249304 nl 01 80internet - ku leuven · lexicon 79 financial calendar annual general meeting 2001:...

annual report>

2001

consolidated

non consolidated

100%100%100%55%100%

100% 100% 100%

100%

100%

100%

75% 25% 100%

100%

80%

100%

51%

74%

100% Telindus K-NET Ltd (Irish branch)

TELINDUS GROUP NV(Belgium)

Telindus Int'l BV(Netherlands)

Datax NV(Belgium)

Telindus NV(Belgium)

Telcor Serv. Int'l cvba(Belgium)

Telindus S.A. (Spain)

Groupe TelindusFrance S.A.

Telindus Int'l BV(Netherlands)

Telindus SpA(Italy)

Telindus S.A. (Switzerland)

Telindus Networks S.A.(Switzerland)

Telindus NV(Israeli branch)

Telindus GmbH(Austria)

Telindus GmbH (Germany)

Telindus HungaryNetworkintegrator Kft

Telindus Ltd(United Kingdom)

Telindus (Thailand) Ltd (Thailand)

Expertel SA(Portugal)

Telindus Ltd(Hong Kong)

100%

100%

Telindus France S.A.(France)

Conseil et FormationSystème SAS (CF6) France

100% Telindus GSM SA(Belgium)

100%

100%

Telindus K-NET Ltd (United Kingdom)

Cellstack Ltd (United Kingdom)

65% Telindus S.A.(Luxembourg)

100%

100%

Computer Home Sarl(Luxembourg)

Telectronics Sarl(Luxembourg)

100%

100%

CF6 Luxembourg S.A.(Luxembourg)

Beim Weissenkreuz S.A(Luxembourg)

5,2%

6,8%

5,6%

25%

Mobistar S.A. (Belgium)

Net Fund Europe CVA(Belgium)

Spearhead Ltd. (Israel)

Infostar Holding nv(Belgium)

INVESTOR RELATIONS

Comments and questions in respect of this annual report and other financial matters

concerning the Telindus Group may be forwarded to: [email protected]

ANNUAL REPORT IN FRENCH/DUTCH

Le rapport annuel est aussi disponible en Français à l’adresse suivante:

Dit jaarverslag is eveneens in het Nederlands beschikbaar op het volgende adres:

Telindus Group NV

Investor Relations

Geldenaaksebaan 335

3001 Heverlee

Tel +32 16 38 25 41

Fax +32 16 38 27 08

E-mail: [email protected]

The annual report is available for download at www.telindus.com > investor relations

TABLE OF CONTENTS

ABOUT THE TELINDUS GROUP 3

IN MEMORIAM 4

SIGNIFICANT EVENTS IN 2001 6

KEY FIGURES 8

BOARD OF DIRECTORS’ REPORT 10

REPORT OF THE CEO 16

STOCK MARKET AND SHARES 18

BUSINESS OVERVIEW 20

FINANCIAL INVESTMENTS 32

TELINDUS VALUES 34

CORPORATE GOVERNANCE 38

STATUTORY AUDITORS’ REPORT 42

CONSOLIDATED FINANCIAL STATEMENTS 43

TELINDUS GROUP NV - FINANCIAL STATEMENTS 77

LEXICON 79

FINANCIAL CALENDAR

ANNUAL GENERAL MEETING 2001: FRIDAY 31 MAY 2002

PAYMENT OF DIVIDEND 2001: 7 JUNE 2002

PUBLICATION OF RESULTS FOR FIRST HALF-YEAR 2002: FRIDAY 2 AUGUST 2002

PUBLICATION OF RESULTS 2002: FRIDAY 31 JANUARY 2003

ANNUAL GENERAL MEETING 2002: FRIDAY 30 MAY 2003

aboutthe Telindus Group

Telindus > annual report 2001

>

The Belgian based Telindus Group isthe European expert in datacommunication and network integration.In addition to the core activities ofintegration, the Group is increasinglyactive in the business of network securityand surveillance.

Telindus Group has expertise in allaspects of modern telecommunicationstechnology, including LAN, WAN, Internetand e-networking, network access andsecurity, VOIP, VPN, fixed and mobilecommunications. Thanks to this know-howand its independency from equipmentmanufacturers, Telindus occupies a uniqueposition that allows it to optimise theefficiency, user-friendliness and cost ofcritical communication applications for itscustomers.

The Group’s unique know-how in thearea of DSP technology is used to producehigh-performance access devices that arehighly regarded by a significant number ofoperators for their flexibility andperformance.

Telindus Group operates over sixtyoffices in seventeen countries in Europe,South-East Asia and the Middle East andhas an extensive network ofrepresentatives in these regions as well asin North America, Latin America andAfrica.

Telindus counts more than sixtyoperators and an eminent range offinancial, governmental and Europeaninstitutions among its clients. Telindus canalso provide a large number of topreferences in the industrial, thedistribution and the media world.

Telindus Group runs a training centreknown as the Telindus High Tech Institute(THTI). On an independent basis, the THTIinstructors offer some 130 telematicscourses on a European scale, dealing witha variety of technologies and aimed atcustomers and own personnel.

In addition to its network activities theTelindus Group has a number ofparticipating interests in companies suchas Mobistar (5.2%), Spearhead (6.8%) andMitiska NetFund Europe (5.6%).

The Telindus Group employsapproximately 2,400 persons and is listedon Euronext Brussels (Ticker TEL).

Telindus > annual report 2001 > about the Telindus Group 3 >>

in memoriamJohn Cordier


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4

Telindus > annual report 2001 > in memoriam 5 >>

The man who wrote the introductionfor this annual report for many years isnot doing it this time around.

John Cordier passed away only a fewmonths ago, on 22 January 2002.

John Cordier and Telindus weresynonymous. John was in fact Telindus. Hewas the backbone of this company formany years. He had the necessarycreativity and nerve to organise amanagement buy-out in 1982 fromTelindus, the very company he wasworking for at the time. John was theperson who looked for partners, investorsand especially the employees. When thecompany went public in 1985, Telindusbegan to grow steadily with an initialexpansion into the neighbouring countriesof Belgium and, in a second movementthrough an extensive acquisitionprogramme, the Telindus name wasintroduced in the other European countriesand as far as south-east Asia.

John was also the mastermind behindMobistar which rapidly became Belgium’sfirst alternative operator. And once againTelindus, as shareholder, could benefitfrom Mobistar’s success, through theexpertise of John who was president.

Someone once wrote: management,you have to love people, otherwise itdoesn’t work. And that’s how John Cordierdid it. John was legendary: he wasdevoted, he listened and he was aninspiring leader.

He was a man who could convincepeople and fill them with enthusiasm.That’s what he did in his own company,

Telindus, but also in sectors that are notgenerally considered to be a ‘naturalenvironment’ for captains of industry. Hewas extremely interested in andcommitted to cultural and social affairs.

At the end of the 80s, he led thefootball team KV Mechelen to theEuropean cup final. John was alsopresident of the Royal Flanders Ballet forseveral years, and in the capacity of firstalderman and alderman for security, hecontributed to the local government of theCity of Mechelen.

A company is in fact a community atwork, the sum of all the availablededication and talent. Thanks to hisendless devotion, his remarkable visionand his infinite memory, John couldinvigorate and enthuse everyone aroundhim.

Anyone who knew John Cordier willnever be able to forget him.

Thanks John.

significant eventsin 2001


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6

Telindus reinforces its position in theSouth East Asian market by acquiring51% of Modern Times Technologies.MTT is based in Hong Kong and hasoperations in the Chinese citiesBeijing, Chengdu, Chongqing,Guangzhou, Kunming, Shanghai,Shenzen and Xinjiang.

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On the 11th of May 2001, a first brickwas laid of the new 14,000 m2

building in Haasrode (Belgium). Theofficial opening of these new TelindusCorporate Headquarters is foreseenend of 2002 – beginning of 2003.

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> 0501

> 1001

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2001> 0301

Telindus and its partners had thehonour of welcoming over 2000international customers and prospectsto the 28th Telindus InternationalSymposium. This Symposium was thefirst one to be held at Brussels Expo,after having housed for over 20 yearsin the Ostend Casino.Because of the international scope ofthe audience, the high quality of theconference programme, and thepresence of best-of-breedmanufacturers, the InternationalTelindus Symposium attracts anextremely high calibre audience of keygovernmental and corporate policy-and decision makers.

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In order to bring its production in linewith the speed the Telindus R&D-department develops new products,Telindus invested in a new ‘HighSpeed Shooter’. The swap of this SMD-inserter increased the productionfacilities of Telindus by at least 30%.

Telindus > annual report 2001 > significant events in 2001 7 >>

After having been hospitalized forseveral months, John Cordier, thefounder and president of the TelindusGroup passed away on January 22nd

2002.

>

2002> 0101

Telindus has been honoured twice by CitrixSolutions Network in 2001. Telindus wasoffered the Awards for ‘Highest Productivity’and ‘Largest Customer Win’ and later theAward of Excellence for ‘Best Premier Partner2001 (Belux)’.Last year, Telindus acquired the Premier ValueAdded Solutions Provider (VASP) status withCheck Point, a recognition of Telindus’extensive security and network servicecapabilities.During the Cisco Partner Summit 2001 in LasVegas, Telindus received the EMEA RegionalAward, recognizing Telindus as Global Partnerof the Year 2000 for EMEA North.Finally, Telindus High-Tech Institute (THTI) wasrecognized as an official ‘NetScreenAuthorized Training Centre’. THTI, being theonly training centre in Europe offering‘NetScreen Authorized Courses’ confirms thecompetencies of THTI, encompassing a broadrange of ‘best of breed’ security solutions.

Since Telindus started its aggressiveacquisition policy back in 1998, someseventeen companies have been acquired andintegrated in the Telindus organisation. By theend of 2001, the unique branding of Telinduswas realized in all the countries whereTelindus has operations.

Bruges is one of two European CulturalCapitals this year. ‘Bruges 2002’ is organizingevents throughout the year and Telindus, oneof the main sponsors, hosts one of therenowned exhibitions ‘Cloistered World, OpenBooks’ where mediaeval manuscripts will takecentre stage.

key figuresTelindus > annual report 2001

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8

1997 1998 1999 2000 2001

In million EUR

150

200

250

300

350

400

450

500

550

600

650

700

In million EUR

2,5

5

7,5

10

12,5

15

11.9

1998

16.0

1999

22.9

2000

2.6

2001

17,5

22,5

20

1997

9.4

1997 1998 1999 2000 2001

In million EUR

-100

-80

-60

-40

-20

0

20

40

60

80

100

1997 1998 1999 2000 2001800

1000

1200

1400

1600

1,049

1,268

1,548

2,176

2,441

1800

2000

2200

2400

> OPERATING INCOME > CASHFLOW FROM OPERATIONS

> OPERATING RESULT > HEADCOUNT AT 31 DECEMBER

Telindus > annual report 2001 > key figures 9 >>

ANALYSIS OF THE CONSOLIDATED INCOME STATEMENT 2001 2000 1999 1998 1997(in million EUR)

Operating income 655.0 559.4 342.7 240.2 193.8

Gross margin 231.5 209.5 145.9 109.4 88.8

EBITDA(1) 35.5 41.0 29.2 22.2 18.4

EBITDA margin in % of revenue 5.4% 7.3% 8.5% 9.2% 9.5%Operating result 2.6 22.9 16.0 11.9 9.4

Operating result margin in % of revenue 0.4% 4.1% 4.7% 5.0% 4.9%Result before tax and extraordinary items -1.9 21.3 15.2 11.2 8.1

Net result(2) -12.9 128.4 23.0 51.0 7.0

CONSOLIDATED BALANCE SHEET 2001 2000 1999 1998 1997(in million EUR)

Total assets 569.1 594.2 537.0 301.6 195.8

Current assets (excluding cash) 298.5 347.3 187.7 109.7 73.9

Current liabilities (excluding borrowings) 204.9 191.5 139.1 98.5 56.9

Net financial position(3) 89.4 71.1 170.8 46.3 21.5

Shareholders’ equity(4) 321.1 351.3 340.9 148.6 97.3

PER SHARE INFORMATION 2001 2000 1999 1998 1997(in EUR)

Earnings per Share(5) -0.11 0.53 0.41 0.35 0.28

Net result per Share(6) -0.32 3.18 0.61 1.58 0.24

Diluted Earnings per Share(6) -0.29 2.90 0.59 1.51 0.24

Closing Share Price 8.00 17.75 26.60 20.13 11.30

Price-Earnings Ratio(7) N/A 46.71 83.13 69.41 45.20

Shareholders' equity 7.94 8.69 9.09 4.60 3.31

Gross dividend 0.15 0.15 0.10 0.07 0.05

Average number of shares - basic (in thousands) 40,437 40,437 37,505 32,315 29,405

Average number of shares - diluted (in thousands) 44,783 44,327 38,777 33,669 29,405

(1) operating result before depreciation and amortisation(2) after minority interest(3) Net of current investments, cash & cash equivalents minus short- and long-term debts(4) stated after deduction of goodwill(5) based on current result after taxes, excluding minority interest(6) based on net result, stated after minority interest(7) calculated as closing share price over earnings per share as defined under (5)

board of directors’ report


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Telindus > annual report 2001 > board of directors’ report

Financial Review

The slackening economy and themanifest confidence crisis experienced atthe start of the last quarter of 2001saddled the telecom sector with anexceptionally difficult year. For Telindus,this deterioration of the economic climateflattened the turnover curve in the secondhalf-year. Operating income in the year2001 amounted to 655 million euros,representing a net growth of about 100million euros, or 17% compared with theyear 2000.

In addition, the weak market precludedthe traditional ‘end-of-year rally’ inDecember and resulted in a negativeoperating result of 1 million euros forTelindus in the second half-year. Includinga one-off restructuring cost of 5.8 millioneuros, the operating result for the year2001 as a whole decreased to 2.6 millioneuros, as opposed to 22.9 million euros in2000.

The financial result for 2001 amountedto a loss of 4.5 million euros, as opposedto a loss of 1.6 million euros for 2000.The 2001 figures include an unrealised lossof 2.3 million euros, booked against the362,010 own shares the Telindus Groupholds in its portfolio. These shares werequoted at 8.0 euros, being the share priceat the end of 2001. These shares havebeen bought during 2001 at an averageprice of 15.6 euros per share.

The group’s efforts to achieve anoptimum management and strictmonitoring of its working capital resultedin a closing of the financial year with anet cash position of about 90 millioneuros, being about 18 million euros morethan at the end of 2000.

The write-off charge on theconsolidation differences of 2.7 millioneuros relates to the goodwill booked onacquisitions realized prior to 2000.Goodwill booked on acquisitions from theyear 2000 onwards was immediatelycharged off the consolidated equity.Therefore the result of this financial yeardoes not show amortizations on thegoodwill of these recent acquisitions. Ifbooked against the results, theseamortizations would have led to a furtherwrite-off charge on the consolidationdifferences of 17.7 million euros. Thisamount is derived from the relatively short5-year term over which the consolidationdifferences, expressed on the CellStack andCF6 acquisitions, are written off.

Analysis of the operatingresults

The group’s weakened turnover isattributable to mixed movements. Whereasthere was a considerable slowdown inEuropean growth, the sales figures forSouth East Asia were entirely in line withexpectations. This development is evidentin the geographic spread of the salesfigures, in which the area outside of theEuropean Union is clearly growing inimportance.

11 >>


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12

In Europe, those countries withconsiderable sales via operatorsexperienced the heaviest slowdown ingrowth as a whole. The Netherlands, theUnited Kingdom, and Germany inparticular sustained a considerable fall inturnover.

The lower sales via operators alsoaffected the composition of the turnover.In 2001, sales of products increased by17% whereas services grew gradually at arate of 26% (from 128.5 million euros to161.5 million euros).

Internal growth versus growth through acquisitions

The 17% growth in turnover wasevenly spread over organic growth andgrowth through acquisitions. The group’srecent expansion in China and Hong Kongaccounts for three quarters of the externalgrowth. Despite the weak economicsituation in Europe, Telindus has furtherstrengthened its position in countries inwhich it holds a considerable share of themarket, such as Belgium, France, Italy andLuxembourg.

Research and Development investments charged against the results

In 2001, Telindus pursued itsinvestments in research and development.A furhter amount of 6.3 million euros wasinvested in the development of accessapplications in Telindus Access Products(TAP), in CellStack digital surveillancetechnology and in the security know-howof CF6.

In conformity with the group’sconservative valuation rules, these costswere charged against the operating resultsin full.

2001

Benelux 43%

European Union (excl. Benelux) 46%

Rest of the world 11%

2000

Benelux 43%

European Union (excl. Benelux) 51%

Rest of the world 6%

GEOGRAPHIC SPREAD OF TURNOVER 2001 GEOGRAPHIC SPREAD OF TURNOVER 2000

46%43%

EU

11%

Benelux

Rest of the world 51%43%

EU

6%

Benelux

Rest of the world

Telindus > annual report 2001 > board of directors’ report 13 >>

2000

Operators 42%

Companies 58%

• Finance 15%

• Industry 29%

• Government 14%

SECTORAL SPREAD OF TURNOVER 2000

2001

Operators 39%

Companies 61%

• Finance 15%

• Industry 32%

• Government 14%

SECTORAL SPREAD OF TURNOVER 2001

39%

Finance15%

61% Industry32%

Government14%

Operators

Companies

42%

Finance15%

58% Industry29%

Government14%

Operators

Companies

2001 2000

Products 75% 76%

• Of which Third party products 70% 70%

• Of which Own products 5% 6%

Services 25% 24%

Turnover 100% 100%

SPREAD OF PRODUCTS AND SERVICES

Turnover Operating result

2001 2000 2001 2000

vs. 2000 vs. 1999 vs. 2000 vs. 1999

Organic growth 9% 33% -95% 51%

Acquisitions 8% 27% 6% -8%

Total 17% 60% -89% 43%

GROWTH ANALYSIS


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14

Cash flow

Generated cash flow evolved in apositive way, especially taking into accountthat the group invested some 15 millioneuros in acquisitions in China and HongKong and in earn-outs due in Spain andItaly. Increasing focus on working capitalpositively influenced these needs, hencegenerating a positive free cash flow of 54.5million euros against a negative free cashflow of 88.9 million euros in 2000.

