Burberry. Jimmy Choo. Lanvin. Montblanc. Nickel. Paul Smith. … · 2018-07-09 · Jimmy Choo On...

Burberry. Jimmy Choo. Lanvin.Montblanc. Nickel. Paul Smith.S.T. Dupont. Van Cleef & Arpels.

Annual report two thousand & nine

Letter to our shareholders 02

Operating highlights and key figures 04

2009 milestones and 2010 outlook 06

The products 08

The market 26

The distribution network 28

Corporate governance 30

Corporate responsibility and the environment 32

Stock market 38

Financial highlights 42

Patronage 44

2009 registration document 45

A strategic year

JEAN MADAR & PHILIPPE BENACIN

Letter to our shareholders

2 Inter Parfums annual report two thousand & nine. Letter to our shareholders

Despite the uncertain and difficult worldwideeconomic environment, Inter Parfums deliveredan exceptional performance in 2009 both forsales and operating cash flow.

- Total sales declined marginally, benefitingfrom the impact of foreign exchange hedges initiated in October 2008, while the portfolio’smain brands consolidated their market sharepositions;

- The brand portfolio was strengthened by two new license agreements, each with leadersin their category and with their own highly distinct styles, Jimmy Choo and Montblanc;

- Results exceeded the latest forecasts, reflectingtight control of over all operating costs andnotably rigorous management of advertisingbudgets combined with positive contributionsfrom European distribution subsidiaries;

- Efforts to reduce inventory levels combinedwith optimized trade receivables collectionstrengthened the financial structure with significant shareholders’ equity, a record cashbalance and substantial debt capacity, shouldthe need arise.

Inter Parfums has begun 2010 on an upbeatnote with new original and creative initiatives.These include notably the launch of several fragrance lines (Burberry Sport, Oriens of Van Cleef & Arpels, a new premium Lanvin line for women...), a make-up line under the Burberry brand and the addition of the Montblanc fragrance lines starting July 1, 2010.

Sales on this basis are expected to exceed €265 million on growth of more than 7% at constant exchange rates over 2009.

Furthermore, following the recent signature of license agreements for the Jimmy Choo and Montblanc brands, new acquisitions in the near or medium term are not excluded.

Finally, Inter Parfums has been fortunate in its successful recruitment of high quality staff in recent years, providing it with considerablegrounds for optimism in its prospects for continued development.

Sincere regards to all,Philippe Benacin & Jean Madar

3Inter Parfums annual report two thousand & nine. Letter to our shareholders

In € thousands 2005 2006 2007 2008 2009

Sales 194,442 216,235 242,123 264,864 259,165% International 92% 92% 91% 90% 90%

Income from operations 25,913 29,182 31,812 34,259 33,683Operating margin 13.3% 13.5% 13.1% 12.9% 13.0%

Net income 16,295 18,694 20,193 21,119 22,647Net margin 8.4% 8.6% 8.3% 8.0% 8.7%

Shareholders’ equity (attributable to the parent) 98,049 115,795 134,233 154,436 169,939

Net cash 34,390 44,072 56,113 26,304 66,201

Total assets 172,078 223,401 271,544 260,572 253,674

Workforce (at December 31) 112 128 145 152 171

Sales (1) Income from operations (1) Net income (1) Total dividends

4 Inter Parfums annual report two thousand & nine. Key figures

06

259.2

264.9

242.1

216.2 29.2

18.7 4.1

31.8

20.2

4.6

34.3

21.1 4.8

33.722.6 5.1

07 08 09 06 07 08 09 06 07 08 09 06 07 08 09

YEAR 2009

KeyfiguresCurrent operating income increased marginally to

€35.3 million from tight control of over all operating costs, rigorous management of advertising budgets combined with

positive contributions from European distribution subsidiaries.

Operating profit totaled €33.7 million, after a provision for impairment for the Nickel brand. On this basis, the operating margin improved slightly over the prior year, advancing to 13%.

Net income totaled €22.6 million, up 7.2% from the prior year resulting in a net margin of 8.7%. This performance benefited

from lower borrowing costs and foreign exchange hedges.

Balance sheet highlights (1)

5Inter Parfums annual report two thousand & nine. Key figures

In a challenging economic environment, efforts to reduce inventory levels and optimize tradereceivables collection contributed to the generation of operating cashflow of €56 million for the period.

In this context, the Group’s financial position was significantly reinforced with shareholders’ equity of €170 million and net cash of more than €45 million at 31 December 2009.

(1) Consolidated data in € millions

68.1Non-current

assets

118.6Curent

assets

66.2Net cash

170.0Shareholder’sequity

20.5Long termdebt

62.4Currentliabilities

Assets Liabilities

6 Inter Parfums annual report two thousand & nine. 2009 milestones and 2010 outlook

2009 MILESTONES AND 2010 OUTLOOK

Driveand Creativity MARCH JUNEFEBRUARY

Launch of the Lanvin L’Homme Sport line of LanvinA revisited version of the Lanvin’s timelessclassic: Lanvin L’Homme Sport is dedicatedto sports lovers and those passionate intheir constant quest to achieve harmonyof mind and body, exemplified by theeffigy of Raphaël Nadal.

Launch of the Burberry The Beat for men line Launch of the new men’s fragrance line, Burberry The Beat for men, symbolizingthe perfect complementary mix of qualities,an original identity and strong values, anintegral part of the Burberry brand today.

Bonus share issueOn June 15, 2009, the company proceeded with its 10th consecutivebonus issue on the basis of one new share for every five shares held.

7Inter Parfums annual report two thousand & nine. 2009 milestones and 2010 outlook

SEPTEMBER OCTOBER 2010 OUTLOOK

Quiksilver license agreementQuiksilver and Inter Parfums decided by mutual agreement to terminate their collaboration on June 30, 2010 before the stipulated expiration date.This measure had no financial impact on either of the parties.

Launch of the Collection Extraordinaireline of Van Cleef & Arpels Inspired by the sublime beauty and diversity the HighJewelry collection, Les Jardins of Van Cleef & Arpels,the new exclusive line Collection Extraordinaire proposessix rare and luxurious scents, confirming with splendorits clear link to the jeweler through extremely refineddetails and high prestige qualities.

Launch of the Paul Smith Man line of Paul Smith With a subtle blend of resonant colors, rich texturesand diverse materials that distinguish the collections ofthe Paul Smith brand, Paul Smith Man is a harmoniousand perfectly balanced fusion of all these qualities.

Signature of a fragrancelicense agreement withJimmy ChooOn October 5, Jimmy Chooand Inter Parfums signed a 12-year worldwide licenseagreement commencing on January 1, 2010 for thecreation, development anddistribution of fragrancesunder the Jimmy Choo brand.

Major commercial initiativesThe year ahead will include a number of promising initiatives that should permit annual sales to exceed€265 million on growth at constant exchange rates of 7% over 2009, with notablythe launch of several fragrancelines for men, a make-up lineunder the Burberry brand and the addition of Montblancfragrances starting July 1, 2010.

THE PRODUCTS

The creativeprocessThe creation and marketing of each product line are intimately linked to the brand, its history, positioning, clientele and, more generally, its universe.

The company creates, manufactures and distributes prestige perfumes through license agreements with leading brands in the high-end ready-to-wear, high fashion, jewelry and accessories sectors.

Inter Parfums’ success is based on long-term partnerships with brands, customers and suppliers, proven expertise in developing and marketing products and production processes and a streamlined organization that outsources packaging and logistics.

The product launch process is the cornerstone of the company’s successful record of growth and expansion. For this reason, the decision to launch a new line is made very early on in the process: the cycle of market research up to the product launch may range between 12 and 18 months.

The success of a product is based on the combination of a good dose of creativity and achieving an optimal fit between the following key components of the marketing mix: the brand’s overall positioning, its “juice”,the bottle, packaging, and marketing strategy.

In July 1993, Inter Parfums entered into an exclusive 10-year license agreement with Burberry Ltd. to create and produce perfumes under the Burberry name and distribute them worldwide, followed by an initial 3-year extension in 2000.

In October 2004, Inter Parfums signed a new agreement for 12.5 years effective July 1, 2004 with an option for an additional five years subject to mutual agreement of the parties.

Lines distributed are: Burberry (1995), Burberry Week end (1997), Burberry Touch (2000), Burberry Brit (2003/2004), Burberry London (2006), Burberry The Beat (2008), Burberry The Beat Men (2009) and Burberry Sport (2010).

Burberry fragrances had sales of €166 million in 2009. In a year without any major launches of women’s fragrance lines and sales virtually unchanged in relation to the previous period, Burberry fragrances consolidated its market share with the introduction of the Burberry The Beat for men line and solid performances by the brand’s existing lines including notably Burberry Brit and Burberry The Beat.

11Inter Parfums annual report two thousand & nine. Burberry products

2009/2010 awards

Best fragrance for women and men for Burberry The Beat for Men and for Women and Honk Kong (SaSa fragrance Awards).Best fragrance and best packaging for Burberry The Beat for Women in the United Kingdom (Cosmopolitan Fragrance Award).Best advertising campaign for Burberry The Beat in France (Cosmetique magazine).Fragrance of the year in the Men’s Nouveau Niche category for Burberry The Beat for Men in the US (Fifi awards).

Burberry The Beat(2008)

Burberry London(2006)

Burberry Sport(2010)

Burberry Brit(2004/2003)

Burberry Brit Sheer(2007)

12 Inter Parfums annual report two thousand & nine. Burberry products

Burberry Touch(2000)

Burberry Weekend(1997)

Burberry(1995)

Burberry Baby Touch(2002)

13Inter Parfums annual report two thousand & nine. Burberry products

In July 2004, Inter Parfums entered into an exclusive 15-year license agreement with the company Lanvin to create, develop and distribute fragrances worldwide under the Lanvin name.

At the end of July 2007, Inter Parfums SA acquired the Lanvin brand names and international trademarks for class 3 fragrance products and make-up from the Jeanne Lanvin SA company. On the same date, the two companies mutually agreed to terminate the existing licensing contract signed in June 2004.

Lines distributed are: Arpège (1927), Lanvin L’Homme (1997), Éclat d’Arpège (2002), Arpège pour Homme (2005), Rumeur (2006), Rumeur 2 Rose (2007), Jeanne Lanvin (2008) and Lanvin L’Homme Sport (2009).

Lanvin fragrance had sales of more than €40 million in 2009. On buoyant trends for initial order renewals for the Jeanne Lanvin line, further gains by the Éclat d’Arpège line (+13%) and the launch of the Lanvin L’Homme Sport line, Lanvin fragrances maintained its positive momentum with growth of 4% over 2008.

Rumeur 2 Rose(2007)

Lanvin l’Homme Sport(2009)

Jeanne Lanvin(2008)

Éclat d’Arpège(2002)

Arpège(1927)

14 Inter Parfums annual report two thousand & nine. Lanvin products

At the end of September 2006, the Van Cleef & Arpels and Inter Parfums groups signed a worldwide license agreement to manufacture and distribute perfumes and related products under the Van Cleef & Arpels brand name with a 12-year term that took effect on January 1, 2007.

Lines distributed are: First (1976), Van Cleef pour Homme (1978), Tsar (1989), Van Cleef (1994), First 1er Bouquet (2008), Féerie (2008), Collection Extraordinaire (2009) and Oriens (2010).

Van Cleef & Arpels fragrances had sales of €20 million in 2009. Declines by the brand’s historic lines in favor of gains by Féerieand Collection Extraordinaire launched respectively in 2008 and 2009 reflected the successful repositioning of Van Cleef & Arpels fragrances in the exclusive high-end segment.

First(1976)

Féérie(2008)

Oriens(2010)

Collection Extraordinaire(2009)

Tsar(1989)

17Inter Parfums annual report two thousand & nine. Van Cleef & Arpels products

In December 1998, Inter Parfums entered into an exclusive 12-year license agreement with Paul Smith to create and produce perfumes and cosmetics under the Paul Smith name and distribute them worldwide.

In July 2008, this agreement was extended for seven years until December 31, 2017 on the basis of comparable contractual terms and conditions.

Lines distributed are: Paul Smith (2000), Paul Smith Extrême (2002), Paul Smith London (2004), Paul Smith Story (2006), Paul Smith Rose (2007) and Paul Smith Man (2009).

Paul Smith fragrances had sales of €13 million in 2009. The launch of the new Paul Smith Man line combined with solid performances by its historic lines, Paul Smith and Paul Smith Extrême enabled the brand to maintain its solid position in the UK market.

Paul Smith Rose(2007)

Paul Smith Man(2009)

Paul Smith Extrême(2002)

Paul Smith Classic(2000)

18 Inter Parfums annual report two thousand & nine. Paul Smith products

2009 awards

Best packaging for Paul Smith Man in Holland (Astir Award).

In June 1997, Inter Parfums entered into an exclusive 11-year agreement with S.T. Dupont to create and produce perfumes under the S.T. Dupont name and distribute them worldwide.

In April 2006, this agreement was extended for an additional three years, i.e. until June 30, 2011.

Lines distributed are: S.T. Dupont (1998), S.T. Dupont Essence Pure (2002), S.T. Dupont Noir (2006), S.T. Dupont Blanc (2007), S.T. Dupont Passenger (2008), S.T. Dupont Rose (2009) and S.T. Dupont Intense (2009).

S.T. Dupont fragrances had sales of €11.5 million in 2009 (4.4% of total revenue).

S.T. Dupont Passenger(2008)

S.T. Dupont Blanc / Noir(2007/2006/2008)

21Inter Parfums annual report two thousand & nine. S.T. Dupont products

S.T. Dupont Essence Pure(2002)

S.T. Dupont(1998)

In April 2004, Inter Parfums acquired a majority stake in Nickel, a company specialized in skincare products for men. In June 2007, Nickel became a wholly-owned subsidiary of Inter Parfums.

In 2009, Nickel had sales of €2.3 million (1.0% of total revenue).

Silicon Valley by Night / by Day(2008)

Maxymum(2009)

Le Grand bluff(2009)

Lendemain de Fête(1996)

Super Clean Soft(2008)

Super Speed(2007)

Attention les Yeux(1997)

Bonne Gueule Brun(1996)

Contre-feu(1996)

22 Inter Parfums annual report two thousand & nine. Nickel products

Sales by brand

In € millions 2005 2006 2007 2008 2009And as a % of total sales

Burberry 131.3 143.3 152.9 169.0 166.267.5% 66.3% 63.2% 63.8% 64.1%

Lanvin 29.5 34.4 33.3 39.0 40.615.1% 15.9% 13.8% 14.7% 15.7%

Van Cleef & Arpels - - 11.9 21.0 20.2- - 4.9% 7.9% 7.8

Paul Smith 14.5 17.7 18.0 13.4 12.87.5% 8.2% 7.4% 5.0% 4.9%

S.T. Dupont 8.8 10.1 11.1 11.5 11.54.5% 4.7% 4.6% 4.3% 4.4%

Roxy/Quiksilver - - 6.6 7.4 3.7- - 2.7% 2.8% 1.4%

Nickel 3.1 4.1 3.3 2.7 2.31.6% 1.9% 1.4% 1.1% 1.0%

Other 7.2 6.6 5.0 0.9 1.93.8% 3.0% 2.0% 0.4% 0.7%

Total 194.4 216.2 242.1 264.9 259.2

In 2009’s challenging economic environment, Inter Parfums achieved very satisfactory performances that further benefited from gains on foreign exchange hedging.

Consolidated sales amounted to €259.2 million, contracting 2.1% atcurrent exchange rates and 6.2% at constant exchange rates compared

to 2008, though marginally exceeding the most recent guidance.

In a year without any major launches of women’s fragrance lines and sales virtually unchanged in relation to the previous

period, Burberry fragrances consolidated its market share with the introduction of the Burberry The Beat for men line and solid

performances by the brand’s existing lines including notably Burberry Brit and Burberry The Beat.

On buoyant trends for initial order renewals for the Jeanne Lanvin line, further gains by the Éclat d’Arpège line (+13%) and the launch of the Lanvin L’Homme Sport line,

Lanvin fragrances maintained its positive momentum with sales of more than €40 million.

Declines by the brand’s historic lines in favor of gains by Féerieand Collection Extraordinaire launched respectively in 2008

and 2009 reflected the successful repositioning ofVan Cleef & Arpels fragrances in the exclusive high-end segment.

26 Inter Parfums annual report two thousand & nine. The market

THE MARKET

Significantinternationalsales

27Inter Parfums annual report two thousand & nine. The market

International marketsIn an extremely difficult economic environment,the worldwide perfumes and cosmetics markets,aided by solid fundamentals, remained resilientin 2009, following satisfactory growth in 2008(+5% excluding currency effects).

However, underlying this general situation,performances by markets were mixed: While Western Europe, North America andJapan still account for the major share of sales,they nevertheless represent mature markets. In contrast, Eastern Europe, Latin Americaand Asia (excluding Japan) are now in a phaseof rapid development. Among emerging markets, three countries today rank among the top ten: Brazil, China and Russia.

Source: Eurostaf

CompetitionInter Parfums operates in a sector dominatedby ten major historic players in the cosmeticsmarket that have fragrance divisions builtaround a brand with billions of euros in sales.There exist around ten midsize players likeInter Parfums that also operate in this segmentwith sales ranging between €100 million and €1 billion.

While Inter Parfums has also developed a brand portfolio in the luxury universe, it has adopted a markedly different approachwith a business model based on methodicallong-term development focused on creationand building customer loyalty rather thanvolume and advertising.

FranceIn France, the beauty market (fragrances, make-up and skincare) contracted 1.4% in value in 2009 in the prestige perfume segment on sales of €2.77 billion. In volume, this downtrend was even strongerwith a decline of 3.9%.

For all distribution channels combined, perfumeries account for approximately 50% of the total beauty market. By product category,fragrances (66% of sales in value) remained virtually flat (-0.7%) while make-up sales declined 1.2%. The strongest downturn wasexperienced by skincare (-4% in value).

Fragrances, make-up and skincare products in China surged 17% in dollar sales. In contrast,Mexico (-14%), Spain (-5%) and Italy (-4%)declined in all three categories. In the UnitedStates, the total prestige industry declined 6% in dollar sales in 2009, with the biggest drop byfragrances, followed by make-up and skincare.

Source: NPD Group

Market shareIn France, Inter Parfums attained roughly a2% share of the selective distribution marketof prestige perfumes. In certain countries suchas the United States, the United Kingdom,Russia or China, the company estimates itsmarket share of total French perfume importsat between 1% and 4%.

Source: Internal estimates

28 Inter Parfums annual report two thousand & nine. The distribution network

AMERICA ASIAEUROPE MIDDLEEASTArgentina

Greta

BrazilEximbiz Comercio Intl

CanadaClarins Canada

ColombiaGrupo Wisa

United StatesProcter & Gamble

MexicoAntera

€61.3m

23.6%of sales (with 16.9%in the US)

€28.7m

11.1%of sales

€37.5m

14.4%of sales

ChinaEternal Optical

South KoreaTdco Ltd

JapanBluebell

Singapourand TaiwanLuxasia

GermanyInter ParfumsDeutschland Gmbh

SpainInter España Parfumset Cosmétiques SL

ItalyInter Parfums Srl

PortugalLuso Helvetica

United KingdomInter Parfums Ltd,Kenneth Green

RussiaKurs

TurkeyTe Ha Guzellik

€44.8m

39.9%of sales (with 32.8%in Wester Europe)

Saudi ArabiaNational Marketing

U.A.E.AlliedCréation AlexandreGhadeer Trading

KoweïtHabchi ChalhoubWahran Trading

THE DISTRIBUTION NETWORK

Multiple and diversified channelsPresent in more than 100 countries

with international markets accounting for more than 90% of sales.

29Inter Parfums annual report two thousand & nine. The distribution network

InternationalInternational distribution

is assured through:- independent companies,

- subsidiaries of major luxury goods corporations,

- duty-free operators (airports, airlines, etc.),

that have exclusive rights to distribute one or more of the company’s brands in

a specific territory.

FranceThe French sales team handles

French distribution directly. The network of sales outlets

breaks down as follows: - Integrated chains (Sephora,

Marionnaud, Nocibé, etc.);- Franchise stores (Beauty Success,

Passion Beauté, etc.);- Department stores

(Galeries Lafayette, Printemps, etc.);- Traditional perfumeries.

The French sales team also handles merchandising (shelf management,

product placement in stores, sales promotion and event planning)

that is a key contributor to the company’s development.

CORPORATE GOVERNANCE

Board of DirectorsandManagementcommitteeInter Parfums adopted the form of a société anonyme, the French equivalent of a joint stock company, when it was created in 1989. It is governed by a Board of Directors and a Management Committee.

30 Inter Parfums annual report two thousand & nine. Corporate governance

As of December 31, 2009 the composition of the Board of Directors was as follows:

Philippe BenacinChairman and Chief Executive Officer of Inter Parfums (appointment renewed April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting)

Jean MadarDirector (appointed April 23, 2004, expiring at the close of the 2010 annual shareholders’ meeting)

Maurice AlhadèveIndependent director (appointed by the shareholders’ meeting of April 23, 2004,expiring at the close of the 2010 annual shareholders’ meeting)

Michel DyensIndependent director (appointed by the shareholders’ meeting of April 23, 2004,expiring at the close of the 2010 annual shareholders’ meeting)

Jean LevyDirector (appointed by the shareholders’ meeting of April 23, 2004, expiring at the closeof the 2010 annual shareholders’ meeting)

Patrick ChoëlDirector (appointed by the shareholders’ meetingof December 1, 2004, expiring at the close of the2010 annual shareholders’ meeting)

Chantal RoosIndependent director (appointed by the shareholders’ meeting of 24 April 2009,expiring at the close of the 2010 annual shareholders’ meeting)

Catherine Bénard-LotzDirector (holder of an employment contractpreceding the appointment by the shareholders’meeting of April 23, 2004, expiring at the closeof the 2010 annual shareholders’ meeting)

Philippe SantiDirector and Executive Vice President (holder of an employment contract precedingthe appointment by the shareholders’ meetingof April 23, 2004, expiring at the close of the2010 annual shareholders’ meeting)

Frédéric Garcia PelayoDirector and Executive Vice President (holder of an employment contract precedingthe appointment by the shareholders’ meetingof 24 April 2009, expiring at the close of the2010 annual shareholders’ meeting)

Management Committee members, left to right: Frédéric Garcia-Pelayo, Jérôme Thermoz, Angèle Ory-Guénard, Axel Marot, Philippe Santi, Philippe Benacin and Hugues de la Chevasnerie

The composition of theManagement Committee on 31 December 2009 was as follows:

Philippe BenacinChairman and Chief Executive Officer

Philippe SantiExecutive Vice PresidentChief Financial andAdministrative Officer

Frédéric Garcia-PelayoExecutive Vice PresidentChief International Officer

Hugues de la ChevasnerieVice President, Burberry Fragrances

Angèle Ory-GuénardVice President, Export Sales,Burberry Fragrances

Jérôme ThermozVice President, French Distribution

Axel MarotVice President, Production & Logistics

Board of Directors Management Committee

31Inter Parfums annual report two thousand & nine. Corporate governance

GENERAL MANAGEMENTP. Benacin

Workforce at December 31 2007 2008 2009

Total workforce 145 152 171

Officers and managers 77 82 84Supervisory staff - 9 9Non-management employees 68 61 78

Average age 36 years 37 years 37 yearsAverage seniority 6 years 6 years 6 years

32 Inter Parfums annual report two thousand & nine. Corporate citizenship

CORPORATE CITIZENSHIP

Social responsibility

Management structure and organization

Inter Parfums’ corporate valuesOver the years, Inter Parfums has developed a corporate culture based on promoting creativity, teamwork, a spirit of trust and corporate responsibility. Inter Parfums management and employees share strong values in respect to working conditions,equal opportunity employment, respect, fighting discrimination and employee training. These values that today represent the foundations for sustainable growth reflect the contribution of the cultural diversity and rich experience of our workforce.

The productionprocess combines high quality and strictcompliance with deadlines essential to produce several million units a year. A team of 24 underAxel Marot managessourcing, supplier relations, quality assurance and costcontrol and operations.

Reflecting the volumeof business of thebrand and distinctterms and conditionsof the license agreement, the Burberry Fragrancesdivision is specificallydevoted to marketingand international distribution of thisbrand. It has 31employees and is headed by Huguesde La Chevasnerie.

Frédéric Garcia-Pelayoleads a dedicated teamof 24 professionals responsible for productdevelopment, marketingand international distribution for theJimmy Choo, Lanvin,Paul Smith, Van Cleef& Arpels and S.T. Dupont brands.

Reflecting the specificities of theNickel brand, its product developmentand marketing aremanaged by the Luxe& Fashion division.

Jérôme Thermoz’s staff of 59 handles the company’s distribution strategyand management andmonitors profit marginsand advertising expenditures in France.

Management of theNickel spas is assuredby a team of 8 that are part of the FrenchDistribution division.

Philippe Santi heads astaff of 31 responsiblefor financial strategyand communications,investor relations,accounting, budgets,cost accounting,labor relations, tax and legal services, cash management and collection.

PRODUCTION& LOGISTICS

A. Marot24 employees

BURBERRYFRAGRANCES

H. de La Chevasnerie31 employees

LUXE& FASHION

F. Garcia-Pelayo24 employees

FRENCHDISTRIBUTION

J. Thermoz59 employees

FINANCE & CORPORATEAFFAIRS

P. Santi31 employees

INTER PARFUMSSRL

Italy

PHILIPPE BENACINJEAN MADAR

INTER PARFUMS INC.Nasdaq - New York

INTER PARFUMSLTD.

United Kingdom

INTER PARFUMS SAEurolist - Euronext Paris

FREE FLOAT

33Inter Parfums annual report two thousand & nine. Corporate citizenship

The ownership structure of Inter Parfums Inc. at 31 December 2009 was as follows:

Inter Parfums and its subsidiariesCommercial operations are conducted primarily through Inter Parfums SA. To pursue its international development, Inter Parfums set up new distribution subsidiaries on January 1, 2007 in the key European markets of Germany, Spain, Italy and the United Kingdom. These subsidiaries are 51%-owned by Inter Parfums and 49%-owned by local distributors. Inter Parfums also created a wholly-owned subsidiary in Switzerland, Inter Parfums Suisse Sarl. This subsidiary is the owner of the Lanvin brand name and international trademarks for class 3 products.

Inter Parfums and its parent companyFounded in 1985, the U.S. company Inter Parfums Inc. is listed on NASDAQ and has business activities in two areas:- Mass market perfumes aimed mainly at the U.S. consumer market and developed by its wholly owned U.S. subsidiary, Jean-Philippe Fragrances LLC;- Prestige perfumes aimed at the global selective perfumes market and developed by its French subsidiary, Inter Parfums (75% owned at 31 December 2009 via Inter Parfums Holding).The US company develops and sells products under license agreements principally under the Gap, Banana Republic, New York & Company, Brooks Brothers and Bebe brands.

FREE FLOAT

Consolidated financial highlights (in $ millions) 2005 2006 2007 2008 2009

Sales 273.5 321.1 389.6 446.1 409.5

Net income 15.3 17.7 23.8 23.8 22.4

Shareholders’ equity 127.8 155.3 192.7 204.2 228.7

Net cash 59.5 71.0 90.0 42.4 100.5

1 euro = 1.4406 USD at December 31, 2009

50%

75%

51%

INTER PARFUMSSUISSESARL

Switzerland

100%

INTER PARFUMSDEUTSCHLAND

GMBHGermany

51%

INTER ESPAÑAPARFUMS &

COSMÉTIQUES SLSpain

51% 51%

25%

50%


The environmentInter Parfums’ business focuses principally on the creationand distribution of products. For this reason, the entireproduction process is outsourced to manufacturing partners. These include producers of juice, glass, caps and cardboard boxes and packaging companies. With no production activities of its own, Inter Parfumsdoes not own laboratories or manufacturing sites.

Even though it operates in a sector less polluting than other industries, Inter Parfums is committed to preserving the environment and quality of life. For this reason, it remains involved in the productionprocess and coordinates with all subcontractors andsuppliers who manufacture its products and are directlyresponsible for their impact on the environment.

Low energy requirementsInter Parfums’ consumption of water and energy islimited to normal office usage in the administrativepremises of its headquarters that house 116employees. Other water and energy consumptionconcern the sales offices and commercial teams in the field that represent 55 employees out of 171.

RecyclingThe company constantly strives to reduce the alreadylow impact of its business on the environment by investing in the treatment and recycling of the packages,cardboard boxes and glass left once its customers havefinished using its products. With this objective,through its participation in the “Eco Emballage” packaging recycling program, Inter Parfums contributes to waste management and recycling.

Minimizing environmental impactsTo balance product quality and aesthetics with environmental considerations, Inter Parfums takes careto reduce packaging volumes at the source and selectthe appropriate materials at each stage of production to ensure optimal conditions for their recycling or disposal. Accordingly, Inter Parfums selects partnersusing cutting-edge design techniques with a commitmentto reduce the impact of manufacturing processes on the environment.

