A N N U A L

R E P O R T

2 0 0 4

Profile

Contents

An industrial group which specialises in the design,development and manufacturing of electroniccomponents, RADIALL is a reputed player in itstrades: telecommunications, military, aerospace andautomotive applications.

With its strong international orientation, the Groupis present on five continents through fourteensubsidiaries and an active network of agents anddistributors.

Since its creation in 1952 by the GATTAZ family,RADIALL has been ensuring the harmonious devel-opment of its human capital, the company’spremium resource.RADIALL’s teams are ceaselessly taking up the chal-lenges of innovation, productivity and competitionto meet the demands of the market, thereby satis-fying both its shareholders and customers. Theirextreme professionalism, strong motivation andcompliance with ethics are the basis for a strategyof long-term development.

In order to be able to offer the most innovativesolutions to its customers, the Group devotes alarge proportion of its resources to research anddevelopment.The continuous improvement of technologies andindustrial processes is the guarantee of RADIALL’sdurability in its worldwide and fiercely competitivemarkets.

The Chairman’s Message Page 1

Management Report Page 11

Consolidated financial statements Page 33

Parent company financial statements Page 50

Resolutions of the General Meeting Page 68

Corporate bodies Page 71

2004 Turnover163 M€

Business activity outside France79 %

Staff1,614

R & D8.1 % of turnover

The Chairman’s message

Has 2004 lived up to its promise?The 2004 financial year has confirmed RADIALL’s turnaround. As we indicated to the financial communityat the end of 2003, growth and profits were to be expected for 2004. The efforts of all involved haveenabled the Group to achieve its objectives, that is:

• To reduce still further our break-even point: operating in increasingly competitive markets has ledRADIALL to further lower its break-even point through the continued transfer of certain productionactivities to low-cost areas, increased purchasing power for parts in Asia and reductions in our structures.

• Taking advantage of the recovery in growth: favourable trends in telecommunications markets andpromising openings in civil and military aerospace have contributed to the increase in orders andturnover (+ 12.6 %) after a three-year recession of historical proportions in the electronics sector.

• Achieving a return to profits: 2004 sees the company with an operating margin of more than 3 %and a net income of close to EUR 4 M.

Finally and most importantly, we have continued to prepare for the future through a policy of research& development and targeted investments.

Could you expand on that last point?RADIALL’s goal is to invest for the long term on diversified markets with technological high addedvalue, pursuing the dual objectives of differentiation through innovation and through service. That’swhy, again this year, we have invested heavily in automotive telematics. We have developed new productranges for military applications and we have used our fibre optic know-how for promising aerospaceapplications. In the telecommunications segment, we have directed our research efforts towards profitable niche markets positioned between the WiFi and Wimax applications, 3rd generation mobilephone technology and GSM in developing countries.

Were there any other causes for satisfaction in 2004?Indeed. I’d like to take this chance to mention the most prestigious - RADIALL received BOEING’s prizefor best supplier in 2004 in the components category. Selected from among some 10,000 BOEING suppliers on the basis of rigorous criteria of quality, logistical performance, competitiveness and customer

Strong sales growth and a return to profitability for the RADIALL Group in 2004

page 1

service, RADIALL is the first connector technology specialist to receive the prize. This award is givenin recognition of years of effort and should raise our profile even further with BOEING and its subcon-tractors and aid in our gaining market share in their applications in the military as well as civil areas.I’d like to thank all our colleagues who have contributed to this success through, in BOEING’s ownwords, "the exceptional quality of products and remarkable service ".

How do you see 2005 developing?The favourable trend seen in 2004 is just now in the process of losing some steam, mostly due to theendless "stop and go" in the telecom infrastructure market. For 2005, we envisage moderate growthwith a quieter first half followed by a bounce back over the latter half of the year. This second burstof momentum will also correspond to the production launch of a major order for tri-band antennas forGENERAL MOTORS in the USA, which should generate additional turnover for the Group from Juneonwards.In terms of performance, the 2005 objective is to once more improve our profitability, even in a lessbuoyant market. The productivity measures which have been undertaken since 2001 will continue tohave a positive impact on the reduction of costs. And if the EUR/USD exchange rate gets back to morereasonable levels, we could be aiming at a net improvement in profits.

And beyond 2005, what’s the future for RADIALL?RADIALL disposes of strengths enabling it to face the future with confidence and continue its adventurealong the path of growth and profits:• A strong capacity for innovation, as we have deliberately maintained our R & D outlays at a high

level (approximately 8 % as a percentage of turnover in 2004). Innovation is the sole means of development for a technological and industrial company like RADIALL, confronted with a globalisedeconomic environment in which main markets, such as telecommunications, have shifted massivelytowards Asia in only a few years.

• An expertise in industrial processes, which enables RADIALL to always produce "better, faster andless expensively" and at the same time achieve reductions in cycle lengths and stock levels - all thiswhile ensuring total quality and the ability to meet delivery deadlines.

• A diversified portfolio of products and markets, which allows us to better cushion ourselves from thesometimes violent fluctuations in certain business segments. RADIALL is present in both telecom-munications and civil aerospace, and also in the automotive, military, medical and instrument fields.The complementary families of products, such as coaxial or multi-contact connectors, antennas,microwave frequency or optical components, also enable us to limit the risks associated with mono-lithic product ranges and to respond to the requirements of the highly profitable technologies of thefuture, wireless and broadband, in demand in all markets.

• Strong positions with major customers, which ensure a competitive edge for durable and profitablegrowth.

• A worldwide presence enabling us to respond to all manner of demands in the areas of production,commercial support, R & D assistance and logistics.

• A solid balance sheet with net company cash reaching EUR 26 M at the end of December without anydebt.

And of course we must not forget the talent of the 1,600employees who, every day, take up the challenges of competition,creativity and the need to adapt. They are the very essence ofprofessionalism, of dedication to service and quality and of acompany spirit of innovation which we wish to pass on to ourcustomers and which is the mark of RADIALL.

I would like to acknowledge them and to thank them for theirtrust and their commitment to our company. Pierre GATTAZ

Chairman of theManagement Board

page 2

Trades ofRADIALL

W i r e l e s s c o m m u n i c a t i o n

I n n o v a t i o n s f o r t h e m i l i t a r y ,a e r o s p a c e a n d s p a c e

Contributing to the development of thecommunication tools of tomorrow andsupplying major equipment manufacturerswith interconnection solutions of high addedvalue to optimize infrastructures and wirelessnetworks.

Offering a product range of high reliabilitymeeting the complex technical specificities ofmulti-signal connector technology embeddedinto armament systems, for use in tactical andstrategic radio-communications and in equip-ment installed on aircraft and satellites.

A u t o m o t i v e T e l e m a t i c sContributing to the emergence of the intelligentand communicative vehicle, offering its occu-pants more entertainment and greater safetythrough the breakthroughs of wireless tech-nology.

page 3

Despite the strong pressure on prices which has charac-terised this market over recent years and the rapid relocation of the industry to Asia (which is becoming oneof the highest-consumption regions of the world),telecommunications remains a segment which is as attrac-tive as ever for those among the western industrials whichknow how to detect high-profit segments and separatethe "wheat from the chaff". Indeed, this market is in astate of perpetual change and every year fresh openingsare being generated through the arrival of new technolo-gies, in particular, in radio.

After the appearance of the Blue Tooth standard in 2001 made radio communications possible over very short distances (< 10 meters) to provide a wireless connection betweendifferent items of equipment (PC and printer, mobile phone and earphone, etc.), there wasthe arrival of Wifi, which has become today’s reference technology in short-distance (under100 meters) broadband radio communications. This means of communication is still muchused in airports, public places and on household networks.Nevertheless, these two technologies are increasingly finding their place in the consumerand office technology markets, with their very high volumes and cutthroat prices.

Since then Wimax technology, which was not even being spoken of as recently as 2003,came to the forefront in 2004, promoted by an American smartcard giant which has championed its cause. This new standard enables wireless communication of data over fiftykilometres at bandwidths as high as 50 Gbits. The frequencies used are presently locatedbetween 2.5 and 11 Ghz. However, a new Wimax standard is already being discussed whichwill use much higher frequencies, around the 40 Ghz mark.This last market is clearly of more interest to RADIALL. In effect, the higher the user frequencies are, the more difficult it becomes to manufacture or copy the related components.

Cellular telephony is still on the move. The deployment of 2G (second generation GSM,CDMAOne or TDMA) continues in areas of the world not as yet equipped (India, Russia,Brazil, etc.). At the same time, 2.5 G (GPRS, etc.) and even 2.75 G (Edge, etc.) networksare being deployed, which are drawing more and more operators ready to offer more content as part of their service.

Telecommunicationsmarkets

RADIALL continues to find major opportunities for future growth

page 4

The new 3 G networks (third generation types such as the W-CDMAEuropean standard or the American CDMA 2000, etc.) enable theoreticalbandwidths of up to 2 Mbits for a stationary user, or 200 Kbits whiledriving. They are still in the process of being tested and deployed inEurope, Asia and the United States and should soon be able to supportsuch advanced functions as interactive messaging, video-telephony andtelevision on mobiles.

RADIALL has over many years been a privileged partner of the major equipment makers inradiotelephony and their associated subcontractors and it firmly anticipates benefiting fromthe upcoming deployment of these networks of the future.

Within the expansion of this vast market of telecommunications by radio, other initiativescan be cited, such as DECT, used primarily for local wireless telephony (< 300 meters), theapplications grouped under the label WLAN (Wireless Local Area Network) for frequenciesbetween 1.5 and 3 Ghz and those grouped under Hyper Lan (High Performance AreaNetwork) or FWA (Fixed Wireless Access) for frequencies between 3 and 6 Ghz etc.

The list is far from being exhaustive as to it must be added radio-telecommunications usedin cars, grouped under the name automotive telematics (GSM, 3G, GPS, TV, DAB, etc.), amarket which should grow by around 15 % per year. Finally, there are military radio-communications applications, which are found increasingly on all battlefields. And not toforget the myriad of wireless applications in all the other segments such as medicine, wire-less monetics, wireless counters, gas or automated teller machines. The list is endless andallows us to imagine that the openings for RADIALL, specialist in radio components, aremany and highly profitable.

However, the applications of most interest to RADIALL will be those involving high frequencies, in general, for higher bandwidths necessitating more sophisticated components.Product differentiation may depend on innovation, the manufacturing process and the tech-nology, even miniaturisation, not solely on price.

page 5

RADIALL’s success in aerospace on the other side of the Atlantic is the resultof a strategy the origins of which go back to the mid-1990s. Like all playersin the aerospace and defence industries, RADIALL had been hit hard by the1992 recession that came in the wake of the first Gulf War. The company thenrepositioned itself in telecommunications markets and, after having adjustedits structure to prevailing business conditions, put in place a strategic planfor development in the aerospace and defence industries. One of the pillarsof this strategy was the conquest of the American market.

In 1994, RADIALL took majority control of an American manufacturer of filteredconnectors, JERRIK Connecting Devices in Arizona. There was a dual purposeto this acquisition: provide an industrial base to lend credibility to RADIALL’spartnership with its American customers and enrich the product range withhigh-technology items.

Whilst BOEING had several times envisaged using RADIALL components butnever taken the final step due to the Company’s lack of visibility on theAmerican market, in 1998 a new opportunity presented itself: BOEING lookedagain at its choice of connectors and put RADIALL under the spotlight as oneof fifty connecting technology specialists under consideration. The speed andprofessionalism of RADIALL, in combination with its local presence through

High point of an American success story

2004RADIALL named BOEING "Supplier of the Year" for

page 6

JERRIK, enabled RADIALL, for the first time, tobe taken on by BOEING. This first success madeit possible to create a climate of trust betweenthe two companies reflected in relations whichhave strengthened continuously over the years.In addition to the EPX connectors whichopened the door to BOEING, RADIALL has sincemarked up successes in rectangular connectors,

fibre optic communication links and radio frequency technology. RADIALLconnectors are found aboard all BOEING aircraft. Over the last year, RADIALLwas chosen to provide optical fibre communication links for the B777Electronic Flight Bag and low-loss antenna connections for the “Connectionby BOEING” broadband Internet system.

The penetration of the BOEING account has been an impressive motor forRADIALL’s on-going growth, not only in civil aerospace, but also in militaryprogrammes. RADIALL has shown itself capable of capitalising on its successand on synergies with its subsidiary, JERRIK, to raise its profile withAmerican equipment manufacturers, becoming one of the key players in thisindustry. In 2004, two RADIALL products were selected for worldwide aerospace stan-dardisation, Arinc: EPX connectors for aircraft galleys and the LuxCis opticconnectors for all future generations of equipment with integrated optictechnology.

This success, manifested in the BOEING award, is the fruit of a strategy basednot only on innovation and service but also on the unstinting nature ofRADIALL’s efforts to develop in these markets.

page 7

The irresistible expansion of China

If only a few years ago technological innovation was primarily the preserve ofCalifornia’s Silicon Valley, these days, more and more often, the breakthroughs arecoming from Asia. Whilst India is excelling in IT, China is emerging as the newtelecommunications heavyweight, with just under three hundred million landlinesubscribers and just as many for mobile phones.

To meet this demand, the equipment manufacturing market is open and very competitive, with significant local players and major western and Japanesegroups. All the players are redoubling their efforts as the allocation of third gen-eration mobile telephone licenses promises to open an enormous market in thecoming years.

RADIALL has had a major strategic stake in China since December 1995 and theestablishment of a partnership with SHANGHAI ELECTRONICS CO. At the time, theGroup had already been present in Hong Kong for many years through its commercial subsidiary.

In July 1997 RADIALL SHANGHAI was founded, a totally new company whichwould become a leader in the field of coaxial connectors.While future prospects may be excellent in this country, it is nevertheless truethat telecoms, suffering since the bursting of the infamous Internet bubble of2001, are still experiencing something of a slowdown.

The Chinese telecommunications industry, while undergoing rapid growth, has also being shaken by the recession and hadto find ways of adjusting its overall economic model.

From a vision of China at the end of the 1990s as the next El Dorado for operators and major equipment manufacturers,the country transformed itself during the 2001-2003 slump into a gigantic assembly workshop for the electronics sector.In response to the demands for drastic price cuts from major contractors, industrials initially reacted by massively relo-cating the assembly of their components and gradually, as the trough of the cycle was reached, looking for local sourcesto provide components. Now christened "the factory of the world", China is starting to "mix it with the big guys" in electronics and to be recognised as a major player in the sector.

Presently, 12 % of RADIALL’s turnover is generated on its territory (including Hong Kong) and RADIALL SHANGHAÏ under-takes assembly on behalf of the Group for its own market as well as for re-export to western countries. Increasingly overseveral years, Chinese suppliers have been accredited by RADIALL and its customers to mass produce components. The target set for 2005 is to double the sourcing of products from China, which could reach 20 % of total sales for coaxial connectors.