Restructuring

As a result of tougher marketconditions, in which many customers deferprojects and curtail their networkexpenditures, Telindus has restructured itsbusiness. This process involves more thansimply cutting costs. It requires arefinement of the business strategy, inwhich existing structures are altered inline with new economic realities. Skills aremarkedly reinforced; systems andprocesses are optimized even further.

Three strategic options were defined,i.e. network security, surveillance andtraining. Obviously the traditional services,such as maintenance and installation, areinextricably bound with the activities ofthe network integrator. These skills are thecornerstone of the Group’s pan-Europeanstrategy.

The restructuring, with staff cutbacksinvolving about 120 jobs, led to aredundancy cost of 6.4 million euros. Itincluded amongst others, the closure ofCellstack Inc. in the United States and theaccelerated integration programme forFrance and Switzerland. The package ofmeasures undertaken should lead tosavings of around 7 million euros perannum.

Linked to the restructuring, a stricterinterpretation of the group stockobsolescence policy led to a total stockprovision of 10 million euros being bookedin 2001.

The bankruptcy or near-bankruptcy ofseveral customers, mainly in the telecomsector, required provisioning or write-offof outstanding receivables for a totalamount of 8 million euros.

This includes the remaining receivableof 4 million euros Telindus has from itscustomer Iaxis. This non-collectableamount from Iaxis Ltd was claimed fromIaxis BV in the context of a support letterprovided by the latter to Telindus. Telindushad attached the most valuable assets ofIaxis BV, being a stake in the companyDigiplex. Due to the unstable financialposition of Digiplex, Telindus has fullyprovisioned its remaining receivable of 4million euros against Iaxis Ltd.

The extraordinary result includes animpairment loss of 1.7 million euros onTelindus’ holdings in the venture capitalprovider, Mitiska NetFund Europe. Afurther loss of 0.2 million euros wasincluded as the result of the winding up ofMinds, in which the Telindus Group held aparticipating interest of 9.5%.

A critical analysis of the goodwillbooked as the result of acquisitions led toimpairment losses amounting to 30.3million euros. This revaluation largelyrelates to takeovers in 2000. Since thisgoodwill had already been netted of fromequity, it had no negative effect on thesolid solvency ratio of the group, whichremains at 56%.

Dividend policy

Notwithstanding the actual turmoil thesector is suffering from, the Board ofDirectors proposes to the General Meetingof 31 May 2002 a distribution of a grossdividend of 0.15 euros per share, beingidentical to the dividend for the year 2000.

Share Capital & Warrants

SHARE CAPITAL

The group has a total of 40,436,930outstanding ordinary shares, all currentlydividend entitled. A potential maximum of4,346,334 shares could be issued, due tothe exercise of the outstanding warrantsas described below.

OUTSTANDING WARRANTS

Telindus operates a remunerationpolicy designed to enable all its personnelto participate in the growth ofshareholders’ value in the mid to longterm. In this context, in 1998, 1999, 2000and 2001, Telindus Group NV issuedwarrants, to which all personnel couldsubscribe. The warrants have a maximumlife of five years and after the third yearthey can be exercised during threeexercise periods, in maximum portions of1/3 of the total number of warrantsoffered to each participant. Theexercisable proportion is one warrant toone share. The respective exercise pricesare 19.92 euros (warrants 1998), 20.82euros (warrants 1999), 20.44 euros(warrants 2000) and 7.93 euros (warrants2001) per share.

The number of outstanding warrants asper April 2002 and the respective exerciseperiods are detailed below.

Telindus > annual report 2001 > board of directors’ report

Treasury Shares

In the context of the authorizationobtained by the Board of Directors fromthe Shareholders Meeting, Telindus Groupheld on December 31st a total number of362,010 Telindus Group shares. Theseshares were purchased on the stock marketat an average price of 15.6 euros pershare. These shares are booked in theaccounts at the year end closing rate of8.0 euros per share.

During the first quarter of 2002,Telindus Group bought another 186,017shares at an average price of 6.98 euroseach. The holding of treasury shares byTelindus Group NV as per end of April is up to 548,027 shares, representing 1.36 %of the total share capital of TelindusGroup NV.

Post Balance Sheet Events

In order to adapt the Telindusorganization to the present marketconditions, tight cost control, already putin place by Telindus at the end of 2001 asa consequence of the weakened marketconditions, will be further maintained.

Specific assignments

According to the provisions of article134 §2 of the Company Law, TelindusGroup NV declares that, during the 2001financial year, there were no specialassignments for Klynveld Peat MarwickGoerdeler Company Auditors SCRL.

In addition and according to theprovisions of article 134 §4 of theCompany Law, Telindus Group NV statesthat other services were provided bycompanies with which Klynveld PeatMarwick Goerdeler Company AuditorsSCRL has professional working

agreements. The assignments concernedspecial tax services and the feesassociated with these assignmentsamounted to EUR 26,528.62.

Jan SteyaertManaging Director Telindus Group

15 >>

Offer Number of Exercise periods

outstanding

warrants

Nov. 2002 Feb. 2003 Nov. 2003 Feb. 2004 Aug. 2004 Feb. 2005 Aug. 2005 Feb. 2006 Aug. 2006

1998 1,056,550 756,034 300,516

1999 942,615 334,636 308,481 299,498

2000 1,535,660 531,470 505,967 498,223

2001 811,509 289,778 263,559 258,172

TOTAL 4,346,334 756,034 334,636 608,997 531,470 299,498 795,745 498,223 263,559 258,172

reportof the CEO


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Telindus > annual report 2001 > report of the CEO 17 >>

I guess that for all of us, 2001 hasgone down in the history books as a yearof dramatic change. Also for Telindus, thiswas the case in more abrupt and profoundways than we could have anticipated.

Yet during the first half of the year ourbusiness was humming nicely as itcontinued to expand rapidly. We were wellon our way to meet or exceed analystexpectations. More significantly perhapswe were making good progress on anumber of strategic initiatives aimed atbroadening our solutions portfolio andsharpening our focus on services.Furthermore we were patiently building a‘transnational’ organization whilstintegrating the many acquisitions of prioryears into one common organisationalmodel and culture. Finally we werebeginning to capitalize on the hiddenpotentials of the two technologyacquisitions of Cellstack (surveillance) andCF6 (security).

Last but not least we were happy towelcome a most dynamic and competentChinese team to our global family as weacquired Modern Times Technology out ofHong Kong.

All in all, we were doing well and ourfuture looked bright. Then came thefamous month of September.

All of a sudden incoming orders beganto fall sharply while dropping to levels notseen in years. Clearly as a result of theglobal recession and the credit crunch inthe operator segment, our customers wereforced to clamp down on capital spendingand delay or cancel all investments in newnetworking equipment. Confronted withthis new reality, we had no choice but toreact swiftly and decisively to bring ouroperating costs in line with reduced levelsof income. But mere cost cutting has neverproven to be a good recipe for lastingsuccess. So we analysed the keyperformance parameters of each operatingcompany and took advantage of the crisisto force the accelerated implementation ofour corporate strategy. As a result I trust2001 will be remembered as the yearwherein Telindus decisively turned thecorner from being a ‘distribution’ companyto becoming a ‘services’ company.

Our ‘value creation’ model has indeedchanged fundamentally albeit it that weremain totally focussed on our corecompetency of networking. In the long runthis will prove to be the most powerful

change to mark 2001. Recessions comeand go and usually don’t last all that long.Strategic shifts such as the one weimplemented during 2001 on the otherhand do have a much more profound andlasting impact on the performance of thecompany. Telindus already redefined thevery essence of network integration eventhough the current economic slowdownmakes it hard for us to demonstrate it.

Blessed with so many dedicated andcompetent people, Telindus no doubt willsucceed in successfully adapting its‘business model’ to the changed realitiesof the markets we serve.

While our short-term focus is torestore profitability in order to get thecrisis behind us, we will soon re-establishour track record of solid profitable growthfuelled by our passion for technology andcustomer service.

Eric Van ZeleC.E.O. Telindus NV

2001not ‘just another year’… just a bit more than ‘another year’.

stock marketand shares


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18

Listing

The Telindus Group shares are listed onthe Euronext Brussels continuous market.

Until February 28th 2002, the TelindusGroup share was part of the BEL-20 index.The most recent reshuffling of the indexresulted in the removal of Telindus Groupfrom the index.

Since 2001, Telindus Group is part ofthe Next-150 index of Euronext.

Share Price

The table below presents the highest,lowest and period-end prices, as well asthe average daily trading volumes. Theyrepresent the official figures of theTelindus Group shares for the past fiveyears as reported by Euronext Brussels.

The closing share price of 5.94 euros at2 May 2002, values the Telindus Group at240.2 million euros. This represents anegative premium of 25.2 % compared toshareholders’ equity of 321.1 million euros.

HIGHEST LOWEST PERIOD-END AVERAGE DAILY TRADED VOLUME

SHARE PRICE EUR EUR EUR NUMBER OF SHARES

1997 11.35 6.39 11.30 24,132

1998 26.97 10.91 20.13 47,048

1999 30.40 17.62 26.60 59,729

2000 30.20 16.69 17.75 55,470

2001

1st quarter 20.00 9.13 13.71 99,302

2nd quarter 12.70 8.85 10.36 71,431

3rd quarter 11.25 6.51 9.31 51,015

4th quarter 9.50 7.33 8.00 34,242

2002

1st quarter 8.65 6.76 6.77 45,929

April 6.94 5.93 5.93 35,110

Telindus > annual report 2001 > stock market and shares

Stock Market

The following graph shows theevolution of the Telindus Group share pricecompared to the evolution of the BEL-20Index for the period 1 January 1999 to 2 May 2002.

19 >>

1999 2000

EUR

4,0

0

20,0

16,0

8,0

12,0

24,0

28,0

32,0

100.000

0

500.000

400.000

200.000

300.000

600.000

700.000

800.000

900.000

2001 2002

Volume

Volume traded

Telindus Group

BEL20 - Price index (relative)

businessoverview


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20

Telindus > annual report 2001 > business overview

Telindus market view

As corporations continuously expandtheir mission-critical networks with newintranet, extranet and e-commerceapplications, network security andperformance are becoming increasinglyvital in eliminating network vulnerabilitiesand preventing business downtime.

Evolutions in core computing andnetwork technology are redefining thetraditional business model at an ever-increasing rate. IT infrastructures todayare fundamental to any organization’sability to capture and process informationin order to remain competitive withinspecific markets.

Only by employing the correct mixbetween expert and conventional servicescan an organization make the best use ofboth its existing infrastructure andemerging technologies to ensure thatcompetitive advantages are retained at alltimes.

Telindus mission

As a one-stop solutions provider andmanufacturer, Telindus is the Europeanleader in data communications andnetwork integration. Telindus markets acomprehensive portfolio of networksolutions on a truly international level,with seventeen countries currentlycovered, from about 30 service centres,spread all over Europe and beyond.

Telindus markets its networkingsolutions in 3 key activity and focus areas:Service Solutions, Security and networkeddigital Surveillance.

Supporting the one-stop solutionphilosophy, Telindus also manufactureshigh speed access solutions, the TelindusAccess Products, and offers a whole rangeof telematic courses with its TelindusHigh-Tech Institute.

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the integratorcoming soon with a network near you

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all eyesand earsall eyesand ears


Telindus Service Solutions is a totalconcept supporting IT to enable businesscontinuity. Telindus has identifiedleading-edge products and services thatadd up to an end-to-end offering,tailor-made to particularities andrequirements in the context of securityand network infrastructure.

It is Telindus’ strategy to offer servicesfrom consulting to managed network and

security services,on strategic aswell as on

operational level inan organization. Thevalue of this offering

is the delivery of an integrated lifecyclesolution aiming to pro-actively and jointlyenhance the organization’s businessthrough the network.

That is why Telindus has adopted acommon delivery methodology and hasstructured and fine-tuned its internationalservice organization to efficiently performan elaborate set of services on a pan-European basis.

Use the Telindus experience

With over 30 years of experience inintegrating total solutions for mission-critical and multi-vendor infrastructures,Telindus and its dedicated teams of highlyqualified and skilled engineers,technicians, project managers andconsultants, procure professional servicesthat span the entire lifecycle for enterpriseand carrier networks.

Whether you require policy designsupport or find your organization facedwith a multi-country, multi-vendorsolution roll-out, Telindus is ideally

positioned to assist with a full portfolio ofservice solutions.

Over the years, Telindus has madesignificant investments in establishing asolid footprint of networking and securityexpertise in Europe and beyond.

The acquisition of CF6 for example, theleading security services specialist,enlarged Telindus’ security servicesportfolio with an offer for intrusive testingand security consulting.

International presence

With a full operational presence in asmany as seventeen countries across Europeand Asia and employing in excess of 2400people, Telindus provides customers withboth business and technology focusedconsulting, integration and managedservices co-ordinated from its 24/7 servicecentres.

Focus on development

Supporting our belief that business hasno choice other than to adopt change,Telindus is continuously working with itscustomers and partners to develop newservices focusing on all areas of ITdelivery, from streamlining existing ITprocesses and IT service management toexploring the commercial benefits of newtechnologies.

Hence Telindus is proud of its closerelationships with leading partners andvendors but strives to maintain a non-partisan approach at all times, in thebenefit of customers and their particularsecurity and networking policies.

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enabling business valueTELINDUS SPAINJavier Martín

Thanks to a strong focus on value-adding solutions and services, 2001 hasbeen another succesful year for the 80Telindus team members in Spain.The market launch of a comprehensivenetwork and security services cataloguecoincided with the establishment of apowerful services team. In 2001, servicerevenues increased to take up 25% oftotal turnover and are expected toreach 50% within 3 years.

Continuous formation of service expertswho support customers in reachingbusiness objectives such as reduction ofoperational costs and enhancingnetwork security, will prove to remain asubstantial opportunity for Telindus. Asorganizations strive to refocusresources on core business they willneed to rely on a professional ICTservice partner for network and securitymanagement.

Ultimately should the quality andflexibility of our offering make Telindusthe reference in the Spanish market forboth traditional as well as expertservices.

In 2001 Telindus was awarded a largeservice contract for Sogecable, aleading pay TV provider in Spain andthird largest European group with over2 million subscribers. The projectincludes services such as LANarchitecture design, installation andcommissioning, project management,24/7 remote management andmaintenance for Sogecable’s completecorporate network in the new buildingin Madrid.‘The availability of remote networkmanagement and network maintenancewas imperative for the success of theprojcect’ stated Juan de Viña, ITManager at Sogecable. The fact that allTelindus services were fully operationaland that clear Service Level Agreementscould be defined, positively influencedthe decision in favour of Telindus. Ontop of that, Telindus’ specialized know-how, expertise and certification levelsfor both engineering and training, madea world of difference.

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TELINDUS > SERVICE SOLUTIONS > NETWORK SERVICES

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TELINDUS FRANCEDominique Tessier

During 2001, Telindus France waschallenged to meet the ever-changingmarket demands: customers seeking fora partner with the capabilitiesaddressing their long-term businessneeds and assisting them in work anddeed.

The market shift in France impliedTelindus evolved from the classical SNAor X25-based information system tothe IP environment. A logical extensionis the provisioning of networkconnectivity and availability over longperiods through Service LevelAgreements. Finally, the definition andimplementation of security policies andsystems are mandatory for anynetwork, willing to survive in this open,connected world.

Telindus France firmly believesorganizations will live an increasinglydemand in efficient security services.As a proof of its competencies,Dominique Tessier is proud to presentGemplus as an illustration of Telindus’provision of business value tointernational organizations.

As the global leader in smart cardtechnology, Gemplus values networksecurity as extremely mission-critical.In order to ensure maximum protectionand have a clear view on the attacksand threats it is exposed to, Gemplusengaged Telindus to define a global loganalysis process for its communicationsnetworks. Initially, Telindus integratedand deployed several sites in Franceand within various EMEA countries.Further deployment will be extended toworldwide locations.

Gemplus opted for a partnership withTelindus as the solution proposedprovides Gemplus with powerfulpossibilities to detect, analyse and stopvicious attacks in real time, be itviruses, intrusion trials or servicedenials. It is expected that theproductivity at Gemplus willdramatically improve thanks to a betteravailability of the networkedinformation systems.

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out ofreachout ofreach


As corporations continually expandtheir mission-critical networks with newe-applications, network securitytechnologies are becoming increasinglyvital in preventing corruption andintrusion and eliminating networksecurity vulnerabilities.

Institutions must look at theirprocesses, skills and organizationalstructure, as well as at security hardware,software and tools. Effective security ispredicated primarily on processes, ratherthan isolated products and services.

(R)evolutions in networkcommunications have been matched stepby step by the threats and dangers posedby the intrusion of hostile hackers andviruses.

There are several business applicationsthat are critical for the day-to-daybusiness and consequently need to beprotected from whatever intrusionpossible.

Telindus offers end-to-end solutionsthat drive networks to a higher level ofsecurity, enabling organizations to accessand reap the benefits of globalcommunications, while minimizing the riskto both their internal network and serversand to networked applications.

Each security project is different,tailor-made to meet the requirements ofan individual company or business.Telindus has therefore adopted a networksecurity approach of providing end-to-endsecurity solutions, starting from thecustomer’s core business and going all theway through to operations.

Consulting Services

Risks to organizations have greatlyincreased with the opening of the internalcorporate network. The internet, e-mail,electronic commerce and extranets havehelped to enlarge the traditional cracks inthe corporate armour.

Even with the best of intentions, thesecurity posture can degrade over timewithout constant surveillance. That is whycompanies rely on a security partner likeTelindus.

With a large critical mass ofknowledge and a team of more than 200consultants, Telindus has what it takes tocover the whole lifecycle of security andnetwork infrastructure spanning strategic,tactical and operational aspects.

Typical consulting assignmentsassumed by Telindus include riskassessment, IT security audit, intrusivetesting, system reinforcement, securitypolicy development, network and ISsecurity design and security training.

Integration Services

Once the security policy andarchitecture defined, complete networksolutions are implemented into thecustomer’s infrastructure. The choice ofleading product partners guarantees a highlevel of protection and the durability ofinvestments.

Telindus delivers the whole set ofintegration services, from deviceinstallation and security configuration,over device & architecture qualification tosecurity training.

