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					                           2003 ANNUAL REPORT


                           Reference Document




The present Reference Document was filed with Autorité des Marchés Financiers on September 24, 2004, in accordance with
regulation N098-01/Nn095-01. It may not be used for the purposes of a financial operation unless it is accompanied by an
Operations Note, as prescribed by the AMF. This Reference Document has been prepared by the issuer, with its signatories
assuming responsibility.
                                       Chairman’s Message


Dear shareholders ,

In 2003, despite the continuing adverse impact of weak demand by our customers for production machines due to
excess capacity, Riber enjoyed remarkable success in the research machine market. This latter market enjoyed a
strong increase in the number of projects due to new technological developments for which the semi-conductor
compound industry is preparing. The commercial success of Riber on this market essentially arises from the
Company’s ability to innovate and anticipate, two values that are the basis of future value creation for our
shareholders.

Although 2003 was disappointing in terms of financial results, Riber continues to pre pare for the future by
pursuing its Research and Development efforts in a less than favorable business cycle. This preparation consists in
targeted investments in areas where Riber possesses a real competitive advantage:
- an investment in semi-conductor compounds with the establishment of the Riber/CNRS Joint Laboratory for
gallium nitride, and;
- an opening to new applications in the silicon semi-conductor industry with our involvement in European Project
INVEST for high-performance electric insulators and the establishment of a new Riber/CNRS Joint Laboratory for
magnetic memories and SiGe nano-structures. These applications should allow for future growth opportunities.

Riber Group 2003 posted 2003 fiscal year sales of € 17.2 million, down 7% over the previous year. Group sales
amounted to € 18.2 million when reported on a constant 2002 €/$US exchange rate basis.

Research machine sales rose 191% to € 9.9 million, while production machines decreased by 64% to € 3.7 million,
accounting for 22% of Group sales. Parts, components and services sales decreased by 25% to € 3.7 million.

Gross profit before inventory writedown provision charges amounted to € 3.6 million, or 21% of Group sales, down
from 36% for the same period last year. This decrease in gross profitability was attributable to an unfavorable
swing in the €/$US exchange rate (€ 1 million), an increase in the share of lower margin research machine sales
as a percentage of Group sales (€ 1 million), and to a deterioration in the average sales price of machines in a
very competitive environment where the supply exceeds demand.

Riber Group posted a 2003 operating loss of € 4.2 million, an improvement on its 2002 operating loss of € 11.9,
with inventory writedown provision charges decreasing to € 0.4 million from € 10.0 million during this time.
Operating expenses (Sales, Administration) decreased by 15% to € 0.8 million thanks to a program of cost
reductions, notwithstanding an € 0.8 million increase in R&D expenses to € 3.1 million that reflect the Company’s
strategy and expected investments in new applications.

Riber Group posted a 2003 net loss of € 3.8 million, an improvement on its 2002 net loss of € 9.3 million.

Group net financial assets at December 31, 2003 amounted to € 9.8 million, compared to € 16.7 million for the
previous year-end, reflecting the 2003 financial year net loss and high-value receivables outstanding at year-end.

             o
I would like t take this opportunity to thank our customers, employees, suppliers and shareholders for their
confidence and support during this period of change.




                                                                                                                 2
                                  2003 Fiscal Year Highlights

New R&D program
In June 2003, Riber and two CNRS laboratories signed separate agreements to establish Joint Laboratories:

   -   The first of these laboratories comprises a RIBER Technology Process Center (TPC) located at the CNRS-
       CREHA facilities in Sophia -Antipolis, France , which will focus on the epitaxy of nitride base (GaN) semi-
       conductor compounds for use in Defense electronics, base stations, high-power electronics and blue lasers.
       This TPC will enable the supply of demonstration epiwafers to Riber customers and to train operators in this
       type of process. A Compact21 Research machine was delivered to this TPC in November 2003.

   -   The second of these laboratories comprises a RIBER Technology Process Center (TPC) located at the CNRS-
                                                                      h
       CRMN facilities in Marseille, France. This TPC will focus on t e realization of ultra -thin oxides that will
       become necessary in future generation various electronic circuits such as memory magnetic devices and
       various audio-video read heads. This TPC will enable, after the realization of preliminary works, to supply
       demonstration epiwafers to Riber customers and to train operators in this process.



Implementation of MBE49OX prototype
In September 2003, RIBER delivered a MBE49 OX machine to the IBM Research Center in Zurich, Switzerland,
within the framework of the INVEST European Project on HK oxides (high dielectric constants). This machine
enables deposits of ultra-thin oxides of metals to act as high-performance electric insulators , and thus to
considerably improve the performances of silicon devices in the future.


Diversification of applications and new customer
In December 2002, Riber received an order for a MBE 49 production machine for the manufacture of Hall-effect
magnetic sensors for Asahi Kasei’s plant in Fuji, Japan. Asahi Kasei is the world leader in the commercialization of
sensors that control the position of electric motors in cars, CD and DVD drives, and contactless circuit-breakers in
mobile phones.

Riber’s reputation, the reliability of these production machines and the superior performances of produced
epiwafers, as well as the capability of Riber to respond to the needs and delivery timetables of Asahi Kasei,
convinced Asahi Kasei to order these new machines from Riber.

The Riber Applications Laboratory in Lille, France for compound semi-conductor has closely collaborated with Asahi
Kasei in order to enable it to set optimal growth conditions for the machine for its applications in order to
accelerate the operation of delivered machines.


Commercial success of Compact21 machine
The Compact21 machine, which was developed in 1997 within the framework of the ANISET European Project in
gallium nitride. During these last few years, it has evolved with the new needs of researchers, and enjoyed
tremendous success in 2003. Thirteen Compact21 machines were delivered in 2003, while only 3 were delivered in
the previous year. Performance, flexibility, accessibility, reliability and small surface area are the major strengths
of this machine, which is offered in a number of variants adapted to different areas of research.




                                                                                                                    3
                                          Key Figures

Sales by Business Segment

(€ millions)                     2003        2002           2001

Components and parts               3.6        5.0            5.7
Research machines                  9.9        3.4            2.6
Production machines                3.7       10.2           25.9


Sales by Geographic Region

(€ millions)                     2003        2002           2001

Asia                               6.4        5.0            4.0
Europe                             6.4        6.8           10.2
North America                      4.2        6.2           19.5
Rest of World                      0.2        0.6            0.5


Gross Profit/ (Loss) and Operating Profit/ (Loss) Margins

(%)                              2003        2002           2001

Gross profit before provisions     21.3       36.1          41.7
Operating profit/(loss)          (23.1)     (64.2)          14.3


Net Profit/ (Loss)

                                 2003        2002           2001

Net profit/loss (€ millions)      (3.8)      (9.3)           3.2
Earnings/(loss) per share (€)    (0.21)     (0.50)          0.17




                                                                   4
                     Recent Developments and 2004 Prospects


Riber acquired in full the Addon company on March 31, 2004.

Addon company is a French company that was established in 1996. It has developed through the design,
manufacture and commercialization, in France and internationally, of innovative components for MBE research
machines and for Organic Light Emitting Diodes (OLED) screens. Addon realized 2003 fiscal year sales of € 1.6
million, and is profitable for many years now, enjoying a solid reputation internationally.

This is a technological acquisition, as Addon’s activity is complementary to that of Riber’s and a diversification
towards OLED screens.

Riber will not meet its 2004 sales year objective as a result of the deferral of sales order decisions that w ill now be
fulfilled in 2005, even though visibility has improved during the last few months with an increase in the number of
research machine and production machine investment projects. In these conditions, the Group forecasts achieving
sales of about € 13 million for 2004, which will lead to a net loss.

Group financial assets, related to on-going operations, will only be marginally affected, as a portion of 2004 fiscal
year machine sales will arise from shipments of existing stock, which will drop significantly. Only the exceptional
acquisition of Addon will have an impact on the Group’s financial assets.

                                                                             he
In addition, Riber has decided to restructure its property assets to refocus t allocation of its resources on its
industrial development, will improving its return on equity.

The improvement in visibility results from the combination of many positive market driven factors:
   -   The utilization rate of machines continues to globally increase and should lead to an increase in capacities
       for wireless telecommunications applications;
   -   The growth in volume for selected opto-electronic application niches will lead to future needs for superior
       capacity machines;
   -   The research machines market has diversified itself into many fields of research sustaining demand;
   -   MBE machines may penetrate new sectors of activity in the near future, though the commercialization of
       research machines.

Riber looks forward to 2005 and subsequent fiscal years with optimism, given the multiplication of projects and its
diversified presence in a great number of mature applications or under development, combined with the excellent
reputation of Riber that arises from the superiority of the performances and reliability of MBE machines that it
manufactures.




                                                                                                                      5
                                               ANNUAL REPORT


                                               TABLE OF CONTENTS

SECTION 1   PERSON RESPONSIBLE FOR REFERENCE DOCUMENT AND INDEPENDENT AUDITORS                   9
      1.1   Person responsible for Reference Document                                            9
      1.2   Declaration of responsibility for Reference Document                                 9
      1.3   Independent auditors                                                                 9
            1.3.0 Principal independent auditors                                                 9
            1.3.1 Alternate independent auditors                                                 9
            1.3.2 Independent Auditors’ Report on the Reference Document                        10
      1.4   Investor relations and information                                                  10

SECTION 2   GENERAL INFORMATION ON THE COMPANY AND ITS SHARE CAPITA L                           11
      2.1   General information on the Company                                                  11
            2.1.0 Company name and head office                                                  11
            2.1.1 Legal form and nationality                                                    11
            2.1.2 Date of creation and term of duration                                         11
            2.1.3 Company mandate                                                               11
            2.1.4 Commerc e and companies register number and APE code                          11
            2.1.5 Review of Company documents and minutes                                       11
            2.1.6 Fiscal year                                                                   11
            2.1.7 Transfer of shares and crossing of statutory threshold levels                 12
            2.1.8 Shareholders’ identification                                                  12
            2.1.9 Dividend distribution                                                         12
            2.1.10 Meetings of shareholders                                                     12
      2.2   General information on the Company’s share capital                                  13
            2.2.0 Share capita l at December 31, 2003                                           13
            2.2.1 Modification of share capital and rights attached to shares                   13
            2.2.2 Treasury shares purchase                                                      13
            2.2.3 Unissued authorized share capital and commitments to increase share capital   13
            2.2.4 Securities not representative of share capital                                13
            2.2.5 Other securities enabling access to share capital                             14
            2.2.6 Share capital evolution from the date of Company creation                     15
            2.2.7 Pledging of share capital                                                     15
            2.2.8 Current share capital and voting rights ownership                             15
            2 .2.9 Share capital ownership evolution during the last three years                16
            2.2.10 Shareholders’ agreements                                                     16
            2.2.11 Commitments to hold shares                                                   16
            2.2.12 Group organization                                                           16
      2.3   Dividends                                                                           16
      2.4   Stock market performance                                                            17

SECTION 3   INFORMATION ON THE COMPANY’S OPERATIONS AND ACTIVITIES                              18
      3.1   The Company                                                                         18
            3.1.0 Company operations and activities overview                                    18
            3.1.1 Company background                                                            19
            3.1.2 Company strategy                                                              19
            3.1.3 Compound semiconductor industry overview                                      21
            3.1.4 Compound semiconductor process technologies                                   23
            3.1.5 Company products                                                              25
            3.1.6 Company manufacturing activities                                              27
            3.1.7 Company customers                                                             28
            3.1.8 Company marketing and sales activities                                        29
            3.1.9 Company research and development activities                                   29
            3.1.10 Company intellectual property                                                30
            3.1.11 Company competitors                                                          30
            3.1.12 Environmental laws and regulations                                           31
            3.1.13 Company personnel                                                            31
            3.1.14 Company property, plant and equipment                                        31
      3.2   Risk Factors                                                                        32
            3.2.0 Risks associated with the compound semiconductor industry                     32
            3.2.1 Risks associated with the Company’s operations                                33
            3.2.2 Risks associated with the Company’s share price                               36
            3.2.3 Market risks                                                                  37
      3.3   Significant exceptional events and litigation                                       37
      3.4   Forecasts                                                                           38
      3.5   Recent developments                                                                 38
      3.6   Pledging of assets                                                                  38
      3.7   Off- Balance Sheet commitments                                                      38