Changes in turnover by geographic zone (in M€)

2002 2003 2004

158.6 145.0 163.1

Europe 82.6 78.9 88.0The Americas 58.5 42.3 44.5The rest of the world 17.5 23.8 30.6

page 8

Economic and share market overview

Changes to turnover(in M€)

2002

158.6145.0

163.1

2003 2004

Changes to operating income(in M€)

2002

- 11.2 - 2.1

5.1

2003 2004

Staff turnoverResearch & Development(in M€)

2002

12.1 12.5 13.1

2003 2004

7.6 %of

turnover

8.6 %of

turnover

8.1 %of

turnover

2002 2003 2004

1,609 1,585 1,614

France 1,031 995 1,000

Europe (out of France) 109 70 56

The Americas 237 219 230

Asia 232 301 328

RADIALL shares are listed on EUROLIST by EURONEXT,Compartment C, integrated into the NextEconomy segment and included on the SBF 250 index.

ISIN Code FR0000050320Bloomberg RLL.FPReuters RADP.PA

page 9

50

100

150

200

250

J F M A M J J A S O N D J F M A M J J A S O N D J F M2003 2004 2005

Changes to share price (100 base)

RADIALLSBF 250

Published forecast schedule 24 May 2005 General Meeting1 June 2005 payment of dividends19 July 2005 2nd quarter turnover for 2005

30 September 2005 half-yearly results for 200514 October 2005 3rd quarter turnover for 200520 January 2006 annual turnover for 2005

Contents

Financial management report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 11

Human resources report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 18

Personal information concerning the corporate officers . . . . . . . . . . . . . . . . . . . . .P 21

Corporate governance and internal audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 23

Management report on the environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 29

Statutory auditors report on the internal audit procedures to the accounting and financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 32

Consolidated financial statements

Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 33

Consolidated income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 34

Financial flows table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 35

Appendix to the consolidated financial statements . . . . . . . . . . . . . . . . . . . . .P 36

Notes on the consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . .P 40

Statutory auditors report on the consolidated financial statements . . . . . . . . . P 49

Corporate financial statements

Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 50

Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 52

Appendix to the parent financial statements . . . . . . . . . . . . . . . . . . . . . . . . .P 53

Notes on the parent financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . .P 55

Table of subsidiaries and interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 63

The company’s financial results for the last five financial years . . . . . . . . . . . . . . P 64

The statutory auditors general report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 65

The statutory auditors special report on the regulated agreements . . . . . . . . . . . . .P 66

The managements board’s special report on stock-options . . . . . . . . . . . . . . . . . . .P 67

Corporate bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .P 71

FinancialStatements

page 10

The Management Board of the RADIALL Group, meeting on 25 March 2005, and chaired by Mr Pierre GATTAZ,examined the consolidated financial statements for the 2004 financial year as audited by the StatutoryAuditors.

Key figures

(In EUR K) 2004 2003 Variation

Turnover 163,099 144,995 + 12 %Operating income 5,130 (2,085) N/AOperating margin + 3.15 % - 1.44 %Financial income (1,118) (829) - 35 %Current income 4,012 (2,914) N/A

Extraordinary income 536 386 + 39 %Taxes on earnings 116 (1,768) N/A

Depreciation of goodwill (782) (840) - 7 %Net income of the consolidated group 3,882 (5,136) N/A

Operating cash flow(1) 9,900 3,374 + 193 %

Equity capital (incl. Minority interests) 104,109 102,197 + 2 %Net cash(2) 25,501 19,396 + 31 %

(1) FFO (Funds from Operations) + changes in WCR

(2) Cash assets + investment securities + own shares – financial loans and debts

1.Strong growth in sales despite the negative impact of exchange rates

The Group’s consolidated turnover for 2004 came to EUR 163,099 thousand against EUR 144,995 thousand in2003, a rise of + 12.5 % on an historical basis. Exchange rates had a strongly negative impact of – 4.5 %. Atconstant exchange rates, business activity would have risen by approximately 17 %.The Group’s consolidation perimeter was modified by the inclusion of RADIALL SYSTEMS in August 2004. Thiscompany was created with a partner and RADIALL has a 90 % holding in it. However, the business activityand assets and liabilities of this entity are not significant (< 0.1 % of the total).

The growth in turnover was more marked in the telecom segment, in particular, in the first half of the year,when the market benefited from the effects of a restocking of components by equipment manufacturers.The Company also invoiced heavily in the aerospace and military segments. Automotive telematics, repre-senting only a fraction of RADIALL’s business but with strong development expected for 2005, is goingforward in line with targets.

Geographically, the Asian region has experienced the strongest growth (+ 28 %) and represents 19 % of sales,behind the Americas (27 %) and Europe (54 %). This increase can be explained by the considerable shift ofproduction sites of certain telecommunications customers which have the final assembly of their basestations carried out in China.

Financialmanagement report

page 11

Turnover by geographic zone appears as follows:

(In EUR K) 2004 2003 Variation

By business activityWireless telephone 71,764 57,273 + 25 %Military, aerospace, spatial 63,609 59,448 + 7 %Automotive telematics 6,524 5,075 + 29 %Industrial 21,203 23,199 - 9 %

By geographic zoneEurope 87,966 78,863 + 12 %The Americas 44,510 42,363 + 5 %The rest of the world 30,623 23,769 + 28 %

Group 163,099 144,995 + 12.5 %

2.A constant increase in business over the four quarters

Quarterly sales over the last two financial years were as follows:

Consolidated turnover (In EUR K) 2004 2003 A/A-1

1st quarter 41,373 36,342 + 14 %2nd quarter 43,044 35,792 + 21 %3rd quarter 41,289 35,944 + 15 %4th quarter 37,393 36,917 + 1 %

Annual total 163,099 144,995 + 12.5 %

After three years of downward business trends, linked to the historical slump experienced by the entire elec-tronics sector, the 2004 financial year saw a marked business resurgence. The growth was most sustainedover the first three quarters contrasted with a weaker fourth quarter affected, in particular, by theunfavourable impact of exchange rates.

3.Return to a positive operating margin

The operating margin was + 3.1 % in 2004, compared with – 1.4 % in 2003.

Significant efforts to reduce the break-even point underway since 2002 and the return to growth in turnoverin 2004 enabled RADIALL to get back to operating profitability after three years of losses.The productivity measures have had a notable influence on staff expenses which fell by more than 5 % inrelative weight as a percentage of turnover.Cost reduction and the quest for flexibility have also been expressed in the continued transfer of part ofproduction to Asian subsidiaries or to assembly subcontractors, notably in Tunisia and Mexico.

page 12

Staff turnover 31/12/04 31/12/03 Variation

France 1,000 995 + 1 %Europe out of France 56 70 - 20 %The Americas 230 219 + 5 %Asia 328 301 + 9 %

Total 1,614 1,585 + 2 %

The Management Board states that given the impossibility of clearly separating charges by geographic zoneand/or by activity, it is not in a position to provide a more detailed operating result.R&D expenses equal 8 % of turnover and this activity has been focused on technological innovations requiredto meet the on-going needs of our customers, work towards the accreditation of new applications and thedevelopment of our range of automotive products.

4.A net profit in 2004

The net profit came to EUR 3,882 thousand compared with – EUR 5,136 thousand for the previous financialyear.

The negative financial result of – EUR 1,118 thousand was essentially due to exchange rate losses.

Net extraordinary income of EUR 536 thousand resulted from a number of items including EUR 1,890 thousandin net capital gains from the sale of assets (including the Rosny-sous-Bois head office) and EUR 904 thousandallocated to provisions for charges related to a redundancy plan affecting eight employees at the Voreppesite.

Taxes on profits and deferred income taxes amounted to EUR 116 thousand in favour of the Company.This figure corresponds to the taxes imposed on profit-making entities with reductions for certain companies(RADIALL SA, RADIALL Ltd and SHANGHAI RADIALL) from tax savings resulting from the use or the partialcapitalisation of reportable fiscal losses unused as at 31 December, 2003.

5.A financial structure which remains solid

The cash flow related to business activity (the internal funding capacity + variation of the working capitalrequirement) came to EUR 9,900 in 2004.

Industrial investments remained at a reasonable level of around 3.5 % of turnover, i.e., EUR 5,683 thousand,up by 51 % on 2003.

The net financial debt went from EUR 2,076 thousand as at 31 December, 2003 to EUR 1,990 thousand as at31 December, 2004, and was largely made up of a property leasing and reimbursable advances.

Cash assets amounted to EUR 18,935 thousand at the end of 2004. Investment securities, including self-heldshares, reached a net value of EUR 6,733 thousand. The provision for depreciation of EUR 601 thousandrepresented the difference between the costs and the average share market price of RADIALL self-held sharesover the previous month.

page 13

In 2004, the company continued with its foreign currency hedging policy so as to be able to combat the riskof the devaluation of its future flows and credit notes, in particular, in USD. However, bearing in mind thehighly volatile nature of the markets, and the cost of foreign currency option premiums, the Group has optedfor partial hedging.

At the end of the 2004 financial year, the Group had in its books four firm forward sales contracts in USD/EURover the 2005 financial year with a total value of USD 1,000 thousand at an average rate of 1.205. In addi-tion, in 2004 the Company concluded two forward contracts with a deactivating barrier for USD 7,500 thou-sand at an average rate of 1.257.

6.Parent company results

Turnover was EUR 116,214 thousand, of which slightly less than half related to inter-company flows.The operating result was a loss of EUR 2,281 thousand, an advance on the 2003 financial year in whichRADIALL SA had lost EUR 4,932 thousand. This improvement results primarily from the positive impact ofgrowth in business activity (+ 19 %) but was partially offset by stock depreciation provisions for componentsfrom the Voreppe factory.The net result is a modest profit of EUR 370 thousand, largely thanks to property capital gains realised on thesale of the Rosny-sous-Bois head office.

Key figures(in EUR K) 2004 2003 Variation

Turnover 116,214 97,310 + 19 %Operating income (2,281) (4,932) + 54 %Operating margin - 2 % - 5.1 %Financial income 478 (989) N/ACurrent income (1,803) (5,920) + 70 %

Extraordinary income 1,910 2,000 - 5 %

Taxes on income (263) (281) - 6 %

Net income 370 (3,640) N/A

Equity capital 86,873 87,639 + 1 %Net cash(1) 13,239 7,588 + 74 %

(1) Cash assets + investment securities + own shares – current loans and debts with credit institutions.

7.Events subsequent to the cut-off date

The Group indicates that there were no events subsequent to the cut-off date for the 2004 accounts andoccurring prior to the meeting of the Supervisory Board to deliberate on those accounts.

8.Outlook for 2005

The slowdown felt in the fourth quarter of 2004 should continue into the beginning of 2005. However,increasing investments in telecommunications infrastructure for third generation cellular telephony, positive

page 14

trends in the automotive segment and the entry into production stage of a major automotive order in theUSA should allow RADIALL to record moderate growth in turnover in 2005.Given the high market volatility and the risks linked to the level of the dollar, it is impossible to provide fore-casted figures for the 2005 business activity and operating income.

9.The new International Financial Reporting Standards (IFRS)

The changes to the accounting standard to come into force in 2005 for companies listed on the regulatedmarket will apply as a matter of course to RADIALL.

Initiated at the end of 2003, the IFRS project steering committee meets once a month to monitor theprogress of working groups and take decisions in respect of available options.

The aim of the working groups is to analyse the financial and organisational impact of the standards and topropose plans for implementation to enable RADIALL to apply the IFRS.

Today, the main options proposed under these standards have been defined.

The fixed assets management software has been changed and is operational in France. It is currently beingdeployed on the main foreign industrial sites and will be operational at some point during the second quarterof 2005.

The accounting procedures manual is being updated and should be finalised for the end of June, 2005.

Foreseeable consequences:

• Detailed calculation of the consequences of the change to standards on the 2004 accounts is beingfinalised. RADIALL cannot at this stage provide figures concerning the impact of its move to IFRS.

• The main identified consequences concern fixed assets (tangible and intangible assets), financial instru-ments, stocks-options, own shares and the presentation of accounts and the annex.

The Group will provide information on the consequences of the IFRS on the opening balance sheet on 1st January, 2004 at the time of publication of its 2005 half-yearly accounts in IFRS at the end of September2005.

10.Technological, research and development report

R&D 2003 2004

In EUR M 12.5 13.1% of turnover 8.6 % 8.1 %

RADIALL increased its research and development efforts over 2004. There was a 4 % increase in outlays bycomparison with 2003 and they now come to more than 8 % as a percentage of turnover.

page 15

In 2004, RADIALL particularly directed its research into the field of airborne connector technology for aero-space with projects for cut-off connectors enabling the different parts of an aircraft to be linked at the timeof final assembly and new connectors derived from the EPX range with the purpose of guaranteeing bulkheadsealing.

RADIALL was also selected by the international standards committee, ARINC, for the LuxCis optic contactconcept, for which there will be promising openings related to in-flight entertainment and broadband appli-cations. Using its experience acquired in the telecommunications area, RADIALL has been able to develop asolution for a harsher environment by dividing what was considered the high price of fibre optics by four.

For telecommunications, the Group has developed a CMS micro-relay capable of transferring power in frequen-cies usually reserved to telecoms (base station redundant applications).

For automotive telematics, RADIALL engineers have launched a project known by the name of R3C, whichbegan with the realisation that there did not exist a coaxial connector capable of combining good electricaland mechanical performance with an ease and speed of installation and, above all, processing security (auto-matic verification of the interface and the effectiveness of the crimping).The originality of the chosen solution was in being able to cable coaxial connectors packaged in rolls in asingle operation. A patent application has been made in respect of this technical achievement. For thecustomer, this will mean a reduction in costs at the cable connector assembly phase. This innovation willenable cable assemblies to be produced using an automatic process.

RADIALL has also launched a range of relays with high repeatability for the instrument market. NamedPlatinum, its purpose is to reinforce RADIALL’s presence in the industrial segment.

11.Shareholders’digest

Changes to the share price

In EUR Highest Lowest Last NEPS(Groupe)

2000 218.00 76.00 180.00 7.842001 184.30 45.00 79.50 (1.98)2002 80.00 29.50 35.95 (6.60)2003 63.00 26.05 56.20 (2.40)2004 75.70 53.90 57.80 1.46

Capital structure

31/12/04 31/12/03% shares % voting rights % shares % voting rights

RADIALL investment company* 27.0 31.6 27.9 32.9HODIALL* 33.4 39.5 32.8 38.4Pierre GATTAZ 12.0 14.0 12.4 13.4Public and others** 27.6 14.9 26.9 15.3

* Holding companies which group together the interests of the GATTAZ families in RADIALL.** The shares which have been identified as being held directly or indirectly by staff representing at least 0.2 % of the total shares.

page 16

page 17

As at 31 December 2004, RADIALL held, under an animation contract and in stock options, 17,680 shares,i.e. 0.79 % of the share capital.

Stock-option plans

Plan no. Meeting Allotment Number Subscription Number Deadlinesdate date of options or purchase of shares for

price remaining exercisingSubscription Purchase(1) to be issued options

6 05/1994 04/2000 500 10,800 108.00 500 03/20057 05/1994 03/2001 1,875 150.00 0 03/20068 05/2001 11/2003 14,200 59.00 14,200 11/2007

(1) Modified by the EGM of 30 May 1995 (replacement of stock options by purchase options).

Dividends distributed for the last three financial years (in EUR)

No dividends were distributed on shares for the last three financial years.

For information, the share capital was converted into euros with no par value.