The bottles of its products are made of recyclable glassand the production process provides for a system of recuperation, grinding and recasting of certain bottlecomponents, which generates savings in volume of materials used of 20%. A biodegradable water-soluble solution that does not harm the environment is used in the coloring of some of its bottles. The process of coating used for certain products is compliant with the law of 2005 destined to reduceemissions of volatile organic compounds (VOC) in the air by the use of “hydro coating”. This commitment to environmental responsibility is also a criteria in selecting subcontractors.

CORPORATE CITIZENSHIP

The environment


Regulatory and environmental issues

Even though Inter Parfums does not manufactureits products itself, it nevertheless ensures their introduction on the market and is consequently responsible for ensuring their inoffensiveness to the skin and eyes. Tests for the first are conductedon voluntary and healthy adult subjects and the second through cell culture tests. Within this framework, it ensures that its products are not subject to any tests on animals. It also ensures compliance with international and European regulations for all products it distributes and notably the Cosmetics Directive that prohibits the use of certain animal derivatives.

Inter Parfums has taken measures for the applicationof the new European Community Regulation on chemicals and their safe use concerning theRegistration, Evaluation, Authorization and Restriction of Chemical substances (EC Directive1907/2006 of December 18, 2006) or REACHwith its suppliers. All technical and organizationalmeasures to be applied following the adoption ofREACH have been implemented by the company.

The pre-registration phase of REACH ended onDecember 1, 2008. During this period, importersand manufacturers of “phase-in” substances wererequired to pre-register the substances once volumeexceeded one ton per year. Pre-registration makes it possible to obtain additional delays in connectionwith the registration procedure.

Inter Parfums, as a downstream user of chemicalsubstances, is not subject to the registration

requirement. However, it has sought to maintain an active role by ensuring that the registration process proceeds effectively and that there exists acontinuous supply for sourcing chemical substancescontained in its products.

Inter Parfums took the initiative to contact its different subcontractors to ensure they and thosefurther down the supply chain effectively complywith registration, notification or authorizationrequest procedures. Inter Parfums has asked all its suppliers to provide commitments that that they will not supply articles containing substanceslisted in appendix XIV (Substances of Very HighConcern). To date, no supplier has declared the presence in articles provided to Inter Parfums of substances that are candidates for authorization.

Information relating to REACH including notablyrisk management measures transmitted throughsecurity data files will be taken into account byInter Parfums or its suppliers as they are issued.

For information, the deadlines for the implementationof REACH are spread over the period from June 1, 2008 to June 1, 2018.

Inter Parfums’ actions in this area exceed that of a simple coordinator by increasing its partners’ awareness of environmental issues and staying informed of the business practices of its subcontractorsand suppliers, highlighting its commitment to environmental responsibility.

STOCK MARKET

ShareholderinformationSince it was listed on the Euronext Paris Second Market in November 1995, Inter Parfums regularly provides investors and the financialcommunity with information on its situation in compliance with the principles of transparency and the best practices in financial communications. This information is provided through a variety of documents and media that includes an annual report, a semi-annualreport, a letter to shareholders, press releases and financial notices, a website www.interparfums.fr, individual and group meetings withfinancial analysts, fund managers, journalists, individual shareholders and other.

38 Inter Parfums annual report two thousand & nine. Stock market

Dividends 2005 2006 2007 2008 2009

Dividend per share (1) €0.23 €0.26 €0.29 €0.32 €0.39

Annual increase (1) +10% +13% +10% +10% +23%

Average number of shares outstanding (2) €9.0m €10,4m €11,5m €12,7m €14,9m(1) ) In light of bonus shares. (2) Excluding treasury shares.

Share price and trading volume data

2000 2002 2004 2006 2008 2009 20102001 2003 2005 2007

60035

50030

Trading volume data in thousandsInter Parfums share in euros and SBF 250

40025

30020

20010

1000

0-10

39Inter Parfums annual report two thousand & nine. Stock market

The Inter Parfums shareprice performance

In an environment of highly volatileequity markets, Inter Parfums’ share price tracked the main indexes throughout the 2009 firsthalf. Expectations that the full-year sales forecast would be reviseddownwards adversely affected the price that reached a low of €13in July.

Following the publication of solidearnings in September that reassuredfinancial markets, the share pricemoved back up to €20 in Octoberand in line with these same indexes.

Economic uncertainties have limited this upward momentumwith the share ending the year at€18.01. For the full year, the shareprice nevertheless gained nearly20% on average daily tradingvolume of 6,000 shares.

Ownership as of 31 December 2009

Inter Parfums has more than 5,700 individualshareholders and more than 200 institutional shareholders (nearly half of which are not French).

Institutions providing financial research on Inter Parfums

CA Cheuvreux, CM-CIC Securities, Exane Bnp Paribas, Fortis Bank, Gilbert Dupont,HSBC Securities, ID Midcaps, Natixis Securities,Oddo Securities, Société Générale.

Upcoming publications

2010 second-quarter salesEnd of July 2010

2010 first-half sales and earningsSeptember 7, 2010

2010 third-quarter salesEnd of October 2010

2010 letter to shareholdersMid-November 2010

2010 annual salesEnd of January 2011

2010 sales and earningsMid-March 2011

Upcoming events

Presentation of 2010 first-half earningsSeptember 7, 2010

MidCaps Events trade show, ParisSeptember 20 & 21, 2009

Actionaria trade show, ParisNovember 19 & 21, 2009

Securities market information

Market: Euronext ParisMarket segment: Euronext compartment BIPO date: November 1995ISIN code: FR0004024222 ITPIndexes: MidCac, CAC Small90, NextPrime, SBF250Market maker: Oddo Midcap

75% 25%

Inter Parfums Inc. Public

40 Inter Parfums annual report two thousand & nine

41Inter Parfums annual report two thousand & nine

42 Inter Parfums annual report two thousand & nine. Financial highlights

FINANCIAL HIGHLIGHTS

Condensedfinancial statementsCONSOLIDATED INCOME STATEMENT

In € thousands, except per share data which is in units 2008 2009

Sales 264,864 259,199

Cost of sales (112,308) (106,958)Gross margin 152,556 152,241

% of sales 57.6% 58.7%

Selling and administrative expenses (117,731) (116,973)Current operating income 34,825 35,268

% of sales 13.1% 13.6%

Other operating income and expenses (566) (1,585)Income from operations 34,259 33,683

% of sales 12.9% 13.0%

Net financial expense (2,752) 1,081

Income before income tax 31,507 34,764

% of sales 11.9% 13.4%

Income tax (10,924) (11,972)Effective tax rate 34,7% 33,6%

Net income before minority interests 20,583 22,792

% of sales 7.8% 8.8%

Attributable to minority shareholders (536) 145Net income 21,119 22,647

% of sales 8.0% 8.7%

43Inter Parfums annual report two thousand & nine. Financial highlights

CONSOLIDATED BALANCE SHEET

In € thousands 2008 (1) 2009

ASSETS

Non-current assetsNet trademarks and other intangible assets 63,371 59,068Net property, plant, equipment 4,162 5,515Non-current financial assets 478 886Deferred tax assets 2,527 2,620

Total non-current assets 70,538 68,089

Current assetsInventories and work in progress 68,518 45,110Trade receivables and related accounts 80,054 66,033Other receivables 11,082 7,480Cash and cash equivalents 30,380 66,873

Total current assets 190,034 185,496

Total assets 260,572 253,585

SHAREHOLDERS’ EQUITY AND LIABILITIES

Shareholders’ equity Common stock 40,176 48,671Additional paid-in capital & reserves 93,141 98,532Net income for the year 21,119 22,647Equity attributable to parent company shareholders 154,436 169,850

Minority interests (166) 109Total shareholders’ equity 154,270 169,959

Non-current liabilitiesProvisions for non-current commitments 712 1,131Non-current borrowings 19,803 11,896Deferred tax liabilities 3,636 2,185Total non-current liabilities 24,151 15,212

Current liabilitiesTrade payables and related accounts 52,866 41,809Current borrowings 10,271 8,647Commitments and contingencies 2,280 1,063Short-term bank loans 4,076 672Other liabilities 12,658 16,223Total current liabilities 82,151 68,414

Total shareholders’ equity and liabilities 262,064 253,585

(1) The consolidated financial position was restated to eliminate the impact of the amendment IAS 38 “Intangible assets”, applicable with retroactive effect on January 1, 2008. See note 1.3 to the condensed financial statements.

44 Inter Parfums annual report two thousand & nine. Patronage

INTER PARFUMS

Patron of the EnsembleMatheusIn 2010, Inter Parfums wanted to confirm its support for the arts by continuing its partnership with the Ensemble Matheus.

The Ensemble Matheus, directed by conductor Jean-Christophe Spinosi, is among a select number of world-class groups,

renowned for its interpretation on period instruments of a repertoire ranging from 17th century to contemporary works (baroque, classical or modern).

45Two thousand nine registration document Inter Parfums

INTER PARFUMS

2009registrationdocumentConsolidated management report

Consolidated financialsCorporate governance

Shareholder informationHistory of the company

Auditors and responsibility statements

46

58

88

106

122

124

CHAPTER ONE

ConsolidatedmanagementreportYear in review 47

Consolidated financials 49

Risk factors 50

Social responsibility 52

Environmental responsibility 53

Dividends 54

Purchases by the company of its own shares 55

Group organization 56

Market share and competition 57

Post-closing events 57

2010 outlook 57

46 Two thousand nine registration document Inter Parfums. Consolidated management report

1. YEAR IN REVIEW

1.1The selective distribution marketIn an extremely difficult economic environment, the worldwide perfumes and cosmetics markets, aidedby solid fundamentals, remained resilient in 2009,following satisfactory growth in 2008 (+5% excludingcurrency effects).

However, underlying this general situation,performances by markets were mixed. While WesternEurope, North America and Japan still account forthe major share of sales, they nevertheless representmature markets. In contrast, Eastern Europe, LatinAmerica and Asia (excluding Japan) are now in aphase of rapid development. Among the emergingmarkets, three countries today rank among the topten: Brazil, China and Russia.Source|: Eurostaf

In France, the beauty market (fragrances, make-upand skincare) contracted 1.4% in value in 2009 in theprestige perfume segment on sales of €2.77 billion. In volume, this downtrend was even stronger with adecline of 3.9%.

For all distribution channels combined, perfumeriesaccount for approximately 50% of the total beautymarket. By product category, fragrances (66% of salesin value) remained virtually flat (-0.7%) while make-up sales declined 1.2%. The strongest downturnwas experienced by skincare (-4% in value).

Fragrances, make-up and skincare products in Chinasurged 17% in dollar sales. In contrast, Mexico (-14%), Spain (-5%) and Italy (-4%) declined in all three categories. In the United States, the totalprestige industry declined 6% in dollar sales in 2009,with the biggest drop by fragrances, followed bymake-up and skincare.Source|: NPD Group

1.22009 milestonesFebruary Launch of the Burberry The Beat for men line

Launch of the new men’s fragrance line, Burberry The Beat for men, symbolizing the perfectcomplementary mix of qualities, an original identityand strong values, an integral part of the Burberrybrand today.

MarchLaunch of the Lanvin L’Homme Sport line of Lanvin

A revisited version of Lanvin’s timeless classic: Lanvin L’Homme Sport is dedicated to sports loversand those passionate in their constant quest toachieve harmony of mind and body, exemplified by the effigy of Raphael Nadal.

June|Bonus share issue

On June 15, 2009, the company proceeded with its 10th consecutive bonus issue on the basis of onenew share for every five shares held.

September|Quiksilver and Inter Parfums decided by mutualagreement to terminate their collaboration on June 30, 2010 before the stipulated expiration date.This measure had no financial impact on either of the parties.

September|Launch of the Collection Extraordinaire line of Van Cleef & Arpels

Inspired by the sublime beauty and diversity the HighJewelry collection, Les Jardins of Van Cleef & Arpels,the new exclusive line Collection Extraordinaireproposes six rare and luxurious scents, confirmingwith splendor its clear link to the jeweler throughextremely refined details and high prestige qualities.

47Two thousand nine registration document Inter Parfums. Consolidated management report

SeptemberLaunch of the Paul Smith Man line of Paul Smith

With a subtle blend of resonant colors, rich texturesand diverse materials that distinguish the collectionsof the Paul Smith brand, Paul Smith Man is aharmonious and perfectly balanced fusion of all these qualities.

October|Signature of a fragrance license agreement withJimmy Choo

On October 5, 2009, Jimmy Choo and Inter Parfumssigned a 12-year worldwide license agreementcommencing on January 1, 2010 for the creation,development and distribution of fragrances under the Jimmy Choo brand.

1.3Operating highlights and key figuresIn 2009’s challenging economic environment, Inter Parfums achieved very satisfactory performancesthat further benefited from foreign exchange hedginggains. Consolidated sales amounted to €259.2million, contracting 2.1% at current exchange rates and 6.2% at constant exchange rates comparedto 2008, though marginally exceeding the mostrecent guidance.

1.4Sales by brand

In € millions 2005 2006 2007 2008 2009And as % of sales

Burberry 131.3 143.3 152.9 169.0 166.267.5% 66.3% 63.2% 63.8% 64.1%

Lanvin 29.5 34.4 33.3 39.0 40.615.1% 15.9% 13.8% 14.7% 15.7%

Van Cleef & Arpels - - 11.9 21.0 20.2- - 4.9% 7.9% 7.8%

Paul Smith 14.5 17.7 18.0 13.4 12.87.5% 8.2% 7.4% 5.0% 4.9%

S.T. Dupont 8.8 10.1 11.1 11.5 11.54.5% 4.7% 4.6% 4.3% 4.4%

Roxy - - 6.6 7.4 3 .7- - 2.7% 2.8% 1.4%

Nickel 3.1 4.1 3.3 2.7 2 .31.6% 1.9% 1.4% 1.1% 1%

Other 7.2 6.6 5.0 0.9 1 .93.8% 3.0% 2.0% 0.4% 0.7%

Total 194.4 216.2 242.1 264.9 259.2

- In a year without any major launches of women’sfragrance lines and sales virtually unchanged inrelation to the previous period, Burberry fragrancesconsolidated its market share with the introduction of the Burberry The Beat for men line and solidperformances by the brand’s existing lines includingnotably Burberry Brit and Burberry The Beat;

- On buoyant trends for initial order renewals for theJeanne Lanvin line, further gains by the Éclat d’Arpègeline (+13%) and the launch of the Lanvin L’HommeSport line, Lanvin fragrances maintained its positivemomentum with sales of more than €40 million;

- Declines by the brand’s historic lines in favor ofgains by Féerie and Collection Extraordinaire launchedrespectively in 2008 and 2009 reflected the successfulrepositioning of Van Cleef & Arpels fragrances in the exclusive high-end segment;

- While volumes remained stable, Paul Smithfragrance sales were adversely affected by theweakness of the pound sterling.


1.5Sales by region

In € millions 2008 2009

North America 49.6 43.8South America 17.8 17.5Asia 33.9 37.5Eastern Europe 26.3 18.4Western Europe 85.3 85.1Middle East 25.6 26.4France 24.2 28.7Other 2.2 1.8

Total 264.9 259.2

- Against the backdrop of a decline in the French fragrance and cosmetics market (Source: NPD BeautyTrends), Inter Parfums delivered good performances (+3%) driven by the portfolio’s main brands;- Despite persistent sluggishness in selected markets,Western Europe (excluding France) remained resilient,benefiting from, among other factors, good performances by our four distribution subsidiaries (+6%);- The Middle East and Asia continued to show robust growth of more than 10%;- North America and Eastern Europe experienced significant declines (30% in volume) in response to the sharpdrop in consumer spending in the US and Russia in late 2008 and early 2009.

2.CONSOLIDATED FINANCIALS

2.1Income statement highlights

In € thousands 2006 2007 2008 2009

Sales 216,235 242,123 264,864 259,199% international 92% 91% 90% 90%

Income from operations 29,182 31,812 34,259 33,683% of sales 13.5% 13.1% 12.9% 13.0%

Net income 18,694 20,193 21,119 22,647% of sales 8.6% 8.3% 8.0% 8.7%

Current operating income increased marginally to €35.3 million from tight control of over all operating costs,rigorous management of advertising budgets combined with positive contributions from European distributionsubsidiaries.

Operating income of €33.7 million reflected tight control over all operating expenses, rigorous management ofadvertising budgets, positive contributions from European distribution subsidiaries and an impairment provisionfor the Nickel brand. On this basis, the operating margin improved slightly over the prior year, advancing to 13%.

Net income totaled €22.6 million, up 7.2% from the prior year resulting in a net margin of 8.7%. This performance benefited from lower borrowing costs and foreign exchange hedges.

2.2Balance sheet highlights

In € millions 2008 (1) 2009

Non-current assets 70.5 68.1Inventories 68.5 45.1Trade receivables 80.0 66.0Net cash 26.3 66.2Shareholders’ equity 154.4 169.9Borrowings 30.0 20.5Trade payables 52.9 41.8

(1) 2008 data was restated to eliminate the impact of the amendment IAS 38 “Intangible assets”, applicable with retroactive effect on January 1, 2008. See note 1.3 to the condensed financial statements.


In a challenging economic environment, efforts toreduce inventory levels and optimize trade receivablescollection contributed to the generation of operatingcash flow of €56 million for the period.

In this context, the Group’s financial position wassignificantly reinforced with shareholders’ equity of€170 million and net cash of more than €45 millionat December 31, 2009.

2.3Cash flow statement highlightsKey changes in consolidated cash flows:

- A very positive trend for cash flows from operatingactivities reflecting a proactive policy to reduceinventories combined with a decline in the tradereceivables balance;

- Cash flows from investing activities with no majorcapital expenditures in the period other than thoserelating to normal operating activities;

- Cash flows from financing activities including the repayment of loans obtained in connection with the acquisition of the Lanvin trademarks and the Van Cleef & Arpels license as well as the paymentdividend for fiscal 2008.

Pursuant to the above, net cash at December 31, 2009totaled €45.7 million.

3.RISK FACTORS

3.1Operating risksLicense agreements

The licensing system which is typical in the perfumeand cosmetics industry consists of a brand namecompany (Burberry, Paul Smith…) granting thelicensee (Inter Parfums) a right to use the brand namein exchange for royalty payments typically indexed to sales. The associated risk pertains to the potentialnon-renewal of agreements upon expiration.

In the case of Inter Parfums, several factors tend to limit or eliminate this risk:

- Length of contracts (10 years or more);- Possibility of early renewal;- Diversified portfolio of licensed brands;- Factors specific to the company (sophisticatedmarketing, distribution network, corporateorganization, etc);- Limited number of potential licensees with a similar profile.

Market conditions

The creation and distribution of prestige perfumes is a highly competitive sector. The positioning ofcompanies in the market depends on several factorsincluding notably historical expertise, the quality ofthe products created and the distribution network.

Insurance

Inter Parfums has always carried adequate insurancefor its activities worldwide under conditions thatcomply with industry standards, providing globalcoverage for important risks and activities.

This coverage includes:

- Property damage and business interruption;- Inventory loss or damage;- Contingent use and occupancy insurance;- Civil liability;- Directors’ and officers’ liability;- Product liability;- Transport;- Professional travel and automobile insurance;- IT equipment loss or damages;- Specific coverage for particular events.

Inter Parfums purchases supplemental insurancewhen required, either in compliance with the law or more specifically to cover business risks or risksarising from specific circumstances.

Insurance coverage is overseen by a specialized brokerand spread among four major European insurers.

To the best of the company’s knowledge, all risks areinsured. None of risks mentioned above are self-insured.

3.2International business risksCurrency risks

A significant portion of the company’s sales is incurrencies other than the euro. In consequence, the company incurs risks related to exchange ratefluctuations for these currencies, notably the US dollar(34.6% of sales) and a lesser extent the pound sterling(8.6% of sales) and the Japanese yen (2.7% of sales).

The primary objective of the company’s foreignpolicy seeks is to hedge the most probable budgetexposure related primarily to cash flows fromoperating activities in US dollars as well as tradereceivables in the US dollar, pound sterling and Japanese yen. To this purpose, the companyhas recourse to forward sale agreements according to procedures that prohibit any transactions ofspeculative nature.

Financial instruments used by the Group to manageits foreign exchange exposure are described in note3.14.3 of the consolidated financial statements.

Country risks

With sales in more than 100 markets, Inter Parfumsregularly reassesses country risks.

For the past few years, the company has incurred no significant default on payments in countriesconsidered at risk.

Given our collections policies, receivables monitoringand the quality of our distributors’ financial health, no country risk reserve allocations were madein the financial statements for the year endedDecember 31, 2009.


3.3 Employee-related risksIn light of the company’s organizational structure, the role of personnel is decisive. To foster personnelretention and increase the level of expertise andservice provided to customers, the company hasdeveloped a strong corporate culture and implementeda system of employee management and motivationbased on a combination of tools including variablecompensation, employee profit-sharing, stock optionsavailable to all personnel, annual review meetings,continuing education, etc.

The company’s rate of employee turnover andabsenteeism is very low (refer to the chapter “socialresponsibility” of this document).

3.4Trade and financial risksCustomer risks

Trade receivable collection risks are managed from the inception of the receivable by maintaining a goodknowledge of the company’s market and customerbase and limiting the volume of orders for newcustomers. In addition, this risk is further reduced by a diversified customer base with 100 customersaccounting for 80% of sales. Balances of outstandingtrade receivables are monitored daily, and collectionprocedures are immediately implemented. The rate of default of trade receivables is 0%.

Risks of default

The risk of not meeting its financial commitments for the company is extremely low given the ratio ofnon-current debt to equity of 12% and significant netcash resources representing 26% of total balance sheet.

Interest-rate risks on loans are covered by interest-rate swaps.

Financial instruments by the Group to manage its interest rate risk described in note 3.14.1 of the consolidated financial statements.

Liquidity risk

A prudent management of liquidity risk impliesmaintaining a sufficient level of liquidity and the availability of financial resources through the appropriate types of credit lines. Maturities forfinancial assets and liabilities are presented in note3.14.2 of the consolidated financial statements.

Equity risk

Treasury shares are held exclusively in connection withthe liquidity agreement managed by a brokerage firm.They are recorded in the consolidated financialstatements at acquisition cost as a charge under equity.

The portfolio of marketable securities includesprimarily money market funds that do not include anequity component. The Group does not use hedginginstruments to cover these positions.

Valuation risks

A significant share of the company’s assets consists of intangible assets and goodwill whose value dependsin large part on future operating performances. The valuation of intangible assets and goodwill alsoimplies recourse to objective judgments and complexestimates concerning items uncertain by nature. If a change occurs in the underlying assumptions onwhich this valuation is based, a reduction in the valueof shareholders’ equity will be recorded. The impact ofsuch adjustment would however be extremely limited.

Risk associated with inadequate internal controls

Effective procedures applied by all Group companiesand in all areas of financial risks identified arereassessed annually in compliance with the FinancialSecurity Act (Loi de Sécurité Financière).

These internal controls are reinforced in France byapplication of the Sarbanes Oxley act within theframework of the regulatory obligations of InterParfums Inc (parent company of Inter Parfums SA)and its listing on NASDAQ (see the chapter on“internal control” of this registration document).

Information technology risks

Inter Parfums and its subsidiaries have an ERPapplication providing integrated sales, productionand accounting management capabilities. This systemmakes it possible to monitor information in real-timeand reduce the risk of data loss and errors frommultiple entries.

The company’s computer system is subject to risks of breakdown, electrical power outages, computerviruses and data theft. To reduce such risks, thecompany has robust security systems that includepower converters, firewalls, antivirus programs, etcand the implementation of a Business ContinuityPlanning (BCP). This plan will improve thecomputer performances and implement a faulttolerance system to restore normal operations in a few minutes.

Litigation and other risks

Contingencies concerned primarily provisions forcontract-related disputes. Following the agreementreached in the period between Inter Parfums and itsdistributor relating to sales conditions the lawsuitcontingency provision was reversed.

The company has had no knowledge in the lasttwelve months of other governmental, judicial orarbitration proceedings that could have a materialimpact on the Group’s activity, assets and liabilities,financial position or earnings.


4.SOCIAL RESPONSIBILITY

Over the years, Inter Parfums has developed acorporate culture based on promoting creativity,teamwork, a spirit of trust and corporateresponsibility.

Inter Parfums management and employees sharestrong values in respect to working conditions, equal opportunity employment, respect, fightingdiscrimination and employee training. These valuesthat today represent the foundations for sustainablegrowth reflect the contribution of the culturaldiversity and rich experience of our workforce.

2007 2008 2009

Total workforce 145 152 171Officers and managers 77 82 84Supervisory staff - 9 9Non-management employees 68 61 78Average age (years) 36 37 37 Average seniority (years) 6 6 6

In the year under review the number of personnelincreased 12.5%.

4.1Workforce by department

Number of employees at 12/31/2008 12/31/2009

General Management 2 2Production & Logistics 22 24Burberry Fragrances 27 31Luxe & Fashion 25 24France 49 59Finance & Corporate Affairs 27 31

Total 152 171

4.2Wages and benefits

In € thousands 2008 2009

Total wages and benefits 15,946 18,428

of which Management Committee members wages, bonuses & social charges 2,923 3,027

of which Management Committee membersshare based payment expenses 208 135

In addition supplemental retirement benefits for executive management of, €119,000 was paid in 2009.

4.3Employee representationAs required by law, elections are held every four years to select a works’ committee and employeerepresentatives. The last elections, held in early 2007,did not elect either a workers’ committee or employeerepresentatives.

4.4The workweek organizationAll employees of the company work on the basis of a 35-hour workweek according to a set number of 218 work days per year and are entitled to 9 daysof reduced working hours benefits (RTT) per year.The rate of absenteeism in 2009 was 4.2% (4.9% in 2008), due primarily to maternity leaves.

4.5Employee compensation and benefitsInter Parfums has a compensation policy, a system of job classifications and performance evaluationsuniformly applied to all employees. These proceduresguarantee equal treatment of men and womenemployees and ensure the general cohesion of personnel.Employees of the company and its subsidiaries alsobenefit from variable incentive compensation benefitslinked to the Group’s performance.

Inter Parfums also promotes employee stock ownershipthrough annual stock option plans available to allemployees.

4.6 Statutory employee profit-sharing In accordance with applicable legislation, anemployee profit-sharing agreement was implementedon December 20, 2001. The amount paid for 2009was €1.1 million (compared to €1 million in 2008).

4.7Promoting the acquisition of new skillsAll Inter Parfums employees are offered trainingto develop technical, management or personal skills.

Employees also regularly exercise their rights toindividual training benefits provide for under Frenchlaw (Droit Individuel à la Formation).


5.ENVIRONMENTAL RESPONSIBILITY

Inter Parfums’ business focuses principally on the creation and distribution of products. For thisreason, the entire production process is outsourced to manufacturing partners. These include producersof juice, glass, caps and cardboard boxes andpackaging companies. With no production activitiesof its own, Inter Parfums does not own laboratoriesor manufacturing sites.

Even though it operates in a sector less polluting than other industries, Inter Parfums is committed topreserving the environment and quality of life. For thisreason, it remains involved in the production processand coordinates with all subcontractors and supplierswho manufacture its products and are directlyresponsible for their impact on the environment.

5.1Low energy requirementsInter Parfums’ consumption of water and energy islimited to normal office usage in the administrativepremises of its headquarters that house 116employees. Other water and energy consumptionconcern the sales offices and commercial teams in the field that represent 55 employees out of 171.

5.2RecyclingThe company constantly strives to reduce the alreadylow impact of its business on the environment byinvesting in the treatment and recycling of the packages,cardboard boxes and glass left once its customers havefinished using its products. With this objective, throughits participation in the “Eco Emballage” packagingrecycling program, Inter Parfums contributes to wastemanagement and recycling.

5.3Minimization of environmental impactsTo balance product quality and aesthetics withenvironmental considerations, Inter Parfums takescare to reduce packaging volumes at the source and select the appropriate materials at each stage of production to ensure optimal conditions for theirrecycling or disposal. Accordingly, Inter Parfumsselects partners using cutting-edge design techniqueswith a commitment to reduce the impact ofmanufacturing processes on the environment.

The bottles of its products are made of recyclableglass and the production process provides for a systemof recuperation, grinding and recasting of certainbottle components, which generates savings involume of materials used of 20%. A biodegradablewater-soluble solution that does not harm the

environment is used in the coloring of some of its bottles. The process of coating used for certainproducts is compliant with the law of 2005 destinedto reduce emissions of volatile organic compounds(VOC) in the air by the use of “hydro coating”. This commitment to environmental responsibilityis also a criteria in selecting subcontractors.

5.4Regulatory and environmental issues Even though Inter Parfums does not manufacture its products itself, it nevertheless ensures theirintroduction on the market and is consequentlyresponsible for ensuring their inoffensiveness to theskin and eyes. Tests for the first are conducted onvoluntary and healthy adult subjects and the secondthrough cell culture tests. Within this framework, itensures that its products are not subject to any testson animals. It also ensures compliance with nationaland European regulations and notably the Cosmeticswhich prohibits the use of certain animal derivatives.As such it ensures compliance with international andEuropean regulations concerning the design andproduction of all products it distributes and isresponsible for ensuring the safety for human use ofcosmetic products it distributes. To this purpose, it conducts tests that that includeensuring innocuous nature for the skin and eyes. Inaccordance with the European Cosmetics Directive,its products are not subject to any tests on animals.Tests for skin irritation are conducted on healthyvoluntary adult subjects and ocular irritantancytesting through cell cultures.

