Annual Report 2003 - GANTS BLANCS · 2011-12-08 · Annual Report 2003 page 6 MONTUPET: GROUP OVERVIEW M ONTUPET is a major french manufacturer, a public limited company dedicated

ANNUAL GENERAL MEETING, JUNE 29TH 2004

Annual Report 2003

page 3 Annual Report 2003

� CONTENTS

MONTUPET on line - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5

MONTUPET, group overview - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6

Board of Directors and Auditors - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9

Board of Directors Management Report - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10

Economical aspects of the company - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10

Legal aspects of the company - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 19

Social and environmental indicators - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 26

Report from the President on the internal control - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 34

Board of Directors support and organisation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 34

Internal audit procedures - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 35

Conclusion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 40

Auditors’ Report on the Board of Directors President’s report with reference to internal audit

procedures regarding preparation and treatment of accounting and financial information - - - - - - - - - - 41

Data for last five fiscal years - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 42

Table of subsidiaries and shareholding interests - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 43

Resolutions presented before the Annual Meeting - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 44

Report of the auditors on the financial statement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 47

Report of the auditors on the consolidated financial statement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 49

Auditors’ Report on an Employee Share Issue - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 51

Special report of the auditors - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 52

Consolidated balance-sheet - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 56

Consolidated income statement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 58

Notes to the consolidated accounts - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 60

Significant items in the fiscal year - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 60

1. Consolidation rules - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 60

2. Notes to the balance-sheet and income statement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 64

3. Financial commitments and other data - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 70

4. Data per geographical area - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 73

MONTUPET SA balance-sheet - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 76

MONTUPET SA income statement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 78

Notes to MONTUPET SA financial statements - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 80

1. Accountancy rules and methods - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 80

2. Development and notes to the financial statements - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 84

3. Financial commitments and other data - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 90

The original language version of the document in French takes precedence over this English language version.

page 4Annual Report 2003


� MONTUPET ON LINE

� Visit MONTUPET website http://www.montupet.fr

presenting data on our group (its history, financial data, activity

overview), the news, the firm (its customers, products,

manufacturing processes), its strategy, the production units,

and a “career” heading.

� On www.journal-officiel.gouv.fr under the heading “les

annonces publiées au balo”, or on your minitel 3615 or 3617

balo, consult MONTUPET legal notices (quarterly turnover,

half-year accounts, notifications of shareholders meetings).

� On financial websites, consult MONTUPET SA share value by

indicating its Euroclear code nr 3704.


�MONTUPET: GROUP OVERVIEW

MONTUPET is a major french manufacturer, a public limited company dedicated to the produc-

tion of moulded car-parts in aluminium alloys.

The group was created in 1977 by merging three french foundries: MONTUPET, DEBARD (later

VIRAX), and FONDERIE DE PRECISION. After 10 years of industrial and financial restructuring, the

group became international by buying in 1987 ALUMALSA, a spanish foundry, and by creating in

1988 and 1989 three new foundries in France, Canada and UK. In the meantime, MONTUPET

became a producer and supplier of tooling equipment, to secure its most technical supplies that

are a strong part of its technology.

Threatened by the automotive crisis from 1991 to 1997, MONTUPET resumed its development by

enhancing its facilities and creating a new foundry in Mexico.

Upon FORD’s request, MONTUPET has taken over a factory in Northern-Ireland that produces

500 000 cylinder-heads per year for the US FORD “Explorer” engine, and will rationalize the mana-

gement and operations of this unit.

THE COMPANY HAS THREE LOCATIONS IN FRANCE:

• A plant in Châteauroux

• A plant in Nogent/Oise - Laigneville

• The head office in Clichy/Seine

THE COMPANY HOLDS 9 SUBSIDIARIES:

• MFT-MONTUPET Snc in Brussels (Belgium): coordination center

• ALUMALSA in Saragossa (Spain): foundry

• MONTUPET Limitee in Rivière-Beaudette (Canada): foundry

• MONTUPET UK in Dunmurry (UK): foundry and tooling

• CALCAST Ltd in Londonderry (UK): foundry

• MONTIAC SA de CV in Torréon (Mexico): foundry

• MONTUPET Inc in Livonia (USA): commercial representation

• MONTUPET Deutschland GmbH (Germany): commercial representation

• MFT Sarl in Paris: trading subsidiary

MONTUPET DESIGNS AND MANUFACTURES 3 PRODUCT RANGES IN CAST ALUMINIUM:

• Unmachined or finished motor-parts: cylinder heads, cylinder-blocks, intake manifolds,

• Machined and painted wheels,

• Unmachined or finished structure parts, and braking parts.

Cars keep taking more and more functions and electronics, and their weight therefore tends to

increase. In the same time, car manufacturers are subject to more stringent rules protecting the

environment; they therefore need to make their vehicles lighter and to bring their engines up to date.

This is where aluminium, and moulded aluminium in particular, plays a great role: thanks to a

better heath conductivity than the cast iron, it enables to design more compact, more powerful

and less polluting motors, and thanks to its low density as compared with steel or cast iron, it

enables to make lighter motors and chassis.


Moreover, aluminium casting processes offer a large design flexibility, appreciated by both

engineers and stylists and explain that an increasing part of wheels are made in light alloy

against steel and plastic wheels.

To further enhance these qualities and offer products tailored to special needs of each manu-

facturer, MONTUPET has diversified its casting processes (gravity or low-pressure casting in

metal, sand or mixed moulds) and extended its know-how to mass-production on transfer lines

or on rapid numerical centres.

This technical policy, together with an internationalised industrial and commercial policy with

MONTUPET total quality policy enable our group to provide our services and products to AUDI,

BOSCH, FIAT, FORD, GENERAL MOTORS, PSA, RENAULT, NISSAN, SAAB, VOLVO, CHRYSLER

and DAIMLER.

MONTUPET, an hundred-year old company, also endeavours to control the effects of its activity

upon the environment and to best use and enhance its people abilities to meet its customers

demand on a long term basis.

A GLOBAL PRESENCE FOR A GLOBAL MARKET

In the current growing trend, our strategy of proximity has led us to set up industrial and

commercial bases close to our current and future customers.

Therefore, by ensuring that all its production plants work closely with each other, MONTUPET

can offer a consistent level of

service and a uniform stan-

dard of quality to customers

who already have, or are

looking for, a global manu-

facturing presence.

� The commercial bases

� The production plants



� PRESIDENT- STÉPHANE MAGNAN

� DIRECTORS- DIDIER CROZET, Executive Director

- MARC MAJUS, Executive Director

- FRANÇOIS FEUILLET

- PHILIPPE GOEBEL

� REGULAR AUDITORS- CABINET GUILLERET, represented by René Guilleret

- BELLOT MULLENBACH & ASSOCIÉS, represented by Thierry Bellot

- and Pascal de Rocquigny

� SUBSTITUTE AUDITORS- ANDRÉ CRESTEIL

- OLIVIER MARION

� BOARD OF DIRECTORS

� AUDITORS


� BOARD OF DIRECTORS MANAGEMENT REPORT

You have been invited to attend this Annual General Meeting, in compliance with the legal statutory

and articles of association provisions, to hear our management report for the fiscal year 2003, and

approve the annual accounts for this fiscal year.

ECONOMICAL ASPECTS OF THE COMPANY

MAIN ACTIVITIES AND PRODUCTS

MONTUPET designs and manufactures parts in cast aluminium and equipment for the automo-

tive industry:

- unmachined or finished motor-parts: cylinder-heads, cylinder-blocks, intake manifolds,

- machined and painted wheels,

- unmachined or finished structure parts, suspension and braking parts,

- part of the tooling necessary to its production.

ACTIVITY AND RESULTS

The consolidated turnover for the financial year 2003, is down by 7.4% at 438.47 million Euros

(i.e. down by 2,6% using a comparable structure (constant exchange rates and metal price).

The cash-flow (net of grants) shows a decrease of 5,6 M2 to 52,3 million Euros (M2).

Operating profit amounts to 26,48 M2, down by 4,8 M2.

This decline resulted from various factors:

• Exceptional factors:

- restructuring costs of the tooling sector, amounting to 1,5 M2,

- total depreciation of capital expenditures relating to the lost-foam process (posted as an

extraordinary cost in the first half-year),

- unfavourable translation into Euros of profits from subsidiaries out of the Euros-zone, for the

consolidated accounts.

• Operating factors:

- collapse of the tooling activity (50%) following the drop in the US$/2 rate, and the shortage of

new orders during this “wait-and-see” period for car-manufacturers,

- decrease in the activity of CALCAST, dedicated to a single FORD cylinder-head for Northern

America.

Group net profit is 20,44 M2 against 24,51 M2 in 2002, a decrease of 16,6%. Net foreign

exchange gains amount to 2,4 M2 against 4,4 M2 en 2002 ; interest expenses are reduced from

4,7 M2 to 2,7 M2 in 2003 due to the drop in debt.


CONSOLIDATED DATA (IN M3)

2003 2002

Consolidated turnover 438,47 473,72*

- at comparable structure (constant exch. rate & metal price) 461,41

Trading profit 26,48 31,37

Result from ordinary activities 27,37 30,45

Group net profit 20,44 24,51

Cash-flow (net of grants) 52,3 58,12

Net Debts (D) 38 87,5

Permanent Capital (PC) 178,71 170,9

D/PC 0,21 0,51

Capital expenditures (fixed assets) net of grants 21,5 18,84

The 2002 turnover amounted to 474,694 M2. A reclassification amounting to 0,977 M2 was imple-

mented to enable a comparison between the two years.

Repartition by customer Repartition by product

Consolidated turnover (in K3) Consolidated operating profit (in K3)


CONTRIBUTION TO CONSOLIDATED FIGURES

Turnovers Operating profit

Fiscal year Fiscal year Variation Variation at Fiscal year Fiscal year 2003 2002 constant 2003 2002

exchange rates and metal price

France

(incl. Belgium) 210.68 212.59 (0.90%) 3.04% 8.47 12.49

Mexico 21.61 22.34 (3.26 %) 15.98% 3.2 1.7

United-Kingdom 139.43 160.75 (13.26%) (8.68%) 11.6 15.06

Spain 48.7 47.16 3.27% 5.52 % 4.23 3.72

Canada 18.05 30.88 (41.54%) (35.42 %) (1.0) (1.6)

TOTALS 438.47 473.7 (7.44%) (2.6%) 26.48 31.39

In France: The activity has been increasing in spite of the decreasing automotive market, sales

of wheels and diesel cylinder-heads remaining very high, and sales of petrol gas-heads still

lower than previous year. The prices decrease however compensated this rise, and significantly

weakened the operating profit.

In Mexico: The activity increases towards the plant full productive capacity, thus increasing the

operating profit, despite a scheduled 30% reduction in the part price, as the contractual volume

was reached.

In the United-Kingdom: The activity has been weakened by the cancellation of a FORD gas

cylinder-head on the 4th quarter, and by the sudden collapse in tooling orders. The PSA diesel

cylinder heads start-up was successful, with lower than planned quantities.

In Spain: The satisfactory profit of 2002 has been maintained despite a reduction in parts

prices, thanks to continuous improvements.

In Canada: The activity was very low, mainly due to the stop of sales of CADILLAC when the Irak

war started. However, thanks to the adjustments of the facilities and workforce, the profit is

presently positive and the development capacities are maintained.

CHANGES IN THE ACCOUNTS REGISTRATION

None.

INVESTMENT AND FUNDING

Total investment in tangible assets was 21,5 M2, net of grants, splitted-down between France

(3,7 M2), United-Kingdom (13,3 M2), Spain (2,2 M2), Mexico (1,7 M2) and Canada (0,6 M2).

The cash-flow and the reduction in working capital requirements have this year again led to a

considerable debt reduction, bringing the debts/assets ratio of group to 0.21, an exceptionally

low figure in our branch.


OUTLOOK

The year 2004 appears not much different from the year 2003. It remains a transition year of

which we shall take advantage to continue to adjust our facilities and processes to meet the

steady pressure from car automakers to reduce prices, whilst aiming at a no-debt policy.

Nevertheless, in 2005, three new orders will start-up: a new diesel cylinder-head for RENAULT,

a “ladder-frame” for the new DAIMLER-MITSUBISHI world engine, that we are currently devel-

oping, and brake parts in Mexico.

On a long-term basis, the strengthening of the antipollution standards will result in develop-

ments of more and more complex cylinder-heads, which is favourable to MONTUPET as the

world-leader in the cylinder-heads technology.

First quarter 2004 turnover (contribution to consolidated figures)France and Belgium 54,8

United-Kingdom 33,0

Spain 13,2

Canada 4,5

Mexico 6,5

TOTAL 111,9

The consolidated turnover for the first quarter 2004 is down by 3,93% as compared with

previous year (116,4 M2), i.e. down by 2,04% at constant exchange rates and metal price.

Cah-flow (in M3)

Net debt / Permanent equity

Gearing


As compared with the first quarter 2003, the first quarter 2004 is favourably marked in Canada

by the return at a standard level of the CADILLAC cylinder-heads production, stopped when the

Irak war started on the first quarter 2003. Unfavourable factors were in the UK the cancellation

of the FORD Sygma cylinder-head on the 4th quarter 2003, in Mexico the low US $ converted in

fewer Euros in the consolidated accounts, and the low tooling sales usually in US $.

RISK FACTORS

Interest rate exposureMONTUPET group currently no longer does any hedging transaction and there is no currently

hedged transaction.

All the borrowing is at variable rate.

Exchange risksMONTUPET group no longer does any hedging transaction and there is no currently hedged

transaction.

I - Euro Zone

MONTUPET SA exchange losses and gains are connected with foreign currency loans to

subsidiaries and bank debts.

MONTUPET SA pays in Mexican Pesos (MXN) the running costs invoiced by its Mexican

subsidiary MONTIAC SA de CV within the “maquiladora” agreement, generating a currency

exposure on the MXN/2 parity.

On another hand, MONTUPET SA being the owner of the production tooling of MONTIAC usually

paid in 2, lower revenues in converted US $ proportionally increase their depreciation costs.

MONTUPET sells in US$ the parts produced by MONTIAC, generating a currency exposure on

the US $/2 parity.

II - Outside the Euro zone

Northern Ireland

MONTUPET UK borrowed funds in 2 ; MONTUPET UK, WILLACE UK and CALCAST LTD acquire

a small part of their tooling in 2, generating a currency exposure on the GBP/2 parity.

WILLACE UK sells its whole production (wheels) in 2 ; MONTUPET UK sells around 40% of its

production in GBP and the balance in 2, but the price in 2 contractually varies with the 2/GBP

parity.

The GBP depreciation is commercially favourable to the subsidiaries in Northern Ireland and

positive or neutral on their profits, but their profits and assets are converted in fewer 2 in the

consolidated accounts.

Tooling subsidiary

Tooling sales towards Northern America, sold in US $, are adversely affected by the US $

decrease.

Mexico - MONTIAC SA de CV

MONTIAC SA de CV owes a debt in US $ to MONTUPET SA, generating for MONTIAC a currency

exposure on the MXN/US $ parity.

As its industrial installations are mostly paid in US $ by MONTIAC, a lower MXN increases their

cost and depreciation (production tooling are owned by MONTUPET SA and mostly bought in 2).


MONTIAC invoices its running costs in MXN to MONTUPET SA and is not subject to the

currency exposure, affecting MONTUPET SA instead.

A MXN depreciation against 2 results in the conversion of MONTIAC profits and assets in fewer

2 in the consolidated accounts.

Canada - MONTUPET LIMITEE

MONTUPET LIMITEE acquires its production tooling mostly in US $. A lower CAD increases

their costs and depreciation.

A new order for CHRYSLER will be sold in US $ (on the basis of the parity US $/CAD = 1,35). The

operating result would benefit from the CAD depreciation against US $.

A CAD depreciation against US $ is commercially favourable to MONTUPET LIMITEE and posi-

tive or neutral on its profits, but its profits and assets are converted in fewer 2 in the consoli-

dated accounts.

Market risks MONTUPET relies entirely on automotive sales and holds 23% of the aluminium cylinder-

heads market share, and around 10% of the aluminium wheels market share.

Automotive sales and production are seasonal and highly cyclical and depend on general

economic conditions, consumer confidence, employment trends, exchange and interest rates,

fuel costs and dealer sales incentives. The volume of automotive sales has fluctuated, some-

times significantly from year to year, inducing delays in new engine programs. We could suffer

the effects of such reports, and of lower than anticipated production levels, whereas we

develop and launch the manufacture of new parts several months in advance.

Our strategy is to systematically obtain written and binding purchase orders from our customers.

However, some of our competitors are sometimes more flexible, and the customers are often

bound to order a portion of their requirements rather than a specific quantity. Program termina-

tions and cancellations are to be compensated, but may be not fully or partially reimbursed.

Our prices are pre-set whereas our costs (metal and energy prices, labour, etc) may then

adversely rise. Our parts sales prices usually decline over the term of the contract and must be

compensated by increases in efficiency which MONTUPET most often manages to achieve.

On another hand, we experience a strong constant pressure for price decreases.

To face competition, and to keep being selected by our customers, we strongly manage to rein-

force our competitivity, our ability to develop and manufacture new parts, our logistic effi-

ciency, our research and development capacities, our international presence and our dura-

bility. Moreover, the expected strengthening of the antipollution standards will result in devel-

opments of more and more complex cylinder-heads, which is favourable to MONTUPET as the

world-leader in the cylinder-heads technology.

As MONTUPET customers are the largest world car-manufacturers, their insolvency risk,

except the program terminations or cancellation badly compensated, is quite unlikely (but

would be most harmful if it came true). Litigations with customers if any are provisioned in the

accounts.