Proposition to the OGM for the 2004 financial year

The Management Board proposed to the OGM that a dividend of EUR 0.50 per share be distributed and allocated the corporate profit as follows:Profit for the 2004 financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR 369,673.68 Loss carried forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR (9,915,335.69)

i.e., an amount of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR (9,545,662.01) allocated in total to the reduction of the general reserve, the amount of . . . . . . . EUR (9,545,662.01)

The amount of the general reserve becomes:69,251,112.58 – 9,545,662.01 = . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .EUR 59,705,450.57

Funds for the distribution of a dividend of EUR 0.50 (fifty euro centimes) per share, i.e. an amount of EUR 1,108,980.00, are to be deducted from the general reserve, being EUR 59,705,450.57 after the allocationof income and which will decrease to EUR 58, 596, 470.57 after the distribution of dividends.At the time of this distribution, RADIALL will be subject to an exceptional deduction of 25 % to be paid fromthe total distributed. The sum paid as this deduction will immediately be used for the creation of a creditagainst treasury which can be used in third-parts for the payment of the corporate income tax related to theincome for the financial year closed, after distribution, and to income for each of the two following financialyears, the unallocated surplus being immediately reimbursable in 2008.

Currently valid delegation of powers given to the Management Board to undertake capitalincreases

Date of EGM Number Previous 2004 Purposeof shares uses uses

May 2001 30,000 0 0 Stock-options

1.Human resources in 2004

1.1. Staffing levels at the year-end20042003200220012000

1.2. Types of contract

At 31/12/04 Open-ended (CDI) Fixed-term (CDD)

2004 1,574 392003 1,525 602002 1,596 132001 1,826 502000 2,134 91

1.3. Breakdown

At 31/12/04 Men Women Total Part- Men Women Total Part-France time Abroad time

2004 503 497 1,000 92 341 272 613 62003 500 495 995 91 334 256 590 62002 526 505 1,031 91 314 264 578 72001 606 587 1,193 53 367 316 683 92000 616 599 1,215 51 488 523 1,011 19

Outside manpower

Average for the period 2000 2001 2002 2003 2004

FranceTemporary staff 269 197 115 129 144Service providers (Régie) 6.0 6.1 8.7

OverseasTemporary staff 185 90 61 135 241

Humanresources report

page 18

231 32854

995 219 30170

1,031 237 232109

1,193 284 249150

1,215 424 257329

1,000

FranceEuropeThe AmericasAsia

page 19

Staff turnover during the period

At 31/12/03 Arrivals Departures At 31/12/04CDI CDD CDI CDD CDI CDD CDI CDD

France 958 37 43 53 39 52 962 38Europe 69 1 6 1 22 1 53 1The Americas 219 0 73 0 61 0 231 0Asia 279 22 76 47 2 308 20

1,525 60 198 54 169 55 1,554 59

2.Changes to staffing levels

Staffing levels in France, with 52 % executives and technicians and 48 % manufacturing staff, stabilised, butwith the creation of some positions in line with the development of the military and aerospace sectors.To rationalise R&D capacity for antenna products and reduce certain structures, a reorganisation plan waspresented to corporate partners in December 2004, which will result in the elimination of five positions.

For Europe in total, permanent staff numbers went from 1,027 to 1,015 as a result of a policy of optimisationof structures.

In Asia, the development of business activity and manufacturing brought total staff, all categories ofcontracts combined, to 537 people (+ 113).

In the United States permanent staff numbers rose by 5 %, the result of both growth and an optimisation ofsites (closure of the site on the East Coast and optimal distribution of resources between the two othersites).

There were no special difficulties encountered in recruiting staff.

3.Working hours

France

The organisation of working hours is governed by the Company-Wide "ARTT" Agreement entered into in 2000.Staff have employment contracts for 212 days per annum for executives, and for others, an actual workingweek of 35 hours with annual modulation and variable working hours, with the widespread practice of “flexitime” as applied in the industrial facilities.The 92 part-time staff, who work between 50 % and 80 % of normal working hours, represent the equivalentof 64 fulltime staff. A system of Time Savings Account (CET) is in place for the management of days of leave or reduction ofworking hours leave. A rider to the CET agreement was signed during the year to make possible cash with-drawals.

The presented rate of absenteeism is calculated on the basis of the following absences: illness, industrialaccidents or whilst travelling to or from work, maternity, care for sick children, authorised, or unauthorised,paid, or unpaid, absences, strikes, individual leave for training.

It decreased by 0.6 point and can be broken down into "insignificant absenteeism" (absences of fewer than22 days), 1.63 %, and 3.44 % for other forms of absence.

Abroad

Working hours are organised according to applicable local legislation.

4.Employment and insertion of handicapped workers,social welfare

66 % of the obligation to employ handicapped workers was met during the financial year by employing suchworkers, with the balance being settled by the compulsory financial contribution.

5.Training

In addition to compulsory contributions, the Company undertook initiatives under its training plan for a totalcost of EUR 642, 880, i.e., 2.46 % as a percentage of payroll.1,002 trainees took part in these initiatives and the 16,600 hours of training were broken down into fourmain areas: business line techniques (46 % of expenses), information and office technology (26 %), manage-ment and communication (16 %), foreign languages (12 %) and quality management (9 %), supplemented bysecurity initiatives.

6.Other elements of RADIALL SA’s social report

2000 2001 2002 2003 2004

Salaries and Wages*Total annual payroll 26,233,349 € 30,873,475 € 28,401,751 € 25,502,724 € 26,185,160 €Profit-sharing / Interests 10,195,640 € 0 € 0 € 0 € 0 €

Health and safetyNo. of industrial accidents withworker being signed off 27 25 21 16 18

Working conditionsAverage number of working hours 35 H actual working hours since 01/07/2000

TrainingTraining expenditure 736,073 € 1,252,751 € 622,832 € 551,831 € 642,880 €

2.81 % 4.06 % 2.19 % 2.16 % 2.46 %

Professional relationsCollective agreements ARTT agreement Profit-sharing Profit-sharing

CET Agreement agreement agreement CET rider

% absenteeism 5.49 % 5.68 % 5.85 % 5.66 % 5.07 %

* sources: DADS (French Annual Declaration of Corporate Data).

page 20

Net compensation (including benefits in kind and directors’ fees) paid to the corporate officersduring the 2004 financial year by RADIALL:

Mr Yvon GATTAZ (EUR 96,293), Mr Didier LOMBARD (EUR 3,333), Mr Robert PAPIN (EUR 3,333), Mr Pierre GATTAZ (EUR 137,084), Mr P. Michel CHURG (EUR 101,695), Mr André HERNANDEZ (EUR 37,174).

List of executive offices held in all companies as at 31 December,2004

Yvon GATTAZ, Chairman of the Supervisory BoardDate of first appointment: 17/12/1993Expiry date of the current term of office: 2006Also Chairman of the Supervisory Board of HODIALL.

Geneviève GATTAZ, Member of the Supervisory BoardDate of first appointment: 17/12/1993Expiry date of the current term of office: 2006Also member of the Supervisory Board of HODIALL.

Bruno GATTAZ, Member of the Supervisory BoardDate of first appointment: 17/12/1993Expiry date of the current term of office: 2006Also Vice-Chairman of the Supervisory Board of HODIALL.

Robert PAPIN, Member of the Supervisory BoardDate of first appointment: 19/09/1997Expiry date of the current term of office: 2009

Didier LOMBARD, Member of the Supervisory BoardDate of first appointment: 20/05/2003Expiry date of the current term of office: 2009Also Director of ORANGE and THOMSON and Member of the Supervisory Board of ST MICROELECTRONICS.Chief Executive Officer of FRANCE TELECOM.

Pierre GATTAZ, Chairman of the Management BoardDate of first appointment: 04/01/1994Expiry date of the current term of office: 2006Also Chairman of the Management Board of HODIALL, Co-Manager of RADIALL GmbH, Chairman of the Boardof Directors of RADIALL Ltd, RADIALL ELETTRONICA, RADIALL BV, RADIALL AMERICA, RADIALL JERRIK,RADIALL DO BRASIL, FUTURISTICS COMPONENTS Inc, RADIALL ASIA, RADIALL PROTECTRON, Director ofSHANGHAÏ RADIALL, NIHON RADIALL KK, RADIALL INTERNATIONAL Ltd, Manager of RADIALL Inc.

P. Michel CHURG, Member of the Supervisory BoardDate of first appointment: 10/02/1995Expiry date of the current term of office: 2006Also member of the Management Board of HODIALL, Co-Manager of RADIALL GmbH, Chairman of RADIALLAB, Director of RADIALL ELETTRONICA, RADIALL BV, RADIALL AMERICA, FUTURISTICS COMPONENTS Inc,RADIALL ASIA, RADIALL PROTECTRON, SHANGHAÏ RADIALL, NIHON RADIALL KK, RADIALL INTERNATIONALLtd.

page 21

Personal informationconcerning the Corporate Officers(article L 225-102-1 of the French Commercial Code)

André HERNANDEZ, Member of the Management BoardDate of first appointment: 21/11/2003Expiry date of the current term of office: 2009Also Chairman of RADIALL JERRIK and RADIALL AMERICA, Vice-Chairman of the Board of Directors ofRADIALL Inc.

Other net compensation (including benefits in kind) paid to the corporate officers during the2004 financial year by subsidiaries or controlling companies:

Compensation paid by companies controlled by: Mr André HERNANDEZ (EUR 165,649).Compensation paid by HODIALL taking part in the control of RADIALL: Mr Yvon GATTAZ (EUR 25,000), Mr Pierre GATTAZ (EUR 89,145), Mr P. Michel CHURG (EUR 57,713).

Other benefits included in remuneration

Stocks-Options held by corporate officers as at 31/12/2004: Mr P. Michel CHURG (900), Mr André HERNANDEZ(1,825).

page 22

Executive Committee of the RADIALL Group

From left to right: André HARTMANN - P. Michel CHURG - Michel MOLLES - Dominique BUTTIN

- Denis BLEY - Pierre GATTAZ - Jean-Pierre WILSCH - André HERNANDEZ

In accordance with the provisions of Article L 225-68 of the French Commercial Code, Mr Yvon GATTAZpresented his report on the conditions of the preparation and organisation of the work of the Board and theinternal audit procedures introduced by the company, to the Supervisory Board Meeting of 25 March 2005.

The main themes of said report were the following:

1.RADIALL SA’s administration and management bodies

RADIALL SA is a French limited company (société anonyme) having elected to be managed by both aSupervisory Board and Management Board.

The Supervisory Board has permanent control over the company’s management by the Management Board,and provides the latter with authorisations prior to the execution of the operations which it is unable to carryout without its authorisation.The Management Board is invested with the widest possible powers as regards third parties in order to act, inany or all circumstances, on behalf of the company, subject to the powers expressly attributed by law to theSupervisory Board and to Shareholders’ Meetings.

The powers of the Management Board have been set forth beyond legal provisions by Article 18 of theMemorandum and Articles of Association which provides that purchases, exchanges and sales of businesses orbuildings, the formation of companies, or any or all contribution of duly-formed companies, or those to beformed, and any or all taking of interests in said companies, shall be authorised beforehand by theSupervisory Board. These provisions are enforceable against third parties.

The Management Board, like the Supervisory Board, meets at least once per quarter, the Management Boardpresenting a report to the Supervisory Board every three months in accordance with legal requirements.

The Supervisory Board and the Management Board do not have specialist committees.

2.Composition and operations of the administration bodies

The Supervisory Board

The Supervisory Board is composed of five (5) members, two (2) of whom are independent. The Supervisory Board met four times in 2004.On average, two-thirds of its members were present at meetings.

The main areas for action of the Supervisory Board in 2004 were the following:examination of the accounts and approval of the management report, modification of the membership of theSupervisory Board, remuneration of the Chairman of the Supervisory Board, discussion of the ManagementBoard’s quarterly reports on business activity, examination of regulated agreements, approval of the report onthe stock-options plans, modification of structures and Group shareholdings, acquisition projects, takingaccount of the Financial Security Law, modifications to the Articles of Association and authorisation to theManagement Board to provide securities and guarantee the financial commitments of subsidiaries.

page 23

Corporategovernance and internal audit

The Management Board

The Management Board is composed of three (3) members.The Management Board met four times in 2004.All its members were present at the meetings.

The main areas for action of the Management Board in 2004 were the following: Drawing up of the quarterlybusiness activity report, closing out of accounts and interim documents and issue of the management report,issue of on the stock-options plans, issue of the list of regulated agreements, taking account of the FinancialSecurity Law, modifications to the Articles of Association, structural changes to the Group perimeter andrequests for authorisation from the Supervisory Board to provide securities and guarantee the financialcommitments of subsidiaries.

3. Internal audit within the RADIALL Group

The fundamental principles of internal auditing

The purpose of the internal audit procedures which are in force within RADIALL is to:• On the one hand, ensure that management or transaction implementation initiatives, and staff conduct, are

in line with the strategy decided upon for the company’s activities by the corporate bodies, and by appli-cable legislation and regulations, and by the company’s in-house values, standards and rules;

• On the other hand, verify that the accounting financial and management information provided to thecompany’s corporate bodies truly reflects the company’s business activity and position.

One of the aims of the internal audit system is to prevent and control the risks arising from the company’sbusiness activity and the risk of errors or fraud, in particular in the fields of accounting and finance. As withany audit system, it is nevertheless unable to provide a watertight guarantee that these risks have beentotally removed.

The values of integrity and ethical conduct have been major concerns of the Group over many years and arecombined under the RADIALL Charter, developed around:

Three objectives:“Giving customer satisfaction” so as to exist;“Developing people” so as to build;“Creating prosperity for the company” so as to continue into the future.

And seven values:“Ethics”: to act with integrity and meet our commitments;“Excellence”: to be the best in all our activities;“Anticipation”: to foresee risks and prepare changes;“Financial rigour”: to defend an essential freedom - financial independence;“Innovation”: to progress through new ideas;“Adaptability”: to know how to change to win;“Globalisation”: to adapt to international needs.

page 24

The internal auditing players

The Operational Departments Committee (Comité des Directions Opérationnelles (CDO)) is responsible for theinternal auditing of the RADIALL Group. Said Committee is composed of the three members of theManagement Board and five other Managers. It meets once every two weeks.Moreover, RADIALL is subject to countless external audits by certain customers and, in particular, those inthe military, aerospace, spatial, automotive and telecommunications segments.These audits cover both technical and financial considerations, and certain elements of risk management.At Group level, internal audit is organised around the following Operational Departments and AdministrativeDepartments:• The General Management,• The Finance Department,• The Information Systems Department,• The Human Relations Department,• The Group Quality Department.

Risk mapping

During 2004, the Group mapped major risks as envisaged under the action plan of the 2003 report. For thispurpose, a project team including representatives of the Finance and Quality Control Departments was estab-lished. After having defined a major risk prescription, it carried out interviews with management staff, havingthem evaluate major risks according to a predefined scale in terms of impact and frequency, in accordancewith their consequences for revenue, on people and on Group assets and then weight these risks so as to onlyselect the most significant.

The Group policy on insurance

Generally, the Company strives to limit its financial risks and has therefore put into place a policy of coverageaiming to transfer the risks for which the Group would be unable to bear the financial consequences to insur-ance companies or banks. In particular, the Group has subscribed worldwide policies for damages to assets(including lost production), third-party liability (general as well as for products) and transport-relateddamages. It has also obtained specific cover in relation to customer risk, the risk of gradual or accidentalpollution on sensitive sites, aviation risk and certain risks relating to certain classes of employees.