Inter Parfums has taken measures for the applicationof the new European Community Regulation on chemicals and their safe use concerning theRegistration, Evaluation, Authorization andRestriction of Chemical substances (EC Directive1907/2006 of December 18, 2006) or REACH with its suppliers. All technical and organizationalmeasures to be applied following the adoption ofREACH have been implemented by the company.

The pre-registration phase of REACH ended onDecember 1, 2008. During this period, importersand manufacturers of “phase-in” substances wererequired to register the substances once volumeexceeds one ton per year. Pre-registration makes it possible to obtain additional delays in connectionwith the registration procedure.

Inter Parfums, as a downstream user of chemicalsubstances, is not subject to the registration requirement.However, it has sought to maintain an active role byensuring that the registration process proceeds effectivelyand that there exists a continuous supply for sourcingchemical substances contained in its products.

Inter Parfums took the initiative to contact itsdifferent subcontractors to ensure they and thosefurther down the supply chain effectively complywith registration, notification or authorizationrequest procedures. Inter-Parfums has asked all its


suppliers to provide commitments that they will notsupply articles containing substances listed inappendix XIV (Substances of Very High Concern).To date, no supplier has declared the presence inarticles provided to Inter Parfums of substances thatare candidates for authorization.

Information relating to REACH including notablyrisk management measures transmitted throughsecurity data files will be taken into account by Inter Parfums or its suppliers as they are issued.

For information, the deadlines for theimplementation of REACH are spread over the period from June 1, 2008 to June 1, 2018.

Inter Parfums’ actions in this area exceed that of a simple coordinator by increasing its partners’awareness of environmental issues and stayinginformed of the business practices of itssubcontractors and suppliers, highlighting itscommitment to environmental responsibility.

6.DIVIDENDS

Since 1998, the company has adopted a policy of distributing dividends that today represents approximately25% of consolidated earnings, destined to reward shareholders while at the same time associating them with theGroup’s expansion. In early May 2009, a dividend of €0.38 per share was paid or a total amount of €5 million.

Dividends

Year 2005 2006 2007 2008 2009

Dividend per share (1) €0.23 €0.26 €0.29 €0.32 €0.39 Annual increase (1) +10% +13% +10% +10% +23%Average number of shares outstanding (2) 8,974,298 10,421,965 11,480,164 12,719,676 14,880,583

(1) In light of bonus shares. (2) Excluding treasury shares.


7. PURCHASES BY THE COMPANY OF ITS OWN SHARES

In compliance with article 241-1 et seq. of the AMF General Regulation, the following paragraph describes theshare repurchase program that will be submitted for authorization to the shareholders’ meeting of 23 April 2010.

7.1Summary of the previous share repurchase programIn connection with the authorization granted by the shareholders’ meeting of April 24, 2009 and implementedby decision of the Board of Directors’ on May 20, 2009, Inter Parfums proceeded with the followingtransactions from April 25, 2009 to 28 February 2010:

Situation at 02/28/2010

Percentage of own shares directly and indirectly held 0.24% of the capitalNumber of shares canceled in the last 24 months noneNumber of treasury shares 38,970 sharesCarrying value of treasury shares €685,302Market value of treasury shares €695,615

Accumulated gross changes Purchases Sales

Number of shares 94,836 99,987Average price of the transaction 16.40 17.15Amounts 1,556,098 1,714,777

Shares purchased and sold have been allocated exclusively for the purpose of market-making activity assured by an investment service provider in connection with a liquidity agreement and in compliance with the conductof business rules of the French association of investment firms (AFEI). No other uses were made and no shareswere canceled. None of the other uses of this authorization granted by the shareholders meeting of 24 April 2009were implemented.

For the duration of this authorization, no shares were canceled and no financial derivatives were used inconnection with its implementation.

7.2Purpose of the new share repurchase authorizationThe shareholders meeting of 23 April 2010 is calledto renew through its sixteenth resolution, theauthorization granted to the Board of Directors to purchase and sell shares of the company for thefollowing purposes:

- Maintain an orderly market in the company’s sharesthrough an investment services provider within theframework of a liquidity agreement in compliancewith the conduct of business rules of the Frenchassociation of investment firms (AFEI);

- Grant employees or officers of the company and/orthe Group stock options (articles L.225-177 et seq.of the French Commercial Code) and/or bonus shares(articles L.225-197-1 et seq. of the FrenchCommercial Code);

- Remittance of shares pursuant to the exercise of rights attached to securities conferring rights byredemption, conversion, exchange, presentation of warrants or any other means to grants of thecompany’s shares;

- Use such shares for payment or exchange inconnection with financial transactions or acquisitionsin compliance with the financial market regulations;

- Cancel shares to increase the return on equity and earnings per share and/or eliminate the impact of dilution for shareholders from capital increasessubject to adoption of the fourth resolution of thisextraordinary general meeting authorizing thiscancellation;

- Permit the company to buy and sell its own sharesfor any other authorized purpose or practice admittedby the market or which may be subsequentlyauthorized or admitted by applicable laws andregulations.

7.3Maximum percentage of capitalMaximum purchase priceExtract of the sixteenth resolution submitted forapproval by the shareholders meeting of 23 April 2010:

Shares acquired shall be subject to the following limits:

- The maximum purchase price is €40 per share,excluding execution costs;

- The total number of shares acquired may not exceed5% of the capital stock outstanding at any time. This 5% limit applies to an amount of capital thatwill be adjusted as applicable for corporate actionsaffecting the capital stock after this meeting, whereby


acquisitions by the company shall under nocircumstances increase its holding, directly andindirectly through subsidiaries, to more than 5% of the capital stock;

- Pursuant to the above, by way of indication andwithout taking into account shares already held bythe company, 16,223,513 shares on December 31,2009 would represent 5% of the capital stockcorresponding to a maximum theoretical purchaseprice of €32,447,026 on the basis of a maximumpurchase price of €40 per share.

7.4Duration of the share repurchase programIn compliance with the provisions of the sixteenthresolution to be submitted to the shareholders meeting ofApril 23, 2010, the authorization to implement this sharerepurchase program is granted for 18 months from thedate of this meeting or no later than October 23, 2011.

If one of the characteristics of the description of thisprogram is modified during the period of its duration,the public shall be notified of this modification inaccordance with the provisions set forth in articleL.212-13 of the AMF General Regulation.


INTER PARFUMSSRL

Italy

PHILIPPE BENACINJEAN MADAR

INTER PARFUMS INC.Nasdaq - New York

INTER PARFUMSLTD

United Kingdom

INTER PARFUMS SAEurolist - Euronext Paris

FREE FLOAT

FREE FLOAT

50%

75%

51%

INTER PARFUMSSUISSESARL

Switzerland

100%

INTER PARFUMSDEUTSCHLAND

GMBHGermany

51%

INTER ESPAÑAPARFUMS &

COSMÉTIQUES SLSpain

51% 51%

25%

50%

8.GROUP ORGANIZATION

The shareholder ownership structure of Inter Parfums Inc. at December 31, 2009 was as follows:

9.MARKET SHARE AND COMPETITION

Market share

In France, Inter Parfums attained roughly a 2% share of the selective distribution market of prestigeperfumes. In certain countries such as the UnitedStates, the United Kingdom, Russia or China, thecompany estimates its market share of total Frenchperfume imports at between 1% and 4%.Source: Internal estimates.

Competition

Inter Parfums operates in a sector dominated by ten major historic players in the cosmetics marketthat have fragrance divisions built around a brandwith billions of euros in sales. There exist around ten midsize players like Inter Parfums that alsooperate in this segment with sales ranging between€100 million and €1 billion.

While Inter Parfums has also developed a brandportfolio in the luxury universe, it has adopted amarkedly different approach with a business modelbased on methodical long-term development focusedon creation and building customer loyalty rather thanvolume and advertising.

10.POST-CLOSING EVENTS

On January 22, 2010, Montblanc International GmbHand Inter Parfums SA signed a license agreement tocreate, produce and distribute perfumes and ancillaryproducts under the Montblanc brand. This licenseagreement for ten and a half years will take effect onJuly 1, 2010.

11.2010 OUTLOOK

Philippe Benacin, President and Chief ExecutiveOfficer declared: “Even though visibility remains low,with a pipeline of promising projects consistent with our strategy, we can approach the coming year withconfidence. In addition, strategic initiatives currentlybeing explored by certain competitors could also provideus with new external growth opportunities in the future”.

Philippe Santi, Executive Vice President, added: “By enabling us to maintain margins at high levelsduring a period of declining sales, our operating modelhas proven its effectiveness. Our solid balance sheet andpositive net cash position provide us with additionaladvantages to pursue our development”.


CHAPTER TWO

ConsolidatedfinancialsConsolidated financial statements 59

Significant accounting policies 64

Basis of presentation 69

Notes to the balance sheet 70

Notes to the income statement 80

Segment reporting 82

Other information 83

58 Two thousand nine registration document Inter Parfums. Consolidated financials

Consolidated statement of comprehensive income

In € thousands, (Except per share data which is in units) Notes 2008 2009

Sales 4.1 264,864 259,199

Cost of sales 4.2 (112,308) (106,958)

Gross margin 152,556 152,241

% of sales 57.6% 58.7%

Selling expenses 4.3 (110,007) (107,199)Administrative expenses 4.4 (7,724) (9,774)

Current operating income 34,825 35,268

% of sales 13.1% 13.6%

Other operating income and expenses 4.5 (566) (1,585)

Income from operations 34,259 33,683

% of sales 12.9% 13.0%

Interest income 1,246 403Interest and similar expenses (2,891) (1,579)

Net finance costs (1,645) (1,176)

Other financial income and expenses (1,107) 2,257

Net financial expense 4.6 (2,752) 1,081

Income before income tax 31,507 34,764

% of sales 11.9% 13.4%

Income tax 4.7 (10,924) (11,972)Effective tax rate 34.7% 33.6%

Net income before minority interests 20,583 22,792

% of sales 7.8% 8.8%

Attributable to minority shareholders (536) 145

Net income attributable to equity holders of the parent 21,119 22,647

% of sales 8.0% 8.7%

Basic earnings per share (1) 4.8 1.66 1.52Fully diluted earnings per share (1) 4.8 1.65 1.52

(1) Not restated for bonuses issues.

59Two thousand nine registration document Inter Parfums. Consolidated financials

Statement of recognized income and expense


Available-for-sale assets (129) -Currency hedges 6,436 (6,436)

Gross income/(expense) recognized directly in equity 6,307 (6,436)

Deferred tax (2,171) 2,216

Net income/(expense) recognized directly in equity 4,136 (4,220)

Consolidated net profit for the period 20,583 22,792

Total recognized income and expense for the period 24,719 18,572

Attributable to minority shareholders (536) 145

Attributable to equity holders of the parent 25,255 18,427


Consolidated statement of financial position

Assets

In € thousands Notes 2008 2009

Non-current assets

Net trademarks and other intangible assets 3.1 59,557 56,455Goodwill 3.2 3,814 2,613Net property, plant, equipment 3.3 4,162 5,515Long-term investments 408 816Other non-current financial assets 70 70Deferred tax assets 3.11 2,527 2,620

Total non-current assets 70,538 68,089

Current assets

Inventories and work in progress 3.4 68,518 45,110Trade receivables and related accounts 3.5 80,054 66,033Current income tax assets 969 -Other receivables 3.6 10,113 7,480Cash and cash equivalents 3.7 30,380 66,873

Total current assets 190,034 185,496

Total assets 260,572 253,585

Shareholders’ equity and liabilities

In € thousands Notes 2008 2009

Shareholders’ equity

Common stock 40,176 48,671Additional paid-in capital 265 1,205Retained earnings 92,876 97,327Net income for the year 21,119 22,647

Equity attributable to parent company shareholders 154,436 169,850

Minority interests (166) 109

Total shareholders’ equity 3.8 154,270 169,959

Non-current liabilities

Provisions for non-current commitments 3.9 712 1,131Non-current borrowings 3.10 19,803 11,896Deferred tax liabilities 3.11 3,636 2,185

Total non-current liabilities 24,151 15,212

Current liabilities

Trade payables and related accounts 52,866 41,809Current borrowings 3.10 10,271 8,647Commitments and contingencies 3.9 2,280 1,063Current income tax assets 309 1,100Short-term bank loans 3.10 4,076 672Other liabilities 3.12 12,349 15,123

Total current liabilities 82,151 68,414

Total shareholders’ equity and liabilities 260,572 253,585

(1) The consolidated financial position was restated to eliminate the impact of the amendment IAS 38 “Intangible assets”, applicable with retroactive effect on January 1, 2008. See note 1.3 to the condensed financial statements.


(1)

(1)

Statement of changes in shareholders’ equity

In € thousands Number Common Paid-in Retained Total equityof shares stock capital earnings Group Minority Total

& net share interestsincome

As of December 31, 2007 (1) 12,087,747 36,301 1,046 96,886 134,233 (342) 133,891

Effect of IAS 38 amendment - - - (1,492) (1,492) - (1,492)

As of December 31, 2007restated (1) 12,087,747 36,301 1,046 95,394 132,741 (342) 132,399

Bonus share issue 1,214,545 3,644 (1,671) (1,973) - - -Shares issued on exercise of stock options 77,068 231 890 - 1,121 - 1,1212008 net income - - - 21,119 21,119 (536) 20,5832007 dividend paid in 2008 - - - (4,580) (4,580) - (4,580)Treasury shares (27,755) - - (485) (485) - (485)Stock-based compensation - - - 298 298 - 298Remeasurement of financial instruments at fair value - - - 4,135 4,135 - 4,135Changes in the scope of consolidation - - - - - 701 701Other changes - - - 87 87 11 98

As of December 31, 2008 (1) 13,351,605 40,176 265 113,995 154,436 (166) 154,270

Bonus share issue 2,678,942 8,037 (286) (7,751) - - -Shares issued on exercise of stock options 152,591 458 1,226 - 1,684 - 1,6842009 net income - - - 22,647 22,647 145 22,7922008 dividend paid in 2009 - - - (5,061) (5,061) - (5,061)Treasury shares 3,177 - - 162 162 - 162Stock-based compensation - - - 208 208 - 208Remeasurement of financial instruments at fair value - - - (4,220) (4,220) - (4,220)Changes in the scope of consolidation - - - - - 135 135Other changes - - - (6) (6) (5) (11)

As of December 31, 2009 (1) 16,186,315 48,671 1,205 119,974 169,850 109 169,959

(1) Excluding treasury shares.


Statement of cash flows


Cash flows from operating activities Net income before minority interests 20,583 22,792Depreciation, amortization and other 4,697 4,621Capital (gains) losses on asset disposals 164 0Net finance costs (1,645) (1,176)Tax charge of the period 10,924 11,972

Operating cash flows 34,723 38,209

Interest expense (2,343) (1,759)Tax payments (13,186) (9,304)

Cash flow after interest expense and tax 19,194 27,146

Change in inventories and work in progress (14,979) 24,598Change in trade receivables and related accounts (4,799) 14,485Change in other receivables 2,244 (1,241)Change in trade payables and related accounts (12,329) (11,057)Change in other current liabilities (1,582) 2,371

Change in working capital needs (31,445) 29,156

Net cash flows provided by (used in) operating activities (12,251) 56,302

Cash flows from investing activitiesAcquisition of intangible assets (782) (614)Acquisition of property, plants and equipment (2,120) (2,876)Changes in the scope of consolidation 701 135Changes in investments and other non-current assets (231) (408)Sales of fixed assets - -

Net cash flows provided by (used in) investing activities (2,432) (3,763)

Cash flow from financing activitiesIssuance of borrowings and new financial debt - -Debt repayments (11,100) (9,470)Dividends paid (4,588) (5,061)Capital increases 1,121 1,684Treasury shares (564) 205Other 5 0

Net cash flows provided by (used in) financing activities (15,126) (12,642)

Change in net cash (29,809) 39,897

Cash and cash equivalents - beginning of year 56,113 26,304

Cash and cash equivalent - end of year 26,304 66,201

The reconciliation of net cash breaks down as follows:


Cash and cash equivalents 30,380 66,873Short-term bank loans (4,076) (672)

Net cash at the end of the period 26,304 66,201


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

1.1Compliance statementIn accordance with EC regulations 1606/2002 of July 19, 2002 on international accountingstandards, the 2009 consolidated financial statementsof the Inter Parfums Group are established incompliance with IAS/IFRS (International AccountingStandards/International Financial ReportingStandards) applicable since 2005 as endorsed by the European Union. In particular, theconsolidated financial statements for the periodending December 31, 2009 and December 31, 2008were restated to eliminate the effects of theamendment to IAS 38 “Intangible assets” concerningthe recognition of our advertising and promotionalexpenses, applied retroactively as of January 1, 2008.These standards have been consistently applied overthe periods presented herein.

Financial information presented herein has beenbased on:

- IFRS standards and interpretations whoseapplication was mandatory starting in 2005;

- Options retained and exemptions used by theGroup for the preparation if IFRS consolidatedfinancial statements.

The consolidated financial statements of December 31, 2009 were approved by the Board of Directors on March 8, 2010. They will bedefinitive when approved by the ordinary generalmeeting of April 23, 2010.

1.2Changes in accounting standardsThe following standards, amendments andinterpretations that entered into force on January 1, 2009have been applied by the company in preparing itsconsolidated financial statements:

- IFRS 8 “Operating segments”;- Amendment to IAS 1 “Presentation of financialstatements”;- Amendment to IAS 23 “Borrowing costs”,- Amendment to IAS 38 “Intangible assets”;- Amendment to IFRS 2 “Vesting conditions andcancellations”;- Amendments to IFRS 1 and IAS 27 “Cost of aninvestment in a subsidiary, jointly controlled entity or associate”;

- Amendment to IFRS 1 “First-time adoption of IFRS - Revision of the structure of the standard”applied in advance;- Amendment to IFRS 7 and IAS 39 “reclassificationof financial assets” (entered into force on July 1, 2008).

The following standards, amendments andinterpretations that entered into force on July 1, 2009have been applied by the company in preparing itsconsolidated financial statements:

- IFRS 3 and IAS 27 revised “Business combinations”;- Amendment to IAS 39 “Financial instruments:recognition and measurement - eligible hedged items”.

These standards, amendments and interpretations do not have a material effect on the company’sconsolidated financial statements.Because of the company’s business, the followingstandards, amendments and interpretations will notbe applied to the consolidated financial statements:

- Amendment to IAS 32 “Classification of rights issues”;- Amendments to IAS 32 and IAS 1 “Puttablefinancial instruments”;- IFRIC 9 and IAS 39 “Embedded derivatives”;- IFRIC 12 “Service concessions”;- IFRIC 13 “Customer loyalty programs”;- IFRIC 14 and IAS 19 “The limit on a definedbenefit asset, minimum funding requirements and their interaction”;- IFRIC 15 “Agreements for the construction of real estate”;- IFRIC 16 “Hedges of a net investment in a foreignoperation”;- IFRIC 17 “Distribution of non-cash assets to owners”;- IFRIC 18 “Transfers of assets from customers”;- IFRIC 19 “Extinguishing Financial Liabilities withEquity Instruments”.

1.3Application of the amendment to IAS 38 “Intangible assets”As of January 1, 2009, expenditure on advertisingand promotional activities is recognized whenreceived or produced in the case of goods or when rendered in the case of services. The impact of this change in method on shareholders’ equity of January 1, 2008 is €1,492,000 that breaks downas follows:

In € thousands Impact on 01/01/2008

Inventories and work in progress (2,276)Deferred tax 784Consolidated shareholder’s equity (1,492)

Results on June 30, 2008 and December 31, 2008were not restated to eliminate the impact of theapplication of the IAS 38 amendment in relation to results recognized on January 1, 2008 that wasconsidered as nonmaterial. The notes presented belowwere restated to eliminate the effects of the retroactiveapplication of the IAS 38 amendment.


1.4First-time adoption of IFRSFor the first time adoption of IFRS for the financialstatements prepared on December 31, 2005 with atransition date of January 1, 2004, Inter Parfumschose to apply the following exemptions for standardsapplicable to the company:

- Fixed assets: the Group has chosen to continue to recognize property, plant and equipment athistorical cost;

- Share-based payments and equivalents: for programsinvolving equity-settled share-based payment, theGroup has elected to apply IFRS 2 for grants after 7November 2002 and not vested before January 1, 2005.

1.5Basis of consolidationOn January 1, 2007, Inter Parfums SA set up newdistribution subsidiaries in four major Europeanmarkets (Italy, Germany, Spain, United Kingdom).These subsidiaries are 51%-owned by Inter Parfumsand 49%-owned by local distributors. Because InterParfums consequently exercises exclusive control overthese companies they are fully consolidated.

In the 2007 second quarter, Inter Parfums acquiredthe remaining stake of Nickel held by minorityshareholders (cf. note 2.3). As a result, Nickel is nowa wholly-owned subsidiary. In effect, minorityshareholders of Nickel and Inter Parfums benefitedfrom a bilateral promise to purchase or sell theminority interests that may be exercised by either ofthe parties from January 1, 2007 to June 30, 2007.

On July 1, 2007, Inter Parfums Trademark and InterParfums Grand Public, wholly-owned subsidiaries ofInter Parfums, were wound up through a simplifiedmerger procedure involving the transfer of all assetsand liabilities (transmission universelle de patrmoineor TUP) to the Group. This had no impact on theconsolidated financial statements.

On June 16, 2008, Inter Parfums created a newwholly-owned subsidiary in Switzerland. At the sametime, Inter Parfums contributed its proprietaryLanvin trademarks and brands to this new entity. On July 1, 2008 and exclusive license agreement was concluded between Inter Parfums Suisse andInter Parfums. This transaction has no impact on the financial statements included in this report.

On October 1, 2008, Nickel became a wholly-ownedsubsidiary of Inter Parfums through the simplifiedmerger procedure involving the transfer of its assetsand liabilities to the latter that had no impact on the consolidated financial statements.

All Group subsidiaries are fully consolidated. Theseinclude Inter Parfums Deutschland GmbH, InterEspaña Parfums and Cosmetiques SL, Inter ParfumsSrl, Inter Parfums Ltd and Inter Parfums Suisse.

Inter Parfums SA

Inter Parfums Suisse Sarl Switzerland 100%Inter Parfums Deutschland GmbH Germany 51%Inter España Parfums et Cosmetiques SL Spain 51%Inter Parfums Srl Italy 51%Inter Parfums Ltd United Kingdom 51%

Subsidiaries’ financial statements are prepared on the basis of the same accounting periods as the parentcompany. The fiscal year is for the 12 month periodthat end on December 31.

1.6Translation methodThe company’s operating currency and currency for the presentation of financial statements is the euro.

Transactions in foreign currencies are translated at the exchange rate in effect on the date of the transaction.Foreign currency denominated payables and receivables are translated at the exchange rate in effect as of December 31, 2009. Translation losses and gains arising from the conversion of accounts denominatedin foreign currencies on December 31, 2009 are recorded in the income statement. Hedged transactions are translated at the negotiated exchange rate.

The main rates of exchange applied in relation to the euro are as follows:

Currency Closing exchange rate Average exchange rate2008 2009 2008 2009

US Dollar (USD) 1.3917 1.4406 1.4707 1.3948Pound sterling (GBP) 0.9525 0.8881 0.7963 0.8909Swiss franc (CHF) 1.4850 1.4836 1.5689 1.5100

(1) Average annual exchange rate calculated starting from July 1, 2008, the date of the start of operations of the Swiss subsidiary.


(1)

1.7Use of estimatesThe preparation of consolidated financial statementsrequires the use of estimates and assumptions for the valuation of certain balance sheet and incomestatement balances. These concern primarily thevaluation of intangible assets, amounts to be set asidefor provisions for contingencies and expenses,provisions for inventory losses and deferred tax assets.Although these estimates are based on management’sbest knowledge of current events and situations, actualresults may ultimately differ from these estimates.

1.8Revenue recognition

Revenue includes principally wholesale sales todistributors and agents and direct sales to retailers for the part registered by Group subsidiaries.

Revenue from perfume and cosmetics products ispresented net of all forms of discounts and rebates.

Revenue is recognized on basis of conditions oftransfer to the buyer of the risks and rewards incidentto ownership to the buyer. Amounts invoiced at year-end when the actual transfer of title occurs in the following year are not recognized under revenueof the year in progress.

1.9Trademarks, other intangible assets and goodwill

Trademarks and other intangible assets

Trademarks and other intangible fixed assets,including trademarks under licensing contracts and acquired trademarks are recorded at cost.

These trademarks that constitute well-establishedlegally protected international brand names areclassified as indefinite life intangible assets and are not amortized.

Finite life intangible assets such as upfront license fees are amortized on a straight-line basis over theduration of the license.

Rights on glass molds are classified as finite lifeintangible assets and are amortized over a durationbetween three and five years.

Licenses and upfront license fees are remeasured at least once a year or whenever there is an indicationof impairment of value in use defined as the presentvalue of estimated future cash flows expected to arisefrom the continuing use of these assets. Data usedoriginates from the annual and multiyear budgets for duration of the license agreements drawn up byManagement. The discount rate before tax appliedfor remeasurement is the weighted average cost ofcapital (WACC) of 7.84% at December 31, 2009. A provision for impairment is recorded under incomeif this value is lower than the carrying value.

Proprietary brands are remeasured at least once a yearon the basis of the present value of estimated futurecash flows to infinity generated by these assets andfair value net of disposal costs determined accordingthe method of price-to-sales in reference to similartransactions.

The discount rate before tax applied for remeasurementis the weighted average cost of capital (WACC) of 7.84% at December 31, 2009 compared to 9.5%at December 31, 2008. This ratio is determined onthe basis of the long-term interest rate of 3.61%corresponding to the average rate for 10-year OATFrench fungible treasury bonds of the last quarter, the rate expected by an investor in this sector and thespecific risk premium for this sector. The growth rateto infinity adopted is 0.9% at December 31, 2009compared with 1.0% for the prior period.

A provision for impairment is recorded under incomeif this value is lower than the carrying value.

Under IAS 38.27b revised in 2004, costs generatedon acquisition analyzed as directly attributable costsare included in the cost of the acquired assets.

Other intangible assets are amortized over their usefullives and subject to impairment testing when anindication of impairment exists.

Goodwill

Goodwill is defined as the difference between the purchase price of shares of consolidatedcompanies and the Group’s share in restated net assets after measurement of the fair value of assets nd liabilities acquired.

Positive goodwill arising from the acquisition of Nickel has been recognized in the balance sheet.

This goodwill is tested annually or whenever thereexists an indication of potential impairment. When the net carrying value of this goodwill exceedsthe higher of the value in use or market value, andimpairment is recorded for the difference. Value in use is based on the present value of future cash flows that will be generated by these assets while marketvalue is determined in reference to recent comparabletransactions or valuations performed by independentappraisers in view of its disposal. Because the carryingvalue of Nickel exceeds the higher of the value in useor market value, an impairment was recorded for the difference (cf. note 3.2) and recognized in “Otheroperating income and expenses”.

1.10Property, plants and equipmentTangible fixed assets are valued at cost (purchase priceplus related costs, excluding acquisition cost) anddepreciated over their estimated useful lives on astraight-line basis (2 to 5 years). Tangible fixed assetsinclude molds for caps.


1.11Inventories and work in progressInventories are valued at the lower of cost or probableresale value. A provision for impairment is recordedwhen their probable resale value is lower than thecarrying value.

Inventories of raw materials and supplies are valuedon the basis of average weighted prices.

The cost of finished products includes the cost of materials used, production expenses and a share of indirect costs valued at a standard rate.

At the end of every year, these standard rates arecompared with the effective rate actually obtainedbased on actual data at year-end.

1.12Non-current financial assetsMarketable securities on initial recognition arerecorded at cost and subsequently remeasured at fairvalue corresponding to the market value at the end of each period.

All Group marketable securities have been classifiedas “available-for-sale financial assets” and presented in “Cash and cash equivalents”.

In accordance with IAS 39.55, gains and losses on“available-for-sale financial assets” are recorded atyear-end in equity. However, in accordance with IAS39.67, a significant or prolonged decline in fair valuebelow the cost value of the securities, is recognized in profit or loss.

At December 31, 2009, losses relating to “assets heldfor sale” classified under “non-current financial assets”were recorded in the income statement.

1.13Accounts receivableAccount receivables are recorded at face value. A provision for impairment is recorded on a case-by-case basis when the probable recovery value is deemed to be less than the carrying value.

1.14 Deferred taxTiming differences between tax base and consolidatedassets and liabilities and tax on restatements onconsolidation give rise to the recognition of deferredtaxes under the liability method, taking the knownyear-end tax conditions into account.

