility of earnings and cash flows
associated with market risks. Derivative instruments held by us are used for
hedging and non-speculative purposes.

We have recognized obligations denominated in foreign currencies. We seek to
hedge a portion of the foreign currency risk arising from foreign
currency-denominated forecasted transactions and certain significant recognized
assets and liabilities. Forwards are used to fix or protect the exchange rate
to be used for designated foreign currency-denominated forecasted transactions.
The gains and losses on the derivative contracts offset, to a certain extent,
the gains and losses on the transactions being hedged resulting in the
avoidance, to a certain extent, of losses affecting our results of operations.

At December 31, 2002 and 2001, we were committed to sell foreign currencies for
proceeds of $256 and $945, respectively. The contracts have varying maturities
with none extending beyond 2003. Gains upon fair-valuing the foreign currency
exchange contracts that amounted to $45 for the year ended 2002 were recorded
in current earnings. The fair values are based on dealer quotes at the
respective reporting dates. We did not designate any of our derivatives as
qualifying hedge instruments under FAS 133. The cumulative effect of adopting
FAS 133 at January 1, 2001, representing the initial revaluation of derivatives
as an after tax charge, would have been $56 in net income as a
cumulative-effect-type adjustment.

The carrying amounts and fair values of our significant financial instruments
were as follows at December 31, 2002 and 2001:

|                                                                                              |  |          |         |            |  |        |         |            |  |   |         |  |  |   |         | 
|--------------------------------------------------------------------------------------------- |  | -------- | ------- | ---------- |  | ------ | ------- | ---------- |  | - | ------- |  |  | - | ------- | 
|                                                                                              |  | 2002     |         | 2001      
|                                                                                              |  |          |         |           
|                                                                                              |  | Carrying |         |            |  |        |         | Carrying   |  |   |         | 
|                                                                                              |  | amount   |         | Fair value |  | amount |         | Fair value
|                                                                                              |  |          |         |            |  |        |         |           
|Cash and cash equivalents                                                                     |  | $        | 15,422  |            |  | $      | 15,422  |            |  | $ | 11,729  |  |  | $ | 11,729  | 
|Trade receivables, prepayments and other current assets                                       |  |          | 72,427  |            |  |        | 72,427  |            |  |   | 69,021  |  |  |   | 69,021  | 
|Bank indebtedness                                                                             |  |          | 5,808   |            |  |        | 5,808   |            |  |   | 10,699  |  |  |   | 10,699  | 
|Accounts payable, accrued liabilities, advance
billings, income tax payable and due to parent |  |          | 68,449  |            |  |        | 68,449  |            |  |   | 65,398  |  |  |   | 65,398  | 
|Long-term debt (including current portion)                                                    |  |          | 179,336 |            |  |        | 141,607 |            |  |   | 181,577 |  |  |   | 134,793 | 
|Foreign currency forward contracts                                                            |  |          | 45      |            |  |        | 45      |            |  |   | 41      |  |  |   | 41      | 

Valuation of Derivative Instruments

The fair value of derivative instruments is sensitive to movements in the
underlying market rates and variables. We monitor the fair value of derivative
instruments on a periodic basis. Foreign currency and commodity forwards are
valued using forward rates observed from quoted prices in the relevant markets
when possible. We assume parties to long-term contracts are economically
rational and will immediately exercise early termination rights if economically
beneficial when such rights exist in the contract.

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

17. SEGMENTED INFORMATION

We operate in one industry segment that designs and manufactures electrical
transmission and distribution equipment that transforms, regulates, conditions
and measures electricity for utility and industrial customers. Sales,
operating income, total assets, purchase of property, plant and equipment,
depreciation and goodwill amortization and sales by customer location
pertaining to the geographic areas in which we operate are presented below.
Product transfers between geographic areas are accounted for based on the
estimated fair market value of the products.

|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|----------------------------------------- |  | ------------ | ------- | ------------ |  | ------------ | ------- | - |  | - | ------- | -
|                                          |  | Year ended   |         | Year ended   |  | Year ended  
|                                          |  | December 31, |         | December 31, |  | December 31,
|                                          |  | 2002         |         | 2001         |  | 2000        
|                                          |  |              |         |              |  |             
|Sales by origin                           |  |              |         |              |  |              |         |   |  |   |         |  
|American operations                       |  | $            | 106,085 |              |  | $            | 102,303 |   |  | $ | 98,017  |  
|European operations                       |  |              | 143,864 |              |  |              | 130,140 |   |  |   | 117,796 |  
|International operations                  |  |              | 40,963  |              |  |              | 25,281  |   |  |   | 7,301   |  
|Intersegment elimination                  |  |              | (35,026 | )            |  |              | (33,468 | ) |  |   | (22,300 | )
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|                                          |  | $            | 255,886 |              |  | $            | 224,256 |   |  | $ | 200,814 |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|Operating income                          |  |              |         |              |  |              |         |   |  |   |         |  
|American operations                       |  | $            | 17,475  |              |  | $            | 15,588  |   |  | $ | 14,001  |  
|European operations                       |  |              | 7,680   |              |  |              | (2,628  | ) |  |   | (443    | )
|International operations                  |  |              | 8,196   |              |  |              | 4,187   |   |  |   | 1,005   |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|                                          |  | $            | 33,351  |              |  | $            | 17,147  |   |  | $ | 14,563  |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|Purchase of property, plant and
equipment |  |              |         |              |  |              |         |   |  |   |         |  
|American operations                       |  | $            | 1,429   |              |  | $            | 867     |   |  | $ | 1,603   |  
|European operations                       |  |              | 2,098   |              |  |              | 3,520   |   |  |   | 2,041   |  
|International operations                  |  |              | 1,663   |              |  |              | 3,338   |   |  |   | 72      |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|                                          |  | $            | 5,190   |              |  | $            | 7,725   |   |  | $ | 3,716   |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|Depreciation and goodwill
amortization    |  |              |         |              |  |              |         |   |  |   |         |  
|American operations                       |  | $            | 1,103   |              |  | $            | 3,205   |   |  | $ | 3,310   |  
|European operations                       |  |              | 4,615   |              |  |              | 6,273   |   |  |   | 8,474   |  
|International operations                  |  |              | 1,272   |              |  |              | 934     |   |  |   | 345     |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|                                          |  | $            | 6,990   |              |  | $            | 10,412  |   |  | $ | 12,129  |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|Sales by customer location                |  |              |         |              |  |              |         |   |  |   |         |  
|Americas                                  |  | $            | 94,722  |              |  | $            | 92,604  |   |  | $ | 88,119  |  
|Europe                                    |  |              | 88,039  |              |  |              | 86,072  |   |  |   | 79,660  |  
|Asia                                      |  |              | 61,088  |              |  |              | 38,928  |   |  |   | 23,444  |  
|Other                                     |  |              | 12,037  |              |  |              | 6,652   |   |  |   | 9,591   |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  
|                                          |  | $            | 255,886 |              |  | $            | 224,256 |   |  | $ | 200,814 |  
|                                          |  |              |         |              |  |              |         |   |  |   |         |  

|                         |  |         |         |         |  |   |         |  |  |  |  | 
|------------------------ |  | ------- | ------- | ------- |  | - | ------- |  |  |  |  | 
|                         |  | Dec. 31 |         | Dec. 31 |  |   |         | 
|                         |  | 2002    |         | 2001    |  |   |         | 
|                         |  |         |         |         |  |   |         | 
|Total assets             |  |         |         |         |  |   |         |  |  |  |  | 
|American operations      |  | $       | 119,492 |         |  | $ | 116,238 |  |  |  |  | 
|European operations      |  |         | 177,105 |         |  |   | 158,263 |  |  |  |  | 
|International operations |  |         | 49,123  |         |  |   | 42,536  |  |  |  |  | 
|                         |  |         |         |         |  |   |         |  |  |  |  | 
|                         |  | $       | 345,720 |         |  | $ | 317,037 |  |  |  |  | 
|                         |  |         |         |         |  |   |         |  |  |  |  | 

18. RELATED PARTY TRANSACTIONS

During the year, we paid $0.6 million (2001
 $0.6 million, 2000  $0.4 million)
in monitoring fees to CVC Capital Partners Limited (CVC). The principal
shareholders of the parent company are four entities, which are managed or
advised by CVC.

19. NEW ACCOUNTING STANDARDS

In July 2001, FAS 143, Accounting for Asset Retirement Obligations, was
issued. This requires recording the fair value of a liability for an asset
retirement obligation in the period incurred. The amount recorded as a
liability is capitalized by increasing the carrying amount of the related
long-lived asset, which is then depreciated over its useful life. If the
liability is settled for an amount other than the recorded balance, either a
gain or loss will be recognized at settlement. The standard is effective for
fiscal years beginning after June 15, 2002, with earlier application permitted.
We are presently evaluating the impact of this standard on our
financial position and results of operations but we

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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

do not expect the adoption
of FAS 143 to have a material impact on our operating results or financial
position.