Over 2004, the Group issued a general tender for its combined insurance policies with the aim of verifying theadequacy of its policies in terms of market conditions (guarantees, premiums, excesses, etc.). As a result ofthis tender the Group has optimised certain cover, including the third-party liability policy for products afterdelivery, to adapt it to the circumstances of the Group’s new opening in the automotive area. It should be noted that no change has occurred in respect of the broker, or in the names of the insurerswhich have been retained again in 2005.

Finally, on a regular basis, the Group takes out forward or optional contracts to cover part of its exchange andinterest rate risks.

page 25

The key features of the internal audit system put in place by the Company

The internal audit system is based on:

• A procedures manual in the context of quality certifications and for the formalisation and steeringof business, research, purchasing, investment and production processes and the approval of theirfunctioning by regular internal and external audits.

• The organisation of the delegation of signature for investment and purchasing commitments, requests toemploy staff, entering into commercial contracts and undertaking banking operations, as well as for all ISOprocesses (production, quality control, commercial, etc.) subject to specific approval procedures

• A budgetary procedure relying on all the functions and key personnel of the Group.

• The use of a centralised ERP widely used on the market and to which most of the Group’s entities arecentrally linked. This software is installed on a single control computer hosted with a reputed outsideservice provider which provides continuous access and the required back-ups. The Group chose centralisedmanagement of access to the various operating systems. Security systems were put in place to verify usersof the message system, the ERP and, generally, all the shared servers.

Legal and operational control exercised by the parent company over the subsidiaries

In all cases, RADIALL disposes of majority control over its subsidiaries. It exercises this control through theintermediary of an effective presence on the boards of directors which operate in accordance with the localregulations of each country and in which the Group has a casting vote wherever this is legally authorised.At an operational level, the subsidiaries have their financial objectives calculated within the framework of alocal budget which has been the subject of discussions and validation by the Operational DepartmentsCommittee (CDO).The subsidiaries dispose of relatively broad management autonomy to achieve their budgetary targets but arerequired to comply with certain Group procedures.

Main audits undertaken

The internal auditor carried out three audits of subsidiaries: of RADIALL Inc and RADIALL JERRIK to assesstheir internal control system in respect of commitments for financial and corporate expenses, and at RADIALLPROTECTRON as a general review of its information system.

4. Internal audit relating to the establishing of the financial and accountinginformation of the parent company

Organisation of the Accounts Division

The Division is structured around a Central Accounts Department based at the registered office and theAccounts Departments in the Plants.

The Central Accounts Department is responsible for the following:• customer accounts,• payments to suppliers,• cash,

page 26

• payroll,• consolidation and reconciliation of inter-company flows,• financial accounting,• drawing up corporate tax returns and relations with the Authorities.

The Accounts Departments in the Plants mainly record supplier invoices (goods, services and fixed assets).In most cases, the principle of the separation of responsibilities (recording/payment) is respected.

IFRS Committee

The goal of the steering committee for the IFRS project is to present accounts which comply with the IFRSstandards at the time of the publication of the June 2005 accounts (in September, 2005). Among the meansused to achieve this objective is the creation of an accounting procedures manual.The procedures relating to the IFRS standards which have significant financial or organisational consequenceswill be finalised by the beginning of the 2nd quarter of 2005.The detailed assessment of the impact of the change of standards on the 2004 accounts is currently beingfinalised.RADIALL cannot, at this stage, provide detailed figures on the consequences of the conversion to IFRS.

Organisation of accounting and financial information systems

Accounting is an integral part of the ERP and is based around a single accounts plan for the whole Group.All general accounting entries relating to income statements and certain balance sheet items are linked toanalytical entries enabling monthly management reports to be drawn up.

Consolidation procedures for the financial statements

The financial statements are consolidated on owner software, which is readily available on the market, andwhich operates on a client/server basis.One person responsible for consolidation reports directly to the Head Accountant. These individuals receiveregularly training concerning both regulatory changes and functional aspects of the IT tool.RADIALL carries out consolidations operations twice yearly, on 30 June and 31 December. An exact scheduleof the consolidation is provided in advance to each Group company to assist with forecasting and shortenlead times. Prior to being integrated and verified in the consolidation software, the entities input their standard docu-ments into a standardised spreadsheet program, having a coherence verification mechanism enabling thequality of the information provided to be ensured. A critical review is carried out and, at all times, theConsolidation Department may verify, by remote access to the ERP accounting systems of the subsidiaries,the coherence of the documents with local figures.

Monitoring of provisions

Twice a year, for the cut-offs of 30 June and 31 December, General Management and the Financial Departmentreview all the provisions entered on to the balance sheets of the different companies.These provisions are adjusted, within the limits of available information and according to whatever estima-tions can be made from them, to reflect the conservatism principle.

page 27

Relations with the Statutory Auditors

The corporate and consolidated financial statements are subject to a full audit as at 31 December and aninterim review at 30 June. Preparation, progress and summary meetings are held regularly between bothfirms.In the main subsidiaries, one of the joint Statutory Auditors is also the local auditor.Faced with the growth of business activity in Asia, the Group decided to appoint one Group auditor for itstwo Chinese subsidiaries from 2005.

An audit plan is discussed annually with the Statutory Auditors. It enables certain work to be concentrated inareas presenting specific risks.

5.Action plan for 2005

So as to constantly improve the Group’s internal audit procedures, RADIALL’s Supervisory Board has providedrecommendations to the Management Board for the 2005 financial year.

These focus on three main areas:

• Establishing a road map of the risks for the Group, which analyses the critical domains, and the way inwhich the Group approaches risks, for each major operational and administrative department (sales,production, studies, finance, human resources, etc.).

• Formalising an internal audit plan, directed, on the basis of the risks identified in the above road map.

page 28

The Management Report on the environment focuses on the activities of RADIALL’s industrial sites.It takes into consideration:• the consequences of activities for the environment,• the measures introduced to limit these consequences,• the prevention of emergency situations,• the targets imposed on the subsidiaries.

1.The action plan for 2005

Consumption of resources in FranceConsumption of water, raw materials and energy at RADIALL’s four French assembly plants is insignificant.This is due to the activities which have been developed on these sites.

• Industrial water consumption is 14,200 m3.Artesian water is drawn from a single source for a volume of 1,800 m3.Water consumption for surface treatment at the Voreppe plant and cooling at the Isle d’Abeau plant, are themost representative uses with respectively 4,400 m3 and 8,500 m3 of water consumed.This consumption has been reduced by 20 % in comparison with 2003 thanks to the installation of closed-circuit cooling systems. As a result, a saving of 3,500 m3 has been made.

• Total energy consumption comes to 12.6 MWh, of which 4.9 MWh is for gas heating and 7.7 MWh for elec-tricity.

Raising staff awareness of concepts of energy efficiency enabled consumption to be stabilised in 2004 at thesame time as production increased markedly.

Sustainable energy sources are not as yet in use on the different industrial sites.

With regard to raw materials, free-cutting brass and plastics are the materials most used. Two hundred andtwenty tonnes of brass were used at the Voiron site.

Conditions for the use of landThe conditions for the use of land are limited to the construction of buildings and car parks. There are nomaterial tips or land treatment of wastes. Retention areas have been installed under Voiron machining equipment.Oil removers are installed in accordance with the regulations in force when car parks are refurbished.

Air-borne wasteThe major part of air-borne waste is comprised of emissions from gas-fired boilers. These are maintained andchecked to limit such waste to a minimum.

Cleaning solvents, principally non-chlorinated degreasing agents, trichlorethylene, dichloromethan andhydrofluoroether, accounted for 5.7 tonnes of emissions.Waste from plating baths (acid, cyanide) are low in quantity but have a higher impact.

Management report on the environment

page 29

Water-borne wasteThe Voreppe site presents the greatest risk to the environment. It has a detoxification plant enabling thewater and bath waste of the surface treatment plant to be treated.There is under 15 m3 of waste produced per day, in compliance with the threshold of 8 litres per square meterof surface produced.Measurements are taken on a daily basis and sent to the authorities for the monitoring of pollution emissions(cyanide, metals and COD). A self-monitoring manual has been drawn up with the Water Agency for thepurpose of continually improving the quality of wastes and analytical means.

Two machining sites produce waste from tribofinition activity to the order of 1 to 5 m3 per day.

In-house noise pollution control measures have been introduced under the aegis of the Health and Safetyand Work Conditions Committees (CHSCT) and the occupational medicine physicians of each site.

RADIALL has not been the subject of any complaints relating to noise or odour pollution.

Waste• The total mass of waste from consumption or household waste (DIB) generated by all the sites is 217tonnes. The recycling rate is 40.5 %, not including the reuse of machining cuttings.Waste consists of paper, cardboard, scrap metal, shavings, plastic cuttings and canteen waste.The sorting of polyethylene was instituted at Voreppe in 2004.

• There were 78 tonnes of special industrial wastes (DIS).Most were generated by surface treatment: highly-treated cyanide and metallic baths. These are treatedexternally by accredited companies.There were 24 tonnes of metallic hydroxides sludge from the reprocessing of water at the Voreppe plant. Thisis stored at the waste containment site.

Cutting fluids and used solvents are dispatched for recycling.

No waste is discharged into the ground in either solid or liquid form.

2.Measures introduced for the environment

Action plans for on-going improvement have been introduced at all sites.These comprise corrective and preventive actions in response to audits or the monitoring of regulatorychanges.

In 2004 these plans enabled:• continued reduction of water consumption,• reduction of waste discharged into water,• improvement of the management of special industrial waste,• the launch of a vast programme for the elimination of lead, hexavalent chrome and cadmium from RADIALL

products in accordance with the European RoHS directive.

page 30

The Voreppe site has an Environmental Management System based on the ISO 14001 standard.This system has been certified since May, 2001 and was renewed in 2004.It has been integrated into the quality management system with resulting heightened efficiency.

ISO 14001 certification has also been obtained and renewed for the Shanghai site.

The main subcontractors are questioned or audited concerning their capacity to respect the environment.

Environment-related investments for 2004 came to a total of EUR 53,000.The improvement of nickel waste treatment and the regulation of pH at the detoxification plant make up EUR 36,000 of this amount.

Forecast investments for 2005 come to EUR 19,000. They relate to the reduction of water consumption, thefiltration of solvents and the improvement of surface treatment waste.

On each site there is a person responsible for environment-related matters. His or her role is to monitorimprovement works, the reception of new regulatory requirements and the bringing of the site into compli-ance. Staff are kept informed by means of noticeboards and monthly or team meetings.Each new recuit is given an environmental-awareness raising induction course which varies in accordancewith the site.

No indemnities were paid by RADIALL as a result of pollution and no actions for compensation were insti-tuted against it during 2004.

Emergency plans for the limitation of any accidental pollution are in place and have been tested whereverpossible (spills, fire drills).

Establishment register (ETARE) plans have been established with departmental emergency services forVoreppe and Isle d’Abeau.

3.Targets imposed on the subsidiaries

Under the Group Environment Policy, the following targets have been imposed on the subsidiaries:• compliance with applicable regulations,• a commitment to preventing pollution by improving waste management,• promotion of respect for the environment among staff.

The Shanghaï (China) plant has a plating activity.Water consumption was 13,300 m3, with 1.4 MWh of electrical energy.Thirty-five tonnes of consumption and household waste and 27 tonnes of special industrial waste wereproduced in 2004.New recruits are given an environmental-awareness raising induction on arrival at the site.In addition to having ISO 14001 certification for its system of environmental management, the site wasjudged to be one of the country’s most environmentally efficient by the Government of China.

Expenses related to the environment came to EUR 7,000 in 2004.

page 31

Ladies and Gentlemen,

In our capacity as Statutory Auditors of RADIALL, and in application of the provisions of the final paragraphof Article L 225-235 of the French Commercial Code, we hereby present our own report on the report estab-lished by your company’s Chairman in accordance with the provisions of Article L 225-68 of the FrenchCommercial Code for the financial year ended 31 December 2004.

The Chairman of the Supervisory Board is in particular responsible for providing information, in his report, onthe conditions for preparing and organising the work of the Supervisory Board and the internal proceduresintroduced within the company.

We are responsible for providing you with our observations as to the information set forth in the Chairman’sreport, concerning the internal audit procedures relating to the elaboration and processing of the accountingand financial information.

We carried out our examination in accordance with the professional standards which apply in France. Thesestandards require that we implement due diligence in order to assess the truthfulness of the information setforth in the Chairman’s report concerning the internal audit procedures relating to the elaboration andprocessing of the accounting and financial information. In particular, this work involved:

– becoming conversant with the aims and general organisation of the internal auditing process, and theinternal audit procedures relating to the elaboration and processing of the accounting and financial infor-mation, as presented in the Chairman’s report;

– becoming conversant with the underlying work for the information thus provided in the report.

On the basis of this work, we have no observations to make on the information provided concerning theinternal audit procedures of the company relating to the elaboration and processing of the accounting andfinancial information, presented in the report of the Chairman of the Supervisory Board, established in appli-cation of the final paragraph of Article L 225-68 of the French Commercial Code.