Aluminium price fluctuations are passed through our customers, but only after a time-lag with

possible adverse effects. We reduce our dependence on aluminium supply by diversifying our

sources (6 suppliers in first fusion).


Financing exposureOur extraordinary low debt/permanent equity gearing (0,21) places us at a competitive advan-

tage over our more leveraged competitors, developing our ability to obtain additional financing

when needed, with low bank margins, to fully dedicate our cash-flow to our corporate purposes

including capital expenditures, and to make us less vulnerable to a downturn in our business.

Exposure to adverse effects on the environment from our production activities MONTUPET strives to control the environmental impacts of its production facilities and the

related risks.

The group operations are classically submitted to regulatory reporting and operating schemes

applicable in each country. Over national and local regulations, some specific authorizations

rule hazardous operations.

Environmental regulations are monitored on each site, responsible for the continuous optimi-

sation of environmental issues. Several industrial facilities are committed to secure the ISO

14001 certification of their Environmental Management System. Nogent and Châteauroux

plants in France, Belfast (MONTUPET UK (including WILLACE UK) plants and Londonderry

(CALCAST) plant in Northern Ireland, Rivière-Beaudette (MONTUPET LIMITEE) plant in

Canada, Torreon (MONTIAC) in Mexico have been certified. ALUMALSA (Spain) is about being

certified in the last quarter 2004.

Environmental exposures proceed from the use and rejection of mineral oils, chemicals (as

amines, volatile compounds, solvents, paints, mastics and glues…) ; from aluminium foundry,

from air compression and radiography workshops… Dust filters, de-oiling devices, sand, metal

sludges and oil recycling devices, thermical oxydators are installed ; regular monitoring

measures are carried-out. Several facilities benefit from their own water detoxication station.

On every site, emergency and fire-prevention programs are set-up.

In France, the Nogent site was set-up tenths of years ago. It was ISO 14001 certified in 2003. It

is however classified as “to watch” in view of the soil pollution by aluminium, copper, and

volatile halogenic coumpounds, and in view of the water pollution by aluminium, nickel, and

vinyl chlorinate.

In France also, the new Laigneville facilities rent by MONTUPET are set-up on a ground polluted

by the previous occupier (Desnoyers), who is contractually responsible for de-polluting it.

There is no litigation in Canada, neither in Spain nor in Mexico, nor in Northern Ireland. In

Nogent in France, a noise litigation is currently only partially solved.

A detailed report on the environmental issues is attached to this directors report.

Insurance coverageMONTUPET SA and its subsidiaries currently carry insurance that covers their property

damages and operating losses, within a general maximum coverage of 150.000.000 2 (with a

general excess amount of 200.000 2 on property damages and of 3 production days equivalent),

with special limitations to some damages.

MONTUPET SA and its subsidiaries are covered by civil liability and post-delivery insurance

programs: civil liability affecting bodily, tangible and intangible property damages to third-

parties whether consecutive or not, damages to properties entrusted to MONTUPET, environ-

mental damages occuring accidentally, taking-out and refitting of delivered products, logistic

costs to recover the distributed products if applicable, within a global ceiling of 7.623.113 2 for

each event, with special limitations to some damages.


RESEARCH AND DEVELOPMENT POLICY

The main axles of the Research and Development at MONTUPET are:

• continuous processes improvement,

• tooling accuracy (in view of reducing the dimensional tolerance of parts),

• knowledge management,

• innovative researches on processes, materials, tooling heat, and products.

By year-end, there were 27 people at MONTUPET S.A. and MONTUPET UK in the R&D departments.

R&D costs incurred mostly by MONTUPET SA and by MONTUPET UK were 2.964 K2 including 682 K2

in investments in 2003.The R&D budget for 2004 is 3.844 K2 including 1.041 K2 in investments.

EVOLUTION OF ACCOUNTING REGULATIONS : IFRS/IAS

In compliance with the European regulation nr 1725-2003, the European companies quoted on

the stock exchange market will publish their accounts opened from January 1st 2005 set-up

according to the International Accounting Standards (IFRS). These accounts will show a

comparison with the IFRS-retreated previous year accounts. MONTUPET is committed to

comply with this rule.

MONTUPET currently studies the differences between the accounting principles it applies and

the IFRS standards. It also performs a study of the necessary adaptations (which should

remain restricted) of its data processing system and networks. The group also launched the

collection and analysis of the retrospective data needed to set-up the opening balance-sheet.

At this stage, the main identified differences are the following (but may not be the only ones) :

• presentation of financial statements : implementing international standards, and particularly

the IFRS 1 standard may lead us to modify our financial statements, namely the statement of

sources and application of funds, and the data per geographical areas (to comply with the

IAS34 standard - data per geographical areas).

• IAS 38 - tangible fixed assets : this standard requires that some precisely defined develop-

ment costs will be accounted within the assets in the balance-sheets and depreciated. Devel-

opment costs not defined as such in this standard as our spendings on new facilities currently

deferred over 3 years will be entirely charged to the profit & loss account.

• IAS 16 - fixed tangible assets : this standard requires that the acquired assets are accounted

by components and depreciated over their own duration. It will imply that we reconsider the

accounting of some extensive maintenance costs, currently in deferred charges.

• IFRS 2 - payment in shares : implementing this standard will lead us to charge the subscrip-

tion options to the P&L account.

• IAS 19 – retirement benefits. retirement commitments and similar items will appear as liabil-

ities on the balance-sheet, whereas they currently are only footnotes to the accounts.

• IAS 20 – public grants – implementing this standard will lead to no longer include capital

grants within the consolidated stockholders’ equity and therefore to show some grants as a

decrease in the cost of granted tangible assets.

• IAS 12 – tax on profit : this standard does not allow the actualisation of the deferred taxes,

which is our current doing.

We are still studying the new standards, until the end of 2004.


STOCK MARKET ACTIVITY

Isin code : FR00000037046

Reuters code : MNTP.PA

RM France / Midcac

Monthly transactions in shares quantities

MONTUPET SA share - average closing rate

(year average: 15,16 3)

Monthly transactions in amounts (3)


LEGAL ASPECTS OF THE COMPANY

DIRECTORS FEES AND COMPENSATIONS

The rewarding and benefits paid by the company of by its subsidiaries to the directors during

the fiscal year 2003 were as follows:

- to Mr Stéphane MAGNAN, Président & Managing Director: 665.179,26 Euros,

- to Mr Didier CROZET, Executive Director: 425.236,90 Euros,

- to Mr Marc MAJUS, Executive Director: 435.594,16 Euros.

The Board of Directors proposes (4th resolution) the allocation of directors fees up to 10.000 Euros.

LIST OF THE OFFICES AND POSITIONS HELD BY THE DIRECTORS DURING THE YEAR

Mr STEPHANE MAGNANFrance

Within MONTUPET group

- MONTUPET SA - Président & Managing Director

- GESFITEC SA - MONTUPET group holding company - President (company merged with

MONTUPET SA on March 31st 2003)

Outside MONTUPET group

- GROUPE DES INDUSTRIES METALLURGIQUES (G.I.M.) - Director

- CHAMBRE SYNDICALE DE L’ALUMINIUM - Director

Abroad


- MFT-MONTUPET Snc (Belgium) - services within the group - Executive Director

- ALUMALSA (Spain) - aluminium foundry, car-parts manufacturer - Director

- WILLACE UK LTD (Northern Ireland) - aluminium foundry, car-parts manufacturer - Director

- BS TOOLING (Northern Ireland) - aluminium foundry, car-parts manufacturer - Director

- GESFITEC LTD (Northern Ireland) - holding - Director

- MONTIAC SA de CV (Mexico) - aluminium foundry, car-parts manufacturer - Managing

Director CEO

- MONTUPET Inc (USA) - commercial representation - Director

Mr DIDIER CROZETFrance


- MONTUPET SA - aluminium foundry, car-parts manufacturer - Director & Executive Mana-

ging Director

- GESFITEC SA - MONTUPET group holding company - Co-Managing Director & Director

(company merged with MONTUPET SA on march 31st 2003)

Abroad




- BS TOOLING (Northern Ireland) - aluminium foundry, car-parts manufacturer - Director

- MONTUPET Inc (USA) - commercial representation - Director

- MONTUPET GmbH (Germany) - commercial representation - Managing Director


M. MARC MAJUSFrance


- MONTUPET SA - Director & Executive Managing Director

- GESFITEC SA - MONTUPET group holding company - Co-Managing Director & Director

(company merged with MONTUPET SA on march 31st 2003)

Outside MONTUPET group

- ETOILE EURO JOUR (France) - mutual fund - Director (mandate terminated in 2004)

Abroad




- MONTUPET UK Ltd (Northern Ireland) - aluminium foundry, car-parts manufacturer - Secretary

- WILLACE UK LTD (Northern Ireland) - aluminium foundry, car-parts manufacturer - Director

and Secretary

- BS TOOLING (Northern Ireland) - aluminium foundry, car-parts manufacturer - Director and

Secretary

- GESFITEC LTD (Northern Ireland) - holding - Director and Secretary

- MONTUPET INC (USA) - commercial representation - Director and Secretary

- MONTIAC SA de CV (Mexico) - aluminium foundry, car-parts manufacturer - CEO and Secretary

Mr PHILIPPE GOEBELFrance

Within TOTAL group

- ATOGLAS EUROPE SAS - ATOFINA subsidiary - acrylic plates producer - Président

- ATOFINA - TOTAL group chemical branch - Co-managing Director

- ALPHACAN - TOTAL group - plastics for the building industry - Director

- SOCIETE CIVILE IMMOBILIERE AGRICOLE DE PARAPON - Manager

Outside TOTAL group

- MONTUPET SA - Director

Mr FRANÇOIS FEUILLETFrance

Within TRIGANO group

- TRIGANO SA - Director, President and Managing Director

- ABAK SA - trailers and garden equipment - TRIGANO representative to the Board of Directors

- ALIZA SARL - Manager

- ARTS ET BOIS SAS - leisure vehicles sub-contractor - Supervisory Board Président

- AUTOSTAR SA - leisure vehicles manufacturer - Executive Board Chairman

- CARAVANES LA MANCELLE SAS - leisure vehicles manufacturer - Supervisory Board President

- CHANOINE DUBOIS SCI– Manager

- CLAIRVAL SAS - leisure vehicles manufacturer - Supervisory Board President

- CMC DISTRIBUTION France SA - leisure vehicles accessories - Director

- CMC France SCP - Manager

- Dr LEGRAND SCI - Manager

- EURO ACCESSOIRES SAS - leisure vehicles accessories - Président

- EUROP’HOLIDAYS SARL - leisure equipment trading - Manager


- LOISIRS FINANCE SA - leisure vehicles financing - TRIGANO representative to the Supervisory Board

- MAITRE EQUIPEMENT SAS - leisure vehicles accessories - Supervisory Board President

- PLISSON SAS - leisure equipment - Supervisory Board Member

- RACLET SAS - leisure vehicles sub-contractor - Président

- RESIDENCES TRIGANO SA - leisure vehicles manufacturer - TRIGANO representative to the

Board of Directors

- RULQUIN SA - leisure equipment - Président

- TECHWOOD SARL - leisure vehicles sub-contractor - Manager

- TRIGANO JARDIN SA - trailers and garden equipment - TRIGANO representative to the Board

of Directors

- TRIGANO MDC SAS - camping equipment - Président

- TRIGANO REMORQUES SAS - trailers and garden equipment - Président

- TRIGANO VDL SAS - leisure vehicles manufacturer - Président

- TROIS SOLEILS SARL - leisure vehicles - Manager

Outside TRIGANO group

- BANQUE REGIONALE DE L’OUEST SA - bank - Director

- MONTUPET SA - Director

Abroad

Within TRIGANO group

- ARCA 2001 SPA (Italy) - leisure vehicles - Chairman of the Board of Directors

- AUTO TRAIL VR LTD (United Kingdom) - leisure vehicles manufacturer - Managing Director

- BENIMAR - OCARSA SA (Spain) - leisure vehicles manufacturer - Sole Executive Director

- BENIMPEX SA (Spain) - leisure vehicles - Executive Director

- DELWYN ENTERPRISES LTD (United Kingdom) - trailers and garden equipment - Managing

Director

- E.T. RIDDIOUGH Sales LTD (United Kingdom) - leisure vehicles accessories - Managing

Director

- S.I.R. FREIZEITARTIKEL GmbH (Germany) - leisure accessories - Manager

- SORELPOL (Poland) - trailers and garden equipment - Manager

- TRIGANO Belgium (Belgium) - leisure vehicles trading - Manager

- TRIGANO SpA (Italy) - leisure vehicles manufacturer - Chairman of the board of Directors

- TRIO SPORT INTERNATIONAL (Denmark) - camping equipment - Chairman of the Board of

Directors


SUBSIDIARIES

MONTUPET SA holds the following subsidiaries (% of directly or indirectly held capital):

- MFT Sarl (100%) (France),

- MFT-MONTUPET Snc (100%) (Belgium),

- MONTUPET UK (100%) (Northern Ireland) and its subsidiaries (Northern Ireland) WILLACE UK LTD,

BS TOOLING LTD et GESFITEC UK LTD,

- CALCAST LTD (100%) (Northern Ireland),

- MONTUPET LIMITEE (100%) (Canada),

- ALUMALSA (97,71%) (Spain),

- MONTIAC SA de CV (100%) (Mexico),

- MONTUPET INC (100%) (USA),

- MONTUPET GmbH (100%) (Germany).

The company did not acquire any new participation in the fiscal year 2003.

No shares from MONTUPET SA are held by any subsidiary.

MONTUPET SA SHAREHOLDERS (AS PER DECEMBER 31ST 2003)

Shares % shares Voting rights % voting rights

Mr Stéphane MAGNAN 1 001 848 9,69% 1 841 196 13,45%

Mr Marc MAJUS 939 866 9,09% 1 713 167 12,52%

Mr Didier CROZET 929 242 8,99% 1 695 412 12,39%

Mr Michel HARAN 538 038 5,20% 983 576 7,19%

Mr Philippe MAUDUIT 465 856 4,51% 911 712 6,66%

PUBLIC (including group staff) 6 463 077 62,52% 6 540 884 47,79%

10 337 927 100,00% 13 685 947 100,00%

The Board proposes (8th resolution) to the Extraordinary General Meeting to amend the memo-

randum of association, in order to enable him to know its shareholders, 60% of the shares

being held in the bearer’s form.

CAPITAL - MODIFICATIONS DURING THE YEAR

The capital is made of 10.337.927 shares with a face value of 1,52 Euros, i.e. 15.713.649 Euros,

against 9.453.147 shares with a face value of 1,52 Euros, i.e. 14.368.783 Euros by December 31st 2002.

This increase in capital results from the issuance of 852.980 shares as reported hereunder (see

information on stock-option schemes). The corresponding capital surplus amounts to

7.854.077 Euros for the year 2003.

On another hand, on march 31st 2003, MONTUPET SA merged with GESFITEC SA. In settlement

of the transferred assets, MONTUPET SA increased its capital by 5.120.528 2 and recorded a

merger premium amounting to 42.017.462 2. MONTUPET SA immediately decreased its capital

by the same amount, in order to cancel its own shares brought by GESFITEC.

MONTUPET SA accounted for the long-term profits special reserve at the reduced 18% rate,

built-up at GESFITEC for 3.256.269 2, by transferring it from its “retained earnings”.


INFORMATION ON STOCK-OPTION SCHEMES

Stock-option scheme Stock options cheme

of January 20th 1998 of November 16th 2001

Subscription price 10,44 9,24

Validity deadline 20/01/03 16/11/05

Options attributed to the directors 495 000 725 000

Options attributed to the 10 first beneficiaries

(excluding directors) 319 537 339 000

Options attributed to other staff members 85 463 136 000

Cumulated attribution 900 000 1 200 000

Exercised options during year 2003 852 980 31 800

Exercised options from the beginning of scheme 889 547 31 900

Existing options on December 31st 2003 0 1 168 100

Number of shares as per December 31st 2003 10 337 927 10 337 927

Number of shares after exercising the existing options 10 337 927 11 506 027

EMPLOYEES PARTICIPATION IN THE CAPITAL

By December 31st 2003, 49.468 nominative shares had been subscribed by employees within

stock options schemes or bought within a company savings scheme and could not be freely

sold. Shares held within previous stock-option schemes including the 1998 option scheme are

not taken into account as they can be freely sold, except within the current stock-option

scheme opened in 2001.

As there shares represented 0,49% of the capital, lower than the proportion of 3% provided by

the article L.225-129, VII of the French Code of Commerce, the Extraordinary General Meeting

faces a resolution (7th resolution) aiming at authorizing an increase in capital in favour of the

company employees.

The issue price will be determined in accordance with the provisions of Article L.443-5 of the

Labour Code. It could not exceed the average rate of the twenty stock-market sessions before

the Board of Directors’ decision, nor be lower than 80% of this average rate (or 70% within a

company scheme providing a freeze of more than ten years).

TRANSACTIONS ON THE COMPANY SHARES

The annual Ordinary and Extraordinary Shareholders Meeting held on June 30th 2003, pursuant

to the provisions of Article L.225-209 of the French Code of Commerce, authorized the Board of

Directors to purchase Company shares, representing up to 10% of the share capital on the day

of the meeting, with the following objectives:


- the management of cash-flow or of shareholders fund if it appears that implementation of

this programme is appropriate;

- the repurchase of a number of shares corresponding to the shares issued or to be issued

following exercise of subscription options for the Company’s shares;

- the application of programmes for purchasing or selling Company shares within the frame-

work of share purchase option plans;

- the purchase and sale in the light of market circumstances;

- the price stabilization by systematic intervention against market trends;

- any other legally permissible objective, or objective which might become legally permissible

by applicable law or regulations then in effect. In such a case, the Company would inform its

shareholders by a press release.