Managed Services

As a pioneer in remote management ofnetwork services, Telindus has establishedin-depth knowledge on how to managenetworks and security infrastructure in themost dynamic and efficient way and bringshighly focused expertise to themanagement of corporate networks.Managed security services demonstrateTelindus’ ability to establish and even takeover on a fully outsourced basis, allmanagement and maintenance of acustomer’s network security.

Telindus managed services include afull range of maintenance, remote firewallmanagement, log file analysis, technologywatch, intrusion detection, vulnerabilitycheck, IT security consulting and ongoingsecurity training… All of these services,available on a 24/7 basis, are tuned anddelivered in accordance with pre-definedcustomer specifications.

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securing your businessTELINDUS > SERVICE SOLUTIONS > SECURITY SERVICES

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TELINDUS HOLLANDGaby Lips

For a managing director of a Telinduscountry like the Netherlands, the ‘thinkglobal, act local’ saying is a valid one,even though we are located close to ourcorporate headquarters in theneighbouring Belgium.

Both enterprise and operators offerenormous potential as target markets forour security and services offers.Customer interest in security shifts fromproducts to services. Telindus is nowconsulted more than ever before todefine tailored security solutions andservices for customers that are aware ofthe potential threats they’re facing.

Customers are looking for intensifiedsupport of the installed base andservices to optimise cost of ownership.Telindus has a solid story with acomprehensive offering of consulting,integration and managed services.

Surveillance, targets a particular – butbooming - market i.e. public services andinstitutions for mass transport likeairports, railways and public highways.

Operators remain an important marketfor Telindus in the Netherlands. They arelooking for partnerships with Telindus toset up and integrate additional servicesto commercialize the availablebandwidth. Fiber to the home in largecities is an opportunity for Telindus.

The yearly customer satisfaction surveyclearly shows that Telindus in theNetherlands is on the right track to ahigh score in customer loyalty. Thisresult was also confirmed by the ‘Ciscocustomer satisfaction survey’ with regardto their products and the requiredservices.

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delivering yourvision

delivering yourvision


Rapidly changing demands forgreater security and improved health &safety have led to an explosion in digitalclosed circuit TV products. The productsare specialised and address areas such asdigital video recording, AutomaticNumber Plate Recognition, MotionDetection and a suite of biometricsolutions including Visual Recognition,Retina Identification and Finger PrintRecognition.

Many products actually addressspecific areas of surveillance andsecurity; today’s challenge is pulling allthe products together to create atailored solution to meet the customer’sneeds.

Analysts currently predict that the useof digital video surveillance will increaseby 30% each year, superseding analoguesurveillance within less than 10 years. Thiswill dramatically change the CCTV marketand the players involved as new skills,services and processes will have to beadopted.

From Multiple Single Service Networks to the Multi-Service Solution

Legacy solutions are generally made ofseparate infrastructures with PublicAddress (PA), telephony, CCTV, accesscontrol,… being carried on separatenetworks, cables or fibres.

Many of these solutions are proprietarylimiting flexibility and potential, and areseverely challenged by limited fibre orcables. On top of that, cost ofmanagement, maintenance and operation

of multiple networks and increasedimplementation and training costs aresubstantial handicaps in the actual marketenvironment.

All the above mentioned impedimentsturn out to be resolved by multi-servicenetworks. Multi-service networks carry all video, voice and data trafficsimultaneously with a high degree ofstandardization for transmission,management, user control andmaintenance.

Multi-service networks offer a highdegree of redundancy, self-healing andprovide a scalable and flexible architecturethat allows for the integration of new andexisting security and surveillanceequipment and components.

Multi-service solutions offer economyof scales bringing the benefits of reducedcost of ownership, management, operationand maintenance.

These solutions offer a broader andwider service level to the user as acommon infrastructure can be used for alla customer’s networking requirements,including all the back office and generalcommercial networking.

Telindus: the pan-European integrator

As Europe’s number one networkintegrator, Telindus has a proven trackrecord working with the industry leadingsecurity integrators and installersproviding reliable business networksolutions.

These solutions enable enterprise andgovernments to leverage the ‘cost’ and‘revenue’ benefits of a single multi-servicenetwork.

A Telindus solution can providetailored, fully managed integratednetworking services providing customerswith the benefits and business advantageof one single broadband infrastructure forall video, voice and data traffic.

Telindus specializes in solutions fororganizations for whom CCTV surveillanceis business or mission critical, requiringhigh-quality, low latency, ‘real-time’ CCTVsurveillance. For organizations within thetransportation industry, such as airports,railways and highways, ‘real-time’ CCTVvideo performance is essential for bothsecurity and health & safety applications.

With an expert services team, Telindusadopts a consultative approach tounderstand the customer’s service andsolution requirements.

By defining and agreeing jointly theservice levels required and developing theKey Performance Indicators (KPIs) ourcustomers and Telindus are able tomeasure the success of a project and toshow value for money.

As the only network integrator inEurope who truly provides a total solutionfor multi-service networking and videosurveillance, Telindus has the experienceand expertise to meet the demands ofcustomers offering fully integrated,serviced and managed multi-servicesolutions.

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networked digital surveillance solutions

TELINDUS > ENTERPRISE NETWORKING > SURVEILLANCE SOLUTIONS

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TELINDUS HONG KONG AND PEOPLES REPUBLIC OF CHINARichard Wong

Since 1997, Telindus in China has beenactively involved in network security andservices, pioneering with a wide range ofservices in this arena. Our prime efforts insecurity and services target provincialoperators and the financial servicesindustry. In 2002, the initial launch ofdigital surveillance has created a lot ofinterest in the market place, with aspecific focus on industries withbroadband and ATM-based wide areanetworks.

Several interesting cases exemplifyTelindus’ involvement in services, securityand surveillance.In 2000, Telindus China helped XJCATV(Xinjiang Cable Television) deploy anetwork platform to offer VPN solutions toits corporate customers. This was the firstCATV province-wide project of its kind.Since, Telindus has been awarded severalmajor contracts by Chinese telco’s, mobileoperators and CATV providers to buildsimilar secure network platforms.

Further on into 2001, Telindus integrated asecure PSTN-based back-up system withone-time-password protection for SSE’s(Shanghai Stock Exchange) satellite systemthat provides secure connectivity to morethan 3300 stockbrokers in China.

In 2001, Telindus was contracted by CFDN(China Financial Data Network) to provideservices for its nationwide network, usedby all banks in China that need tointerconnect with The People’s Bank ofChina. Telindus China provides 24/7support, on-site maintenance, periodicalpreventive maintenance and consultingservices.

As the managing director of Telindus inChina I would like to further elaborate onour strategy for security, services andsurveillance.To have engineers close to major provincialcapitals, we further expanded ourgeographical coverage through satelliteoffices and local partnerships coveringareas where Telindus has no physicalpresence. With people as our mostimportant asset, we invested heavily intraining, with our internal structure beingreshaped into virtual teams that focus onspecific solutions and technologies tobetter reflect market demands.As Telindus integrates a large number ofleading third-party products into multi-vendor environments we are in anexcellent position to further establish ourpartnerships with companies like Cisco,EMC and Oracle for the promotion of‘disaster recovery’.

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the first choice

for thel@st mile

the first choice

for thel@st mile


Telindus manufactures, markets andsupports access products (TelindusAccess Products) that enabletelecommunication carriers and privatenetwork owners to provide high-speeddigital services over the existinginfrastructure, such as voice-band, xDSL,fibre-optic, integrated IP routing andaccess multiplexing technology.

Telindus has over 30 years ofexperience as a manufacturer of telecomaccess equipment. Telindus AccessProducts are well received and widelyaccepted by many large enterprises,incumbent and new-license-operators allover the world. The comprehensive productsuite brings recognized added value andoptimization to the operation of accessnetworks.

With the recent introduction of TelindusSHDSL (Single pair High-speed DigitalSubscriber Line) technology in the accessnetwork, operators can take maximumadvantage of the unbundling of thecopper access infrastructure, thusreducing the operational expensesassociated with the interconnection ofinternal infrastructure, leased lines,Frame-Relay and IP services significantly.Telindus fibre-optic transmission andnew multiplexing equipment enablescost-effective delivery of multiple E1connections over fibre, interfacingseamlessly with the existing SDH(Synchronous Digital Hierarchy)infrastructure.For the deployment of fixed broadbandservices, Telindus ADSL, SHDSL CPE(Customer Premises Equipment) andTelindus access routers are the idealfoundations of professional IP-basedservices.

For Telindus, quality assurance is norecent innovation. By delivering carriergrade quality products supported byprofessional network management tools,Telindus ensures that its customers candeploy a reliable network service. TelindusAccess Products are distributed, installedand maintained through Telindus officesand through a network of value addedresellers (VARs) in over 50 countriesworldwide.

Telindus Access Products are designedand manufactured in the corporateheadquarters in Belgium and offer anumber of valuable assets:• A variety of connectivity options

spanning a wide range ofapplications

• Full integration and support by asuite of network managementsolutions

• Professional support from a globalservice network

> www.telindusproducts.com

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carrier-grade access systemsTELINDUS ACCESS PRODUCTS

A c c e s s P r o d u c t s

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the telecom vision

supplier

the telecom vision

supplier


Security and network training is a keycomplement to Telindus’ network solutions.With over 25 years of experience, THTI(Telindus High-Tech Institute) offers acomprehensive number of more than 130telematics courses that embrace everyaspect of corporate networks, theirimplementation and their management.

THTI thanks its success to a vendor-independent training strategy. Its courses arelectured with a practice-oriented approachand exemplified with real-life simulations ondemo networks. The broad spectrum ofcourses can be offered European-wide, viathe Telindus High-Tech Institutes in severalEuropean countries or in any of Telindus’locations. Courses can be customized tocustomer needs, requirements andconvenience.

As the ‘telecom vision supplier’, THTIprojects what is happening now but -just asimportant- can present a strategic outlookon new trends and new technologies thatwill be in common use three to five yearsfrom now.

The course curriculum covers both basiccourses as well as training on the economic,application, protocol and troubleshootingaspects in all areas of network and telecomtechnology.

Furthermore THTI is the certified learningpartner for many leading networking vendorslike Cisco, NetScreen, Nortel, Juniper,Checkpoint and Microsoft. High-quality andpractical-oriented training on the products islectured by certified trainers..

Last but not least, THTI continues tofocus on new, emerging E-learningimplementations as it strongly believes thata mixed offering of traditional andalternative training methods is the qualityassurance that customers require. Instructor-led training in combination with self-tuition,computer-based and web-based training,virtual classrooms and remote labs, coachingand mentoring are consolidated as THTI’snew TILA strategy: the THTI IntegratedLearning Architecture.

With this strategy, THTI aims atdelivering efficient, low-cost training andcertification programs for Cisco andMicrosoft, resulting in motivated,knowledgeable trainees, to the satisfactionof employers and the ICT industry at large.

> www.thti.telindus.com

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networking & informationtechnology training TELINDUS UK

Peter Deacon

As the Managing Director of Telindus UK, I amconscious of the fact that the best assets anycompany has to carry it through adversemarket conditions are loyal staff and loyalcustomers. 2001 was a tough year forTelindus UK too, but thanks to an outstandinglevel of customer loyalty and the UK teamshard work, we maintained stability, continuedour investment programme to enhance ourservices and remained steadfast to our ‘bestof breed, manufacturer independent’philosophy.

In line with Telindus strategy, the UKoperation focused much of its energy indeveloping our service offerings, culminatingin the launch of ‘in Control’, a UK initiativethat offers customers a portfolio of costeffective service led solutions. Our wins todate include providing a variety of managedservices to ITN, NTL, Nottinghamshire Police,ATS Euromaster to name but a few.

Telindus UK training department enjoyedtremendous success in its first year ofoperation and was one of the first trainingorganisations to be accredited by the Instituteof IT Training- the world’s first professionalbody for IT training professionals.

In another area of strategic focus – that ofsurveillance, notable successes have beenawarded, included the London Undergroundcontract to design, install and commission adigital video surveillance system to cover 180stations plus a 20-year training and supportcontract. Additionally, Telindus UK were partof the team awarded the prestigious LondonOrbital M25 Motorway CCTV enhancementcontract – a project that has been nominatedfor several industry awards. We believe in thetremendous growth potential of surveillanceapplications, particularly in the public sectorand transport markets.

Our 2001 Customer Satisfaction Survey wastangible proof that the UK continues todeliver exceptional levels of customer service.We were delighted to see that acrosscategories ranging from technical competenceto reputation and service, Telindus UK wasrated as good or excellent.

Telindus UK will continue to work onconverting a buoyant healthy pipeline ofopportunities into success stories and I amoptimistic that 2002 will see us make furthersignificant impact and contributions locallyand to the Group.

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TELINDUS HIGH-TECH INSTITUTE

financialinvestments


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Mobistar: participating interest of 5.2%

Mobistar, in which Orange (FranceTélécom Group, via Wirefree ServicesBelgium) holds a 50.6% stake, is thesecond biggest operator in Belgium.Mobistar describes itself as the telecomoperator amongst operators, with a fullyintegrated package of fixed and mobilecommunication services for voice and data.

MOBILE TELEPHONY

In 2001, the degree of penetration ofmobile telephony in Belgium rose fromsome 55% at the end of 2000 to about75% on 31 December 2001. As Mobistarincreased its customer base by 41.5%,reaching a total number of 2,547,000customers, Mobistar expanded its marketshare, which as per end of 2001 stands at33.1%. This success resulted in the mobilebusiness breaking even over 2001.

The success of SMS messages iscontributing to the substantial increase ofturnover, whereby mobile datatransmissions represented 8.5% of themobile turnover of 2001.

MOBISTAR CORPORATE SOLUTIONS

Mobistar Corporate Solutions, a 100%subsidiary of Mobistar, is dedicated tolarge customers and projects. Its businessis built on the seamless integration offixed and mobile communications. This isseen by most of large accounts as anextremely important advantage. And that’salso why Mobistar is integrating mobiledata transmission in its corporatesolutions package, pleasing over a hundredcompanies with its ‘Office Zone’, ‘PocketOffice’ or ‘Office Access’ applications.

PROSPECTS

The penetration rate of 75% attainedas at the end of 2001 suggests aprogressive maturity of the mobiletelephony market in Belgium. Substantialgrowth of the mobile telecommunicationsmarket resides now more in thedevelopment of voice telephony as well asthe coming developments in the area ofmobile data. Mobistar’s belonging to theOrange Group has a considerableadvantage in developing and implementingthe new technologies needed.

Mobistar will realize its firstconsolidated net profit in 2002, because ofan increased focus on improvement of itscustomer base through strengtheningcustomer loyalty. A second profit driver arethe revenues generated through data

transmission, thanks notably to thesuccess of the new GPRS services.

The additional period accorded to theoperators for deploying their UMTSinfrastructure has been welcomed byMobistar, as it will allow the company topostpone certain investments whiledeveloping more and other mobile dataapplications.

> www.mobistar.be

Consolidated figures for Mobistar:

(in million euros) 2001 2000 1999 1998

Revenues 881 621 388 256

EBITDA 155 78 17 5

Current result (31) (56) (84) (85)

Net profit (31) (56) (84) (85)

Number of subscribers (in units) 2,547,000 1,800,000 1,040,000 510,000

Telindus > annual report 2001 > financial investments

Mitiska Net Fund Europe: participating interest of 5.6%

Mitiska Net Fund Europe is a Belgianventure capital fund with a capital of 71.5million euros, of which as per end ofDecember 2001, 40 million euros has beeninvested. The venture capital fund investsonly in non-listed European Internetbusinesses.

Net Fund Europe participates inbusinesses with an internet focus, with acertain diversity in terms of sub-sector,life cycle, geographical locations, and has22 participating interests in its portfolioper end of December 2001.

As of today the Telindus Group hasinvested an amount of 2.8 million euros,with a further commitment of 1.2 millioneuros. As per 31 December 2001, thevalue of this participation, based on thenet equity per share of Mitiska Net FundEurope, amounts to 1.1 million euros.Accordingly, an impairment loss has beenrecorded in the 2001 accounts of TelindusGroup, amounting to some 1.7 millioneuros.

> www.netfundeurope.com

SpearHead SecurityTechnologies Inc.: participating interest of 6.8%

During 2000, Telindus has invested anamount of USD 5 million in exchange of astake of 6.8% in Spearhead. Spearhead haspioneered the development of a new levelof network security. The NetGAPcomplements the organization’s existingsecurity infrastructure, protecting itagainst known and unknown network andoperating systems vulnerabilities.

As the company is actually starting thecommercialization of its NetGAP, turnoverremains modest and the company is stillmaking a cash-drain. Net cash available asper end of 2001 amounts to USD 10.9million.

> www.spearheadsecurity.com

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Telindus valuesTelindus > annual report 2001

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Telindus stands for high qualitynetwork integration solutions, serving itscustomers all over Europe and in South-East Asia.

This high quality standard can onlybe realized through a support for moreextensive values than only technology.And as we all know, technology isembedded in the human factor of theorganization. That’s why Telindus hasworked out an efficient and systematictool to allocate skills in an effective waythroughout its organization.

In the concern of having an efficientand smoothly running organization,Telindus is investing in new state-of-the-art corporate headquarters. Telindus willbe re-housed in ‘the office of 2020’ by theyear-end of 2002.

Telindus is not only concerned aboutits own staff. It is also keen to contributeto the broader cultural environment. Thisconcern made Telindus to one of the mainsponsors of the project ‘Bruges 2002’Cultural Capital of Europe.

Integrating knowledge - the unlimited capacity of being

PEOPLE ARE CENTRE-STAGE IN THE SEARCH FOR EXCELLENCE

With seventeen country business unitsthroughout Europe and South-East Asia,Telindus has a wealth of talent at itsdisposal. No need to tell that in a searchfor excellence, one of the strategicprojects of the group is the optimalallocation of skills, in a concern ofdelivering client solutions wherever andwhenever needed.

Telindus offers services trans-nationally, so we need to pull togethervirtual teams from our existing pool ofexpertise. Currently available skills andtraining requirements need to be flaggedat the earliest opportunity. Hence ourcompetence management initiative tofulfil our technical engagements towardsour customers within the deadlines of theservice level agreements.