Executed in Antony and Paris, on 25 April 2005

MAZARS & GUERARDChristian COMERMAN Denis GRISON

Management reportestablished by the StatutoryAuditorsin application of the final paragraph of article L 225-235 of theFrench Commercial Code, on the basis of the report from theChairman of the Supervisory Board of RADIALL as regards theinternal audit procedures relating to the establishing and proces-sing of the accounting and financial information - Financial yearending on 31 December, 2004

page 32

CONSOLIDATED BALANCE SHEET as at 31 December 2004

Assets (in EUR K) 31/12/03 31/12/04

Goodwill 3,611 2,733

Intangible assets 682 455

Tangible assets 22,625 19,701

Financial assets 1,213 870

Fixed assets 28,131 23,759

Inventories and work-in-progress 43,756 41,675

Trade accounts receivable 28,562 29,563

Other receivables and adjustment accounts 16,697 16,832

Self-held securities 862 1,047

Investment securities 7,067 5,686

Cash assets 11,699 18,935

Current assets 108,643 113,738

Total assets 136,774 137,497

Liabilities (in EUR K) 31/12/03 31/12/04

Capital 3,381 3,381

Premiums 11,211 11,211

Consolidated reserves 90,688 83,793

Group’s share of income (5,321) 3,234

Group’s equity capital 99,959 101,619

Consolidated reserves of minority interests 2,053 1,842

Minority interests’ loss 185 648

Minority interests 2,238 2,490

Provisions for liabilities and charges 4,225 4,067

Loans and financial debts 2,076 1,990

Trade accounts payable 15,563 13,726

Other debts and adjustment accounts 12,713 13,605

Debts 30,352 29,321

Total liabilities 136,774 137,497

Consolidatedfinancial statements

page 33

CONSOLIDATED INCOME STATEMENT as at 31 December 2004(in EUR K) 2003 2004

Turnover 144,995 163,099

Other operating revenue 12,799 6,999Material costs (47,367) (52,402)Staff expenses (56,218) (54,598)Other operating expenses (40,282) (42,613)Taxes and charges (3,217) (4,173)Allocations for depreciation and provisions (12,885) (11,182)

Operating loss (2,085) 5,130as a % of Turnover - 1.4 % 3.1 %

Financial expenses and revenue (829) (1,118)

Current loss from consolidated companies (2,914) 4,012

Extraordinary expenses and revenue 386 536Taxes on earnings (1,768) 116

Net loss from consolidated companies (4,296) 4,664

Depreciation of goodwill (840) (782)

Net loss of the consolidated group (5,136) 3,882

Minority interests 185 648

Group’s share of net loss (5,321) 3,234

Number of shares 2,217,960 2,217,960Earnings per share (in EUR) (2.40) 1.46

page 34

FINANCIAL FLOWS TABLE(in EUR K) 2003 2004

Operating transactions

Net loss (5,321) 3,235

Minority interests in earnings of consolidated companies 185 648Net allocations for depreciation and provisions 6,054 8,281Capital gains and losses on disposals 21 (1,890)Deferred taxes 670 (1,473)

Funds from operations 1,609 8,801

Reduction (increase) in inventories 408 1,160Reduction (increase) in trade receivables (2,806) (165)Reduction (increase) in operating debts 1,480 (808)Reduction (increase) in other current assets and liabilities 2,548 883

Variation in working capital requirements 1,630 1,070

Net cash-flow generated by business activities 3,239 9,871

Investment transactionsAcquisitions of intangible assets (47) (214)Acquisitions of tangible assets (2,765) (5,822)Acquisitions of financial assets (41) (121)Disposals of fixed assets 415 3,155Impact of variations in the perimeter

Net cash- flow related to investment transactions (2,438) (3,002)

Financing transactionsReduction (increase) in minority interests 135 (174)Dividends paid to minority interests (275) (278)Collections from loans 243 405Repayment of loans (323) (427)

Net cash-flow related to financing transactions 220 (474)

Impact of currency fluctuations (1,177) (475)

Cash position variation (596) 5,920

Opening cash position 19,130 18,534

Closing cash position 18,534 24,454

* including movements in relation to own shares.

page 35

Key events

After the three years of downward trends in business activity linked to an historical recession affecting allRADIALL markets, the 2004 financial year saw a marked upsurge in activity.The Group closed its accounts with an operating margin of more than 3 % of turnover and net income of fourmillion euros.Among the significant events, the Group proceeded with the sale of its head office at Rosny-sous-Bois andlaunched, in December, 2004, a redundancy plan affecting eight positions, most of them at the Voreppe site.In respect of the balance sheet, efforts were made to reduce the working capital requirement. In addition,the company generated a significant cash flow which, in combination with its control of investments, hasfacilitated a considerable increase in available funds.

1.Accounting principles

RADIALL’s consolidated financial statements were drawn up in accordance with the Act of 3 January 1985,with its enacting Decree of 17 February 1986 and the Order of 22 June 1999 concerning CRC regulation 99-02.

1.1 Consolidation methodsThe companies which are exclusively controlled are consolidated by the full-integration method. There are nojointly controlled companies, or companies in which RADIALL has a notable interest. Consolidation wascarried out on the basis of the financial statements as at 31 December 2004 for all consolidated companies.Any or all internal transactions are eliminated upon consolidation.

1.2 Conversion of the accounts and financial statements of foreign companies expressed inforeign currency

The balance sheets of foreign companies are converted into euros at the year-end exchange rate; incomestatements are converted at the average exchange rate for the financial year. The resulting translation differ-entials are included in the equity capital in the “translation differential” item.

1.3 Conversion of transactions denominated in foreign currencyTransactions denominated in foreign currencies are converted at the effective rate on the day of transaction;receivables and debts denominated in foreign currencies at the financial year-end are converted at theclosing rate; translation differentials are recorded in the income statement.

1.4 Research and development expenses All research and development expenses are recorded as expenses for the financial year.

2.Valuation methods

2.1 Fixed assetsTangible and intangible fixed assets appear in the balance sheet for their historical cost or their contributionvalue.

2.1.1 Intangible assetsGoodwill results from the difference between the cost of acquisition and the percentage of the correspondingshareholders’ equity re-estimated and adjusted to the Group’s standards. It is depreciated by the straight-line

Appendix to the consolidatedfinancial statements

page 36

method over periods of between 5 and 10 years. In each case, if there is a risk of loss of value, accelerationin the depreciation of goodwill may be recorded in the results.The other intangible assets are recorded at their historical value and are depreciated by the straight-linemethod over periods of between 1 and 5 years.

2.1.2 Tangible assetsTangible assets appear in the balance sheet at their historical value. They are depreciated by the straight-linemethod, over the following periods:– Buildings: 20 years– Technical and industrial equipment: 3 to 7 years– Other tangible assets: 5 to 10 yearsLeasing agreements for equipment (office equipment, vehicles) are recorded in the consolidated financialstatements as leasing if using the preferential method would not have had a significant impact on thebalance sheet and the income statement.The other equipment, which is financed by leases, which has the characteristics of an acquisition, is capi-talised.

2.2 Non-consolidated equity interestsEquity interests are accounted for at their acquisition price. If this value is less then the value in present use,a provision for depreciation is made for the balance. The value in present use is the proportion of equitycapital represented by the interests, where applicable, adjusted in order to take account of the perspectivesfor development and earnings.

2.3 Inventories and work-in-progressInventories of purchased materials and components are mainly valued in accordance with the obsolescencecost method. The risks of obsolescence are estimated on the basis of historical consumption and disposalforecasts when available.Products which are disposed of between 12 and 24 months are provided for at 30 %. From 24 to 36 months,the provision is 70 %, and over 36 months, the rate is 95 %.Products with no term of disposal are provided for at 100 %.New products, or those purchased under a specific customer agreement, are not provided for. When a specificrisk is identified, an adequate provision is made.In addition, a weighting or acceleration coefficient is applied to these depreciation rates according todifferent technical and commercial criteria (stage of product’s life, rapid technologically evolving market,etc.)

2.4 Receivables and debtsReceivables and debts are valued at their nominal value.They are depreciated by means of a provision in the event of the risk of non-collection.In several countries (France, Germany, the United Kingdom and the Netherlands), Group companies made useof credit insurance to cover their outstanding accounts.

2.5 Investment securities, self-held securities and net cashNet investment securities and cash assets are valued at the lower figure of their acquisition value and theirmarket value. Self-held shares are intended either to adjust the stock market price, or to be used for stock-option plans.

page 37

They are valued on the basis of the average of the last 20 stock market prices.Net cash comprises the self-held shares, the investment securities net of provisions and the cash assets, lessoverdrafts and short-term credit facilities.

2.6 Deferred taxesThe income tax charge corresponds to the tax which is payable for each consolidated entity, corrected bydeferred assessments. These are calculated using the liability method for all timing differences, which mayexist in accounting for the book earnings for a financial year and the bases used for calculating tax. They arecalculated by taking the future rate of corporate tax into account on its application date.When the taxable entities are in the red, the tax assets are restricted to the amount of the deferred taxcredits recorded, if they are unlikely to be collected, except if the possibility of tax loss carry-backs definitelyexists.

2.7 Provisions for liabilities and charges

2.7.1 Provisions for severance payments on retirementIn accordance with the laws and practices of each country, our commitments are accounted for as expensesat their most likely realisation value. The end-of-career severance payments, which are owed to employeesand estimated on the basis of statistical parameters, which take account of seniority, age, and the probablerevaluation of remuneration, are accounted for by partially transferring their management to an insurancecompany, and by provisions for the supplementary proportion.

2.7.2 Other provisions for liabilities and chargesThese provisions are intended to cover the probable risks and expenses arising from events which haveoccurred, or which are ongoing.

2.8 Financial instrumentsThe Group uses insurance cover, or financial instruments, to reduce or to limit exposure to fluctuations inforeign exchange and interest rates. The losses and profits, which are connected to this operation, areaccounted for as financial transactions.

3.Other information

3.1 Changes in the consolidation perimeterIn 2004, RADIALL SYSTEMS was created as a subsidiary of RADIALL VENTURES CAPITAL, a 90 % holding with acapital of EUR 100 K.

3.2 Segment-based informationBy far the most important activity of RADIALL is the manufacturing of connectors and associated compo-nents for use in electronic applications.In order to improve the awareness of the company and its applications, RADIALL provides the breakdown ofits turnover and certain available information by geographical zone.

page 38

3.3 Events subsequent to the cut-off dateThe Group indicates that there were no events subsequent to the cut-off date for the 2004 accounts andoccurring prior to the meeting of the Supervisory Board to deliberate on those accounts.

Companies consolidated by the full integration method Town Country % interest % control

RADIALL SA Rosny s/bois France 100 100

RADIALL VENTURES CAPITAL Rosny s/bois France 80 80

RADIALL SYSTEMS Rosny s/bois France 90 90

RADIALL Ltd Perivale UK 100 100

RADIALL GmbH Rödermark Germany 100 100

RADIALL B.V Hoevelaken Netherlands 100 100

RADIALL A.B. Sollentuna Sweden 100 100

RADIALL ELETTRONICA SRL Assago Italy 100 100

RADIALL AMERICA Vancouver USA 100 100

JERRIK CONNECTING DEVICES Inc Tempe USA 100 100

RADIALL INCORPORATED Vancouver USA 100 100

FUTURISTICS COMPONENTS Inc Waterbury USA 100 100

RADIALL DO BRASIL COMPONENTES EL. LTDA Rio de Janeiro Brazil 99.37 99.37

RADIALL ELECTRONICS (ASIA) Ltd Kowloon Hong Kong 55 55

RADIALL INTERNATIONAL Ltd Kowloon Hong Kong 100 100

RADIALL PROTECTRON Ltd Bengalore India 51 51

NIHON RADIALL KK Tokyo Japan 65 65

SHANGHAÏ RADIALL ELECTRONICS CO. Ltd Shanghaï China 75.95 80

page 39

1.Goodwill

In EUR K 31/12/03 Acquisitions Allocations Translation Disposals 31/12/04differential

Gross values 9,930 (459) 9,471Depreciation (6,319) 0 (782) 363 (6,738)

Book values 3,611 0 (782) (96) 0 2,733

2. Intangible assets

In EUR K 31/12/03 Reclassifications Acquisitions Translation Disposals 31/12/04differential

Setting-up costs 124 (6) 118Patents and licences 5,441 1 214 (31) (615) 5,010Goodwill 446 (27) 0 419Other intangible assets 128 0 0 (5) 0 123

Total gross values 6,139 1 214 (57) (615) 5,670

In EUR K 31/12/03 Reclassifications Depreciations Translation Disposals 31/12/04differential

Setting-up costs 104 0 5 (5) 104Patents and licences 4,926 (27) 427 (28) (613) 4,685Goodwill 301 22 (19) 304Other intangible assets 126 (27) (5) 121

Total depreciations 5,457 (27) 454 (57) (613) 5,214

3.Tangible assets

In EUR K 31/12/03 Reclassifications Acquisitions Translation Disposals 31/12/04differential

Land* 1,178 0 8 (19) 315 852Buildings* 22,960 (82) 391 (189) (2,979) 20,101Plant and equipment 70,071 143 4,288 (851) (3,364) 70,287Other fixed assets 8,802 83 712 (179) (672) 8,746Current fixed assets 794 (144) 106 (9) 0 747Advances and down payments 192 (192) 178 0 0 178

Total gross values 103,997 (192) 5,683 (3,402) (7,330) 100,911

* Including EUR 1,829 K of assets financed by leasing.

Notes on the consolidatedfinancial statements

page 40

In EUR K 31/12/03 Reclassifications Depreciations Translation Disposals 31/12/04differential

Buildings * 14,169 (49) 1,050 (59) (2,719) 12,392Plant and equipment 60,072 0 5,596 (611) (3,335) 61,722Other fixed assets 7,131 48 676 (144) (615) 7,096

Total depreciation and provisions 81,372 (1) 7,322 (814) (6,669) 81,210

* Including EUR 246 K of allocations to depreciation for assets financed by leasing.

3bis.Net tangible assets by geographic zone

In EUR K 2003 2004 Variation %

Europe 16,885 14,174 - 16 %Americas 3,917 3,847 - 2 %Rest of the World 1,823 1,680 - 8 %

Total 22,625 19,701 - 13 %

4.Financial assets

In EUR K 31/12/03 Acquisitions Translation Disposals 31/12/04differential

Other capitalised securities 1,117 (117) 1,000Other financial assets 267 121 (5) (168) 215

Total gross values 1,384 121 (5) (285) 1,215

The other capitalised securities have been depreciated by EUR 345 K.

5. Inventories and work-in-progress

In EUR K 31/12/03 31/12/04 Variation

Raw materials and supplies 40,904 38,442 (2,462)Goods and services in progress 4,927 4,656 (271)Intermediate and finished products 18,234 17,445 (789)

Total gross values 64,065 60,543 (3,522)

Provisions for raw materials and supplies (14,852) (14,678) 174Provisions for finished products (5,457) (4,190) 1,267

Total provisions (20,309) (18,868) 1,441

Book values 43,756 41,675 (2,081)% of provision 31.7 % 31.2 %

page 41

5bis. Inventories and work-in-progress by geographic zone

In EUR K 31/12/03 31/12/04 Variation %

Europe 33,073 30,202 - 9 %Americas 7,199 7,043 - 2 %Rest of the World 3,484 4,430 27 %

Total 43,756 41,675

6.Change in customer receivables

In EUR K 31/12/03 31/12/04 Variation

Customers 29,783 30,953 1,170Provision (1,221) (1,390) (169)

Book value 28,562 29,563 1,001% of provision 4.1 % 4.5 %

7.Changes in other receivables

In EUR K 31/12/03 31/12/04 Variation

Advances and down payments on orders 77 189 107Other receivables 4,455 2,559 (1,896)Corporate taxes 1,464 2,300 836Carry back 7,125 7,125 0Deferred taxes assets 2,536 3,866 1,330Adjustment accounts 1,040 798 (242)

Total 16,697 16,832 135

With the exception of the carry back and deferred tax asset receivables, all the other abovementioned receiv-ables have a due date of less than one year.

8.Net cash

In EUR K 31/12/03 31/12/04 Variation

Other investment securities 7,067 5,686 (1,381)Cash assets 11,699 18,935 7,236Total cash (assets) 18,766 24,621 5,855Overdrafts and credit facilities (232) (167) 65Net cash (excluding self-held securities) 18,534 24,454 5,920Self-held securities 1,622 1,648 26Provisions on securities (760) (601) 159Book value of self-held securities 862 1,047 185

Net cash (with self-held securities) 19,396 25,501 6,105

The other investment securities were mainly acquired during the fourth quarter of 2004. Their value is similarto their closing value, without any major capital gains.The portfolio of the other investment securities mainly consists of monetary or assimilated Unit Trusts(SICAV) and Mutual Funds (FCP).

page 42

9.Equity capital

In EUR K Capital Premiums Consolidated Group Group Minority Minority Share ofreserves earnings share reserves earnings minority

interests

31 December 2002 3,381 11,211 110,194 (14,646) 110,140 2,738 (64) 2,674

Appropriation of earnings N-1 (14,646) 14,646 0 (64) 64 0Earnings N (5,321) (5,321) 0 185 185Distribution of dividends 0 (275) 0 (275)Translation differential (4,860) (4,860) (346) 0 (346)

31 December 2003 3,381 11,211 90,688 (5,321) 99,959 2,053 185 2,238

Appropriation of earnings N-1 (5,321) 5,321 0 185 (185) 0Earnings N 3,235 3,234 648 648Distribution of dividends 0 (255) (255)Variation of perimeter 0 10 10Translation differential (1,574) (1,574) (151) (151)

31 December 2004 3,381 11,211 83,793 3,235 101,619 1,842 648 2,490

The share capital of the parent company was not modified in 2004. It was EUR 3,381,268 for 2,217,960shares without par value.