Potential tax credits resulting from loss carry forwardsare only recorded when their use in the short term is deemed likely, and subject to depreciation whenappropriate, are maintained in the balance sheet.

1.15Cash and cash equivalentsCash comprises marketable securities, cash and cashequivalents that consist of highly liquid investmentswith maturities of three months or less and readilyconvert to a known cash amount and are subject toan insignificant risk of changes in value.

1.16Treasury shares

Inter Parfums shares held by the Group are recordedas a deduction from equity at cost.

If sold, the proceeds are recorded directly underequity net of tax.

1.17Commitments and contingencies

Retirement severance benefits

This reserve is maintained to honor the company’semployee pension benefit commitments andcorresponds to the present value of the payments towhich employees are entitled, under the collectivebargaining agreement, once they retire. For themeasurement of retirement indemnities for 2009,Inter Parfums adopted the procedure for voluntaryseverance agreements introduced on July 23, 2008extending the interprofessional agreement of January 11, 2008. This procedure provides for thesystematic signature of a severance agreement by theemployer and the employee specifying the terms andconditions of the termination. Because last yearmethod involving compulsory retirement was applied,the impact of this change in the assumptions used forcalculation was dealt with under past service costs.The projected unit credit was applied. This methodtakes into account rights and wages projected to term,the probability of payment as well as the proratedamount of seniority so that commitments correspondto the value of service already rendered by employees.

Accordingly, the calculation of commitments forseverance benefits involves estimating the probablepresent value of projected benefit obligations (PBO),i.e. the rights of employees at the time of departuretaking into account the probability of departure anddeath of the employees before term as well as theimpact of revaluations and discounts. This projectedbenefit obligations is then prorated to take intoaccount seniority of the employees of the companyon the calculation date.

Other commitments and contingencies

Allocations are made to reserves for all clearly definedrisks and expenses when past or current events rendertheir occurrence likely. These reserves are revalued atthe end of every fiscal year to reflect changes in theirimpact or likelihood of occurrence.


1.18Financial instrumentsDerivative financial and hedging instruments are usedby the Group to reduce exposure to interest rate andforeign exchange risks. Such instruments are not usedfor speculative purposes.

A swap to cover interest-rate risks in connection withLanvin loans of 2007 linked to 3 month Euribor wasimplemented on the date the loan agreement wasconcluded. In compliance with IAS 39, the differencein the market value of this instrument and thenotional amount is recorded in the income statement.

The company has recourse to forward exchangecontracts and cash flow hedges. These contractsdestined to hedge exposure of trade receivables inforeign currencies (primarily the US dollar andSterling pound) have maturities of three to sixmonths. Currency gains and losses from theseinstruments are recognized in the income statement.

In addition, hedges destined to cover future sales in US dollars were acquired at the end of 2008. These hedges proved coverage for approximately 80%of budgeted sales in this currency for 2009. In accordance with IAS 39, these hedges of projectedcash flows were accounted for as cash flow hedges.Hedge accounting is applicable if the hedge isformally defined and documented on inception of the hedging relationship and it is demonstrated thathedging relationship will be highly effective over thelife of the hedging instrument. At year-end, hedginginstruments corresponding to these criteria arerecognized in the balance sheet at fair value. The gain or loss on the hedging instrumentdetermined to be effective shall be recognized directlyin equity. In 2009, revenue was restated to eliminatethe impact of these hedges.

1.19 BorrowingsOn initial recognition, borrowings are measured at fair value to which are added transaction costsdirectly attributable to the issuance of the liability.

At year-end, borrowings are recognized at amortizedcost according to the effective interest rate method.

1.20Other liabilitiesOther financial debt and operating liabilities aremeasured at fair value on initial recognition. This amount generally corresponds to the amount of the invoice in the case of short-term payables.

1.21Stocks optionsIFRS 2 requires that a charge be recorded in theincome statement with a corresponding increase to reserves representing advantages granted tobeneficiaries of stocks options. For the measurementof these advantages, the company uses the Black &Scholes model. This model takes into account thecharacteristics of the plans (exercise price, exerciseperiod), market data at time of grants (risk-free rate,share price, volatility, projected dividends) andassumptions the behavior of beneficiaries. Changesoccurring after the grant date do not have an impacton this initial valuation. The value of the options isrelated notably to their expected lifespan that thecompany considers corresponds to the holding periodprovided for under tax provisions. This expense isrecognized over the duration of the vesting period.

1.22Registration of trademarksUnder IAS 38, expenses incurred in connection withthe registration of each trademark are not capitalizedand are expensed under “research and consulting costs”.

1.23Earnings per shareBasic earnings per share are calculated using theweighted average number of shares outstandingduring the year and excluding treasury shares.

Fully-diluted earnings per share are calculated basedon the average number of shares outstanding in the period, after excluding only treasury sharesdestined to be held on a long-term basis and adjustedfor the effects of all diluted potential ordinary shares.


2.BASIS OF PRESENTATION

2.1Presentation of the income statementThe consolidated financial statements of the companyare presented by function. Under this format, expensesand income are broken down by function (cost ofsales, selling expenses, administrative expenses) andnot according to the nature of the origin of expensesand income.

2.2Presentation of the balance sheetThe balance sheet is presented based on a classificationbetween current and non-current liabilities.

2.3Segment reportingSegment information presented in this report is basedon the segments used by management to monitorGroup operations.

2.3.1 Primary segment reporting format: business lines

The company is organized and focused around twoprofit centers: selective perfume and cosmetics. Thecosmetic sector currently accounts for less than 10%of sales and is expected to expand in the years ended.

Details on these two sectors for which the companypossesses performance indicators are disclosed below.

2.3.2 Secondary segment reporting format: geographical segments

The company that has a significant internationaldimension analyzes sales by geographical segment.

All assets necessary for the company’s activity arelocated in France.


3. NOTES TO THE BALANCE SHEET

3.1Trademarks and other intangible assets

3.1.1Nature of intangible assets

In € thousands 2008 + - 2009

Gross value

Indefinite life intangible assetsNickel trademark 2,133 - - 2,133Lanvin trademark 36,323 - - 36,323

Finite life intangible assetsS.T. Dupont upfront license fee 1,219 - - 1,219Burberry upfront license fee 5,000 - - 5,000Van Cleef & Arpels upfront license fee 18,250 - - 18,250Quiksilver acquisition cost 490 - - 490

Other intangible assetsRights on molds for bottles 8,716 554 - 9,270Registration of trademarks 440 - - 440Other 489 60 - 549

Total cost 73,060 614 - 73,674

Amortization and depreciation

Indefinite life intangible assetsNickel trademark - (384) - (384)

Finite life intangible assetsS.T. Dupont upfront license fee (1,060) (64) - (1,124)Burberry upfront license fee (1,576) (450) - (2,026)Van Cleef & Arpels upfront license fee (3,042) (1,521) - (4,563)Quiksilver acquisition cost (98) (175) - (273)

Other intangible assetsRights on molds for bottles (6,915) (1,063) - (7,978)Registration of trademarks (440) - - (440)Other (372) (59) - (431)

Total amortization and depreciation (13,503) (3,716) - (17,219)

Total 59,557 (3,102) - 56,455

Nickel trademark

As Inter Parfums is the owner of the Nickel brand,acquired on April 1, 2004, no amortization wasrecognized in its balance sheet. The brand is tested for impairment once a year on December 31.

Lanvin trademark

As Inter Parfums acquired ownership for the Lanvintrademark and brand name for class 3 products inJuly 2007 no amortization was recognized in itsbalance sheet. The brand is tested for impairmentonce a year on December 31.

S.T. Dupont upfront license fee

An upfront license fee of €869,000 paid on April 1, 1997 is amortized of the over the 11-yearterm of the S.T. Dupont license agreement. In March2006, an additional license fee of €350,000 was paidto be amortized over the remaining term of thelicense agreement.

Burberry upfront license fee

The upfront license fee of €3 million paid on July 1, 2004 is amortized over the 12.5 year term of the Burberry license agreement. In September2006 an additional license fee of €2 million was paidto be amortized over the remaining term of thelicense agreement.


Van Cleef & Arpels upfront license fee

An upfront license fee of €18 million was paid onJanuary 1, 2007 and is amortized over the 12-yearterm of the Van Cleef & Arpels license agreement.

Quiksilver acquisition cost

Costs incurred in connection with the acquisition of theQuiksilver license agreement of €490,000 are amortizedover its 12 year term. Because the license agreement wasterminated on June 30, 2010 before term , an acceleratedamortization expense was recognized in 2009.

Rights on molds for bottles

Rights on molds for bottles are amortized over 5 years. Design costs are amortized over 3 years.

3.1.2 Impairment tests

Nickel trademark

An impairment test was performed on December 31, 2009,based on the method of discounting future royaltypayments to infinity resulting in the recognition of a provision of €384,000 for the period.

Lanvin trademark

An impairment test was performed on December 31, 2009, on the basis of the present value of future cash flows discounted to infinity and the price-to-sales ratio method. On the basis of these methods, no provisions were recorded.

Upfront license fees

All upfront license fees were measured on December31, 2009 using the discounted cash flow method. No provision was recorded.

For all discounts, the weighted average cost of capital(WACC) of 7.84% is applied.

Analysis of sensitivity

A one point fluctuation in the discount rate before taxor the perpetuity growth rate would not result in animpairment of trademarks and other intangible assets.

3.2GoodwillGoodwill from the 100% shareholding in Nickel wasrecognized in the balance sheet at December, 31 2007.This goodwill corresponds to the initial acquisition of a 67.57% stake in June 2004 for €6,910,000followed by 32.43% in June 2007 for €3,518,000.

At December 31, 2007, the final allocation of thecost price broke down as follows:

In € thousands

Acquisition cost 10,428

Net equity purchased 2,879Allocation to intangible assets 2,133Allocation to deferred tax assets 969Allocation to deferred tax liabilities (755)Fair value of acquired assets and liabilities (5,226)

Goodwill 5,202

After being tested for impairment on December 31, 2009, an additional impairmentcharge of €1,201,00 was recognized. The total provision recognized in the balance sheetis on this basis €2,589,000.

3.3Property, plant and equipment

In € thousands 2008 + - 2009

Fixtures, improvements, fittings 3,719 2,439 (486) 5,672Office and computer equipment and furniture 1,391 217 (112) 1,496Molds for caps 5,282 831 - 6,113Other (1) 763 274 (369) 668

Total cost 11,155 3,761 (967) 13,949

Accumulated and depreciations (1) (6,993) (2,206) 765 (8,434)

Total 4,162 1,555 (202) 5,515

(1) Including fixed assets held under finance leases (vehicles) for a gross amount of €354,000 and an accumulated depreciation of €91,000.


3.4 Inventories and work in progress


Raw materials and components 23,570 16,538Finished goods 49,778 32,487

Total cost 73,348 49,025

Allowance for raw materials (1,924) (129)Allowance for finished goods (2,906) (3,786)

Total provisions (4,830) (3,915)

Total 68,518 45,110

(1) See note 1.3 “Application of the amendment to IAS 38”.

3.5Trade receivables and related accounts


Total cost 80,766 67,251Provisions (712) (1,218)

Total 80,054 66,033

Maturities for trade receivables break down as follows:


Not due 56,870 50,5450 - 90 days 17,748 14,76731 - 60 days 3,088 687181 - 360 days 77 816More than 360 days 2,983 436

Total cost 80,766 67,251

3.6 Other receivables


Accruals 2,090 1,130Company current accounts 1,306 528Value-added tax 1,145 1,093Hedging instruments 4,836 3,912Other 736 817

Total 10,113 7,480

Hedging instruments include the market value of those implemented at the end of 2008 to hedge sales in US dollars for 2009.

3.7Cash and cash equivalents


Certificates of deposit (less than 3 months) 12,000 44,629Money-market mutual funds 14,239 16,823Bank accounts 4,141 5,421

Cash and cash equivalents 30,380 66,873


(1)

3.8Shareholders’ equity

3.8.1 Common stock

As of December 31, 2009, Inter Parfums’ capital wascomposed of 16,223,513 shares full paid-up with a parvalue of €3, 74.6%-held by Inter Parfums Holding.

For the period under review, capital increases resultfrom the exercise of stock options and the capitalincrease in connection with the bonus issue of June 15, 2009 on the basis of one new share for everyfive shares held.

3.8.2 Stock option plans

The managers and employees of Inter Parfums and itssubsidiaries benefit regularly from stock option plans.

In December 2009, a new plan was established for87,000 stock options at a price of €17.60 for whichall employees were eligible.These options are subjectto a vesting period of 4 years.

The characteristics of plans currently in force are as follows:

Plans Number of Number of Grant Vesting Subscription beneficiaries shares granted date period price

exercised at inception

Plan 2004 74 47,000 03/25/04 4 years €18.40 Plan 2005 85 112,700 05/26/05 4 years €17.20 Plan 2006 84 98,800 06/01/06 4 years €21.90 Plan 2008 (IP Inc) 96 84,500 02/14/08 4 years $11.30 Plan 2009 135 87,000 12/17/09 4 years €17.60

(1) Subscription price adjusted for bonus issues.

In the period, changes in plans issued by Inter Parfums SA break down as follows:

Plans Options Conversions Grants Bonus Cancellations Optionsoutstanding in the in the share in the oustanding

at period periods grants period at12/31/2008 12/31/2009

Plan 2002 43,119 (51,368) - 8,249 - -Plan 2003 83,313 (99,828) - 16,515 - -Plan 2004 128,917 (987) - 25,806 - 153,736Plan 2005 130,665 (408) - 25,798 (1,759) 154,296Plan 2006 128,075 - - 25,426 (1,065) 152,436Plan 2009 - - 87,000 - - 87,000

514,089 (152,591) 87,000 101,794 (2,824) 547,468

At December 31, 2009, the potential number of Inter Parfums SA shares that may be created is 547,468.

In February 2008, all employees of the Group benefited from a stock option plan created by the parentcompany Inter Parfums Inc. This plan was recognized in accordance with IFRIC 11 and will be charged to Inter Parfums SA by the parent company.

Benefits granted to employees in the form of stock options recognized as additional compensation, inaccordance with IFRS 2, were calculated using the Black & Scholes model. The impact of this calculation,including the US plan, represents an expense spread over the duration of the vesting period . This expenseamounted to €397,000 for 2009 and €524,000 for 2008.


(1)

The estimation of the fair value of each stock option based on the Black & Scholes model is calculated on the grant date on the basis of the following assumptions:

Plans Fair value Risk-free Dividend Volatility Share price of the options interest yield rate retained for

rate the calculation

Plan 2002 €10.96 3.00% 1.00% 35% €31.97

Plan 2003 €14.62 3.00% 1.00% 41% €44.00

Plan 2004 €12.48 4.20% 1.00% 23% €64.75

Plan 2005 €6.76 4.50% 1.00% 22% €30.25

Plan 2006 €10.37 4.60% 0.94% 25% €35.00

Plan 2008 (1) $3.96 2.72% 1.20% 39% $11.59

Plan 2009 €4.27 3.56% 2.67% 30% €17.60

(1) 2008 plan has been issued by the parent company Inter Parfums Inc.

For all these plans, the stock options have terms of six years.

3.8.3 Treasury shares

Within the framework of the share repurchase program authorized by the General Meeting on April 24, 2009,37,198 Inter Parfums shares were held by the company as of December 31, 2009.

Changes in the period break down as follows:

In € thousands Number of shares Book value

At December 31, 2008 40,375 834Acquisitions 108,855 1,786Bonus issues as of June 15, 2009 6,425 -Sales (118,457) (1,972)

At December 31, 2009 37,198 648

Management of the share repurchase program is assured by an investment services provider within the frameworkof a liquidity agreement in compliance with the conduct of business rules of the French association of investmentfirms (AFEI).

Purchases of shares under this program are subject to the following conditions:

- The maximum purchase price is €45 per share, excluding execution costs;- The total number of shares acquired may not exceed 5% of the capital stock outstanding.

3.8.4 Minority interests

Minority interests that concern the percentage not held (49%) in the European subsidiaries (Inter ParfumsDeutschland GmbH, Inter España Parfums et Cosmetiques SL, Inter Parfums Srl and Inter Parfums Ltd) break down as follows:

In € thousands 12/31/2008 12/31/2009

Reserves attributable to minority interests 370 (36)Earnings attributable to minority interests (536) 145

Minority interests (166) 109

Minority shareholders have an irrevocable obligation and the ability to offset losses by an additional investment.


3.8.5 Information on equity

The company is not subject to specific regulatory or contractual obligations in respect to capital stock.

In compliance with the provisions of article L.225-123 of the French Commercial Code, the shareholders’ meeting of September 29, 1995decided to create shares carrying a double votingright. These shares must be fully paid up andrecorded in the company’s share register in registeredform for at least three years.

Since 1998, the company has adopted a policy ofdistributing dividends that today represents nearly25% of consolidated earnings, destined to reward

shareholders while at the same time associating themwith the Group’s expansion. In early May 2009, adividend of €0.38 per share was paid or a totalamount of €5 million.

In respect to financing, given the Group’s significantshareholders equity and low gearing, financing forsignificant operations required by the Group wasobtained from banks in the form of medium-term loans.

In addition to the company’s commitment withlending institutions to comply with contractualcovenants, the level of consolidated shareholders’equity is regularly monitored to ensure the companycontinues to have sufficient financial flexibility to take advantage of all potential opportunities for external growth.

3.9 Commitments and contingencies

In € thousands 2008 Increases Provisions Provisions 2009used in reversal of

the period unusedprovisions

Reserves for severance benefits 712 419 - - 1,131

Total commitments and contingencies > 1 year 712 419 - - 1,131

Other commitments and contingencies 2,280 1,010 (1,453) (774) 1,063

Total commitments and contingencies < 1 year 2,992 1,429 (1,453) (774) 2,194

Since 2008, for the measurement of retirementseverance benefits, Inter Parfums has adopted the procedure for voluntary severance agreementsintroduced on July 23, 2008 extending theinterprofessional agreement of January 11, 2008.

For 2009, the following assumptions were applied: - Voluntary termination at age 65;- A rate of 45% for employer payroll contributions for all employees;- A 5% average annual salary increase;- A 5% annual rate of turnover for all employees under 55 years of age and nil above;- The TH 00-02 mortality table for men and the TF 00-02 mortality table for women;- A discount rate of 3.96%.

Past service costs not recognized of €585,000 were recorded under off-balance sheet items atDecember 31, 2009.

On the basis of these assumptions, the annual expense of €420,000 recorded under current income breaksdown as follows:

- Cost of services rendered: €162,000- Financial expense: €41,000- Cost of actuarial losses: €217,000

Contingencies concerned primarily provisions forcontract-related disputes. Following the agreementreached between Inter Parfums and its distributorrelating to sales conditions the lawsuit contingencyprovision was reversed.


3.10.3Additional disclosures

The floating-rate portion of the Lanvin debtcontracted in June 2004 was covered by a swap. This swap at 12-month Euribor at year-end with a floor of 2.10% and a cap of 3.85%.

At June 30, 2009, this loan was fully reimbursed and the corresponding swap position was closed out.

The floating-rate portion of the Lanvin debtcontracted in September 2007 was also covered by a swap against a fixed rate of 4.42%.

At December 31, 2009, on the basis of a notionalamount of €12.1 million, a gain of €61,000 inconnection with this swap was recognized in theincome statement and for which the Group did notapply hedge accounting in accordance with IAS 39.The market value of the swap at December 31, 2009represented a negative amount for the company of€522,000.

3.10.4Covenants

The loans obtained by the parent company aresubject to the following covenant ratios:

- net debt to net equity;- net debt to cash flow.

These ratios are calculated by the company every year.

In 2009, these covenants were fully met. The current level of these ratios is considerably belowthe contractual limits. As a result, the Group hasconsiderable financial flexibility in respect to thesecommitments.

3.10Borrowings and other financial debt

3.10.1 Borrowings by maturity and rate

In € thousands Total < 1 year 1 to 5 years >5 years

Floating-rate (Euribor 3M) 12,622 4,811 7,811 -Fixed rate 7,643 3,744 3,899 -Automobile leases 278 92 186 -Bank overdrafts 672 672 - -

Total at December 31, 2009 21,215 9,319 11,896 -

In € thousands Total < 1 year 1 to 5 years >5 years

Floating-rate (Euribor 3M) 18,683 6,583 12,100 -Fixed rate 11,238 3,594 7,644 -Automobile leases 153 94 59 -Bank overdrafts 4,076 4,076 - -

Total at December 31, 2008 34,150 14,347 19,803 -

All borrowings are in euros.

3.10.2 Analysis of borrowings

Lanvin Lanvin Van Cleef 2004 2007 & Arpels

Inception date June 30, 2004 September 28, 2007 January 1, 2007Initial amount (in € thousands) 16,000 22,000 18,000Duration 5 years 5 years 5 yearsRate Floating Rate Floating Rate Fixed rate

3M Euribor +0.60% 3M Euribor +0.40% 4.1%Repayment schedule quarterly quarterly quarterlyAmount payable at 12/31/2009 (in € thousands) - 12,100 7,643


3.11 Deferred taxDeferred taxes from consolidation adjustments and loss carryforwards are recovered as follows:

In € thousands 2008 Changes Changes 2009through through reserves income

Deferred tax liabilitiesTiming differences between financial and tax accounting 48 - (40) 8Acquisition cost 761 - (67) 694Forward exchange hedges 2,022 (2,216) 901 707Stocks options - 109 (109) -Gains (losses) on treasury shares - 43 (43) -Loan swap - - - -Remeasurement gains (losses) 734 - - 734Other 71 - (29) 42

Total deferred tax liabilities 3,636 (2,064) 613 2,185

Deferred tax assetsTiming differences between financial and tax accounting 748 - 176 924Loan swap 201 - (21) 180Inventory margin 753 - (64) 689Advertising and promotional costs (1) 784 - (31) 753Market value of securities - - 46 46Other 41 - (13) 28

Total deferred tax assets before depreciation 2,527 - 93 2,620

Depreciation of deferred tax - - - -

Net deferred tax assets 2,527 - 93 2,620

Total net deferred tax 1,109 (2,064) 520 (435)

(1) See note 1.3 “Application of the amendment to IAS 38”.

3.12Other short-term liabilities


Accrued credit notes 3,006 2,884Current account liabilities - -Tax and employee-related liabilities 6,072 8,362Other debts 3,271 3,877

Total 12,349 15,123


(1)

3.13Financial instruments The following table presents financial instruments in the balance sheet according to the categories provided for under IAS 39.

In € thousands Notes Carrying Fair Fair value Available Loans & DerivativesAt December 31, 2009 value value through for sale receivable

profit or loss assets or payables

Other non-current financial assets 886 886 - 70 816 -Trade receivables and related accounts 3.5 66,033 66,033 - - 67,888 (1,855)Other receivables 3.6 7,480 7,480 - - 3,568 3,912Cash and cash equivalents 3.7 66,873 66,873 - - 66,873 -

Assets 141,272 141,272 - 70 139,145 2,057

Borrowings 3.10 20,543 20,391 522 - 20,021 -Trade payables and related accounts 41,809 41,809 - - 41,809 -Short-term bank loans 3.10 672 672 - - 672 -Other liabilities 3.12 15,123 15,123 - - 15,123 -

Liabilities 78,147 77,995 522 - 77,625 -

In € thousands Notes Carrying Fair Fair value Available Loans & DerivativesAt December 31, 2008 value value through for sale receivable

profit assets assets or payables

Other non-current financial assets 478 478 - 70 408 -Trade receivables and related accounts 3.5 80,054 80,054 - - 79,025 1,029Other receivables 3.6 10,113 10,113 - - 5,277 4,836Cash and cash equivalents 3.7 30,380 30,380 - - 30,380 -

Assets 121,025 121,025 - 70 115,090 5,865

Borrowings 3.10 30,074 29,160 583 - 29,491 -Trade payables and related accounts 52,866 52,866 - - 52,866 -Short-term bank loans 3.10 4,076 4,076 - - 4,076 -Other liabilities 3.12 12,349 12,349 - - 12,349 -

Liabilities 99,365 98,451 583 - 98,782 -

The fair value of all current assets and liabilities (trade receivables, payables, short-term loans and debt, cash at bank overdrafts), because of their short-term maturities, is considered identical to the carrying value. The fairvalue of non-current debt is determined by estimating future cash flows, loan by loan, that are updated at year-endon the basis of actual market rates at year-end for similar types of borrowing, as presented in the table above.

3.14Risk managementThe primary risks related to the Group’s business and organization concerning interest rate and foreignexchange rate risks remain marginal. The potentialimpacts of other risks on the company’s financials are not material.

3.14.1 Interest rate risks

The Group’s exposure to interest rate is primarilyfrom debt. The objective of the Group’s policy is to ensure a stable level of financial expense throughthe use of hedges in the form of interest rate swapsand the use of floor and caps.

These financial instruments are not eligible for hedgeaccounting under IAS 39. The Group neverthelessconsiders that these transactions are not speculative in nature and are necessary to effectively manage itsinterest rate exposure.

Sensitivity to interest rates

The interest expense recorded in 2009 on medium-termdebt represents the maximum expense in light of theceiling provided for under the conditions for the fixedrate swap.


3.14.2Liquidity risk

The net position of financial assets and liabilities by maturity is as follows:

In € thousands < 1 year 1 to 5 years >5 years

Financial assets 61,452 70 -Financial liabilities (8,236) (11,785) -

Net position before hedging 53,216 (11,715) -

Hedging of assets and liabilities (Swaps) (411) (111) -

Net position after hedging 52,805 (11,826) -

Financial liabilities by year break down as follows:

In € thousandsAt December 31, 2009 2010 2011 2012 Total

Floating-rate debt - nominal 4,400 4,400 3,300 12,100Floating-rate debt - interest 543 314 86 943Fixed rate debt - nominal 3,744 3,900 - 7,643Fixed rate debt - interest 256 100 - 356Interest rate swaps 411 102 8 522

In € thousandsAt December 31, 2008 2009 2010 2011 2012 Total

Floating-rate debt - nominal 6,000 4,400 4,400 3,300 18,100Floating-rate debt - interest 787 543 314 86 1,730Fixed rate debt - nominal 3,594 3,744 3,900 - 11,238Fixed rate debt - interest 406 256 100 - 762Interest rate swaps 300 169 86 28 583

3.14.3Foreign exchange risk

Net positions of the Group in the main foreign currencies are as follows:

In € thousands USD GBP YEN CAD

Assets 19,353 3,492 1,041 44Liabilities (927) (502) (10) -

Net position before hedging 18,426 2,990 1,031 44

Currency hedges 1,855 (93) - -

Net position after hedging 20,281 2,897 1,031 44

In addition, because a significant portion of the Group’ssales are in foreign currencies it incurs a risk from exchangerate fluctuations, primarily from the US dollar (34.6% of sales) and to a lesser extent the pound sterling (8.6% of sales) and the Japanese yen (2.7% of sales).

Foreign exchange risk management policy

The Group’s exchange rate risk management policyseeks to cover budget exposures considered highlyprobable related to monetary flows resulting from US dollar sales, as well as trade receivables in theperiod in US dollars and pound sterling.

To this purpose, the Group has recourse to forwardexchange sales, according to procedures that prohibitspeculative trading:

- All forward currency hedging must be backed interms of amount at maturity by an identifiedeconomic underlying asset;- Every identified budget exposure hedged for 80%.

At December 31, 2009, the Group had fully hedgedits positions in US dollars and pound sterling fortrade receivables recorded.

The 2009 sales budget was hedged for 80%, withadditional forward currency sales made for thebalance.

The nominal amounts of hedges open, based on tradereceivables measured at year-end are as follows:


Forward sales of US dollars 26,026 27,866Forward sales of pound sterling 5,010 5,906Forward sales of Japanese yen 745 -

Difference in market and carrying value - -


4.NOTES TO THE INCOME STATEMENT

4.1Breakdown of consolidated sales by brand


Burberry 169,031 166,242Lanvin 38,967 40,634Van Cleef & Arpels 21,018 20,158Paul Smith 13,403 12,789S.T. Dupont 11,464 11,512Roxy 7,379 3,691Nickel 2,657 2,305Christian Lacroix 1,274 -Other (329) 1,868

Total 264,864 259,199

4.2Cost of sales


Raw materials, trade goods and packaging (118,152) (76,123)Changes in inventory and allowances 16,069 (22,171)POS advertising (5,626) (4,395)Transportation costs (1,031) (490)Other expenses related to the cost of sales (3,568) (3,779)

Total cost of sales (112,308) (106,958)

4.3Selling expenses


Advertising (44,647) (39,359)Royalties (25,164) (25,000)Staff costs (11,224) (12,755)Subcontracting (14,367) (14,820)Transportation costs (3,407) (3,002)Commissions (2,086) (1,746)Travel expenses (2,235) (1,951)Allowances and reversals (2,340) (3,495)Other selling expenses (4,537) (5,071)

Total selling expenses (110,007) (107,199)


Sensitivity to foreign exchange risk

The Group considers that a 10% fluctuation in theexchange rate of the US dollar in relation to the eurorepresents a pertinent risk factor that may reasonablyoccur within a given year. An immediate upswing inthe exchange rate (US dollar and pound sterling) of10% would result in a maximum positive currencyeffect of €7.0 million on sales and €5.9 million onoperating income. A 10% decrease of these sameexchange rates would have an equivalent negativecurrency effect of the same amounts.