And of course, to be effective, theemployee skills register has to reflectreality, wherefrom the need to fullyintegrate it within the HR framework andnew HR management applications.

VIRTUAL REALITY

The major benefit of the tool lies inthe implementation of trans-nationalprojects. A case in point is the Ben GurionAirport project in Israel. This was the firstinstance where Telindus started atremendous project from scratch. Thechallenge consists in building out a fullyequipped airport, with state of the arttechnology, in a country where Telindushad no business unit. Once a projectmanager was identified, he built out hisproject team, while drawing expertise from

other Telindus divisions. The networkdesign team, for example, came from theUK.

If a project manager wants someonewith specific knowledge, that’s noproblem. We have a virtual community ofexperts – on tap. Regardless of where theyare located geographically. With an onlinedatabase of technical expertise and, forexample, language abilities, we can beresponsive in staffing these projects.

COMPETENCE MANAGEMENT SYSTEM – KEY FEATURES

• Europe-wide coverage• Accessible via web-interface• Skills updated by employees• Skills searchable across the

organization• Technical and soft skills are rated

with management approval• Availability of staff known for each

project• Standardized competence ratings

across Telindus• Updated every six months within

appraisal procedure• Incorporated within the corporate HR

management application

Telindus > annual report 2001 > Telindus values

Telindus inside – Telindus in-site: Telindus integrating life

2020 VISION: FLEXIBLE WORKING – FLEXIBLE MINDS

By year-end, Telindus will be re-housedin its new corporate headquarters,described as ‘the office of 2020’.

The building has been designed in aconcern to have the staff feel positiveabout Telindus. This brings benefits for ourclients as well as for our staff. Thebuilding’s style is 21st century – light andspacious, technically advanced andenclosed with natural surroundings. Puresimple lines, a minimalist design from therenowned Belgian architect Jo Crepain.

The ‘office of 2020’ will be a ‘smart’building, in that it will be a ‘showcase’ forthe implementation of recent technicalinnovations. This practical demonstrationof our capabilities should be a real boostfor our sales team. Wireless networking, IPtelephony and video surveillance over ATMwill all be incorporated in the finalsolution.

The ‘nomadic working’ concept–whereby employees can connect to thenetwork from any workstation– will beincorporated in the final design,

guaranteeing a maximum connectivity forvoice, video and data, a case of ‘plug-and-work’.

The building is also smart in terms offlexibility. Although it is difficult toforecast the future, the office has thepossibility to take 33% more staff than wehave today.

In the new facilities, it is also easy toreplace office space by additional trainingfacilities, anything is possible. This is our‘future proof’ guarantee in terms ofexpansion capabilities.

Actual facilities will depend on anemployee’s function. Those spending themajority of their time outside the office,such as sales personnel and field staff, willmainly work in open-space desks, in a‘plug-and-work’ docking stationenvironment. Others, like those in HR orAccounts, will work in a mixture of closeand open offices, together with meetingrooms.

Our new headquarters will reflect astrong belief that people should be judgedon the quality of their work rather than onthe number of hours spent in the office.

The informal communication layer isalso considered as being important. That’swhy the building incorporates a bar,excellent restaurant facilities and pooltables in its concept. It is extremelyimportant that people can meet and

exchange ideas. The restaurant facilities,canteen and leisure corners are there toensure a good level of communication.

KEY FACTS

• Automatic lights, air conditioningand sun blinds

• 2 restaurants, including one forcustomers

• 2 floors for underground parking• Ground floor – parking and entrance

hall• 1st floor – meeting rooms /

auditorium (70 seats)• 2nd & 3rd floor – office space (open

plan and closed)• 24 classrooms for the training

institute

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Telindus > annual report 2001 > Telindus values

Bruges - European Cultural Capital of the year 2002

From its glorious mediaeval past to itsthriving present, Bruges – EuropeanCultural Capital of the year 2002 – is amagnificent example of all that is best inEurope. With its involvement in ‘Bruges2002’, Telindus underlines its ownEuropean culture and its strategic role inbuilding tomorrow’s Europe.

One of the most stunning cities inEurope, Bruges, dates from the ninthcentury, while through its link to the sea,Bruges was a veritable Venice of theNorth, a textile trading center as well as amajor player in the financial world.

The fourteenth century was for Bruges’golden age, with artists such as Jan VanEyck and Hans Memling living in the city.

In the 16th century, a disaster struckBruges, with its access to the sea beingsilted up. Happily, this kept the center ofBruges almost totally unchanged until thepresent day. This year, this perfectlypreserved state of history can be observedwhen the city is crowned Cultural Capitalof Europe.

BRUGES 2002 AND TELINDUS

Telindus, having strengthened itsEuropean roots through several Europeanacquisitions in recent years, seeksinvolvement with international events,either geographically or in terms ofrecognition.

‘Bruges 2002’ is a perfect vehicle toachieve increased European brandawareness, as the event will be reportedwidely across Europe over an extendedperiod.

On top of that, Telindus is keen tocontribute to Europe’s cultural heritage.

TECHNOLOGY SERVES SOCIETY

‘Bruges 2002’ is not only hosting avast number of exhibitions, performingarts and artists but has the ambition toadd to the rich cultural heritage inbuilding the city’s outlook of tomorrow.

Telindus has that same strong bondbetween past and future, basic and hightech and old and new.

‘Cloistered World, Open Books’, hostedby Telindus is one of the three mainexhibitions at ‘Bruges 2002’. The exhibitionbuilds on the medieval principle ofknowledge transfer via books andmanuscripts.

Although monks rarely traded places ormoved outside the boundaries of their flatworld, their hand writings and miniaturessure did.

Super-highways today allow people toconnect regardless of time and distanceand absolute mobility is what makes roadwarriors or digital nomads. Mankindclearly has an urge to learn, connect,interact and evolve and that is where ournetworks prove their efficiency and addedvalue.

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> www.telindus.com > news and events > sponsoring

corporategovernance


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38

Relationship with principal shareholders

The principal shareholders of TelindusGroup NV are the Cordier Group andSidinvest NV.

The Cordier Group is a syndicate ofshareholders, consisting of members of theCordier family, and Covatel, a ‘StichtingAdministratiekantoor’ established underDutch law and controlled by the Cordierfamily and in which also othershareholders participate.

Under the shareholders’ agreement, theprincipal shareholders are required toconsult each other to reach an agreementon important and strategic decisions.

Number %

Cordier Group 10,534,950 26.05%

Sidinvest NV 4,033,405 9.97%

Other Shareholders 25,868,575 63.97%

Total 40,436,930 100.00%

Number %

Cordier Group 10,714,850 23.93%

Sidinvest NV 4,033,405 9.01%

Other Shareholders 30,035,009 67.07%

Total 44,783,264 100.00%

NON-DILUTED BASIS (1)

FULLY DILUTED BASIS (2)

9.97%26.05%

Cordier Group

OtherShareholders Sidinvest NV63.97%

9.01%23.93%

Cordier Group

OtherShareholders Sidinvest NV

67.07%

Sidarfin N.V. Sidinvest N.V.

Family Cordier

Stichting Administratie

kantoor Covatel

Sidmar N.V.

9.98%

61.61%100%

24.75%

Cova-Invest N.V.

Telindus Group N.V.

Finindus N.V.

control

control

30.70%

0.19%

1.12%

Shareholder ownership

(1) The table above shows shareholders ownership,

based on the most recent transparency declaration,

dated February 11th 2000.

(2) The table above shows shareholders ownership

on a fully diluted basis, taking into account the number

of outstanding warrants as at end of April 2002.

Telindus > annual report 2001 > corporate governance

Composition of the Board of Directors

As at 31 December 2001, the TelindusBoard of Directors consists of nineteenmembers, of whom twelve represent theprincipal shareholders (Cordier group andSidinvest NV) and who were elected inaccordance with the shareholders’agreement. Seventeen Directors are non-executive and are therefore not involved inthe day-to-day management of thecompany or any of its subsidiaries. Sevenof the non-executive directors areindependent and have therefore not beenappointed by the principal shareholders.

The Board of Directors elects thechairman amongst its members. Thefunctions of chairman of the Board andCEO (Chief Executive Officer) of theTelindus Group have been entrusted toJohn Cordier, who passed away on January22nd 2002. During the meeting of theBoard of Directors of April 25th 2002, hehas been replaced as a chairman byGuanxi NV (represented by RonaldEveraert).

All directors are appointed in theshareholders’ General Meeting, for aperiod of maximum six years. They can bere-appointed and, at any time during their

term, be dismissed by a decision of theshareholders’ General Meeting. There is noage limit for exercising a director’smandate.

The table below shows the compositionof the Board of Directors as at end of April2002, including the principal occupationand expiry date of the Directors’ term.

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NAME PRINCIPAL OCCUPATION EXPIRY CURRENT TERM AT AGM OF YEAR ENDING:

2 Bouckaert Pierre Director-General, Sidmar NV 31 Dec 2002

1 Cordier John President, Telindus Group NV Deceased on 22 Jan 2002

1 Cordier Carmen(1) Director, Telindus Group NV 31 Dec 2004

3 Dehaene Jean-Luc Director of companies 31 Dec 2004

3 De Publigraaf NV,

represented by De Nolf Rik Chairman, Roularta Media Group NV 31 Dec 2006

1 De Speyebeek NV,

represented by Desimpel Aimé Chairman, De Speyebeek NV 31 Dec 2006

1 Guanxi NV,

represented by Everaert Ronald Chairman, Mercator & Noordstar NV 31 Dec 2006

2 Hoffmann Gérard(1) Vice President Steelcord Business Development 31 Dec 2006

1 Leysen Christian Chairman, AXE Investments NV 31 Dec 2005

3 LMCL CV,

represented by Vansteenkiste Luc Managing Director, Recticel NV 31 Dec 2006

3 Malevé Roger Managing Director, Stork MEC NV 31 Dec 2005

2 Matthys Paul Managing Director, Sidmar NV 31 Dec 2001

2 Paprocki Peter Senior Vice President Subsidiaries, Sidmar NV 31 Dec 2005

2 Ruppert Jacques Financial Manager, Profilarbed S.A. Resigned in April 2002

1 Steyaert Jan Managing Director, Telindus Group NV 31 Dec 2005

3 Tordeurs Louis Vice Chairman, S.R.I.W. 31 Dec 2002

1 Van Coppenolle Paula Director, Telindus Group NV 31 Dec 2003

3 Van der Plassche Daniel Director, Telindus Group NV 31 Dec 2005

3 Van Marcke Investments NV,

represented by Van Marcke Jean Chairman, Van Marcke Investments NV 31 Dec 2006

1 Van Zele Eric(1) CEO Telindus 31 Dec 2007

2 Von Kunitzki Norbert Chairman ad interim, Telindus Group NV 31 Dec 2003

2 Vriens August Chairman, Gimvindus NV 31 Dec 2006

1 Director appointed by the Cordier Group (1) Starting current term at AGM of year ending: 31 Dec 20012 Director appointed by Sidinvest NV3 Independent Director


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40

Changes in the composition of the Board of Directors

Following the departure of JohnCordier, the vice-chairman Norbert VonKunitzki became chairman ad interim. Atthe Board of Directors meeting of 25 April2002, Guanxi NV (represented by RonaldEveraert) has been elected as the newchairman, while Norbert Von Kunitzkiremains the vice-chairman.

The mandate of Paul Matthys ends asfrom the Annual General Meeting of 31May 2002 onwards and will not berenewed.

Carmen Cordier replaces the mandateof John Cordier as a board member, whileGérard Hoffmann has taken over theposition of Jacques Ruppert after hisresignation. The nomination of bothCarmen Cordier and Gérard Hoffmann willbe confirmed during the Annual GeneralMeeting of 31 May 2002.

Jan Steyaert has been nominatedmanaging director of Telindus Group. Hewill share this function together with EricVan Zele, who will be proposed as a newboard member on the Annual GeneralMeeting of 31 May 2002.

Functioning of the Board of Directors

The Board of Directors meets when theinterests of the company require this, orwhen convened by at least two directors.This happened five times in 2001. Typicalitems that are discussed during Boardmeetings are the quarterly financialfigures of the Telindus Group and theindividual subsidiaries, more specificallythe results and operations, cash flows,

financial position and working capital,issuing of warrant plans, investmentdecisions and acquisition strategy anddecisions. Similar to the year-end pressrelease, the half-year press release andother press releases are approved by theBoard of Directors.

The Board of Directors can onlydeliberate if the majority of its membersare present or validly represented.Decisions are, in principle, made by amajority of votes of the directors who arepresent or represented. The specialmajority quorum of the law has, in thebylaws of the company, been increased to80% of the votes present. A director mayappoint another member of the Board tovote in his name. Every director is entitledto act as a proxy for one or more directorsand to represent him or her at the meetingof the Board of Directors.

The remuneration, paid out to directorsfor the year 2001 amounted to 81,200euros.

Committees within the Board of Directors

AUDIT COMMITTEE

The Audit Committee assists the Boardof Directors in financial matters and hasall the investigative powers accorded to independent public auditors under Belgianlaw.

As per end of April 2002, the AuditCommittee consists of five Directors,selected on the basis of their specificskills. The Audit Committee was led byRonald Everaert, who transferred thepresidency to Pierre Bouckaert, after hisnomination as President of the Board of

Directors. The other members areChristian Leysen, Roger Malevé and JanSteyaert. Four members of the auditcommittee are non-executive, of whichone independent. One is executive. JohnCordier, who passed away on January 22nd2002, was not replaced as a member ofthe Audit Committee.

In 2001, the Audit Committee met onfour occasions to monitor the financialreporting within the Group. It alsodiscussed the content and conclusions ofinternal and external audits, reacheddecisions on the accounting policies andvalorization rules and managed thefinancial relationship between thecompany and its shareholders.

The remuneration, paid out to membersof the Audit Committee for the year 2001amounted to 36,200 euros.

REMUNERATION COMMITTEE

The Remuneration Committee advisesthe Board of Directors on theremuneration of the Group’s seniormanagement and on the remunerationpolicy to be applied within the TelindusGroup as a whole. Certain powers relatedto the warrant plans have also beenawarded to the Remuneration Committee.

Luc Vansteenkiste, an independentDirector, chairs the RemunerationCommittee. The other effective membersare Peter Paprocki, Jan Steyaert, DaniëlVan der Plassche and Gust Vriens, beingone executive and four non-executives, ofwhich two independent. Mr. Cordier, whopassed away on January 22nd 2002, wasnot replaced as a member of theRemuneration Committee.

Telindus > annual report 2001 > corporate governance

The remuneration, paid out to membersof the Remuneration Committee for theyear 2001 amounted to 17,450 euros

Day-to-day management of the company

The day-to-day management of theTelindus Group is shared between JanSteyaert and Eric Van Zele.

Operational activities are headed up byof Telindus, Eric Van Zele and four vicepresidents (VP):

• Eric Van ZeleCEO and responsible forbusiness development

• Vincent SimonartVP Operations

• Edwin BexVP Finance and Administration

• René LathouwersVP Technology and Engineering

• Guy VanderlindenVP Emerging countries

On a bi-weekly basis, the CEO and VP’smeet and discuss the technological focus,the operational organization, financialperformance,… of the Telindus Group.

On a bi-monthly basis, the operationalmanagement briefs the country managers,during a 2 days management council. Thesame elements as listed above arediscussed during that gathering.

The corporate activities include audit,legal, treasury, financial reporting, tax andhuman resources and are under thesupervision of managing director JanSteyaert. These activities support theabove mentioned operational team in theirdecision making.

Dividend policy

During 2001, Telindus Group hasreported a net loss, as a result of therestructuring process. Nevertheless, thegroup is convinced that this one-off eventdoes not dramatically impact the financialposition of the Telindus Group. Hence, theBoard of Directors proposes to maintainthe 0.15 euros of dividend payable overthe last year.

Statutory auditor

The financial statements of theTelindus Group have been audited byKlynveld Peat Marwick GoerdelerBedrijfsrevisoren – Reviseurs d’Entreprises,Bourgetlaan 40, 1130 Brussels, representedby Mr Erik Clinck, and by Ernst & Young,Marcel Thirylaan 204, 1200 Brussels,represented by Mr Eric De Lembre. Thecollege of statutory auditors has issued anunqualified audit opinion on both theconsolidated financial statements and thecompany financial statements of TelindusGroup NV.

This annual report contains a fullversion of the consolidated financialstatements of the Telindus Group. Of thecompany financial statements, a shortenedversion has been included, in accordancewith article 105 of the Belgian CompanyCode. The consolidated and companyfinancial statements will be deposited withthe National Bank of Belgium in June 2002and will be available at the Group’sheadquarters.

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statutory auditor’s report


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42

Report of the College of Statutory Auditors on the Consolidated Financial Statements of the Telindus Group Submitted to the Annual General Meeting of the Shareholders of Telindus Group NV

CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2001

In accordance with legal and statutory requirements, we are reporting to you on the completion of the mandate which you haveentrusted to us.

We have audited the consolidated financial statements for the year ended 31 December 2001, with a balance sheet total of569,050 thousand euros and loss of the year of 12,453 thousand euros. These consolidated financial statements have been preparedunder the responsibility of the Board of Directors of the Company. In addition we have reviewed the Board of Directors’ report.

UNQUALIFIED AUDIT OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS

Our audit was performed in accordance with the standards of the ‘Institut des Réviseurs d’Entreprises-Instituut derBedrijfsrevisoren’. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement, taking into account the Belgian legal and regulatory requirementsrelating to the consolidated financial statements.

In accordance with these standards we have considered the administrative and accounting organisation of the Group as well as thesystem of internal control. The Group’s management has provided us with all explanations and information which we required, for ouraudit. We have examined, on a test basis, the evidence supporting the amounts included in the consolidated financial statements. Wehave assessed the accounting policies used, the significant accounting estimates made by the Company and the overall presentation ofthe consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements of Telindus Group NV and subsidiaries for the year ended 31 December 2001present fairly the financial position of the Group and the results of its operations, in conformity with the prevailing legal andregulatory requirements in Belgium, and the disclosures made in the notes to the accounts are adequate.

ADDITIONAL ASSERTIONS

As required by Belgian generally accepted auditing standards the following additional information is provided. This additionalinformation does not alter our audit opinion on the financial statements.