As at 31 December, 2004, the following current stock-options plans relating to the parent company were ineffect:• open as at 1 January, 2004: 14,700• open during the year: 0• exercised during the year: 0• having lapsed: 0• open as at 31 December, 2004: 14,700There are no stock-option plans for subsidiaries.

Registered shares which have been held by the same holder for at least 4 years carry a double voting right.

10.Provisions for liabilities and charges

In EUR K 31/12/03 Allocations Reversals Reversals Exchange 31/12/04used not used differences and

reclassifications

Deferred tax liability 203 39 (33) (6) 203End-of-career payments 1,220 51 1,271Technical and commercial contingencies 530 133 (494) (20) 1,145 1,294Restructuring 373 938 (357) 7 61Other risks 1,899 169 (310) (250) (1,170) 338

Total 4,225 1,330 (1,194) (270) (24) 4,067

A reversal of EUR 250 K of unused provision corresponds to a transaction agreement for which the amountpaid was less than the funded provision.

page 43

10bis.Severance payments on retirement

Assumptions 2003 2004

1) Retirement age 63 632) Salary increase rate 3.0 % 2.8 %3) Inflation rate 2.0 % 2.0 %4) Rate of return on collective funds 4.5 % 4.5 %5) Turnover 2.5 % 3.5 %

Total commitment in EUR K 2,676 2,760

Commitments entrusted to an insurance company 1,456 1.489Commitments recorded in provisions for liabilities and charges 1,220 1.271

6) Mortality table TV88/907) Retirement conditions: 100 % at employee’s initiative

11.Schedule of loans and financial debts

In EUR K 31/12/03 - 1 year from 1 + 5 years 31/12/04to 5 years

Repayable advances 548 658 658Leasing agreements 1,297 138 622 405 1,165Cash advances 231 167 167

Total 2,076 305 1,280 405 1,990

Debts in EUR 1,938 289 1,156 405 1,850Debts in USD 16 0 0Debts in other currencies 122 16 124 140

Total 2,076 305 1,280 405 1,990

12.Other debts

In EUR K 31/12/03 31/12/04

Down payments on orders 698 405Income taxes 1,221 1,756Other tax and social security debts 8,729 9,725Debts on fixed assets 751 425Other debts and adjustment accounts 1,314 1,294

Total 12,713 13,605

13.Financial instruments

13.1 Foreign exchange risksWithin the framework of its policy of hedging against foreign exchange risks, the company had carried outthe following transactions as at 31 December 2004:

page 44

• USD/EUR forward sales: USD 1,000 K at an average rate of 1.205,• USD/EUR optional forward sales: USD 7,500 K at an average rate of 1.257.These forward sales have a due date of less than 1 year.The value of these contracts as at 31 December, 2004 is estimated at + EUR 46 K.

13.2 Interest rate risksThe company, in the context of its hedging policy against rate risks and to finance leasing instalments (Seenote at 11), undertook the following operation on 31 December, 2004:• exchange of interest conditions: swap until 1 January, 2012 between Euribor 12 months and Euribor 3 months with a ceiling of 3 % and a deactivating barrier at 4.65 % for an amount of EUR 1,450 K(redeemable in consecutive annual payments of EUR 200 K until 1 January, 2012).

14.Other off-balance sheet commitments

At the end of December 2004, the value of the customer order book was EUR 40,646 K

15.Breakdown of turnover by geographic zone

En EUR M 2003 2004 VariationEUR M % EUR M % %

France 30.7 21 % 35.0 21 % 14 %Other European countries 48.1 33 % 53.0 32 % 10 %Americas 42.3 29 % 44.5 27 % 5 %Rest of the World 23.8 16 % 30.6 19 % 29 %

Total 144.9 100 % 163.1 100 % 13 %

16.Other operating revenue

In EUR K 2003 2004 Variation %

Stored production 943 (697)Capitalised production costs 388 167 - 57 %Operating subsidy 83 0Reversals of depreciation and operating provisions 7,389 5,619 - 24 %Transfer of operating expenses 2,725 1,216 - 55 %Other revenue 1,271 694 - 45 %

Total 12,799 6,999 - 45 %

17.Material costs

In EUR K 2003 2004 Variation %

Raw materials and supplies 43,892 50,669 15 %Reduction (increase) in inventories 3,475 1,733 - 50 %

Total 47,367 52,402 11 %

page 45

18.Workforce and staff expenses

In EUR K 2003 2004 Variation %

Salaries 41,857 39,815 - 5 %Social security contributions 14,361 14,783 3 %

Total 56,218 54,598 - 3 %France 37,305 37,372 0 %International 18,913 17,225 - 9 %

Total Staff expenses 56,218 54,598 - 3 %

Staffing levels 2003 2004 Variation %

France 989 1,000 1 %International 577 613 6 %

Average staffing levels 1,566 1,673 3 %

18b.Remuneration of RADIALL SA corporate officers

In EUR Office Net remuneration(1)(2) Directors’ fees(2)

Mr Yvon GATTAZ Chairman of the Supervisory Board 92,960 3,333Mr Didier LOMBARD Member of the Supervisory Board 3,333Mr Robert PAPIN Member of the Supervisory Board 3,333Mr Pierre GATTAZ Chairman of the Management Board 137,084Mr P. Michel CHURG Member of the Management Board 101,695Mr André HERNANDEZ Member of the Management Board 202,823

(1) Including benefits in kind.

(2) Paid by RADIALL SA and its subsidiaries.

19.Other operating expenses

In EUR K 2003 2004 Variation

Other non-stocked purchases 5,848 6,522 12 %External services 33,534 35,570 6 %Other expenses 900 521 - 42 %

Total 40,282 42,613 6 %

20.Research and development expenses

The amount of R&D expenses, recorded entirely as charges for the financial year, came to EUR 13.1 M.

page 46

21.Allocations for depreciation and operating provisions

In EUR K 2003 2004 Variation

Depreciation on fixed assets 9,392 7,777 - 17 %Provisions on current assets 2,817 3,125 11 %Loss and contingency provisions 676 280 - 59 %

Total 12,885 11,182 - 13 %

22.Financial income

In EUR K 2003 2004

Foreign exchange gains 2,374 23Interest and related revenue 425 1,765Reversals of provisions 1 159

Total financial revenue 2,800 1,947

Foreign exchange losses 3,306 2,516Interest and financial expenses 257 375Allocations to financial provisions 66 174

Total financial expenses 3,629 3,065

23.Extraordinary income

In EUR K 2003 2004

On management operations 34 50On capital operations 190 2,955Reversals of provisions 4,765 595

Total extraordinary revenue 4,989 3,600

On management operations 3,970 670On capital operations 211 1,065Allocations to provisions 422 1,329

Total extraordinary expenses 4,603 3,064

The extraordinary income results primarily from the capital gain realised on the sale of the Rosny head office(EUR 1,845 K) and restructuring costs in France (EUR 904 K).

page 47

24. Income taxes

24.1 Validation of the tax

In EUR K 2003 2004

Pre-tax income (3,368) 3,766Theoretical tax at the rate in force in each country 1,103 (572)Impact of non-deductible expenses and non-taxable revenues* (204) (279)Deferred taxes not recorded in the deficits for the period (2,531) (335)Recording of previously non-activated tax revenues 825Research tax credit 263Others (136) 213

Tax charge (1,768) 115

* Including deductible depreciation of goodwill.

Retained losses corresponding to unaccounted deferred tax liabilities come to EUR 12,723 K of which EUR 8,261 K from RADIALL SA and EUR 4,462 K from RADIALL Ltd. There are no deadlines for the reporting ofthese deficits.

24.2 Tax charge

In EUR K 2003 2004

Taxes due (1,098) 1,357Deferred taxes (670) (1,473)

Total taxes (1,768) (116)

Differed taxes are mainly the result of temporary differences and previously unused tax revenues.

page 48

Ladies and Gentlemen,

In performance of the assignment which was entrusted to us by your General Meeting, we audited RADIALL’sconsolidated financial statements for the financial year ended 31 December 2004, as appended to this report.The consolidated financial statements were closed out by the Management Board. On the basis of our audit,we are responsible for providing an opinion on these financial statements.

I. Opinion on the consolidated financial statements We carried out our audit in accordance with the standards of the profession in France. These standards requirethat we use due diligence in order to be reasonably sure that the consolidated financial statements containno major misstatements. An audit involves examining, by means of sampling, the probative elements whichjustify the information contained in these financial statements. It also involves assessing the accountingprinciples which were used and the significant estimates which were made in order to draw up the financialstatements and to assess their overall presentation. We consider that our audit provides a reasonable basisfor the opinion provided below.We hereby certify that the consolidated financial statements are, as regards the accounting standards andprinciples applicable in France, legally-constituted and genuine, and provide an accurate picture of theassets, the financial position, and the results of all the companies included in the consolidation perimeter.

II. Justification of the assessment Under the provisions of Article L 225-235, Sub-paragraph 2, of the French Commercial Code relating to thejustification of our assessment, we bring the following items to your attention:We assessed the accounting approach followed by the Company for the assessment of inventories, work-in-progress and deferred taxes as respectively described in Notes 2.3 and 2.6 of the Annex. Our work hasconsisted of assessing the reasonableness of the data and hypotheses on which these items were based andthe calculations performed by the Company.The assessments thus made come within the framework of our assessment of consolidated accounts, taken asa whole, and have therefore contributed to the formation of our opinion without reservations, expressed inthe first part of this report.

III. Specific verificationMoreover, we have verified the information provided in the Group’s management report. We have nocomments to make as to its accuracy and coherence with the consolidated financial statements

Executed in Antony and La Défense, on 25 April 2005

MAZARS & GUERARDChristian COMERMAN Denis GRISON

StatutoryAuditors Report on the consolidated financial statementsFinancial year ending on 31 December, 2004

page 49

BALANCE SHEET as at 31 December 2004Assets (in EUR K) 31/12/03 31/12/04

Gross Deprec & prv Net

Fixed assets

Intangible assets 442 4,044 3,804 240Patents and licences 120 3,476 3,275 201Software 322 498 459 39Goodwill 70 70

Tangible assets 14,493 76,784 64,760 12,024Land 760 444 444Buildings 4,940 13,499 9,285 4,214Technical plant 7,030 56,900 51,316 5,584Other fixed assets 958 5,148 4,159 989Current fixed assets 613 615 615Advances and down payments 192 178 178

Financial assets 24,200 27,008 2,049 24,959Interests 24,046 26,893 2,049 24,046Other capitalised securities 92 6 6Other financial assets 62 109 109

Total fixed assets 39,135 107,836 70,613 37,223

Current assets

Inventories and work-in-progress 32,284 45,071 15,401 29,670Raw materials and supplies 21,300 30,482 12,614 17,868Goods and services in progress 3,708 3,356 3,356Intermediate and finished products 7,276 11,233 2,787 8,446

Trade receivables 28,489 27,542 11 27,531

Other assets 12,805 11,695 11,695Advances and down payments on orders 61 37 37Other receivables 11,259 9,870 9,870Prepaid expenses 616 585 585Unrealised foreign exchange losses 869 1,203 1,203

Cash 7,805 13,992 601 13,391Own shares 863 6,745 601 6,144Other securities 6,427Cash assets 515 7,247 7,247

Total current assets 81,383 98,300 16,013 82,287

Total assets 120,518 206,136 86,626 119,510

Corporatefinancial statements

page 50

Liabilities (in EUR K) 31/12/03 31/12/04

Equity capitalCapital 3,381 3,381Premiums 21,179 21,179Legal reserve 338 338Statutory and contractual reserves 65,179 65,179Regulated reserves 4,164 4,164Retained earnings (6,276) (10,007)Profit (loss) for the financial year (3,640) 370Investment subsidy Regulated provisions 3,313 2,269

Total equity capital 87,638 86,873

ProvisionsFor contingencies 2,580 3,145For expenses 1,220 1,271

Total provisions 3,800 4,416

Debts

Financial debts 2,456 6,642Loans and debts with credit institutions 217 152Loans and financial debts 2,239 6,490

Trade payables 19,054 13,639

Other debts 7,571 7,940Advances and down payments on orders 48 26Tax and social security debts 6,931 7,217Debts to fixed asset suppliers 275 381Other debts 64 74Unrealised foreign exchange gains 253 242

Total debts 29,080 28,221

Total liabilities 120,518 119,510

page 51

INCOME STATEMENT as at 31 December 2004(In EUR K) 2003 2004

Operating revenueSales of production 96,798 115,479Sales of services 512 735

Total Turnover 97,310 116,214

Stored production 340 967Capitalised production costs 388 167Operating subsidies 83Reversals of provisions, depreciation, and transfer of expenses 5,445 1,578Other revenue 573 654

Total operating revenue 104,139 119,580

Operating expenses Purchases of materials and supplies 35,354 41,670Reduction (increase) in inventories (392) 2,275Other purchases and external services 26,357 29,377Taxes and charges 2,832 3,414Salaries 26,781 26,564Social security contributions 10,523 10,796Allocations

for depreciation of fixed assets 6,752 5,770to provisions on current assets 18 1,504to provisions for loss and contingencies 550 169

Other expenses 296 322

Total operating expenses 109,071 121,861

Operating loss (4,932) (2,281)

Financial revenueFinancial revenue 1,572 2,989Foreign exchange lgains 1,466 1,010

Total financial revenue 3,038 3,999

Financial expensesFinancial expenses 2,182 1,578Foreign exchange losses 1,845 1,943

Total financial expenses 4,027 3,521

Financial income (989) 478

Pre-tax current loss (5,921) (1,803)Extraordinary revenue 6,003 4,793Extraordinary expenses 4,003 2,883

Extraordinary loss 2,000 1,910Income taxes (281) (263)

Net loss (3,640) 370

page 52

Key events

After several years of reduced business activity, there has been a turnaround in the health of RADIALL’saccounts. 2004 saw high growth in turnover and the Company recorded a modest net profit. However, againlargely due to unfavourable exchange rates and provisions against circulating assets, operating incomeremained slightly in the red. Among the significant events, the Group proceeded with the sale of its Rosny-sous-Bois head office and launched, in December, 2004, a redundancy plan affecting eight positions, most ofthem at the Voreppe site.As in 2003, the trend was for continued improvement of operations and of the balance sheet.There was also a marked improvement in cash liquidity.

1.Accounting principles

RADIALL’s corporate financial statements are established on the basis of the provisions of the 1999 GeneralChart of Accounts, accredited by the Order of 22 June 1999. The accounting rules and methods used are thesame as for the previous financial year.