                                                                                                     6
SECTION 4    FINANCIAL REPORT                                                                                            39
      4.1    Management discussion and analysis on Company financial performance and situation                           39
             4.1.0 Financial performance                                                                                 39
             4.1.1 Financial situation                                                                                   41
             4.1.2 Investment policy                                                                                     41
             4.1.3 Sales order backlog                                                                                   41
      4.2    Financial statements and notes                                                                              42
             4.2.1 Consolidated financial statements and notes                                                           42
                           Independent Auditors’ Report on Consolidated Financial Statements                             42
                            Consolidated Balance Sheet                                                                   43
                            Consolidated Inc ome Statement                                                               45
                            Consolidated Cash Flow Statement                                                             46
                            Consolidated Equity Movements Statement                                                      47
                            Notes to the consolidated financial statements                                               48
             4.2.2 Parent company financial statements and notes                                                         61
                           Independent Auditors’ Report on Parent Company Financial Statements                           61
                            Parent Company Balance Sheet                                                                 62
                            Parent Company Income Statement                                                              64
                            Parent Company Cash Flow Statement                                                           65
                            Notes to the parent company financial statements                                             66
                           Independent Auditors’ Special Report on Regulated Agreements                                  75
      4.3    Executive Board report to the Combined General Meeting of June 13, 2003                                     76
                            Five-Year Financial Highlights Table                                                         98

SECTION 5    CORPORATE GOVERNANCE                                                                                         99
      5.1    Reports issued pursuant to Article L.225-68 of the Commerc ial Code                                          99
             Report of the Chairman of the Supervisory Board on the work of the Board an d Internal Control Procedures    99
             5.1.1 Report of the Independent Auditors on the Chairman of the Supervisory Board’s Report                  103
      5 .2   Executive Board, Supervisory Board and Management Committees’ members                                       104
             5.2 .0 Executive Board                                                                                      104
             5.2.1 Supervisory Board                                                                                     104
             5.2.2 Management Committees                                                                                 105
      5 .3   Management compensation and benefits                                                                        105
             5 .3 .0 Management remuneration                                                                             105
             5 .3 .1 Share options subscription plans                                                                    105
             5 .3 .2 Regulated Agreements                                                                                105
             5 .3 .3 Loans and guarantees provided to members of the Executive Board and Supervisory Board               105
      5 .4   Group auditors’ fees                                                                                        106
      5 .5   Employee stock option and p rofit sharing plans                                                             106
             5.5.0 Employee stock option and profit sharing plans                                                        106
      5 .6   Shareholders’ Diary                                                                                         106

             GLOSSARY OF TERMS                                                                                           107




                                                                                                                               7
                                             Reference Document Table of Contents

In order to facilitate the reading of this Annual Report registered as a Reference Document, the following table of contents has been prepared
lis ting the primary information required by the Autorité des Marchés Financiers within the framework of its regulations and application instructions.


INFORMATION                                                                                                           ANNUA L REPORT
                                                                                                                          Pages:

CERTIFICATION OF PERSONS RESPONSIBLE
    -   Certification of person responsible for Reference Document                                                              9
    -   Certification of independent auditors                                                                                  10
    -   Information policy                                                                                                     10
GENERAL INFORMATION ON THE ISSUER AND ITS SHARE CAPITAL
ISSUER
    -   Applicable regulations (foreign companies )                                                                           N/A
SHARE CAPITAL
    -   Particularities (limitation in voting rights exercise…..)                                                              13
    -   Unissued authorized share capital                                                                                      13
    -   Potential share capital                                                                                                14
    -   5- year share capital evolution table                                                                                  15
MARKET FOR SECURITIES
    -   18- month share price and trading volume evolution                                                                     17
    -   Dividends                                                                                                              17
SHARE CAPITAL AND VOTING RIGHTS
    -   Current allocation of share capital and voting rights                                                                  16
    -   Evolution of shareholders                                                                                              16
    -   Shareholder agreements                                                                                                 17
GROUP OPERATIONS
    -   Organi zation of Group (parent company – subsidiaries relations, information on subsidiaries)                       17 & 81
    -   Group key figures                                                                                                      4
    -   Sector information (by business, by geographic region and/or country)                                                 58
    -   Market and competitive positioning of issuer                                                                          30
    -   Investment policy                                                                                                     41
    -   Performance indicators (value creation for the company …)
ANALYSIS OF GROUP RISKS
    -   Risk factors
                -     Market risks (liquidit y, interest rates , exchange rates, shares portfolio )                            37
                -     Operational risks (including dependence on suppliers, customers, sub-contractors,                        33
                      contracts, manufacturing processes ….)
                -     Legal risks (particular regulation, concessions, patents , licenses , significant litigation,       30 /31 & 38
                      exceptional events ….)
                -     Industrial and environmental risks                                                                    36 & 80
    -   Insurance and risks coverage                                                                                          37
NET ASSETS, FINANCIAL POSITION AND RESULTS
    -   Consolidated financial statements and notes                                                                            42
    -   Off- Balance Sheet commitments                                                                                         38
    -   Fees paid to independent auditors and members of their network                                                        106
    -   Pro forma financial information                                                                                       N/A
    -   Key financial ratios for banks , ins urance companies and brokers                                                     N/A
    -   Parent company financial statements and notes                                                                          61

CORPORATE GOVERNANCE
    -   Composition and operation of Supervisory and Executive Boards                                                         104
    -   Composition and operation of committees                                                                               104
    -   Executive officers (remuneration and social benefits, options granted and exercis ed BSA & BSPCE)                     104
    -   Ten highest paid non-executive officers (options granted and exercised)
    -   Regulated agreements                                                                                                  105
RECENT EVOLUTIO N AND PROSPECTS
    -   Recent evolution                                                                                                    5 & 38
    -   P rospects                                                                                                            5

N/A : Non- applicable




                                                                                                                                                     8
            SECTION 1 — PERSON RESPONSIBLE FOR REFERENCE DOCUMENT
                           AND INDEPENDENT AUDITORS


1.1   PERSON RESPONSIBLE FOR REFERENCE DOCUMENT


  Michel Picault, Chairman of the Executive Board of Riber SA


1.2   DECLARATION OF RESPONSIBILITY FOR REFERENCE DOCUMENT

  "To the best of our knowledge, this Reference Document contains all the necessary information for investors to
  make informed decisions on the company regarding its assets, operations, financial situation, financial results
  and future prospects, with no information of any significance being omitted."
  Michel Picault
  Chairman of the Executive Board of Riber SA


1.3   INDEPENDENT AUDITORS

1.3.0 Principal independent auditors

  PricewaterhouseCoopers Audit
  Tour AIG, 34 Place des Corolles
  92 908 La Défense, France
                          Date of first appointment:        October 30, 1987

                          Mandate term and expiry date:     Until the date of the Meeting to
                                                            consider the financial statements for
                                                            the fiscal year ending December 31, 2005


  Boissière Exp ertise Audit
  57, rue Boissière
  75016 PARIS, France
                          Date of first appointment:        May 25, 2000

                          Mandate term and expiry date:     Until the date of the Meeting to
                                                            consider the financial statements for
                                                            the fiscal year ending December 31, 2005



1.3.1 Alternate independent auditors

  Michel Jouan
  34, place des Corolles
  92908 Paris La Défense Cedex, France

                          Date of first appointment:        June 30, 1994

                          Mandate term and expiry date:     Until the date of the Meeting to
                                                            consider the financial statements for
                                                            the fiscal year ending December 31, 2005

  Pierre Kuperberg
  136, avenue de Wagram
  75017 PARIS, France
                          Date of first appointment:            May 25, 2000

                          Mandate term and expiry date:     Until the date of the Meeting to
                                                            consider the financial statements for
                                                            the fiscal year ending December 31, 2005




                                                                                                               9
1.3.2 Independent Auditors’ Report on the Reference Document

  “As independent auditors of the RIBER SA company and pursuant to the application of regulation COB 95-01,
  we have conducted, in accordance with the standards of our profession in France, the verification of accounting
  and financial information contained in the attached Reference Document.

  The responsibility for preparing this Reference Document lies with Michel Picault, Chairman of the Executive
  Board. It is our responsibility to offer assurance on the fairness of the accounting and financial information it
  conta ins.

  The due diligence procedures we conducted were in accordance with French professional standards and
  consisted in appreciating the fairness of accounting and financial information and verifying their consistency
  with the financial statements that had already been the subject of an audit report. In addition, they consisted
  of reading the information contained in the Reference Document, in order to identify, where applicable,
  significant inconsistencies with the accounting and financial information presented and to identify any
  information that is clearly misleading that we would have detected based on our general knowledge of the
  Company that we acquired in order to fulfill our mandate. This Reference Document does not contain forecast
  data resulting from a structured process.

  The parent company financial statements for the fiscal years ending December 31, 2002 and D     ecember 31,
  2003 and the consolidated financial statements for the fiscal years ending December 31, 2001, December 31,
  2002 and December 31, 2003 were approved by the Executive Board and were the object of a financial audit
  by us, in accordance with French professional standards, which resulted in their certification without any
  reservations or observations. Our reports on the annual company and consolidated accounts for the fiscal year
  ending December 31, 2004 comprise a justification of our assessments, pursuant to the provision of Article
  L.225-235 of the Commercial Code, which is applied for the first time. These assessments concern the
  provisions for the writedown of inventory in the company and consolidated accounts.

  On the basis of our due diligence procedures, we have no observations to make regarding the fairness of the
  accounting and financial information presented in this Reference Document.”

  Paris, September 21, 2004

                      PricewaterhouseCoopers Audit              Boissière Expertise Audit

                                  Joel Romei                           Tita A. Zeitoun



1.4   INVESTOR RELATIONS AND INFORMATION

  Michel Picault
  Chairman of the Executive Board
  e-mail:     invest@riber.com
  phone:      33-1-47-088455
  fax:        33-1-47-160255

  Web site: www.riber.com

  Copies of the present Reference Document are available at Riber’s head office.




                                                                                                                10
                   SECTION 2 — GENERAL INFORMATION ON THE COMPANY
                                 AND ITS SHARE CAPITAL



2.1    GENERAL INFORMATION ON THE COMPANY

2.1.0 Company name and head office

   Company name
   Riber SA

   Head office
   133, boulevard National
   92503 Rueil-Malmaison, France

2.1.1 Legal form and nationality

   Public limited company with an Executive Board and Supervisory Board pursuant to articles L210-1 to L247-10
   of the Commercial Code and Decree n° 67-236 of March 23, 1967 regarding commercial companies.

   Riber SA is a French company.

2.1.2 Date of creation and term of duration

   Riber was established on December 8, 1987 as a public limited liability company called France Ultravide SA and
   was initially registered at the Versailles Comme rce and Companies Register under number 87 B 02 321 for a
   99-year term of duration expiring on December 8, 2086.

2.1.3 Company mandate (Article 3 of by-laws)

Riber’s mandate, both in France and internationally, includes the:

   •    development, manufacture and sale of systems, components and related supplies implementing vacuum
       and ultra vacuum techniques, and more generally all types of equipment

   •    acquisition of ownership interests in whatever form, in any businesses and companies whose activities or
       those of its industry would be similar or related to those of the Company or would in nature favor the
       activities of the Company or those of its industry;

   •   and, generally, all commercial, industrial, financial, and property, plant and equipment transactions related
       directly or indirectly to the Company’s mandate or all other similar and related mandates.