The consolidated Board of Directors’ report contains the information required by law and is in accordance with the consolidatedfinancial statements.

Brussels, 30 April 2002

Klynveld Peat Marwick Goerdeler Ernst & YoungStatutory auditors Statutory auditors

Represented by Represented byErik Clinck Eric De Lembre

statementsconsolidated financial

>

TABLE OF CONTENTS

CONSOLIDATED INCOME STATEMENT 44

CONSOLIDATED BALANCE SHEET 46

CONSOLIDATED CASH FLOW STATEMENT 48

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 50

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 51

TELINDUS GROUP NV - FINANCIAL STATEMENTS 77


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44

(*) The notes are included on the pages 51 to 75

Year ended 31 December 2001 2000 1999(‘000 EUR) Notes (*)

Operating revenues 655,026 559,411 342,436

Turnover (2) 637,274 542,731 337,631

Change in inventory finished goods, work- and contracts-

in-process 11,402 9,838 821

Fixed assets own construction 28 13 232

Other operating income 6,322 6,829 3,984

Operating charges (5) (652,456) (536,511) (326,406)

Raw materials, consumables and goods for resale (424,116) (380,718) (210,869)

Change in inventory raw materials, consumables and

goods for resale 582 30,821 14,128

Services and other goods (59,581) (55,169) (39,717)

Payroll expense (3) (134,589) (111,892) (76,178)

Depreciation of fixed assets (14,508) (13,463) (12,305)

Allowances for inventories, contracts-in-progress and

amounts receivable (4) (17,943) (4,030) (1,253)

Provisions for risks and charges (486) (587) 420

Other operating charges (1,815) (1,473) (864)

Operating profit (EBIT) 2,570 22,900 16,030

Financial result (4,509) (1,559) (864)

Amortisation of goodwill (6) (2,666) (2,434) (1,884)

Other financial income and (expense) (7) (1,843) 875 1,020

Profit (loss) before tax and extraordinary items (1,939) 21,341 15,166

income statementTelindus Group

consolidated

Telindus > annual report 2001 > consolidated financial statements 45 >>


2001 2000 1999(‘000 EUR) Notes (*)

Extraordinary result (8,367) 113,034 10,941

Gain on sale of investments (8) 0 113,810 12,005

Restructuring costs (8) (8,266) (1,518) (1,024)

Other extraordinary items (101) 742 (40)

Profit (loss) before tax (10,306) 134,375 26,107

Income taxes (2,147) (4,836) (2.719)

Current income taxes (9) (2,368) (4,663) (2,918)

Deferred income taxes (9) 221 (173) 199

Net profit (loss) for the year (12,453) 129,539 23,388

Group share (12,861) 128,427 22,983

Minority interest 408 1,112 405

income statementTelindus Group

consolidated


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46



Fixed assets 151,004 133,738 130,122

Formation expenses (10) 3,768 5,644 7,294

Intangible assets (11) 4,056 2,970 2,571

Goodwill (12) 64,184 63,637 63,396

Tangible fixed assets (13) 53,675 34,721 32,216

Financial fixed assets (14) 25,321 26,766 24,645

Current assets 418,046 460,447 406,841

Inventories and contracts-in-progress (15) 72,818 82,704 35,878

Amounts receivable (16) 210,561 252,938 144,273

Current investments (17) 97,984 95,238 209,317

Cash & cash equivalents (17) 21,558 17,888 9,787

Deferred charges and accrued income 15,125 11,679 7,586

Total assets 569,050 594,185 536,963

balance sheetTelindus Group

consolidated



2001 2000 1999(‘000 EUR) Notes (*)

Equity 321,135 351,327 340,910

Share capital 134,444 134,444 134,444

Share premium 143,058 143,058 143,058

Consolidated reserves 105,581 172,411 63,905

Goodwill (12) (61,969) (98,493) 0

Translation differences (597) (921) (1,259)

Investment grants 618 828 762

Minority interests 5,524 6,046 5,432

Non-current liabilities 8,976 6,405 5,989

Provisions for liabilities and charges (18) 6,363 2,901 2,214

Deferred tax liabilities (19) 1,029 1,270 1,026

Long-term debt, non-current portion (17) 1,584 2,234 2,749

Current liabilities 233,415 230,407 184,632

Long-term debt, current portion (17) 357 1,299 2,501

Short-term debt (17) 28,184 38,458 43,994

Trade accounts payable 92,919 92,156 73,310

Advances received 11,307 17,425 4,210

Amounts payable from taxes, remuneration and

social security (20) 37,197 33,324 20,113

Other amounts payable (21) 21,213 12,487 14,045

Accrued charges and deferred income (22) 42,238 35,258 26,459

Total equity and liabilities 569,050 594,185 536,963

balance sheetTelindus Group

consolidated


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48



Operating activities


Amortisation of formation expense, intangible assets

and goodwill 6,058 5,411 4,124

Depreciation of tangible fixed assets 11,074 10,486 10,065


amounts receivable 17,943 4,030 1,253

Allowances for current investments 0 0 355

Provisions for risks and charges 257 672 (4)

Minority interests (1,419) (499) 168

Operating cash flow before changes in working capital,

tax and extraordinary items 31,974 41,441 31,127

(Increase) decrease in inventories and contracts-in-progress (1,949) (44,364) (11,257)

(Increase) decrease in amounts receivable 45,600 (96,901) (46,803)

Increase (decrease) in amounts payable (18,540) 12,923 24,310

Other changes in working capital 3,067 4,096 3,735

Operating cash flow before tax and extraordinary items 60,152 (82,805) 1,112

Income taxes (2,388) (4,592) (2,858)

Extraordinary items (3,241) (1,519) (861)

Cash flow from operating activities (17) 54,523 (88,916) (2,607)

Investing activities

Capitalised formation expenses 0 (196) (7,571)

Acquisition of intangible fixed assets (2,508) (1,460) (1,157)

Acquisition of tangible fixed assets (40,443) (15,828) (14,458)

Proceeds from sale of tangible fixed assets 10,639 4,929 2,677

Acquisition of subsidiaries, net of cash acquired (6,551) (112,164) (24,802)

Acquisition of other investments (400) (6,827) (1,000)

Disposal of subsidiaries 0 709 0

Disposal of non-consolidated investments 0 118,979 12,601

(Increase) decrease in guarantees deposited 24 (426) (187)

Cash flow from investing activities (17) (39,239) (12,284) (33,897)

cash flow statementTelindus Group

consolidated


(*) The notes are included on the pages 51 to 75(**) Cash & cash equivalents for the purposes of the cash flow statement includes current investments but excludes own shares

2001 2000 1999(‘000 EUR) Notes (*)

Financing activities

Proceeds from issue of share capital 0 0 174,453

Repayment of long-term debt (651) (516) (10,154)

Increase in long-term debt from acquisitions of subsidiaries (2,149) (218) 0

Dividends paid (6,066) (4,044) (2,907)

Repurchase of own shares (1,820) (1,077) 0

Cash flow from financing activities (17) (10,686) (5,855) 161,392

Net change in cash & cash equivalents (17) 4,598 (107,055) 124,888

Cash & cash equivalents at 1 January (**) 112,049 219,104 94,216

Cash & cash equivalents at 31 December (**) 116,647 112,049 124,889

cash flow statementTelindus Group

consolidated


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50

of changes in equityTelindus Group

Share Share Consolidated Goodwill Translation Investment Total equity

(‘000 EUR) Notes (*) capital premium reserves differences grants

1 January 2000 134,444 143,058 63,905 0 (1,259) 762 340,910

Net profit Group share 128,427 128,427

Other recognised gains

& losses 338 66 404

Goodwill on

acquisitions (112,348) (112,348)

Amortisation goodwill (13,855) 13,855 0

Dividend paid (6,066) (6,066)

31 December 2000 134,444 143,058 172,411 (98,493) (921) 828 351,327

1 January 2001 134,444 143,058 172,411 (98,493) (921) 828 351,327

Net profit Group share (12,861) (12,861)

Other recognised gains

& losses 324 (210) 114

Goodwill on

acquisitions (12) (11,434) (11,434)

Amortisation goodwill (12) (17,706) 17,706 0

Impairment allowance

goodwill (12) (30,252) 30,252 0

Dividend paid (21) (6,011) (6,011)

31 December 2001 134,444 143,058 105,581 (61,969) (597) 618 321,135

consolidated statement

Telindus > annual report 2001 > notes to the consolidated financial statements 51 >>

Identification

Telindus Group NV (the ‘Company’) is a limited liability company (‘naamlozevennootschap’ / ‘société anonyme’) incorporated in Belgium and registered at IJzerlaan24, 1040 Brussels. It is registered with the Chamber of Commerce in Brussels withnumber HR 441501. Its VAT number is BE 442.674.035.

The list of Directors and the statutory auditors (‘commissarissen’ / ‘reviseursd’entreprises’) is included in the annual report on pages 39 to 42.

Statement of Compliance

The consolidated financial statements of the Company for the year ended 31 December2001 comprise Telindus Group NV and its subsidiaries (together referred to as ‘the Group’)and the Group’s interest in associates. Comparative figures are for the financial yearcommenced on 1 January 2000 and ended 31 December 2000. The comparative figures areconsistent with the 2000 financial statements.

The consolidated financial statements were authorised for issue by the Directors onthe Board Meeting of 25 April 2002 and approved by the shareholders on the AnnualGeneral Meeting of 31 May 2002.

The consolidated financial statements have been prepared under Belgian law usingthe generally accepted accounting principles in Belgium.

Conversion to IAS / IFRS

Currently, the Group is in the process of converting from Belgian GAAP toInternational Accounting Standards (IAS) – now also referred to as InternationalFinancial Reporting Standards (IFRS) – as its primary basis of accounting. It is theDirectors’ objective to publish the Group’s consolidated financial statements inaccordance with IAS as from the financial year ending 31 December 2004, includingcomparative figures for 2003.

In the context of the change-over to IAS, the 2001 consolidated financial statementsand the notes thereto are presented using certain presentation and disclosurerequirements in accordance with IAS, nevertheless complying with all requirements ofapplicable Belgian laws and regulations.

Basis of preparation

The financial statements are presented in euro (€), rounded to the nearest thousand.They are prepared on the historical cost basis except for treasury shares that are statedat their fair value. Financial investments that are available-for-sale are valued athistorical cost.

The accounting policies have been consistently applied by the Group’s enterprisesand are consistent with those used in the previous year.

financial statementsTelindus Group

notes to the consolidated


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52

Summary of significant Accounting Policies

I. PRINCIPLES OF CONSOLIDATION

Subsidiaries are those enterprises controlled by the Company. Control exists whenthe Company has the power, directly or indirectly, to govern the financial and operatingpolicies of an enterprise so as to obtain benefits from its activities. The financialstatements of subsidiaries are included in the consolidated financial statements from thedate that control commences (or a date nearby) until the date that control ceases.

Associates are those enterprises in which the Group has significant influence, but nocontrol, over the financial and operating policies. The consolidated financial statementsinclude the Group’s share of the total recognized gains and losses of associatesaccording the equity-method of accounting, from the date that significant influencecommences until the date that significant influence ceases. When the Group’s share oflosses exceeds the carrying amount of the associate, the carrying amount is reduced tonil and recognition of further losses is discontinued except to the extent that the Grouphas incurred obligations in respect of the associate.

Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

II. FOREIGN CURRENCIES

Transactions in foreign currencies are translated to euro at the foreign exchange rateruling at the date of the transaction. Monetary assets and liabilities denominated inforeign currencies at the balance sheet date are translated to euro at the foreignexchange rate ruling at that date. (Unrealised) foreign exchange gains and losses arisingon this translation are recognized in the income statement. Non-monetary assets andliabilities denominated in foreign currencies, which are stated at historical cost, aretranslated to euro at the foreign exchange rate ruling at the date of the transaction.

The assets and liabilities of subsidiaries stated in foreign currencies are translated toeuro at foreign exchange rates ruling at the balance sheet date. The revenues andexpenses are translated to euro at the average rate for the period approximating theforeign exchange rates ruling at the dates of the transactions. Foreign exchangedifferences arising on translation are recognized directly in equity.

III. GOODWILL

Goodwill arising on acquisition of subsidiaries represents the excess of the cost ofthe acquisition over the fair value of the net identifiable assets acquired. Goodwill isstated at cost less accumulated amortisation and impairment losses. The cost of goodwillincludes the estimated amount of additional purchase consideration payable (‘earn-out’),where applicable. Amortisation is charged on a straight-line basis over the goodwill’sestimated useful life. Except for goodwill on entities acquired that are operating in ahighly technological industry sector and whose principal activity is Research &

Telindus > annual report 2001 > notes to the consolidated financial statements

Development, which is amortised over 5 years, the useful life of goodwill has beendetermined at 30 years. This is justified by the significant and long-term impact of theacquired entities on the Group’s core activity of network integration.

Goodwill on acquisitions performed in 1999 and earlier, is capitalised under fixedassets with the amortisation charged to the income statement. Goodwill on acquisitionsof 2000 and 2001 has, allowed on an exception basis by the Banking and FinanceCommission (CBF), been deducted directly from equity. Amortisation is accounted for bytransferring an amount, equal to the amortisation charge for the period, from goodwillto consolidated reserves, therefore not impacting the income statement.

IV. REVENUE

Revenue from the sale of goods is recognized in the income statement when thesignificant risks and rewards of ownership have been transferred to the buyer. Revenuefrom services rendered is recognized in the income statement according to the‘completed contract’-method.

In case the services are rendered as part of a contract, potentially in combinationwith the sale of goods, that is of significant value and running over several months,revenue is recognised in proportion to the stage of completion of the contract at thebalance sheet date according to the ‘percentage of completion’-method. The stage ofcompletion is estimated by management using project-specific parameters for large,diverse projects and by reference of costs incurred in proportion to total contract costsfor smaller, routine projects. An expected loss on a contract is recognized immediately inthe income statement.

No revenue is recognized if there are significant uncertainties regarding the recoveryof the consideration due, associated costs or the possible return of goods.

V. INCOME TAX

Income tax on the profit or loss for the year comprises current and deferred tax.Current tax is the expected tax payable on the taxable income for the year, using taxrates enacted or substantially enacted at the balance sheet date, and any adjustment totax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing only forthose temporary differences that result in deferred tax liabilities. Temporary differencesrelate to differences between the carrying amounts of assets and liabilities for financialreporting purposes and the amounts used for taxation purposes. The amount of thedeferred tax liabilities provided is based on the expected manner of realisation orsettlement of the carrying amount of assets and liabilities, using tax rates enacted orsubstantially enacted at the balance sheet date. In addition, deferred tax liabilities arerecognised on the expected future income tax payable related to taxable incomerecognised from government grants and the deferred taxation on reinvested capital gainsrealised on the sale of tangible fixed assets. No deferred tax is recognised on temporarydifferences arising from goodwill that is not deductible for tax purposes.

Deferred tax assets are not recognized.

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54

VI. FORMATION EXPENSES

Formation expenses and costs related to share capital increases are capitalised andamortised on a straight-line basis over a period of 5 years. Costs related to the issue ofloans are amortised over the duration of the loan. Restructuring costs are notcapitalised.

VII. INTANGIBLE ASSETS

Expenditure on internal research and development activities, is recognized in theincome statement as an expense as incurred.

Other intangible assets such as externally purchased research & development, softwareand licenses, are stated at cost less accumulated amortisation and impairment losses.Amortisation is charged on a straight-line basis over the intangible’s estimated useful life,which has been determined at 5 years.`

VIII. TANGIBLE FIXED ASSETS

Tangible fixed assets are stated at cost less accumulated depreciation andimpairment losses. The cost of self-constructed assets includes the cost of materials,direct labour and an appropriate proportion of production overheads.

Leases through which the Group obtains rights to the use of assets and in which thecontractual instalments – in the case of movable property increased with the purchaseoption that, if applicable, may not exceed 15% of the total capital invested by the lessor– reconstitute the entire capital plus financing interests and ancillary costs, areclassified as finance leases. Tangible fixed assets acquired by way of a finance lease arestated at cost, being the capital portion of the lease debt to be reimbursed, lessaccumulated depreciation and impairment losses. Leases that do not meet the criteria offinance leases are classified as operating leases with the related contractual obligationsbeing recognized in the income statement as an expense on a straight-line basis overthe term of the lease.

Subsequent expenditure is capitalised only when it increases the future economicbenefits embodied in an item of property, plant and equipment. All other expenditure isrecognized in the income statement as an expense as incurred.

Depreciation is charged to the income statement on a straight-line basis over theestimated useful lives of each tangible fixed asset item. Land is not depreciated. Theestimated useful lives are as follows:

Number of yearsBuildings 25-40Plant, machinery and equipment 3-5Furniture and vehicles 4-5Leasehold improvements incl. in ‘other’ according lease period


IX. INVENTORIES AND CONTRACTS-IN-PROGRESS

Raw materials and consumables are stated at purchase cost according the FIFO-method (‘first-in-first-out’). Goods purchased for re-sale are stated at the individualpurchase price of each individual (serialised) item. Work-in-progress and finished goodsare valued at manufacturing cost, which includes all direct production costs and anallocation of fixed and variable production overheads, based on normal operatingcapacity. Valuation allowances are recognized and charged to the income statementwhen net realisable value is lower than cost. The net realisable value is the estimatedselling price in the ordinary course of business, less the estimated costs of completionand selling expenses.

Contracts-in-progress are stated at cost, less a provision for foreseeable losses. Costincludes all expenditure related directly to specific projects and an allocation of fixedand variable overheads incurred in the Group’s contract activities. Progress billings oncontracts are recorded against advances received. The cost of contracts with asignificant value running over several months is increased with the profit margin thatcan be recognized to date, according to the ‘percentage of completion’-method. Othercontracts are accounted for according to the ‘completed contract’-method, whereby theprofit margin is only and entirely recognised upon completion of the project.

X. TRADE AND OTHER RECEIVABLES

Trade and other receivables are stated at their nominal value. Valuation allowancesare recognized and charged to the income statement when receivables are uncollectableor when their collection is doubtful.

XI. INVESTMENTS

Available-for-sale financial investments held to create a strategic and long-termrelationship with the investee, are carried at cost with impairment losses beingrecognized in case of a permanent decline in carrying value. They are classified underfinancial fixed assets.