In April 2002, FAS 145, Rescission of FAS 4, 44 and 64, Amendment to FAS 13,
and Technical Corrections, was issued. This standard updates, clarifies and
simplifies existing accounting pronouncements. It rescinds FAS 4, which
required all gains and losses from extinguishment of debt to be aggregated and,
if material, classified as an extraordinary item, net of related taxes. Upon
adoption, the criteria in APB 30 will be used to classify such gains and
losses. Gains or losses on extinguishments of debt that were classified as
extraordinary in prior periods presented that do not meet APB 30 criteria for
classification as extraordinary must be reclassified into earnings from
operations. FAS 145 also rescinds FAS 64, which amended FAS 4 and FAS 44,
which established accounting requirements for the transition of the Motor
Carrier Act of 1980. FAS 145 amends FAS 13 to require that certain lease
modifications that have economic effects similar to sale-leaseback transactions
be accounted for in the same manner as sale-leaseback transactions. We have
early adopted this new standard. We believe that this standard does not have a
material impact on our financial position and results of operations.

In July 2002, FAS 146, Accounting for Costs Associated with Exit or Disposal
Activities was issued. This addresses financial accounting and reporting for
costs associated with exit or disposal activities and nullifies Emerging Issues
Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). FAS 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized when the
liability is incurred and that an entitys commitment to a plan, by itself,
does not create a present obligation to others. We must adopt this standard
for exit or disposal activities that are initiated after December 31, 2002. We
do not expect the adoption of FAS 146 to have a material impact on our
operating results or financial position.

In November 2002, FASB issued Interpretation No. 45, Guarantors Accounting
and Disclosure requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. The Interpretation expands on the accounting guidance
of Statements No. 5, 57, and 107 and incorporates without change the provisions
of FASB Interpretation No. 34, which is being superseded. The Interpretation
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees such as standby letters of credit. It also clarifies
that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair value, or market value, of the obligations it
assumes under that guarantee and must disclose that information in its interim
and annual financial statements. The initial recognition and initial
measurement provisions apply on a prospective basis to guarantees issued or
modified after December 31, 2002, regardless of the guarantors fiscal
year-end. The disclosure requirements in the Interpretation are effective for
financial statements of interim or annual periods ending after December 15,
2002 and we have complied with the disclosure requirements. We do not expect
the future adoption of other parts of this standard to have a material impact
on our operating results or financial position.

In December 2002, FASB issued Statement 148, Accounting for Stock-Based
Compensation  Transition and Disclosure. This Statement amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The transition guidance and annual disclosure
provisions of Statement 148 are effective for fiscal years ending after
December 15, 2002, with earlier application permitted in certain circumstances.
The interim disclosure provisions are effective for financial reports
containing financial statements for interim periods beginning after December
15, 2002. Under the provisions of Statement 123 that remain unaffected by
Statement 148, companies may either recognize expenses on a fair value based
method in the income statement or disclose the pro forma effects of that method
in the footnotes to the financial statements. We are still assessing this new
standard but do not believe that it will have a material effect on our results
of operation or financial condition upon adoption.

In January 2003, FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities. Many variable interest entities have commonly been referred
to as special-purpose entities or off-balance sheet structures, but the
guidance applies to a larger population of entities. The interpretation applies
immediately to variable interest entities created after January 31, 2003, and
to variable interest entities in which an enterprise obtains an interest after
that date. It applies in the first fiscal year or interim period beginning
after June 15, 2003, to variable interest entities in which an enterprise holds
a variable interest that is acquired before February 1, 2003. In general, a
variable interest entity is a corporation, partnership, trust, or any other
legal structure used for business purposes that either (a) does not have equity
investors with voting rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its activities. A
variable interest entity often holds financial assets, including loans or
receivables, real estate or other property. A variable interest entity may be
essentially passive or it may engage in research and development or other
activities on behalf of another company. Some disclosures apply to financial

F-23



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TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

statements
issued after January 31, 2003. We have assessed this new standard and do not
believe that it has a material effect on our results of operations or financial
condition.

20. SUBSEQUENT EVENT

On January 13, 2003, we announced a restructuring plan for Trench Suisse-France
(TSF). This restructuring plan aims to improve the long-term competitiveness
of TSF in the market. The restructuring includes the termination of 34 jobs in
the administrative area and in the production area the number of temporary jobs
will be reduced. The estimated costs associated with this restructuring is
approximately $1 million, which will be accounted for under FAS 146.

21. SHARE OPTIONS

During the year ended December 31, 2000, Trench Electric Holdings B.V., the
parent company of Trench Electric B.V., approved a new share option scheme,
which included in its terms the ability to grant share options to certain
employees of Trench Electric B.V. The share options granted under this scheme
may only be exercised within a 10 day period preceding the sale or flotation of
the Group. These options do not have an expiry date but may not be exercised
unless sale or flotation occurs. No compensation cost has been recognized for
this scheme for the year ended December 31, 2002 (2001  nil and 2000  nil)
as it was not considered probable that the future performance criteria would be
met as of December 31, 2002. This result is not necessarily indicative of
compensation that may be recognized in future years in respect of these
options.

Share option activity for the three years ended December was as follows:

|                                 |  |              |       |                |  |   |      | 
|-------------------------------- |  | ------------ | ----- | -------------- |  | - | ---- | 
|                                 |  | Number of    |       | Weighted-     
|                                 |  | Shares       |       | Average       
|                                 |  | Under Option |       | Exercise Price
|                                 |  |              |       |               
|Outstanding at December 31, 1999 |  |              | 968   |                |  | $ | 4.08 | 
|Granted                          |  |              | 2,558 |                |  | $ | 4.08 | 
|Forfeited                        |  |              | (128  | )              |  | $ | 4.08 | 
|                                 |  |              |       |                |  |   |      | 
|Outstanding at December 31, 2000 |  |              | 3,398 |                |  | $ | 4.08 | 
|                                 |  |              |       |                |  |   |      | 
|Granted                          |  |              |      |                |  | $ | 4.08 | 
|Forfeited                        |  |              |      |                |  | $ | 4.08 | 
|                                 |  |              |       |                |  |   |      | 
|Outstanding at December 31, 2001 |  |              | 3,398 |                |  | $ | 4.08 | 
|                                 |  |              |       |                |  |   |      | 
|Granted                          |  |              |      |                |  | $ | 4.08 | 
|Forfeited                        |  |              |      |                |  | $ | 4.08 | 
|                                 |  |              |       |                |  |   |      | 
|Outstanding at December 31, 2002 |  |              | 3,398 |                |  | $ | 4.08 | 
|                                 |  |              |       |                |  |   |      | 
|Exercisable at December 31, 1999 |  |              |      |                |  |   |     | 
|Exercisable at December 31, 2000 |  |              |      |                |  |   |     | 
|Exercisable at December 31, 2001 |  |              |      |                |  |   |     | 
|Exercisable at December 31, 2002 |  |              |      |                |  |   |     | 

F-24



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

22. GUARANTEES

We extend a variety of financial and product warranty guarantees to third
parties. As of December 31, 2002 the following were outstanding:

|                      |                                        |   |           |        |           |   |   |   | 
|--------------------- | -------------------------------------- | - | --------- | ------ | --------- | - | - | - | 
|In
000s U.S. Dollars |                                        |   |           |        |           |   |   |  
|                      |                                        |   | Maximum   |        | Carrying 
|                      |                                        |   | Potential |        | Amount of
|                      |                                        |   | Payment   |        | Liability
|                      |                                        |   |           |        |          
|Financial guarantees: |                                        |   |           |        |           |   |   |  
|                      | CIBC letters of credit and guarantees  |   | $         | 13,879 |           |   | $ |  | 
|                      | Other letters of credit and guarantees |   |           | 2,287  |           |   |   |  | 
|                      |                                        |   |           |        |           |   |   |  
|                      |                                        | $ | 16,166    |        |           | $ |  |  
|                      |                                        |   |           |        |           |   |   |  

We accrue for costs associated with guarantees when it is probable that a
liability has been incurred and the amount can be reasonably estimated. The
most likely cost to be incurred is accrued based on an evaluation of currently
available facts, and where no amount within a range of estimates is more
likely, the minimum is accrued.

We provide service and warranty policies on our products and extend performance
and operating cost guarantees beyond normal service and warranty policies on
some of our products. Liability under service and warranty policies is based
upon a review of historical warranty and service claim experience. Liability
for performance and operating cost guarantees is based upon future product
performance and durability, and is estimated largely based upon historical
experience. Adjustments are made to accruals as claim data and historical
experience warrant. In addition, we may incur discretionary costs to service
our products in connection with product performance issues.