2.1.4 Commerce and Companies Register number and APE code

   Riber is registered with the Nanterre Commerce and Companies Register under number B 343.006.151 since
   May 29, 1992.

   APE Code: 332 B

2.1.5 Review of Company documents and minutes

   At the Company’s head office.

2.1.6 Fiscal year (Article 18 of the bylaws)

   From January 1 to December 31 of the same year.




                                                                                                                 11
2.1.7 Transfer of shares and exceeding of statutory threshold levels (Article 10 of the bylaws)

All individuals or companies or legal entities acting alone or in concert, whose holdings of share capital and/or
voting rights increase or decrease by 5% or more or any multiple of 5%, ranging from beyond the 5% threshold to
100%, must notify the Company, by registe red letter with confirmation of receipt addressed to the Company’s
head office within 8 days from the date of crossing the threshold, details of the total number of shares, voting
rights and securities enabling eventual access directly, indirectly or in concert to the Company’s share capital.

Otherwise, the shareholder will be prevented from using his/her voting rights for a period of two years from the
regularization of the situation, in the event that a shareholder makes such a request.

2.1.8    Shareholders’ identification (Article 7 of the bylaws)

The Company has the possibility of requesting, at any time, pursuant to the payment of a fee to the authority
responsible for registering share ownership, the identity of Company shareholders who may exercise immediately
or eventually, voting rights at Meetings of shareholders .

2.1.9    Dividend distribution (Article 8 of the bylaws)

   In addition to voting rights that are allocated by law, each share has the right to a portion of the Company’s
   net assets, net profit or liquidation proceeds proportional to the percentage of share capital that it represents.

   In order that all shares receive, without exception, the same net amount, the Company, unless legally
   prohibited, will bear the amount of any proportional tax that could be due for selected shares only, notably in
   the event of the dissolution of the Company or a reduction of its share capital.

   However, in the event that there exist many classes of shares to which are associated different voting rights,
   this tax-bearing itself will be applied separately to each class of shares.

   Each time it is necessary to own a number of shares in order to exercise a voting right, it is incumbent upon
   shareholders not owning a sufficient number of shares to group their shares together in order to reach this
   number.

   Ownership of a share carries the full duty of adherence to Company bylaws and to decisions of the General
   Meeting.

2.1.10 Meetings of shareholders (Article 17 of the bylaws)

   Meetings of shareholders are called and held in accordance with the conditions stipulated by law. Meetings are
   held at head office or at another location as specified in the Notice of Meeting. A secret ballot is held in the
   event that shareholders holding at least 10% of the share capital so request. All shareholders may attend the
   Meetings, either in person or through a designated representative, upon presentation of proof of identity and
   share ownership.

   Pursuant to the application of measures incorporated in Article 136 o f decree n° 67-236 of March 23, 1967, the
   right to attend Meetings is contingent upon either:

   •    the nominative registration of the shareholder, or

   • the delivery to the locations indicated in the Notice of Meeting of bearer shares or of a certificate of deposit
     delivered by the bank, financial institution or depository stockbrokerage firm of these shares or of a
     certificate of the designated intermediary or any organization that replaces it, stating the unavailability of
     shares registered in the account until the date of the Meeting,

   five days before the date of the Meeting.

   Meetings are chaired by the Chairman of the Supervisory Board, or in his/her absence, by a member of the
   Supervisory Board so designated. Otherwise, the Meeting will elect its Chairman itself. Minutes of the
   Meetings are prepared, and their copies certified and delivered in accordance with the law.




                                                                                                                   12
2.2   GENERAL INFORMATION ON THE COMPANY’S SHARE CAPITAL

2.2.0 Share capital at December 31, 2003

              Share capital:          € 3,035,523.20 fully paid-up
              Number of shares:       18,972,020 single class shares
              Par value:              € 0.16

  Each share has the right to a portion of the Company’s net assets, net profit or liquidation proceeds
  proportional to the percentage of share capital that it represents. The bylaws do not provide for double voting
  rights.

2.2.1 Modification of share capital and rights attached to shares

 All modifications of share capital or rights attached to the shares that compose it are subject to legal measures,
 with the bylaws not stipulating any specific course of action

2.2.2 Treasury shares purchase

  A share buyback program was authorized by the AMF on May 27, 2004 (authorization n°04-498), published in
  the press on June 2, 2004 in summary form and adopted by the General Meeting of June 17, 2004.

                                                                                      7,
  Under the terms of a resolution of the Combined General Meeting of June 1 2004, the Company was
  authorized to transact in its own shares on the market, in accordance with the provisions contained in Articles
  L225-209 of the Commercial Code. The maximum global amount allocated to the purchase of the Company’s
  own shares is set at € 9,000,000. In addition, the maximum share purchase price is set at € 5 and the
  minimum share sale price is set at € 0.2. This authorization is valid until the General Meeting called to approve
  the financial statements for the fiscal year ending December 31, 2004. The Company is in addition authorized
  to cancel shares pursuant to Article L225-209 of the Commercial Code, with this authorization expiring on the
  day of the General Meeting called to approve the financial statements for the fiscal year ending December 31,
  2004. This cancellation authorization is given up to a share capital maximum limit of 10% for periods of 24
  months.

  Within the framework of the regularization of its share price, the Company in 2003 purchased 90,760 shares at
  an average price of € 1.22 per share and sold 92,099 shares at an average price of € 1.17 per share. Riber
  held 21,203 treasury shares December 31, 2002 at an average per share purchase cost of € 1.80. At December
  31, 2003, the Company thus held 19,864 shares acquired at an average purchase cost of € 1.56 per share with
  a view to regularizing the Company’ share price.

  Furthermore, the Company held, at December 31, 2002, 284,073 treasury shares for multiple purposes. During
  2003, Riber did not acquire or sell any of its own shares, thus holding 284,073 treasury shares at December
  31, 2003. The net value of these shares, consisting of € 1,328,056 in gross value and € 870,698 in writedown
  provision, was deducted from Group equity.

2.2.3 Unissued authorized share capital and commitments to increase share capital

  Share capital increases
  The Combined General Meeting of June 17, 2004 authorized the Executive Board to issue various marketable
  securities with maintenance of the preferential right of subscription and with suppression of preferential right of
  subscription. The authorization applies to a maximum amount of € 1,500,000, of which € 1,000,000 may be
  realized with suppression of the preferential right of subscription. The duration of the validity of the present
  delegation is set at 26 months from the date of the said Meeting that is until August 16, 2006 inclusive.
  Pursuant to the provisions of Article L. 225-129 VII of the Commercial Code modified by Article 29 of the Law
  2001-152 of February 19, 2001 on employees’ savings, this same Meeting did not authorize the Executive
  Board to proceed with an increase in share capital reserved for employees of the Company that belong to a
  company savings plan, up to a maximum nominal amount of € 40,000.

2.2.4 Securities not representative of share capital

  None




                                                                                                                  13
2.2.5 Other securities enabling access to share capital

  Share subscription warrants
  On June 29, 1998, Riber issued 630,255 share subscription warrants, with each of these warrants giving its
  holder the right to subscribe to one Riber share at a price of FRF 1 per share. These warrants were offered to
  selected managers of Riber at a price of FRF 0.01. 20% of these warrants are exercisable each year. These
  warrants will expire five years after issuance that is on June 29, 2003.

  During 2003, 145,460 subscription warrants were exercised.

  On March 14,2000, Riber issued 350,000 share subscription warrants, each of these granting a right to
  subscription to one Riber share at a price of € 10 per share. These warrants were allocated to selected
  managers of Riber at a price of FRF 0.01 per warrant. Of these 350,000 warrants, 115,000 were exercisable by
  tranche of 20% each year. These warrants will expire five years after their issuance .

                             Summary of securities enabling access to share capital

                                                                   Share Subscription Warrants

           Shareholders’ Meeting date                            June 29, 1998       March 14, 2000
           Executive Board meeting date                          April 22, 1998    February 25, 2000
           Total number of shares that can be subscribed               630,255              350,000
           Total number of shares that can be subscribed to by         582,860              350,000
           management
           Number of managers concerned                                      4                    6
           Warrants/options exercise – commencement date         June 29, 1998        May 25, 2000
           Warrants/options exercis e – expiry date              June 29, 2003       March 14, 2005
           Subscription price                                    FRF 1 (€ 0.15)              € 10.0
           Number of shares subscribed to at Dec. 31, 2003         251,090                   0
           Number of warrants that have been cancelled             379 165                   0
           Number of warrants exercisable at May 31, 2004                 0            350,000


  Share subscription warrants are not quoted.

  Share purchase and subscription options
  The Combined General Meeting of June 13, 2001 authorized the Executive Board to allocate 300,000 share
  purchase and subscription options to its employees. Subscription options will be void and may no longer be
  exercised after a 7-year period following the day on which they were granted. As of October 19, 2001, the
  Executive Board has made use of this authorization and decided to allocate all 300,000 Riber share subscription
  options. Each of these subscription options provides a right to subscription, until October 19, 2008, to a new
  share in the Company issued pursuant to an increase in its share capital, up to a maximum value of € 48,000,
  comprising 300,000 new shares with a par value each of € 0.16. The subscription price, calculated based on
  the average Riber share price during the twenty stock market trading days preceding its allocation that is
  October 19, 2001, amounted to € 3.08. These options may not be exercised until four years after October 19,
  2001. Once this four-year period has elapsed, holders may exercise their options in 3 equal tranches over a
  further three-year period.
  Detailed information concerning the allocation and exercise of share subscription options is presented in Section
  5.2.1 below.

  The Combined General Meeting of June 13, 2002 authorized the Executive Board to allocate 100,000 share
  purchase and subscription options to its employees. Subscription options will be void and may no longer be
  exercised after a 7-year period following the day on which they were granted. As of August 26, 2002, the
  Executive Board has made use of this authorization and decided to allocate all 100,000 Riber share subscription
  options. Each of these subscription options provides a right to subscription, until August 28, 2007, to a new
  share in the Company issued pursuant to an increase in its share capital, up to a maximum value of € 16,000,
  comprising 100,000 new shares with a par value each of € 0.16. The subscription price, calculated based on
  the average Riber share price during the twenty stock market trading days preceding its allocation that is
  August 26, 2002, amounted to € 0.99. These options may not be exercised until four years after August 26,
  2002. Once this four-year period has elapsed, holders may exercise their options in 3 equal tranches over a
  further three-year period.
  Detailed information concerning the allocation and exercise of share subscription options is presented in Section
  5.2.1 below.

  Dilutive impact of shares providing access to share capital
  The exercise of the full number of rights providing access to share capital as authorized by the General Meeting
  will result in a 3.95% dilution of the current share capital (through the exercise of share subscription warrants
  and share subscription options granted to Group employees).



                                                                                                                14
2.2.6 Share capital evolution from the date of Company creation

  Fiscal               Details of                              Number of                   Share capital                  Share          Par value     Share capital    Number of
  year                transaction                              shares issued               increase                       premium                      book value       shares
                                                                                             (FRF)                          (FRF)          (FRF)         (FRF)
  1987                Constitution                                2,500                     250,000                           0             100         250,000           2,500
  1988                Share capital increase                      5,500                     550,000                           0             100         800,000           8,000
  1992                Share capital increase
                      by partial assets                         262,000                    26,200,000                        0              100        27,000,000       270,000
                      contribution
  1997                Change in par value                      26,730,000                      0                             0               1         27,000,000       27,000,000
                      Share capital reduction                  (22,000,000)                (22,000,000)                      0               1         5,000,000        5,000,000
                      Share capital increase                   10,000,000                  10,000,000                        0               1         15,000,000       15,000,000
   At its March 14, 2000 General Meeting, the shareholders approved the conversion of the share capital into
   Euros. The same Meeting decided to increase the share capital of the Company by € 113,250 to € 2,400,000.
   Pursuant to this decision, the Company’s share par value is set at € 0.16.