Fixed-income financial assets with the intent to hold to maturity are carried at cost,with a valuation allowance recognized in case of a permanent decline in value. They areclassified under current investments.

Own shares held (treasury shares) resulting from the repurchase of share capital, areinitially recorded at cost and are classified as current investments. Subsequently,treasury shares are measured at fair value, with any resultant gain or loss recognized inthe income statement. The fair value is the quoted closing price at the balance sheetdate. A reserve for treasury shares equal to the carrying amount of the treasury shares isset up within consolidated reserves.

XII. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise bank balances, bank deposits and petty cash.They are valued at nominal amounts.

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XIII. PROVISIONS FOR LIABILITIES AND CHARGES

A provision is recognized to cover losses or charges that, at the balance sheet date,are probable or certain to be incurred, and of which the nature is clearly identified butthe amount uncertain. All foreseeable risks, contingent losses and impairments that havearisen during the year or in prior years are taken into account, even if these risks, lossesand impairments only become known between the balance sheet date and the date atwhich the Directors have authorised the financial statements to be issued.

A provision for early retirement is recognised when the Group is firmly committed,through individual agreements, to pay future benefits to an employee whilst dischargingthe employee of rendering any service as compensation for the benefits received.

A restructuring provision is recognised when the Group has approved a detailed andformal restructuring plan, and the restructuring has either commenced or has beenannounced publicly. Future operating costs are not provided for.

XIV. IMPAIRMENT

The carrying amounts of the Group’s assets are reviewed at each balance sheet dateto determine whether there is any indication of impairment. If any such indication exists,the asset’s recoverable amount is estimated. An impairment loss is recognized wheneverthe carrying amount of an asset exceeds its recoverable amount. Impairment losses arerecognized in the income statement, except for goodwill directly deducted from equity, inwhich case impairment losses are charged directly against consolidated reserves.

XV. TRADE AND OTHER AMOUNTS PAYABLE

Trade and other payables are stated at their nominal value.

XVI. DIVIDENDS

Dividends declared are recognized as a liability in the period to which they relate.

XVII. GOVERNMENT GRANTS

A government grant is recognized when the right to the grant is definite. In case acondition precedent is attached to receiving the grant, the grant is not recognised.

Grants related to assets are recorded under equity after deduction of deferred tax,calculated as the estimated amount of income tax payable when the grant is released toincome and generates taxable income. The release to income of the government grantand the related deferred tax liability follows the pattern of the depreciation of theunderlying asset.

Government grants that do not relate to assets, such as interest subsidies andsubsidies related to the exploitation of a business, are not recognised on the balancesheet but are credited directly to the income statement. Exploitation subsidies arerecognised in other operating income; interest subsidies in financial income.


XVIII. PENSION SCHEMES

Contributions to defined contribution pension plans are recognized as an expense inthe income statement as incurred.

The Group operates defined benefit plans in a limited number of countries. Theobligations in respect of defined benefit plans are accrued for in proportion to thebenefits earned to date, and does not take into account estimated future increases ofthe benefits as a result of salary increase, years of service etc.

XIX. EQUITY COMPENSATION BENEFITS (WARRANT PLAN)

The Group has issued warrant plans that allow Group employees to acquire shares ofthe Company. The warrant exercise price equals the average of the closing market pricesof the underlying share of the 30 days preceding the date of the grant. Warrants aregranted according to the rules set by the Remuneration Committee and no considerationis payable for acquiring a warrant.

Employer’s taxes are accrued in those countries where taxes are payable on realisedcapital gains and when, based on the closing share price at the balance sheet date, thewarrant is ‘in-the-money’. When the warrants are exercised, new shares are issued andequity is increased by the amount of the proceeds received: share capital is increased bythe nominal amount per share with the remainder being recorded as share premium.

XX. DERIVATIVE FINANCIAL INSTRUMENTS

The Group uses derivative financial instruments to hedge its exposure to foreignexchange risk on operational activities and interest rate risks arising from investmentactivities. In accordance with its treasury policy, the Group does not hold or issuederivative financial instruments for trading purposes.

Forward exchange contracts are recognized initially at cost. Subsequent to initialrecognition, the pro rata part of the premium/discount is recognised in the incomestatement. The settlement of the contract is recorded at the (approximate) forward rateand as such no (significant) gain or loss on the settlement is incurred.

Forward rate agreements are not recognised at inception. Upon settlement of thecontract, any resultant gain or loss from the settlement is recognised in the incomestatement.

XXI. HEDGING

Where forward exchange contracts are used to hedge the exchange risk on foreigncurrency purchases, the corresponding foreign currency amounts payable are translatedat the hedged rate in the hedging mechanism if the hedge is specific and there is anapproximate match between amounts and maturity dates of the contract(s) and thehedged transaction(s).

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1. Acquisition and disposal of subsidiaries

ACQUISITIONS

In March 2001 the Group acquired 51% of the shares of the network integratorModern Time Technology Co Ltd (‘MTT’) based in Hong Kong. Through the acquisition theGroup also obtained control over MTT’s newly set-up 100% subsidiary, Yunnan TelindusTechnologies Co Ltd, with 7 offices located throughout the Chinese mainland. During theyear, MTT changed its name to Telindus Ltd. The total purchase consideration wassatisfied in cash. The companies contributed revenues of € 35.9m to the Group’sconsolidated 2001 accounts.

In April 2001 the Group acquired the remaining shares of Kern Datanet SA.Consequently the Group’s share in this entity increased from 69.3% to 100%. On 1 June2001 the assets and liabilities of Kern Datanet SA were contributed and its businesstransferred to the existing Telindus SA (Spain). Kern Datanet SA was subsequentlydissolved. The purchase consideration for the step-up acquisition was satisfied in cash.For the financial year 2001, the operations of the former Kern Datanet SA contributedrevenues of € 31.6m.

In respect of the acquisitions performed during the year, a number of adjustments tothe identifiable assets and liabilities were recorded in order to align the opening balanceof the newly consolidated subsidiary with Group accounting policies. The adjustmentsrelate mainly to valuation of inventories and amounts receivable, and depreciation ratesfor fixed assets.

The acquisitions performed during 2001 have been accounted for according thepurchase method of accounting. The results and operations of the acquired companieshave been included as from the date at which control was obtained, or a date nearby. Nooperations were disposed off as a result of the acquisitions.

DISPOSALS

In April 2001 the 100% subsidiary CF6 SA (Luxemburg) was transferred to TelindusSA (Luxemburg), in which the Group has a 64.70% holding. No significant result wasmade from this partial disposal.

Other changes in the consolidation perimeter– Telindus SA and Intégral Solutions SA (France): liquidated after being merged with Telindus France SA;– Gutenberg Communications AG and CCP Intégration SA (Switzerland): liquidatedafter being merged with Telindus Networks SA of Switzerland;– Telectronics Sarl (Luxemburg): the business was transferred to the Group companyInformalux (Luxemburg), that subsequently changed its name to Telectronics SA(Luxemburg).– CellStack Systems Inc (USA): liquidated subsequent to the sales of the business toa 3rd party, being the former management of the entity;


– CF6 SA (Belgium): liquidated subsequent to the transfer of its assets, liabilities andoperations to Telindus NV (Belgium).

2. Turnover and gross margin

As a result of both organic and external growth through acquisitions, turnover hasincreased year-over-year by 17%. The gross margin, for this purpose calculated as thedifference between turnover and the cost of raw materials, consumables and goods forresale over turnover (including the effect of the change in inventories), has decreasedfrom 36.7% in 2000 to 34.7% in 2001. This is explained by a margin erosion on productsales, especially after the collapse of the telecom sector and the events of 11 September,not fully compensated by a proportional growth in services.

The total turnover of the Group realised in Belgium in 2001 amounts to € 146m,compared to € 112.3m in 2000.

3. Payroll expense

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Year ended 31 December 2001 2000€’000 €’000

Salaries and wages (106,895) (88,245)Social security charges (21,832) (19,997)Personnel insurance costs (2,643) (2,759)Other personnel costs (3,219) (891)Total payroll expense (134,589) (111,892)

Year ended 31 December 2001 2000Number Number

Workers 48 49Employees 2,337 1,976Senior management 37 35Total headcount (average of the year) 2,422 2,060Total headcount (average of the year) – Belgium 822 789

Payroll expense can be detailed as follows:

Headcount can be split as follows


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4. Allowances for inventories, contracts-in-progress andamounts receivable

As at 31 December 2001, a total allowance of € 17.9m for inventories and tradereceivables has been recorded.

Due to the slackening economy after September 11, and the severe spending cuts inthe telecom sector, the Company decided to tighten its valuation policies with regard tounsold and uncommitted inventories of OEM-equipment; as a result of this, it increasedits provision for obsolete inventories by approximately € 6m to bring it to a year totalof € 10m.

The bankruptcy or near-bankruptcy of several customers, mainly in the telecomsector, required provisioning or write-off of outstanding receivable amounts for a totalof € 7.9m. This includes the write-off of outstanding amounts receivable from Iaxis for€ 4m. In 1999 the Group entered into an agreement with Iaxis Ltd (UK) for the supplyand maintenance of equipment. When in the second half of 2000 Iaxis Ltd went intoadministration, the total receivable amounted to € 20.7m. Later in that year a totalamount of € 11,9m was recovered and an allowance was set up of € 1,0m, resulting ina net receivable at the prior year-end of € 7.8m. No write-down was considerednecessary as a result of a support letter received from Iaxis Ltd’s parent company, IaxisBV (the Netherlands). The principal assets of Iaxis BV include its investment in Digiplex,a pan-European internet hotel operator. During 2001 and until the date of issue of thesefinancial statements there were no further receipts, but it has been estimated thatanother € 3.8m will be received from the liquidators of Iaxis Ltd. This has resulted in anet exposure at 31 December 2001 of € 4m, in principle covered by the support letterfrom Iaxis BV. However, due to the weak financial position of Digiplex, the value of thesupport letter is compromised. On this basis the Directors of Telindus Group havedecided to write off the entire receivable by recording a further allowance of € 4m.

The Group has taken immediate measures in order to avoid further write-offs andallowances in the future, by coordinating centrally the Group’s inventories andoutstanding receivables, as well as by the strict application of the policy to purchaseOEM-equipment (i.e. products from 3rd party ‘Original Equipment Manufacturers’) onlywhen backed by a customer order.

5. Operating charges

Total operating charges include research expenditure incurred in 3 Group companiesi.e. Telindus NV (Belgium), CellStack Systems Ltd (UK) and Conseil et Formation Système(CF6) SA of approximately € 6.3m. In accordance with the Group’s accounting policies,these expenses have been recognised in the income statement as a period expense.

6. Amortisation of goodwill

The amortisation charge of goodwill of € 2.7m relates to goodwill on acquisitionsperformed in 1999 and earlier. Goodwill on acquisitions of 2000 and 2001 is deducted


directly from equity. The slight increase from 2000 is the result of the buy-out of theminority interest in Kern Datanet SA (Spain), now Telindus SA (Spain).

INCOME FROM CURRENT INVESTMENTS

Income from current investments of € 4,7m is mainly from interest earned oncommercial paper and short-term bank deposits. Notwithstanding the acquisitionsperformed in recent years, the Group is still cash-rich following the share capital increase in1999 and the capital gain realised on the sale of Mobistar and Ubizen shares in 2000. Thecash that is not required in the daily operations is principally invested in commercial paperwith maturity periods of, usually, 3 months or less, as well as in short-term bank deposits.The decrease in income from current investments is due to a lower average of the amountof current investments in 2001 compared to 2000 (due to the 2000 acquisitions) as well asthe downward trend in market interest rates.

INTEREST AND OTHER DEBT CHARGES

Interest and other debt charges of € 3.4m are mainly from interest paid on short-term borrowings. Short-term borrowings are used to cover short-term cash requirementsand are taken on when it is more advantageous to borrow in the market than to sellcommercial paper before maturity. Although it is Group policy that Group entities borrowfrom the Group’s coordination centre, a very limited number of Group entities have loanswith external banks in case this is more favourable for the entity.

LOSS ON TREASURY SHARES

As at 31 December 2000 the Group held 60,650 own shares. During 2001 anadditional 301,360 shares were purchased, resulting in a total number at 31 December2001 of 362,010. At an average purchase price of € 15.6 per share they represent a costof acquisition of € 5.6m, for which an allowance of € 0.4m was already recorded in2000. Given the closing share price of € 8.0 per share at 31 December 2001 the market

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Income from current investments 4,741 7,341Other financial income 13,097 7,135

Financial income 17,838 14,476Interest and other debt charges (3,364) (3,424)Loss on treasury shares (2,344) (423)Other financial charges (13,973) (9,754)

Financial charges (19,681) (13,601)Financial income and (charges), net (1,843) 875

7. Other financial income and (expense)


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value of the shares amounts to € 2,9m. Consequently a further allowance of € 2.3mwas recorded at 31 December 2001 to reduce the carrying amount to market value.

OTHER FINANCIAL INCOME AND CHARGES

Other financial income and charges include mainly exchange gains and losses. TheGroup’s sales are mainly denominated in euro and to some extent in pound sterling, USdollar, Swiss franc, Chinese renminbi, Hong Kong dollar and Thai baht. Purchases fromproducts for re-sale (OEM-equipment) are principally denominated in US dollar. Otherpurchases are usually in local currency. Therefore an exchange risk is incurred on thebusiness of OEM-equipment, which is covered through the Group’s hedging mechanism.The near break-even result in 2001 of € -0.9m is the result of the Group’s hedgingstrategy whereby the exchange risk incurred on USD-purchases of OEM-equipment ishedged through short-term foreign exchange contracts.

8. Extraordinary result

GAIN ON SALE OF INVESTMENTS

The total gain on sale of investments of € 113.8m realised in 2000 originates fromthe sale of the entire participation of 9.7% in Ubizen, resulting in a tax-free capital gainof € 86,4m and the disposal of part of the investment in Mobistar (from 6.6% to 5.2%),resulting in a tax-free capital gain of € 27.4m.

During 2001 there were no disposals of Mobistar shares or other (non-consolidated)investments.

In response to the tough market conditions, especially as from quarter 4 of 2001,Group management decided to go ahead with a restructuring program, implementedimmediately. In addition to a refinement of the business strategy, entailing a review ofthe corporate structures, strategic options, skills and systems and processes, 121 personswere made redundant. The total impact of this restructuring program amounted to € 5,8mof which part relates to the set-up of a provision for early retirement. The 2000

RESTRUCTURING COSTS

The restructuring costs of € 8,3m comprise:


Redundancy costs (6,446) (1,518)Impairment allowance Mitiska NetFund Europe (1,655) 0Impairment allowance Minds (165) 0Total restructuring costs (8,266) (1,518)


redundancy costs related to the restructuring of the French operations.Mitiska NetFund Europe is a venture capital company that invests in non-listed

internet businesses and in which the Group has a 5.6% investment. It is recorded as anavailable-for-sale financial investment under financial fixed assets. As at 31 December2001, the total invested amount is € 2.6m. Based on the decline in the net equity of thisventure capital fund, itself due to the downward evolution of the value of its investments,an impairment loss was recognised of € 1.7m. At 31 December 2001, the carrying amountof € 0.9m reflects the Group’s share in the net equity amount of NetFund.

Subsequent to the bankruptcy of Minds NV, in which Telindus Group held a 9.5%investment, the carrying amount of the investment of € 165k was written off.

9. Income taxes

The effect of the 2001 restructuring costs under extraordinary items on the currentincome tax expense is insignificant, since the costs are in principle tax deductible in thecurrent year. The gain on disposal on the sale of Mobistar and Ubizen shares in 2000however did have a significant effect on the prior year taxable income tax charge, sincethe capital gain on shares is not taxable in Belgium.

10. Formation expenses

All formation expenses capitalised relate to costs from the share capital increase ofTelindus Group NV in 1999 and are amortised on a straight-line basis over 5 years. Inaccordance with Group policy, no restructuring costs are capitalised.

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Income tax provision current year (4,256) (4,476)(Increase) decrease prior years tax provision 1,888 (187)

Total current income tax expense (2,368) (4,663)Deferred tax on government grants and capital gains 30 50Origination and reversal of temporary differences 191 (223)

Total deferred income tax expense 221 (173)Total income tax expense (2,147) (4,836)

Formation expenses€’000

Balance at 1 January 2001 5,643Expenses incurred during the year 0Amortisation and impairment (1,860)Translation differences (16)Other movements 1

Balance at 31 December 2001 3,768

Research & Concessions. Other TotalDevelopment licenses etc intangibles

€’000 €’000 €’000 €’000CostBalance at 1 January 2001 11,318 12,594 99 24,011

Acquisitions (other than from business combinations) 152 2,356 0 2,508Acquisitions through business combinations 0 0 0 0Disposals (11,144) (37) 0 (11,181)Transfers 0 0 0 0Effects of movements in foreign exchange rates 0 0 0 0

Balance at 31 December 2001 326 14,913 99 15,338Amortisation and impairment lossesBalance at 1 January 2001 (11,168) (9,840) (33) (21,041)

Amortisation charge for the year (97) (1,402) (33) (1,532)Disposals 11,144 150 0 11,294Transfers 0 0 0 0Effects of movements in foreign exchange rates 0 (3) 0 (3)

Balance at 31 December 2001 (121) (11,095) (66) (11,282)Net book valueBalance at 1 January 2001 150 2,754 66 2,970Balance at 31 December 2001 205 3,818 33 4,056


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11. Intangible assets

The carrying amount of capitalised Research & Development represents externallypurchased R&D. Internally generated intangible assets from R&D-activities are, inaccordance with Group accounting policies, not capitalised.

Concessions and licenses comprise mainly software licenses acquired from third parties.


12. Goodwill

According to the Group accounting policies, goodwill on acquisitions performed in1999 and earlier, is capitalised under fixed assets. Goodwill on acquisitions of 2000 and2001 has exceptionally been deducted directly from equity.

GOODWILL CAPITALISED UNDER FIXED ASSETS

New goodwill capitalised during the year arises from the buy-out of the 30,7%minority interest of Kern Datanet SA (Spain). As the acquisition through which controlwas obtained of Kern Datanet was performed in 1999, the goodwill arising on thesubsequent acquisition of the remaining shares in 2001 was treated equally andcapitalised under fixed assets.