The changes in the carrying amount of service and product warranties and
product performance guarantees for the year ended December 31, 2002 are as
follows:

|                                 |  |         |       |  
|-------------------------------- |  | ------- | ----- | -
|                                 |  | Dec. 31
|In 000s U.S. Dollars            |  | 2002   
|                                 |  |        
|Balance as of January 1, 2002    |  | $       | 2,027 |  
|Warranties and guarantees issued |  |         | 1,267 |  
|Settlements made                 |  |         | (736  | )
|Adjustments to provision         |  |         | 10    |  
|Exchange                         |  |         | 161   |  
|                                 |  |         |       |  
|Balance as of December 31, 2002  |  | $       | 2,729 |  
|                                 |  |         |       |  

Certain companies at the TEBV level or below are cross guaranteeing the loans
at the TEHBV parent level, namely the vendor loan to BBA and certain
shareholder loans by the four CVC entities.

23. SUPPLEMENTAL GUARANTOR INFORMATION

Trench Electric S.A. and Trench Inc., two wholly owned subsidiaries, issued
senior subordinated notes in the amount of $160,000, which are fully and
unconditionally guaranteed on an unsecured, senior subordinated joint and
several basis by the Group and each of our material members, other than Trench
France S.A., Finatrench (France) S.A., Valtimon Holding BV, the Chinese joint
ventures and Trench Brasil Ltda. The following combining financial data
illustrates the composition of the guarantor members and the non-guarantor
members. Separate complete financial statements of the respective guarantors
would not provide additional information which would be useful in assessing the
financial composition of the guarantor members and thus are not presented.

The eliminations in the combining balance sheet include the elimination of
Finatrench (France) S.A.s investment in its subsidiary companies, Trench
Germany GmbH, a guarantor, and Trench France S.A., a non-guarantor. The
eliminations are incorporated in the combining statement of shareholders
equity to arrive at the ending balances.

F-25



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING BALANCE SHEETS

As at December 31, 2002
(expressed in thousands of U.S. dollars)

|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|------------------------------------------------- |  | --------- | ------- | --------- |  | ------------ | ------- | -------- |  | - | ------- | - |  | - | ------- | -
|                                                  |  |           |         |           |  | Non-         |         |          |  |   |         |   |  |  
|                                                  |  | Guarantor |         | Guarantor |  |              |         |          |  |   |         |  
|                                                  |  | Members   |         | Members   |  | Eliminations |         | Combined
|                                                  |  |           |         |           |  |              |         |         
|ASSETS                                            |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Current assets                                    |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Cash and cash equivalents                         |  | $         | 9,091   |           |  | $            | 6,331   |          |  | $ |        |   |  | $ | 15,422  |  
|Trade accounts receivable                         |  |           | 38,102  |           |  |              | 33,154  |          |  |   | (3,990  | ) |  |   | 67,266  |  
|Inventories, net                                  |  |           | 17,854  |           |  |              | 22,034  |          |  |   |        |   |  |   | 39,888  |  
|Prepayments                                       |  |           | 450     |           |  |              | 193     |          |  |   |        |   |  |   | 643     |  
|Deferred income tax                               |  |           |        |           |  |              | 416     |          |  |   | (54     | ) |  |   | 362     |  
|Income tax receivable                             |  |           |        |           |  |              | 22      |          |  |   | (22     | ) |  |   |        |  
|Other current assets                              |  |           | 2,778   |           |  |              | 1,740   |          |  |   |        |   |  |   | 4,518   |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total current assets                              |  |           | 68,275  |           |  |              | 63,890  |          |  |   | (4,066  | ) |  |   | 128,099 |  
|Property, plant and equipment                     |  |           | 48,890  |           |  |              | 22,325  |          |  |   |        |   |  |   | 71,215  |  
|Goodwill                                          |  |           | 123,030 |           |  |              | 9,882   |          |  |   | (9,002  | ) |  |   | 123,910 |  
|Prepaid pension                                   |  |           | 252     |           |  |              |        |          |  |   |        |   |  |   | 252     |  
|Deferred financing costs                          |  |           | 4,199   |           |  |              | 521     |          |  |   |        |   |  |   | 4,720   |  
|Deferred income tax                               |  |           | 3,970   |           |  |              | 7,739   |          |  |   |        |   |  |   | 11,709  |  
|Investment in subsidiaries                        |  |           | 29,015  |           |  |              | 41,139  |          |  |   | (70,154 | ) |  |   |        |  
|Long-term receivables                             |  |           | 5,735   |           |  |              |        |          |  |   |        |   |  |   | 5,735   |  
|Other assets                                      |  |           | 80      |           |  |              |        |          |  |   |        |   |  |   | 80      |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total assets                                      |  | $         | 283,446 |           |  | $            | 145,496 |          |  | $ | (83,222 | ) |  | $ | 345,720 |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|LIABILITIES                                       |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Current liabilities                               |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Bank indebtedness                                 |  | $         | 4,767   |           |  | $            | 1,041   |          |  | $ |        |   |  | $ | 5,808   |  
|Trade accounts payable                            |  |           | 13,626  |           |  |              | 17,719  |          |  |   | (3,990  | ) |  |   | 27,355  |  
|Accrued liabilities                               |  |           | 13,327  |           |  |              | 12,275  |          |  |   |        |   |  |   | 25,602  |  
|Advance billings                                  |  |           | 1,955   |           |  |              | 4,127   |          |  |   |        |   |  |   | 6,082   |  
|Due to parent                                     |  |           | 6,103   |           |  |              |        |          |  |   |        |   |  |   | 6,103   |  
|Income tax payable                                |  |           | 3,316   |           |  |              | 13      |          |  |   | (22     | ) |  |   | 3,307   |  
|Deferred income tax                               |  |           | 180     |           |  |              |        |          |  |   |        |   |  |   | 180     |  
|Current portion of obligation under capital lease |  |           | 50      |           |  |              | 507     |          |  |   |        |   |  |   | 557     |  
|Current portion of long-term debt                 |  |           | 3,167   |           |  |              | 10,119  |          |  |   |        |   |  |   | 13,286  |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total current liabilities                         |  |           | 46,491  |           |  |              | 45,801  |          |  |   | (4,012  | ) |  |   | 88,280  |  
|Group loans                                       |  |           | (38,753 | )         |  |              | 38,753  |          |  |   |        |   |  |   |        |  
|Current portion of obligation under capital lease |  |           | 3       |           |  |              | 116     |          |  |   |        |   |  |   | 119     |  
|Long-term debt                                    |  |           | 160,909 |           |  |              | 5,141   |          |  |   |        |   |  |   | 166,050 |  
|Pension and post-retirement benefits              |  |           | 16,587  |           |  |              |        |          |  |   |        |   |  |   | 16,587  |  
|Deferred income tax                               |  |           | 5,465   |           |  |              | 6,676   |          |  |   | (54     | ) |  |   | 12,087  |  
|Other liabilities                                 |  |           | 12,090  |           |  |              |        |          |  |   |        |   |  |   | 12,090  |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total liabilities                                 |  |           | 202,792 |           |  |              | 96,487  |          |  |   | (4,066  | ) |  |   | 295,213 |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Minority interest                                 |  |           | 8,698   |           |  |              |        |          |  |   |        |   |  |   | 8,698   |  
|Contingencies and commitments                     |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|                                                 
|SHAREHOLDERS EQUITY                              |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Share capital                                     |  |           | (4,574  | )         |  |              | 34,638  |          |  |   | (30,044 | ) |  |   | 20      |  
|Additional paid in capital                        |  |           | 75,693  |           |  |              | 388     |          |  |   | (387    | ) |  |   | 75,694  |  
|Accumulated other comprehensive income (expense)  |  |           | (3,652  | )         |  |              | 730     |          |  |   |        |   |  |   | (2,922  | )
|Accumulated (deficit) earnings                    |  |           | 4,489   |           |  |              | 13,253  |          |  |   | (48,725 | ) |  |   | (30,983 | )
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total shareholders equity                        |  |           | 71,956  |           |  |              | 49,009  |          |  |   | (79,156 | ) |  |   | 41,809  |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total liabilities and shareholders equity        |  | $         | 283,446 |           |  | $            | 145,496 |          |  | $ | (83,222 | ) |  | $ | 345,720 |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  