  Fiscal               Details of transaction                    Number of                 Share capital                    Share          Par       Share capital     Number of
  year                                                            shares                     increase                      premium        value       book value        shares
                                                                   issued
                                                                                             (Euros)                       (Euros)      (Euros)       (Euros)
  2000.......         Share capital increase                                                     113,250                                   0.16      2,400,000       15,000,000
                      Share     capital     increase                3,720,930                    595,349                  36,613,951       0.16      2,995,349       18,720,930
                      Share     capital     increase                   93,780                     15,005                                   0.16      3,010,354       18,814,710
  2001.......         Share     capital     increase                    9,480                      1,517                                   0.16      3,011,870       18,824,190
  2002.......         Share     capital     increase                    2,370                        380                                   0.16      3,012,250       18,826,560
  2003.......         Share     capital     increase                   62,520                     23,273                                   0.16      3,0 35 ,253     18,972,020


   On January 22, 2003, the Executive Board noted a €                                                             10,003.20 share capital increase arising from a partial
   exercise of share subscription warrants. On June 12,                                                           2003, the Exe cutive Board noted a € 5,687.20 share
   capital increase arising from the partial exercise of                                                          share subscription warrants. On June 26, 2003, the
   Executive Board noted a € 7,583.20 share capital                                                                increase arising from the partial exercise of share
   subscription warrants.

2.2.7 Pledging of share capital

   None.

2.2.8 Current share capital and voting rights ownership

   The table below lists the Company’s major shareholders and their holdings at June 1, 2004. It should be noted
   that the share numbers and percentages listed in the table apply to both share capital and voting rights
   ownership, as there are no double voting rights

                                                                                                                                              Share ownership
                                            Shareholders                                                                                   Number         Percentage
 Axa Investment Managers Private Equity Europe(1)(6 ) ..................................                                                1 ,921 ,733        10 .1
 Merill Lynch Pierce F&S……………………………………………………………………..                                                                                    1 ,322 ,989          7 .0
 Michel Picault(1)..............................................................................................                        1 ,151 ,566          6 .1
 Barclays Bank..................................................................................................                        1 ,065 ,100          5 .6
 ADI Alternative Investment.............................................................................                                1 ,110 ,000          5 .9
 IDI(1)..............................................................................................................                      719 ,548          3 .8
 Finove Ltd(2)...................................................................................................                          542 ,341          2 .9
 Catherine Chaix(1)..........................................................................................                              151 ,259          0 .8
 Coparis ............................................................................................................                       70 ,000          0 .4
 Jean-Bernard Para...........................................................................................                               40 ,921          0 .2
 Erich Spitz(1)..................................................................................................                           88 ,974          0 .5
 Bernard Daugeras(4)(5)..................................................................................                                         1            (- )
 Jean Jacquin(4)(5)..........................................................................................                               19 ,036          0 .1
 Erick Fouque(3)...............................................................................................                             11 ,428            (- )
 Xavier Moreno(3)............................................................................................                               10 ,564            (- )
 Michel Baudron................................................................................................                                   1            (- )
 Gilbert Hayat...................................................................................................                                 1            (- )
 Treasury shares ...............................................................................................                           238 ,610          1 .3
 General public .................................................................................................                      10 ,479 ,755         55 .2
 Total ................................................................................................................                18 ,972 ,020       100 .0
   (1)      Member of the Executive Board or the Supervisory Board of Riber.
   (2)      Finove Ltd holds these shares in Riber following the liquidation of its 100% held subsidiary Finovelec Entreprises SA, whose assets it
            acquired in full on April 27, 2000.
   (3)      These shareholders became Riber shareholders on April 14, 2000 through the exercise of Riber share acquisition options that were
            acquired from Suez Industrie on July 15, 1999, at an exercise price of FRF 2.29 per share. Shares underlying these options have been
            held by Suez Industrie since 1997
   (4)      These shareholders acquired their shares from IDI SCA on March 3, 1998
   (5)      These shareholders acquired their shares from Finovelec Entreprises SA on March 13, 1998
   (6 )     Axa Investment M anagers Private Equity Europe acquired these shares from Etoile Investissements in September 2002.




                                                                                                                                                                                     15
   This allocation of share capital was established on the basis of a study done on March 31, 2004 updated by
   shareholding certificates produced by shareholders present at the AGM of June 17, 2004, as well as the list of
   registered shareholders dated from June 2, 2004. On a total of 18,972,020 shares, the study identified
   14,832,303 that can be added to the 2,469,320 registered shares. The number of identified shareholders
   amounted to 3,829, to which can be added 19 registered shareholders.

   The Company is not aware of any shareholder who holds, directly or indirectly, alone or in concert, more than
   5% of the Company’s share capital or voting rights.
   Riber’s executive management team control together, directly or indirectly, 1,391,799 shares representing
   7.3% of the share capital

2.2.9 Share capital ownership evolution during the last three years
   In May 2000, 9,302,325 shares, of which 3,720,930 shares resulted from an increase in share capital, were
   made available on the market, representing 49.7 % of the share capital on the date the share was listed on the
   Stock Exchange.

              (%)          Dec. 31 2003              Dec. 31 2002              Dec. 31, 2001
      Senior management              7.3                       6.9                        6.9
      Investors                     36.1                      30.1                       30.0
      Treasury shares                1.4                       1.5                        1.6
      General Public                55.2                      61.5                       61.5
      Total                        100.0                     100.0                      100.0


2.2.10 Shareholders’ agreements

   No shareholders’ agreements have been put into place since the listing of the share on the New Market of the
   Paris Stock Exchange.

2.2.11 Commitments to hold shares

   Commitment agreements to hold shares, which were put into place at the time of the share listing on the Paris
   Stock Exchange on May 25, 2000, had a maximum duration of 9 months. To date, no holding agreement has
   been put into place.

2.2.12 Group organization

   No person alone or in concert controls the Riber S.A company.
   On January 2, 2001, Riber SA sold its German subsidiary, leaving it with only one subsidiary, Riber Inc, which it
   fully owns.
   On March 31, 2004, Riber SA acquired in full the Addon company.


2.3    DIVIDENDS

   The Company envisages reinvesting its net profits in order to finance its development and accordingly has no
   intention to distribute dividends over the next few years.
   The Company has not distributed any dividends to shareholders during the 1997 to 2003 fiscal years.
   Unclaimed dividends and interim dividends are transferred to the State Treasury after five years, in accordance
   with Article.2277 of the Civil Code.




                                                                                                                 16
2.4    STOCK MARKET PERFORMANCE

  Riber SA shares have been listed on the Euronext New Market of the Paris Stock Exchange since May 25, 2000.
  9,302,325 shares were offered at € 10 a share at its initial listing.
  The Riber SA share EUROCLEAR code is 7595 and its ISIN code is FR0000075954.
  The stock has been a component of the Next Economy Euronext Paris index since December 2001.
  A share price management contract with Société Générale is in operation.


      Month             Average Daily   Monthly Low    Monthly High      Average      Average Daily
                         Transaction       Price          Price         Share Price    Transaction
                          Volumes           (€)            (€)             (€)           Values
                                                                                           (€)
   January 2003           21,306         0.81             0.95               0.89          19,235
   February 2003          18,544         0.66             0.83               0.66          14,554
   March 2003              9,409         0.60             0.72               0.66           6,178
   April 2003             38,107         0.61             1.10               0.83          36,738
   May 2003               13,496         0.85             0.95               0.90          12,286
   June 2003              25,212         0.78             0.89               0.85          21,099
   July 2003              25,008         0.72             0.83               0.76          19,075
   August 2003           123,664         0.69             1.21               0.80         128,006
   September 2003         60,537         1.13             1.28               1.20          73,257
   October 2003           71,212         0.99             1.38               1.22          86,826
   November 2003          53,064         1.23             1.83               1.61          85,388
   December 2003          35,289         1.40             1.79               1.61          56,715
   January 2004           64,916         1.45             1.67               1.60         102,915
   February 2004          89,545         1.63             2.05               1.88         167,618
   March 2004             49,550         1.72             2.06               1.86          93,874
   April 2004             51,036         1.60             1.94               1.75          91,690
   May 204                18,013         1.41             1.70               1.57          28,633
   June 2004              35,536         1.03             1.57               1.38          44,782
  Source: Reuters


  Stock Exchange Performance (Transaction Volume and Price)




              Average               Series2     Series1    Average price
              volume
              120,000                                         2.00
                                                              1.80
              100,000                                         1.60
               80,000                                         1.40
                                                              1.20
               60,000                                         1.00
                                                              0.80
               40,000                                         0.60
               20,000                                         0.40
                                                              0.20
                    0                                         0.00
                 Ja 3
                 M 3




                 M 4
                 Se 3
                 M 3




                 M 4
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                                                                                                           17
      SECTION 3 - INFORMATION ON THE COMPANY OPERATIONS AND ACTIVITIES


3.1   THE COMPANY

3.1.0 Company Operations and Activities Overview

  Riber designs, develops and manufactures epitaxial equipment and related components for the compound
  semiconductor industry. It also provides its customers with worldwide after-sales service to ensure the
  maintenance of equipment as well as training and technical services. Riber’s principal product is epitaxial
  equipment using MBE (      Molecular Beam Epitaxy) technology, namely MBE production machines and MBE
  research machines. It also manufactures and supplies a small number of non-MBE research machines that use
  a technology called ultra -high vacuum chemical vapor deposition, a technique in which gas source materials are
  deposited onto a surface in an ultra -high vacuum chamber.

  Epitaxy is a critical enabling technology in the compound semiconductor industry because it is an essential first
  step allowing for the manufacture of many electronic devices made of compound semiconductors. The
  substantial advantages of compound semiconductors over silicon semiconductors include the unique physical
  characteristics of compound semiconductors, which enable electronic devices made of compound
  semiconductors to operate at higher frequencies with lower power consumption, while generating better
  linearity and less electronic noise and distortion. In addition, compound semiconductor devices can emit light
  and sense magnetic fields, properties that silicon semiconductors do not have. As a result, compound
  semiconductors have emerged as key components in a variety of high technology applications for mobile
  phones and satellite communications, communications by fiber optics, computers, defense systems, the
  automotive industry and consumer electronics.

  There are several competing epitaxial processes used in the manufacture of compound semiconductor devices.
  However, MBE is the preferred technology for the producers of compound semiconductor devices used in the
  most advanced, high performance and fastest growing applications, such as cellular telephones, network
  infrastructures for audio-video teleco mmunications, sensors for automobiles, satellite communication handsets,
  equipment for fiber optic networks and consumer electronics applications such as set-top boxes for television
  Internet services and DVD players.

  Our experience and expertise in MBE technology and brand name recognition among research scientists and
  manufacturers of compound semiconductor devices enables us to offer our customers around the world a wide
  range of machines and components for use in both large-scale commercial production of epitaxial wafers and
  advanced research on compound semiconductor and other advanced materials.             Customers that have
  purchased Riber’s MBE production machines include suppliers that produce and sell epitaxial wafers to
  manufacturers of compound semiconductor devices, and integrated industrial companies that both produce and
  process epitaxial wafers to manufacture compound semiconductor devices. Customers that have purchased
  Riber’s MBE research machines include universities and research institutes around the world, as well as large
  industrial companies.

  Our headquarters and manufacturing facilities are located in the western suburbs of Paris, at Rueil-Malmaison,
  Hauts-de-Seine department. We are represented throughout the world by a network of 23 sales agents and
  distributors. The Group is represented in the United States by Riber Inc, a wholly owned subsidiary that was
  established in July 1997.

  From January 1, 2001 to March 31, 2004, the Group comprised Riber SA, parent company and u                  nique
  production center, and Riber Inc, a subsidiary responsible for the distribution and delivery of Riber SA products
  in the United States and which is actively managed by Riber SA. Within the framework of its activity, Riber Inc
  has had recourse since its creation to administrative, financial and commercial services provided by Riber SA in
  exchange for fees calculated on the performance of the subsidiary. Riber SA also grants interest-bearing
  financial advances to its subsidiary.