On December 31st, the company owns 83.354 MONTUPET SA shares within this programme,

bought at an average price of 13,93 Euros, ie for a total cost of 1.160.751 Euros.

Acquiring costs amount to 0,12% of each purchasing order.

In view of the average December rate at 13,97 Euros, no depreciation provision was set up on

these shares. They are registered among the financial assets, under the account nr 2771.

The consolidation re-treatment of this transaction was to reduce the consolidated stockhol-

ders’equity.

By may 31st 2004, not any further share had been bought within this program.


UNDEDUCTIBLE ITEMS FROM TAX BASIS

They amount to 19.266 Euros and relate to the depreciation of company vehicles.

DISTRIBUTED DIVIDENDS IN THE LAST THREE YEARS AND APPROPRIATION PROPOSAL

Fiscal year Net dividend Tax credit

2000 0 0

2001 0 0

2002 0,50 0

(distributed out of an

Ordinary Meeting

appropriating the year profit)

The Board of Directors proposes to appropriate the year 2003 profit amounting to

25.430.725 Euros as follows:

• appropriate 496.546 Euros to the legal reserve, thus increasing it from 1.074.819 Euros to

1.571.365 Euros,

• distribute a dividend of 0,20 Euro per share, together with a tax credit of 0,10 Euro, représen-

ting a global amount of 2.050.895 Euros,

• Therefore, record:

- that the previous retained earnings amounted to 10 484 136 Euros by December 31st 2003

(taking into account the transfer of 3.256.269 Euros to the long term profits special reserve as

decided by the General Combined Meeting held on March 31st 2003),

- and will therefore increase from 10.484.136 Euros to 33.367.420 Euros.

REMARKS FROM THE WORKERS COUNCIL

None.


SOCIAL AND ENVIRONMENTAL INDICATORS

MONTUPET SA SOCIAL INDICATORS

(Article L.225-102-1 of the French Commercial Code).

Number of employeesAs per December 31st 2003 the company had 1 780 employees in France. In 2003, MONTUPET SA

recruited 59 employees on permanent contracts and 213 fixed-term contracts were signed. By

year end, 106 employees were on temporary contracts. The total number of overtime hours for

2003 was 43 291. There were no redundancies and no staff reduction scheme in year 2003 ;

35 employees were severed on various matters.

Short-time working measures taken in Nogent affected 184 workers, representing 4.400 hours

globally.

Organization of the working weekAs per December 31st 2003, there were 1 766 full-time workers and 14 part-time workers.

105 managers were working on a 217 days per year basis. 1.675 day or shift workers were

working 35 hours per week. Absenteeism, expressed as the number of hours absent over the

possible number of working hours, totalled 6.66% including 5.64% on sick leave and 0.21% for

injuries to workmen.

RemunerationThe yearly overall payroll amounted to 40 258 150 Euros, with total payroll costs amounting to

16.418.332 Euros. The year result did not enable payments under the legal profit sharing

scheme. Employees can benefit from a company savings scheme. There is no incentive

scheme. A yearly comparative male-female status report is written and presented to the

Workers Council.

Labour relations and collective bargaining agreementsThe Workers Council had three meetings in the year. An agreement upon skills and employ-

ment, and aged workers stoppage of work (in French “CASA”) was signed on May 31st 2002.

Health and safetyThere were 60 accidents leading to sick leave. There were no fatalities, and 7 professional

diseases were declared. 903 072 Euros were spent on safety.

Training3.9% of payroll were spent in year 2003 for the training of 1 171 employees.

Handicapped employees94 handicapped employees work at the french sites.

Social aid programsThe Workers Council budget amounted to 530 804 Euros. 2.816.779 Euros were spent on social

aid programmes in 2003.


External supports to productionThe cost of external supports to production (nearly entirely within the group) was 61.307.425 Euros in

2003.

MONTUPET ensures that its suppliers comply with the fundamental principles of international Labour

Law. In all the countries where the company and its subsidiaries are settled, the international Labour

Law (in french OIT) is applicable: France, United kingdom, Spain, Canada, United States and Mexico,

and the MONTUPET group complies with them.

Local impact of the company activitiesThe Company writes a yearly report upon the management of skills and employment and their impact

on the local community, which is presented to the trade-union representatives. In France as abroad,

the company plants take into account the impact of their activities upon the local development and the

local population as follows:

- recruitment in the local employment area and measure of internal stability rate,

- service contracts set-up with local suppliers and follow-up of their turnovers,

- support of local associations.

The group plants regularly meet the authority representatives and the economical and social forces in

the regions where they operate.

MONTUPET SA ENVIRONMENTAL INDICATORS

Presentation and scope of the report

This report shows the main indicators of MONTUPET environmental policy. It also shows how the dedi-

cated teams in the production sites deal with the environmental issues.

Included in the report are the French production sites:

- our plant in Châteauroux (around 1000 employees),

- our plant in Nogent-Laigneville on two sites (around 680 employees).

Both sites are Classified Installations for the Environmental Protection.

For 15 years, MONTUPET has been developing an environmental policy around three main axles:

1. application of regulations,

2. pollution risks prevention,

3. continuous optimisation of every environmental issue: water, air, waste, energy, and pollution risks

prevention.

Moreover, since year 2000, all the production sites have been certified or are currently under way to be

certified ISO 14001.

1. Environmental impacts of the production sites

1.1. Water consumption

Consumption (cubic meters) Ratio (cu.m / cast aluminium ton)

Years 2001 2002 2003 2001 2002 2003

Châteauroux 100 280 119 969 124 729 4.4 4.6 4.36

Nogent/Laigneville 35 063 39 543 40 833 1.31 1.46 1.61


1.2. Energy consumption breakdown

Natural gas

Consumptions (KWh) Ratio (kWh / cast aluminium ton)

Years 2001 2002 2003 2001 2002 2003

Châteauroux 104 711 628 118 989 033 124 107 195 4 550 4 538 4 864

Nogent/Laigneville 83 199 208 76 224 620 74 511 135 3 128 2 832 2 950

Electricity

Consumptions (kWh) Ratio (kWh / cast aluminium ton)

Years 2001 2002 2003 2001 2002 2003

Châteauroux 43 147 749 46 326 477 48 258 926 1 875 1 767 1 891

Nogent/Laigneville 24 522 634 24 265 425 23 197 366 922 901 918

Water and energy consumptions are decreasing. Decreasing the energy consumptions is a priority,

implemented through:

- regular control of the facilities,

- prevention and repair of any leak (air, water, gas),

- improvement of the energy efficiency of some equipments and stopping some of them during the

non-working days,

- in Nogent/Laigneville, water consumption remains steady.

1.3. Consumptions of toxic items

These are mainly:

1. phenolic resins (average phenol content 6%),

2. superficial treatments with chromic and hydrofluoric acids (in Châteauroux only).

Toxic comprounds Phenol (in ton) Chromium (in ton) Fluorine (in ton)

Years 2001 2002 2003 2001 2002 2003 2001 2002 2003

Châteauroux 6.2 6 5.4 1.43 1.60 1.77 2.31 1.99 1.61

Nogent/Laigneville 4 4.5 4.2 NA NA NA NA NA NA

Since mid-2003, one of the two “wheels-finishing” workshop operates with superficial treatments

exempt from chromium compounds, in line with the European regulation issued in September 2000,

dedicated to the management of the life cycle of out-of-service cars. The other workshop is to operate

with the same process in 2004.

Less phenol-concentrated phenolic resins (phenol content under 5%) are still currently being tested

(tests began in 2003 in Châteauroux). Other tests are currently focused on replacing the organic

solvents used in de-oiling devices with “biological” devices in Châteauroux. The solvents used in this

process are recycled in Nogent /Laigneville.


1.4. Main industrial effluents (in air, in water, and waste)

Effluent releases are followed-up regularly in compliance with regulatory requirements:

Effluent type Effluent description

Atmospheric emissions - combustion gas

- volatile Organic Compounds (VOCs)

- dusts

- amine fumes (processed in Nogent, and in Laigneville in

2004)

Water emissions - industrial waters and rain-waters are filtered through a

de-oiling device and in a clarification basin (except in

Laigneville)

- effluents directed in the natural surroundings in Nogent

but under monthly control

- in Châteauroux, effluents from the detoxication station of

the superficial treatment effluents

Special Industrial Waste many industrial waste are produced and eliminated or

re-used in compliance with the regulations: aluminium

slags and shavings, used sand, used oils, paint sludges and

powder, metal sludges, used solvants, etc.

1.4.1. Atmospheric emissions

Sites VOCs (in tons) Greenhouse gas emissions (CO2) (in tons)

Years 2002 2003 2002 2003

Châteauroux 111 116 21 845 22 786

Nogent/Laigneville 47 44 13 994 13 680

1.4.2. Water emissions

In Châteauroux an internal physico-chemical clarification plant processes all the superficial treat-

ment effluents produced in the “wheels-finishing” process. A quality control of the effluents from this

station is implemented daily and communicated to the regulatory authorities. In addition, on both

sites, water emissions are regularly controlled by certified laboratories.


1.4.3. Industrial waste

Waste description Special waste* Ordinary waste Aluminium waste re-used

quantity (in ton) quantity (in ton) externally (in ton)

Years 2001 2002 2003 2001 2002 2003 2001 2002 2003

Châteauroux 1 051 1 024 1 155 959 1 014 982 3 380 3 179 3 053

Nogent/Laigneville 1 040 1 029 542 146 108 204 1 561 1 690 1 761

* except casting sand

In Châteauroux 95% of the used casting sands are thermically regenerated and re-used within the

production process. In Nogent/Laigneville, 85% (representing an 8% improvement) of the sands are

re-used externally in other companies industrial operations.

Efforts were focused in 2003 to re-use waste: a selective waste-sorting process was implemented in

Nogent/laigneville by year-end 2003.

1.4.4. Odour pollution

Odour pollution at MONTUPET SA principally concerns amine items used in the coring process. Two

washing towers fit the Nogent site to process the amine effluents.

In 2004, a washing tower will process the volatile organic compounds in Laigneville.

1.4.5. Noise pollution

MONTUPET’s operations may cause some noise pollution. The noise emissions can be harmful to the

local community, depending upon the site location (industrial zones for Châteauroux and Laigneville

or city district for Nogent /Oise). In Nogent, several actions have been being taken and enabled to

reduce the noise by several decibels at some places on the property limits.


2. Measures to limit biological imbalanceSeveral devices and actions enable to prevent the pollution risks and to control the environmental

impact of the plants.

Well maintained greenery at the group’s sites (trees plantation).

3. Environmental Management System /ISO 14001 certification process

Plants Implemented EMS ISO 14001 certification

Châteauroux Since September 2000 Obtained in December 2000

Certification renewed in February 2003

Nogent/Laigneville Since September 2003 Obtained in December 2003

4. Action for compliance with the applicable regulationsOn each site an Environment Department is committed to monitor the environmental regulations and

to control the compliance with the orders of the prefect. They are the company representatives with

the dedicated authorities (DRIRE).

Châteauroux and Nogent Sur Oise plants are Classified Installations for the Environmental Protection

subject to authorization.

The annex plant of Laigneville was examined on March 2004 before the departmental local authorities,

that are expected to issue their decision.

The plant regularly communicates to the authorities the monitoring results such as:

- the nature and quantity of the eliminated industrial waste,

- the effluents analysis (air, water,...).

Air

• Thermical oxydators

treat painting solvants

• Regular control of

atmospheric effluents

• Dust-filters

• Washing tower

(in Nogent, and in

Laigneville in 2004)

Water / subsoil

• Detoxication station of

the effluents resulting

from superficial

treatments

• Daily control of the

effluents from the

detoxication station

• Dye penetrant effluents

treatment

• Control with

piezometer of

underground waters

• Security floodgates to

retain industrial waters

in case of pollution

(in Laigneville only)

Waste

• Used sand, aluminium

shaves, used oil

recycling devices

• Industrial waste stored

separately and

eliminated by certified

companies in compliance

with the regulations

Chemicals

• Chemicals stored

separately

• Nogent and Laigneville

fitted with a complementary

retention

• Stores currently fitted

to prevent fire (detectors,

fire-alarm, fire-proof

walls) in Nogent and

Laigneville


5. Expenditures to protect the environment

Capital expenditures (in Euros) Waste processing

Plants Châteauroux Nogent/Laigneville Châteauroux Nogent/Laigneville

2001 305 000 66 300 340 600 28 300

2002 580 000 71 220 289 400 6 680

2003 522 000 455 736 361 035 19 032

6. Environmental managementManagement

An environment department manages the environmental issues and coordinates the actions under-

taken in the environmental area in each plant. On each plant district, corresponding members take

over these issues with the employees.

Training / Information

- training of the environment corresponding members,

- training of all the employees on the environmental news and such topics as “waste sorting”,

- awareness of every new employee to the company environmental culture,

- “chemicals” training for all the employees handling chemicals,

- training of the staff which work is directly related to the environment,

- training of internal auditor in Nogent/Laigneville.

Internal audits

The environment department is also engaged in organizing internal audits intended to measure the

results and progresses on environmental issues.

Risks prevention programme

An internal operation programme or risks study on each site describes urgency cases. Urgency cases

describe the relevant reactions, the means, and the organisation to be set-up to minimize environ-

mental risks, such as:

- fire,

- explosion,

- accidental spreadings.

7. Provisions and guarantees for environmental risksNone.

8. Fines for judicial disputes in year 2003An amount of 46.000 2 was put to guarantee the works for noise pollution in Nogent in 2002. This

amount will be refunded after completion.

9. Goals set-up by the mother companyAll MONTUPET SA subsidiaries are operating in the automotive field. Car manufacturers are engaged

to comply with very stringent requirements to protect the environment.


Therefore, in each country, MONTUPET set-up an environmental team in charge of building an

Environmental Management system (EMS) and of implementing it, and securing its ISO 14001

certification.

The ISO 14001 certification was obtained and then regularly confirmed by:

- MONTUPET UK Ltd (UK) in August 1999,

- MONTUPET LIMITEE (CAN) in June 2002,

- CALCAST Ltd (UK) in January 2003,

- MONTIAC SA de CV (Mexico) in August 2003,

- ALUMALSA (Spain) is to be certified in the fourth quarter 2004.

Throughout the implementation and certification of each subsidiary EMS, MONTUPET sets

them three goals:

- compliance with the local laws and rules,

- customers satisfaction,

- pollution risks prevention,

- continuous optimisation of the environmental issues.

Throughout the implementation of its EMS, each subsidiary defines quantified goals for each

environmental side of its operations (consumption, out-sorting, effluents, waste, odour and

noise pollutions). These goals obviously depend upon the local context and upon the initial

condition of each plant.

Whereas these goals are not identical, the group secures the consistency of the implemented

methods and techniques.

MONTUPET SA and its industrial subsidiaries are in the same field of operations, i.e. aluminium

foundry, machining and painting. The group technical management therefore supervises the

design, implementation and management of the industrial processes thus securing the consis-

tency of the actions taken to prevent or reduce the environmental impact of their operations.


� REPORT FROM THE PRESIDENT ON THE INTERNAL CONTROL

INTRODUCTION

In accordance with requirements of the French Security Act nr 2003-706 of August 1st 2003, the

President of the Board draws-up a report on:

• the board preparation and organisation

• the internal audit procedures.

This report is the first one. In view of recommendations from organisms such as A.F.E.P. (Asso-

ciation Française des Entreprises Privées - Private French Companies Association), A.G.R.E.F.

(Association des Grandes Entreprises Françaises - Large French Companies Association) and

from the A.M.F. (Autorité des Marchés Financiers - Financial Markets Authority), it logically

shows satisfying items, and improvable or missing items. These items are identified and

improving actions are described in the last paragraph of each section. The next annual reports

will enably to measure the company progress.

Therefore, the data enabling them to strengthen their confidence in the current corporate gover-

nance and it its continuous improvement policy, are made available to MONTUPET shareholders.

BOARD OF DIRECTORS OPERATIONS SUPPORT AND ORGANISATION

A. RESPONSIBILITIES AND PREROGATIVES OF THE BOARD OF DIRECTORS

The MONTUPET SA Board of Directors defines the strategic guidelines and ensures they are

properly applied, appoints the corporate officers, ensures the quality and periodicity of the

financial and accounting disclosures to the shareholders and to the financial market.

It takes decisions modifying the current strategy and the scope of the activity. It proposes reso-

lutions to be submitted to the shareholders. Its decisions are taken in view of the long-term

interests of the company.

B. BOARD OF DIRECTORS MEMBERS

Directors' skillsThe appointment of the five current directors was submitted to the shareholders meetings in

view of their knowledge of the industrial word (among them, four are aware of the automotive

industry), and in view of their successful management of international industrial companies.

IndependenceTwo directors are independent, as they do not belong to any group company, have no business

relationships with the group, nor any family link with a corporate officer or senior executive.

The three other directors are the President and the two executive managing directors, and are

therefore totalled implied in the company management.

This operational dependency is balanced by their common interest in the company with its

shareholders, as they are the company leading shareholders.


INFORMATION TO THE DIRECTORS

Access to the informationThe directors have a free access to the information available within the company. For practical

reasons, the independent directors contact the President or the board secretary to be commu-

nicated the required data, or get access to the departments or to the people they wish to meet.