F-26



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING BALANCE SHEETS

As at December 31, 2001
(expressed in thousands of U.S. dollars)

|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|------------------------------------------------- |  | --------- | ------- | --------- |  | ------------ | ------- | -------- |  | - | ------- | - |  | - | ------- | -
|                                                  |  |           |         |           |  | Non-         |         |          |  |   |         |   |  |  
|                                                  |  | Guarantor |         | Guarantor |  |              |         |          |  |   |         |  
|                                                  |  | Members   |         | Members   |  | Eliminations |         | Combined
|                                                  |  |           |         |           |  |              |         |         
|ASSETS                                            |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Current assets                                    |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Cash and cash equivalents                         |  | $         | 4,925   |           |  | $            | 6,804   |          |  | $ |        |   |  | $ | 11,729  |  
|Trade accounts receivable                         |  |           | 40,676  |           |  |              | 30,919  |          |  |   | (7,195  | ) |  |   | 64,400  |  
|Inventories, net                                  |  |           | 17,222  |           |  |              | 18,722  |          |  |   |        |   |  |   | 35,944  |  
|Prepayments                                       |  |           | 317     |           |  |              | 116     |          |  |   |        |   |  |   | 433     |  
|Deferred income tax                               |  |           | 340     |           |  |              | 91      |          |  |   |        |   |  |   | 431     |  
|Other current assets                              |  |           | 1,957   |           |  |              | 2,231   |          |  |   |        |   |  |   | 4,188   |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total current assets                              |  |           | 65,437  |           |  |              | 58,883  |          |  |   | (7,195  | ) |  |   | 117,125 |  
|Property, plant and equipment                     |  |           | 42,939  |           |  |              | 22,098  |          |  |   |        |   |  |   | 65,037  |  
|Goodwill                                          |  |           | 115,382 |           |  |              | 8,454   |          |  |   | (8,454  | ) |  |   | 115,382 |  
|Prepaid pension                                   |  |           | 1,006   |           |  |              |        |          |  |   |        |   |  |   | 1,006   |  
|Deferred financing costs                          |  |           | 5,023   |           |  |              | 552     |          |  |   |        |   |  |   | 5,575   |  
|Deferred income tax                               |  |           | 6,536   |           |  |              | 4,541   |          |  |   |        |   |  |   | 11,077  |  
|Investment in subsidiaries                        |  |           | 32,298  |           |  |              | 41,139  |          |  |   | (73,437 | ) |  |   |        |  
|Long-term receivables                             |  |           | 1,766   |           |  |              |        |          |  |   |        |   |  |   | 1,766   |  
|Other assets                                      |  |           | 69      |           |  |              |        |          |  |   |        |   |  |   | 69      |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total assets                                      |  | $         | 270,456 |           |  | $            | 135,667 |          |  | $ | (89,086 | ) |  | $ | 317,037 |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|LIABILITIES                                       |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Current liabilities                               |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Bank indebtedness                                 |  | $         | 9,808   |           |  | $            | 891     |          |  | $ |        |   |  | $ | 10,699  |  
|Trade accounts payable                            |  |           | 19,625  |           |  |              | 20,708  |          |  |   | (7,195  | ) |  |   | 33,138  |  
|Accrued liabilities                               |  |           | 7,874   |           |  |              | 12,770  |          |  |   | 822     |   |  |   | 21,466  |  
|Advance billings                                  |  |           | 892     |           |  |              | 1,679   |          |  |   |        |   |  |   | 2,571   |  
|Due to parent                                     |  |           | 3,696   |           |  |              |        |          |  |   |        |   |  |   | 3,696   |  
|Income tax payable                                |  |           | 3,473   |           |  |              | 1,054   |          |  |   |        |   |  |   | 4,527   |  
|Deferred income tax                               |  |           | 136     |           |  |              |        |          |  |   |        |   |  |   | 136     |  
|Current portion of obligation under capital lease |  |           | 74      |           |  |              | 429     |          |  |   |        |   |  |   | 503     |  
|Current portion of long-term debt                 |  |           | 2,543   |           |  |              | 8,342   |          |  |   |        |   |  |   | 10,885  |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total current liabilities                         |  |           | 48,121  |           |  |              | 45,873  |          |  |   | (6,373  | ) |  |   | 87,621  |  
|Group loans                                       |  |           | (26,746 | )         |  |              | 26,746  |          |  |   |        |   |  |   |        |  
|Current portion of obligation under capital lease |  |           | 44      |           |  |              | 533     |          |  |   |        |   |  |   | 577     |  
|Long-term debt                                    |  |           | 164,001 |           |  |              | 6,691   |          |  |   |        |   |  |   | 170,692 |  
|Pension and post-retirement benefits              |  |           | 13,956  |           |  |              |        |          |  |   |        |   |  |   | 13,956  |  
|Deferred income tax                               |  |           | 6,477   |           |  |              | 3,855   |          |  |   |        |   |  |   | 10,332  |  
|Other liabilities                                 |  |           | 3,509   |           |  |              |        |          |  |   |        |   |  |   | 3,509   |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total liabilities                                 |  |           | 209,362 |           |  |              | 83,698  |          |  |   | (6,373  | ) |  |   | 286,687 |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Minority interest                                 |  |           | 6,933   |           |  |              |        |          |  |   |        |   |  |   | 6,933   |  
|Contingencies and commitments                     |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|                                                 
|SHAREHOLDERS EQUITY                              |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Share capital                                     |  |           | (1,878  | )         |  |              | 33,657  |          |  |   | (31,759 | ) |  |   | 20      |  
|Additional paid in capital                        |  |           | 75,694  |           |  |              | 388     |          |  |   | (388    | ) |  |   | 75,694  |  
|Accumulated other comprehensive income (expense)  |  |           | (18,958 | )         |  |              | 3,432   |          |  |   |        |   |  |   | (15,526 | )
|Accumulated (deficit) earnings                    |  |           | (697    | )         |  |              | 14,492  |          |  |   | (50,566 | ) |  |   | (36,771 | )
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total shareholders equity                        |  |           | 54,161  |           |  |              | 51,969  |          |  |   | (82,713 | ) |  |   | 23,417  |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  
|Total liabilities and shareholders equity        |  | $         | 270,456 |           |  | $            | 135,667 |          |  | $ | (89,086 | ) |  | $ | 317,037 |  
|                                                  |  |           |         |           |  |              |         |          |  |   |         |   |  |   |         |  

F-27



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
For the year ended December 31, 2002
(expressed in thousands of U.S. dollars)

|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  
|------------------------------------------------- |  | --------- | ------- | --------- |  | ------------ | ------ | -------- |  | - | ------- | - |  | - | ------- | -
|                                                  |  |           |         |           |  | Non-         |        |          |  |   |         |   |  |  
|                                                  |  | Guarantor |         | guarantor |  |              |        |          |  |   |         |  
|                                                  |  | members   |         | Members   |  | Eliminations |        | Combined
|                                                  |  |           |         |           |  |              |        |         
|Sales                                             |  | $         | 185,839 |           |  | $            | 80,127 |          |  | $ | (10,080 | ) |  | $ | 255,886 |  
|Cost of sales                                     |  |           | 128,455 |           |  |              | 59,822 |          |  |   | (10,080 | ) |  |   | 178,197 |  
|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  
|Gross profit                                      |  |           | 57,384  |           |  |              | 20,305 |          |  |   |        |   |  |   | 77,689  |  
|Selling, general and
administrative expenses      |  |           | 29,641  |           |  |              | 15,452 |          |  |   |        |   |  |   | 45,093  |  
|Gain on sale of assets                            |  |           | (755    | )         |  |              |       |          |  |   |        |   |  |   | (755    | )
|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  
|Operating income                                  |  |           | 28,498  |           |  |              | 4,853  |          |  |   |        |   |  |   | 33,351  |  
|Foreign exchange losses (gains)                   |  |           | (2,763  | )         |  |              | 470    |          |  |   |        |   |  |   | (2,293  | )
|Interest expense and other                        |  |           | 16,104  |           |  |              | 3,534  |          |  |   |        |   |  |   | 19,638  |  
|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  
|Income before income taxes,
and minority interest |  |           | 15,157  |           |  |              | 849    |          |  |   |        |   |  |   | 16,006  |  
|Provision for income taxes                        |  |           | 6,286   |           |  |              | 479    |          |  |   |        |   |  |   | 6,765   |  
|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  
|Income before minority interest                   |  |           | 8,871   |           |  |              | 370    |          |  |   |        |   |  |   | 9,241   |  
|Minority interests                                |  |           | 2,759   |           |  |              |       |          |  |   |        |   |  |   | 2,759   |  
|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  
|Net income for the year                           |  |           | 6,112   |           |  |              | 370    |          |  |   |        |   |  |   | 6,482   |  
|Minimum pension liability adjustment              |  |           | (285    | )         |  |              |       |          |  |   |        |   |  |   | (285    | )
|Foreign currency translation
adjustment           |  |           | 10,190  |           |  |              | 2,699  |          |  |   |        |   |  |   | 12,889  |  
|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  
|Comprehensive income
for the year                 |  | $         | 16,017  |           |  | $            | 3,069  |          |  | $ |        |   |  | $ | 19,086  |  
|                                                  |  |           |         |           |  |              |        |          |  |   |         |   |  |   |         |  