Riber acquired in full the Addon company on March 31, 2004.

The Addon company is a French company that was established in 1996. It has grown through the design,
manufacture and commercialization, in France and internationally, of innovative components for MBE research
machines and for Organic Light Emitting Diodes (OLED) screens.




                                                                                                                 18
This is a technological acquisition, as Addon’s activity is complementary to that of Riber’s and a diversification
towards OLED screens.
   Riber thus expands its range of components for MBE research and production machines. Some of the
   components commercialized by Addon were not part of Riber’s portfolio of components. These components
   became necessary in order to master the epitaxy by MBE processes in new areas: nitride-based epiwafers for
   future microwave and blue laser devices, ultra -thin oxide deposits like HK insulators for future CMOS, and
   magnetic materials evaporation for future memories, areas in which Riber has intensified its R &D efforts.

   Riber opens new development prospects toward s an application different to that of the epitaxy of compound
   semi-conductors, by becoming a supplier of components for machines that realize OLED screens. Certain
   components of these machines are similar to those used in MBE machines. OLED screens should enjoy
   significant growth in the future. They are at the production stage for small-area screens and are targeting in
   the medium-term large-size screens for audio/video devices, as well as those for domestic use.

3.1.1 Company background

  Created as a French company in 1964, Riber began as a distributor to French research laboratories of ultra-high
  vacuum components imported from the United States. In 1976, we became a division of Instruments SA, a
  French scientific instrumentation company. During this time, our experience with ultra -high vacuum processes
  enabled us to become a leader in the development of MBE technology, and in 1978 Instruments SA, thanks to
  Riber, became one of the first companies to manufacture and sell MBE machines. In 1992, we became a wholly
  owned subsidiary of Instruments SA and in 1997 our entire share capital was sold to a group of investors
  comprising selected Instruments SA shareholders and management team members. This enabled us to
  strengthen our financial position and accelerate our strategic reorientation emphasizing the manufacture of MBE
  production machines instead of MBE research machines. During 1997, Riber established two sales subsidiaries,
  Riber Inc. and Riber GmbH, taking over the business of the Instruments SA subsidiaries in international markets
  of significance to Riber SA. These subsidiaries enable the Group to better serve these local markets with the
  maintenance of a local inventory. The subsidiary Riber GmbH was sold and became a commercial agent with
  effect from January 1, 2001. We explain the reasons behind our decision to pursue a strategy that prioritizes
  the manufacture of MBE production machines in section 3.1.2 "Company strategy".

3.1.2 Company strategy

   Our objectives are to enhance our leadership position within the market for MBE machines and to increase our
   market share of the overall epitaxial equipment and components market. Riber seeks to maintain technological
   leadership through the design and production of MBE and other epitaxial machines that are capable of
   exploiting emerging epitaxial manufacturing technologies

   The key elements of our strategy are as follows:

   Building upon our strong reputation in the MBE research machine market to retain our technological leadership
   and to develop new opportunities in the MBE production machine market

   One of the objectives of the Company is to maintain its current share of MBE research machines in its total
   sales, and remain in this market to exploit our strong reputation for quality and technical performance among
   members of the research community. We believe that this reputation for product quality among research
   scientists may influence companies in their decision to purchase MBE production machines. We also believe
   that our ongoing involvement in research and development programs will allow us to monitor developments in
   evolving technologies and enable us to apply technological advances to the design and development of new
   MBE production machines.

   Consolidating and expanding our leadership position in the MBE production machine market.

   Riber decided in 1995 to favor the manufacture of MBE production machines over MBE research machines, as
   the former offered significantly higher profit margins than the latter. The growth in demand for products using
   high performance compound semi-conductors had created a sustained, consequential demand for MBE
   production machines.

   Riber will maintain its leadership position and remain competitive on the MBE production machines market by:
    -  using the Technologies Process Centers that are operated within the CNRS/RIBER Joint Laboratories in
       order to demonstrate to customers the performances of epiwafers obtained from RIBER machines, qualify
       new components for such machines and realize scientific publications;
    -  constantly improving the operating costs, production process quality and the reliability of its machines,



                                                                                                               19
     Riber hopes that it will be able to satisfy the increasing needs of the market and introduce at the
     opportune moment, new MBE machines, thanks to the expansion of production capacity achieved in
     November 2000.

Intensifying our research and development efforts to expand MBE and MBD technology and to increase our
market share in the global compound semiconductor epitaxial machine market

We believe that our expertise in designing and manufacturing a broad range of MBE machines is a key
competitive advantage. We also believe that, to increase our market share in the global compound
semiconductor epitaxial equipment market, we will need to expand the applications of MBE and MBD
technology and persuade potential customers that our MBE and MBD machines offer the most flexible, high
performance, cost-effective solution to the commercial production of epitaxial wafers for compound
semiconductor devices used in the most advanced applications. To meet these objectives, we intend to
intensify our research and development efforts and to enter into partnership agreements with French or
European research laboratories in order to establish new applications laboratories for the research of certain
targeted technologies, including:

•   The use of MBE technology for the production of very high frequency, phosphorous-based electronic devices.
    MBE for use in the production of epitaxial wafers made of indium phosphoro us is a technique that, if
    successfully developed, would enable MBE machines to be used in the manufacture of epitaxial wafers for
    phosphorous-based electronic devices, which are used in selected wireless very high frequency
    communications applications and high-speed fiber optic network applications.

•    The use of MBE technology for the production of data storage lasers and microwave frequency high
    temperature devices. MBE for the production of compound gallium nitride epitaxial wafers is a process that,
    if successfully developed, would enable us to manufacture MBE machines for the commercial production of
    epitaxial wafers used to make blue laser diodes, in order to increase the data storage capacity of HD-DVD
    players and high power low-noise microwave frequency devices operating in high temperature
    environments.

•   The use of epitaxy for the production of electronic devices with a silicon and germanium alloy base for the
    nano-structures of future silicon devices. electronic devices. The use of epitaxy for the production of
    electronic devices with a silicon and germanium alloy base for future microprocessors and memories is a
    technology, which if successfully developed, would allow us to supply epitaxial equipment to the silicon
    semiconductor industry.

• The use of MBD technology for the production of silicon base electronic devices. The use of deposits by
   molecular beam for the realization of high insula tion ultra-thin oxide layers for use in the production of
   future CMOS electronic devices for future microprocessors is a technology, which if successfully developed,
   would allow us to supply MBE equipment to the silicon semiconductor industry.

•    The use of MBD technology for the production of MRAM memories. The use of deposits by molecular beam
    for the realization of high insulation ultra -thin oxide layers and magnetic materials for use in the production
    of future MRAM is a technology, which if successfully developed, would allow us to supply MBD equipment to
    the silicon semiconductor industry.

We believe that our planned investments in each of these areas will help us to support our growth by enabling
us to improve upon our existing machines and to design new equipment capable of exploiting emerging
epitaxial manufacturing technologies. In addition, by establishing applications laboratories, we will be able to
demonstrate the capabilities of our equipment to potential customers by providing them with very high quality
epitaxial wafers produced with our machines. We believe that this ability to demonstrate our MBE technology
to potential customers first hand will assist us in maintaining our competitive advantage over other
manufacturers of MBE equipment and help us to increase our market share of the overall epitaxial market by
demonstrating the benefits of our MBE production machines to potential customers.

Strengthen our very profitable MBE components and parts manufacturing operations.

We believe that the increase in the number of MBE machines worldwide represents an opportunity to develop
our MBE components and parts operations. These operations require the strengthening of our ability to
collaborate with scientific researchers in order to develop new accessories that respond to the technical needs
of our customers. Regarding our parts operations, Riber intends to develop its after-sales service through the
hiring of new employees, the launch of a new services center in Asia, a 24-hour customer support telephone
service, the rapid response capability of our technicians, preventative maintenance and the availability of parts



                                                                                                                 20
  on a worldwide basis.

  Pursue acquisition opportunities.

  We believe that our success is dependent upon our ability to respond quickly to the technological changes in
  the compound semiconductor industry. We intend to increase our manufacturing flexibility and to expand the
  range of technologies at our disposal by acquiring instrumentation or equipment manufacturers that have
  developed products and technologies for the deposition of very thin films of materials which have the potential
  to be used in the manufacture of compound semiconductor devices. We believe that this acquisition strategy
  will enable us to increase our know-how and experience with very thin epitaxy technology and allow us to
  respond more rapidly to changes in market demand.

3.1.3 Compound semiconductor industry overview

The compound semiconductor revolution.

  Developments in information, communication and consumer electronics technologies in the past decade, such
  as the decreasing size of cellular telephones, the increasing complexity of Internet-related applications and
  advances in fiber optic communications, have resulted in demand for power efficient, sophisticated electronic
  devices that can operate at very high frequencies, emit light and sense weak magnetic fields. In addition,
  developments such as the start-up of new terrestrial wireless communications services, the expansion of
  satellite communications systems and the widespread increase in speed and quantity of both submarine and
  terrestrial fiber optic networks have increased rapidly the scope of commercial applications for these electronic
  devices and made it necessary that they be produced cost-effectively and in commercial volumes. In the past,
  manufacturers of electronic devices relied on advances in silicon semiconductor technology to meet many of
  the technical requirements for high technology applications. However, because compound semiconductor
  devices are capable of performing critical functions that are beyond the physical limits of silicon, they have
  become indispensable for the operation of many of today's most advanced information, communication and
  consumer electronic applications.

  Advantages of compound semiconductors over silicon semiconductors

  A semiconductor is a substance, usually a solid chemical element or compound in crystalline form, that can
  conduct electricity under some conditions but not others, making it a good medium for the control of an
  electrical current. Unlike silicon, which is a single element semiconductor that has a limited set of inherent
  electronic characteristics, compound semiconductor materials are made from a mixture of a variety of
  elements. These mixtures, or compounds, include gallium arsenide, indium phosphorous, aluminum and
  gallium arsenide and silicon germanium alloy. As we explain in greater detail below in section 3.1.4
  "Compound semiconductor process technologies", the performance characteristics of compound semiconductors
  are dependent upon both the chemical composition of these compounds and the level of incorporation of
  controlled impurities within the compound semiconductor crystal structure .

  Advantages of compound semiconductor devices over silicon devices include:

  • greater electron speeds within the compound semiconductor device, which are at least four times faster than
    speeds within silicon devices, therefore enabling the device to operate at higher frequencies;

  • the ability to emit light, which means that unlike silicon devices, compound semiconductor devices can be
    used in LEDs and laser diodes;

  • magnetic properties that enable compound semiconductor devices to detect weak magnetic fields; and

  • operation at greater temperatures and in high-radiation environments, such as in outer space .

      Compound semiconductor devices applications and end-use markets

  Epitaxial wafers are processed to make compound semiconductor devices that perform a wide range of
  functions in an increasing variety of applications, and the manufacturing technologies employed in making
  them vary depending upon the design of the compound semiconductor device, which is based on the function
  for which the device is used. Although compound semiconductor devices may be classified by a number of
  technical characteristics, there are three main functional types into which these devices may be grouped:

  •    High frequency devices that transmit, receive and manipulate high frequency signals. These devices are



                                                                                                                21
    used in wireless communications applications such as function switches, power amplifiers, command stage
    amplifiers, mixers, transmitte rs, receivers and transceivers. Among the high frequency electronic devices
    used for wireless communications, there are power amplifiers and low-noise amplifiers.