3.14.4 Counterparty risk

Financial instruments used by the Group to manage interest rate and foreign exchange risksare obtained from counterparties with benchmarkratings. At December 31, 2009, counterparties(according to Standard & Poor’s) were rated AA.

Cash is deposited with financial institutions with a rating issued by a specialized agency. At December 31, 2009, 81% of counterparties(according to Standard & Poor’s) were rated AA.

4.4Administrative expenses


Purchases and external costs (2,658) (2,777)Staff costs (2,854) (3,546)Tax and related expenses (459) (367)Allowances and reversals (794) (1,344)Other administrative expenses (959) (1,740)

Total administrative expenses (7,724) (9,774)

4.5Other operating income and expensesAn additional goodwill impairment charge of €1,201,000 was recognized on the difference between the marketvalue of Nickel’s business estimated at December 31, 2009 and its carrying value under “Other operatingincome and expenses”.

4.6Net financial expense


Interest income 1,246 403Interest and similar expenses (2,891) (1,579)

Net finance costs (1,645) (1,176)

Currency gains (losses) (942) 2,302Other financial income and expenses (165) (45)

Net financial expense (2,752) 1,081

4.7Income taxes

4.7.1 Analysis of income taxes


Current income tax (10,531) (11,453)Deferred tax arising from timing differences 115 216Deferred tax arising from consolidation adjustments (508) (735)

Total income taxes (10,924) (11,972)

4.7.2 Reconciliation of the effective tax expense and theoretical tax expense

The difference between the effective tax recorded and the theoretical tax expense calculated by applying the taxrate of 34.4% applicable for fiscal 2009 and 2008 to pretax income reflects the following.


Tax base 31,507 34,764Theoretical tax calculated at the standard rate (10,848) (11,969)Effect of tax rate change on deferred taxes 309 615Depreciation of tax assets from loss carryforwards (147) 42Permanent nondeductible differences (238) (660)

Income tax (10,924) (11,972)


4.8Earnings per share

In € thousands, except number of shares and earnings per share in euros 2008 2009

Consolidated net income 21,119 22,647Average number of shares 12,719,676 14,880,583

Basic earnings per share (1) 1.66 1.52

Dilution effect of stock options: Potential fully diluted consolidated net income 66,499 -Potential fully diluted average number of shares outstanding 12,786,175 14,880,583

Diluted earnings per share (1) 1.65 1.52

(1) Not adjusted for bonus shares granted in 2008 and 2009.

5.SEGMENT REPORTING

5.1Primary segment information: business lines

In € thousands 2008 2009Perfumes Cosmetics Total Perfumes Cosmetics Total

Sales 262,207 2,657 264,864 255,889 3,310 259,199Income from operations 35,242 (417) 34,825 36,089 (821) 35,268Impairment - (566) (566) - (1,585) (1,585)

Trademarks, licenses and goodwill 57,877 5,494 63,371 57,222 1,846 59,068Inventory 67,118 1,400 68,518 44,415 695 45,110Other segment assets 126,517 1,382 127,899 149,096 400 149,496

Total segment assets 252,296 8,276 260,572 250,733 2,941 253,674

Segment liabilities 80,989 1,162 82,151 68,293 1,21 68,414

Segment assets and liabilities consist of operating assets (liabilities) used primarily in France.

5.2Secondary segment information: geographical segmentsSales by geographical sector break down as follows:


North America 49,632 43,766South America 17,785 17,452Asia 33,911 37,448Eastern Europe 26,294 18,420Western Europe 85,263 85,135France 25,638 26,466Middle East 24,187 28,672Other 2,154 1,840

Total 264,864 259,199


6.OTHER INFORMATION

6.1Off balance sheet commitments

6.1.1 Summary of balance sheet commitments


Guaranteed minima on trademark royalties 220,299 203,087Headquarter rental payments 7,652 6,113Guaranteed minima for warehousing and logistics 7,950 5,150Firm component orders (inventories) 4,124 2,914Pension liabilities 607 585

Total commitments given 240,632 217,849

6.1.2Commitments given by maturity at December 31, 2009

In € thousands Total Up to 1 year 1 to 5 years 5 years or more

Guaranteed minima on trademark royalties 203,087 24,612 107,420, 71,055Headquarters rental payments 6,113 1,321 3,806 986Guaranteed minima for warehousing and logistics 5,150 2,900 2,250 -

Total contractual obligations 214,350 28,833 113,476 72,041

Firm component orders (inventories) 2,914 2,914 - -Pension liabilities 585 22 87 476

Total other commitments 3,499 2,936 87 476

Total commitments given 217,849 31,769 113,563 72,517

Maturities are defined on the basis of the contract terms (license agreements, leases, logistic agreements, etc.).

6.1.3 Other commitments

Commitments in respect to forward currency sales at December 31, 2009 amounted to $36,436,000and £5,388,000.

Act No. 2004-391 of May 4, 2005 on lifelongvocational training and social dialogue established an individual training benefit for employees in France(Droit Individuel à la Formation or DIF). Pursuant tothis measure, the company has provides for trainingbenefits of the basis of 21 hours per year and per employee. The number of training benefitsvested by Group employees totaled 6,894 hours at December 31, 2009 and 939 of training hoursunder this provision were used by Group employeesin the year.

In compliance with obligations under German law,under the terms of a comfort letter issued at the endof June 2007, Inter Parfums provided a guaranteewithout restrictions to ensure that its Germansubsidiary Inter Parfums GmbH, is managed andfunded to honor at all times its payment obligationsto all creditors.

At the end of July 2007, Inter Parfums acquired the Lanvin brand names and international trademarksfor class 3 fragrance products and make-up from theJeanne Lanvin company. The Jeanne Lanvin companyholds a buy back option for the brands which will be exercisable on July 1, 2025.

6.1.4 Commitments received

Commitments received in connection with forwardcurrency sales at December 31, 2009 amounted to €27,866,000 for hedges for US dollars and€5,906,000 for pound sterling representing totalcommitments of €33,772,000.


6.2License agreements

Nature of License Duration Expiration datelicense inception date

Burberry Original July 1993 13 years and 6 months -Renewal July 2004 12 years and 6 months December 2016

S.T. Dupont Original July 1997 11 years -Renewal January 2006 5 years and 6 months June 2011

Paul Smith Original January 1999 12 years -Renewal July 2008 7 years December 2017

Christian Lacroix Original March 1999 10 years and 10 months December 2010

Quiksilver Original April 2006 11 years and 9 months June 2010 berfore term

Van Cleef & Arpels Original January 2007 12 years December 2018

Jimmy Choo Original January 2010 12 years December 2021

The renewal of the Burberry license agreement on July 1, 2004 was accompanied by an option to extend thelicense by an additional five years and an option by Burberry Ltd to acquire the license at its market value atDecember 31, 2011.

On September 1, 2009 Quiksilver and Inter Parfums decided by mutual agreement to terminate theircollaboration on June 30, 2010 before the stipulated expiration date. This measure had no financial impact on either of the parties.

6.3Proprietary brandsLanvin

In June 2004, Inter Parfums signed an exclusiveworldwide license agreement with Lanvin effective July 1, 2004 to create, develop and distribute fragrancelines under the Lanvin brand name for 15 years.

At the end of July 2007, Inter Parfums acquired the Lanvin brand names and international trademarksfor class 3 fragrance products and make-up from theJeanne Lanvin company.

Inter Parfums and Lanvin also mutually agreed withimmediate effect to terminate the license agreementsigned in July 2004 and at the same time concluded a technical and creative assistance agreement in viewof developing new perfumes based on net sales untilJune 30, 2019. The Jeanne Lanvin company holds a buy-back option for the brands which will beexercisable on July 1, 2025.

Nickel

In April 2004, Inter Parfums acquired a majoritystake in Nickel, a company specialized in skincareproducts for men.

In June 2007, Nickel became a wholly-ownedsubsidiary after Inter Parfums acquired the company’sremaining shares.

6.4InsuranceInter Parfums is named as beneficiary under a €15 millionlife insurance policy for Philippe Benacin.

6.5Employee-related data

6.5.1 Employees by category


Executive officers and management 82 84Supervisory staff 9 9Employees 61 78

Total 152 171

6.5.2 Employees by department


General Management 2 2Production & Operations 22 24Burberry Fragrances 27 31Luxe & Fashion 25 24France 49 59Finance & Corporate Affairs 27 31

Total 152 171


6.5.3 Wages and benefits


Total wages and benefits 15,946 18,428of which Management Committee members - wages, bonuses & social charges 2,923 3,027of which Management Committee members - share based payment expenses 208 135

In addition supplemental retirement benefits for executive management of €119,000 was paid in 2009.

6.6Information on related parties

6.6.1 Management Committee

The seven members of the Management Committeeexercise responsibilities in the areas of strategy, themanagement and oversight. They have employmentcontracts and receive compensation as follows:


Wages, bonuses & social charges 2,923 3,027Share based payment expenses 208 135

The executive officers Philippe Benacin and Jean Madar, cofounders of Inter Parfums SA are also executive officers and majority shareholders of the parent company Inter Parfums Inc.

6.6.2 Board of Directors

The ten members of the Board of Directors exerciseresponsibilities in the areas of strategy, managementconsulting, acquisitions and oversight. Only outsidedirectors are paid directors’ fees that break down asfollows:


Directors’ fees (1) 35 45

(1) Calculated on the basis of actual Board meeting attendance.

6.6.3 Relations with the parent company

The accounts of Inter Parfums and its subsidiaries,through Inter Parfums Holding, are all fullyconsolidated into the accounts of Inter Parfums Inc.,whose registered office is located at 551 Fifth Avenue,New York, NY 10176 USA, United-States. Nomaterial transaction exists between Inter Parfums SAand Inter Parfums Inc.

6.6.4 Relations with subsidiaries

Inter Parfums’ subsidiaries Inter ParfumsDeutschland GmbH, Inter España Parfums and Cosmetiques SL, Inter Parfums Srl, InterParfums Ltd and Inter Parfums Suisse Sarl are fullyconsolidated. The main transactions between theseentities are of a commercial nature and concern thesale of products of the parent company to subsidiariesthat assure the distribution in their respectivemarkets. These transactions also generate cash flowsbetween the subsidiaries and the parent company.Subsidiary sales represent approximately 15% ofGroup revenue.


6.7Auditors’ feesTotal auditors’ fees expensed in the income statement relating to their engagement as statutory auditors breaksdown as follows:

In € thousands MAZARS2008 |% 2009 |%

Work as statutory auditors and certification of individual and consolidated financial statements:Of the Issuer 250 74% 250 75%Of fully consolidated subsidiaries 90 26% 83 26%Other directly related assignments - - - -

Other services rendered by members of the auditor’s network to fully consolidated subsidiaries - - - -

Total 340 100% 333 100%

In € thousands SFECO & FIDUCIA2008 |% 2009 |%

Work as statutory auditors and certification of individual and consolidated financial statements:Of the Issuer 84 97% 87 97%Of fully consolidated subsidiaries - - - -Other directly related assignments 3 3% 3 3%

Other services rendered by members of the auditor’s network to fully consolidated subsidiaries - - - -

Total 87 100% 90 100%

6.8Post-closing eventsOn January 22, 2010, Montblanc International GmbH and Inter Parfums SA signed a license agreement to create, produce and distribute perfumes and ancillary products under the Montblanc brand. This license agreement for ten and a half years will take effect on July 1, 2010.


CHAPTER THREE

CorporategovernanceBoard of Directors 89

Management committee 94

Compensation of executive management 94

Special report of the Board of Directors on stock options 97

Chairman’s report on the work of the Board and internal control 98

88 Two thousand nine registration document Inter Parfums. Corporate Governance

financier_uk_2.qxd 7/05/10 15:17 Page 88

1.BOARD OF DIRECTORS

Inter Parfums adopted the form of a société anonyme,the French equivalent of a joint stock company, whenit was created in 1989. It is governed by a Board ofDirectors and a Management Committee.

The Board of Directors’ meeting of December 22, 2008reviewed the AFEP-MEDEF recommendations ofOctober 6, 2008 pending the adoption of a corporategovernance code specifically adapted for small andmid-caps. This code developed by Middlenext andsupplementing the AFEP-MEDEF recommendationswas adopted and rendered public in December 2009.

The items requiring vigilance described in theMiddlenext code of December 2009 were brought to the attention of the Board of Directors thatdecided to refer to this code. It sets forth the mainissues that must be addressed to ensure effectivecorporate governance, with this Middlenext code itself based on the recommendations of the AFEP-MEDEF and the AMF.

Composition of the Board of Directors

The company has strengthened the Board of Directorsthat initially had four members, by appointing newboard members for renewable six-year terms to benefitfrom their additional expertise and experience. On December 31, 2009 the Board of Directors had10 members.

A modification of the duration of appointments will be proposed when the renewal of the terms of directors shall be submitted to the vote on theGeneral Meeting on April 23, 2010. In effect, theMiddlenext Code recommends that the duration of appointments set forth in bylaws be adapted to the specific characteristics of the company, within the limits provided for by law. The company wishesto maintain a realistic approach in respect to therenewal of appointments, by avoiding terms that aretoo long, with a potential adverse affect director’sindependence, but also too short, that coulddiscourage their investment in the company.

In this context, and subject to the adoption by the general meeting of April 23, 2010 of resolution25 proposing to modify article 12 of the bylaws, the company would extend the duration of the termsof directors to 4 years.

The Board ensures that at least 30% of its membersare independent directors. A director is considered to be independent according to the criteria of theMiddlenext Code when there exists no materialfinancial, contractual or family relationship thatcould compromise their free exercise of judgmentwhereby the director may not:- Be a current employee or corporate officer(mandataire social) of the company or a company ofits group or have been so within the past three years;- Be a significant customer or supplier of thecompany or its group, or for which the company orits group represents a significant part of its business;- Be the main shareholder of the company;- Be related by close family ties to a corporate officeror a main shareholder;- Have been an auditor of the company within theprevious three years.

On the basis of these criteria, the board includes three independent directors, Mrs. Chantal Roos, Mr. Maurice Aladhève and Mr. Michel Dyens.

To date, the Board has three members with the statusof employees resulting from an employment contractpredating their appointment as directors.

As a general rule, members of the Board of Directorshave an in-depth or multidisciplinary experience of the business world in international markets. Theyare subject to conduct of business rules that includenotably obligations of secrecy and due diligence inthe performance of their duties ensuring the effectivework of the Board in a collegiate nature. Directors are provided not only with information before eachmeeting but also on a permanent basis concerning allstrategic and financial matters necessary to performtheir duties in the most effective manner.

The Board charter (Règlement Intérieur) adopted onMarch 3 2009 has been revised to incorporate therecommendations of the Middlenext Code ofDecember 2009 and is reproduced below in full.

89Two thousand nine registration document Inter Parfums. Corporate Governance


Composition of the Board and profiles

As of December 31, 2009 the composition of the Board of Directors was as follows:

Philippe Benacin, Chairman and Chief ExecutiveOfficer of Inter Parfums (appointment renewed April 23, 2004, expiring at the close of the 2010annual shareholders’ meeting).

Philippe Benacin, 50, a graduate of the ESSECbusiness school and cofounder of the company with his partner Jean Madar, has served as Chairman and Chief Executive Officer of Inter Parfums SAsince its creation in 1989.

Other appointments: Chairman of the Board of Directors of Inter Parfums HoldingPresident and Vice Chairman of the Board of Inter Parfums Inc (United States).

Jean Madar, Director (appointed April 23, 2004, expiringat the close of the 2010 annual shareholders’ meeting).

Jean Madar, 48 a graduate of the ESSEC businessschool, is the cofounder of the company with hispartner Philippe Benacin.

Other appointments: Chief Executive Officer of Inter Parfums Holding.Chief Executive Officer and Chairman of the Board of Inter Parfums Inc (United States).

Maurice Alhadève, Independent director (appointed by the shareholders’ meeting of April 23, 2004, expiringat the close of the 2010 annual shareholders’ meeting).

Other appointments: none.

Patrick Choël, Director (appointed by theshareholders’ meeting of December 1, 2004, expiringat the close of the 2010 annual shareholders’ meeting).

Other appointments: Director of Inter Parfums Inc(United States), Director of Parfums Christian Dior,Director of Guerlain, Director of Modelabs

Michel Dyens, Independent director (appointed by the shareholders’ meeting of April 23, 2004,expiring at the close of the 2010 annual shareholders’meeting).

Other appointments: Director of Direct Panel,Chairman of Michel Dyens & Co.

Frédéric Garcia-Pelayo, Director and Executive Vice President (holder of an employment contractpreceding the appointment by the shareholders’meeting of 24 April 2009, expiring at the close of the 2010 annual shareholders’ meeting).

Frédéric Garcia Pelayo, 51, EPSCI international exchangeprogram graduate of the ESSEC Business School, hasbeen Vice President for Export Sales of Inter Parfumssince 1994 and Executive Vice President since 2004.


Jean Levy, Director (appointed by the shareholders’meeting of April 23, 2004, expiring at the close of the2010 annual shareholders’ meeting).

Other appointments: Director of the Inter Parfums Inc.(United States), Director of Price Minister SADirector of Axcess Groupe SA, Director of MoM SAS.

Chantal Roos, Independent director (appointed bythe shareholders’ meeting of 24 April 2009, expiringat the close of the 2010 annual shareholders’ meeting)


Philippe Santi, Director and Executive Vice President(holder of an employment contract preceding the appointment by the shareholders’ meeting of 23 April 2004, expiring at the close of the 2010annual shareholders’ meeting)

Philippe Santi, 47, graduate of the École Supérieur de Commerce of Reims and a public accountant hasserved as the Chief Financial and AdministrativeOfficer of Inter Parfums SA since 1995 and ExecutiveVice President since 2004.

Other appointments: Director of the parent companyInter Parfums Inc.

Catherine Bénard-Lotz, Director (holder of anemployment contract preceding the appointment by the shareholders’ meeting of April 23, 2004,expiring at the close of the 2010 annual shareholders’meeting).


Absence of condemnations

To the best of the Company’s knowledge, in the lastfive years none of the members of the Board ofDirectors have been:

- Convicted for fraud or penalties for infractionsrendered by statutory or regulatory authorities;

- Involved in a bankruptcy, receivership or liquidationproceeding as a director or officer;

- Disqualified from serving as a director or officer or participating in the management of the operationsof an issuer.

Absence of potential conflicts of interest

To the best of the Company’s knowledge, there exist no potential conflicts of interest between the dutiestowards the company and the personal interests and/orother duties of one of the members of the board.

Absence of service contracts with board members

To the best of the Company’s knowledge, none of the board members is bound by service agreementswith the company or one of its subsidiaries providingfor the grant of benefits under its terms.



2.CHARTER OF THE BOARD OF DIRECTORS

This Charter or ‘Rules of Procedure’ (RèglementIntérieur), previously entitled “Charter of the Boardof Directors” adopted by the Board on March 3,2009, was updated by the Board on March 8, 2010,in order to take into account the provisions of theMiddlenext Code of December 2009 to which theBoard has opted to refer instead of theAFEP/MEDEF Code previously used.

The full text of the Middlenext Code is attached to this Charter.

Applicable to all current and future directors, and in line with the Middlenext Code, this Charter, isdestined to supplement the provisions of the law,regulations and the company’s bylaws, in the interestof the company and its shareholders in order tospecify:

- The composition of the Board/criteria of independencefor members;- The role the Board in the performance of its dutiesand powers;- Board procedures (meetings, discussions,information provided to members);- Board procedures (meetings, discussions,information provided to members);- The duties of Board members (code of conduct:loyalty, confidentiality, abstention, etc.).

1.Composition of the Board of DirectorsThe Board of Directors includes a maximum of 18members with at least three selected from independentpersons having no ties of interest with the company sothat they are entirely free in the exercise of their judgment.

A director is considered to be independent accordingto the criteria of the Middlenext Code when thereexists no material financial, contractual or familyrelationship that could compromise his or her freeexercise of judgment whereby the director may not:

- Be a current employee or corporate officer(mandataire social) of the company or a company of itsgroup or have been so within the past three years;

- Be a significant customer or supplier of the companyor its group, or for which the company or its grouprepresents a significant part of its business;

- Be the main shareholder of the company;

- Be related by close family ties to a corporate officer or a main shareholder;

- Have been an auditor of the company within theprevious three years.

The Board may consider that one of its members, even though fulfilling the above criteria, should not be considered as independent, in light of his or herparticular situation or that of the company, with respect to its shareholder structure or for any other reason.Conversely, the Board may also consider that one of itsmembers not fulfilling these criteria to be independent.

2.Role of the Board of Directors

2.1Strategic body

The mission of the Board of Directors is to determinethe strategy of the company and ensure that thisstrategy is implemented. Subject to the powersgranted to shareholders’ meetings and within thelimits of the company’s corporate purpose, the Boardmay address any matter pertaining to the propermanagement of the company and settle all items ofbusiness relating thereto.

In addition to the attributes provided for by law and regulations, the Board may be called to addressand grant its approval for, in particular, the followingmatters:

- Assessing the environment of the company andanalyzing opportunities for external growth throughacquisitions;- The creation of a company or acquiring controllinginterest in all forms in any company or undertakingoutside the group;- Reviewing projects involving material investmentsor not relating to the company’s ordinary operatingactivities;- Analyzing major strategic projects presented toexecutive management and their impact on theeconomic and financial situation of the company;- Analyzing the annual budget submitted by executivemanagement;- Implementing procedures for control or verificationit considers appropriate.

And in general, the Board ensures the merits of anymeasure adopted for the strategic development of thecompany and the solidity of the company’s balance sheet.

2.2Audit committee function

On March 3, 2009 the Board of Directors decided thatin light of the company’s organization and structure, anindependent audit committee would not be establishedand that in consequence, in accordance with theprovisions provided for under article L. 823-20of the French Commercial Code, it would exercisethe functions of audit committee in plenary session.

In connection with a performance of the functions of audit committee, the primary tasks of the Board of Directors are to:

- Ensure compliance with accounting regulations andthe correct application of the principles for preparingthe company’s accounts;



- Ensure that the process for producing financialinformation is based on internal procedures for thecollection and control of information that guaranteeits quality and exhaustive nature;

- Assess the performance of internal control systemsby evaluating the organization principles andfunctioning of internal audit and by verifying theprocess for identifying risks; Review the auditmissions and evaluations of the internal controlsystem carried out by the Finance Department;

- Monitor the application of the rules ofindependence and objectivity of the auditors in theperformance of their duties, the conditions for therenewal of their appointments and setting their fees.

3.Procedures for exercising general management

3.1The Chairman of the Board of Directors

The Chairman, appointed by the Board of Directorsfrom among its members, organizes and manages thework of the Board on which he reports to theshareholders’ meeting. He ensures that managementbodies of the company are effectively run and, inparticular, that directors are able to perform theirduties. The Chairman may request any documents or specific information to assist the Board ofDirectors in connection with preparing its meetings.

The Chairman actively contributes to the performanceof the duties of directors by serving as an intermediarybetween the latter and the main parties involved inimplementing the company’s strategic objectives.

3.2General Management

The Board of Directors determines the manner that General Management is exercised, under itsresponsibility, either by the Chairman of the Board ofDirectors, or by a person appointed by the latter withthe title of Chief Executive Officer (Directeur Général).

The Board of Directors’ meeting of December 19,2002 decided not to separate the functions ofChairman of the Board of Directors from those ofChief Executive Officer. In this respect, and subjectto the powers granted by law to general meetings andthe limitations provided for by the provisions of theCharter, the Chairman of the Board of Directorsexercises the functions of Chief Executive Officer andis vested with the broadest powers to act in allcircumstances in the name of the company with theexception of the following strategic decisions that aresubmitted for approval to the Board of Directors:

- Any financial commitment (immediate or deferred)for an amount exceeding €10 million per transactionand having a material impact on the company’s scopeof consolidation, including mainly the acquisition ordisposal of assets or equity investments in companies;

- Any decision, regardless of the amount involved,that could potentially materially affect the strategy of the company or materially modify the scope of itsnormal activity.

On proposals by the Chief Executive Officer, the Board of Directors may appoint one or moreindividuals to assist the Chief Executive Officer with the title of Executive Vice President (DirecteurGénéral Délégué).

4.Functioning of the board of directors

4.1Calling and holding of Board meetings

Notice of meetings may be issued by any meansincluding orally and may be transmitted by theSecretary of the Board within at least eight daysbefore each meeting.

The Board meets as often as the interests of thecompany require, and in general, at least five times a year, with three of these meetings devoted toreviewing the budget, strategy and the activity of the company. Decisions by the Board are adopted onthe basis of a simple majority. In the case of split vote,the Chairman of the meeting has the casting vote.

The Board establishes for the year according to theproposal of the Chairman a schedule for its meetings,with the exception of extraordinary meetings.

4.2Participation in meetings through videoconferencing or telecommunications media

In accordance with applicable regulations and article 14of the company’s bylaws, directors who participate inBoard meetings through videoconferencing ortelecommunications technology are considered presentfor calculating the quorum and majority.

The Chairman ensures that videoconferencing andtelecommunications technologies used guarantee theeffective participation of all parties in the meetings. The proceedings must be broadcast without interruption.Measures necessary to identify each party and verify thequorum must be assured. Failing this, the Board meetingmay be adjourned.

The attendance register and the minutes must indicatethe names of directors having participated throughvideoconferencing or telecommunications means

Remote participation using the technologies is expresslyprohibited for proceedings concerning the followingdecisions:

- The approval of the company’s statutory andconsolidated financial statements;

- Preparing the management report to be included in the Group’s management report.



4.3Transmission of information to directors

All directors are provided with the documents andinformation required to make decisions on the itemsof business on the agenda on an informed basis.

It is the responsibility of all directors to ensure thatthey possess all information they consider necessaryfor the effective conduct of proceedings of the Boardand, when applicable, request this information whenthey consider that it has not been made available.

Furthermore, directors are kept regularly informed,between the meetings of all events or transactions of a material nature for the strategic priorities of thecompany and provided with all relevant informationwhen warranted by events concerning the company.

4.4Evaluation of the work of the Board

Once a year, the Chairman of the Board invites the Board members to express their views on thefunctioning of the Board and on the preparation of its work for the purpose of:

- Preparing a report on the Board’s work;- Examining the composition of the Board;- Ensuring the quality and effective conduct of discussions on matters of importance.

The discussions are recorded in the minutes of the meeting.

5.Code of conduct of directors

5.1Obligations of discretion and secrecy

Concerning non-public information acquired inconnection with their duties, directors shall beconsidered subject to a true obligation of professionalsecrecy that exceeds the obligation of discretionprovided for by article L225-37 subsection 5 of theFrench Commercial Code.

In general, directors shall refrain from speakingindividually outside the collegial framework of theBoard of Directors about matters considered therein.Outside the company, directors undertake to respectthe collegial nature on any oral or writtencommunication that they may issue.

5.2Duties of independence

Directors have a duty to act in all circumstances in theinterest of the company and all shareholders. To thispurpose, they are subject to an obligation of informing theBoard of any situation involving a conflict of interest, evena potential conflict of interest, and must refrain fromvoting in the proceedings relating thereto, and if necessary,resign. Absence of information thereon constitutesconfirmation of that no conflict of interest exists.

And in general, directors shall be prohibited fromengaging in transactions in the shares of the company

and/or the group if they possess privileged information.Each party is personally responsible for assessing theprivileged nature of information in his or her possession,and, in consequence, to authorize or prohibit any use ortransmission of such information, and to engage in anytransactions in the company’s shares.

And in any case, directors undertake to comply with theirobligation to refrain from any dealings in the company’sshares for a period of 15 days prior to:

- The publication of the interim consolidated or annualresults, according to the calendar available to the Director;

- The publication of quarterly, interim and annual sales,according to the calendar available to the Director.

5.3Obligations of due diligence

At the time they assume their appointment, everyBoard member duly notes the obligations resultingtherefrom and notably those relating to legal rulesgoverning holding multiple appointments and beforeaccepting, signs the Board Charter. To this purpose, it is recommended that a Director, when exercisingthe function of “executive officer”, does not acceptmore than three appointments as a director of a listedcompany, including companies outside of his or herown group.

The Directors must devote to their duties thenecessary time and attention. To this purpose, they will limit the appointments that they hold to a reasonable number to ensure their regularparticipation in the meetings of the Board.

Directors have an obligation to obtain and requestwithin the appropriate delays from the Chairmaninformation necessary to effectively participate in the items of business to be addressed by the Board of Directors’ meetings.

5.4Obligation to report dealingsin the company’s shares

Directors and persons with whom they have closerelations must report to the AMF the purchase, sale,subscription or exchange of shares of the Companywhen the amount exceeds €5,000 for the calendaryear in progress.