F-28



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)

For the year ended December 31, 2001
(expressed in thousands of U.S. dollars)

|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------------- |  | --------- | ------- | --------- |  | ------------ | ------ | -------- |  | - | ------ | - |  | - | ------- | -
|                                                                            |  |           |         |           |  | Non-         |        |          |  |   |        |   |  |  
|                                                                            |  | Guarantor |         | guarantor |  |              |        |          |  |   |        |  
|                                                                            |  | members   |         | Members   |  | Eliminations |        | Combined
|                                                                            |  |           |         |           |  |              |        |         
|Sales                                                                       |  | $         | 171,299 |           |  | $            | 59,972 |          |  | $ | (7,015 | ) |  | $ | 224,256 |  
|Cost of sales                                                               |  |           | 119,353 |           |  |              | 48,443 |          |  |   | (7,015 | ) |  |   | 160,781 |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Gross profit                                                                |  |           | 51,946  |           |  |              | 11,529 |          |  |   |       |   |  |   | 63,475  |  
|Selling, general and
administrative expenses                                |  |           | 34,187  |           |  |              | 12,141 |          |  |   |       |   |  |   | 46,328  |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Operating income (loss)                                                     |  |           | 17,759  |           |  |              | (612   | )        |  |   |       |   |  |   | 17,147  |  
|Foreign exchange losses (gains)                                             |  |           | 9,235   |           |  |              | (133   | )        |  |   |       |   |  |   | 9,102   |  
|Interest expense and other                                                  |  |           | 16,409  |           |  |              | 3,509  |          |  |   |       |   |  |   | 19,918  |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|(Loss) income before income taxes,
extraordinary gain and minority
interest |  |           | (7,885  | )         |  |              | (3,988 | )        |  |   |       |   |  |   | (11,873 | )
|Provision for income taxes                                                  |  |           | 2,900   |           |  |              | (738   | )        |  |   |       |   |  |   | 2,162   |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|(Loss) income before minority interest                                      |  |           | (10,785 | )         |  |              | (3,250 | )        |  |   |       |   |  |   | (14,035 | )
|Minority interests                                                          |  |           | 1,192   |           |  |              |       |          |  |   |       |   |  |   | 1,192   |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Net (loss) income for the year                                              |  |           | (11,977 | )         |  |              | (3,250 | )        |  |   |       |   |  |   | (15,227 | )
|Minimum pension liability adjustment                                        |  |           | 114     |           |  |              |       |          |  |   |       |   |  |   | 114     |  
|Foreign currency translation
adjustment                                     |  |           | (1,072  | )         |  |              | 458    |          |  |   |       |   |  |   | (614    | )
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Comprehensive (loss) income
for the year                                    |  | $         | (12,935 | )         |  | $            | (2,792 | )        |  | $ |       |   |  | $ | (15,727 | )
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  

For the year ended December 31, 2000
(expressed in thousands of U.S. dollars)

|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------------- |  | --------- | ------- | --------- |  | ------------ | ------ | -------- |  | - | ------ | - |  | - | ------- | -
|                                                                            |  |           |         |           |  | Non-         |        |          |  |   |        |   |  |  
|                                                                            |  | Guarantor |         | guarantor |  |              |        |          |  |   |        |  
|                                                                            |  | members   |         | Members   |  | Eliminations |        | Combined
|                                                                            |  |           |         |           |  |              |        |         
|Sales                                                                       |  | $         | 167,460 |           |  | $            | 38,633 |          |  | $ | (5,279 | ) |  | $ | 200,814 |  
|Cost of sales                                                               |  |           | 117,468 |           |  |              | 29,039 |          |  |   | (5,279 | ) |  |   | 141,228 |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Gross profit                                                                |  |           | 49,992  |           |  |              | 9,594  |          |  |   |       |   |  |   | 59,586  |  
|Contract termination                                                        |  |           | 644     |           |  |              |       |          |  |   |       |   |  |   | 644     |  
|Selling, general and
administrative expenses                                |  |           | 35,982  |           |  |              | 8,397  |          |  |   |       |   |  |   | 44,379  |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Operating income                                                            |  |           | 13,366  |           |  |              | 1,197  |          |  |   |       |   |  |   | 14,563  |  
|Gain on extinguishment of debt                                              |  |           | (2,170  | )         |  |              |       |          |  |   |       |   |  |   | (2,170  | )
|Foreign exchange losses (gains)                                             |  |           | 7,525   |           |  |              | 140    |          |  |   |       |   |  |   | 7,665   |  
|Interest expense and other                                                  |  |           | 20,252  |           |  |              | 3,477  |          |  |   |       |   |  |   | 23,729  |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|(Loss) income before income taxes,
extraordinary gain and minority
interest |  |           | (12,241 | )         |  |              | (2,420 | )        |  |   |       |   |  |   | (14,661 | )
|Provision for income taxes                                                  |  |           | 1,880   |           |  |              | 1,105  |          |  |   |       |   |  |   | 2,985   |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|(Loss) income before extraordinary
gain and minority interest               |  |           | (14,121 | )         |  |              | (3,525 | )        |  |   |       |   |  |   | (17,646 | )
|Minority interests                                                          |  |           | 272     |           |  |              |       |          |  |   |       |   |  |   | 272     |  
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Net (loss) income for the year                                              |  |           | (14,393 | )         |  |              | (3,525 | )        |  |   |       |   |  |   | (17,918 | )
|Minimum pension liability adjustment                                        |  |           | (912    | )         |  |              |       |          |  |   |       |   |  |   | (912    | )
|Foreign currency translation
adjustment                                     |  |           | 90      |           |  |              | (3,163 | )        |  |   |       |   |  |   | (3,073  | )
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  
|Comprehensive (loss) income
for the year                                    |  | $         | (15,215 | )         |  | $            | (6,688 | )        |  | $ |       |   |  | $ | (21,903 | )
|                                                                            |  |           |         |           |  |              |        |          |  |   |        |   |  |   |         |  

F-29



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING STATEMENTS OF SHAREHOLDERS EQUITY

(expressed in thousands of U.S. dollars)

|                                                   |  |                   |         |                       |  |             |         |          |  |            |         |             |  |          |        |             |  |         |        |             |  |   |        |   |  |             |         |   |  |   |         |   |  |   |         |  
|-------------------------------------------------- |  | ----------------- | ------- | --------------------- |  | ----------- | ------- | -------- |  | ---------- | ------- | ----------- |  | -------- | ------ | ----------- |  | ------- | ------ | ----------- |  | - | ------ | - |  | ----------- | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                   |  | Guarantor members |         | Non-Guarantor members |  | Combined   
|                                                   |  |                   |         |                       |  |            
|                                                   |  |                   |         |                       |  | Minimum     |         |          |  |            |         |             |  |          |        | Minimum     |  |         |        |             |  |   |        |   |  | Minimum     |         |   |  |  
|                                                   |  |                   |         |                       |  | pension and |         |          |  |            |         |             |  |          |        | pension and |  |         |        |             |  |   |        |   |  | pension and |         |   |  |  
|                                                   |  |                   |         |                       |  | cumulative  |         |          |  |            |         |             |  |          |        | cumulative  |  |         |        |             |  |   |        |   |  | cumulative  |         |   |  |  
|                                                   |  | Capital           |         | translation           |  |             |         |          |  | Capital    |         | translation |  |          |        |             |  | Capital |        | translation |  |   |        |  
|                                                   |  | employed          |         | adjustment            |  | Total       |         | employed |  | adjustment |         | Total       |  | employed |        | adjustment  |  | Total  
|                                                   |  |                   |         |                       |  |             |         |          |  |            |         |             |  |          |        |             |  |        
|Balance
 December 31,
1999                        |  | $                 | 72,439  |                       |  | $           | (12,945 | )        |  | $          | 59,494  |             |  | $        | (351   | )           |  | $       | 1,904  |             |  | $ | 1,553  |   |  | $           | 72,088  |   |  | $ | (11,041 | ) |  | $ | 61,047  |  
|Net (loss) income for
the year                     |  |                   | (14,996 | )                     |  |             |        |          |  |            | (14,996 | )           |  |          | (2,922 | )           |  |         |       |             |  |   | (2,922 | ) |  |             | (17,918 | ) |  |   |        |   |  |   | (17,918 | )
|Minimum pension
liability adjustment               |  |                   |        |                       |  |             | (912    | )        |  |            | (912    | )           |  |          |       |             |  |         |       |             |  |   |       |   |  |             |        |   |  |   | (912    | ) |  |   | (912    | )
|Foreign currency
cumulative translation
adjustment |  |                   |        |                       |  |             | 90      |          |  |            | 90      |             |  |          |       |             |  |         | (3,163 | )           |  |   | (3,163 | ) |  |             |        |   |  |   | (3,073  | ) |  |   | (3,073  | )
|                                                   |  |                   |         |                       |  |             |         |          |  |            |         |             |  |          |        |             |  |         |        |             |  |   |        |   |  |             |         |   |  |   |         |   |  |   |         |  
|Balance