Steady communicationNo systematical information is currently given to the directors, except the information sent

with the board meetings summoning.

BOARD MEETINGS

In 2003, the Board met four times with the following attendance:

Date Attendance

7th January 2003 4 présent / 4 directors

20th March 2003 4 présent/ 4 directors

20th May 2003 3 présent/ 5 directors

25th September 2003 5 présent/ 5 directors

No directors fees were paid in 2003.

FORECASTED IMPROVEMENTS

On the basis of the quarterly achievements revue, a written information will be communicated

to the directors, independently from the board meeting summoning.

A remuneration committee will meet each year to examine and possibly modify the remunera-

tion of the corporate officers and of the senior executives who are working in direct relation

with the President.

INTERNAL AUDIT PROCEDURES

StakesMONTUPET internal control main objectives are to:

• Ensure that the company activities comply with the legal requirements where they are

carried-out,

• Control whether the company activities are consistent with the defined strategy, and reach

the expected achievements,

• prevent errors and frauds, and if any arises, reduce and repair their consequences,

• protect and secure the company property,

• deliver genuine and reliable financial and accounting disclosures.

This control is carried-out in the obvious interest of every concerned party, and therefore in the

shareholders'interest. It has always been efficiently usual in our company, thanks to the group

nature, its market, its management rules. It rests on the implementation of many procedures

and of frequent audits.


PRINCIPLES AND ORGANISATION

Group natureSeveral factors contribute to the efficiency of the control over the group activities.

Consistent activities

The group companies are implied in only two strongly connected activities: the foundry and

machining of aluminium parts on one hand, and the manufacturing of tooling for the

aluminium foundry on another hand. Managers and auditors therefore carry-out the same

controls anywhere in the group.

Long-standing activities

These activities are well known as the company began the foundry activity one century ago, the

machining activity thirty years ago, and the tooling manufacturing fifteen years ago.

A strong internal growth

Among the nine MONTUPET SA subsidiaries, seven were created ex-nihilo. This ensures a

strong cultural control by the parent company over its subsidiaries.

Very demanding customers

The automotive field is renowned for its demanding requirements, translated into very frequent

audits from our customers in our plants, throughout the implementation stages of our

commercial contracts. This opening tradition favours the internal control.

A steady management

The corporate officers and many managers have been experienced in the company activities for

a long time, which enables them to carry-out a relevant control.

Management rulesMONTUPET specific form of management, adopted in 1984 and developed since then, and its

translation into rules governing, among others, information, decision-making, power delega-

tion, enhances at best each one's control over its professional environment and the hierarchy's

operational control. For instance, the delegator empowers the proxy without giving up its

responsibilities: he becomes therefore binded to carry-out a follow-up, whereas the proxy has

to report to him. The follow-up and reporting methods may vary, but the proxy always has to

report any difficulty, doubt or error.

The implementation of these regulary audited rules, secures the hierarchy line operations.

OrganisationThe essential activities dedicated to our customers satisfaction, the security of the company's

staff and assets, its financial health, the protection of its environment, are managed through

written and updated procedures.These written procedures:

• secure the activities uniformity and repeatability,

• facilitate training,

• enhance the activities transparency.

They are reviewed when modifications arise within the company or in the legal requirements. A

procedure is regarded as in force only when it is duly applied.

These procedures are steadily audited through internal and external audits. They comply with

international standards in view of assessing their relevance and enforcement level. The

following pages summarize them.


This organisation and these means enable formal review of the accounting and financial data,

as follows:

Review Frequency Delay Nature Attendants

Expenditures Weekly +2 days Correct gaps Plant Management

Flash result Monthly +2 weeks Adjust targets President

Capital expenditures Monthly +2 weeks Monitor commitments President

Achievements Quarterly +2 weeks Propose to adjust strategy President

Board of Directors At least Define strategy Directors

twice a year

SPECIFIC PROCEDURES FOR THE ACCOUNTING AND FINANCIAL DISCLOSURES

The implemented procedures aim at three targets:

- ensure the exhaustiveness, reliability and availability of the financial information,

- decentralise controls and actions, relying upon accountants and auditors in subsidiaries and

the plants,

-operate with an accurate number of employees and at reasonable costs.

1. Management controlIn MONTUPET SA and each subsidiary, a “management control” department is in charge of

collecting the financial and management data, checking their reliability, comparing them with

the target plans, and participating in drafting the group reporting and target-plans.

A dedicated team within MFT-MONTUPET SNC screens disparities between forecasted and

actual figures in each entity, integrates the financial data, and checks overheads.

This team also performs steady on-site visits of foreign operations to ensure the group-wide

coherence of the procedures and assess the risks management.

The subsidiaries pool their skills and help one another within their geographical area:

- MONTUPET UK performs assistance and audit assignments within the three group entities in

Northern Ireland,

- MONTUPET LIMITEE in Canada and MONTIAC SA de CV in Mexico use the same accounting

software and exchange data and skills.

MONTUPET LIMITEE has a leading role to audit and reconcile the accounts within the American area.

2. The company accountsCompany accounts of MONTUPET SA and each company are established by their own accountants.

They are reviewed by independent local auditors, who report to the group managing partners

and to the statutory auditors reviewing the consolidated accounts.

The “sales-customers” and “purchases-suppliers” processes are ruled by written procedures

set-up to ensure the accuracy and exhaustiveness of the accounting entries related to custo-

mers and suppliers.


A new upgraded integrated software application will be implemented in 2004 to process the

purchasing-suppliers function.

The group debt is managed by the top-management as well as the financing decisions.

Transactions and cash in currencies are monitored or processed in the headquarters.

3. The accounts consolidationConsolidated statements are established twice a year using the standardized consolidation

reports generated by each consolidated subsidiary accounts department on the basis of a refe-

rence accounting document.

They are audited for group coherence and rely on the management control on each production

site and at the head-office, and on their certification by independent local auditors.

MONTUPET SA auditors review and certify the consolidated statements presented by the Board

of Directors. They also carry-out each year a number of specific audits in connection with

financial audits, as for instance the audit of the purchasing procedure or of the automated

data-processing.

A current application aiming at integrating the monthly financial reporting within the consoli-

dation software should improve the data convergence between the group entities.

OTHER PROCEDURES

Health - SafetyHealth and safety procedures are specific in each unit, in view of operational efficiency and

compliance with local rules. They are currently managed through the Quality Management

System, a certified ISO 9001 or ISO/TS 16949 (where applicable) system. They also are inter-

nally audited within the social audit frame. In each unit, a Health and Safety manager reports to

the plant manager, and there is a workers representative (CHSCT in France) setup.

Capital expenditures and purchasesA capital expenditures scheme is drawn-up and reviewed at least each year at the group level.

Every capital expenditure, whatever its amount, whatever the subsidiary, is technically and

economically screened, and submitted to the President's approval, or to one of the two execu-

tive directors'approval when the President is not available.

The unit manager authorizes current operating purchases and capital expenditures priory

approved by the President.

Operating expenses are monitored weekly. Capital expendures are monitored by a project

manager. The purchasing department looks for the best sourcings, launches invitations to

tender, negotiates and implements contracts and orders. In view of the obtained results, he

reviews the suppliers panel together with the technical, quality, logistic, and engineering

departments.

The purchasing department is liable to hedge the risks of price variation and raw material

availability through forward purchases. Such transactions are restricted to our forecasted

production needs and are usually reported to the President.

A set of procedures rules these activities. They are managed by the Quality Management

System, a system certified by internal and external audits according to the ISO 9001 or

ISO/TS16949 standards where applicable.


Labour and remunerationsEach site usually adjusts its workforce with its workload. The monthly "Flash Result" review

assesses this adjustment efficiency. The wages policy is negotiated annually between management

and labour (unions representatives in France). It is applied alongside the year through pay rises or

individual premiums and monitored by the human resources department of each company.

Quality and environmentA Quality Management System and an Environment Management System, relying upon the

ISO9001, ISO/TS16949 and ISO14000 standards are available in each company. These systems

aim at the long-lasting satisfaction of the customers, the local authorities and the social envi-

ronment of our units.

They include commitments to abide by applicable legal requirements and to develop a contin-

uous improvement process. They are monitored regularly, through internal or external audits.

Operational risksThe purchasing department centralizes the group insurance programmes. These insurance

contracts cover damages, operating losses, civil liability and transportations. Our civil liability

insurance covers liable damages to third-parties, brought through our activity or through our

products, some of which are automotive security products such as wheels for instance.

The control over risks secured by the Quality Management System and the Environment

Management System is completed by a prevention policy defined with our insurance compa-

nies and implemented. Our patent rights are managed by the technical department assisted by

an external agency. Dedicated lawyers might be hired when necessary.


Juridical responsibilityOur juridical responsibility may become involved in trade litigations with our customers or

suppliers or in disputes with employees. Our lawyers are selected according to the litigation

nature, to the country and to their reputation. Our patent rights are managed by the technical

department assisted by an external agency. Dedicated lawyers might be hired when necessary.

FORECASTED IMPROVEMENTS

In order to perpetuate our health and security actions, a group responsible has been appointed.

She is assigned to deepen and harmonize the existing procedures referring to the OHSAS18001

standard, and to implement any possibly currently missing procedure.

An Entreprise Resource Planning (ERP) is currently adopted to process the purchasing function

(commercial and accounting processes) insuring the operating productivity and reliability. It

will get started on May 2004.

CONCLUSION

This report describes the running methods within the MONTUPET group, about the board

meeting organisation and the internal control. They appear to me mostly fitted to the trans-

parency and security needs as expressed by the financial markets, and liable to keep our

shareholders confident in their company's governance.

This opinion in reinforced by the reading of the reports issued by other industrial companies,

taking into account our size, branch of industry and specificity.

However, aiming at improving in this matter as in our industrial activity, we already

programmed some improvements in these running methods and obviously remain interested

to receive any suggestion.


� AUDITORS’ REPORT ON THE BOARD OF DIRECTORS PRESIDENT’S REPORT WITH REFERENCE TO INTERNAL AUDIT PROCEDURES REGARDING PREPARATION

AND TREATMENT OF ACCOUNTING AND FINANCIAL INFORMATION

Pursuant to provisions of Article 225-325 of the French Commercial Code.

(Translated from the original French language report).

To the Shareholders,

In our capacity as Statutory Auditors of MONTUPET SA, pursuant to provisions of Article 225-325

of the French Commercial Code, we hereby submit our report on the report presented by the

President of the Board of Directors of your Company, in compliance with Article 225-37 of the

Commercial Code, for the fiscal year 2003.

Managing Partners are responsible for the definition and implementation of adequate and effi-

cient internal audit procedures. The President of the Board of Directors sets forth in his report,

the conditions in which the Board of Directors operations are prepared and organized as well

as the internal audit procedures established by the Company.

We are responsible for expressing our observations on the information and statements set

forth in the President’s report on the internal audit procedures with respect to preparation and

treatment of accounting and financial information.

Pursuant to professional standards applicable in France, we reviewed the internal auditing

objectives and general organization together with the internal auditing procedures with respect

to preparation and treatment of accounting and financial information presented in the Presi-

dent’s report.

On this basis, we have no matters to bring to shareholders’ attention on the information and

statements with respect to Company internal audit procedures relative to preparation and

treatment of accounting and financial information contained in the Board of Directors Presi-

dent’s report, drawn up under provisions of Article L.225-37 of the French Commercial Code.

Paris, June 8th 2004

The Auditors

BELLOT MULLENBACH & ASSOCIES GUILLERET & Associés

Thierry Bellot, Pascal de Rocquigny René Guilleret

Registered in the Auditors Company Registered in the Auditors Company

of Paris of Versailles


� DATA FOR LAST FIVE FISCAL YEARS

Financial data at year’s end 1999 2000 2001 2002 2003

a. Share Capital 14 362 816 14 369 174 14 340 987 14 368 783 15 713 649

b. Issued share capital 9 421 390 9 425 560 9 434 860 9 453 147 10 337 927

c. Number of convertible debentures 0 0 0 0 0

Global result on operating

a. Turnover 214 360 263 252 280 439 292 446 214 292 787 883 298 571 762

b. Profit before taxes, personnel’s profit sharing,

depreciation and provisions 13 450 925 18 586 908 18 656 118 25 249 595 45 336 564

c. Income tax 0 0 30 490 30 490 1 162 873

d. Profit after taxes, personnel’s profit sharing,

depreciation and provisions 1 058 271 (4 893 570) (6 580 423) 4 711 808 25 430 725

e. Distributable profit and distributed

retained earnings 1 579 642 0 0 5 151 458 2 050 435

Result on operations per share

a. Profit after taxes, personnel's profit sharing,

but before depreciation and provisions 1,43 1,97 1,97 2,67 4,27

b. Profit after taxes, personnel's profit sharing,

depreciation and provisions 0,11 (0,52) (0,70) 0,50 2,46

c. Net dividend per share 0,17 0 0 0,50 0,20

d. Tax pre-paid to the Treasury 0,08 0 0 0 0,10

Personnel

a. Number of employees 1 742 1 935 1 893 1 819 1 781

b. Wages ans salaries 37 084 690 40 598 004 41 847 254 41 361 180 40 258 150

c. Social security 16 032 867 16 045 315 16 065 764 16 378 916 16 418 332


MONTUPET MONTUPET MFT MONTIAC ALUMALSA MONTUPET MONTUPET MFT-MON- CALCAST

UK LTD GMBH SARL SA DE CV LIMITEE INC TUPET SNC LTD

Issued share capital 12 390 26 8 7 680 3 486 7 368 8 10 836 41

Accumulated retained

earnings before distribution

of profit for the fiscal year 48 187 25 297 (3 402) 8 213 2 908 69 7 698 460

Share held by parent

company in % 100,0 100,0 50,0 100,0 97,7 100,0 100,0 99,0 100,0

Value of share capital held by

parent Company (gross = net) 12 390 26 4 7 680 1 561 7 435 9 10 836 41

Loans and advances granted by

the parent company and not yet

repaid (in MONTUPET SA books) 0 0 0 0 0 0 0 0 0

Guarantees given by the parent

Cy (converted at year end)

maximal amount 123 690 (1) 0 0 0 4 573 (1) 4 925 0 0 1 419

used amount 2 880 0 0 0 0 0 0 0 0

Turnover for the fiscal year 2003 80 942 127 1 742 7 299 48 700 18 052 306 4 314 27 987

Profit or loss for the fiscal year 2003 9 354 1 58 357 2 426 (747) 5 2 459 1 325

Dividends received by the parent

Cy during the fiscal year 2003 17 027 0 (2) 0 0 0 0 0 0

Consolidation retreatments are taken into account.

(1) Including 12,196 M2 in favour of MONTUPET UK or its subsidiaries and 4,573 M2 in favour of MONTUPET UK,

MONTUPET Limitee or ALUMALSA.

(2) Payment of 90% of gross margin in 2003 : 846 363 2.

MONTUPET UK Ltd: Dunmurry Industrial Estate - The Cutts - Derriaghy - Belfast bt17 9hu / Nothern Ireland

MONTUPET GmbH: Karl-Götz Strasse 17 - 97424 Schweinfurt / Germany

MFT Sarl: 41, rue de la Bienfaisance - 75008 Paris / France

MONTIAC SA de CV: Calle San Pablo n° 50 - Desarrollo Industrial - Mieleras - CP 27400 - Torréon - Coahuila / Mexico

ALUMALSA: Carretera de Castellon - Km 8,400 - Apartado 4047 - Saragosse / Spain

MONTUPET Limitee: 50, rue Léger - Riviere-Beaudette / Quebec / Canada

MONTUPET Inc: 17197 N. Laurel - Park Drive - Livonia / Michigan 48152 / USA

MFT-MONTUPET Snc: Av. Gal Dumonceau, 56 - 1190 Forest / Belgium

CALCAST Ltd: 20 Kean’s hill road - Campsie Industrial Estate - Co Londonderry 99136 - North Ireland

� TABLE OF SUBSIDIARIES AND SHAREHOLDING INTERESTS AS AT DECEMBER 31ST 2003 (IN K4)


� RESOLUTIONS PRESENTED BEFORE THE ANNUAL MEETING HELD ON JUNE 29TH 2004

RESOLUTIONS WITHIN THE AUTHORITY OF AN ORDINARY GENERAL MEETING

FIRST RESOLUTION

Approval of the parent company’s financial statements and directors discharge

The Shareholders, having heard the Board of Directors and the Auditors reports on the social

accounts for the fiscal year 2003 and after studying the income statement, the balance-sheet,

together with their notes, approve these accounts and balance-sheet as shown, as well as all

the transactions they reflect.

They consequently discharge the directors from their financial administration during the fiscal

year 2003.

SECOND RESOLUTION

Approval of the consolidated financial statements

The Shareholders, having heard the Board of Directors and the Auditors reports on the

accounts for the fiscal year 2003 and after studying the consolidated income statement, the

consolidated balance-sheet, together with their notes, approve these consolidated accounts

and balance-sheet as shown, as well as all the transactions they reflect.