The reduction of goodwill under ‘adjustments’ represents the reversal of an accrual foran additional purchase consideration payable (‘earn-out’). The reversal was performedbecause the conditions for the payment of the additional consideration have not beenfulfilled and the Group is consequently discharged from paying any additional amounts.

GOODWILL DEDUCTED FROM EQUITY

New goodwill deducted from equity in 2001 results from the acquisition of ModernTime Technology Co Ltd (Hong Kong).

In addition to the annual amortisation charge of € 17.7m (a transfer within equityfrom goodwill to consolidated reserves), total impairment losses of € 30.3m were

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Goodwill capitalised Goodwill deducted Totalunder fixed assets from equity

€’000 €’000 €’000CostBalance at 1 January 2001 69,768 112,348 182,116

New goodwill from business combinations 4,375 11,433 15,808Additional goodwill recognised Adjustments (1,162) (1,162)Disposals

Balance at 31 December 2001 72,981 123,781 196,762Amortisation and impairment lossesBalance at 1 January 2001 (6,131) (13,855) (19,986)

Amortisation charge for the year (2,666) (17,705) (20,371)Impairment losses (30,252) (30,252)Disposals

Balance at 31 December 2001 (8,797) (61,812) (70,609)Net book valueBalance at 1 January 2001 63,637 98,493 162,130Balance at 31 December 2001 64,184 61,969 126,153


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recorded on the goodwill from following acquisitions:– In connection with the scission of the activities of CF6 in consulting and training

on one hand and intrusion testing on the other hand, a valuation was performed of theentity. The valuation was done using the same parameters that were used at the date ofacquisition and showed that the recoverable amount had decreased considerably.Accordingly, an impairment loss was recognised to bring the carrying amount to theestimated recoverable amount.

– Due to the less than expected contribution of Gutenberg GmbH and CCP IntégrationSA (Switzerland) and the restructuring required to integrate the business and adapt it to thecurrent market conditions, the goodwill related to these acquisitions has become impaired.In order to better reflect its recoverable amount, an impairment loss has been recognised.

– Following the sale of CellStack Inc (USA) for a symbolic amount, the remainingbalance of the goodwill to this acquisition was completely written off.

13. Tangible fixed assets

Land & Installations, Furniture & Leased Other Assets Totalbuildings machinery & vehicles assets under

equipment construction€’000 €’000 €’000 €’000 €’000 €’000 €’000

CostBalance at 1 January 2001 23,004 78,060 10,137 533 3,002 1,226 115,962

Investments 360 30,974 1,274 34 2,277 5,575 40,494Acquisitions from business 0 112 6 0 13 0 131

combinationsDisposals 0 (13,521) (1,218) (79) (180) 0 (14,998)Transfers 0 123 (16) 0 0 (107) 0Translation differences 0 152 73 5 8 0 238

Balance at 31 December 2001 23,364 95,900 10,256 493 5,120 6,694 141,827Depreciation and impairment

lossesBalance at 1 January 2001 (8,422) (63,315) (7,343) (449) (1,712) 0 (81,241)

Depreciation for the year (1,042) (7,851) (1,074) (54) (1,058) 0 (11,079)Reversal from disposals 0 3,266 971 75 120 0 4,432Transfers 0 (4) 4 0 0 0 0Translation differences 0 (193) (54) (4) (13) 0 (264)

Balance at 31 December 2001 (9,464) (68,097) (7,496) (432) (2,663) 0 (88,152)Net book valueBalance at 1 January 2001 14,582 14,745 2,794 84 1,290 1,226 34,721Balance at 31 December 2001 13,900 27,803 2,760 61 2,457 6,694 53,675

Of which:- land & buildings 0- installations, machinery & equipment 0- furniture & vehicles 61


The carrying amount of land & buildings of € 13.9m at 31 December 2001 comprisesmainly the buildings owned by Telindus NV and Telindus GSM SA in Belgium and TelindusSA in Luxemburg. Most other Group entities do not own land and buildings and disposeof their offices and facilities through operating leases.

Installations, machinery & equipment consist mainly of the cost of ‘field equipment’or spare parts used for the replacement of defective equipment that is covered bymaintenance contracts with customers, as well as the production facilities of theTelindus Access Products in Haasrode, Belgium.

The value of assets under construction of € 6.7m relates to the buildings beingconstructed on the Group’s sites in Haasrode and Ostend, both in Belgium. The remainingcost to complete the construction of the buildings is estimated at € 27m.

14. Financial fixed assets

ASSOCIATED COMPANIES

The amount of associated companies represents the cost of acquisition of 25% of theshare capital of Infostar Holding NV. Subsequent to year-end the participation was soldwith no significant result from disposal. No income or loss from associates through theequity-method had been recognised, because Infostar was a dormant company with nosignificant profits or losses.

AVAILABLE-FOR-SALE FINANCIAL INVESTMENTS

The available-for-sale financial investments at 31 December 2001 include thestrategic holdings in Mobistar for € 17.7m (5.2%), Spearhead Technologies for € 5.5m (6.8%) and Mitiska Net FundEurope for € 0.9m (5.6%).

Mobistar is the second largest mobile phone operator in Belgium. At 16 April 2001 theclosing share price of Mobistar was € 17.79 per share, resulting in a market value of theTelindus Group share in Mobistar of € 57.3m and an unrealised capital gain of € 39.6m.

OTHER FINANCIAL FIXED ASSETS

Other financial fixed assets include principally guarantees deposited in connectionwith projects carried out for government organisations.

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Associated companies 15 15Available-for-sale financial investments 24,151 25,572Other financial fixed assets 1,155 1,179Total financial fixed assets 25,321 26,766


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15. Inventories and contracts-in-progress

RAW MATERIALS, WORK-IN-PROGRESS AND FINISHED GOODS

Raw materials, work-in-progress and finished goods relate to the manufacturing ofthe Group’s own line of Telindus Access Products.

GOODS PURCHASED FOR RESALE

Goods purchased for resale include OEM-equipment purchased from 3rd partymanufacturers such as Cisco, Juniper, Com21, Marconi, Riverstone, Netscreen, Nokia etc.Usually goods are re-sold to customers together with the configuration and installationof the product, as well as a support contract. The decrease of the stock level from theprior year-end is explained by the significant obsolescence provisions recorded, as wellas the improved and centrally coordinated follow-up of inventories at a Group level andthe strict application of the policy to purchase OEM-equipment only when backed by acustomer order.

CONTRACTS-IN-PROGRESS

Contracts-in-progress represent the year-to-date cost incurred on several largeprojects of network integration, such as at the Ben Gurion airport in Tel Aviv, Israel andthe Astrid project for the federal government in Belgium. In accordance with theaccounting policies, the cost of the projects include an allocation of overheads and thepro rata part of the profit margin based on the ‘percentage of completion’-method.


Raw materials 3,197 4,343Work-in-progress 3,122 2,817Finished goods 5,152 4,333Goods purchased for resale 44,653 55,891Advance payments 547 790Inventories 56,671 68,174Contracts-in-progress 16,147 14,530Total inventories and contracts-in-progress 72,818 82,704


16. Amounts receivable

Trade debtors and the ‘days-sales-outstanding’ ratio have decreased considerablycompared to the prior year. This is partly due to slightly lower sales in quarter 4 of 2001compared to quarter 4 of 2000, but is mainly the result of intensified creditmanagement and credit control, both at Group level and locally. The largestimprovements were noted in those countries with traditionally high overdue amounts(Italy and Spain).

17. Net financial position

The positive cash flow from operations has enabled the Group to pay for theacquisitions of subsidiaries, the investments in fixed assets, the payment of a dividendand the reimbursement of external debt. The cash position at 31 December 2001 hasimproved by € 18.2m compared to the prior year.

Current investments include commercial paper purchased for € 77.5m and bankdeposits of € 16.4m. The commercial paper was emitted by Belgian and internationalgroups with high credit ratings and with maturity dates generally not exceeding 3 months.The average interest rate earned on the commercial paper owned at year-end isapproximately 3.6%.

In view of the significant cash position, it is Group policy to minimise external debt.The decrease in short-term debt is the net result of the replacement of a bank loan inthe Italian entity with a Group loan, new debt from the acquisition in Hong Kong –China and additional borrowings by the Swiss entity.

The balance of short-term debt at year-end consists principally of a short-term,renewable borrowing of CHF 29.3m at variable interest (2.8% at 31 December 2001) anda short-term loan of HKD 30m with a variable interest (Hong Kong prime rate).

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Trade debtors 198,896 248,579Other amounts receivable 11,665 4,359Amounts receivable 210,561 252,938


Current investments 97,984 95,238Cash & cash equivalents 21,558 17,888Long-term debt, non-current portion (1,584) (2,234)Long-term debt, current portion (357) (1,299)Short-term debt (28,184) (38,458)Net financial position 89,417 71,135


>

70

LONG-TERM DEBT REPAYMENT SHEDULE

18. Provisions for liabilities and charges

Pensions and similar obligations mainly include the following:– a provision for pre-retirements of € 1.4m set-up following the pre-pension ofcertain employees in connection with the restructuring;– provision for amounts payable when termination of employment in Italy, set upaccording local requirements of € 1.1m;– accrual of € 0.7m for the Luxemburg pension plan in which executives participate;– accrual for ‘back-service’ of € 0.4m payable related to the pension plan in theGroup’s entity in the Netherlands.Other liabilities and charges mainly include provisions for warrantees on Telindus

Access Products sold.

19. Deferred taxes

The temporary differences that give rise to deferred tax liabilities relate to thefollowing:

1 year or less 1 – 5 years more than 5 Total non-(current) years current

Leasing 155 54 0 54Credit institutions 81 383 6 389Other loans 121 287 0 287Financial debts 357 724 6 730Other debts 0 854 0 854Total long-term debt 357 1,578 6 1,584


Pensions and similar obligations 3,617 1,520Taxation 38 6Other liabilities and charges 2,708 1,375Provisions for liabilities and charges 6,363 2,901

Deferred tax liability Taxe baseYear ended 31 December

2001 Movement 2000 2001 Movement 2000€’000 €’000 €’000 €’000 €’000 €’000

Government grants (272) 30 (302) 677 (75) 752Temporary differences (757) 211 (968) 2,030 (532) 2,562Total deferred tax liabilities (1,029) 241 (1,270) 2,707 (607) 3,314


– the application of accelerated depreciation rates for tax purposes, whereas onconsolidation depreciation is charged according the straight-line method (Belgiansubsidiaries);– the expensing of support fees payable to equipment suppliers in the period whenincurred for tax purposes, whereas they are deferred in time on consolidation (Dutchsubsidiary).In accordance with the Group accounting policies, no deferred tax assets are

recognised.

20. Amounts payable from taxes, remuneration and social security

21. Other amounts payableOther amounts payable include a liability recognised for the dividend declared for

the 2001 financial year of € 6m.

22. Accrued charges and deferred incomeThe balance of accrued charges and deferred income of € 42.2m at 31 December

2001 consist principally the deferred revenue in connection with service contracts thatare invoiced in advance.

23. Employee benefit plansThe Group operates a remuneration policy designed to enable all members of

personnel to benefit from a growth of shareholders’ value in the mid to long term. Inthis context the Group has issued warrant plans, to which all personnel could subscribeduring the months of December 1998, 1999, 2000 and 2001. The warrants have aduration of five years and can be exercised during three exercise periods as from thethird year. Each warrant entitles its holder to subscribe to one regular Telindus Groupshare. The respective exercise prices are € 19.92, € 20.82, € 20.44 and € 7.93 pershare. The first part of the warrants became exercisable in January 2002. Given themarket share price of approximately € 8 per share, none of the warrants have beenexercised to date.

71 >>


Taxes 16,531 13,894Remuneration and social security 20,666 19,430Total amounts payable from taxes, remuneration and social security 37,197 33,324


>

72

24. Related parties and related party transactions

TRANSACTIONS AND BALANCES WITH TELINDUS GROUP NV DIRECTORS

25. Contingencies

There are no significant contingent liabilities nor assets.

26. Commitments

FINANCIAL INSTRUMENTS

Overview of the outstanding forward exchange contracts at 31 December 2001:

According to Group accounting policies and Belgian GAAP, the commitment inforward exchange contracts is not recognised on the balance sheet but is recorded off-balance sheet. The pro rata part of the premium/discount is recognised in the incomestatement. If the contracts were recorded on the balance sheet and valued at the spotrate of 31 December 2001, an (unrealised) gain would have been recorded of € 1,9m.

CAPITAL COMMITMENTS

In respect of the construction of the buildings in Haasrode and Ostend, the Group iscommitted to incur an estimated cost of € 27m to completion.

WARRANTEES

The Group offers a one-year warrantee period on Telindus Access Products sold. Aprovision is set up for the corresponding warrantee obligations, based on the value ofactual sales and historical data of repair costs. As from 2002 onwards, the warranteeperiod is extended to 2 years.

Year ended 31 December Foreign currency Value at Unrealised gain transaction forward rate (loss)

Currency ’000 €’000 €’000Purchase (sale) of USD 29,900 33,539 15,661Purchase (sale) of GBP (17,900) (29,062) (14,315)Purchase (sale) of HKD (30,000) (4,380) 599Total 97 1,945

Year ended 31 December 2001€’000

Remuneration and emoluments 1,226Outstanding amount of advances and loans granted 0


Warrantees on 3rd party products (OEM-equipment) is covered by the support feepaid to the product supplier and does not result in any repair cost for the Group.

PENSIONS

The Group operates a number of extra-legal pension plans in the different Groupentities of the defined contribution type, that are entrusted to external insurancecompanies. Premiums are accrued as they become due and recorded as a period expense.As an exception, Telindus SA (Luxemburg), Telindus BV (the Netherlands) and Telindus SA(France) have adopted pension plans of a defined benefit type. In accordance with Groupaccounting policies, the obligations in respect of these defined benefit plans are accruedfor in proportion to the benefits earned to date.

ACQUISITIONS

In April 2002 the Group has paid the final instalment of the purchase considerationfor the acquisition of CellStack System Ltd. Similarly a deferred payment will be made in2003 related to the acquisition of Intégral Solutions SA.

In respect of the acquisition of Modern Time Technology Co Ltd (now Telindus LtdHong Kong), an accrual was recorded that represents the estimated amount of theremaining purchase consideration. The exact amount will depend on a number ofparameters such as the profitability and financial performance of the entity. The accruedamount has been recorded against goodwill.

The Group has a commitment to pay a further amount of € 1,4m as its share inNetFund’s subscribed share capital amount. This amount will become payable in 2002and 2003.

EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Because the market conditions in the 1st quarter of 2002 are still relatively weak,the tight cost control put in place by the Group at the end of 2001, will be maintainedin order to adapt the Telindus organization to the present market conditions.

In March 2002, the Group acquired for € 1.3m another 186,017 own shares, bringingthe total number of treasury shares at 548,027, representing 1.36% of the share capital.

73 >>


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74

Company Name Address Country VAT number Group ownershipTelindus NV Yzerlaan 24 Belgium BE 442.257.642 100.00%

1040 BrusselTelindus GSM SA Parc Scientifique Initialis 1 Belgium BE 457.839.802 100.00%

7000 MonsTelCor International Services Geldenaaksebaan 335 Belgium BE 466.917.220 100.00%CVBA 3001 HeverleeDatax NV Ringlaan 51 Belgium BE 432.934.457 55.00%

2600 BerchemTelindus BV Savannahweg 19 The Netherlands NL 007.081868.B01 100.00%

3542 AW UtrechtTelindus International BV Savannahweg 19 The Netherlands - 100.00%

3542 AW UtrechtTelindus SA Route d’Arlon 81– 83 Luxembourg LU 1223.5468 64.70%

8009 StrassenTelectronics SA Rue de l’Industrie 1 Luxembourg LU 1003.8784 64.70%

4823 RodangeTelindus Computer Home Sàrl Route d’Arlon (Belle Etoile) Luxembourg LU 1475.9028 64.70%

8050 BertrangeBeim Weissenkreuz SA Alleé Marconi 16 Luxembourg LU 19.902.206.178 64.05%

2120 LuxembourgCF6 Luxembourg SA Boulevard Royal 8 Luxembourg LU 1775.5016 64.70%

2449 LuxembourgTelindus France SA Burospace 25 France FR 19.348.505.256 100.00%

91570 BièvresGroupe Telindus France SA Burospace 25 France FR 65.334.041.084 100.00%

91570 BièvresConseil et Formation Système Rue des Trois Fontanot 41 France FR 32.334.129.731 100.00%(CF6) SAS 92024 Nanterre CedexTelindus Ltd Hatchwood Place, Farnham United Kingdom GB 363.2907.50 100.00%

RoadOdiham, Hants RG29 1AB

Telindus K-Net Ltd Hatchwood Place, Farnham United Kingdom GB 664.6269.06 100.00%RoadOdiham, Hants RG29 1AB

CellStack Systems Ltd Unit D Brookmount Court United Kingdom GB 719.9842.81 100.00%Kirkwood RoadCB4 2QH Cambridge

Eckmann Datentechnik Sylvesterallee 2 Germany DE 1498.79.328 100.00%Netzwerkservice Telindus GmbH 22525 HamburgTelindus SpA Via Cornelia 498 Italy IT 018.689.410.04 100.00%

00166 RomaTelindus SA Plaza Ciudad de Viena 6 Spain ES A8064.4081 100.00%

28040 Madrid

List of fully consolidated companies

Telindus > annual report 2001 > notes to the consolidated financial statements 75 >>

Expertel Comunicacoes e Travessa da Telheira Portugal PT 503.270.350 74.00%Servicos SA nr.305/309 – Freixieiro

4451-00 Matosinhos CodexTelindus SA Chemin des Primevères 45 Switzerland CH 405.059 100.00%

1701 FribourgTelindus Networks SA Chemin des Primevères 45 Switzerland CH 141.262 100.00%

1701 FribourgTelindus Hungary Network Andràssy ut.46 Hungary ATU 49121702 100.00%Integrator Kft 1061 BudapestTelindus GmbH Am Heumarkt 7/2/23 Austria 10263301-2-42 100.00%