December 31,
2000                        |  | $                 | 57,443  |                       |  | $           | (13,767 | )        |  | $          | 43,676  |             |  | $        | (3,273 | )           |  | $       | (1,259 | )           |  | $ | (4,532 | ) |  | $           | 54,170  |   |  | $ | (15,026 | ) |  | $ | 39,144  |  
|Net (loss) income for
the year                     |  |                   | (12,342 | )                     |  |             |        |          |  |            | (12,342 | )           |  |          | (2,885 | )           |  |         |       |             |  |   | (2,885 | ) |  |             | (15,227 | ) |  |   |        |   |  |   | (15,227 | )
|Dividends received/(paid)                          |  |                   | (2,955  | )                     |  |             |        |          |  |            | (2,955  | )           |  |          | 2,955  |             |  |         |       |             |  |   | 2,955  |   |  |             |        |   |  |   |        |   |  |   |        |  
|Minimum pension
liability adjustment               |  |                   |        |                       |  |             | 114     |          |  |            | 114     |             |  |          |       |             |  |         |       |             |  |   |       |   |  |             |        |   |  |   | 114     |   |  |   | 114     |  
|Foreign currency
cumulative translation
adjustment |  |                   |        |                       |  |             | (1,072  | )        |  |            | (1,072  | )           |  |          |       |             |  |         | 458    |             |  |   | 458    |   |  |             |        |   |  |   | (614    | ) |  |   | (614    | )
|                                                   |  |                   |         |                       |  |             |         |          |  |            |         |             |  |          |        |             |  |         |        |             |  |   |        |   |  |             |         |   |  |   |         |   |  |   |         |  
|Balance

December 31,
2001                        |  | $                 | 42,146  |                       |  | $           | (14,725 | )        |  | $          | 27,421  |             |  | $        | (3,203 | )           |  | $       | (801   | )           |  | $ | (4,004 | ) |  | $           | 38,943  |   |  | $ | (15,526 | ) |  | $ | 23,417  |  
|Net (loss) income for
the year                     |  |                   | 6,112   |                       |  |             |        |          |  |            | 6,112   |             |  |          | 370    |             |  |         |       |             |  |   | 370    |   |  |             | 6,482   |   |  |   |        |   |  |   | 6,482   |  
|Dividends received/(paid)                          |  |                   | 100     |                       |  |             |        |          |  |            | 100     |             |  |          | (794   | )           |  |         |       |             |  |   | (794   | ) |  |             | (694    | ) |  |   |        |   |  |   | (694    | )
|Minimum pension
liability adjustment               |  |                   |        |                       |  |             | (285    | )        |  |            | (285    | )           |  |          |       |             |  |         |       |             |  |   |       |   |  |             |        |   |  |   | (285    | ) |  |   | (285    | )
|Foreign currency
cumulative translation
adjustment |  |                   |        |                       |  |             | 10,190  |          |  |            | 10,190  |             |  |          |       |             |  |         | 2,699  |             |  |   | 2,699  |   |  |             |        |   |  |   | 12,889  |   |  |   | 12,889  |  
|                                                   |  |                   |         |                       |  |             |         |          |  |            |         |             |  |          |        |             |  |         |        |             |  |   |        |   |  |             |         |   |  |   |         |   |  |   |         |  
|Balance

December 31,
2002                        |  | $                 | 48,358  |                       |  | $           | (4,820  | )        |  | $          | 43,538  |             |  | $        | (3,627 | )           |  | $       | 1,898  |             |  | $ | (1,729 | ) |  | $           | 44,731  |   |  | $ | (2,922  | ) |  | $ | 41,809  |  
|                                                   |  |                   |         |                       |  |             |         |          |  |            |         |             |  |          |        |             |  |         |        |             |  |   |        |   |  |             |         |   |  |   |         |   |  |   |         |  

F-30



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING STATEMENTS OF CASH FLOWS

For the year ended December 31, 2002
(expressed in thousands of U.S. dollars)

|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |        |  
|-------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | - | --------- | ------ | --------- | - | -------- | ----- |  | - | ------- | ------ | -
|                                                                                                   |                                                                      |   |           |        |           |   | Non-     |       |  |   |        
|                                                                                                   |                                                                      |   | Guarantor |        | guarantor |   |          |       | 
|                                                                                                   |                                                                      |   | Members   |        | Members   |   | Combined
|                                                                                                   |                                                                      |   |           |        |           |   |         
|Cash provided by (used in)                                                                         |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|OPERATING ACTIVITIES                                                                               |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Net (loss) income for the year                                                                     |                                                                      | $ | 6,112     |        |           | $ | 370      |       |  | $ | 6,482   |       
|Adjustments to reconcile net income to net
cash provided by operating activities
Minority interest |                                                                      |   | 2,759     |        |           |   |         |       |  |   | 2,759   |       
|                                                                                                   | Depreciation of property, plant and equipment                        |   |           | 3,960  |           |   |          | 3,030 |  |   |         | 6,990  |  
|                                                                                                   | Amortization of goodwill                                             |   |           |       |           |   |          |      |  |   |         |       |  
|                                                                                                   | Loss on sale of assets                                               |   |           | 218    |           |   |          | 45    |  |   |         | 263    |  
|                                                                                                   | Gain on sale of assets                                               |   |           | (781   | )         |   |          |      |  |   |         | (781   | )
|                                                                                                   | Amortization of deferred financing costs
and other non-cash interest |   |           | 1,342  |           |   |          | 113   |  |   |         | 1,455  |  
|                                                                                                   | Unrealized exchange gain on long-term debt
and bank indebtedness     |   |           | (3,665 | )         |   |          |      |  |   |         | (3,665 | )
|Changes in non-cash working capital
and other non-cash items                                       |                                                                      |   | 5,603     |        |           |   | (5,279   | )     |  |   | 324     |       
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|                                                                                                   |                                                                      |   | 15,548    |        |           |   | (1,721   | )     |  |   | 13,827  |       
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|INVESTING ACTIVITIES                                                                               |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Acquisitions, net of cash acquired                                                                 |                                                                      |   | (1,933    | )      |           |   | 981      |       |  |   | (952    | )     
|Purchases of property, plant and equipment                                                         |                                                                      |   | (3,061    | )      |           |   | (2,129   | )     |  |   | (5,190  | )     
|Proceeds on sale of assets                                                                         |                                                                      |   | 850       |        |           |   | 1        |       |  |   | 851     |       
|Proceeds on sale of technology                                                                     |                                                                      |   | 5,000     |        |           |   |         |       |  |   | 5,000   |       
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|                                                                                                   |                                                                      |   | 856       |        |           |   | (1,147   | )     |  |   | (291    | )     
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|FINANCING ACTIVITIES                                                                               |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Net payments on revolving
credit facility with CIBC  net                                          |                                                                      |   | (5,712    | )      |           |   | (128     | )     |  |   | (5,840  | )     
|Proceeds from short-term debt                                                                      |                                                                      |   |          |        |           |   | 362      |       |  |   | 362     |       
|Payments on long-term debt                                                                         |                                                                      |   | (2,811    | )      |           |   | (958     | )     |  |   | (3,769  | )     
|Payments on capital leases                                                                         |                                                                      |   | (72       | )      |           |   | (460     | )     |  |   | (532    | )     
|Increase/(decrease) in debt payable to affiliate                                                   |                                                                      |   | (4,303    | )      |           |   | 4,303    |       |  |   |        |       
|Dividends                                                                                          |                                                                      |   | 100       |        |           |   | (794     | )     |  |   | (694    | )     
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|                                                                                                   |                                                                      |   | (12,798   | )      |           |   | 2,325    |       |  |   | (10,473 | )     
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Effect of exchange rate changes on cash                                                            |                                                                      |   | 560       |        |           |   | 70       |       |  |   | 630     |       
|Increase (decrease) in cash and cash
equivalents during the year                                   |                                                                      |   | 4,166     |        |           |   | (473     | )     |  |   | 3,693   |       
|Cash and cash equivalents  Beginning of
year                                                      |                                                                      |   | 4,925     |        |           |   | 6,804    |       |  |   | 11,729  |       
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Cash and cash equivalents  End of year                                                            |                                                                      | $ | 9,091     |        |           | $ | 6,331    |       |  | $ | 15,422  |       
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Supplemental disclosures:                                                                          |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Cash paid during the year for:                                                                     |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Income taxes                                                                                       |                                                                      | $ | 3,793     |        |           | $ | 2,239    |       |  | $ | 6,032   |       
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       
|Interest                                                                                           |                                                                      | $ | 17,398    |        |           | $ | 785      |       |  | $ | 18,183  |       
|                                                                                                   |                                                                      |   |           |        |           |   |          |       |  |   |         |       