THIRD RESOLUTION

Allocation of income

The Shareholders note that the accounting result for the fiscal year 2003 is a profit amounting

to 25 430 725 Euros, and in compliance with the Board of directors proposals :

• record that the previous retained earnings amounted to 10 484 136 Euros by December 31st 2003

(taking into account the transfer of 3.256.269 Euros to the long term profits special reserve as

decided by the General Combined Meeting held on March 31st 2003),

• appropriate 496.546 Euros to the legal reserve, thus increasing it from 1.074.819 Euros to

1.571.365 Euros,

• distribute a dividend of 0,20 Euro per share, together with a tax credit of 0,10 Euro, repre-

senting a total amount of 2.050.895 Euros,

• record that the available retained earnings will therefore increase from 10.484.136 Euros to

33.367.420 Euros,

• record that the amount of distributed dividends in the last three years and of the corre-

sponding tax credits (tax already paid to the fiscal authorities), were:


Fiscal year Net dividend French Tax Credit

2000 0 0

2001 0 0

2002 0,50 Euros 0

(decided by a Meeting not

held to appropriate a year

profit)

FOURTH RESOLUTION

Directors fees

The shareholders decide to allocate 10.000 Euros to the Board of Directors.

FIFTH RESOLUTION

Ratification of the agreements mentioned in article L.225-38 to L.225-42 of the French Code of

Commerce

The Shareholders, having heard the auditor's report upon the transactions provided by the arti-

cles L225-38 to L225-42 of the Code of Commerce, approve and ratify the permission given by

the Board of Directors to enter into such transactions.

SIXTH RESOLUTION

Regulation of a Director’s appointment

As an inaccuracy slept into the minutes of the Combined Meeting held on March 31st 2003, the

shareholders confirm their decision taken on March 31st 2003 as follows :

• on one hand, by ratifying the cooptation of Mr François FEUILLET as Director, up to Mr François HENROT’s

- his predecessor – term end, i.e. after the Shareholders’ Meeting called to approve the finan-

cial statements for the 2002 fiscal year,

• on another hand, by appointing Mr François FEUILLET as Director for a period of six years,

expiring at the conclusion of the Shareholders’ Meeting called to approve the financial state-

ments for the 2009 fiscal year.

SEVENTH RESOLUTION

Authorization of an Employee Share Issue

The report of the Board of Directors and the report by the Auditors having been made available

to the shareholders, pursuant to the provisions of Article L.225-129, VII of the French Commer-

cial Code, the shareholders hereby authorize the Board of Directors to increase the share

capital, if it appears fit to the Board, at the time and in the quantities it will decide, in one or

several times, by a maximum amount of 30.400 2 nominal, i.e. by a maximum number of

20.000 shares with a face value of 1,52 Euro, this capital increase being reserved to the

company employees within a company savings scheme, and as provided by the Article L.443-5

of the Labour Code.

The shareholders empower the Board of Directors to implement this authorization, and in that

purpose :


• determine seniority requirements to benefit from this operation, within the legal limits, and

the maximum number of shares a single employee may subscribe,

• determine the number of shares to be issued and their possession date,

• determine, according to the Article L.443-5 al. 3 of the Labour Code, the subscription price of

the new shares and the time to subscribe,

• determine the payment time limits and modalities,

• record the capital increase(s) and the related modifications in the Articles of Association,

• carry-out all the official acts needed following the capital increase, including implementing a

company savings scheme.

This authorization entails the waiver of pre-emptive rights to subscribe for the shares to be

offered to employees for subscription.

EIGHTH RESOLUTION

Shareholders identification

The shareholders decide to modify the Article 13 of the Articles of Association as follows :

“complying with article L.228-2 of the French Commercial Code, the company may ask at any

time to the relevant authorities against payment, the name and birth-date – for legal entities,

the name and creation date – the nationality and address of the shareholders with voting

rights, the quantity of detained shares, and the possible restrictions attached to their shares”.

RESOLUTIONS WITHIN THE AUTHORITY OF THE ORDINARY AND OF THE EXTRAORDINARY

GENERAL MEETINGS

NINHT RESOLUTION

Power to carry-out official acts

The General Meeting gives all powers to the carrier of a copy of the minutes of the meeting, in

view of carrying out all deposits and official acts provided by the law.


� REPORT OF THE AUDITORS ON THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR 2003



In accordance with the terms of our appointment at the Annual Shareholder’s Meeting, we

hereby submit our report for the year ended December 31st 2003, on :

- our examination of the financial statements of MONTUPET SA, as attached to this report,

- the specific procedures and information required by law.

These financial statements have been approved by your management board. Our responsibility

is to express an opinion on these financial statements, based on our audit.

I – OPINION ON THE FINANCIAL STATEMENTS

We conducted our audit in accordance with professional standards applied in France. Those

standards require that we plan and perform our audit to obtain a reasonable assurance that the

financial statements are free from material misstatement. An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures in the financial statements. It also

includes assessing the accounting principles used and significant estimates made in the

preparation of the financial statements, as well as evaluating their overall presentation. We

believe that our audits provide a reasonable basis for our opinion.

We certify that the financial statements present fairly, in all material respects, the assets and liabi-

lities and financial position of the company at December 31st 2003, and the result of operations for

the year then ended in accordance with French generally accepted accounting principles.

II – JUSTIFICATION OF OUR ASSESMENTS

In accordance with Article L.225-235 of the French Commercial Code relating to the justifica-

tion of the assessments, which applies for the first time to the year ended December 31st 2003,

we mention the following points :

The introductory paragraph in the notes details the accounting treatment and the conse-

quences of the significant events in the fiscal year on the results of operations and on the

financial position. We appreciated the relevance of these information and of their evaluation.

Your company describes the nature and depreciation durations of deferred charges in the para-

graph 2.11 in the notes to the financial statements. We appreciated the applied accounting

treatment and the depreciation methods and durations.

The assessments we have performed on the above matters are part of our audit procedures

relating to the financial statements, taken as a whole, and have thus contributed to the unqua-

lified audit opinion expressed in part one of this report.


III – SPECIFIC VERIFICATION

We have also performed the specific procedures required by law, in accordance with profes-

sional standards applied in France.

We are satisfied that the information given in the Board of Directors’ report and the documents

sent to shareholders on the financial position and financial statements is fairly stated and

agrees with those financial statements.

As required by the law, we also verified that details of the identify of shareholders are disclosed

in the Board of Directors report.


The Auditors






� REPORT OF THE AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR 2003



In accordance with the terms of our appointment at the Annual Shareholder’s Meeting, we have

audited the Consolidated financial statements of MONTUPET for the year ended December 31st 2003,

as attached to this report

These consolidated financial statements have been approved by your management board. Our

responsibility is to express an opinion on these financial statements, based on our audit.

I – OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS

We conducted our audit in accordance with professional standards applied in France. Those

standards require that we plan and perform our audit to obtain a reasonable assurance that the

financial statements are free from material misstatement. An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures in the financial statements. It also

includes assessing the accounting principles used and significant estimates made in the

preparation of the financial statements, as well as evaluating their overall presentation. We

believe that our audits provide a reasonable basis for our opinion.

We certify that the consolidated financial statements present fairly, in all material respects, the

consolidated results of operations and the consolidated assets and liabilities and financial

position of the consolidated entities.

II – JUSTIFICATION OF OUR ASSESMENTS

In accordance with Article L.225-235 of the French Commercial Code relating to the justifica-

tion of the assessments, which applies for the first time to the year ended December 31st 2003,

we mention the following points :

The introductory paragraph in the notes details the accounting treatment and the conse-

quences of the significant events in the fiscal year on the results of operations and on the

financial position. We appreciated the relevance of these information and of their evaluation.

Your company describes the nature and depreciation durations of deferred charges in the para-

graph 2.5. in the notes to the financial statements. We appreciated the applied accounting

treatment and the depreciation methods and durations.

The assessments we have performed on the above matters are part of our audit procedures

relating to the consolidated financial statements, taken as a whole, and have thus contributed

to the unqualified audit opinion expressed in part one of this report.


III – SPECIFIC VERIFICATION

On another hand, we also audited the data contained in the report of the Board of Directors.

We have no adverse comments upon the reliability and agreement of the consolidated accounts with

the data given in the Group management report.


The Auditors






� AUDITORS’ REPORT ON AN EMPLOYEE SHARE ISSUE PURSUANT TO PROVISIONS OF ARTICLE 225-19 VII OF THE FRENCH COMMERCIAL CODE

- COMBINED MEETING HELD ON JUNE 29TH 2004 (SEVENTH RESOLUTION) -



In our capacity as Statutory Auditors of your company, and pursuant to provisions of Article L. 225-135

of the Commercial Code, we hereby present our report on the planned employee share issue

which would result in a capital increase of a maximum of 30.400 2, submitted to shareholders

for approval in accordance with the provisions of Article L.225-129 VII of the Commercial Code

and Article L. 443-5 of the Labour Code.

The Board of Directors are inviting shareholders to grant them full powers to set the terms and

conditions of the related share issue, as presented in their report, as well as to waive their pre-

emptive subscription right.

We conducted our review in accordance with the professional standards applicable in France.

Those standards require that we carry out the necessary procedures to verify the methods used

to determine the issue price of new shares.

Subject to further examination of the terms and conditions of this issue, we have no matters to

bring to shareholders’ attention regarding the methods used to determine the issue price of

new shares as presented in the Board of Directors’ report.

As the issue price of new shares is not determined, we are not in a position to comment on the

final terms and conditions under which the issue will be conducted, nor, in consequence, on

the proposed waiver of shareholder’s pre-emptive rights to subscribe for the issue concerned,

the principle of which is in keeping with the nature of the proposed operation.

In accordance with Article L.155-2 of the decree of March 23rd, 1967, we will issue as supple-

mentary report at the time of each such issue conducted by the Board of Directors.


The Auditors






� SPECIAL REPORT OF THE AUDITORS FOR THE FISCAL YEAR 2003


Ladies and Gentlemen,

In our capacity as Statutory Auditors of your company, we inform you about the regulated tran-

sactions, previously ratified by the Board of directors.

In compliance with Article L.225-40 of the French Commercial Code, we were informed of the

transactions that were previously approved by your Board of Directors.

We are not expected to trace such transactions but to communicate to you, on the basis of the

information we received, the main features and implementations of those we are aware of,

without assessing their liability. You are expected to appreciate the interest resulting from

these transactions in view of approving them.

Directors concerned: Messrs Stéphane MAGNAN and Marc MAJUS

The Board of Directors agreed that the current account advances between MONTUPET SA and

MONTIAC bear interest at the rate of 3,5% for the fiscal year 2003. The current account debiting

balance was amounting to 1.377.342 Euros by December 31st 2003.

The interests thus charged by MONTUPET SA to MONTIAC amounted to 48.146 Euros for the

fiscal year 2003.

On another hand, in compliance with the decree of march 23rd 1967, we were informed that the

following transactions concluded during previous years were still in force in year 2003.

1. MFT SARL

The profit sharing agreement dated January 9th 1990, between MONTUPET SA and MFT SARL, located

in 41, rue de la Bienfaisance - 75008 PARIS, that was no longer operative since January 2nd 1997, came

back into force in year 1999, in the interest of the MONTUPET SA – MFT group. This agreement,

amended on April 8th 1999 provides that MFT SARL will pay 90% of its gross margin to

MONTUPET SA, representing 846.363 Euros for the fiscal year 2003.

2. MFT-MONTUPET SNC

The Board of Directors, in its meeting of March 29th 2004, confirmed its authorization of the

following transactions signed with the group coordination centre, MFT-MONTUPET SNC,

located in 56, avenue du Général Dumonceau - 1990 FOREST in Belgium, as follows:

2.1. CAPITAL CONTRIBUTION

None in year 2003.

2.2. FINANCING OF SUBSIDIARIES

No further loan was granted in year 2003.


2.3. FACTORING TRANSACTIONS

MONTUPET SA sold invoices to the coordination centre during year 2003. Sold amounts were

322.134.422 Euros. Financing charges amounted to 811.298 Euros and factoring charges to

651.779 Euros.

2.4. INVOICED SERVICES

The coordination centre invoiced 2.418.333 Euros mainly representing staff, administrative and

similar costs, plus 8%.

MONTUPET SA also pays the social contributions concerning the directors who are expatriated

in Belgium, and are the executive directors of the coordination centre MFT-MONTUPET SNC.

These costs amounted to 113.725 Euros for the fiscal year 2003. These paid contributions

concerning the other employees originating from MONTUPET SA amounted to 177.561 Euros.

3. MONTIAC

3.1. Upon March 27th 1998, MONTUPET SA signed with MONTIAC, its wholly owned subsidiary

located in Mexico, a “maquila” (subcontracting) agreement, by which MONTIAC produces

cylinder-heads, cylinder-blocks, wheels, braking-parts, structure parts, intake manifolds… on

behalf of MONTUPET.

Within this agreement, MONTUPET is committed to pay to MONTIAC all its direct and indirect

staff costs, rents, utility goods, insurances, raw materials and local components, plus a 5%

margin. The amount thus charged in year 2003 amounts to 7.154.083 Euros, including the 5%

margin.

3.2. Within a know-how and technical assistance agreement dated march 27th 1998,

MONTUPET provides free of charge its know-how, its designs, trade-marks, machining equip-

ment, and raw materials to its wholly owned subsidiary, MONTIAC, located in Mexico; in the

sole view of enabling MONTIAC to provide mounting or production services to MONTUPET.

3.3. An agreement of mercantile commission dated July 1st 1999, appendix to the “maquila”

agreement, provides that MONTIAC will deliver its production to specified MONTUPET custo-

mers and the invoicing to these customers. As a compensation, MONTUPET pays a commission

amounting to 0,1% of the invoiced amounts (namely to FORD Mexico).

In 2003, MONTIAC invoiced its production up to 21.283.948 Euros and the mercantile commis-

sion amounted to 9.352 Euros.


The Auditors





� CONSOLIDATED FINANCIAL STATEMENTS


� CONSOLIDATED BALANCE-SHEET ENDING DECEMBER 31ST 2003

Assets Fiscal year 2003 Fiscal year 2002

Gross value Depreciation Net value Net value

(K Euros) (K Euros) (K Euros) (K Euros)

Intangible assets

Goodwil 1 620 1 620 0 0

Others 1 304 1 049 255 116

TOTAL 2 924 2 669 255 116

Fixed assets

Land 4 009 0 4 009 4 267

Buildings 46 814 24 527 22 287 25 984

Machinery and equipment 307 271 186 842 120 429 130 005

Others 38 835 24 012 14 823 17 451

Assets under construction 998 0 998 1 621

TOTAL 397 927 235 381 162 546 179 328

Financial assets

Shares in unconsolidated subsidiaries 35 0 35 35

Loans and others 521 0 521 634

TOTAL 556 0 556 669

TOTAL FIXED ASSETS 401 407 238 050 163 357 180 113

Inventories and work in progress

Raw materials 27 696 1 422 26 274 28 996

Spare-parts 1 496 0 1 496 2 250

Tooling 4 390 0 4 390 7 545

Work in progress and finished goods 18 626 36 18 590 23 567

TOTAL 52 208 1 458 50 750 62 358

Trade debtors

Advances and deposits on order 457 0 457 490

Accounts receivable and related 109 111 524 108 587 123 538

Other trade debtors 4 560 0 4 560 851

TOTAL 114 128 524 113 604 124 879

Others debtors

Deferred taxation 0 0 0 0

Others debtors 2 582 0 2 582 4 625

TOTAL 2 582 0 2 582 4 625

Marketable securities 10 0 10 2 445

Cash 9 873 0 9 873 6 734

Prepayment 4 383 0 4 383 1 724

TOTAL CURRENT ASSETS 183 184 1 982 181 202 202 765

Deferred charges 7 305 0 7 305 10 454

TOTAL ASSETS 591 896 240 032 351 864 393 332


> Liabilities Fiscal year 2003 Fiscal year 2002

(K Euros) (K Euros)

Stockholders’equity

Called-up Share capital 15 714 14 369

Capital surplus 11 496 3 642

Legal reserve 1 075 1 075

Regulated reserves 3 735 479

Other reserves 42 42

Consolidation difference 110 541 91 855

Retained earnings 10 484 14 180

Translation adjustment (9 958) (3 764)

Current year profit - Inside Group 20 458 24 507

TOTAL STOCKHOLDERS’EQUITY-Inside Group 163 587 146 385

Minority interests as per 01/01/2003 1 880 5 562

Current year profit - Outside group (78) 291

Minority interests as per 31/12/2003 1 802 5 853

TOTAL STOCKHOLDERS’EQUITY 165 389 152 238

Other permanent capital and grants

Capital grants 12 760 17 691

Conditional advances 790 1 014

TOTAL 13 550 18 705

TOTAL PERMANENT CAPITAL 178 939 170 943

Provisions for liabilities and charges

Provisions for liabilities and charges 1 402 1 775

Deferred taxation 14 392 13 062

TOTAL 15 794 14 837

Financial liabilities 47 998 96 734

Payments received on account 6 231 7 372

Liabilities

Accounts payable 65 972 68 379

Taxation and social security 18 692 17 509

Other trade creditors 8 367 5 587

TOTAL 93 031 91 475

Other creditors

Suppliers of fixed assets and others 8 440 9 489

TOTAL 8 440 9 489

Deferred income 1 431 2 482

TOTAL LIABILITIES AND STOCKHOLDERS’EQUITY 351 864 393 332


Operating income

NET SALES 438 472 474 694

Changes in inventory (5 373) (3 346)

Own work capitalized 1 297 6 698

Operating subsidies 7 833 5 665

Charges transfers 0 2 795

Others 10 995 10 935

TOTAL OPERATING INCOME 453 224 497 441

Operating costs

Cost of raw materials and other supplies 189 108 205 673

Other operating expenses 52 163 62 648

Salaries and wages 129 536 139 167

Taxes 5 964 6 223

Depreciation charges on fixed assets and

changes in provisions charges on current assets 40 419 35 613

Other charges 9 524 16 739

TOTAL OPERATING EXPENSES 426 714 466 063

1. Operating profit 26 510 31 378

Financial income

Receivable interests 376 50

Exchange gains 5 924 6 021

Release of provisions 1 0

Others 185 158

TOTAL FINANCIAL INCOME 6 486 6 229

Financial expenses

Payable interests and related charges 2 747 4 682

Negative differences in exchange rates 3 508 2 468

Write-downs and provisions 1 0

Others (648) 4

TOTAL FINANCIAL EXPENSES 5 608 7 154

2. Financial profit (loss) 878 (925)

3. Profit from ordinary activities 27 388 30 453

� CONSOLIDATED INCOME STATEMENT

Fiscal year 2002 (K4)Fiscal year 2003 (K4)


4. Extraordinary profit (421) 3 040

Income tax 4 834 1 632

Deferred tax 1 753 7 063

5. Total net consolidated profit 20 380 24 798

Minority interests (78) 291

NET CONSOLIDATED PROFIT ATTRIBUTABLE TO GROUP 20 458 24 507

ARE:

IN EUROS PER SHARE:

Net Profit attributable to the Group - per share 1,98 2,59

Profit from ordinary activities after income tax - per share 2,02 2,27

Diluted net Profit - per share 1,78 2,13

Number of issued shares 10 337 927 9 453 147

Stock option schemes 1998 (year 2002 only)

and 2001: nr of issuable shares 1 168 100 2 063 333

Number of issued and issuable shares 11 506 027 11 516 480

Fiscal year 2003 (K4) Fiscal year 2002 (K4)


� NOTES TO THE CONSOLIDATED ACCOUNTS AS PER DECEMBER 31ST 2003

These accounts were approved by the Board of Directors on march 29th 2004. They are shown in

thousands Euros.