1030 WienTelindus (Thailand) Ltd 473 Bond Street, Muangthong Thailand 301115 1082 80.00%

Thani, Bangpood 11120 Bangkok

Telindus Ltd Room 03-06, 21st Floor Hong Kong - 51.00%Dominion Centre43-59 Queen’s Road EastWanchai Hong Kong

Yunan Telindus Technology Room 1610, Bank China 530-111719414407 51.00%Co Ltd Hotel Kunming

399 Youth RdKunming Yunnan Province

Companies accounted for using the equity-method

Company Name Address Country VAT number Group ownershipInfostar Holding NV Kol. Bourgstraat 149 Belgium BE 465.098.568 25.00%

1140 Evere

Non-consolidated investments

Company Name Address Country VAT number Net equity as at Net result as at Group 31/12/2001 31/12/2001 ownership

Mobistar NV Kol. Bourgstraat 149 Belgium BE 456.810.810 EUR 3,729k EUR (6,937)k 5.2%1140 Brussel

Spearhead Ha’avada St 11 Israel - USD 11,575k USD (8,753)k 6.8%Technologies Ltd Rosh-Ha’ayinNet Fund Europe CVA Industrielaan 23 Belgium BE 465.995.423 EUR 833k EUR 910k 5.6%

1740 Ternat


>

76

Telindus > annual report 2001 > company accounts Telindus Group NV 77 >>

income statementTelindus Group NV

summary

Year ended 31 December 2001 2000 1999(‘000 EUR)

Operating revenues 10,975 11,016 7,923Turnover 10,777 10,909 7,653

Other operating income 198 107 270

Operating charges (11,757) (12,829) (15,465)Raw materials, consumables and goods for resale (1,012) (895) (682)

Services and other goods (6,062) (7,495) (11,242)

Payroll expense (4,306) (4,118) (3,227)

Depreciation of fixed assets (358) (300) (303)


amounts receivable (9) (7) 0

Other operating charges (10) (14) (11)

Operating profit (EBIT) (782) (1,813) (7,542)

Financial result (3,415) (43,222) (141,464)Financial income 123 46,942 142,349

Financial charges (3,538) (3,720) (885)


Extraordinary result (1,979) (6,528) 35,635Extraordinary income 3 4,341 35,635

Extraordinary charges (1,982) (10,869) 0

Profit (loss) before tax (6,176) 34,881 169,557

Income taxes 124 167 (294)

Net profit (loss) for the year (6,052) 35,048 169,263

Accumulated profits (losses) to be appropriated 264,989 278,182 255,151Net profit (loss) for the year (6,052) 35,048 169,263

Retained earnings brought forward 271,041 243,134 85,888

Appropriation of accumulated profits (losses) 264,989 278,184 255,151Transfer to reserves 1,820 1,077 7,973

Retained earning carried forward 256,968 271,041 243,134

Dividend 6,066 6,066 4,044

Director’s emoluments 135 0 0


>

78

balance sheetTelindus Group NV

summary

Year ended 31 December 2001 2000 1999(‘000 EUR)

Fixed assets 656,789 638,474 549,764Tangible fixed assets 384 319 429

Financial fixed assets 656,405 638,155 549,335

Current assets 5,102 3,574 1,997Amounts receivable 1,996 2,097 1,749

Current investments 2,926 1,105 35

Cash & cash equivalents 10 22 23

Deferred charges & accrued income 170 350 190

Total assets 661,891 642,048 551,761

Equity 560,325 572,578 543,595Share capital 134,444 134,444 134,444

Share premium 143,058 143,058 143,058

Reserves 25,855 24,035 22,959

Retained earings 256,968 271,041 243,134

Non-current liabilities 31 0 0Provisions for risk and charges 31 0 0

Current liabilities 101,535 69,470 8,166Long-term debt, non-current portion 0 0 620

Long-term debt, current portion 0 620 1,468

Short-term financial debts 92,551 59,880 5

Trade amounts payable 1,267 1,914 1,071

Advances received 43 52 65

Amounts payable from taxes, remuneration and social security 926 806 757

Other amounts payable 6,668 6,150 4,164

Accrued charges & deferred income 80 48 16

Total equity and liabilities 661,891 642,048 551,761

Telindus > annual report 2001 79 >>


>

80

Lexicon

ATMATM or Asynchronous Transfer Mode is

a dedicated-connection switchingtechnology that organizes digital data into53-byte cell units and transmits them overa physical medium using digital signaltechnology. Individually, a cell is processedasynchronously relative to other relatedcells and is queued before beingmultiplexed over the transmission path.Because ATM is designed to beimplemented by hardware (rather thansoftware), faster processing and switchspeeds are possible.

AuthenticationAuthentication ensures that a message

originated from the expected sender hasnot been altered on route. Passwords arethe most common authenticationmechanism.

BackboneA backbone is a larger transmission

line that carries data gathered fromsmaller lines that interconnect with it. Atthe local level, a backbone is a line or setof lines that local area networks connectto for a wide area network connection orwithin a local area network to spandistances efficiently (for example, betweenbuildings). On the Internet or other widearea network, a backbone is a set of pathsthat local or regional networks connect tofor long distance interconnection.

BroadcastIn networking, a distinction is made

between broadcasting and multicasting.Broadcasting sends a message to everyoneon the network whereas multicastingsends a message to a select list ofrecipients.

CPECustomer Premises Equipment.

Telecommunication equipment that isinstalled at the customer site.

DirectoryDirectory is a network service that

identifies all resources on a network andmakes them accessible to users andapplications. Resources include e-mailaddresses, computers, and peripheraldevices such as printers.

DSLDSL is short for Digital Subscriber Line,

which is a technology for bringing high-bandwidth information to businesses overordinary copper telephone lines. xDSLrefers to different variations of DSL, suchas ADSL, HDSL, and RADSL, SHDSL.

DSPDSP or Digital Signal Processing refers

to various techniques for improving theaccuracy and reliability of digitalcommunications. Basically, DSP works byclarifying, or standardizing, the levels orstates of a digital signal. A DSP circuit isable to differentiate between human-madesignals, which are orderly, and noise.

E-businessE-business or ‘electronic business,’ –

derived from terms as ‘e-mail’ and ‘e-commerce’ – is the conduct of business onthe Internet, not only buying and sellingbut also servicing customers andcollaborating with business partners.

E-commerceE-commerce is the broad definition of

the new phenomenon of remotecommercial transactions usingtelecommunications and the Internet.People are increasingly shopping for goods

and services through the Internet, withsuppliers developing specialist web sitesthat allow potential customers to ‘browse’as if they were in a department store. Thelocation of the supplier is not relevant;they can be in the same country or manythousands of miles away. The take-up ofe-commerce was inhibited by fears aboutthe security of Internet transactions butadvances in the encryption process havelargely addressed these concerns.

E-learningE-learning or ‘electronic learning,’ –

derived from terms as ‘e-mail’ and ‘e-commerce’ – is possibility of interactivelearning via the Internet.

ERPERP or Enterprise Resource Planning is

an industry term for the broad set ofactivities supported by multi-moduleapplication software that help amanufacturer or other business managethe important parts of its business,including product planning, partspurchasing, maintaining inventories,interacting with suppliers, providingcustomer service, and tracking orders. ERPcan also include application modules forthe finance and human resources aspectsof a business. Typically, an ERP systemuses or is integrated with a relationaldatabase system.

Ethernet / Fast EthernetEthernet is one of the most common

local area network (LAN) wiring schemes,Ethernet has a transmission rate of 10Megabits per second; a newer standardcalled Fast Ethernet will carry 100Megabits per second.

ExtranetAn extranet is a private network that

uses the Internet protocols and the public

Telindus > annual report 2001 > lexicon

telecommunication system to securelyshare part of a business’s information oroperations with suppliers, vendors,partners, customers, or other businesses.An extranet can be viewed as part of acompany’s intranet that is extended tousers outside the company.

FirewallA firewall is a set of related programs

that protects the resources of a privatenetwork from users from other networks.Basically, a firewall, working closely with arouter program, filters all network packetsto determine whether to forward themtoward their destination. A firewall isoften installed in a specially designatedcomputer separate from the rest of thenetwork so that no incoming request canget directly at private network resources.The term also implies the security policythat is used with the programs.

GigabitA gigabit equals a billion bits or also a

thousand megabits. Workstations nowoften have one- or two-gigabit harddrives. Some servers have mass storagemeasured in terabits.

GPRSGPRS or General Packet Radio Service

represents the first implementation ofpacket switching within GSM, which isessentially a circuit switched technology.Rather than sending a continuous streamof data over a permanent connection,packet switching only utilises the networkwhen there is data to be sent. Using GPRSwill enable users to send and receive dataat speeds up to 115kbit/s.

GSMGSM or Global System for Mobile

communication is a digital mobiletelephone system that is widely used in

Europe and other parts of the world. GSMdigitizes and compresses data, then sendsit down a channel with two other streamsof user data, each in its own time slot. Itoperates at either the 900 MHz or 1800MHz frequency band.

InternetThe Internet, sometimes called simply

“the Net,” is a worldwide system ofcomputer networks – a network of networksin which users at any one computer can, ifthey have permission, get information fromany other computer (and sometimes talkdirectly to users at other computers). It wasconceived by the Advanced ResearchProjects Agency (ARPA) of the U.S.government in 1969 and was first known asthe ARPANET Today, the Internet is a public,cooperative, and self-sustaining facilityaccessible to hundreds of millions of peopleworldwide. Physically, the Internet uses aportion of the total resources of thecurrently existing public telecommunicationnetworks. Technically, what distinguishesthe Internet is its use of a set of protocolscalled TCP/IP (for Transmission ControlProtocol/Internet Protocol). Two recentadaptations of Internet technology, theintranet and the extranet, also make use ofthe TCP/IP protocol.

IntranetAn Intranet is an internal, private

Internet.

Intrusion detectionAn intrusion detection system or

service inspects all inbound and outboundnetwork activity and identifies suspiciouspatterns that may indicate a network orsystem attack from someone attempting tobreak into or compromise a system.

IPIP or Internet Protocol is a protocol

used for the transmission of information,primarily between computers over theInternet. It works by dividing theinformation to be transmitted into anumber of packets and then attaches aheader to each packet containing addressinformation. The packet is then sent intothe Internet where it is routed to itsdestination. Because each packet is treatedas a separate entity, even through it mightbe part of a long message, IP is said to be aconnectionless packet switched protocol.

IP TelephonyIP Telephony is a category of hardware

and software that enables people to use IPnetworks as the transmission medium fortelephone calls. This means that standardvoice signals are encoded using IP. Atpresent most voice signals are carriedusing circuit switched bearers where achannel is set up and maintained betweenthe calling and called parties for theduration of a call. Using IP results in avery different arrangement where thevoice is divided into packets and eachpacket is sent separately. The benefits ofthis are that the total bandwidth requiredcan be reduced since nothing needs to besent when the caller is not speaking.

ISDNISDN or Integrated Services Digital

Network is a digital telephone service thatcan run over the same copper cables usedfor the old-fashioned analogue telephonenetwork. An ISDN line is capable of carryingdata and voice simultaneously. Data usersgenerally enjoy a transfer rate of 56,000bits per second, though it is possible to useboth the data and voice channels for dataand increase transfer rates.

ISP (Internet Service Provider)An ISP or Internet Service Provider is a

company that allows home and corporate

81 >>


>

82

users to connect to the Internet. Theconnection may be part-time (for homeusers), or it may be a full-time (forcompanies and clients running full-timeservers).

LAN (Local Area Network)LAN, short for Local Area Network, is a

network of computers that is usuallyconfined to one office building. LANs arelinked together in larger networks as WideArea Networks (WANs).

NetworkAny collection of two or more

computers connected together, sharinghardware or software, is a network. LAN isa formal term for a smaller network, andWAN is a formal term for a larger network.The Internet is sometimes referred to as‘the world’s biggest network.’

PKIPKI, short for Public Key Infrastructure,

a system of digital certificates, certificateauthorities and other registrationauthorities that verify and authenticatethe validity of each party involved in anetworked transaction.

Remote accessRemote access is the ability to get

access to a computer or a network from aremote distance. In corporations, people atbranch offices, telecommuters, and peoplewho are travelling may need access to thecorporation’s network. Home users getaccess to the Internet through remoteaccess to an Internet Service Provider(ISP). Dial-up connection through desktop,notebook, or handheld computer modemsover regular telephone lines is a commonmethod of remote access.

RouterRouters are network hardware or

software that serve as transport pointsbetween different networks. They providetrafficking and filtering functions.

SDHSynchronous Digital Hierarchy. High-

speed transmission system used fordelivering telecommunication connectionsat fixed speeds.

SMDSurface Mounted Device. Production

technology for mounting high-densityelectronic components on printed circuitboards.

SwitchAlso called bridge, gateway or hub. In

telecommunications, a switch is a networkdevice that selects a path or circuit forsending a unit of data to its nextdestination. A switch may also include thefunction of the router, a device or programthat can determine the route andspecifically to what adjacent networkpoint the data should be sent to. Ingeneral, a switch is a simpler and fastermechanism than a router, which requiresknowledge about the network and how todetermine the route.

Token ringA token ring network is a Local Area

Network (LAN) in which all computers areconnected in a ring or star topology and abit- or token-passing scheme is used inorder to prevent the collision of databetween two computers that want to sendmessages at the same time. The token ringprotocol is the second most widely usedprotocol on local area networks afterEthernet.

UMTS (Universal MobileTelecommunications System)

UMTS is the European member of the

IMT2000 family of third generation cellularmobile standards. The goal of UMTS is toenable networks that offer true globalroaming and can support a wide range ofvoice, data and multimedia services. Thesenew UMTS networks will build on thesuccess of GSM, and on the GSM operators’existing investment in infrastructure.

VOIP (Voice Over Internet Protocol)See IP Telephony

VPN (Virtual Private Network)VPN, short for Virtual Private Network,

refers to a network that can safely be usedas if it were private, even though some ofits communication uses insecureconnections. All traffic on thoseconnections is encrypted.

WAN (Wide Area Network)WAN or Wide Area Network is a larger

network, usually consisting of a collectionof LANs, which span a large geographicalarea.

WAPWAP is short for Wireless Application

Protocol, is a secure specification thatallows users to access informationinstantly via handheld wireless, such asmobile phones, pagers, two-way radios,smart-phones and communicators.

WebsiteA website is a collection of web files on

a particular subject that includes abeginning file called a home page. Forexample, most companies, organizations, orindividuals that have websites have a singleaddress that they give you. This is theirhome page address. From the home page,you can get to all the other pages on theirsite.

> AUSTRIA

Am Heumarkt 7/2/23

A – 1030 Wien

TEL +43 1 718 59 30

FAX +43 1 718 59 20

> BELGIUM

Geldenaaksebaan 335

B – 3001 Heverlee

TEL +32 16 382 011

FAX +32 16 400 102

> CHINA

Room 1610, Bank Hotel Kunming

399 Youth Road

Kunming Yunnan Province

TEL +86 871 316 18 34

FAX +86 871 316 18 44

> FRANCE

25, Burospace

F – 91572 Bievres Cedex

TEL +33 1 69 35 63 00

FAX +33 1 69 35 63 10

> GERMANY

Dieselstraße 5

D-61476 Kronberg

TEL +49 6173 93 507 0

FAX +49 6173 93 507 20

> HONG KONG

Room 03-06, 21st Floor

Dominion Centre

43-59 Queen’s Road East

Wanchai

TEL +852 2 802 21 26

FAX +852 2 802 38 09

> HUNGARY

Andràssy ut. 46

1st Floor

HU – 1061 Budapest

TEL +36 1 312 02 12

FAX +36 1 312 14 19

> ITALY

Via Cornelia 498

I – 00166 Roma

TEL +39 06 61 24 31

FAX +39 06 61 24 33 00

> LUXEMBURG

Route d’Arlon 81-83

L – 8009 Strassen

TEL +352 450 915

FAX +352 450 911

> PORTUGAL

Rua Soeiro Pereira Gomes

Edificio Amrérica, 7 – Sala 13

P – 1649-001 Lisboa

TEL +351 21 011 8800

FAX +351 21 782 73 41

> SPAIN

Plaza Ciudad de Viena, 6 2a Planta

Torre Metropolitana

E – 28040 Madrid

TEL +34 91 456 00 08

FAX +34 91 536 10 74

> SWITZERLAND

En Budron E9

CH – 1052 Le Mont-sur-Lausanne

TEL +41 (0)21-653 35 31

FAX +41 (0)21-652 75 26

> SWITZERLAND

Hardturmstrasse 101

POBox 522

CH – 8037 Zurich

TEL +41 1 444 5 999

FAX +41 1 444 5 888

> THAILAND

473 Bond Street

Muang Thong Thani 3

Pakkred, Nonthaburi 1112

Bangkok

TEL +66 2 960 03 40

FAX +66 2 960 03 59

> NETHERLANDS

Savannahweg 19

NL – 3542 AW Utrecht

TEL +31 30 247 77 11

FAX +31 30 247 77 37

> UNITED KINGDOM

Hatchwood Place

Farnham Road

Odiham

UK – Hampshire RG29 1AB

TEL +44 1 256 709 200

FAX +44 1 256 709 210

> IRELAND

3013 Lake Drive

CityWest Business Campus

Dublin 24

TEL +353 1 469 3709

FAX +353 1 469 3150

> ISRAEL

11 Moshe Levy St.

Suite 504

P.O.B. 145 Rishon Le Zion

75658

TEL +972 3 9434750

FAX +972 3 9434751

>

> TELINDUS HEADQUARTERS

Geldenaaksebaan 335

B – 3001 Heverlee, Belgium

TEL +32 16 38 20 11

FAX +32 16 40 01 02

www.telindus.com

> TELINDUS HIGH-TECH INSTITUTE

Geldenaaksebaan 335

B – 3001 Heverlee

TEL +32 16 382 818

FAX +32 16 400 254

www.thti.be

> CELLSTACK SYSTEMS

Unit D, Brookmount Court

Kirkwood Road

Cambridge

UK – CB4 2QH

TEL +44 1223 509300

FAX +44 1223 509310

www.cellstack.com

249304 nl 01 80internet - ku leuven · lexicon 79 financial calendar annual general meeting 2001:...

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