•    Opto-electronic devices that emit and detect light signals. Opto-electronic devices that emit light include
    LEDs used for illumination in consumer electronics applications and multimedia and laser diodes and vertical
    cavity surface emitting lasers (VCSEL), used for carrying information over fiber optic wires. Opto-electronic
    devices that detect light include ultra -violet detectors used in flame sensing and missile detection
    equipment, infrared detectors used in night vision and heat sensing equipment, image sensors used in
    medical instrumentation, and camcorders and solar cells used in satellite solar energy panels. Opto-
    couplers are opto-electronic devices that both emit and detect light and are used principally to provide
    circuit insulation in televisions and video recorders .

•   Magnetic devices that detect magnetic field signals and sense metal objects. Such magnetic devices include
    magnetic resistant sensors and Hall effect sensors. Magnetic devices are used in applications such as
    automotive systems that require electronic feedback and control, including position sensing in windshield
    wipers and anti-lock braking systems.

As we discuss in greater detail below in section 3.1.4 "Compound semiconductor process technologies –
Competing compound semiconductor process technologies", there presently are four main epitaxial
processes that can be used to make epitaxial wafers for the manufacture of compound semiconductor
devices: liquid phase epitaxy (LPE), vapor phase epitaxy (VPE), metal organic chemical vapor
deposition (MOCVD) and MBE. Compound semiconductor devices made from epitaxial wafers
produced by one or more of these four principal epitaxial processes are used in a number of applications
for various end-use markets, depending on the functional category to which they belong.

Compound semiconductor devices produced with MBE technology

Compound semiconductor devices made from epitaxial wafers produced with MBE technology are currently
used notably in:

•   wireless communications applications using high-frequency, power efficient devices, including handsets for
    cellular telephones, pagers, handsets for personal communications services, point-to-point communications
    equipment used to link the cells of a wireless cellular network together, and equipment for wireless local
    area networks for data communications in schools and businesses;

•     applications for satellite communication systems that use high-performance high-frequency devices to
    receive or transmit information cost-effectively over wide geographic areas;

•    data communications applications such as equipment for submarine and terrestrial fiber optic networks,
    which, following the example of multiple waves division multiplexers, enable the transfer of different format
    data within the same optical fiber, or which use high frequency devices such as command stages, amplifiers
    and high-power laser diodes called "pumped lasers" for carrying information over long-distance
    telecommunications networks and for supporting flows of information over the Internet;

•    electronic applications requiring very high processing speeds, transmission rates and storage capacities,
    such as microprocessors that rely upon power-efficient high frequency devices, DVD drives which use laser
    diodes to read and store data, as well as hard disk readers, CD-Rom, DVD and HD-DVD drives which use
    magnetic devices in their motors ;

•    consumer electronics products that use high frequency devices, such as receivers for the Global Positioning
    System (GPS), which enables people to pinpoint their geographic position when driving, hiking or sailing,
    receivers for direct satellite television reception, and set-top boxes and cable modems for digital and two-
    way interactive television;

•    equipment that integrates high-frequency devices for testing the performance of silicon semiconductor
    devices; and

•    military applications that rely upon high-performance high frequency devices, including smart weapons,
    radars, advanced satellite communications and electronic counter-measures.

Examples of new applications that use compound semiconductor devices manufactured with MBE that are
currently in the process of commercial development include:




                                                                                                              22
  • applications for the wireless communications market such as cellular telephones designed for Internet access
    and equipment for video distribution systems, including local multipoint distribution equipment and
    microwave video distribution systems, that enable broadband microwave wireless transmission direct from
    local antenna to homes, for use in interactive television and receiving real-time multimedia from the
    Internet;

  •    applications for the data communications market such as equipment for dense wave-division multiplexing
      systems, which are used in transmitting information over fiber optic networks ;

  •   applications for the automotive electronics market using high-frequency devices, such as advanced collision
      avoidance radar also known as "smart" cruise control, which detects the presence of other vehicles and
      obstructions and automatically regulates the car's speed to avoid accidents; and

  •    applications for the consumer electronics market such as interactive set-top boxes for television Internet
      services.

  The commercial markets for these applications are emerging and are still in their formative stages. Please
  see the section 3.1.2 "Strategy", section 3.1.4 " Compound semiconductor process technologies" and
  section 3.1.11"Competitors" for more information regarding additional compound semiconductor
  devices manufactured from epitaxial wafers produced with MBE technology.

3.1.4 Compound Semiconductor Process Technologies

Epitaxy

  Epitaxy is a crystal growth process in which very thin layers of compound semiconductor crystals are grown on
  the surface of a bulk crystal material called the substrate or wafer. If the chemical composition of these
  surface layers, also known as epitaxial layers or epitaxial films, is similar enough to the crystal structure of the
  substrate, the deposited layers of compound semiconductor materials will form a single crystal structure
  replicating that of the wafer material. The substra te is generally composed of gallium arsenide or indium
  phosphorous. Other compound semiconductor materials, such as aluminum gallium arsenide, indium gallium
  arsenide, indium aluminum arsenide, indium antimonite and indium phosphorous, may also be used as
  epitaxial films. Impurities called dopants are selectively incorporated into the epitaxial layers to enhance their
  electrical properties. Both the number and thickness of the epitaxial layers, as well as their chemical
  composition and incorporated dopants, determine the performance characteristics of the devices that are made
  from the resulting epitaxial wafer, or epiwafer

Molecular beam epitaxy

  MBE is an epitaxial process that takes place in an ultra-high vacuum reactor in which source materials, typically
  elements such as gallium, arsenic and aluminum, are introduced in the form of a series of simultaneous
  molecular beams. Molecular beams are created by heating solid source materials, which are placed inside
  crucibles within containers known as effusion cells, until they vaporize. A gas source may be used instead of a
  solid source, in which case the source material is introduced into the reactor through a gas injector nozzle.
  Due to the ultra -high vacuum environment of the reactor, which has an average internal pressure that is one
  hundred billion times lower than standard atmospheric pressure, when the gas source materials are injected
  into the reactor or the vaporized solid source materials evaporate from the crucibles, their molecules form a
  series of directed beams that travel without collision until they make impact with the wafer's surface. As the
  molecular beams collide with the surface of the wafer, their molecules decompose into the constituent atoms of
  the source materials. Because the wafer is heated during the process, there is sufficient kinetic energy for the
  atoms to rearrange themselves into a single crystal structure replicating the crystal structure of the underlying
  wafer.

  To ensure optimal uniformity of the thickness of the deposited layers of compound semiconductor crystals, the
  wafer, or wafers in the case of multi-wafer MBE machines, are rotated in the reactor during the time the
  compound semiconductor deposition process takes place. Precise control over the compound semiconductor
  growth procedure is achieved by placing mechanical, computer-controlled shutters between the effusion cells
  and the wafer. Closing a shutter preve nts a molecular beam from reaching the wafer, which allows for both the
  formation of very thin epitaxial layers and for abrupt transitions between these layers. The thickness of
  epitaxial layers formed in the MBE process can vary from 1/1000 of a micrometer to 50 micrometers (one
  micrometer is approximately 100 times thinner than a sheet of paper). This fine-tuning of molecular beam
  release is an important aspect of MBE technology, because very sharp layer definition is required for many of



                                                                                                                   23
  today's high-performance electronic devices .

  The ability to close and open each shutter independently also allows for the possibility of controlling the mixture
  of source materials and dopants beamed at the wafer at any moment in time, and therefore allow one to
  determine the chemical composition of each new epitaxial layer. The sequencing of shutter positions may be
  changed so that molecular beams of different combinations of source materials and dopants are directed
  toward the wafer's surface to create epitaxial layers of different chemical compositions. This ability to change
  the chemical composition of each new epitaxial layer permits the design of a specific electrical profile for a
  given compound semiconductor device, and therefore the pathway an electrical current will follow within the
  device.

  The key advantages of the MBE process compared to other compound semiconductor process technologies
  include:

  •   Precise control. MBE's high level of process control allows the epiwafer manufacturer to grow epitaxial
      films with different chemical compositions to atomic level accuracy (with the material thickness of each
      surface layer being as thin as one or two atoms) and at the same time to ensure that uniformity across the
      wafer surface is maintained. The possibility of obtaining very high epilayer uniformities allows epiwafer
      manufacturers using MBE technology to achieve yields as high as 95% from each epiwafer, which means
      that up to 95% of the epiwafer material can be processed to make compound semiconductor devices. The
      ability of MBE to produce abrupt transitions between e     pilayers of different compound semiconductor
      crystals also reduces electronic noise and distortion and increases power efficiency in high-frequency
      devices. In addition, the very high purity of compound semiconductor crystal, made possible as a result of
      the ultra -high vacuum environment of the MBE reactor, enables the manufacture of high-frequency devices
      that are very efficient at handling electron flows .

  •    Monitoring of the epitaxial process. The ultra -high vacuum environment of the MBE reactor makes it
      possible to use electrons and light particles as probes, to continuously monitor with great precision the
      wafer's surface and epilayer quality during epitaxial growth. These monitoring processes facilitate the
      control of the crystal growth process and thereby provide a highly accurate quality control mechanism.

  •   Manufacturing flexibility. The use of ultra -high vacuum technology results   in very low pressure within the
      MBE reactor. This allows for the rapid removal of unused source materials     upon completion of an epiwafer
      growing cycle, barring which the reactor would need to be purged. This        decreases the amount of time
      between two epitaxial growing cycles and increases production capacity        i.e., the number of epiwafers
      produced per unit of time.

  •   Safety and ease of maintenance. The MBE process does not use the high volumes of toxic gases generally
      used in several competing compound semiconductor manufacturing processes, resulting in greater safety
      and ease of maintenance

Competing compound semiconductor process technologies

  Other epitaxial processes currently used to produce epiwafers include liquid phase epitaxy (LPE), vapor phase
  epitaxy (VPE) and metal organic chemical vapor deposition (MOCVD). LPE and VPE are mature techniques with
  several limitations with respect to producing the thin epilayers required for the manufacture of high-
  performance compound semiconductor devices. MOCVD is capable of producing thin, relatively highly uniform
  epilayers and is used to produce epiwafers for the manufacture of a broad range of opto-electronic devices and
  for some high frequency devices. The principal characteristics, advantages and disadvantages of each of these
  three technologies are as follows:

  •      LPE (Liquid Phase Epitaxy) is a relatively simple technique in which the formation of compound
      semiconductor layers, or epilayers, is achieved by bathing the wafer in a liquid composed of source
      materials, which are heated and liquefied under normal atmospheric pressure. This process can be used for
      the deposition of relatively thick epilayers, which can be grown very quickly. Although LPE is suitable for
      large-scale epiwafer production, its use is limited because it is not capable of growing the thin compound
      semiconductor layers required by the electronic devices used in advanced applications.

  •    VPE (Vapor Phase Epitaxy) is a low cost, mature epitaxial process in which the source materials are
      deposited onto the heated wafer's surface in gaseous form under normal atmospheric pressure. Although
      VPE cannot be used to grow very thin epilayers, epilayer thickness is easier to control than with LPE.
      Although VPE is still widely used for the production of epiwafers for the manufacture of mass market LEDs,
      its commercial applicability is otherwise limited.



                                                                                                                  24
  •    MOCVD (Metal Organic Chemical Vapor Deposition) was developed principally in response to the inability of
       VPE to grow thin epilayers. In this technique, gas source materials are deposited onto the heated, rotating
       wafer under low-pressure conditions, forming epilayers with compositions corresponding to the gases used.
       MOCVD can be used to grow thin epilayers with relatively high epilayer thickness uniformity, and it is a cost-
       effective technique for producing commercial volumes of epiwafers for some high-performance compound
       semiconductor devices.

  We believe that MBE offers advantages over the competing epitaxial technologies described above by enabling
  epiwafer manufacturers to have more precise control over epilayer thickness, uniformity and purity of chemical
  composition and to make ve ry abrupt transitions between epilayers, all of which are essential for producing the
  electronic properties required by the manufacturers of the most sophisticated compound semiconductor
  devices. From a technical standpoint, MBE and MOCVD each have their respective strengths and drawbacks,
  with the result that MOCVD tends to have different uses than MBE. For example, MOCVD is the dominant
  epitaxial technology for the production of epiwafers used for manufacturing high-quality LEDs and solar cells,
  for which ultra -thin epilayers are not required, whereas the manufacture of high-frequency electronic devices
  requiring extremely thin epilayers is achieved predominantly by MBE.