2.Valuation principles and methods

2.1 Valuation principleThe basic method used to value the elements recorded in the accounts is the historical costs method. Fixedassets which justify it are recorded at their contribution value on the entry date.

2.2 Research and development expensesAll research and development expenses are recorded as expenses for the financial year.

2.3 Intangible assetsIntangible assets are depreciated by the straight-line method over periods of between 1 and 5 years.

2.4 Tangible assetsTangible assets are depreciated by the straight-line method over the following periods:– buildings : 20 years– technical and industrial equipment: 3 to 7 years– other tangible assets: 5 to 10 years.

2.5 Equity interestsEquity interests are accounted for at their acquisition price. If this value is less then the value in present use,a provision for depreciation is made for the balance. The value in present use is the proportion of equitycapital represented by the interests, where applicable, adjusted in order to take account of the perspectivesfor development and earnings.

2.6 Inventories and work-in-progressInventories of purchased materials and components are mainly valued in accordance with the obsolescencecost method. The risks of obsolescence are estimated on the basis of historical consumption and disposalforecasts when available. Products which are disposed of between 12 and 24 months are provided for at 30 %. From 24 to 36 months, the provision is 70 %, and over 36 months, the rate is 95 %.

Appendix to the parent company financial statements

page 53

Products with no term of disposal are provided for at 100 %. New products, or those purchased under a specific customer agreement, are not provided for. When a specific risk is identified, an adequate provisionis made.In addition, a weighting or acceleration coefficient is applied to these depreciation rates according to different technical and commercial criteria (stage of product’s life, rapid technologically evolving market, …).

2.7 Receivables and debtsReceivables and debts are valued at their nominal value, and are re-valued at the closing rate, where appli-cable. Receivables are depreciated by means of a provision in the event of the risk of non-collection.

2.8 Investment securities, self-held securities and net cash Net investment securities and cash assets are valued at the lower figure of their acquisition value and theirmarket value.Self-held shares are intended either to adjust the stock market price, or to be used for stock-option plans.They are valued on the basis of the average of the last month.Net cash comprises the self-held shares, the investment securities net of provisions and the cash assets, lessoverdrafts and short-term credit facilities.

2.9 Provisions for liabilities and charges

2.9.1 Provisions for severance payments on retirementEnd of career payments owed to French employees, assessed on the basis of an actuarial simulation, areaccounted for in the company’s accounts. The management of these commitments is partially transferred toan insurance company, with a provision for liabilities and charges being made for the supplementary propor-tion.

2.9.2 Other provisions for liabilities and chargesThese provisions are intended to cover the probable risks and expenses arising from events which haveoccurred, or which are ongoing.

2.10 Financial instrumentsThe Group uses insurance cover or financial instruments to reduce or to limit exposure to fluctuations inforeign exchange and interest rates. The losses and profits, which are connected to this operation, areaccounted for as financial transactions.

3.Other informations

3.1 Modification of, or changes to, methodsThe 2004 financial statements were drawn up in strict compliance with previous methods.

3.2 Changes to equity interests The consolidation perimeter did not change during 2004.

3.3 Events subsequent to the cut-off dateThe Group indicates that there were no events subsequent to the cut-off date for the 2004 accounts andoccurring prior to the meeting of the Supervisory Board to deliberate on those accounts.

page 54

Notes on the parent companyfinancial statements

page 55

1.Changes in tangible assets

In EUR K 31/12/03 Acquisitions Transfers Disposals 31/12/04

Land 760 (316) 444Buildings 16,209 343 (82) (2,971) 13,499Plant and equipment 57,080 2,631 143 (2,954) 56,900Other fixed assets 5,066 338 84 (340) 5,148Current fixed assets 613 408 (406) 615Advances and down payments 192 178 (192) 178

Total 79,920 3,898 (261) (6,773) 76,784

In December, 2004, RADIALL sold its head office land and building. The recorded value before tax of this salewas EUR 2,725 K. As a condition of the sale, the Company took a lease on these same premises in the form ofa simple commercial contract without the option to purchase. The company signed a rental agreement for aminimum period of occupancy of six years.In 2004, investment securities were higher than in 2003 (+ 30 %) whilst remaining at a low level.

2.Changes in depreciation of tangible assets

In EUR K 31/12/03 Increase Reduction 31/12/04

Buildings 11,269 777 (2,761) 9,285Plant and equipment 50,050 4,267 (3,001) 51,316Other fixed assets 4,108 342 (291) 4,159

Total 65,427 5,386 (6,053) 64,760

3.Changes to financial assets

In EUR K 31/12/03 Increase Reduction 31/12/04

Equity interests 26,893 26,893Other securities 92 (86) 6Other financial assets 62 55 (8) 109

Gross total 27,047 55 (94) 27,008

Provisions for depreciation of equity interests (2,847) (124) 922 (2,049)

Total 24,200 (69) 828 24,959

4.Changes in gross inventories

In EUR K 31/12/03 31/12/04 Variation

Raw materials and supplies 32,758 30,482 (2,276)Goods and services in progress 3,708 3,356 (352)Intermediate and finished products 9,914 11,233 1,319

Total gross value 46,380 45,071 (1,309)

Provisions for raw materials and supplies 11,458 12,614 1,156Provisions for finished products 2,638 2,787 149

Total provisions 14,096 15,401 1,305

Total book value 32,284 26,670 (2,614)% of provisions 30.4 34.2

5.Trade receivables

This item corresponds to the amount of customer receivables and commercial papers received. The latter itemincludes commercial papers with a value of EUR 1,896 K. The due dates of the receivables are less than 1 year.

5bis.Breakdown of other receivables

In EUR K 31/12/03 31/12/04- 1 year + 1 year Total - 1 year + 1 year Total

Carry back 7,125 7,125 7,125 7,125Corporate tax 66 835 901 761 415 1,176Other receivables from the State 3,066 3,066 1,307 1,307Miscellaneous adjustment accounts 1,713 1,713 2,087 2,087

Total 4,845 7,960 12,805 4,155 7,540 11,695

The company tax receivable of more than one year corresponds to the research tax credit which can becashed in three years and various tax deductions at source which will remain chargeable against future taxes.

6. Inventory of investment securities

Deposit certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .EUR 5,097 KSelf-held RADIALL shares:• Own shares under animation contract. . . . . . . . . . . . . . . . . . . . .EUR 401 K i.e. 6,882 shares• Own shares for purchase options: . . . . . . . . . . . . . . . . . . . . . .EUR 1,247 K i.e. 10,799 sharesAs at 31 December, these shares were depreciated on the basis of the average share market price for themonth of December, i.e., a total of EUR 601 K.

page 56

7.Changes in equity capital

In EUR K

Equity capital at 31/12/2003 87,638Exit taxe (91)Changes to regulated provisions (1,044)2004 profit 370

Equity capital at 31/12/2004 86,873

The company’s share capital did not undergo any changes during 2004. It stands at EUR 3,381,268 for2,217,960 shares without par value.At 31 December 2004, the stock-option plans were as follows:

Number of shares

• Open as at 01/01/2004 14,700• Opened during the year 0• Exercised during the year 0• Having lapsed 0• Open as at 31/12/2004 14,700

Registered shares which have been held by the same holder for at least 4 years carry a double voting right.

7bis.Structure of the share capital

31/12/04 31/12/03% shares % voting % shares % voting

rights rights

RADIALL investment company* 27.0 31.6 27.9 32.9HODIALL* 33.4 39.5 32.8 38.4Pierre GATTAZ 12.0 14.0 12.4 13.4Public and others** 27.6 14.9 26.9 15.3

* Holding companies which group together the interests of the GATTAZ families in RADIALL.

** The shares which have been identified as being held directly or indirectly by staff representing at least 0.2 % of the total shares.

Registered shares held by the same shareholder for over four years will have double voting rights attached.As at 31 December 2004, RADIALL held, under an animation contract and purchase options, 17,681 shares,i.e., 0.79 % of the share capital.

page 57

8.Provisions

In EUR K 31/12/03 Increases Reversals Having 31/12/04become

irrelevant

Accelerated depreciation 3,313 613 (1,657) 2,269

Total 3,313 613 (1,657) 2,269

Foreign exchange risks 869 1,203 (869) 1 203Technical and commercial risks 1,053 107 (432) (20) 708Miscellaneous risks(1) 658 913 (337) 1,234

Total provisions for risks 2,580 2,223 (1,638) (20) 3,145

End-of-career payments 1,220 51 1,271

Total provisions for expenses 1,220 51 1,271

(1) The provision against miscellaneous risks includes an allocation for a redundancy plan of EUR 904 K to be implemented at thebeginning of 2005.

8bis.Severance payments on retirement

Assumptions 2003 2004

1) Retirement age 63 632) Salary increase rate 3 % 2.8 %3) Inflation rate 2 % 2 %4) Rate of return on collective funds 4.5 % 4.5 %5) Turnover 2.5 % 3.5 %

Total commitment in EUR K 2,676 2,760

Commitments entrusted to an insurance company 1,456 1,489Commitments recorded in provisions for liabilities and charges 1,220 1,271

6) Mortality table TV88/907) Retirement conditions 100 % at employee’s initiative

9.Schedule of debts

31/12/03 31/12/04In EUR K - 1 year + 1 year Total - 1 year + 1 year Total

Loans and debts with credit institutions 217 217 152 152Miscellaneous financial debts 46 267 313 0 534 534Group current accounts 1,926 1,926 5,956 5,956Accrued commercial papers 2,415 2,415 1,947 1,947Suppliers 16,914 16,914 12,073 12,073Advances and down payments 48 48 26 26Tax and social security debts 6,930 6,930 7,219 7,217Others 317 317 316 316

Total 28,813 267 29,080 27,687 534 28,221

page 58

10.Accrued liabilities and accrued revenue in the balance sheet items

Accrued liabilities and accrued revenue, included in the balance sheet items, are neither significant orextraordinary, and do not show any particular variation from one year to the other

11. Items regarding affiliated companies

In EUR K 31/12/03 31/12/04

Interests (Gross amounts) 26,893 26,893Trade receivables 15,825 14,493Other receivables 14 15Loans and sundry financial debts (Current accounts) (1,809) (5,719)Trade accounts payable (5,802) (2,870)

12.Off-balance sheet commitments

Within the framework of its policy of hedging against foreign exchange risks, the Company carried out thefollowing transactions as at 31 December 2004:• USD/EUR forward sales: USD 1,000 K at an average rate of 1.205,• USD/EUR optional forward sales: USD 7,500 K at an average rate of 1.257.These forward sales have a due date of less than 1 year.The value of these contracts as at 31 December, 2004 is estimated at + EUR 46,354 K.

The company, in the context of its hedging policy against rate risks and to finance leasing instalments (Seenote at 1), undertook the following operation on 31 December, 2004:• exchange of interest conditions: swap until 1 January, 2012 between Euribor 12 months and Euribor

3 months with a ceiling of 3 % and a deactivating barrier at 4.65 % for an amount of EUR 1,450 K(redeemable in consecutive annual payments of EUR 200 K until 1 January, 2012).

A grant of EUR 100 K was accorded by RADIALL SA to the company RVC in 2002.This is to be reimbursed in the event of a "return to better fortune" within a period of five years.

Leasing commitments

In EUR K - 1 year 1 to 5 ans + 5 years 31/12/04

Property leasing(1) 138 622 405 1 165

(1) Relating to the Château-Renault establishment (37).

page 59

13.Turnover

In EUR K 2003 2004

France 30,745 34,931With affiliated companies Others 30,745 34,931

International 66,565 81,283With affiliated companies 47,199 56,515Others 19,366 24,768

Total 97,310 116,214

14.Other purchases and external charges

Among other services etc., this item includes subcontracting expenses of EUR 5,499 K (an increase of 27 %compared with 2003) and temporary staff expenses of EUR 4,342 K (an increase of 17 % compared with2003).Sales commissions also rose, from EUR 1,562 K to EUR 2,275 K, i.e., an increase of 46 %.Other expenses remained relatively stable.

15.Staff expenses

Average staffing levels in 2004 (1,000 people) were stable compared with 2003 (989 people). Similarly, therewere practically no changes to payroll.

15bis.Remuneration of corporate officers

In EUR Office Net remuneration(1)(2) Directors’ fees(2)

Mr Yvon GATTAZ Chairman of the Supervisory Board 92,960 3,333Mr Didier LOMBARD Member of the Supervisory Board 3,333Mr Robert PAPIN Member of the Supervisory Board 3,333Mr Pierre GATTAZ Chairman of the Management Board 137,084Mr P. Michel CHURG Member of the Management Board 101,695Mr André HERNANDEZ Member of the Management Board 37,174

(1) Including benefits in kind.

(2) Paid by RADIALL SA.

16.Reversal of depreciation,provisions and transfers of expenses

This item corresponds to reversals of provisions for depreciation of customer accounts (EUR 39 K), reversalsof provisions on tangible assets (EUR 125 K), reversals of provisions for liabilities and operating expenseshaving become irrelevant, transfers of expenses (EUR 1,328 K), and depreciation of inventories havingbecome obsolete (EUR 188 K).

page 60

17.Other management revenue

This relatively stable item requires no commentary.

18.Financial income

Financial income mainly consists of dividends received by subsidiaries of EUR 612 K and reversals of provi-sions against financial risk of EUR 624 K. Overall, the company recorded a net exchange loss of EUR 933 K.

19.Extraordinary income

Extraordinary income mainly consists of the net sum of capital gains realised from the sale of fixed assets,i.e., EUR 1,909 K, (including the head office for EUR 1,845 K, realised in December, 2004) and the net rever-sals of accelerated depreciation for EUR 1,044 K.The company also funded an extraordinary provision of EUR 904 K covering a restructuring plan announced atthe end of 2004 and to be implemented in 2005.

20.Staff interests

This year, the staff did not share in the profits.

21.Corporate tax

This year the Company registered a research tax credit of EUR 263 K.It also disposes of an unused tax credit of EUR 8,261 K in respect of its retained losses.