SIGNIFICANT ITEMS IN THE FISCAL YEAR

• Following the decrease in the tooling activity, restructuring measures were implemented.

Among those, early retirements cost 1.431 K€, accounted among the personnel costs,

• In 2003, MONTUPET UK wholly depreciated the capital expenditures incurred to create the

lost foam process, thus impacting the year result by 1.710 KGBP, i.e. 2.474 K€,

• A part produced by MONTUPET UK for FORD Is no longer produced since end september

2003. Measures were taken to transfer the production equipment on other programmes in

Belfast and in Canada, so that no extra depreciation was needed,

• After a customer modified its order programme, MONTUPET claimed an indemnity, payment

of which was agreed and which was accounted for 1.811 K€ in 2003 accounts, and was paid on

May 7th 2004.

1. CONSOLIDATION RULES

The consolidated accounts were drawn-up in compliance with the French principles and rules,

including the rule nr 99-02 issued by the “Comité de la Réglementation Comptable” (Accoun-

tancy Council) probated on June 22nd 1999.

1.1. CONSOLIDATED GROUP

Consolidation methods and holding rates are unchanged as compared with previous year.

The consolidated entities, that are consolidated using the global method, are the following:

- MONTUPET SA (mother-company),

- MONTUPET LIMITEE (100%) (Canada): aluminium foundry, car-parts manufacturer,

- MONTUPET UK (100%) (Northern Ireland): aluminium foundry, car-parts manufacturer, and

its subsidiaries WILLACE UK LTD, BS TOOLING LTD, GESFITEC UK LTD,

- ALUMALSA (97,71%) (Spain): aluminium foundry, car-parts manufacturer,

- MFT-MONTUPET Snc (100%) (Belgium): services inside the group,

- MONTIAC SA DE CV (100%) (Mexico): aluminium foundry, car-parts manufacturer,

- CALCAST LTD (100%) (Northern Ireland): aluminium foundry, car-parts manufacturer,

- MFT SARL (100%) (France): metal trading and services.

MONTUPET Inc. (USA), and MONTUPET GMBH, wholly owned by MONTUPET SA, of minor

significance for the purpose of providing a true and fair view of the Group were not taken into

account. Complementary data upon the affiliated companies appear on §2.3 hereunder.

1.2. CONSOLIDATION PRINCIPLES

All transactions between consolidated entities were eliminated. Minority interest were

recorded proportionally in the stockholders’ equity and in the income statement.

Statements of all consolidated entities are closed at December 31st 2003, each fiscal year


including twelve months. The difference deriving from initial consolidation i.e. Between the

book-value of a company shares and their purchase price is allocated to identifiable items, or

capitalized as goodwill, disclosed under intangible assets. By end 2003, the goodwill was fully

written off. Unmatured discounted bills were included into the consolidated balance sheet.

The statements of consolidated companies are translated as follows:

Balance-sheets are translated at the rate valid at the reporting date.

In the P&L account, income and expenses are translated at the annual average market rate.

Translation adjustments resulting from the difference between previous and current closing

year exchange rates on the items in the balance-sheet, as well as those resulting from the

difference between the yearly average and closing exchange rates on the items in the income

statement appear as “translation adjustments” in the stockholders’ consolidated entity.

• Main exchange rates record:

- Sterling Pound: 31.12.2002: 1 £ = 1,5373 €

31.12.2003: 1 £ = 1,4188 €

- Canadian Dollar: 31.12.2003: 1 CAD = 0,6042 €

31.12.2002: 1 CAD = 0,616 €

1.3. ACCOUNTING PRINCIPLES AND BASES OF VALUATION

1.3.1. Intangible assetsIntangible assets are valued at purchase cost. Start-up expenses are written off immediately in the

year they are incurred. Research and development expenses are fully recorded in the P&L account.

1.3.2. Fixed assetsFixed assets are valued at purchase cost plus costs to put them in working condition, or at

production cost. Interests related to loans financing fixed assets are not included.

Assets - except lands - are depreciated according to the following durations and methods:

Buildings 20 years Straight line method

Fixtures and fittings 8 to 25 years Straight line method

Machinery and tooling 8 to 15 years Straight line method

or 8 years Declining balance method

Vehicles 4 years Straight line method

Office furniture and 1 to 10 years Straight line method

Equipment or 8 years Declining balance method

1.3.3. Financial assetsParticipations in unconsolidated subsidiaries are valued either at purchase cost, or on the

basis of their value in use in view of their future prospects. Other financial assets are valued at

purchase costs. Accruals are set-up if applicable (bad debts).

1.3.4. Inventories and in process productsInventories and in process products are valued at (purchase or manufacturing) cost or sales

price, whichever is lower. No financial cost is included.

Inventories from intra-group supplies are not reduced by inter-company profits and losses, the

total being not significant.


1.3.5. Receivables and liabilitiesReceivables and liabilities are registered at their nominal value. Those denominated in foreign

currencies are translated at the exchange rate valid on the reporting date, or at the hedged

rate if covered by hedging transactions. Foreign currencies translation differences are reported

in the P&L account (exchange loss or gain). Bad debts are written off when applicable.

1.3.6. Marketable securitiesMarketable securities are recorded at their nominal value, excluding procurement costs.

During the year, MONTUPET SA bought shares within the programme authorized by the Annual

General Shareholders Meeting on June 30th 2003. On December 31st 2003, MONTUPET SA thus

held 83.354 of its own shares, bought at an average price of 13,98 € i.e. 1.160 K€. The consoli-

dation re-treatment of this transaction was to reduce the consolidated stockholders’equity.

1.3.7. Ordinary and Extraordinary profit (loss)The result from ordinary activities is the addition of the operating profit (or loss) and of the

financial profit (or loss). It includes all the profits and losses directly related to the current

group activities.

Extraordinary profits and losses are made of significant items that, in view of their unordinary

and not recurrent nature (such as assets disposals, provisions for risks and charges, expatria-

tion allocations, penalties), cannot be regarded as belonging to the current group activities.

1.3.8. Deferred taxesTiming differences between the taxable income and the accounting profit of consolidated

companies, together with some consolidation measures, result in deferred taxes in the consol-

idated statements.

Deferred taxes calculated using the variable method are rated as follows:

- French companies: rate is 34,35%,

- Spanish companies: rate is 35%,

- British companies: rate is 30% (subsidiaries in Northern Ireland)

- Canadian subsidiary: rate is 31,35%.

When the impact is significant, deferred taxes are discounted at 6%, according to a repayment

schedule.

This discounting reduces the net deferred tax liabilities by 1.379 K€ in MONTUPET SA accounts

and by 1.624 K€ in the subsidiaries in Northern Ireland, and increases them by 43 K€ in

MONTUPET LIMITEE accounts.

From the fiscal year 2002, deferred taxes were calculated for the subsidiaries in Northern Ireland

without taking into account their capital expenditure programmes nor their grant schemes.

Deferred taxes are therefore amounting to 14.392 K€. Deferred tax liabilities now appear among

the provisions for liabilities and charges to comply with the current practice.

The contribution record per company appears under § 2.15.


1.3.9. Retirement benefits

Amount on 31.12.2003

MONTUPET SA Retirement benefit commitments 1 380

MONTUPET UK retirement pension scheme (1) 473

TOTAL 1 853

(1) Pension scheme risks sharing: excess of liabilities over assets at 31.12.03.

The group companies have chosen pension schemes with defined contributions, therefore not

underwriting any commitment beyond these paid contributions. On another hand, MONTUPET SA

pays a retirement indemnity to its employees when they retire and MONTUPET UK partially

shares its pension scheme risk.

1.3.10. Capital grantsThey are apportioned to the profit and loss account as the related fixed assets are depreciated.

1.3.11. Leasing contractsMajor leasing contracts have been restated in the accounts. Capitalized leased assets are a

building depreciated over 20 years, and lands (not depreciated).

The corresponding liability was reported under “other financial borrowings” and amounts to

2.895 K€ at the reporting date.


2. NOTES TO THE BALANCE-SHEET AND INCOME STATEMENT

2.1. FIXED ASSETS (IN K€)

Assets Opening Increases Decreases Exchange rate Closing balance variations balance

Goodwill 1 620 0 0 0 1 620

Other intangible assets 1 113 214 (23) 0 1 304

Tangible assets 385 063 25 281 (10 409) (12 756) 387 179

Tangible assets on lease 10 748 0 0 0 10 748

Financial assets 669 1 (100) (14) 556

TOTAL 399 213 25 496 (10 532) (12 770) 401 407

2.1.1. Goodwill (in K€)

Gross value 31.12.2003 Endowments Net value 31.12.2003

MONTUPET UK 316 316 0

MONTUPET SA 416 416 0

WILLACE UK 398 398 0

BS TOOLING 401 401 0

MFT SARL 89 89 0

TOTAL 1 620 1 620 0

2.1.2. Other intangible assets (in K€)

Opening balance Endowments Closing balance


MONTUPET UK consolidated 387 282 105

MFT SARL 5 4 1

CALCAST 1 0 1

TOTAL 1 304 1 049 255

2.2. DEPRECIATIONS AND PROVISIONS FOR LIABILITIES AND CHARGES RECORD (IN K€)

Assets Opening balance Increases Decreases Exchange rate Closing balancevariations

Intangible assets 2 617 106 (54) 0 2 669

Tangible assets (1) 216 483 34 079 (9 131) (6 050) 235 381

Financial assets 0 0 0 0 0

TOTAL 219 100 34 185 (9 185) (6 050) 238 050

(1) Including fixed assets

on lease 4 816 522 0 0 5 338


2.3. UNCONSOLIDATED PARTICIPATIONS (IN K€)

Assets % participation Capital Result

MONTUPET Inc 100% 82 5

MONTUPET GmbH 100% 52 1

2.4.RECEIVABLES AND PAYABLES ANALYSIS (IN K€)

Accounts are receivable and payable within one year, except those mentioned hereunder.

Trade & sundry debtors Trade & sundry liabilities

over one year over one year

MONTUPET SA 1 312 0

CALCAST 0 1 371

MONTUPET LIMITEE 31 0

TOTAL 1 343 1371

2.5. DEFERRED CHARGES (IN K€)

Assets Gross value Increases Decreases Gross value

01.01.2003 (depr. & exch. 31.12.2003

rate variations)

MONTUPET SA:

- Extensive maintenance expenses 2 516 2 792 (2 633) 2 675

- Expatriation expenses of staff members 101 128 (106) 123

- Expenses related to our Mexican

subsidiary MONTIAC 3 887 0 (1 413) 2 474

- Expenses on Laigneville facilities 1 113 0 (342) 771

-New works started 2 837 0 (1 575) 1 262

TOTAL 10 454 2 920 (6 069) 7 305

Deferred charges appear in MONTUPET SA accounts only and are mainly made up as follows:

- Extensive maintenance expenses over large equipments (excluding breakdowns), amortized over 3 years; ie

the average delay between two maintenance operations,

- Testing and pre-operating expenses related to our Mexican subsidiary (from October 1st 2000) and to a plant

in France, Laigneville, (from January 1st 2001), amortized over 5 years,

- Spending on new facilities, amortized over 3 years, computed on the basis of a year production / whole fore-

casted production (with this equipment).


2.6. VARIATION IN CONSOLIDATED CAPITAL (IN K€)

Group Outside group Total

Consolidated share capital by 01.01.2002 131 934 5 561 137 495

Euro conversion round-offs (2) 1 (1)

MONTUPET SA capital increase (incl.capital surplus) 191 0 191

Translation adjustment (7 825) 0 (7 825)

Impact of Montupet UK deferred taxes upon the

opening net worth (2 420) 0 (2 420)

Equity by 31.12.2002 121 878 5 562 127 440

2002 earnings 24 507 291 24 798

Distributed dividends 0 0 0

Consolidated equity by 01.01.2003 146 385 5 853 152 238

MONTUPET SA capital increase (incl.capital surplus) 9 199 0 9 199

MONTUPET SA buying of own shares (1 160) 0 (1 160)

Distributed dividends (5 152) (3 973) (9 125)

Translation adjustments (6 194) 0 (6 194)

Miscellanea 51 0 51

Consolidated equity by 31.12.2003 143 129 1 880 145 009

2003 earnings 20 458 (78) 20 380

TOTAL 163 587 1 802 165 389

Called-up and fully paid share capital consists in 10.337.927 shares with a face value of 1,52 Euros each, i.e. a

total of 15.713.649 Euros, against 9.453.147 shares with a face value of 1,52 Euros each, i.e. 14.368.783 Euros

as per December 31st 2002.

This results from:

- The issue of 852.980 shares created under the stock-option scheme dated January 20th 1998 authorized by

the Extraordinary General Meeting held on January 20th 1998 (On December 31st 2003, 889.547 shares had

been created out of 900.000).

- The issue of 31.800 shares created under the stock-option scheme dated November 16th 2001 authorized by

the Extraordinary General Meeting held on February 29th 2001 (On December 31st 2003, 31.900 shares had

been created out of 1.200.000).

The corresponding capital surplus amounts to 7.854.077 Euros for year 2003.

The 1998 stock-option scheme was closed in 2003. 1.168.100 shares are issuable within the 2001 stock-option

scheme. The share capital could therefore be made of 11.506.027 shares.

During the year, MONTUPET SA bought shares within the programme authorized by the Annual General

Shareholders Meeting on June 30th 2003. On December 31st 2003, MONTUPET SA thus held 83.354 of its own

shares, bought at an average price of 13,98 € i.e. 1.160 K€. The consolidation re-treatment of this transaction

was to reduce the consolidated stockholders’equity.


2.7. OTHER EQUITY AND CAPITAL GRANTS ON THE BALANCE-SHEET (IN K€)

Balance Increase Apportionment Exchange rate Closing

to profit & loss variations balance

Grants 17 691 3 796 (7 583) (1 144) 12 760

Conditional advances 1 014 0 (224) 0 790

TOTAL 18 705 3 796 (7 807) (1 144) 13 550

Other equity are made up of non refundable grants.

Conditional advances are a financial assistance from ANVAR (innovation incentives) and ADEME. ADEME

funds financed a used casting sand regeneration system.

2.8. FINANCIAL LIABILITIES (IN K€)

Gross amount Current portion Between 1 and 5 years Over five years

Bank loans 45 103 37 108 13 395 0

Leasing contracts 2 895 586 1 269 1 040

TOTAL 47 998 32 294 14 664 1 040


2.9. FINANCIAL LIABILITIES ANALYSIS PER CURRENCY (IN K€)

Amount in K4

Euro - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 38 510

Sterling Pound - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 8 250

US Dollar - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 238

Canadian Dollar - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0

Others - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0

TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 47 998

In compliance with the company policy, all the interests on financial liabilities are payable on the basis of a

variable rate. Repayable subsidies were granted without interests.

2.10. PROVISIONS RECORD (IN K€)

Assets Opening Increases: Decreases: Exchange rate Closing

balance endowments recaptures variations balance

MONTUPET SA reserves

for risks and charges 25 0 (25) 0 0

MONTUPET UK

consolidated (1) 1 750 0 (219) (129) 1 402

TOTAL 1 775 0 (244) (129) 1 402

(1) Provision for equipment maintenance costs.

2.11. PUBLIC GRANTS:

2.11.1. Grants received in Northern Ireland:By year-end, receivable grants reported in the balance-sheet amounted to 1.192 K€.

2.12. GRANTS RECEIVED IN THE P&L ACCOUNT

They include training and employment grants (250 K€) and capital expenditures grants (7.583 K€) apportio-

nable to the fiscal year.