To this purpose, they will send their declaration tothe AMF by electronic means within five trading daysfollowing the transactions and send at the same timea copy of the declaration to the Secretary of the Boardof Directors of the company.



6.Compensation

6.1Directors’ fees

The Board of Directors freely sets the amount of feesfor attendance for which the general meeting fixesthe annual amount. It allocates this amount equallyamong members on basis of their attendance and the amount of time they devote to their duties.

By express waiver of the Directors concerned, directors’ fees are allocated exclusively to directorsselected from outside the company.

6.2Compensation of directors for special assignments

The Board of Directors may entrust one of its memberswith a mission, for which it determines the conditionsand terms that are subject to approval by the Board,except by the Board member designated for this mission.

The Board will determine notably the amount of compensation, the duration of the mission as well as the procedures for payment and the reimbursement of expenses incurred in the performance of this mission.The Chairman is responsible for ensuring that this mission is properly carried out according to the conditions approved by the Board to whom it regularlyreports thereon.

7.Modification the Board CharterThis Charter may be adapted or modified by decisionof the Board of Directors.

Every new member of the Board of Directors shall be provided with a copy of this Charter as well as the company’s bylaws (statuts).

3.MANAGEMENT COMMITTEE

Mission

The purpose of the Management Committee, led by the Chairman and Chief Executive Officer, is toaddress operational issues related to the developmentof the company.

Composition as of December 31, 2009

Philippe Benacin, Chairman and Chief ExecutiveOfficer.

Philippe Santi, Executive Vice President,Chief Financial and Administrative Officer.

Frédéric Garcia-Pelayo, Executive Vice President,Chief International Officer.

Hugues de la Chevasnerie, Vice President, BurberryFragrances.

Angèle Ory-Guénard, Vice President, Export SalesBurberry Fragrances

Jérôme Thermoz, Vice President, French Distribution.

Axel Marot, Vice President, Production & Logistics.

The Management Committee met five times in 2009(six times in 2008) and discussed the following itemsof business:

March: 2008 closing, 2009 first-quarter salesforecasts, review of launches by brand, externalgrowth project; international distribution,recruitments;

May: first-quarter sales, second-quarter forecasts,marketing projects, partnership, external growthprojects; organization of logistics, new premises;

July: 2009 first-half sales, 2009 first-half earningsforecasts, situation of European subsidiaries, review ofbrand launches, international distribution, inventoryand cash position, recruitments;

October: summary of 2009 first-half results, 2009third-quarter sales, 2009 full-year forecasts, marketingprojects, growth projects, 2009 budget, organizationof logistics, recruitments;

December: 2010 budget, 2009 sales forecasts,marketing review of launches by brand, externalgrowth project; organization of logistics, recruitments.

4.COMPENSATION OF EXECUTIVE MANAGEMENT

In connection with the preparation of thisregistration document, the Board of Directors hasanalyzed the different components of compensationand benefits for corporate officers in light of theprinciples set forth in the Middlenext Coderecommendations of December 2009. It reviewed the procedures in place for determining cashcompensation and benefits of all kinds granted tocorporate officers that are presented below in detail.

In general, the Board of Directors sets thecompensation policy for officers both in reference to market practice in comparable sectors and the sizeof the company notably in respect to sales and thenumber personnel.



Total compensation Total compensation Total compensation paid for 2007 paid for 2008 paid for 2009

Philippe Benacin (1)

Chairman and Chief Executive OfficerNet fixed compensation €153,600 €176,640 €199,680Net variable compensation €115,200 €114,400 €163,200Benefits in-kind €68,100 €70,800 €70,800Supplemental executive retirement plans €7,720 €7,990 €8,230

Philippe Santi (2)

Director - Executive Vice President Net fixed compensation €153,600 €176,640, €199,680Net variable compensation €141,600 €124,800, €172,800Supplemental executive retirement plans €7,720 €7,990 €8,230

Frédéric Garcia-Pelayo (3)

Director - Executive Vice President Net fixed compensation €153,600 €176,640 €199,680Net variable compensation €141,600 €124,800 €172,800Benefits in-kind - €5,130 €6,840Supplemental executive retirement plans €7,720 €7,990 €8,230

Catherine Bénard-Lotz (4)

Director Net fixed compensation €65,300 €74,400 €82,560Net variable compensation €42,400 €31,200 €47,200Supplemental executive retirement plans €7,720 €7,990 €8,230

Jean Madar (5)

Director Gross fixed compensation $400,000 $400,000 $380,000Gross Bonus $100 000 - -

(1) Philippe Benacin does not have an employment contract with the company. He exercises his functions as Chairman and Chief ExecutiveOfficer pursuant to his appointment as a corporate officer by the Board of Directors.

(2) Compensation paid to Philippe Santi as a salaried employee with the position of Director of Finance and Corporate Affairs under the terms of an employment contract predating his appointment as Executive Vice President (Directeur Général Délégué) and Director of the Company that remained in force. Philippe Santi receives no compensation of any nature in connection with his appointment as an officer of the company.

(3) Compensation paid to Frédéric Garcia Pelayo as a salaried employee with the position of Chief International Officer under the terms of an employment contract predating his appointment as Executive Vice President (Directeur Général Délégué) and Director of the Companythat remained in force. Frédéric Garcia Pelayo receives no compensation of any nature in connection with his appointment as an officer ofthe company.

(4) Compensation paid to Catherine Bénard-Lotz as a salaried employee with the position of Chief Legal Officer under the terms of anemployment contract predating her appointment as Director of the Company that remained in force. Catherine Bénard-Lotz receives no compensation of any nature in connection with her appointment as a company director.

(5) Compensation paid to Jean Madar by the parent company of the Group, Inter Parfums Inc (United States) as the Chief ExecutiveOfficer of this company. Jean Madar receives no compensation of any nature from Inter Parfums SA.

Compensation of officers for 2009

Compensation of officers consists of both fixed and variable components. Fixed compensation takes intoaccount the level of responsibilities, experience and performance. Variable compensation is determined inrelation to the company’s achievement of overall performance objectives and events related to each fiscal year.

One half of variable compensation is determined in accordance with net sales, operating income and net profit,and half in relation to qualitative criteria of performance. This latter criteria is evaluated in respect to thecontribution of corporate officers to achieving the objectives of the company and results actually obtained.

On this basis, compensation paid to executives as officers or salaried employees in connection with employmentcontracts concluded prior to becoming officers is disclosed below.



Directors’ fees for 2009

Directors’ fees are allocated to the Board of Directors by the shareholders’ meeting for fiscal 2009 for a setamount per meeting attended of €2,500. The tenth resolution of the shareholders’ meeting of April 24, 2009 set the total amount of directors’ attendance fees for the year at €60,000.

On this basis, for fiscal 2009 a total of €45,500 was paid to the five non-salaried directors for their attendance at meetings. The other directors expressly waived their rights to receive attendance fees.

Administrateurs Directors’ fees Directors’ fees in 2008 in 2009

Philippe Benacin (Chairman) NA NAFrédéric Garcia-Pelayo (Executive VP) NA NAPhilippe Santi (Executive VP) NA NAMaurice Alhadève €10,000 €12,500 Catherine Bénard-Lotz NA NAPatrick Choël €10,000 €10,000 Michel Dyens €7,500 €5,000 Jean Levy €7,500 €7,500 Jean Madar NA NAChantal Roos NA €10,000

NA : Not applicable.

Stock options and other compensation

- Stock-options

Rules for the grant of stock options to officers are based on the level of responsibilities and the performance of the company’s share. The quantity of stock options granted to officers may vary from one year to anotheraccording to the performance of the company over this period.

On 17 December 2009, the Board of Directors decided to grant options to corporate officers on that datewhose exercise will be contingent on criteria of internal performance based on the company’s sales . Under theseterms, the number of options exercisable is based on the average rate of actual growth for the company’s salesrelative to the rate of attainment of the target for average growth. This objective is set by the Board of Directorsfor a period of reference corresponding to the 4 year tax waiting period that applies to the stock option planestablished by this Board.

In compliance with the provisions of article L.225-185 of the French Commercial Code imposing an obligationto hold shares issued resulting from the exercise of options until the end of the appointments of corporateofficers, and in light of market practices, the Board of Directors decided that these officers must maintain 10%of the shares resulting from the exercise of options for the duration of their appointment.

- Benefits in-kind

Philippe Benacin received benefits in-kind for the costs of a company car and housing benefits representing a totalamount of €70,800.

Frédéric Garcia-Pelayo benefits in-kind for the costs of a company car for an amount of €6,840.

- Executive retirement plans

Executive officers benefit from a supplemental retirement plan in the form of a defined contribution annuityfund. The benefits of this plan were subsequently extended to senior executives of the company. This contribution to a private defined contribution pension fund is paid in part by the beneficiaries and in partby the employer for an amount equal four times French Social Security ceiling. The annual contribution perbeneficiary is approximately €8,200. The supplemental retirement plan is part of the overall compensationpolicy adopted by the company for senior executives and managers.

- Other types of benefits

No executives benefit from forms of remuneration, indemnities or benefits owed or which could be owedresulting from the assumption, termination or change of functions of corporate officer of the company orsubsequent to these events.



5.SPECIAL REPORT OF THE BOARD OF DIRECTORS ON STOCK OPTIONS

In compliance with article L. 225-184 of the French Commercial Code, this report is produced by the Board of Directors to inform the combined shareholders’ meeting of 23 April 2010 of transactions carried out in fiscal2009 by virtue of the provisions under articles L.225-177 to L. 225-186 of said code.

Options granted to and exercised by each corporate officer of the company in 2009,in connection the appointments they held

Number of shares Subscription Expiration granted/exercised price date

IP Inc. options granted during the period to officers (plan of December 31, 2009)

Philippe Benacin 19,000 $12.14 12/31/2015Jean Madar 19,000 $12.14 12/31/2015

IP Inc. options granted during the period to officers (plan of December 17, 2009)Philippe Benacin 6,000 €17.60 12/17/2015Jean Madar 6,000 €17.60 12/17/2015Philippe Santi 6,000 €17.60 12/17/2015Frédéric Garcia-Pelayo 6,000 €17.60 12/17/2015Catherine Bénard-Lotz 2,500 €17.60 12/17/2015

IP Inc. options exercised in the period by officers

Philippe Benacin 75,000 $10.26 12/09/2009Jean Madar 75,000 $10.26 12/09/2009Philippe Santi 11,250 $10.26 12/09/2009

IPSA options exercised in the period by officers (1)

Philippe BenacinPlan of August 26, 2003 17,570 €12.60 08/26/2009Jean MadarPlan of August 26, 2003 17,570 €12.60 08/26/2009Philippe SantiPlan of August 26, 2003 8,786 €12.60 08/26/2009Frédéric Garcia-PelayoPlan of August 26, 2002 8,798 €7.70 08/26/2009Plan of August 26, 2003 8,786 €12.60 08/26/2009Catherine Bénard-LotzPlan of August 26, 2003 2,110 €12.60 08/26/2009

(1) Number and subscription price adjusted for the grant of new bonus shares (1 for 5) of June 15, 2009.

Stock options granted to the 10 highest paid employees of the company that are not officers and exercised by the 10 employees of the company having exercised the greatest number of options in 2009

Number of shares Subscription Expiration granted/exercised price date

IPSA options granted to the 10 highest paid employees (1)

Plan of December 17, 2009 40,800 €17.60 12/17/2015

Options exercised by the 10 employees exercising the greatest number (1)

Plan of August 26, 2002 32,215 €7.70 08/26/2009Plan of August 26, 2003 27,949 €12.60 08/26/2009

Total 60,164 -

(1) Number and subscription price adjusted for the grant of new bonus shares (1 for 5) of June 15, 2009.


(1)

(1)


6.CHAIRMAN’S REPORT ONTHE WORK OF THE BOARDAND INTERNAL CONTROL

Pursuant to the provisions of article L.225-37, of theFrench Commercial Code the Chairman of the Boardof Directors hereby reports on the:

- Terms and conditions governing the preparation and organization of the Board’s work;- Internal control procedures implemented by the company.

This report has been produced on the basis of workundertaken by the Finance and Corporate AffairsDepartment, with the operating departments of thecompany and exchanges with the statutory auditorsin connection with internal audits conducted at thecompany’s initiative.

Furthermore, the report has been drawn up in linewith the Middlenext Code of corporate governancefor small and mid-caps published in December 2009.This code includes “points requiring specialattention” (“points de vigilance”) that were reviewedby the Board of Directors. These points cover themain questions that must be addressed to ensureeffective corporate governance. This MiddlenextCode was itself drafted in line with the guidelines oncorporate governance issued by the French PrivateCompanies Association (AFEP) and French BusinessConfederation (MEDEF) or the AFEP-MEDEF codeand the French market regulator, the AMF.

This report was submitted for approval to the Boardof Directors on March 18, 2010.

6.1Preparation and organization of the board’s work

6.1.1Composition and operation of the Board of Directors

Under the company’s bylaws, the Board of Directorsmay have three to eighteen members.

At December 31, 2009, corporate governance of thecompany was overseen by a Board that included tendirectors three of which qualified as independentdirectors. Detailed information on the compositionof the Board of Directors is disclosed in theregistration document (annual report) in the sectionon directors and officers.

In compliance with the bylaws, the duration ofappointments is six years. It is proposed that theGeneral Meeting renew the appointments of directorsfor four years that is less than the six-year termprovided for under the company’s bylaws. The purpose of this proposal is to comply with the recommendation of the Middlenext Code for the duration of appointments provided for in bylaws

to be adapted to the specific characteristics of the company, within the limits established by law. The Board considers that a period of four years is reasonable to maintain the independence of thedirector by a shorter term while at the same timeencouraging his or her investment in the performanceof the company.

This option to provide for periods that are lower thanthe terms established under the bylaws is subject tothe modification of the provisions of article 12 of thebylaws, submitted to the General Meeting for a voteon April 23, 2010 . If this resolution is approved, theBoard will be authorized to propose the renewal ofappointments for 4 year terms.

The Board may meet as often as the interests of thecompany requires and at least five times a year at therequest of the Chairman and according to a calendarjointly established that may be modified at the requestof directors or when justified by unforeseen events.

The Chairman represents the Board of Directors. He organizes the work of the Board and reports onthis work to the general meeting. The work of theBoard is carried out in a collegial framework and in amanner that complies with the laws, regulations andrecommendations. Accordingly, the Chairman of theBoard of Directors ensures directors are provided withinformation in advance and on a regular basis, thatconstitutes an essential condition for the performanceof their duties.

The Board has not deemed it necessary to date toform special committees in part because of the natureof the organization of the company and its businessmodel, and in part because of the extensive in-depthexperience directors have in respect to the worldof business and the international markets ofcompetitors. This type of organization contributes to a flexible decision-making processes.

In compliance with the new provisions of articleL.823-20 of the French Commercial Code, the Boardof Directors decided on March 3, 2009 not to createan independent audit committee but rather toexercise the functions of audit committee in plenarysession on condition that this includes participationof independent directors.

To date, the Company has not established formalprocedures to evaluate the functioning and work ofthe Board, in light of the specific characteristics of itsorganization and operating procedures. Even thoughregular exchanges of points of view are already assuredin practice, the Company intends to apply theframework of the Middlenext recommendations infavor of the principle of self-oversight by directorsand their ability to perform annual assessments onthe effectiveness of their operating procedures. To thispurpose, once a year the Chairman of the Board willinvite Board members to express their views on thefunctioning of the Board and on the preparation ofits work. The content of these proceedings will berecorded in the minutes of the meeting.



6.1.2Powers and missions of the Board of Directors

In line with the option adopted by the Board ofDirectors on December 29, 2002, in light of thecompany’s structure and the active participation of the founder in its development, the Board decidednot to separate the functions of Chairman of theBoard of Directors with that of Chief ExecutiveOfficer (Directeur Général). In consequence PhilippeBenacin, who exercises the functions of Chairman of the Board of Directors, also serves as the ChiefExecutive Officer of the company. As such he isvested with all powers in respect to third parties to actunder all circumstances in the name of the companyand within the limitations expressly provided by lawgranted to Board of Directors or shareholders meetings,and in compliance with the general and strategicorientations defined by the Board of Directors.

Decisions having a material impact on the scope of consolidation or that could materially affect thecompany’s strategy must be submitted to the Board of Directors for approval or subject to a delegation of authority for this purpose by the Board. Thislimitation is specified in the Board Charter.

The Board of Directors determines strategic prioritiesof the company and ensures that they areimplemented. Subject to the powers granted toshareholders’ meetings and within the limits of thecompany’s charter, the Board considers any matterrelating to the proper management of the company.

It issues decisions concerning the holding of multipleappointments or the separation of the appointmentsof Chief Executive Officer (Directeur Général) andChairman of the Board, appoints corporate officers,imposes possible limits on the authorities of the ChiefExecutive Officer, approves the draft report of theChairman, performs controls and verifications itconsiders appropriate, in respect to managementcontrol and the fair presentation of accounts, reviewsand approves the financial statements, and ensuresthe quality of financial information provided toshareholders and the market.

In the period ended December 31, 2009, the Board ofDirectors met eight times. The average rate of attendanceof directors was 72.50%. In general, meetings wereheld at the company’s headquarters in Paris.

In the period under review, the Board of Directorsaddressed the following items of business:

- Review of the parent company statutory andconsolidated financial statements for the fiscal yearended December 31, 2008 and the interim financialstatements and the notice of the Annual GeneralMeeting;

- Review of the fiscal year 2009 budget and outlook;

- Capital increase through the capitalization of reserves;

- Setting the Chairman’s remuneration;

- Authorizations concerning agreements inaccordance with articles L 225-39 et seq. of theFrench Commercial Code;

- Analysis of financial information disclosed by the company to shareholders and the market;

- Analysis of the major strategic, economic andfinancial priorities of the company;

- Examination and authorization of external growthprojects, notably license agreements for brands ;

- Grants of new stock options to salaried personnel as well as corporate officers.

Auditors attend Board of Directors’ meetings held toconsider the company’s accounts or any other mattersregarding which they may provide Board members an informed opinion.

6.1.3Charter of the Board of Directors

On March 3, 2009, the Board of Directors adopted aCharter defining the operating rules of the Board andthe terms of a code of conduct for directors thatsupplement the provisions provided for by the lawand the company’s bylaws. The main provisions of thischarter are as follows:

- The composition, role, organization and operatingprocedures of the Board;- The functions of audit committee exercised by the Board of Directors;- The rules of conduct applicable to members of the Board of Directors;- Compensation of directors;- Rules governing transactions involving thecompany’s shares in accordance with the provisions of the French Monetary and Financial Code and the AMF General Regulation.

This Charter is destined to regularly evolve as newregulations and recommendations are introduced and in response to proposals by directors to ensure the optimal effectiveness of the Board’s work.Modifications were made to this Charter by the Boardon March 8, 2010.

The full text of this Board Charter is published in the registration document of the company.

6.1.4Transmission of information to directors

Directors are provided with all relevant documentsand information to effectively perform their duties.Before each Board meeting, directors receive:

- A meeting agenda established by the Chairman in coordination with General Management and,when applicable, directors proposing items to bediscussed;

- An information file concerning issues to beaddressed under the agenda requiring particularanalysis for the purpose of an informed discussion,during which directors may ask relevant questionsto ensure their adequate understanding of the matters addressed;

- And, when useful, press releases that have beenpublished by the company as well as significantpress articles and reports of financial analysts.



In addition to information provided in connectionwith Board meetings, directors are regularly providedwith all significant information concerning thecompany. They may request any explanation or theissuance of additional information, and in general,formulate any requests for access to informationthey may consider useful.

6.1.5Directors’ fees

Directors’ fees are allocated exclusively to outsideofficers of the Board of Directors. The total amountgranted by the general meeting is freely allocated by the Board of Directors.

The Board has decided to allocate this total amountto each director on the basis of their level of regularattendance.

6.1.6Participation in shareholders meetings

Under the terms of article 19 of the company’s bylaws all shareholders have a right to participate in general meetings, personally or through a proxy,regardless of the number of shares they hold, uponsimple justification of their identity and ownership of the shares.

6.1.7Disclosure of information provided for under article L.225-100-3 of the French Commercial Code

To the best of the company’s knowledge there exist noitems, and notably those relating to the structure of the share capital that could have a potential impact inthe event of a public offering. The structure of the sharecapital as well as the equity interest that have beenbrought to the company’s attention and any otherinformation relating thereto are described in chapter 2 of the section on shareholder information of thisregistration document. Similarly, rules concerning theappointment and revocation of members of the Board of Directors are subject to the rules of common law.

6.2Internal control procedures

6.2.1Definition

The company’s internal control procedures have inlarge part been based on the guidelines established byarticle 404 of the Sarbanes Oxley Act that applies tothe US parent company because it is listed on a NewYork Stock Exchange. The principles determinedtherein are in part provided for under the AMFguidelines of January 2007 completed by theguidelines for small and mid caps of January 9, 2008.

Internal control constitutes a set of procedures definedand implemented by the company under theresponsibility of General Management to ensure:

- Compliance with laws and regulations as well as theframework defined by the company’s internal values;- The application of instructions and priorities set by general management;- The effective application of internal processes notablyconcerning the protection of corporate assets;- The reliability of financial information.

In this context, the objective of internal control is tomanage and prevent risks resulting from the activity of the company and risks of errors or fraud,particularly in areas relating to the protection of thecompany’s assets as well as accounting and finance.

However, no system of internal control can provide an absolute guarantee of achieving these objectives.The probability of achieving such objectives is subjectto limits inherent in any system of internal control,related notably to uncertainties concerning the externalenvironment, the exercise of judgment or problemsthat may arise in response to human error or simpleerror, and the need to perform cost-benefit analysisbefore implementing any controls.

6.2.2Components of the internal control system

The Company’s internal control system is based on the following principles:

- Clearly defined responsibilities in preparing,implementing and ensuring the management of internal control procedures;- Identifying, analyzing and managing risks; - Ongoing assessments of the effectiveness of internalcontrols.

6.2.2.1. The internal control environment

Organization of the company

The company is organized around two divisions. The operating division encompasses the departmentsfor Export Sales and French Sales, Marketing andProduction and Development whereas the divisionincluding the support functions is placed under themanagement of Finance and Corporate Affairs.

The line management departments, assisted by thetechnical expertise provided by the support functions,coordinate the implementation of objectives andachieving the operating result set by GeneralManagement. To this purpose, they participate in theinternal control procedures when key operatingprocesses associated with sales to distributors and themanagement of the company’s image have an impacton assets and/or results.

Integrated into the framework for internal control,the departments for support functions cover allprocesses relating to the management of resources(cash management, human resources, compliancewith tax obligations, settlement of trade payables andreceivables, the processing and communication ofaccounting and financial information, monitoringlegal and regulatory developments, etc). They alsohave a role in defining and communicating policiesand information about good practices for theCompany’s activity and ensure their effective



application in compliance with applicable laws and regulations, maintaining a safe environment and the reliability of financial information.

This organization has demonstrated its flexibility,strength and effectiveness based on achieving realsynergies between the operating and support functiondepartments. It is also based on an objective topromote the convergence of the resources of thedifferent divisions involved and the principle of adecentralized organization combining the advantagesof flexibility and the delegation of responsibilitiesnecessary for ensuring the optimal and coherentapplication of the strategic objectives set by generalmanagement.

Risk management responsibilities are exercised atevery reporting level of the Company. Staff, linemanagement and support function managementactively intervene as participants with a direct stake in an approach focused on internal controls of theprocesses they supervise, within the framework ofmissions defined by General Management, theirorganization and contributions to critical decisions.

To this purpose, they possess the knowledge andinformation necessary to establish, operate andoversee the internal control procedures in relation to the objectives that have been set for them. An in-depth analysis of the separation of operationaland control tasks was undertaken to effectivelyaddress the objectives of control.

The Company also consolidates subsidiaries and, to this purpose, applies to them the Group’s internalprocedures relating to the preparation and processingof accounting and financial information.

The key tools of internal control

These tools are based on rules and procedures as well as initiatives undertaken to raise awareness amongmanagement bodies and staff of the Company’s internalcontrol needs. These rules and procedures make itpossible to ensure that the instructions of GeneralManagement are concretely implemented at the level of the operating and support function activities.

The Internal Procedures Manual

This tool formalizes a certain number of internalprocedures considered essential for the effectiveoperations of the company in a secure environment.This manual details the main operating and financialprocesses covering notably sales/customers,sourcing/suppliers, inventory, cash management/budget,accounting procedures, IT systems and personnel/payroll.This manual also describes the procedure for expenserequests and bank accounts signature authorizations.

Code of Good Conduct

A priority for managing human resources is to ensurethat profiles effectively match the correspondingresponsibilities while adhering to the key values:prudence, pragmatism, responsiveness, highstandards, transparency and loyalty. Contributing to the expertise and know-how of a team of men and women sharing a common culture ofcommitment to integrity and high standards that

distinguish the Company thus constitutes animportant part of internal control. These values are set forth in a Code of Good conduct that providesguidelines on professional conduct to be adopted,notably in the areas of compliance with laws andregulations, preventing conflicts of interest and financial transparency in order to preventsituations of fraud. This Code is signed by therecipient and remitted to all new employees whojoin the Company.

Self-evaluation questionnaire

This questionnaire has been drafted according toprinciples of internal control that are consistent withthe Company’s activities. It is reviewed annually by linemanagement both for operating and support functiondepartments. This questionnaire covers notably:

- Corporate governance practices: the internal controlenvironment reflecting the general tone set byGeneral Management, the level of awareness of theBoard of Directors and the Management Committeeconcerning priorities for control, procedures andmethods and the organization of the Company aswell as the resulting actions;

- The analysis of risk: this covers the identificationand analysis of major risks incurred in implementingobjectives set by the Company to subsequentlydetermine the risk management approach to be adopted;

- Information and communication systems: thesesystems permit the identification, input and exchangeof information according to the conditions thatenable management and staff concerned to exercisetheir responsibilities.

Information System Charter

This document defines the rights and obligations ofemployees, users of the information system, to ensurethat the information technology resources are used ina secure environment complying with the proceduresof internal control. It is signed by all users and madeavailable to all new employees who undertake tocomply with its provisions.

6.2.2.2. Key participants in internal control procedures

The Board of Directors

In connection with information provided to theBoard, its members review all the main characteristicsof the internal control procedures and system. The Board may exercise its authority to request verifications and controls it considers appropriate to ensure the transparency, effectiveness and securityof the internal control environment.

General Management

This includes the Chairman and Chief ExecutiveOfficer, assisted by two Executive Vice Presidents.They define the major strategic priorities to achievethe commercial and financial objectives of thecompany. This is done by providing clearly definedinternal procedures and an internal control system for which they are directly responsible. They definethe general principles and ensure the implementationof the different components of internal control.



Management Committee

This Committee includes management from theoperating and support function departments whoreport directly to the Chairman and Chief ExecutiveOfficer. It is a decision-making body that focuses on strategic issues, monetary performance anddiscussions about important issues relating to thecompany’s organization and projects. It ensures thatthe policy for internal control is correctly effectivelyimplemented and monitors the work carried out forthis purpose as well as the corresponding action plans.Each Management Committee member is responsiblefor ensuring that the common rules and principlescomprising the framework of the internal controlsystem are applied and understood in thedepartments under his or her responsibility.

The Finance and Corporate Affairs Department

Placed under the authority of General Management,this department is responsible for implementing the internal control to prevent and manage risksresulting from the Company’s activities, and notablyaccounting and financial risks, including errors or fraud. To this purpose, it must ensure that the ongoing controls implemented are necessary and adequate and are correctly applied and effectivein safeguarding the Company’s assets against allpotential incidents. The Finance Department alsoprovides technical support to operating departmentsby establishing operating procedures, defining andpromoting the use of tools, procedures and goodpractices essential for application by the latter of the objectives defined by General Management. In addition, it centralizes and consolidates financialand accounting information for all Group entities. It furthermore ensures the consistent nature of thisinformation in relation to the budget approved byGeneral Management and the Board of Directors and such information is adequately supported.

It is also responsible for ensuring that GeneralManagement and the operating departments areaware of legal issues. To this purpose, it monitors legaland regulatory developments and takes measures toavoid exposure to potential criminal risks and risksrelated to commercial law and intellectual propertyrights. It is also responsible for managing litigationand disputes in close collaboration with outside legalcounsel and attorneys, as well as drawing up andreviewing the main contracts of the Company.

6.2.2.3. Internal control procedures

Internal control procedures, established by theFinance Department and approved by GeneralManagement, are designed to secure the differentprocesses used to achieve the objectives set by theCompany. To this purpose, controls performed atevery level of responsibility, are based primarily onthe application of standards and procedures. Theseprocedures are organized around the following keyareas identified as representing potential risks:

Operating processes:

- Sales/trade receivables management/collection: thisprocess ensures that all deliveries made and/or services

rendered are invoiced within the specified period andinvoices are properly recorded in the trade receivablesaccounts. It also determines procedures for issuingcredits which must be justified and controlled beforebeing booked. This procedure makes it possible toidentify potential doubtful trade receivables andanticipate risks of default;

- Purchasing/management of trade payables: thisprocess is formalized by procedures based, on the onehand, on the separation of the functions for placingorders and for authorizing orders, acceptance, therecording of the transactions in the accounts andpayment of suppliers, and on the other hand a processfor monitoring and reconciling purchase orders,receiving slips invoices (quantity, price, terms ofpayment) supplemented by a procedure for preventingdual recognition/payment of supplier invoices.Eventually anomalies are analyzed and monitored.