3.1.5 Company products

  We offer a broad product range of MBE machines and related components and parts for use in both the
  production of epiwafers in commercial volumes and advanced research of compound semiconductors and other
  advanced materials. We also manufacture a small number of ultra-high vacuum chemical vapor deposition
  machines for the research and development of epitaxial growth techniques for use in the manufacture of silicon
  germanium-based compound semiconductor devices.

  Our MBE machine models are designed and engineered with the same technical platform, which means that the
  general design of each machine and its component parts is standardized to a significant extent. This
  sta ndardization allows our customers to begin with an MBE research machine and then, with minimum learning
  time and expense, scale up to commercial epiwafer production by purchasing one of our MBE production
  machines manufactured with the same platform. Although our MBE research machines are used primarily for
  research relating to compound semiconductor materials, in certain circumstances our customers use MBE
  research machines for low-volume epiwafer production. Depending on the needs of the customer, our
  adaptable technology also enables the use of either solid or gas source materials in the MBE process.

  All of our MBE machine models are equipped with an ultra-high vacuum reactor in which the epitaxy process
  takes place. Attached to the reactor is a wafer transfer subsystem used to bring the wafer(s) from normal
  atmospheric pressure to the ultra-high vacuum conditions inside the reactor. The wafer transfer subsystem
  may be either manual or semi-automated for MBE research machines or fully automated for MBE production
  machines. In the case of a fully automated wafer transfer subsystem, wafers are loaded in wafer holders,
  called platens, which are inserted into a cassette that can contain up to 10 platens. This means that, for a
  reactor having a wafer load capacity of 4×6 inch, each platen will contain four wafers measuring six inches
  across. The multiple plate cassette is then placed in an entry chamber where each platen is processed
  automatically, one at a time, until the entire cassette is emptied.

Production machines

  From the development of our first MBE production machine in 1988, until December 31, 2003 we had designed,
  manufactured and shipped a total of 52 MBE production machines. The table below provides general
  information with respect to the MBE production machines we shipped to our customers during the fiscal year
  ending December 31, 2003.

                    Number of machines         Examples of chemical     Wafer load capacity and          Year
      Model               delivered               composition of         maximum production            launched
                  during the 200 fiscal year        epiwafer                    output
      MBE 49(1)               1                Gallium and aluminum    4×4 and 6×3 inch                  1991
                                               arsenide                Production of 13,500 4-inch
                                               Phosphorous indium      wafers per year
      MBE 6000                1                Gallium and aluminum    4×8 and 7x6 inch                  2001
                                               arsenide                Production of 23,625 6-inch
                                               Phosphorous indium      wafers per year

  __________
  (1) 1991 Model: 3×4 inch; 1996 Model: 4×4 and 6×3 inch



                                                                                                                  25
We believe we have established ourselves as the technological leader of the MBE production machine market.
In 1991, we were the first company to develop and bring to market a fully automated MBE production machine,
the MBE 49 (3 x 4 inch). When we introduced an improved version of the MBE 49 in 1996, we became the first
company to sell an MBE machine with a wafer load capacity of 4×4 inch. In 1999, when we manufactured our
first MBE 6000, we were the first company to introduce to the market an MBE production machine with a wafer
load capacity of 4×6 inch. We believe that the MBE 6000 is one of the most competitive epiwafer machines on
the market, offering one of the lowest costs of ownership for the production of high quality epiwafers. Cost of
ownership is based on throughput, production, yield, operating costs and capital costs. In 2002, Riber was the
first in the world to deliver a 7×6 inch MBE production machine, the MBE 7000 with a capacity 75% greater
than the previous model. This machine was designed to meet the needs of customers producing hyper-
frequency circuits.

The advantages offered by Riber MBE machines in terms of productivity, production yield, operating costs and
capital costs arise from the technological lead that Riber machines enjoy over its competitors. This
technological lead results from the research and development work undertaken by Riber engineers, the
constant information exchanges conducted between Riber and its customers, the proximity of Riber to the
research laboratories and the technological monitoring undertaken by Riber

Research machines

We expect that the research market will remain a strategically important part of our business because our
presence in the research and development segment of the MBE machine market enhances what we believe to
be our strong brand image and reputation for technical performance and product reliability among research
scientists, who may be influential in a company's decision to select the supplier of MBE machines. Our
continued involvement in research and development programs also allows us to follow closely the
developments in evolving technologies and to detect opportunities for future industrial applications of these
technologies.

Each model is designed to accommodate specific compound semiconductor materials listed in the column
entitled "Examples of the chemical composition of epiwafers." The features of each model are adapted to and
accommodate the compound semiconductor source materials used, which depend on the research objectives of
the user.

Since the introduction of our first MBE research machine in 1978, and until December 31, 2003, we have
designed, manufactured and shipped a total of 399 machines of this type. The following table provides general
information on the number of research machines that were shipped to our customers during the fiscal year
ending December 31, 2003.


                Number of machines         Examples of the           Wafer load capacity and          Year
   Model              delivered               chemical              maximum production output   launched
               during the 2003 fiscal        composition of
               year                           epiwafers
Compact 21                13             Gallium nitride, gallium    1×3 inch/manual or 1 x 2        1997
                                         antimonite                  inch/manual
                           2
Epineat CMT                              Cadmium and mercury         3×2 inch/manual                 1989
                                         tellurium

MBE 32                     3             Gallium and aluminum        1 x 3 inch/manual               1985
                                         arsenide

Our MBE research machines enable our customers to use either solid or gas sources in accordance with their
specific requirements.

In addition to our MBE research machines, we also manufacture an ultra -high vacuum chemical vapor
deposition epitaxial reactor called the Epineat SiGe, for use in either the research of silicon-based compound
epitaxy techniques or in the pilot production of silicon germanium epiwafers. Ultra-high vacuum chemical
vapor deposition is a technique in which gas source materials are deposited onto a surface in an ultra-high
vacuum chamber. Each of the three Epineat SiGe reactors we have sold since we introduced this model in
1992 is still in operation.

Although the commercial uses of silicon germanium are presently limited, recent developments in silicon
germanium technology have made it increasingly probable that, within the next few years, electronic devices



                                                                                                             26
  made from silicon germanium compound semiconductors will offer a competitive alternative to some gallium
  arsenide-based compound semiconductor devices manufactured from epiwafers produced with MBE technology.

  Components, parts and services

  Components and parts. Examples of our accessories include effusion cells for the vaporization of source
  materials, gas injection and flow rate systems, which enable the precise injection of gas-source materials, and
  process control systems, which regulate the epitaxial growth process. Examples of our spare parts include
  filaments, gaskets, heaters, platens, bolts and crucibles.

  We develop and bring to market one or two new accessories each year.

  Services. We offer our customers worldwide a wide array of services, ranging from continuing education on
  epitaxial system processes to on-site tech nical support. For example, we offer our customers training on MBE
  crystal growth processes for a variety of compound semiconductors, as well as consulting services related to
  wafer supply, wafer handling and epiwafer control equipment. At the customer’s request, we also provide
  engineering support for the modification of existing machines and the custom design of new accessories. In
  addition, we offer preventative chemical decontamination and cleaning services on MBE machines and
  components.

  Our after sales support includes maintenance training and worldwide dispatch of spare parts. In March 2000,
  we implemented a 24-hour telephone hotline service for technical support and the dispatch of spare parts for
  MBE production machines. In establishing the hotline service, our aim is to provide all our MBE production
  machine customers with the possibility of receiving technical assistance and components, if necessary, within
  48 hours of notification.

3.1.6 Company manufacturing activities

  Our MBE machines and components are assembled and tested in class 1,000 and class 10,000 clean rooms,
  respectively, which are controlled for dust, pressure, temperature and humidity. "Class 1,000" and "class
  10,000" are measures of the amount of dust and other suspended particles in the air, and a clean room with a
  class rating of 10,000 means that the concentration of particulate matter in the air is ten times greater than
  that in a class 1,000 clean room. Our clean room facilities are located within our manufacturing center in Rueil-
  Malmaison, France. The strict control of environmental conditions in the clean rooms is necessary to keep our
  machines and components free from contamination. We outsource the manufacture of most of the mechanical
  parts and electronic assemblies we require for the assembly of our machines and components to
  subcontractors. After manufacture, all mechanical parts and components are chemically treated to ensure that
  our machines are able to meet required ultra -high vacuum levels.

  We have an integrated information system for the design and manufacture of our products. The design of our
  equipment and components is guided by Autocad Mechanical Desktop 2000. Material and semi-finished
  product requirements, and the flow of parts and costs are managed with a software application called Mapics
  XA. In addition, we have an Intranet network which coordinates the flow of information between various
  manufacturing workstations and between different departments.

  Our Quality Department is staffed with three technicians who supervise every stage of the manufacturing
  process and who ensure the implementation of our quality assurance program. Our quality assurance program
  is based upon adherence to internal procedures relating to the identification of raw materials and mechanical
  parts to ensure that the materials we receive from our suppliers conform to our specifications, the ongoing
  correction of design and manufacturing problems with defect sheets, which are completed by our employees
  and indicate imperfections in materials or equipment, and the observance of established quality guidelines at all
  stages of the design, assembly and testing of machines and components. We intend to qualify for ISO 9001,
  an international standard for quality assurance in design, development, production, installation and servicing,
  by the first half of 2005.

  Depending on the number of options selected by the customer, on average seven or eight months of
  manufacturing and assembly time are required for the manufacture of one of our MBE production or research
  machines. An additional three to eight weeks are generally required to insta ll the machine at a customer's
  premises and to demonstrate the characteristics of machine performance and epiwafer quality.            The
  manufacturing cycle for our accessories averages between four and five months. Our manufacturing capacity is
  currently limited to the manufacture of 45 MBE production machines and MBE research machines per year. We
  provide more information on our planned expansion in Section 3.1.4 "Property, plant and equipment".

  We depend on approximately 25 subcontractors for the manufacture of most mechanical parts and electronic


                                                                                                                27
  assemblies. We also rely upon approximately 28 suppliers of off-the-shelf products such as pumps, UHV
  components and electronics. In addition, we rely upon two suppliers in the United States and Austria for the
  supply of the raw materials required for the manufacture of our components, tantalum and molybdenum.
  These suppliers are Plansee Aktiengesellschaft (Austria) and H.C. Stark Inc (Unite d States). We import
  approximately 18% of the materials required for the manufacture of our machines and components from the
  United States, Germany, the United Kingdom and Japan.

3.1.7 Company customers

  We sell our products globally to two general categories of customers: MBE production machine customers and
  research machine customers. The market for our components, parts and services extends to both of these
  groups.

  The following table provides an analysis of sales by our most important customers as well as the 5 and 12 best
  customers :

                                Analysis of sales by most important customers

                                                  Fiscal year ending December 31 (1)
                                                2001                 2002               2003
                                                    (in € millions except for percentages)
  Most important customer (2) .              3.30      9.6%       3.93     21.1%     1.87     10.8%
  5 most important customers (2)            14.35     41.9%      12.18     65.4%     5.45     31.5%
  12 most important customers (2)           23.94     69.9%      14.92     80.1%    10.00     57.7%
  Total sales..........................     34.24    100%        18.63    100%      17.32    100%
  (1) Source: Riber annual financial statements prepared in accordance with French GAAP
  (2) Customers may not necessarily be the same from one fiscal year to another

  MBE production machine customers

  We have three groups of MBE production machine customers: customers that produce and sell epiwafers to
  manufacturers of electronic and opto-electronic devices, customers that produce and process epiwafers for
  electronic and opto-electronic devices used in consumer and industrial products, and finally customers that
  produce and process epiwafers for electronic and opto-electronic that they incorporate into their products.