F-31



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING STATEMENTS OF CASH FLOWS

For the year ended December 31, 2001
(expressed in thousands of U.S. dollars)

|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |       |  
|-------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | - | --------- | ----- | --------- | - | -------- | ----- | - | - | ------- | ----- | -
|                                                                                                   |                                                                      |   |           |       |           |   | Non-     |       |   |   |        
|                                                                                                   |                                                                      |   | Guarantor |       | guarantor |   |          |       |  
|                                                                                                   |                                                                      |   | members   |       | Members   |   | Combined
|                                                                                                   |                                                                      |   |           |       |           |   |         
|Cash provided by (used in)                                                                         |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|OPERATING ACTIVITIES                                                                               |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Net (loss) for the year                                                                            |                                                                      | $ | (11,978   | )     |           | $ | (3,249   | )     |   | $ | (15,227 | )    
|Adjustments to reconcile net income to net
cash provided by operating activities
Minority interest |                                                                      |   | 1,192     |       |           |   |         |       |   |   | 1,192   |      
|                                                                                                   | Depreciation of property, plant and equipment                        |   |           | 4,038 |           |   |          | 2,887 |   |   |         | 6,925 |  
|                                                                                                   | Amortization of goodwill                                             |   |           | 3,229 |           |   |          | 258   |   |   |         | 3,487 |  
|                                                                                                   | (Gain) loss on sale of assets                                        |   |           | (58   | )         |   |          |      |   |   |         | (58   | )
|                                                                                                   | Amortization of deferred financing costs
and other non-cash interest |   |           | 754   |           |   |          | 443   |   |   |         | 1,197 |  
|                                                                                                   | Unrealized exchange loss on long-term debt
and bank indebtedness     |   |           | 9,435 |           |   |          | (133  | ) |   |         | 9,302 |  
|Changes in non-cash working capital
and other non-cash items                                       |                                                                      |   | (3,097    | )     |           |   | (938     | )     |   |   | (4,035  | )    
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|                                                                                                   |                                                                      |   | 3,515     |       |           |   | (732     | )     |   |   | 2,783   |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|INVESTING ACTIVITIES                                                                               |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Acquisitions, net of cash acquired                                                                 |                                                                      |   | (2,553    | )     |           |   | 321      |       |   |   | (2,232  | )    
|Purchases of property, plant and equipment                                                         |                                                                      |   | (998      | )     |           |   | (6,727   | )     |   |   | (7,725  | )    
|Proceeds on disposal of property, plant and
equipment                                              |                                                                      |   | 452       |       |           |   |         |       |   |   | 452     |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|                                                                                                   |                                                                      |   | (3,099    | )     |           |   | (6,406   | )     |   |   | (9,505  | )    
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|FINANCING ACTIVITIES                                                                               |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Proceeds from revolving
credit facility with CIBC  net                                            |                                                                      |   | (366      | )     |           |   | 923      |       |   |   | 557     |      
|Proceeds from long-term debt                                                                       |                                                                      |   |          |       |           |   |         |       |   |   |        |      
|Payments on long-term debt                                                                         |                                                                      |   | (2,544    | )     |           |   | (1,059   | )     |   |   | (3,603  | )    
|Proceeds from capital leases                                                                       |                                                                      |   |          |       |           |   | 967      |       |   |   | 967     |      
|Increase/(decrease) in debt payable to affiliate                                                   |                                                                      |   | (2,175    | )     |           |   | 2,175    |       |   |   |        |      
|Increase/(decrease) in capital                                                                     |                                                                      |   | (636      | )     |           |   | 636      |       |   |   |        |      
|Dividends                                                                                          |                                                                      |   | (2,955    | )     |           |   | 2,955    |       |   |   |        |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|                                                                                                   |                                                                      |   | (8,676    | )     |           |   | 6,597    |       |   |   | (2,079  | )    
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Effect of exchange rate changes on cash                                                            |                                                                      |   | 200       |       |           |   | (189     | )     |   |   | 11      |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Increase (decrease) in cash and cash
equivalents during the year                                   |                                                                      |   | (8,060    | )     |           |   | (730     | )     |   |   | (8,790  | )    
|Cash and cash equivalents  Beginning of
Year                                                      |                                                                      |   | 12,985    |       |           |   | 7,534    |       |   |   | 20,519  |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Cash and cash equivalents  End of year                                                            |                                                                      | $ | 4,925     |       |           | $ | 6,804    |       |   | $ | 11,729  |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Supplemental disclosures:                                                                          |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Cash paid during the year for:                                                                     |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Income taxes                                                                                       |                                                                      | $ | 920       |       |           | $ | 417      |       |   | $ | 1,337   |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      
|Interest                                                                                           |                                                                      | $ | 17,774    |       |           | $ | 866      |       |   | $ | 18,640  |      
|                                                                                                   |                                                                      |   |           |       |           |   |          |       |   |   |         |      

F-32



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SUPPLEMENTAL COMBINING STATEMENTS OF CASH FLOWS

For the year ended December 31, 2000
(expressed in thousands of U.S. dollars)

|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |        |  
|----------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | - | --------- | ------ | --------- | - | -------- | ----- | - | - | ------- | ------ | -
|                                                                                                                              |                                                                      |   |           |        |           |   | Non-     |       |   |   |        
|                                                                                                                              |                                                                      |   | Guarantor |        | guarantor |   |          |       |  
|                                                                                                                              |                                                                      |   | members   |        | Members   |   | Combined
|                                                                                                                              |                                                                      |   |           |        |           |   |         
|Cash provided by (used in)                                                                                                    |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|OPERATING ACTIVITIES                                                                                                          |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Net (loss) income for the year                                                                                                |                                                                      | $ | (14,392   | )      |           | $ | (3,526   | )     |   | $ | (17,918 | )     
|Adjustments to reconcile net income to net
cash provided by operating activities
Extraordinary gain on extinguishment of debt |                                                                      |   | (2,170    | )      |           |   |         |       |   |   | (2,170  | )     
|                                                                                                                              | Minority interest                                                    |   |           | 272    |           |   |          |      |   |   |         | 272    |  
|                                                                                                                              | Depreciation of property, plant and equipment                        |   |           | 7,444  |           |   |          | 1,116 |   |   |         | 8,560  |  
|                                                                                                                              | Amortization of goodwill                                             |   |           | 3,303  |           |   |          | 266   |   |   |         | 3,569  |  
|                                                                                                                              | (Gain) loss on sale of assets                                        |   |           | 37     |           |   |          | (617  | ) |   |         | (580   | )
|                                                                                                                              | Amortization of deferred financing costs
and other non-cash interest |   |           | 4,847  |           |   |          | 133   |   |   |         | 4,980  |  
|                                                                                                                              | Restructuring provision                                              |   |           | (1,364 | )         |   |          |      |   |   |         | (1,364 | )
|                                                                                                                              | Unrealized exchange loss on long-term debt
and bank indebtedness     |   |           | 7,675  |           |   |          | 129   |   |   |         | 7,804  |  
|Changes in non-cash working capital
and other non-cash items                                                                  |                                                                      |   | 5,692     |        |           |   | (427     | )     |   |   | 5,265   |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|                                                                                                                              |                                                                      |   | 11,344    |        |           |   | (2,926   | )     |   |   | 8,418   |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|INVESTING ACTIVITIES                                                                                                          |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Acquisitions, net of cash acquired                                                                                            |                                                                      |   | (10,291   | )      |           |   |         |       |   |   | (10,291 | )     
|Purchases of property, plant and equipment                                                                                    |                                                                      |   | (2,513    | )      |           |   | (1,203   | )     |   |   | (3,716  | )     
|Proceeds on disposal of property, plant and
equipment                                                                         |                                                                      |   | 128       |        |           |   | 1,403    |       |   |   | 1,531   |       
|Net investment in China JV                                                                                                    |                                                                      |   | (1,408    | )      |           |   |         |       |   |   | (1,408  | )     
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|                                                                                                                              |                                                                      |   | (14,084   | )      |           |   | 200      |       |   |   | (13,884 | )     
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|FINANCING ACTIVITIES                                                                                                          |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Payments on revolving
credit facility with CSFB  net                                                                         |                                                                      |   | (12,584   | )      |           |   |         |       |   |   | (12,584 | )     
|Proceeds from revolving
credit facility with CIBC  net                                                                       |                                                                      |   | 10,045    |        |           |   |         |       |   |   | 10,045  |       
|Proceeds from long-term debt                                                                                                  |                                                                      |   | 18,173    |        |           |   | 6,827    |       |   |   | 25,000  |       
|Payments on long-term debt                                                                                                    |                                                                      |   |          |        |           |   | (7,411   | )     |   |   | (7,411  | )     
|Financing costs                                                                                                               |                                                                      |   | (1,664    | )      |           |   |         |       |   |   | (1,664  | )     
|Increase/(decrease) in debt payable to affiliate                                                                              |                                                                      |   | 10,012    |        |           |   | (10,012  | )     |   |   |        |       
|Increase in capital                                                                                                           |                                                                      |   | (13,325   | )      |           |   | 13,325   |       |   |   |        |       
|Bond purchase                                                                                                                 |                                                                      |   | (6,986    | )      |           |   |         |       |   |   | (6,986  | )     
|Assumption of cash in (investment in) Trench China                                                                            |                                                                      |   | (2,900    | )      |           |   | 5,169    |       |   |   | 2,269   |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|                                                                                                                              |                                                                      |   | 771       |        |           |   | 7,898    |       |   |   | 8,669   |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Effect of exchange rate changes on cash                                                                                       |                                                                      |   | (339      | )      |           |   | (345     | )     |   |   | (684    | )     
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Increase (decrease) in cash and cash
equivalents during the year                                                              |                                                                      |   | (2,308    | )      |           |   | 4,827    |       |   |   | 2,519   |       
|Cash and cash equivalents  Beginning of
year                                                                                 |                                                                      |   | 15,293    |        |           |   | 2,707    |       |   |   | 18,000  |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Cash and cash equivalents  End of year                                                                                       |                                                                      | $ | 12,985    |        |           | $ | 7,534    |       |   | $ | 20,519  |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Supplemental disclosures:                                                                                                     |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Cash paid during the year for:                                                                                                |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Income taxes                                                                                                                  |                                                                      | $ | 1,949     |        |           | $ | 78       |       |   | $ | 2,027   |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       
|Interest                                                                                                                      |                                                                      | $ | 17,602    |        |           | $ | 1,157    |       |   | $ | 18,759  |       
|                                                                                                                              |                                                                      |   |           |        |           |   |          |       |   |   |         |       