2.13. EXTRAORDINARY INCOME & EXPENSES (IN K€)

Profits Losses

Entity analysis


ALUMALSA 243 0

MONTUPET LIMITEE 3

MONTUPET UK CONSOLIDATED 816 309

CALCAST 0 279

MONTIAC 0 5

MFT SARL 0 6

TOTAL 1 416 1 837

Analysis by nature

Extraordinary expenses transfer

- Expenses of expatriated staff members 127

Other extraordinary income

- Land expropriation in Spain 163

- Indemnity received from a customer 74

- Gain on Cendicor dismantling 41

- Others 162

Other extraordinary expenses

- Montupet SA expenses of expatriated staff members 158

- Penalties and indemnities 128

- Others 247

Extraordinary provisions for risks and charges (net) 139

Gains and losses on assets disposals

- Supplier dispute settling and several capital transactions 48

- Sales of fixed assets 662

- Net accounting value of sold assets 1 304

TOTAL 1 416 1 837


2.14. RESEARCH & DEVELOPMENT EXPENSES

Research and development expenses were mostly incurred by MONTUPET SA and MONTUPET UK. They

amounted to 2 964 K€ and were broken-down as follows:

- Personnel expenses - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 282 K€

- Operating expenses (equipment, consumable goods, patents, depreciation) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 682 K€

2.15. DEFERRED TAXES (IN K€)

Temporary Endowments Exchange rates Closing balance

differences (and recaptures) variation

MONTUPET SA 6 088 2 311 0 8 399

ALUMALSA 450 79 0 529

MONTUPET UK consolidated 6 349 (587) (428) 5 334

MONTUPET LIMITEE 175 (79) 6 102

CALCAST 0 29 (1) 28

TOTAL 13 062 1 753 (423) 14 392

2.16. TAXES ANALYSIS (IN K€)

Consolidated result before taxes - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 26 968

Mother-company tax rate - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 34,33%

Theorical tax - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9 257

Impact of:

- foreign companies tax rate difference - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (508)

- permanent differences - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (2 758)

- un-activated losses - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 297

- tax credits - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (35)

- discounting - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 336

- other differences - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (3)

Actual corporation tax - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6 587

Of which:

- payable tax - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 834

- deferred tax - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 753

3. FINANCIAL COMMITMENTS AND OTHER DATA

3.1. COMMITMENTS GIVEN (IN K€)

MONTUPET SA

- Guarantees and securities - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 880

- Other commitments - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 283

MONTUPET UK consolidated

- Guarantees and securities - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 068

MONTUPET LIMITEE

- Other commitments - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 351

TOTAL COMMITMENTS GIVEN - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 582


3.2. COMMITMENTS RECEIVED (IN K€)

MONTUPET SA

- Guarantees and securities received - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 290

TOTAL COMMITMENTS RECEIVED - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 290

3.3. HEDGING TRANSACTIONS

There was not any hedging transaction in year 2003.

3.4. EMPLOYEES

2003 2002 2001

Directors and executives 182 185 175

Foremen, technicians, and employees 800 808 873

Workers 3 158 3 237 3 311

TOTAL 4 140 4 230 4 359

3.5. DIRECTORS FEES

Salaries and advantages granted to the directors in view of their duties in the controlled subsidiaries globally

amount to 1.526.010,32 Euros.


3.6. MONTUPET GROUP STATEMENT OF SOURCES AND APPLICATION OF FUNDS (IN K4)

Fiscal year 2003 Fiscal year 2002

I - Cash-flow from operating activities:

A. Net income before minority interests 20 458 24 507

- Minority interests (78) 291

B. Adjustments to reconcile net income to net cash

provided by operating activities

- Gross depreciations and changes in reserves for risks

and charges 40 013 35 734

- Capital grants apportioned to profit and loss (7 583) (4 263)

- Changes in deferred taxes 1 808 7 063

- Net capital gains on disposals of assets 594 (2 471)

- Increase in deferred charges (2 921) (2 737)

C. Gross cash-flow of consolidated companies A+B (1) 52 291 58 124

D. Net change in working capital (except variation in

deferred taxes) 26 866 1 763

CASH-FLOW PROVIDED BY OPERATING ACTIVITIES C+D 79 157 59 887

II - Cash-flow from investing activities:

- Additions to fixed assets (25 495) (23 366)

- Additions to investments (1)

- Proceeds from disposals of tangible or intangible assets 709 4 003

- Proceeds from disposals of investments (692) 178

CASH-FLOW (USED) BY INVESTING ACTIVITIES (25 479) (19 185)

III - Cash-flow from financing activities:

- Capital increase in cash (incl. capital surplus) 9 199 191

- Loans variations (new loans less repayments) (54 795) (59 226)

- Grants variation (grant received less repayments) 3 796 4 806

- Conditional advances variation (new advances less repayments) (279) (183)

- Buying of own shares (1 160)

- Dividends paid to parent company shareholders (5 152)

- Dividends paid to minority interests shareholders (3 973)

- Others 5

NET (USED) CASH PROVIDED BY FINANCING ACTIVITIES (52 359) (54 412)

Cash variation:

- Impact of exchange rate variations (615) (196)

NET CURRENT CASH VARIATION (615) (196)

Current cash variation before exchange rates variation 1 319 (13 710)

- Impact of exchange rate variations (615) (196)

TOTAL CASH-FLOWS 704 (13 906)

(1) The gross cash-flow defined in the above table does not include the capital grants apportioned to profit and loss

(7 583 K€) and changes in assets reserves (- 74 K€). This table is calculated at average exchange rates.


4. DATA PER GEOGRAPHICAL AREA

Turnovers

Year 2003 Year 2002 Variation

France and Belgium 210,68 212,59 (0,90%)

Mexico 21,61 22,34 (3,27%)

United-Kingdom (1) 139,43 160,75 (13,26%)

Spain 48,7 47,16 3,27%

Canada 18,05 30,88 (41,55%)

TOTAL 438,47 473,72 (1) (7,44%)

Operating result Net fixed assets

Year 2003 Year 2002 Year 2003 Year 2002

France & Belgium 8,47 12,49 59,10 68,47

Mexico 3,2 1,7 14,00 15,92

United-Kingdom (1) 11,6 15,06 67,10 71,12

Spain 4,23 3,72 14,10 13,94

Canada (1) (1,6) 8,30 9,88

TOTAL 26,5 31,37 162,60 179,33

(1) 1 million € were reclassified between turnover / other operating income for CALCAST, to

improve the comparability of the fiscal years.


� FINANCIAL STATEMENTS



Gross value Accumulated Net value Net value

(Euros) write downs (Euros) (Euros) (Euros)

Intangible assets

Patents 895 831 748 251 147 580 9 171

Goodwill 127 461 127 461 127 461

Other intangible assets 15 245 15 245 0 0

TOTAL 1 038 537 763 496 275 041 136 632

Fixed assets

Land 2 321 402 2 321 402 2 321 402

Buildings 8 004 315 5 223 240 2 781 075 3 188 755

Technical equipment & machines 83 988 178 41 625 257 42 362 921 49 151 263

Other equipment 33 361 098 19 301 949 14 059 149 16 184 004

Assets under construction 410 248 410 248 231 851

Payments on account 35 689 35 689 186 631

TOTAL 128 120 930 66 150 446 61 970 484 71 263 906

Financial assets

Shares in affiliated Cies 39 939 497 39 939 497 39 939 497

Loans to affiliated Cies 1 377 342 1 377 342 1 074 705

Other participations 1 184 523 1 184 523 23 773

Loans 416 689 416 689 469 283

Deposits and mortgages 69 690 69 690 71 847

TOTAL 42 987 741 0 42 987 741 41 579 105

TOTAL FIXED ASSETS 172 147 208 66 913 942 105 233 266 112 979 643

Inventories and work in progress

Raw materials & supplies 15 455 213 1 422 007 14 033 206 17 402 810

Work in progress & finished goods 9 191 807 36 298 9 155 509 11 037 615

TOTAL 24 647 020 1 458 305 23 188 715 28 440 425

Outstanding debts

Advances and deposits on orders 407 334 407 334 709 243

Receivables and related 64 575 547 523 969 64 051 578 55 917 275

Others 2 786 009 2 786 009 3 084 688

TOTAL 67 768 890 523 969 67 244 921 59 711 206

Marketable securities 9 693 9 693 2 444 477

Cash 1 338 396 1 338 396 770 217

Prepaid expenses 2 650 787 2 650 787 1 744 775

TOTAL CURRENT ASSET 96 414 786 1 982 274 94 432 512 93 111 100

Deferred charges 7 304 149 7 304 149 10 452 903

Difference of exchange rates 513 958 513 958 293 829

TOTAL ASSETS 276 380 101 68 896 216 207 483 885 216 837 475

� MONTUPET SA BALANCE SHEET AS PER DECEMBER 31st 2003


Liabilities Fiscal year 2003 Fiscal year 2002

(Euros) (Euros)

Capital

Called-up Share Capital 15 713 649 14 368 783

Capital surplus 11 496 388 3 642 310

Legal reserve 1 074 819 1 074 819

Regulated reserves 3 735 281 479 012

Other reserves 42 364 42 364

Retained earnings 10 484 136 14 180 056

Grants received 5 502 7 835

Regulated provisions 19 704 058 20 150 896

Current year profit 25 430 725 4 711 808

TOTAL CAPITAL STOCK 87 686 922 58 657 883

Other capital stock

Research and development funding 687 172 974 781

TOTAL PERMANENT CAPITAL 88 374 094 59 632 664


Provisions for liabilities 513 958 318 329

Provisions for charges 0 0

TOTAL 513 958 318 329

Financial liabilities

Bank loans and overdrafts 28 507 265 53 350 244

Other financial loans and liabilities 0 860 419

TOTAL 28 507 265 54 210 663

Outstanding liabilities

Payments received on account 4 413 088 5 356 540

Accounts payable and related 64 314 425 57 380 325

Taxation and Social Security 12 662 367 10 993 916

Suppliers of fixed assets 1 458 035 1 462 014

Other outstanding liabilities 3 758 938 22 136 441

TOTAL 86 606 853 97 329 236

Deferred income 2 461 401 2 980 568

Difference of exchange rates 1 020 314 2 366 015

TOTAL LIABILITIES 207 483 885 216 837 475

>



(Euros) (Euros)

Operating income

Sales from production 297 707 693 291 972 648

Services 864 069 815 235

NET SALES 298 571 762 292 787 883

Changes in inventory (2 661 935) (1 268 335)

Own work capitalized 216 018 211 474

Operating subsidies 103 565 133 265

Write back of depreciation charges and charges

transfers 4 925 701 4 304 179

Others 7 530 949 11 647 693

TOTAL OPERATING INCOME 308 686 060 307 816 159

Operating expenses

Cost of raw materials and other supplies 107 389 091 105 568 167

Changes in inventory 2 635 707 4 224 636

Other operating expenses 105 821 226 102 178 751

Taxes 5 459 844 5 746 286

Salaries and wages 40 258 150 41 361 180

Social security costs 16 418 332 16 378 917

Depreciation charges on fixed assets 19 067 766 18 733 350

Provision charges on current assets 1 803 870 1 504 237

Other charges 267 255 409 434

TOTAL OPERATING EXPENSES 299 121 241 296 104 958

1. Operating profit 9 564 819 11 711 201

Financial income

From participations 17 026 800 0

From marketable securities 0 0

Other interest receivable and similar income 146 602 94 682

Write back of depreciation charges and

charges transfers 293 829 1 176 082

Positive differences in exchange rates 4 033 287 566 765

Profits on sales of marketable securities 15 934 28 550

TOTAL FINANCIAL INCOME 21 516 452 1 866 079

Financial expenses

Depreciations and provisions charges 513 958 293 829

Interest payable and related charges 2 421 875 4 758 799

Negative differences in exchange rates 1 114 296 831 892

Losses on sales of marketable securities 0 0

TOTAL FINANCIAL EXPENSES 4 050 129 5 884 520

2. Financial profit (loss) 17 466 323 (4 018 441)

3. Profit from ordinary activities 27 031 142 7 692 760

� MONTUPET SA INCOME STATEMENT AS PER DECEMBER 31st 2003



(Euros) (Euros)

Extraordinary income

On revenue transactions 39 711 2 001

On capital transactions 47 645 26 003

Write back of depreciations and provisions 1 776 906 384 442

TOTAL EXTRAORDINARY INCOME 1 864 262 412 446

Extraordinary expenses

On revenue transactions 479 193 415 047

On capital transactions 645 617 15 102

Depreciations and provisions charges 1 176 996 2 932 759

TOTAL EXTRAORDINARY EXPENSES 2 301 806 3 362 908

4. Extraordinary loss (437 544) (2 950 462)

Profit sharing by workers and employees 0 0

Taxes on income 1 162 873 30 490

5. Net profit for the year 25 430 725 4 711 808

>


� NOTES TO MONTUPET SA FINANCIAL STATEMENTS AS ON 31.12.2003

The fiscal year includes 12 months, from January 1st to December 31st 2003. Notes and tables

hereunder form an integral part of the annual accounts. These annual accounts were drawn up on

March 29th 2004 by the Board of Directors.

SIGNIFICANT ITEMS IN THE FISCAL YEAR

After a customer modified its order programme, MONTUPET claimed an indemnity, payment of

which was agreed and which was accounted for 1.811 K€ in 2003 accounts, and has been paid

on May 7th 2004.

1. ACCOUNTANCY RULES AND METHODS

1.1. VALUATION METHODS

The annual accounts of the fiscal

year ending on December 31st 2003

were prepared and presented in

compliance with accountancy rules,

respecting the prudence and fiscal

year independency principles and

assuming the continuity of opera-

tions.

Evaluation methods used for 2003

have not been modified since last

year.

1.2. ADDITIONAL DATA

1.2.1. Fixed assets

a) Tangibles

Fixed assets are valued at purchase costs plus costs to put them in working condition. Procu-

rement costs are not included.

Assets are depreciated according to the following durations and methods:

Buildings 20 years Straight line method

Fixtures and fittings 8 to 10 years Straight line method

Machinery and tooling 8 years Declining balance method

Office furniture 10 years Straight line method

Computers 4 years Straight line method

Software 1 year Straight line method

b) Financial assets

Investments in unconsolidated subsidiaries are valued either at purchase cost, either on the

basis of their value in use in view of the future prospects of the subsidiary. Other financial

assets are valued at purchase cost. Accruals are set up if applicable (bad debts).


Financial assets are split as follows:

Gross value Increases Decreases or Gross value

01.01.2003 Disposals 31.12.2003

Shares in affiliated companies 39 939 497 0 0 39 939 497

Loans to affiliated companies 1 074 705 8 765 256(1) 8 462 619(2) 1 377 342

Others participations 23 773 1 160 750(4) 0 1 184 523

Long term loans granted to

personnel (3) 469 283 15 670 68 264 416 689

Deposit and mortgages 71 847 1 520 3 677 69 690

TOTAL 41 579 105 9 943 196 8 534 560 42 987 741

(1) Corresponds to the loans granted to MONTIAC.

(2) Corresponds to invoices covering expenses and commissions, issued by MONTIAC in 2003;

(3) Long term loans granted to the staff mainly represent the employer contribution towards home

building until 1986. They were granted to collecting organisms for 20 years and bear no interest.

(4) Corresponds to the acquiring of 83.354 own shares (see § 1.2.4.).

1.2.2. InventoriesRaw materials and goods are valued applying the First in - First out (FIFO) method. Storage

costs are not included in this valuation. Finished products and in process products are

valued at manufacturing cost. Manufacturing expenses are valued on the basis of the

normal production capacity of the company, excluding any under-activity or storage costs.

Inventories and in process products are reduced by depreciation, if applicable, as follows:

• Raw materials, supplies, consumable goods, and packing: a provision is set-up when the

turn-over of stocks is low.

• In process products and tooling: the depreciation represents the difference between cost

and sale price when the latter is lower.

Inventories are detailed as follows:

Gross value 01.01.2003 Depreciation Net value 31.12.2003

Raw materials 4 097 187 34 422 4 062 765

Other supplies 6 742 861 858 855 5 884 006

In process products 5 208 118 23 205 5 184 913

In process tooling 4 560 054 528 730 4 031 324

Packing 55 111 0 55 111

Finished products 3 983 689 13 093 3 970 596

TOTAL 24 647 020 1 458 305 23 188 715

1.2.3. Receivables and liabilitiesReceivables and liabilities are recorded at their nominal value. Those drawn-up in

foreign currencies are translated at the exchange rate valid on the reporting date.

Doubtful receivables are depreciated by way of provisions.


1.2.4. Securities• Securities

Securities are registered at their nominal value, excluding costs incurred for their acquiring.

According to the stock option plan authorized by the general extraordinary meeting of

December 18th 1987, and opened in 1990, the company bought 20 245 MONTUPET SA shares,

corresponding at the number of issued options. 20 005 options have been exercised to date,

and the plan is now closed. MONTUPET SA therefore still owns 2 400 MONTUPET SA shares,

registered at 9 693 Euros (240 x 10 after operation in capital).

• Own shares

The annual Ordinary and Extraordinary Shareholders Meeting held on June 30th 2003, pursuant

to the provisions of Article L.225-209 of the French Code of Commerce, authorized the Board of

Directors to purchase Company shares, representing up to 10% of the share capital on the day of

the meeting less 2.400 shares already owned, with the following objectives:

• the management of cash-flow or of shareholders fund if it appears that implementation of

this programme is appropriate,

• the repurchase of a number of shares corresponding to the shares issued or to be issued

following exercise of subscription options for the Company’s shares,

• the application of programmes for purchasing or selling Company shares within the frame-

work of share purchase option plans,

• the purchase and sale in the light of market circumstances,

• the price stabilization by systematic intervention against market trends,

• any other legally permissible objective, or objective which might become legally permissible

by applicable law or regulations then in effect. In such a case, the Company would inform its

shareholders by a press release.