Accounting and financial processes:

- Cash management: this evaluation makes it possibleto ensure that bank accounts are reconciled on aregular basis with information received from thebanks and reviewed periodically in order to documentand explain eventual variances; The Company hasalso implemented a system for hedging foreignexchange risk related notably to transactionsconducted in US dollars. The amount of hedges aswell as the exchange rate targets are the subject ofregular discussions between the Finance Departmentand General Management;

- Budget process: control, in this context, consists inensuring that annual budget is established accordingto the instructions of General Management and thatactual performances are monitored through regularreporting tools based on data obtained from theoperating departments with the primary objective ofanalyzing actual performances in relation to forecastand prior periods. This review of “forecasts versusactual” makes it possible to identify potentialinconsistencies, errors or omissions and make theappropriate management decisions to correct thecorresponding data (revenue, operating expenses, etc.);

- Preparing financial and accounting information: the review of the fair presentation and consistency of account closing procedures to ensure a reliableconsolidation consistent with data collected andsubmitted to the Finance Department;

- Information systems management: this process isdestined to ensure the development and maintenanceof computer applications and the network, the logicaland physical security of the information system,providing for a backup plan to guaranteeconfidentiality of information and ensure the securityof systems and applications for the continuity and the resumption of activity in the event of an incident.

6.2.2.4. Identifying, evaluating, managing and managing monitoring risks

Risk mapping

This procedure, launched in 2004 and regularlyupdated since, has made it possible to classify risks intofour categories: operating risks, risks related to



international operations, environmental and employee-related risks and risks related to the financialenvironment that are presented in detail in Chapter 3 of the management report. In light of the nature of thecompany’s activity, no material risks have been identifiedthat are not considered to be effectively managed.

Activities of control

These controls are carried out within the framework of the plan for the self-assessment of internal proceduresto contribute to a better understanding and theappropriation of internal control procedures, ensure theircorrect application and, if necessary, improve procedurescurrently in force. This regular review of risks makes it possible to measure progress in implementingprogrammed actions, changes since the previousassessment of risks and adopt new procedures that may be identified through this process.

This process of self-assessment is undertaken annuallywith the assistance of a well-known outside independentaudit firm. This involves identifying key assets of thecompany, analyzing potential risks, existing or emerging,by type of task assigned to each department concernedand meetings with the operating departments concerned.

The audit consists of conducting a general overview of the organization of internal control to obtain a descriptionof the internal control system by sending managers asample of tasks selected according to the degree of riskthey generate for the company when they have an impacton the company’s financial statements.

If processes and the associated controls are notformalized or are considered insufficient aremediation plan or corrective actions areimplemented by the manager concerned to completethe existing system of internal controls.

On completion of this self-assessment process, theFinance Department submits executive summaries on thiswork to the General Management and the Board ofDirectors. It also reports the results of this self-assessmentto the Management Committee so that its members can ensure that management of the divisions are aware of the results of the work and the stakes involved by theirparticipation in the remediation as well as to thedysfunctions identified or potential dysfunctions thatcould result from inadequate controls.

The test of internal control procedures conducted in 2009resulted in the performance of 73 controls focusing on 64 areas of risk relating notably to sales and purchasing,inventory, cash management and the information system.In particular, audit of the information systems wasinitiated by the Company’s auditors. This work concernedthe organization of information systems department, the evaluation of general IT controls, the management of operations, projects and security and the policy for ensuring the availability and continuity of service of systems. This audit identified weaknesses at the level of security management followed by a remediation planthat was immediately implemented.

6.2.3Internal control procedures relating to accounting and financial information

6.2.3.1. Process of managing the accounting and financial organization

Organization

Internal control procedures applicable to accountingand financial data are prepared and implementedunder the responsibility of the Finance Departmentand the oversight of General Management in thefollowing areas: financial communications,accounting, consolidation, management control, cashmanagement, information systems and compliancewith laws and regulations. To achieve this objective, it is supported by the managers of the different teamsof the Finance Department (Finance, Accounting,Management Control, Consolidation, HumanResources, Cash Management, Information Systemsand Legal Affairs).

Relations with statutory auditors

In connection with the half yearly and annualclosings of the accounts, the statutory auditorsorganize their work by undertaking:

- A prior review of procedures and internal control tests;

- A meeting prior to the approval of the accounts to define the program of reviews and the calendar and organization of their work;

-An audit of the financial statements prepared by the Finance Department;

- A meeting presenting a summary of their work to General Management.

On this basis, the statutory auditors certify the fairpresentation of the consolidated and parent companyfinancial statements.

Application of accounting standards

The accounting department has a process foridentifying and processing changes in accountingstandards and the approval of the resulting proceduresfor accounting treatment. Similarly, there existprocedures to ensure the accounting department isinformed of changes in Group practices that couldaffect the methodology or procedures for recordingtransactions. The scope of accounting management is constantly updated.

Organization and security of information systems

The company uses an ERP application that integratessales management, financial accounting, subsidiaryaccounts and cost accounting capabilities. Theorganization and operating of the entire informationsystem is subject to measures that limit the conditionsof access to the system, the validation of processingand closing procedures, conservation of data, andverification of entries.

To ensure continuity in processing accounting data,backup systems and a continuity plan have beenimplemented in the event of a sudden dysfunction. In addition, all data is backed up daily and a copykept in a secure location. In terms of conservation



and protection of data, a procedure for secure accessto accounting and financial data has been developedinvolving the designation of individual and personalrights assigned to specific persons accompanied bypasswords.

In 2009, a Business Continuity Planning (BCP) wasimplemented involving the use of server virtualizationtechnology. The objective of this plan is to improveIT performances in line with the growth andcomplexity of the Company’s activity.

6.2.3.2. Preparing accounting and financial information

Operating process for producing the accounting information

Internal control processes at this level have beenimplemented through the following measures basedon previously defined procedures and approvalmechanisms:

- A planned program for account-closingssubsequently communicated to operatingdepartments;

- Close collaboration between the different managersof the support function and operating departments;

- Analysis of the relevance of information reportedparticularly concerning sales, orders and theexamination of margins;

- A detailed review of the accounts by GeneralManagement in view of their approval before the finalclosing.

Meetings are organized to coordinate activity with the different departments concerned in order toensure the exhaustive nature of information providedto prepare the accounts.

Process for account closings and the production of consolidated financial statements

Account cut-off procedures are subject to preciseinstructions provided by the Finance Department inrespect to the closing process, indicating informationto be entered, restatements required, the timetable of activity as well as the planning for precise tasks foreach party participating this process.

Procedures for producing interim and annualfinancial consolidated financial statements are basedon IFRS guidelines.

At the level of subsidiaries, local managementprovides detailed reporting that includes financialstatements and analysis of business performances.This information is in turn subject to in-depthanalysis by General Management with the technicalsupport of the Finance Department.

Financial communications

The financial communications process is subject to a clearly defined reporting schedule for informationdestined for financial markets and market authorities.This calendar ensures that communications complieswith the requirements of applicable laws andregulations relating to financial disclosures bothconcerning the nature of information to be disclosed,the required deadlines and compliance with theprinciple of equal access to information by allshareholders.

6.2.4Forecasted trends for 2010

The company assures permanent oversight of allorganizational changes to anticipate, adapt andoptimize internal control procedures in real time. Its internal control procedures are also designed torespond to both regulatory requirements and futureissues facing the company.

Initiatives carried out in 2009 resulted in theimplementation of more effective systems formonitoring trade receivables and cash positions ofsubsidiaries and more robust security for managementinformation systems.

In line with this ongoing approach, the company will continue to set new priorities with the followingobjectives:

- Pursuing the Business Continuity Plan;

- Undertaking studies for the migration of theintegrated Enterprise Resource Planning application(ERP);

- Strengthening the level of controls for operating and administrative entities in connection with theapplication of remediation plans;

- Extending tests to new internal control processes;

- The quality and fair presentation of financialinformation, rigorous and effective management of major risks, monitoring regulatory requirements.



CHAPTER FOUR

ShareholderinformationStatutory Information 107

Capital stock 109

The Annual General Meeting: Resolutions submitted to the extraordinary and ordinary shareholders’ meeting of April 23, 2010 113

106 Two thousand nine registration document Inter Parfums. Shareholder information


1. STATUTORY INFORMATION

1.The company

1.1General information

Corporate name: Inter Parfums

Registered office:4, rond-point des Champs Élysées 75008 ParisDate of incorporation: April 5, 1989Date of expiration: April 5, 2088

Legal form: Corporation (société anonyme) with a Board of Directors governed by the provisions of Livre II of the French Commercial Code andCompanies Act No. 67-236 of March 23, 1967.

Corporate charter: The company’s business purposein France and all other countries includes:

- The purchase, sale, manufacture, import and exportof all products related to perfumes and cosmetics;- The use of license agreements;- Providing all services related to the above-mentionedactivities;- The company’s participation by all means, directlyor indirectly, in all transactions that may relate to itsbusiness purpose through the creation of newcompanies, the contribution, subscription orpurchase of company shares or rights, mergers or other, through the creation, acquisition, rental or lease management of all rights to conduct businessor establishments, and through the acquisition,operation or disposal of all procedures and patentsrelated to these activities;- And, generally, all commercial, industrial, financial,civil, securities and real estate transactions that relatedirectly or indirectly to the company’s businesspurpose or to any similar and related activities.

Fiscal year: January 1 - December 31Siret number: 350 219 382 00032Activity code: 46.45 Z Wholesale perfume and beauty products.

1.2Share account registration

At the option of their owners, shares in France areregistered in a standard personal account (comptenominatif pur), an administered personal account(compte nominatif adiministré) or to the beareridentifiable at an authorized intermediary. EuroEmetteurs Finances handles share services andmanagement exclusively for personal accounts.Questions may be addressed to the registered office.

2.Main legal provisions and bylaws

2.1Shareholders’ meetings (article 19 of the bylaws)

All shareholders have the right to participate inshareholders’ meetings or to be represented, regardlessof the number of shares owned, provided the shares arefully paid up and registered in the shareholder’s namefor at least three days prior to the shareholders’ meetingupon presentation of a certificate filed by an approvedintermediary at the sites mentioned in the Meetingnotice, confirming that the shares are not available upuntil the date of the Meeting.

All shareholders may be represented by a spouse or another shareholder. All shareholders may vote bycorrespondence using a proxy statement that complieswith legal provisions and is obtainable by returning the Meeting notice.

107Two thousand nine registration document Inter Parfums. Shareholder information


2.2Special shareholder disclosure obligations (article 20 of the bylaws)

In accordance with the provisions of L.233-7 of theFrench Commercial Code, all shareholders, naturalpersons or legal entities, acting alone or in concert,who cross thresholds in either direction in respect tothe number of shares owned representing more thanone twentieth, one tenth, three twentieths, one fifth,one quarter, one third, one half, two thirds, eighteentwentieths or nineteen twentieths of the capital orvoting rights they hold, must notify the company by certified mail with return receipt of the number of shares and voting rights within five trading days. If this requirement is not met, the provisions ofarticle L 233-14 of the French Commercial Codeshall apply.

Under article L. 233-7 subsection VII of the FrenchCommercial Code, said shareholders must also statetheir intentions with regard to share ownership forthe next 12 months whenever the thresholds of onetenth or one fifth of the capital or voting rights havebeen crossed.

2.3Appropriation and distribution of earnings (article 24 of the bylaws)

If the financial statements approved by theshareholders’ meeting show a distributable profit as defined by law, the shareholders’ meeting decideswhether to make appropriations to one or moreretained earnings or reserve accounts under itscontrol, to carry it forward or to distribute it.

The shareholders’ meeting may grant shareholders thechoice of receiving a dividend in cash or in shares forall or part of the dividend or interim dividends to bedistributed, subject to the applicable legal provisions.

Following the approval of the financial statements by the shareholders, any losses that should occur arecarried forward to be offset against future earningsuntil these losses have been fully utilized.

2.4Double voting rights (article 11 of the bylaws)

In accordance with the provisions of article L 225-123of the French Commercial Code, the extraordinaryshareholders’ meeting of September 29, 1995 createdshares with double voting rights. These shares must be fully paid up and recorded in the company’s shareregister in registered form for at least three years.

2.5Documents on display

The bylaws, minutes and other company documentsare available at Inter Parfums’ registered office.

2.6Legal jurisdiction

In the event of litigation, the courts having jurisdictionare those of the registered office in cases where thecompany is a defendant. They are designated accordingto the nature of the litigation, barring any contraryprovisions of the new Civil Procedure Code.



2.CAPITAL STOCK

1.Five-year history of capital stock transactions

Year Transaction type Number Shares Total Capital stockof shares created shares (in euros)

2005 Exercise of 1998 stock options 11,402 11,402 8,738,488 26,215,464Exercise of 1999 stock options 29,590 29,590 8,768,078 26,304,234Exercise of 2000 stock options 57,118 57,118 8,825,196 26,475,588Exercise of 2001 stock options 33,575 33,575 8,858,771 26,576,313Bonus share issue 875,888 875,888 9,734,659 29,203,977

2006 Exercise of 1999 stock options 28,758 28,758 9,763,417 29,290,251Exercise of 2000 stock options 39,559 39,559 9,802,976 29,408,928Exercise of 2001 stock options 43,795 43,795 9,846,771 29,540,313Exercise of 2002 stock options 55,486 55,486 9,902,257 29,706,771Exercise of 2003 stock options 484 484 9,902,741 29,708,223Exercise of 2004 stock options 704 704 9,903,445 29,710,335Exercise of 2005 stock options 363 363 9,903,808 29,711,424Exercise of 2006 stock options 330 330 9,904,138 29,712,414Bonus share issue 976,942 976,942 10,881,080 32,643,240

2007 Exercise of 2000 stock options 33,028 33,028 10,914,108 32,742,324Exercise of 2001 stock options 29,039 29,039 10,943,147 32,829,441Exercise of 2002 stock options 22,878 22,878 10,966,025 32,898,075Exercise of 2003 stock options 7,809 7,809 10,973,834 32,921,502Exercise of 2004 stock options 4,429 4,429 10,978,263 32,934,789Exercise of 2005 stock options 24,563 24,563 11,002,826 33,008,478Bonus share issue 1,097,541 1,097,541 12,100,367 36,301,101

2008 Exercise of 2001 stock options 39,857 39,857 12,140,224 36,420,672Exercise of 2002 stock options 26,638 26,638 12,166,862 36,500,586Exercise of 2003 stock options 8,711 8,711 12,175,573 36,526,719Exercise of 2004 stock options 1,862 1,862 12,177,435 36,532,305Bonus share issue 1,214,545 1,214,545 13,391,980 40,175,940

2009 Exercise of 2002 stock options 51,368 51,368 13,443,348 40,330,044Exercise of 2003 stock options 99,828 99,828 13,543,176 40,629,528Exercise of 2004 stock options 987 987 13,544,163 40,632,489Exercise of 2005 stock options 408 408 13,544,571 40,633,713Bonus share issue 2,678,942 2,678,942 16,223,513 48,670,539

As of December 31, 2009, Inter Parfums’ capital was composed of 16,223,513 shares with a par value of €3.

2.Authorized capital

2.1Previous authorizations

The shareholders’ meeting of 24 April 2009 authorizedthe Board of Directors to increase the capital stock byissuing ordinary shares with or without shareholders’preemptive rights for maximum nominal amountsrespectively of €10 million. These authorizations werebe granted for 26 months from the date ofshareholders meeting of April 24, 2009, replacing andsuperseding the authorizations previously granted bythe shareholders meeting of April 20, 2007 for thesame purpose. To date, the Board of Directors has notmade use of these authorizations.

This shareholders’ meeting also authorized the Boardof Directors to increase the capital by an amount notexceeding €20 million through the capitalization ofearnings, additional paid-in capital and reserves. TheBoard of Directors made use of this authorization:

- Pursuant to its decision of May 20, 2009 to increasethe capital stock by €8,036,826 through the creationof 2,678,942 bonus shares on the basis of one newshare for every five shares held;

The maximum amount of present or future capitalincreases that may result from all issuances authorizedby the shareholders’ meeting of April 24, 2009 is€40,500,000 that includes the €500,000 authorizedin connection with the capital increase reserved foremployees proposed in the resolution that was rejectedby this meeting.



2.2Breakdown of option holders as of December 31, 2009

Plan 04 Plan 05 Plan 06 Plan 09

Management comittee members 58,339 49,376 50,793 28,000Employees 95,397 104,920 101,643 59,000

Total 153,736 154,296 152,436 87,000

3.Ownership of Inter Parfums capital stock and voting rights

3.1Situation at February 26, 2010

Shares % of Voting % of voting held capital right right

Inter Parfums Holding SA 12,068,264 74.39% 23,364,711 84.91%French investors 1,815,542 11.19% 1,815,542 6.60%Foreign investors 965,218 5.95% 965,218 3.51%Individuals 1,335,519 8.23% 1,370,978 4.98%Treasury shares 38,970 0.24% -

Total 16,223,513 100.00% 27,516,449 100.00%

A survey of shareholder ownership identified 5,730 shareholders at February 26, 2010. Excluding Inter ParfumsHolding, ownership breaks down as follows:

- 115 French investors and mutual funds owning 11.2% of the capital stock compared with 100 in 2008owning 10.5%;

- 90 foreign investors, located mainly in the U.K., Switzerland, the U.S. and Luxembourg, who own 5.9% of the capital stock compared with 75 in 2008 with 7.0%;

- 5,525 individuals owning 8.2% of the capital stock compared with 5,375 in 2008 owning 7,0%.

To the Company’s knowledge, there are no other shareholders that possess directly, indirectly or together, 5% or more of the capital or voting rights.

3.2Changes in Inter Parfums Holding’s ownership over four years

At 31 December 2006 2007 2008 2009

Inter Parfums Holding 71.56% 72.02% 75.32% 74.56%

Free float and employees 28.44% 27.98% 24.68% 25.44%

Total 100.00% 100.00% 100.00% 100.00%

4.Breakdown of Inter Parfums Holding’s capital stock as of December 31, 2009Inter Parfums Holding, whose sole equity holding is Inter Parfums, is itself wholly owned by Inter Parfums Inc.,listed on NASDAQ in the United States with approximately 1,900 shareholders. As of December 31, 2009 it had the following ownership structure:

- Philippe Benacin and Jean Madar : 50.04%;- Public : 49.96%.



5.DividendSince 1998, the company has adopted a policy of distributing dividends that today represent approximately 25%of consolidated earnings, destined to reward shareholders while at the same time associating them with theGroup’s expansion. In early May 2009, a dividend of €0.38 per share was paid or a total amount of €5 million.

6.Shareholders’ agreementsNo shareholders’ agreements exist at the level of Inter Parfums Holding.

7.Special shareholder disclosure obligationsIn compliance with article L.233-7 of the French Commercial Code, all shareholders acquiring a number of shares that increases above or below certain statutory reporting thresholds are required to notify the Frenchfinancial market authority (Autorité des Marchés Financiers). If such modifications are not made in accordancewith the applicable legal provisions, the company will apply the provisions of article L.233-14 relating to thecancellation of voting rights. In 2009, the company was not informed of any changes in share ownershipinvolving the crossing of these statutory thresholds.

8.Key stock market data

In number of shares and euros 2005 2006 2007 2008 2009

Shares outstanding as of December 31 9,734,659 10,881,080 12,100,367 13,391,980 16,223,513Market capitalization as of December 31 334m 386m 380m 242m 292mHigh (1) 35.10 41.88 38.00 31.55 20.49Low (1) 26.65 31.52 25.82 17.00 13.06Average (1) 31.20 35.25 34.04 23.63 16.67Year-end (1) 34.29 35.43 31.32 18.05 18.01Average daily volume (1) 8,093 7,785 11,204 6,220 6,022Earnings per share (1) 1.82 1.79 1.76 1.66 1.52Dividend per share (1) 0.37 0.38 0.38 0.38 0.39Average number of shares outstanding (2) 8,974,298 10,421,965 11,480,164 12,719,676 14,880,583

(1) Historical data (not restated for bonus share issues undertaken each year). (2) Excluding treasury shares.

9.Share priceIn an environment of highly volatile equity markets, Inter Parfums’ share price tracked the main indexesthroughout the 2009 first half. Expectations that the full-year sales forecast would be revised downwards adverselyaffected the price that reached a low of €13 in July.

Following the publication of solid earnings in September that reassured financial markets, the share price movedback up to €20 in October and in line with these same indexes.

Economic uncertainties have limited this upward momentum with the share ending the year at €18.01. For the full year, the share price nevertheless gained nearly 20% on average daily trading volume of 6,000 shares.



10.Share price and trading activity trends since 2007

In euros High Low Trading Trading volume value

(number (€ millions)of shares)

2007January 35.70 33.00 224,882 7,815February 36.00 32.85 169,928 5,925March 37.00 30.78 305,034 10,501April 36.65 35.22 172,533 6,238May 38.00 36.01 250,701 9,361June 37.43 34.13 205,181 6,874July 34.99 33.20 142,542 4,661August 34.00 30.70 155,143 4,948September 35.55 32.64 279,239 9,554October 35.86 32.70 298,271 10,254November 33.05 27.75 257,857 7,904December 31.90 25.82 395,719 11,228

2008January 31.55 23.20 450,739 12,831February 27.53 23.95 295,168 7,428March 29.15 25.00 164,250 4,604April 27.97 26.89 105,044 2,881May 28.13 25.35 103,781 2,742June 26.60 22.70 77,309 1,884July 23.10 21.98 68,650 1,548August 22.98 21.85 25,937 580September 24.20 21.00 64,077 1,444October 21.81 17.00 151,693 2,981November 20.00 17.60 41,679 773December 19.20 18.00 44,008 815

2009January 18.70 15.40 58,359 968February 15.75 14.95 62,188 961March 16.34 14.32 63,169 979April 17.20 15.29 122,492 1,999May 18.50 16.57 55,915 975June 18.93 14.27 94,351 1,416July 14.86 13.06 159,945 2,241August 15.60 14.50 111,347 1,685September 19.20 15.16 331,382 5,731October 20.49 19.35 197,296 3,895November 19.40 17.23 107,910 1,944December 18.01 17.10 171,186 2,997

2010January 18.90 17.55 140,550 2,555February 18.22 17.19 138,609 2,463

Historical data (not restated for bonus share issues undertaken between 2000 and 2009).

A capital increase through a bonus share issue on the basis of one new share for ten existing shares in June 2007resulted in the automatic division of the share price from this date by 1,10.

A capital increase through a bonus share issue on the basis of one new share for ten existing shares in June 2008resulted in the automatic division of the share price from this date by 1,10.

A capital increase through a bonus share issue on the basis of one new share for five existing shares in June 2009resulted in the automatic division of the share price from this date by 1.20.



3.ANNUAL GENERALMEETING: RESOLUTIONSSUBMITTED TO THEEXTRORDINARY ANDORDINARY SHAREHOLDERS’MEETING OF APRIL 23, 2010

Ordinary Resolutions

First resolution

Review and approval of the parent company financialstatements for the period ended December 31, 2009and the grant of discharge to directors

The shareholders, in accordance with the conditions of quorum and majority that apply at ordinary generalmeetings, after reviewing the Board of Directors’ report,including the Chairman’s report on internal controlprocedures and risk management, as well as the Auditors’report on the financial statements for the period endedDecember 31, 2009, approve the annual financialstatements, as presented showing a net income of€20,045,185 . They also approve the transactionsdescribed in the accounts and summarized in thesereports. In consequence, the shareholders grant dischargefor the period ended December 31, 2009 to all directorsfor their management.

They furthermore approve the total amount ofdisallowed deductions under article 39-4 of the FrenchGeneral Tax Code of €43,256 for 2009.

Second resolution

Review and approval of the consolidated financialstatements for the period ended December 31, 2009

The shareholders, in accordance with the conditions of quorum and majority that apply at ordinary generalmeetings, after reviewing the report of the Board ofDirectors and the Auditors’ report on the consolidatedfinancial statements of the Group for the period endedDecember 31, 2009, approve the financial statements aspresented showing an IFRS net income of €22,647,000.They also approve the transactions described in theaccounts and summarized in these reports.

Third resolution

Approval of the appropriation of net income

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, approving the proposal Board of Directors, decide to appropriate net income of the period of €20,045,185 as follows:

Net income of the period €20,045,185

Appropriation to the legal reserve 849,460Retained earnings €12,883,062 Dividend (1) €6,312,663

Total appropriation €20,045,185

(1) According to a price of €0.39 per share, and taking intoaccount the number of treasury shares held at December 31, 2009that will be adjusted in the case of a change to take into accountthe actual number of shares held on the dividend payment dateand stock options exercised by beneficiaries.

Shareholders accordingly set, for all qualifying sharescomprising the capital stock a dividend of €0.39 per share. This amount thus allocated amongshareholders shall qualify for the full 40% taxallowance provided for under article 158.3.2 of the French General Tax Code to individuals withtheir tax residence in France.

The dividend payment date is May 3, 2010.

If on the dividend payment date the company holdstreasury shares, the amount corresponding todividends not distributed for said shares will beallocated to retained earnings:

As required by law the shareholders duly note thatdividends for the last three periods were as follows:

Year Number Dividendof shares

2008 13,391,980 €0.38 2007 12,100,367 €0.38 2006 10,881,080 €0.38

Fourth resolution

Approval of regulated agreements under articles L. 225-38 et seq. of the French Commercial Code

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings and after reviewing the Auditors’special report on related-party agreements governedby articles L. 225-38 et seq. of the French CommercialCode, approve this report and each of theseagreements described therein.

Fifth resolution

Renewal of the appointment of Mr. Philippe Benacin

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. PhilippeBenacin as director for a term of four years.



Sixth resolution

Renewal of the appointment of Mr. Jean Madar

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. Jean Madarasas director for a term of four years.

Seventh resolution

Renewal of the appointment of Mr. Maurice Alhadeve

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. MauriceAlhadève as director for a term of four years.

Eighth resolution

Renewal of the appointment of Mr. Patrick Choël

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. Patrick Choëlas director for a term of four years.

Ninth resolution

Renewal of the appointment of Mr. Michel Dyens

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. Michel Dyensas director for a term of four years.

Tenth resolution

Renewal of the appointment of Mr. Garcia-Pelayo

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. FrédéricGarcia-Pelayo as director for a term of four years.

Eleventh resolution

Renewal of the appointment of Mr. Jean Levy

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. Jean Levy as director for a term of four years.

Twelfth resolution

Renewal of the appointment of Ms. Chantal Roos

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Ms. Chantal Roosas director for a term of four years.

Thirteenth resolution

Renewal of the appointment of Mr. Philippe Santi

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Mr. Philippe Santias director for a term of four years.

Fourteenth resolution

Renewal of the appointment of Ms. Catherine Bénard-Lotz

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarygeneral meetings, subject to the condition precedentof the approval of the twenty-fifth resolutionapproving the modifications of article 12 of thebylaws, renew the appointment of Ms. CatherineBénard-Lotz as director for a term of four years.

Fifteenth resolution

Setting of directors’ fees

The shareholders, in accordance with the conditionsof quorum and majority applicable to ordinary generalmeetings, after having reviewed the Board ofDirectors’ report, set annual directors fees for the yearin progress at €90,000 and grant full power to theBoard of Directors to determine the criteria forallocating these fees among board members within thelimit of this amount and the date of their payment.

Sixteenth resolution

Renewal of the authorization for the company to purchase and sell its own shares on the marketwithin the framework of article L.225-209 of the French Commercial Code

The shareholders, in accordance with the conditionsof quorum and majority that apply at ordinarymeetings and after reviewing the report of the Boardof Directors and in accordance with the provisions of article L.225-209 of the French Commercial Codeet seq. and the provisions of articles 241-1 to 241-6 of the AMF General Regulation, grant the Board of Directors the authority, which it may furtherdelegate, to acquire shares of the company, accordingto the terms and conditions set forth below.

The purpose of this authorization is to permit thecompany to purchase and sell its own shares for usesprovided for by law. On this basis, the shareholders



decide that this share repurchase program may beused for the following purposes:

- Maintain an orderly market in the company’s sharesthrough an investment services provider within theframework of a liquidity agreement in compliancewith the conduct of business rules of the Frenchassociation of investment firms (AFEI);

- Grant employees or officers of the company and/orthe Group stock options (articles L.225-177 et seq.of the French Commercial Code) and/or bonus shares(articles L.225-197-1 et seq. of the FrenchCommercial Code);

- Remittance of shares pursuant to the exercise of rights attached to securities conferring rights by redemption, conversion, exchange, presentation of warrants or any other means to grants of thecompany’s shares;

- Use such shares for payment or exchange inconnection with financial transactions or acquisitionsin compliance with the financial market regulations;

- Cancel shares to increase the return on equity andearnings per share and/or eliminate the impact of dilutionfor shareholders from capital increases subject to adoptionof the twenty-fourth resolution of this extraordinarygeneral meeting authorizing this cancellation;

- Permit the company to buy and sell its own shares forany other authorized purpose or practice admitted bythe market or which may be subsequently authorizedor admitted by applicable laws and regulations.