F-33



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Other information:

Analysis of provisions:

|                                           |  |              |       |              |  |              |        |   |  |   |       |  
|------------------------------------------ |  | ------------ | ----- | ------------ |  | ------------ | ------ | - |  | - | ----- | -
|                                           |  | Year ended   |       | Year ended   |  | Year ended  
|                                           |  | December 31, |       | December 31, |  | December 31,
|                                           |  | 2002         |       | 2001         |  | 2000        
|                                           |  |              |       |              |  |             
|Allowance for doubtful accounts            |  |              |       |              |  |              |        |   |  |   |       |  
|Balance, beginning of period               |  | $            | 843   |              |  | $            | 2,446  |   |  | $ | 892   |  
|Reversal of accrual to income in Trench UK |  |              |      |              |  |              | (1,003 | ) |  |   |      |  
|Charged to profit and loss                 |  |              | (265  | )            |  |              | (447   | ) |  |   | (732  | )
|Adjustment to allowance, net of exchange   |  |              | 1,173 |              |  |              | (153   | ) |  |   | 2,286 |  
|                                           |  |              |       |              |  |              |        |   |  |   |       |  
|Balance, end of period                     |  | $            | 1,751 |              |  | $            | 843    |   |  | $ | 2,446 |  
|                                           |  |              |       |              |  |              |        |   |  |   |       |  

|                                      |  |              |       |              |  |              |        |   |  |   |       |  
|------------------------------------- |  | ------------ | ----- | ------------ |  | ------------ | ------ | - |  | - | ----- | -
|                                      |  | Year ended   |       | Year ended   |  | Year ended  
|                                      |  | December 31, |       | December 31, |  | December 31,
|                                      |  | 2002         |       | 2001         |  | 2000        
|                                      |  |              |       |              |  |             
|Provision for inventory obsolescence  |  |              |       |              |  |              |        |   |  |   |       |  
|Balance, beginning of period          |  | $            | 2,188 |              |  | $            | 2,320  |   |  | $ | 1,353 |  
|Charged to profit and loss            |  |              | (534  | )            |  |              | (1,044 | ) |  |   | (695  | )
|Additional provision, net of exchange |  |              | 237   |              |  |              | 912    |   |  |   | 1,662 |  
|                                      |  |              |       |              |  |              |        |   |  |   |       |  
|Balance, end of period                |  | $            | 1,891 |              |  | $            | 2,188  |   |  | $ | 2,320 |  
|                                      |  |              |       |              |  |              |        |   |  |   |       |  

F-34



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

Subsidiary Information

We own, directly or indirectly 100%, of the following companies (except for MWB
(Shanghai) Co. Ltd. in China, which is 65% owned and Trench Fushun Bushing Co.
Ltd in Fushun, China, which is 65% owned).

|                                                                                                               |  |                                                                                      |  |                                                                                                     
|-------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------
|Trench Electric BV &
Valtimon Holding BV
Strawinskylaan 3105
1077ZX Amsterdam,
The Netherlands                 |  | Trench Limited
71 Maybrook Drive
Scarborough, Ontario
M1V 4B6
Canada
+1 416 298 8108 |  | Trench Germany GmbH
Nürnberger Strasse 199
D-96050 Bamberg
Germany
+49 951 1803 0                   
|                                                                                                               |  |                                                                                      |  |                                                                                                     
|Trench Austria GmbH
Paschinger Strasse 49
A-4060 Linz-Leonding
Austria
+43 732 6793 0                          |  | Trench Inc.
71 Maybrook Drive
Scarborough, Ontario
M1V 4B6
Canada
+1 416 298 8108    |  | Finatrench (France) SA
112 Avenue Kleber
BP 163, Trocadero 75770
Paris, France
+33 3 89 70 23 23    
|                                                                                                               |  |                                                                                      |  |                                                                                                     
|Trench Switzerland A.G.
Lehenmattstrasse 353
CH 4052, Basel
Switzerland
+41 61.315 51 11                       |  | Trench Electric SA
69 route dEsch
Luxembourg
L-2953                                 |  | Trench France SA
16 rue du Général-Cassagnou
68302 St. Louis, Cedex
France
+33 3 89 70 23 23        
|                                                                                                               |  |                                                                                      |  |                                                                                                     
|MWB (Shanghai) Co. Ltd.
3658 Jiang Cheng Road
Minhang, Shanghai, China
200245
+86 21 6463 3611                 |  | Trench (UK) Ltd.
South Drive, Hebburn
Tyne & Wear
 England
+44 191 483 4711          |  | Trench Brasil Ltda
Via Expressa de Contagem, 2685
CEP: 32370-485
Contagem, MG
Brasil
+55 31 391 5959
|                                                                                                               |  |                                                                                      |  |                                                                                                     
|Trench Fushun Bushing Co., Ltd
Dong Er Dao, Shuncheng District
Fushun, Liaoning, 113126
China
+86 413 764 4095 |  |                                                                                      |  |                                                                                                     

F-35



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

SIGNATURE

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

|                            |  |     |  |                                          
|--------------------------- |  | --- |  | -----------------------------------------
|Dated this: 24th March 2003 |  |     |  | TRENCH ELECTRIC B.V.                     
|                            |  |     |  |                                          
|                            |  | By: |  | (-s- Michael J. Bissell)                 
|                            |  |     |  |                                          
|                            |  |     |  | Michael J. Bissell
Group Finance Director

F-36



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

CERTIFICATIONS

I, Michael J. Bissell, certify that:

1.     I have reviewed this annual report on Form 20-F Equivalent of Trench
Electric B.V.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | a. |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c. |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent
function):



| | a. |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified
for the registrants auditors any material weaknesses in internal
controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                                         
|-------------------- |  | ----------------------------------------
|Date: March 24, 2003 |  |                                         
|                     |  |                                         
|                     |  | /s/ Michael J. Bissell                  
|                     |  |                                         
|                     |  | Michael J. BissellGroup Finance Director

F-37



---



##### 



TRENCH ELECTRIC B.V.  FORM 20-F Equivalent

CERTIFICATIONS

I, Howard Poulson, certify that:

1.     I have reviewed this annual report on Form 20-F Equivalent of Trench
Electric B.V.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | a. |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c. |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent
function):



| | a. |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified
for the registrants auditors any material weaknesses in internal
controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                              
|-------------------- |  | -----------------------------
|Date: March 24, 2003 |  |                              
|                     |  |                              
|                     |  | /s/ Howard Poulson           
|                     |  |                              
|                     |  | Howard PoulsonChief Executive

F-38