On December 31st, the company owns 83.354 MONTUPET SA shares within this programme,

bought at an average price of 13,93 Euros, ie for a total cost of 1.160.751 Euros.

In view of the average December rate at 13,97 Euros, no depreciation provision was set up on

these shares. They are registered among the financial assets, under the account nr 2771.

1.2.5. Conditional advancesConditional advance movements are recorded as follows:

Opening New loans Repayments Closing Current

balance balance portion

ANVAR loans 777 780 0 225 772 552 008 80 022

ADEME loans 197 001 0 61 836 135 165 63 163

TOTAL 974 781 0 287 608 687 173 143 185

These advances are refundable financial loans. Anvar advances are innovation incentives.

ADEME advances helped to finance a sand regeneration system.


1.2.6. Debenture loans and other loansLoan movements are recorded as follows:

Opening Loans sub- Loans Closing Current

balance scribed in 2003 Repayments balance portion

Other loans 21 886 154 0 6 586 154 15 300 000 2 700 000

TOTAL 21 886 154 0 6 586 154 15 300 000 2 700 000

This table does not include:

- bank current loans and overdrafts - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13 187 956

- outstanding interests - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13 909

Totalling - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13 207 265

That together with above-mentioned "other loans" - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 15 300 000

make-up the "bank loans and overdrafts" disclosed in the balance-sheet - - - - - - - - - - - - - - 28 507 265


2. DEVELOPMENT AND NOTES TO THE FINANCIAL STATEMENTS

2.1. FIXED ASSETS RECORD

Assets Gross value Purchases Disposals Gross value

01.01.2003 31.12.2003

Intangible assets 879 747 179 985 21 195 1 038 537

TOTAL 879 747 179 985 21 195 1 038 537

Fixed assets

Land 2 321 402 0 0 2 321 402

Buildings 8 031 258 0 26 943 8 004 315

Technical equipment and machines 83 380 565 3 018 644 2 411 031 83 988 178

Fixtures, fittings, tools and equipment 32 670 622 1 134 593 2 543 155 31 262 060

Vehicles 0 0 0 0

Office equipment and furnitures 2 318 428 127 997 347 388 2 099 037

TOTAL 128 722 275 4 281 234 5 328 517 127 674 992

Assets under construction 231 851 405 675 227 278 410 248

Payments on account 186 631 35 689 186 631 35 689

TOTAL 418 482 441 364 413 909 445 937

Investments - financial assets

Shares in affiliated companies and

related loans 41 014 202 8 765 256 8 462 619 41 316 839

Loans 469 283 15 670 68 264 416 689

Others 95 620 1 162 271 3 677 1 254 214

TOTAL 41 579 105 9 943 197 8 534 560 42 987 742

TOTAL FIXED ASSETS 171 599 609 14 845 780 14 298 181 172 147 208

2.2. AMORTIZATION AND DEPRECIATION RECORD

2.2.1 Accounting depreciation record

Opening balance Increases Decreases Closing balance

Intangible assets 743 115 41 576 21 195 763 496

Fixed assets:

Buildings 4 842 503 403 869 23 132 5 223 240


Fixtures, fittings, tools and equipment 16 788 041 2 745 808 2 056 961 17 476 888

Vehicles 0 0 0 0

Office equipment and furnitures 2 017 005 155 445 347 388 1 825 062

TOTAL 58 619 966 12 998 070 4 704 094 66 913 942


2.2.2. Derogatory depreciation record

Opening balance Increases Decreases Closing balance


TOTAL 20 150 896 1 176 996 1 623 834 19 704 058

2.3. PROVISIONS RECORD

Description Opening balance Increases Decreases Closing balance

Regulatory provisions

Derogatory depreciation 20 150 896 1 176 996 1 623 834 19 704 058

TOTAL 20 150 896 1 176 996 1 623 834 19 704 058


Provisions for exchange losses 293 829 513 958 293 829 513 958

Other provisions 24 500 0 24 500 0

TOTAL 318 329 513 958 318 329 513 958

Provisions on fixed assets and others

Intangible assets 0 0 0 0

Tangible assets 0 0 0 0

Financial assets 0 0 0 0

Inventories and work in progress 1 504 237 1 458 305 1 504 237 1 458 305

Trade debtors 551 627 345 565 373 223 523 969

Other depreciation provisions 0 0 0 0

TOTAL 2 055 864 1 803 870 1 877 460 1 982 274

TOTAL 22 525 089 3 494 824 3 819 623 22 200 290


2.4. TIME ANALYSIS OF RECEIVABLES AND PAYABLES

Receivables Gross amount Current portion Non-current

31.12.2003 portion

Loans to affiliated compagnies 1 377 342 1 377 342 0

Other loans (1) (2) 416 689 65 547 351 142

Other financial assets 69 690 0 69 690

Doubtful or bad debts under litigation 6 667 0 6 667

Other trade receivables (3) 64 568 880 63 684 678 884 202

Personnel and related 31 005 31 005 0

Social Security receivable and related 184 240 184 240 0

State and other authorities

- Income tax 0 0 0

- Value added tax 528 629 528 629 0

- Sundry taxes 46 000 46 000 0

Others

- Group 1 095 256 671 477 423 779

- Other debtors 900 879 641 316 259 563

- Deferred charges 2 650 787 2 650 787 0

TOTAL 71 876 064 69 881 021 1 995 043

(1) New loans granted. 15 670

(2) Repayments received. 68 264

Liabilities Gross amount Current Between 1 Over 5 years

31.12.2003 portion and 5 years

Bank loans and overdrafts 28 507 265 15 907 265 12 600 000 0

Sundry financial loans and liabilities 0 0 0 0

Accounts payable 64 314 425 64 314 425 0 0

Personnel and related 3 048 791 3 048 791 0 0

Social Security payable and related 6 768 245 6 768 245 0 0

State and other autorities

- Corporation tax 1 072 383 1 072 383 0 0

- Value added tax 943 049 943 049 0 0

- Other taxes and related 829 899 829 899 0 0

Suppliers of fixed assets and related accounts 1 458 035 1 458 035 0 0

Other liabilities 3 758 938 3 758 938 0 0

Deferred income 2 461 401 2 461 401 0 0

TOTAL 113 162 431 100 562 431 12 600 000 0

Loans subscribed during the year 0

Loans refunded during the year 6 586 154


2.5. BILLS OF EXCHANGE PAYABLE OR RECEIVABLE

Accounts receivable and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 30 565 105

Accounts payable and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9 010 389

Creditors suppliers of fixed assets and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 151 843

TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9 162 232

2.6. INFORMATION ABOUT RELATED COMPANIES

Loans to affiliated companies - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 337 342

Accounts receivable and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 575 594

Sundry creditors - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 095 256

TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 048 192

Suppliers and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 26 228 377

Sundry debts - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 134 597

2.7. DEFERRED INCOME

Trade debtors and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7 322 917

Other debtors - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 653 358

TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7 976 275

2.8. PREPAYMENTS

Advance payments on purchases and services - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 650 787

2.9. DEFERRED INCOME

Deferred invoicing of tooling - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 461 401

2.10. PAYABLE CHARGES

Bank loans and overdrafts - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 19 309

Sundry financial loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0

Trade creditors and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 952 328

Taxation and Social Security - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5 408 314

Creditors suppliers of fixed assets and related - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 48 170

Creditors (customers, drawable credit-notes) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 268 203

Other creditors - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 292 190

TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9 988 514


2.11. DEFERRED CHARGES

Opening Increases Decreases Closing balance balance

Extensive maintenance expenses (1) 2 516 148 2 792 369 2 632 826 2 675 691

Expatriation expenses of staff members (1) 100 491 128 572 105 660 123 403

Expenses related to our mexican

subsidiary MONTIAC (2) 3 887 250 0 1 413 545 2 473 705

Spending on new facilities (3) 2 836 697 0 1 575 413 1 261 284

Spending our Laigneville facility (4) 1 112 317 0 342 251 770 066

TOTAL 10 452 903 2 920 941 6 069 695 7 304 149

(1) Amortized over 3 years.

(2) Amortized from October 1st 2000, upon 5 years.

(3) Depreciations were computed on the basis of a year production / whole forecasted produc-

tion ratio (with this equipment).

(4) Amortized over 5 years from January 1st 2001.

2.12. DETAILS OF SHARE CAPITAL

Called-up and fully paid share capital consists in 10 337 927 shares with a face value of

1,52 Euros each, i.e. a total of 15 713 649 Euros, against 9 453 147 shares with a face value of

1,52 Euros each, i.e. 14 368 783 Euros as per December 31st 2002.

This results from:

• The issue of 852.980 shares created under the stock-option scheme dated January 20th 1998

authorized by the Extraordinary General Meeting held on January 20th 1998 (On December 31st 2003,

889.547 shares had been created out of 900.000).

• The issue of 31.800 shares created under the stock-option scheme dated November 16th 2001

authorized by the Extraordinary General Meeting held on February 29th 2001 (On December 31st 2003,

31.900 shares had been created out of 1.200.000).

The corresponding capital surplus amounts to 7.854.077 Euros for year 2003.

See 2.15 for more details upon “movements in shareholders equity”.

2.13. DETAILS OF TURNOVER

Industrial analysis

Automotive sector - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 297 707 693

Other sectors (services) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 815 818

Sundry sales - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 48 251

TOTAL Turnover - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 298 571 762

Geographical analysis

Domestic turnover - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 186 177 950

Foreign turnover - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 112 393 812

TOTAL Turnover - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 298 571 762

Machining equipment sales that remain our customers properties in our plants, up to

6 387 600 Euros, are deducted from the turnover, and appear among the other operating

income.


2.14. CORPORATION TAX (IN K3)

Profit on ordinary activities - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 27 031 142

Extraordinary loss - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (437 544)

Corporation tax - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (1 162 873)

ACCOUNTING RESULT - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25 430 725

2.15. MOVEMENTS IN SHAREHOLDER’S EQUITY

Shareholder's equity as of 01.01.2003 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 58 657 883

Increase in Share Capital - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 344 866

Related share premiums - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7 854 077

New capital grants - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0

Grants apportioned to Profit and Loss - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (2 333)

Distributed dividends - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (5 151 458)

Regulated provisions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (446 838)

TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 62 256 197

2003 Earnings - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25 430 725

Shareholder's equity as of 31.12.2003 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 87 686 922

2.16. OTHER TRANSACTIONS IMPACTING THE STOCKHOLDERS’EQUITIES

On march 31st 2003, MONTUPET SA merged with GESFITEC SA. In settlement of the transferred

assets, MONTUPET SA increased its capital by 5.120.528 € and recorded a merger premium

amounting to 42.017.462 €. MONTUPET SA immediately decreased its capital by the same

amount, in order to cancel its own shares brought by GESFITEC. MONTUPET SA accounted for

the long-term profits special reserve at the reduced 18% rate, built-up at GESFITEC for

3.256.269 €, by transferring it from its “retained earnings”.


3. FINANCIAL COMMITMENTS AND OTHER DATA

3.1. LEASING

Building Land Building Extension CompanyClichy Fay-aux-Loges Fay-aux-Loges of Châteauroux Restaurant

Plant in Châteauroux

Purchase value 3 827 233 304 898 3 109 960 (4) 2 362 282 457 347

Appropriations:

Cumulated previous fiscal years 2 100 123 0 2 176 972 1 093 957 86 861

Appropriations during fiscal year 2003 191 362 0 155 498 343 447 39 783

TOTAL 2 291 485 0 2 332 470 1 437 404 126 644

Royalties paid:

Cumulated previous years 4 221 307 579 755 3 838 353 1 410 904 154 736

Appropriations during fiscal year 2003 400 852 18 530 202 481 378 644 58 924

TOTAL 4 622 159 598 285 4 040 834 1 789 548 213 660

incl. grants received up to 2 134 286 €

Rentals payable: (1) (2) (2) (3)

Current portion (2003) 426 209 0 0 380 152 53 820

Payable between 1 and 5 years

(2005 to 2008) 958 019 0 0 580 431 215 280

TOTAL 1 384 228 0 0 960 583 269 100

Book value 1 029 641 0 0 0 16 769

Amount entered in the fiscal year 2003 244 259 18 530 202 481 378 644 58 924

incl. grants received up to 152 449 €

(1) Payable rentals are estimated amounts. They are made of 2 parts: one fixed part, and one varied part, the

latter being calculated upon the basis of the quarterly EURIBOR. The rate used to calculate these rentals is

the last one known for the period from March 19th 2004 to June 19th 2004, i.e 0,7053%,

(2) The leasing contract with “Auxicomi”, relating to land and building at Fay-aux-Loges, expired on

December 31st 2003,

(3) These payable rentals also are estimated amounts. The interests were calculated on the basis of the quar-

terly EURIBOR as per December 31st 2003, i.e. 0,690965%,

(4) This is the net amount, after deducting grants received up to 686 021 Euros.


3.2. COMMITMENTS AND CONTINGENT LIABILITIES (EXCLUDING LEASING)

3.2.1. Commitments given

Amount In favour of

� Bank guarantee covering exchange transactions given to Crédit du

Nord up to 82,9 M€

- outstanding amount (1) 0 € MONTUPET UK

� Bank guarantee to Crédit du Nord covering currency

advances up to 15,1 M€


� Bank guarantee to Crédit du Nord covering currency advances

up to 6,1 M€, covering loans granted to MONTUPET SA or

MONTUPET UK


� Letter of intent in favour of Ulster Bank up to 3,5 MGBP including

2,5 MGBP for MONTUPET UK and 1MGBP for Calcast

- outstanding amount (1) 30.504 GBP CALCAST LTD

� Guarantee letter given to the Industrial Development Board

(refunding commitment of conditional grants in unenforcement case)

- covered grants at year end 1.999.000 GBP MONTUPET UK

� Letter of intent covering an open credit granted by BNP Canada up

to 8 MCAD

- outstanding amount (1) 0 CAD MONTUPET LIMITEE

� Bank guarantee to Credit Mutuel up to 12,2 M€ covering currency

advances to MONTUPET SA or its subsidiaries


� Bank guarantee to CIC up to 4,57 M€ covering loans granted to

MONTUPET UK, MONTUPET Ltee or ALUMALSA

- outstanding amount (1) 0 € ALUMALSA

(1) Drawings by MONTUPET SA are not mentioned as these are not commitments given.


3.2.2. Other commitments given- Outstanding interests on current loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 58 668

(excluding outstanding interest on available credit-lines used up to 7.600.000 €

at CIC and up to 5.000.000 € at Credit Lyonnais )

- Balance due on current orders of fixed assets - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 224 528

3.2.3. Retirement benefitsBenefit pension commitments covering salaried employees amount to 1.379.850 € (social

contributions not being taken into account). This computation is based on a formula which

considers a retirement age of 65, a 6% discounting rate for year 2003, data from the life-table

TV 73/77, a turnover rate varying with age, and wage increases related to age and status.

3.2.4. Commitments received- Commitments received from suppliers of fixed assets - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 35 689

- Commitments received from other suppliers - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 254 194

3.3. INCIDENCE OF TAX ADJUSTMENT

The year income is a profit of 25.430.725 €.

After allocating the deferred depreciations upon the fiscal year result amounting to

9.063.400 €, the fiscal income is 3.352.922 €.

The payable corporation tax amounts to 1.162.873 €. There is no profit sharing in favour of the

employees in 2003.

3.4. DEFERRED TAXATION

- Deferred income tax liability:

relates to the provision for deferred charges registered in 2003: 2 920 941 - - - - - - - - - - - - - - - 1 002 857

- Deferred income tax asset:

relates to the “Organic” charges registered in 2003: 362 057 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 124 306


3.5. DIRECTORS FEES

No director fees were paid in 2003.

3.6. EMPLOYEES

- Directors and executives - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 99

- Foremen, technicians, and employees - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 369

- Workers - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 292

TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 760

3.7. FINANCIAL EXPENSES AND INCOME

Profits resulting from exchange rate variation derive from customers and suppliers settle-

ments in currencies and bank debts in currencies. Financial income from affiliated companies,

amounting to 17.026.800 Euros, are the dividends paid by MONTUPET UK to MONTUPET SA.

3.8. EXTRAORDINARY INCOME AND EXPENSES

Extraordinary income

- Operating extraordinary income - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 39 711

They correspond to:

- Suppliers regulations up to 28.151 €,

- Customers regulations up to 7.443 €,

- Miscellanea up to 4.117 €.

- On capital transactions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 47 645

They correspond to:

- A supplier litigation settlement up to 43.000 €,

- Capital grants apportioned to the income up to 2 333 €,

- Miscellanea up to 2.312 €.

- Provision write-downs and expense transfers - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 776 906

They correspond to:

- The transfer of expatriation allocations up to 128 572 €,

- A provision write-down for derogatory depreciations up to 1 623 834 €,

- A dispute provision write-down up to 24 500 €.

- Operating extraordinary expenses - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 479 193

They mainly correspond to:

- Expatriation allocations and other related costs up to 158 073 €,

- The cancellation of interests up to 300.312 €,

- Various penalties up to 12.661 €,

- Various expenses up to 8.147 €.

- Extraordinary expenses on capital transactions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 645 617

Represent the book value of sold fixed assets, up to 645 617 €,

- Extraordinary depreciation charges - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 176 996

They correspond to derogatory depreciation up to 1 176 996 €.


NOTES

Documents

Annual Report 2003 - GANTS BLANCS · 2011-12-08 · Annual Report 2003 page 6 MONTUPET: GROUP OVERVIEW M ONTUPET is a major french manufacturer, a public limited company dedicated