Shares acquired shall be subject to the following limits:

- The maximum purchase price is €40 per share,excluding execution costs;

- The total number of shares acquired may not exceed5% of the capital stock outstanding at any time. This 5% limit applies to an amount of capital thatwill be adjusted as applicable for corporate actionsaffecting the capital stock after this meeting,whereby acquisitions by the company shall under no circumstances increase its holding, directly andindirectly through subsidiaries, to more than 5% of the capital stock;

- Pursuant to the above, by way of indication andwithout taking into account shares already held bythe company, 16,223,513 shares on December 31,2009 would represent 5% of the capital stockcorresponding to a maximum theoretical purchaseprice of €32,447,026 on the basis of a maximumpurchase price of €40 per share.

The Board of Directors may adjust the above-mentionedprices pursuant to modifications in the par value of theshare, the capitalization of retained earnings and bonusissues, stock splits or reverse splits, repayment orreduction of capital, distribution of retained earnings or other assets and any other transactions involving thecompany’s capital stock, to reflect the impact of thesetransactions on the share’s value.

In accordance with applicable regulations, said sharesmay be purchased, held, sold or transferred,according to the case, through one or more

transactions, at any time the Board of Directors so chooses including when tender offers are in effectsubject to applicable regulations, by any means, on or off market, and notably through block trades.

Shares held by the Company must, in compliancewith the law, be maintained in registered form. Inaddition said shares that will not confer pre-emptiverights or entitlement to dividends shall be deprived of voting rights.

The shareholders grant all powers to the Board ofDirectors that may in turn delegate such authority to:

- Place all stock orders on or off the market;

- Sign any agreements notably with a view tomaintaining registers of purchases and sales;

- Submit all declarations to the Autorité des MarchésFinanciers (AMF) or any other such entity, carry outall formalities and, in general, make all necessaryarrangements.

The shareholders decide that this authorization:

- Shall take effect from the date of the Board ofDirectors’ meeting that decides to implement thisdecision that will automatically result in theexpiration of the previous authorization grantedunder the ninth resolution of the shareholders’meeting of April 24, 2009;

- Will expire after a period of 18 months from thedate of this meeting.

The Board of Directors will notify the generalmeeting of all transactions carried out under thisresolution.

Seventeenth resolution

Powers

All powers are granted to the bearer of copies orextracts of the minutes of this shareholders’ meetingruling in accordance with the conditions of quorumand majority that apply at ordinary general meetingsto perform all legal formalities relating to the aboveresolutions.

Extraordinary resolutions

Eighteenth resolution

Authority granted to the Board of Directors to issuesecurities convertible or exchangeable for shares of thecompany, immediately or in the future, maintainingshareholders’ preemptive rights (€25,000,000)

The shareholders, in accordance with the conditionsof quorum and majority that apply at extraordinaryshareholders meetings, after having reviewed theBoard of Directors’ report, and in compliance withthe provisions of articles L.225-129-2 of the FrenchCommercial Code:

1. Vest the Board of Directors, with the authority,which the latter may further delegate in accordancewith the law, to increase the capital, through one orseveral tranches, in France or in other countries,



in amounts and at such times it chooses, by issuing in euros or other currencies at the choice of the Boardof Directors (i) ordinary shares as well as any othersecurities of any nature convertible or exchangeablefor shares by all means, immediately and/or in future,or (ii) securities conferring rights to the allotment ofdebt securities;

2. Resolve that the maximum nominal amount ofcapital increases that may be carried out immediatelyor in the future under this authority may not exceed€25,000,000. This amount may nevertheless beincreased as necessary, by the nominal amount of additional securities to be issued to preserve, asrequired by law, the rights of holders of securitiesconferring rights to equity securities of the company.It is furthermore specified that the nominal amountof capital increases that may be carried out,immediately or in the future, under this authorizationshall be included under the maximum authorizedamount for capital increases provided for under the twenty-second resolution of this Meeting;

3. Resolve that the maximum nominal amount of debt securities of the company that may be issuedand convertible or exchangeable for shares of thecompany, immediately or in the future, shall notexceed €100,000,000, it being specified that thismaximum amount covers all debt securities that maybe issued under the authority granted to the Board of Directors by this resolution and the nineteenth and twentieth resolutions;

4. Decide that shareholders qualify in proportion tothe number of shares they hold for preemptive rightsto subscribe for new shares or securities issued underthis authorization on the basis of irrevocableentitlement (à titre irréductible). In addition, the Board of Directors may grant shareholders theright to subscribe to excess shares without tradingrights (à titre réductible) over and above the numberof the shares they were entitled to by exercising theirirrevocable entitlement, in proportion to said rightsand within the limit of their demand;

5. Resolve that if applications for shares on the basisof irrevocable entitlement and for excess shareswithout trading rights fail to account for the entireissue of shares or securities provided for under thisresolution, the Board of Directors may at its initiativeallocate all or part of the shares or securities not takenup, offer to the public all or part of the securities nottaken up or limit the capital increase to the amountof taken up provided that the take-up accounts for at least three quarters of the amount initially set;

6. Grant the authorization provided for under thisresolution for 26 months or until June 23, 2012 onwhich date it shall be considered to have lapsed if notused by the Board of Directors and duly note that thisauthorization cancels from this date onwards theprevious authorization granted by the twelfth resolutionof the shareholders’ meeting of April 24, 2009 with thissame purpose, i.e. authorizations to issue stockmaintaining shareholders’ preemptive rights;

7. Duly note that the grant of authority under thisresolution entails the automatic waiver in favor of holders of securities subsequently convertible or exchangeable into ordinary shares, of theirpreferential right to subscribe for those shares to which said securities would confer rights, inaccordance with the provisions of article L.225-132of the French Commercial Code;

8. Decide that the Board of Directors shall be grantedthe authority, which the latter may further delegate in accordance with the law, to implement thisresolution, for each of the capital increases concerned,and notably to:

- Set the characteristics, amount and procedures foreach issue as well as the securities issued;

- Determine the category of securities issued and setthe subscription price, with or without issuepremium, the procedures for their payment, theirdate of record, which may be retroactive, or theprocedures whereby the securities issued under thisissue shall be convertible, exchangeable or exercisablefor ordinary shares of the company, as well as theconditions according to which shall be temporarilysuspended, in accordance with the applicable legalprovisions, the preferential rights of the holders ofsecurities convertible, exchangeable or exercisable for ordinary shares;

- Set the procedures to maintain, if necessary, therights of holders of securities convertible,exchangeable or exercisable for shares of the companyin the future;

- Charge, as necessary, and notably issue expensesincurred, to issue premium;

- And in general, take all useful measures andconclude all agreements to successfully undertake the proposed issues,

- Take all measures and perform all formalities usefulfor the issue, the listing of the securities and theagency agreement for the servicing of securities issuedunder this authority as well as for the exercise ofrights attached to the securities or resulting fromcapital increases carried out,

- Record the capital increase(s) resulting from theissue carried out under this authority and amend thearticles of incorporation and bylaws in consequence;

9. Resolve, in the event of the issue of debtinstruments (including securities conferring rights the allotment of the debt securities provided forunder article L.228-91 of the French CommercialCode), whether they are subordinated or not, set theirinterest rate, stipulate their term and the other termsof issuance and/or redemption/repayment, set theconditions whereby the securities are convertible,exchangeable or exercisable for shares of the companyor for the allotment of debt securities, amend duringthe life of the securities, the above terms, incompliance with applicable formalities.



Nineteenth resolution

Authority granted to the Board of Directors to issuesecurities convertible or exchangeable for shares of thecompany, immediately or in the future, suspendingshareholders’ preemptive rights (€25,000,000)

The shareholders, in accordance with the conditionsof quorum and majority applicable to extraordinaryshareholders meetings, and after reviewing the reportof the Board of Directors and the special report of theAuditors and in accordance with provisions of articleL.225-129 of the French Commercial Code:

1. Vest the Board of Directors, with the authority,which the latter may further delegate in accordancewith the law, to increase the capital, entailing thesuspension of shareholders’ preemptive rights,through one or several tranches, in France or in othercountries, in amounts and at such times it chooses, by issuing in euros or other currencies at the choice of the Board of Directors (i) ordinary shares as well as any other securities of any nature convertible orexchangeable for shares by all means, immediatelyand/or in future, or (ii) securities conferring rights to the allotment of debt securities;

2. Resolve that the maximum nominal amount ofcapital increases that may be carried out immediatelyor in the future, entailing the suspension ofshareholders’ preemptive rights, under this authoritymay not exceed €25,000,000. This amount maynevertheless be increased as necessary, by the nominalamount of additional securities to be issued topreserve, as required by law, the rights of holders ofsecurities conferring rights to equity securities of thecompany. It is furthermore specified that the nominalamount of capital increases that may be carried out,immediately or in the future, under this authorizationshall be included under the maximum authorizedamount for capital increases provided for under the twenty-second resolution of this Meeting;

3. Resolve that the maximum nominal amount of debt securities of the company that may be issuedand convertible or exchangeable for shares of thecompany, immediately or in the future, shall notexceed €100,000,000 it being specified that thismaximum amount covers all debt securities that maybe issued under the authority granted to the Board of Directors by this resolution and the eighteenth and twentieth resolutions;

4. Resolve to suspend shareholders’ preemptive rightsto securities to be issued, it being specified that theBoard of Directors may establish in favor ofshareholders, a subscription priority for all or part of the issue for a period and subject to conditions itshall set in compliance with the provisions of articleL.225-135 of the French Commercial Code. This priority period result shall not give rise to thecreation of negotiable rights but may be exercised on the basis of irrevocable entitlement (à titreirréductible) according to the exact rights or on a non-preferential basis (à titre réductible) for theexcess amounts without trading rights;

5. Duly note that the grant of authority under this resolution entails the automatic waiver in favor of holders of securities subsequently convertible or exchangeable into ordinary shares, of theirpreferential right to subscribe for those shares towhich said securities would confer rights, inaccordance with the provisions of article L.225-132of the French Commercial Code ;

6. Resolve that if applications for shares, including, if applicable, those of shareholders, fail to account for the entire issue of shares or securities provided for under this resolution, the Board of Directors mayat its initiative allocate all or part of the shares orsecurities not taken up, offer to the public all or partof the securities not taken up or limit the capitalincrease to the amount of taken up provided that the take-up accounts for at least three quarters of the amount initially set;

7. Grant the authorization provided for under thisresolution for 26 months or until June 23, 2012 onwhich date it shall be considered to have lapsed if notused by the Board of Directors and duly note that thisauthorization cancels from this date onwards the previousauthorization granted by the thirteenth resolution of theshareholders’ meeting on April 24, 2009 with this samepurpose, i.e. authorizations to issue stock, suspendingshareholders’ preemptive rights;

8. Resolve in compliance with L.225-136 of theFrench Commercial Code, that the issue price of sharesdirectly issued shall be at least equal to the minimumamount provided for by laws and regulations in forcewhen this authorization is used, it being specified thaton this date, the minimum price provided for underarticle R.225-119 of the French Commercial Codeequals the weighted average price of the last threetrading sessions preceding the fixing, that may besubject to a discount not to exceed 5%;

9. Resolve that the Board of Directors shall be granted,which the latter may further delegate in accordancewith the law, the powers necessary to implement thisauthority, for each of the capital increases, for thepurpose of notably setting the terms and conditions of the issue, subscription, payment, recording thecompletion of the resulting capital increases, andamending the articles of incorporation and bylaws inconsequence, and notably making the same decisions asthose referred to in point 8 of the eighteenth resolution;

10. Resolve, in the event of the issue of debtinstruments (including securities conferring rights the allotment of the debt securities provided forunder article L.228-91 of the French CommercialCode), whether they are subordinated or not, set theirinterest rate, stipulate their term and the other termsof issuance and/or redemption/repayment, set theconditions whereby the securities are convertible,exchangeable or exercisable for shares of the companyor for the allotment of debt securities, amend duringthe life of the securities, the above terms, incompliance with applicable formalities.



Twentieth resolution

Authority granted to the Board of Directors to issuesecurities convertible or exchangeable for shares of thecompany, immediately or in the future, suspendingshareholders’ preemptive rights, through an issueprovided for under II de article L.411-2 of the FrenchMonetary and Financial Code (€25,000,000)

The shareholders, in accordance with the conditions of quorum and majority applicable to extraordinaryshareholders meetings, and after reviewing the reportof the Board of Directors and the special report of theAuditors and in accordance with provisions of articleL.225-129 of the French Commercial Code and articleL.411-2 of the French Monetary and Financial Code:

1. Vest the Board of Directors, which the latter mayfurther delegate in accordance with the law, with all authorities to increase the capital, entailing thesuspension of shareholders’ preemptive rights,through a “private placement” destined exclusively for qualified investors or a restricted circle of investorsas provided for in subsection II of article L.441-2 of the French Monetary and Financial Code, throughone or several tranches, in France or in othercountries, in amounts and at such times it chooses, by issuing in euros or other currencies, at the choiceof the Board of Directors (i) ordinary shares as well as any other securities of any nature convertible orexchangeable for shares by all means, immediatelyand/or in future, or (ii) securities conferring rights to the allotment of debt securities;

2. Resolve that the maximum nominal amount ofcapital increases that may be carried out immediatelyor in the future, entailing the suspension ofshareholders’ preemptive rights, under this authoritymay not exceed 20% of the share capital at the timeof the issue. This amount may nevertheless beincreased as necessary, by the nominal amount of additional securities to be issued to preserve, as required by law, the rights of holders of securitiesconferring rights to equity securities of the company.It is furthermore specified that the nominal amountof capital increases that may be carried out,immediately or in the future, under this authorizationshall be included under the maximum authorizedamount for capital increases provided for under thetwenty-second resolution of this Meeting;

3. Resolve that the maximum nominal amount of debt securities of the company that may be issuedand convertible or exchangeable for shares of thecompany, immediately or in the future, shall notexceed €100,000,000, it being specified that thismaximum amount covers the total for all debtsecurities that may be issued under the authoritygranted to the Board of Directors by this resolutionand the eighteenth and nineteenth resolutions;

4. Resolve to suspend shareholders’ preemptive rightsto securities to be issued, it being specified that theBoard of Directors may establish in favor ofshareholders, a subscription priority for all or part of the issue for a period and subject to conditions itshall set in compliance with the provisions of articleL.225-135 of the French Commercial Code.

This priority period result shall not give rise to thecreation of negotiable rights but may be exercised on the basis of irrevocable entitlement (à titreirréductible) according to the exact rights or on a non-preferential basis (à titre réductible) for the excessamounts without trading rights;

5. Duly note that the grant of authority under thisresolution entails the automatic waiver in favor of holders of securities subsequently convertible or exchangeable into ordinary shares, of theirpreferential right to subscribe for those shares towhich said securities would confer rights, inaccordance with the provisions of article L.225-132of the French Commercial Code ;

6. Resolve that if applications for shares, including, if applicable, those of shareholders, fail to account forentire issues of shares or securities provided for underthis resolution, the Board of Directors may at itsinitiative allocate all or part of the shares or securitiesnot taken up, offer to the public all or part of thesecurities not taken up or limit the capital increase to the amount of taken up provided that the take-upaccounts for at least three quarters of the amountinitially set;

7. Grant the authorization provided for under thisresolution for 26 months or until June 23, 2012 onwhich date it shall be considered to have lapsed if notused by the Board of Directors;

8. Resolve in compliance with L.225-136 of theFrench Commercial Code, that the issue price ofshares directly issued shall be at least equal to theminimum amount provided for by laws andregulations in force when this authorization is used, itbeing specified that on this date, the minimum priceprovided for under article R.225-119 of the FrenchCommercial Code equals the weighted average priceof the last three trading sessions preceding the fixing,that may be subject to a discount not to exceed 5%;

9. Resolve that the Board of Directors shall begranted, which the latter may further delegate inaccordance with the law, the powers necessary toimplement this authority, for each of the capitalincreases, for the purpose of notably setting the termsand conditions of the issue, subscription, payment,recording the completion of the resulting capitalincreases, and amending the articles of incorporationand bylaws in consequence, and notably making the same decisions as those referred to in point 8 of the eighteenth resolution;

10. Resolve, in the event of the issue of debtinstruments (including securities conferring rights the allotment of the debt securities provided forunder article L.228-91 of the French CommercialCode), whether they are subordinated or not, set theirinterest rate, stipulate their term and the other termsof issuance and/or redemption/repayment, said theconditions whereby the securities are convertible,exchangeable or exercisable for shares of the companyor for the allotment of debt securities, amend duringthe life of the securities, the above terms, incompliance with applicable formalities.



Twenty first resolution

Authority granted to the Board of Directors toincrease the amount of each of issue with or withoutshareholders’ preemptive rights

The shareholders, in accordance with the conditionsof quorum and majority applicable to extraordinaryshareholders meetings, and after reviewing the reportof the Board of Directors and the special report of theAuditors and in accordance with provisions of articlesL.225-135-1 and R.225-118 of the FrenchCommercial Code:

- Vest the Board of Directors, which the latter mayfurther delegate according to the law, with theauthority to increase the amount of each issue, with or without shareholders’ preemptive rights, as provided for above by the eighteenth, nineteenthand twentieth resolutions, at the same price retainedfor the initial issue, subject to the periods and limitsprovided for by applicable regulation on the date of the issue (today, within 30 days from the end ofthe subscription period and within the limit of 15%of the initial issue);

- Decide that the nominal amount of the capitalincrease decided by virtue of this resolution shall beincluded under the maximum amount provided forunder the twenty-second resolution as well as thespecific limit of the resolution used for the initial issue;

- Grant the authorization provided for under thisresolution for 26 months or until June 23, 2012 onwhich date it shall be considered to have lapsed if notused by the Board of Directors;

- Duly note that this authorization cancels as of todayand replaces the previous authorization granted bythe fourteenth resolution of the shareholders’ meetingof 24 April 2009, unused to date and destined for thesame purpose.

Twenty-second resolution

Maximum aggregate amount of capital increasesgiving present or future rights to the share capitalunder authorizations granted

The shareholders, in accordance with the conditionsof quorum and majority that apply at extraordinaryshareholders meetings, and after having reviewed theBoard of Directors’ report, and in compliance withthe provisions of articles L.225-129-2 of the FrenchCommercial Code set the maximum aggregateamount of present or future capital increases at:

1. €75,500,000, for issues authorized by resolutions18, 19, 20, 21 and 23, it being specified that thisamount may be increased, as necessary, by thenominal amount of additional shares to be issued topreserve the rights of holders of securities convertible,exchangeable or exercisable for shares of thecompany;

2. €300,000,000 as the maximum total amount for bonds or other debt securities giving access to the share capital that may be issued by virtue ofauthorizations thereof.

All these amounts that remain subject to the maximumauthorized capital increase do not take into account the consequences of adjustments that might be made,in compliance with the law pursuant to issuance ofsecurities giving future rights to the share capital.

Twenty-third resolution

Authority granted to the Board of Directors to proceedwith capital increases reserved for employees inaccordance with article L.225-129 -6 of the FrenchCommercial Code and entailing the suspension ofshareholders’ preemptive rights

The shareholders by virtue of the precedingresolutions, in accordance with the conditions ofquorum and majority applicable to extraordinaryshareholders’ meetings and after reviewing the Boardof Directors’ report and the Auditors’ report inaccordance with articles L.225-129-6 and L.225-138-1of the French Commercial Code and articles L.3332-18et seq. of the French Labor Code:

1. Grant authority to the Board of Directors, whichthe latter may further delegate as permitted by law, at its sole discretion, to increase the capital, in one or more transactions in amounts and at times of itschoosing through the issue of common stock reservedfor employees of the company or affiliated companiesin accordance with applicable laws belonging to acompany savings plan;

2. Waive in favor of employees entitled to benefitfrom capital increases that may be decided by virtueof this authorization, the preemptive rights ofshareholders to new shares that shall be issued;

3. Resolve that the maximum nominal amount of capital increases that may be undertaken by virtue of this resolution shall be €500,000, whereby thisamount may however be increased as necessary byadditional securities that must be issued to preserve,as required by law the rights of holders of securities,giving access to the shares of the company and thatthe nominal amount of capital increases permittedunder this authorization is independent and distinctand as such not included under the limits providedfor under the twenty-second resolution ;

4. Grant full authority to the Board of Directorswithin the above limits and conditions for thepurpose of implementing the authority herebygranted, including notably to:

- Determine the list of grantees benefiting from thesuspension of preemptive subscription rights, thenumber of shares to be granted to each qualifyingemployee and the issue price subject to the limitsimposed by articles L.225-138-1 of the FrenchCommercial Code and articles L.3332-19 et seq.of the French Labor Code;

- Determine the dates and procedures for the capitalincrease(s);

- Receive applications for shares and determine theprocedures for their payment;

- Produce a supplemental report describing the finalterms of the offering, and in general, take all measures



and undertake all formalities required for the issue,the listing of the securities and custodial and relatedservices for securities covered by this authorization,and amend the articles of the bylaws in consequence;

5. Grant the authorization provided for under thisresolution for 26 months from the date of thismeeting or until June 23, 2012.

Twenty-fourth resolution

Authority granted to the Board of Directors to reducethe capital by the cancellation of treasury shares

The shareholders, in accordance with the conditionsof quorum and majority that apply at extraordinaryshareholders meetings, and after reviewing the reportof the Board of Directors and the special report of theAuditors and the sixteenth resolution of the ordinarygeneral meeting of this day authorizing the companyto purchase its own shares:

- Authorize the Board of Directors to cancel, at itsown discretion, through one or more transactions, at amounts and times of its choosing, treasury sharesacquired within the framework of article L.225-209of the French Commercial Code, not to exceed 5% of the common stock outstanding and by period of24 months, reducing the authorized capital in dueproportion, in accordance with applicable laws andregulations;

- This authorization is for eighteen months from thismeeting, or until October 23, 2011, and replaces theprevious authorization by the shareholders’ meetingof April 24, 2009, that was not used;

- Grant full authority to the Board of Directors, with the possibility of further delegating to any person soauthorized by law, to reduce the capital through one ormore transactions, to notably determine the final amountof the capital reduction and the terms and proceduresand record the completion of the capital reduction,amending in consequence the bylaws, performing allnecessary formalities, and notably filings with all bodiesand in general doing everything necessary.

Twenty-fifth resolution

Modification article 12 of the bylaws relating to the terms of Directors’ appointments

The shareholders, in accordance with the conditionsof quorum and majority that apply at extraordinaryshareholders meetings, after having reviewed theBoard of Directors’ report, decide to modifysubsection 3 of article 12 of the bylaws for thepurpose of taking into account recommendationsrelating to corporate governance.

In consequence, subsection 3 of article 12 will bereplaced by the following text:

Directors are appointed for terms of FOUR (4) years thatexpire at the end of the ordinary general meeting called to rule on the financial statements for the period endedand held in the year in which their appointments expires.

The remaining provisions of article 12 remain unchanged.

Twenty-sixth resolution

Powers

All powers are granted to the bearer of copies or extractsof the minutes of this shareholders’ meeting ruling inaccordance with the conditions of quorum and majoritythat apply at extraordinary general meetings to performall legal formalities relating to the above resolutions.



CHAPTER FIVE

Historyof thecompany

122 Two thousand nine registration document Inter Parfums. History of the company


1982

Creation of Inter Parfums SA in France by Philippe Benacin and Jean Madar

1985

Creation of Inter Parfums Inc in the United States, parent company of Inter Parfums SA

1988

Beginning of the selective perfume activity with the signature of a license agreement for the Régine’s brandInitial public offering of Inter Parfums Inc on NASDAQ in New York

1993

Signature of a license agreement to create and produce perfumes under the Burberry name and distribute them worldwide

1994

Listing of Inter Parfums SA on the over-the-counter market of the Paris stock exchangeAcquisition of the Molyneux and Weil brands

1995

Transfer of the company from the over-the-counter market to the Second Market of Paris stock exchange with a rights issue

1997

Signature of a license agreement to create and produce perfumes under the S.T. Dupont name and distribute them worldwide

1998

Signature of a license agreement to create and produce perfumes under the Paul Smith and distribute them worldwide

1999

Signature of a license agreement to create and produce perfumes under the Christian Lacroix and distribute them worldwide

2000

Extension of the Burberry license agreement

2004

Signature of a new Burberry license agreement

2006

Extension of the S.T. Dupont license agreementSignature of a license agreement for the Quiksilver and Roxy brands

2007

Signature of a license agreement to create and produce perfumes under the Van Cleef & Arpels brand and distribute them worldwide

2008

Extension of the Paul Smith license agreement

2009

Signature of a license agreement to create and produce perfumes under the Jimmy Choo brand and distribute them worldwide

2010

Signature of a license agreement to create and produce perfumes under the Montblanc brand and distribute them worldwide

123Two thousand nine registration document Inter Parfums. History of the company


CHAPTER SIX

Auditors andresponsibilitystatementsAuditors 125

Responsibility statement for the registration document 125

124 Two thousand nine registration document Inter Parfums. Auditors and responsibility statements


AuditorsThe statutory auditors having issued reports on the parent company and consolidated financial statements are:

Mazars SFECO & Fiducia Audit

61 rue Henri Regnault 50 rue de Picpus92400 Courbevoie 75012 Parisrepresented by Denis Grison represented by Gilbert Métoudiappointed by the AGM of December 1, 2004 appointed by the AGM of May 19, 1995reappointed by the AGM of April 20, 2007 reappointed by the AGM of April 20, 2007expiration date: 2013 AGM expiration date: 2013 AGM

The alternate auditors are respectively:

Mr. Guillaume Potel Mr. Serge Azan

61 rue Henri Regnault 16 rue Daubigny92400 Courbevoie 75017 Parisappointed by the AGM of December 1, 2004 appointed by the AGM of May 19, 1995reappointed by the AGM of April 20, 2007 reappointed by the AGM of April 20, 2007expiration date: 2013 AGM expiration date: 2013 AGM

Auditors’ fees are described in section 6.7 of the notes to the consolidated financial statements.

Responsibility statement for the registration documentI hereby certify that, to my knowledge and after all due diligence, the information contained in this registrationdocument is true and accurate and contains no omissions likely to affect the import thereof.

I declare that, to the best of my knowledge, the financial statements have been prepared in accordance with theapplicable financial reporting standards and give a true and fair view of the assets and liabilities, financialposition and results of the operations of the company and that the management report included thisRegistration Document faithfully presents business trends, the results and financial position of the companyand the description of the main risks and uncertainties.

I have obtained a completion of work letter from the statutory auditors in which they indicate that they haveverified the information concerning the financial situation and accounts presented in this registration documentand read the entire registration document.

The auditors have drawn our attention in their report on the consolidated financial statements for fiscal 2009,to Note 1.3 of the consolidated financial statements concerning changes in accounting methods resulting fromstandards, amendments and interpretations applied by the company.

The statutory auditors have issued reports on the historical financial information for 2008 and 2007, includedon respectively pages 42 and 63 of the French language original of the registration document (document deréférence) filed with the AMF on April 1, 2009 and pages 85 and 104 of the 2007 registration document filedwith the AMF on April 4, 2008, without qualified opinions or comments.

Philippe Benacin Chairman and Chief Executive Officer

Responsibility for financial information

Philippe Santi Chief Financial and Administrative Officer

125Two thousand nine registration document Inter Parfums. Auditors and responsibility statements


126 Two thousand nine registration document Inter Parfums

NOTES


127Two thousand nine registration document Inter Parfums


To receive information or be added to the company’s financial communications mailing list contact: the Investor Relations department

Karine MartyTelephone: +33 800 47 47 47Fax: 01 40 74 08 42Via the website: www.inter-parfums.fr

128 Two thousand nine registration document Inter Parfums. Photos: S. Durand and E. Ouvray. Design: Agence Marc Praquin


4 rond-point des Champs Élysées75008 ParisTel. +33 1 53 77 00 00

www.inter-parfums.fr

financier_uk_2.qxd 7/05/10 15:17 Page IV

Burberry. Jimmy Choo. Lanvin.Montblanc. Nickel. Paul Smith.S.T. Dupont. Van Cleef & Arpels.

Annual report two thousand & nine

4 rond-point des Champs Élysées75008 ParisTel. +33 1 53 77 00 00

www.inter-parfums.fr

Burberry. Jimmy Choo. Lanvin. Montblanc. Nickel. Paul Smith. … · 2018-07-09 · Jimmy Choo On...

Documents

Transcript of Burberry. Jimmy Choo. Lanvin. Montblanc. Nickel. Paul Smith. … · 2018-07-09 · Jimmy Choo On...