Breakdown of taxes on profits

In EUR K Before tax After tax

Current income (1,803) (1,540)Exceptional income 1,910 1,910Income taxes 263 0

Income 370 370

page 61

22.Elements likely to reduce or increase RADIALL’s future tax debts

In EUR K 31/12/03 Increase Reduction 31/12/04

Regulated provisions and expenses to reintegrate in the future- Accelerated depreciation 3,313 613 (1,647) 2,269- Investment subsidies 1 (1)

Future tax base 3,314 613 (1,658) 2,269

Expenses not deductible for tax purposes for the year- Temporarily non-deducted provisions and expenses 3,784 2,285 (1,656) 4,413- ORGANIC 126 186 (126) 186- Participation

Prepaid tax base 3,910 2,471 (1,782) 4,499

Future tax savings (on the basis of taxes at 35.43 %) 211 800

23.Staffing levels

Staffing levels at 31 December had changed as follows:

In EUR K 31/12/03 31/12/04

Employees / operatives 558 555Technicians / supervisors 241 236Executives and general management 196 209

Total 995 1,000

24.Research and Development

Research and development expenses for 2004 were EUR 10,098 K.

page 62

In EUR K Capital Reserves % of capital Book value Turnover, Net Dividends(1) retained held of shares excl. taxes income collected

(1) 2004 2004 by Gross Net (2) (2) RADIALL SA

FRANCERADIALL VENTURES CAPITAL 1,000 (30) 80.00 876 653 0 (154)

ETRANGERRADIALL GmbH (RFA) 486 271 100.00 229 229 12,594 778

RADIALL ELETTRONICASrl (ITALY) 257 3,918 100.00 596 596 9,900 1,217

RADIALL B.V. (NETHERLANDS) 16 1,888 100.00 11 11 4,527 371

RADIALL A.B. (SWEDEN) 33 21 100.00 47 47 840 274 272

RADIALL AMERICA (USA) 11,380 5,175 100.00 13,527 13,527 0 0

RADIALL ELECTRONICSASIA Ltd (HONG KONG) 28 404 55.00 18 18 3,941 523

RADIALL DO BRASILCOMPONENTES EL. LTDA (BRAZIL) 123 (197) 99.37 683 375 162 71

RADIALL Ltd (UK) 3,169 3,211 100.00 4,521 4,521 9,661 656

RADIALL PROTECTRON Ltd (INDIA) 337 624 51.00 274 274 1,875 232

NIHON RADIALL KK (JAPAN) 179 673 65.00 116 116 1,855 (676)

SHANGHAI RADIALLELECTRONICS CO. Ltd (CHINA) 5,444 (2,275) 71.00 5,994 4,476 19,221 1,888 340

RADIALL INTERNATIONAL(HONG KONG) 1 122 100.00 1 1 6,084 (83)

(1) The amounts in local currency were converted at the closing rate for the foreign subsidiaries.

(2) The amounts in local currency were converted at the average rate for the financial year for the foreign subsidiaries.

Closing rate (EUR) Average rate (EUR)

US Dollar 1.3621 1.2433Hong Kong Dollar 10.5881 9.6836Pound Sterling 0.7051 0.6786Swedish Crown (Krona) 9.0206 9.1250Indian Rupee 59.4000 56.3243Yen 139.6500 134.3984Yuan 11.2734 10.2928Brazilian real 3.6137 3.6336

page 63

Tableof subsidiaries and interestsat 31 December, 2004

MainCurrencies used

In EUR 2000 2001 2002 2003 2004

Financial position at the end of the financial yeara) Share capital 3,381,268 3,381,268 3,381,268 3,381,268 3,381,268b) Number of shares issued 2,217,960 2,217,960 2,217,960 2,217,960 2,217,960

Global income from operations carried outa) Turnover, exclusive of taxes 146,338,938 131,112,266 92,767,685 97,310,065 116,214,433b) Profits (losses) before tax, profit-sharing,

depreciation and provisions 22,791,007 15,028,546 (835,764) (3,259,617) 5,453,708c) Income taxes 5,517,853 (2,624,570) (4,942,410) (281,010) (262,508)d) Profits (losses) after tax, before profit-sharing,

depreciation and provisions 17,273,154 17,653,116 4,106,646 (2,978,607) 5,716,216e) Net income 9,588,552 (614,137) (8,563,838) (3,639,765) 369,674f) Amount of distributed profit 2,063,638 1,108,980*

Earnings per sharea) Earnings after tax, before

depreciation and provisions 7.31 7.96 1.85 (1.34) 2.46b) Earnings after tax, profit-sharing,

depreciation and provisions 4.32 (0.28) (3.86) (1.64) 2.28c) Dividend paid per share 0.94 0.50*

Staffa) Employees (average staffing levels) 1,112 1,246 1,106 989 1,000b) Payroll 27,233,799 31,422,668 30,116,915 26,781,434 26,564,225c) Amounts paid in corporate benefits 10,712,091 12,018,893 11,258,980 10,404,080 10,512,092

* Subject to the approval of the OGM of 24 May, 2005.

The company’sfinancial result for the last five financial years

page 64

Ladies and Gentlemen,

In execution of the assignment entrusted to us by your General Meeting, we hereby present our report to youfor the financial year ended 31 December 2004:• the audit of RADIALL S.A.’s annual financial statements, as appended to this report,• the justification of the assessment,• the specific verification and information required by law.The annual financial statements were closed out by the Management Board. On the basis of our audit, we areresponsible for providing an opinion on these financial statements.

I. Opinion on the annual financial statements We carried out our audit in accordance with the standards of the profession in France. These standards requirethat we use due diligence in order to be reasonably sure that the annual financial statements contain nomajor misstatements. An audit involves examining, by means of sampling, the probative elements whichjustify the information contained in these financial statements. It also involves assessing the accountingprinciples which were used and the significant estimates which were made in order to draw up the financialstatements and to assess their overall presentation. We consider that our audit provides a reasonable basisfor the opinion provided below.We hereby certify that the annual financial statements are, as regards the accounting standards and princi-ples applicable in France, legally-constituted and genuine and provide an accurate picture of the results ofthe operations for the previous financial year, as well as the company’s financial position and assets at theend of said financial year.

II. Justification of the assessment Under the provisions of Article L 225-235 of the French Commercial Code relating to the justification of ourassessment, we bring the following items to your attention:We assessed the accounting approach followed by the Company for the assessment of inventories, work-in-progress and deferred taxes as respectively described in Notes 2.5 and 2.6 of the Appendix. Our work hasconsisted of assessing the reasonableness of the data and hypotheses on which these items were based andthe calculations performed by the Company.The assessments thus made come within the framework of our assessment of annual accounts, taken as awhole, and have therefore contributed to the formation of our opinion without reservations, expressed in thefirst part of this report.

III. Verification and specific informationWe also carried out the specific verification required by law, in accordance with the professional standardsapplicable in France.We have no comment to make as to the accuracy and coherence of the information, which is provided in theManagement Board’s management report and in the documents sent to the shareholders on the financialposition and the annual financial statements, with said annual financial statements.In accordance with the law, we have verified that the management report provides you with information as tothe identity of the holders of the share capital.

Executed in Antony and La Défense, on 25 April 2005

Statutory AuditorsMAZARS & GUERARD

Christian COMERMAN Denis GRISON

The StatutoryAuditor’s general reportFinancial year ending on 31 December, 2004

page 65

Ladies and Gentlemen,

In our role as your company’s statutory auditors, we hereby present our report on the regulated agreements.It is not our responsibility to search for the possible existence of other conventions, but, rather, to informyou, on the basis of the information with which we have been provided, as to the essential features andterms and conditions of the agreements of which we have been informed, without having to provide anopinion as to their utility or appropriateness. You are responsible, under the terms of Article 92 of the Decreeof 23 March, 1967, for assessing the benefit derived from concluding these agreements when approvingthem.We carried out our work in accordance with the professional standards applicable in France. These standardsrequire the performance of the audit with due diligence for the purpose of verifying the consistency of theinformation provided to us with the source documents from which it is derived.

Agreements authorised during the financial yearWe hereby inform you that we were not informed of any agreement having been concluded corresponding tothe terms of Article L 225-86 of the French Commercial Code.

Agreement approved during previous financial years the execution of which continued during thefinancial yearMoreover, in application of the Decree of 23 March, 1967, we were informed that the execution of thefollowing agreement, approved during previous financial years, continued over the previous financial year.

• Service Agreement with HODIALLAgreement between HODIALL and RADIALL SA having been updated during the 2004 financial year(Additional Clause No. 8). HODIALL undertakes to provide RADIALL SA with assistance and advice as regardscarrying out the following operations: Group strategy, financial and tax services, financial management andcommunication, corporate promotion, legal assistance, legal secretariat, administrative services and manage-ment of insurance programmes.The remuneration paid by your company for these services was EUR 652,000 for the 2004 financial year.

Executed in Antony and La Défense, on 25 April 2005

Statutory AuditorsMAZARS & GUERARD

Christian COMERMAN Denis GRISON

The StatutoryAuditor’s special report on theregulated agreementsFinancial year ending on 31 December, 2004

page 66

In accordance with the provisions of Article L 225-184 of the French Commercial Code relating to the alloca-tion of stock options to employees and managers, we hereby inform you that, during the 2004 financial year,the Management Board did not grant any purchase options or share subscriptions to employees or corporateofficers.

page 67

The ManagementBoard’s special report on stock-options

Resolutions within the competence of an Ordinary General Meeting

FIRST RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, and after having been read the Management Board’s management report and the StatutoryAuditors’ general report, approves the annual corporate financial statements for the financial year ended 31December 2004, as drawn up and presented, as well as the operations set forth in these financial statementsor summarised in these reports.

SECOND RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, and after having been read the Management Board’s management report, the report from theChairman of the Supervisory Board, and the Statutory Auditors’ report, approves the annual consolidatedfinancial statements for the financial year ended 31 December 2004, as drawn up and presented, as well asthe operations set forth in these financial statements or summarised in these reports.

THIRD RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, unreservedly and fully discharges the members of the Management Board and the SupervisoryBoard, as regards their duties for the previous financial year.

The General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, also discharges the Statutory Auditors as regards their verification and audit assignment during thesame financial year.

FOURTH RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, and after having been read the special report of the Statutory Auditors on the agreements asreferred to in Article L 225-86 of the French Commercial Code, acknowledges the report and approves theoperations referred to therein.

FIFTH RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, and after having been read the special report of the Management Board on the stock-options plansimplemented during the 2004 financial year, notes that no allocation of options was decided on by theManagement Board.

SIXTH RESOLUTIONIn accordance with Article 39 of the Amended Finance Law for 2004 (N°2004-1485 of 30/12/2004), alloca-tions to the reserve for long-term capital gains are abolished. Amounts assigned to the special reserve mustbe transferred to another reserve account, from which an extraordinary tax of 2.5 % must be deducted as apriority.The General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, having been informed of the Management Report of the Management Board, formally notes thatthe extraordinary tax on long-term capital gains, coming to EUR 91,585.25, was entered into accounts, as at31 December 2004, while awaiting the decision of the General Meeting concerning allocation, against thecarried forward loss, this carried forward loss account having thus increased from an amount of EUR 9,915,335.69 to EUR 10,006,920.94.

Draftresolutions

page 68

SEVENTH RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, decides, in application of the legislative provisions referred to in the Sixth Resolution above,firstly, that all amounts which appear in the special reserve for long-term capital gains, i.e., an amount of EUR 4,163,409.42, be transferred to the general reserve which increases from EUR 65,179,288.41 to EUR 69,342,697.83 and, secondly, to deduct the amount of EUR 91,585.25 from this same general reserve.As a consequence of this decision and of the accounting operations of 31 December, 2004 referred to in theSixth Resolution above, the General Meeting formally notes that the general reserve decreases from EUR 69,342,697.83 to EUR 69,251,112.58 and that the carried forward loss decreases from an amount of EUR 10,006,920.94 to an amount of EUR 9,915,335.69.

EIGHTH RESOLUTIONThe General Meeting, deliberating under the conditions of quorum and majority required for General Meetings,decides to allocate the income for the 2004 financial year as follows:

Profit for the 2004 financial year......................................................................EUR 369,673.68 Loss carried forward ...................................................................................... EUR (9,915 335.69)

i.e., an amount............................................................................................. EUR (9,545,662.01) allocated in total to the reduction of the general reserve by the amount of........... EUR (9,545,662.01)

The amount of the general reserve becomes:69,251,112.58 – 9,545,662.01 = .................................................................... EUR 59,705,450.57

NINTH RESOLUTIONThe General Meeting, deliberating under the conditions of quorum and majority required for General Meetings,decides to distribute a dividend of EUR 0.50 (fifty euro centimes) per share, i.e., an amount of EUR1,108,980.00 (one million, one hundred and eight thousand, nine hundred and eighty euros)(1), the numberof existing shares being 2,217,960 (two million, two hundred and seventeen thousand, nine hundred andsixty).This dividend is deducted from the general reserve which comes to EUR 59,705,450.57 after the allocation ofincome, and decreases to EUR 58,596,470.57 after the distribution of the dividends.

(1) Subject to the allocation to the general reserve of dividends of shares which may be held by the Company at the moment ofpayment.

The dividends shall become due for payment on 1 June, 2005.

The General Meeting formally notes that no dividends were distributed for the three previous financial years.

TENTH RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, authorises the Management Board, in accordance with Article L 225-209 of the French CommercialCode, to carry out possible acquisitions of RADIALL shares, within the limit of 5 % of the share capital,including totally as blocks of shares, so as to:• act to regularise the share price by the intermediary of an investment services provider within the frame-

work of a liquidity contract entered into in accordance with the charter of professional ethics of the AFEIrecognised by the AMF.

page 69

The maximum purchase price per share shall not exceed 100 euros. The minimum resale price per share shallbe 40 euros. The maximum amount of funds that the Company may use for this share purchase programme is11,089,800 euros.This purchase authorisation is granted for a maximum duration of 18 months from the date of this GeneralAssembly. It cancels and replaces, for the unused part, the authorisation granted by the Mixed GeneralMeeting of 19 May, 2004.

In order to execute this present authorisation, all powers are conferred on the Management Board. It maydelegate the said powers for placing of all share market orders, entering into all agreements, making alldeclarations, undertaking all formalities and generally performing all actions required.

ELEVENTH RESOLUTIONThe General Meeting formally notes the operations carried out by the company managers in respect of theCompany securities.

TWELFTH RESOLUTIONThe General Meeting, deliberating under the conditions for quorum and majority required for Ordinary GeneralMeetings, resolves to allocate remuneration to the members of the Supervisory Board, as a consideration fortheir work, in the form of directors’ fees, an annual overall sum of fifteen thousand (15,000) euros for the2004 financial year.The Supervisory Board itself shall be responsible for the distribution of this overall sum between its members.

THIRTEENTH RESOLUTIONAll powers are hereby given to the bearer of an original or copy of the minutes of this Meeting to carry outthe lodgement and publication formalities stipulated by the law.

page 70

Supervisory Board

Yvon GATTAZ Chairman of the Supervisory Board

Bruno GATTAZ Vice-Chairman

Geneviève GATTAZ

Didier LOMBARD

Robert PAPIN

Management Board

Pierre GATTAZ Chairman of the Management Board

P. Michel CHURG Deputy Managing Director

André HERNANDEZ Divisional Manager (Antennas & Cable Assemblies)

Executive committee

Pierre GATTAZ Chairman of the Management Board

P. Michel CHURG Deputy Managing Director

Denis BLEY Financial Director

Dominique BUTTIN Divisional Manager (Multi-Contact & Switches)

André HARTMANN Divisional Manager (Coax)

André HERNANDEZ Divisional Manager (Antennas & Cable Assemblies)

Michel MOLLES Sales Manager

Jean-Pierre WILSCH Human Resources Manager

Statutory auditors

MAZARS & GUERARD Christian COMERMAN

Le Vinci - 4, allée de l’Arche 8, allée du Ruisseau

92075 Paris La Défense Cedex 92160 Antony

Alternate Statutory Auditors

Yves ROBIN Francis BASTIEN

Person responsible for information

Denis BLEY Tel. +33 1 49 35 35 35

denis.bley@radiall.com

Corporatebodies

page 71

page 72

Notes

BOEING Trophy award ceremony at Newport Beach - 23 March, 2005

RADIALL SA101, rue Philibert Hoffmann

93116 Rosny-sous-Bois - FranceTel. +33 1 49 35 35 35 - Fax +33 1 48 54 63 63

www.radiall.com