  In contrast to the fragmented research machines market, the current market for MBE production machines is
  highly concentrated with a potential customer base of approximately 40 companies. Riber gained one new
  customer during 2003, and we believe that growing applications of MBE technology will enable us to continue
  to expand our MBE production machine customer base.
  Suppliers of epiwafers that have purchased Riber manufactured MBE production machines include: Procomp
  Informatics Limited, Picogiga SA, IQE Ltd., Epinova GmbH, Intelligent Epitaxy Technology Inc. and MBE
  Technology PTE Ltd. Integrated industrial companies having purchased our MBE production machines notably
  include Skyworks Inc., Northrop-Grumman, RF Micro Devices Inc., Sumitomo Electric, Supra, Infineon,
  Raytheon, Agere, A.O.I., Bookham, I.P.G., Shott Optovance, Triquint, Sharp, NSC, Asahi Kasei and Avanex.

  Research machine customers

  Our research machine customers include research institutes and universities that conduct studies funded by
  research programs sponsored by governments, international organizations and industrial companies. Our
  research machines are also used as training tools for graduate students who may work on projects related to
  developing or refining compound semiconductor production technologies. In addition, industrial companies
  have purchased our research machines in connection with either research programs or the pilot production of
  compound semiconductor devices. Although we have had some repeat customers, because the purchase of
  new machines is dependent upon renewed funding, customers of our research machines generally limit their
  orders to a single machine.

  Customers who have purchased our research machines over the last few years: University of Ulm, University
  of Berlin, University of Linz, le T.U. Braunschweig, University of Hannover, University of Freiburg, University of
  Iena, IEMN, University of Montpellier, CNRS-LPN, INSA of Rennes, University of Karsruhe, University of
  Humbolt, University of Tokyo, Nippon Institute of Technology, University of Tokyo, Alps, Institute of Advanced
  Sciences and Technologies of Japan, Japanese Institute of Physics and Chemistry, University of Michigan,
  Rockwell, le Naval Research Laboratory, University of Arkansas, I     TRI, Technological University of Nanyang,
  National University of Taiwan, University of Kabangsaan, University of Dongguk, KETI, National University of
  Cheng Kung, National University of Tsing Hua, Photonics Institute of Technologies of Korea.



                                                                                                                 28
3.1.8 Company marketing and sales activities

      We market, sell and distribute our products through a worldwide network of 25 third-party experienced sales
      agents and distributors. In the United States, we operate through our wholly owned subsidiary, Riber, Inc.
      Our sales agents, distributors and subsidiary report to our area sales managers for each of the Americas, Asia
      and Europe, and our sales agents and distributors work under contracts without fixed duration or are
      renewable . Depending on the degree of involvement of the representative or distributor in the sale, installation
      or service, sales agents and distributors receive commissions or discounts of between 5% and 15% of the sale
      price for production and research machines and commissions or discounts ranging between 15% and 25% of
      the sale price for components. Riber distributors and sales agents generally also sell products from other
      companies operating in the instrumentation industry.

      Our sales agents, distributors and subsidiary work closely with our area sales managers in developing
      relationships with prospective customers, marketing new machines and closing sales transactions. They are
      also responsible for following up markets related to the Company’s business. Area sales managers are
      responsible for providing technical support to sales agents and distributors, and they are also charged with
      developing sales strategies for their respective territories in order to enable them to develop their clientele in
      the best manner. Personnel from our applications laboratory and members of senior management may also
      become involved in direct efforts in circumstances where members of our sales force may lack the technical
      know-how to address particular client needs.

      In 2003, approximately 30% of our total revenues were generated in US dollars. Although payment terms may
      vary from customer to customer, with respect to our MBE production machine customers we typically receive a
      40% down payment at the time of order, 50% upon delivery and 10% upon completion of final installation and
      testing. The payment terms for customers of our research machines are dependent on the timing of
      disbursements of research grant funds, government authorizations and business practices of the institution.
      Payment terms are one month from reception of the invoice. We believe we are not exposed to significant
      risks of customer non-payment because our research machines are often financed by public funds, and our
      production machines are purchased by customers that provide us in advance with either bank guarantees or
      irrevocable letters of credit.

      The following table provides an analysis of our global sales by the three business segments we serve:

                                                  Analysis of sales by business segment

                                                                      Fiscal year ending December 31 (1)
                                                          2001                  2002                      2003
                                                   o
                                                  N    Sales Sales         No Sales    sales   No     Sales    Sales
                                                        (€M)   (%)             (€M)     (%)           (€M)      (%)
 Production machines                              12     25.9  75.7         4   10.2     54.8    2      3.7     21.4
 R & D machines ..........................         6      2.6   7.6         4     3.4    18.1   18      9.9     57.2
 Components, parts and services                   —       5.7  16.7        —      5.0    27.1    —      3.7     21.4
 Total.........................................          34.2   100             18.6     100           17.3      100

(1) Source: Riber financial statements prepared in accordance with French GAAP. Minor discrepancies may arise due to rounding
     differences

      The following table provides an analysis of our global sales by geographic region:

                                                  Analysis of sales by geographic region

                                                 Fiscal year ending December 31 (1)
                                              2001                 2002                2003
                                                   (in € millions except for percentages)
              Europe ..                    10.20     29.8%      6.84      36.7%     6.42     37.1%
              United-States                19.54     57.1%      6.19      33.2%     4.30     24.8%
              Asia ......                   3.95     11.5%      4.99      26.8%     6.42     37.1%
              Rest of World                 0.55      1.6%      0.61       3.3%     0.18      1.0%
              Total .................      34.24    100.0%     18.63    100.0%     17.32    100.0%

(1)    Source: Riber financial statements prepared in accordance with French GAAP.            Minor discrepancies may arise due to
       rounding differences

3.1.9 Company research and development activities

      We believe that research and development is critical to our success, and we are committed to increasing our
      investment in research and development in the future. The table below sets forth information with respect to



                                                                                                                               29
      our research and development spending since 2001:
              (in € thousands except for %)                        Fiscal year ending 31 December(1)
                                                                     2001         2002       2003
             Total gross expenditures............................      3,626       3,511      4,039
             Reimbursements arising from government funding            (—)          (247)      (474)
             R&D expenditures charged to cost of goods sold             (1,665)     (983)      (439)
             Total net expenditures...............................       1.961     2,281      3,126
             Total gross expenditures as a percentage of sales         5.7%         12.2%      18.0%
(1)    Source: Riber financial statements prepared in accordance with French GAAP. Minor discrepancies may arise due to
       rounding differences.

      Our research and development efforts focus primarily on:
      • developing new epitaxial equipment and technologies;
      • developing new accessories;
      • improving performance of existing MBE machines;
      • customizing existing MBE machines; and
      • researching more efficient manufacturing techniques.

      During 2003, the Joint Laboratory in Lille, France, established in partnership with CNRS, received many
      customers wishing to produce compound semiconductors, notably Asahi Kasei and NSC.
      Asahi Kasei, the world leader in the manufacture of Ha ll-effect magnetic sensors, was able to assess through
      this laboratory the technical merits of epiwafers manufactured with the MBE 49 and develop manufa cturing
      process stages for their epiwafers. NSC did the same for the realization of high performance VCSELs.

      In June 2003, two new agreements were signed with CRHEA and CRMC2 within the framework of a Joint
      Laboratory agreement with CNRS. These laboratories will focus on hyperfrequency applications (high power
      medium frequency communications in an hostile location, and opto-electronic with a gallium nitride base (blue
      laser) for the CREA, and two applications with a ultra-thin oxide films (a few dozen atoms) for potential CMOS
      and MRAM applications, as well as germanium silicon base nano-technological applications for CRMC2.

3.1.10 Company intellectual property

      We believe that our success depends significantly on our ability to maintain our proprietary technology,
      manufacturing processes and know-how rather than on patents. While we outsource the manufacture of most
      mechanical parts, our strategy is to keep key production stages and manufacturing know-how within Riber to
      protect our proprietary information for the critical aspects of our manufacturing process. We also take other
      measures to safeguard our confidential and proprietary information, including relying upon trade secrets and
      entering into formal and informal non-disclosure agreements with our employees and suppliers.

      We have been issued with six patents in various jurisdictions. These patents, with variable expiry dates, cover
      the major European countries and the US, and they are held by Riber SA, the parent company. However, none
      of these patents relates to any material aspect of the current or planned commercial versions of our MBE
      machines or related components and parts. We have not sought to obtain additional patents, primarily
      because we believe the design of most of our equipment is based upon mechanical engineering processes that
      are well known and therefore not patentable: our technological leadership derives not from a single aspect of
      our manufacturing process but rather from our accumulated know-how and experience with applied ultra-high
      vacuum processes, our skill in designing machines and accessories to meet the needs of our customers and our
      knowledge of the chemical treatment and assembly of mechanical parts we purchase from our suppliers

      We have the rights to six trademarks, including trademark protection of the "Riber" name in France.

3.1.11 Company competitors

  MBE machines and related components markets

      The MBE machines and related components market is very competitive. Our major competitor is the United
      States-based Veeco Applied Epi Inc, which carries on business as Applied Epi Inc and before that as EPI MBE
      Products Group, a unit of the Chorus Corporation. We also face competition from the UK company Oxford
      Instruments, which acquired the assets of VG Semicon, Finland-based DCA Instruments, which sells ultra-high
      vacuum deposition machines for various uses, including MBE, and, to a lesser extent, companies that compete
      only within their own national markets, such as SVT Associates in the United States, Omicron in Germany, and
      Eiko and Anelva in Japan.

      Veeco Applied Epi Inc, initially a major supplier of parts and accessories for MBE machines, has now become
      Riber’s major competitor in the MBE research machine and production machine market.



                                                                                                                     30
  Oxford Instruments acquired the assets of VG Semicon, Riber’s previous major competitor, whose sales volume
  has dramatically decreased in the last few years.

     Compound semiconductor epitaxial equipment market

  In the wider market for epitaxial equipment used in the c    ompound semiconductor industry, of which the
  market for MBE machines forms a part, our major competitors are manufacturers of MOCVD production
  machines such as Emcore Corporation, Aixtron AG, Nippon-Sanso K.K. and Thomas Swan Ltd. As described in
          n
  detail i Section 3.1.4 "Compound semiconductor process technologies”, MOCVD technology dominates the
  market for the sale of epitaxial equipment used to produce epiwafers for opto-electronic devices such as high-
  quality LEDs and solar cells while MBE technology is predominant in the market for epitaxial equipment used in
  the manufacture of high frequency electronic devices. In some cases merchant suppliers of epiwafers and
  industrial manufacturers of compound semiconductor devices own both MBE and MOCVD production machines.
  Direct competition between the two technologies is currently limited to epiwafer production used to produce
  laser diodes and some high frequency electronic devices

3.1.12 Environmental laws and regulations

  The Company has been authorized by local authorities to operate surface treatment facilities, which are subject
  to declarations and authorizations, in order to treat mechanical parts using mineral acids and other chemical
  agents. This facility is regulated pursuant to the provisions of the Decree of January 4, 1985 concerning the
  control of disposal networks of nuisance generating waste. This facility handles very low volumes of hazardous
  materials and generated hazardous wastes. In addition, as discussed in Section 3.1.5 "Company Products", we
  offer to our customers chemical decontamination and cleaning services on MBE machines and related
  components which may subject us to liability under environmental and safety laws.

3.1.13 Company personnel

                     Analysis of workforce composition and size from 2001 to 2003

   Workforce composition             2001          2002         2003
   Production and quality control     74             67           64
   Commercial and marketing           18             16           17
   Research and development           26             27           22
   Administration                     10              9           10
   Total France                      128            119          113

  At December 31, 2003, the average age of non-managerial employees was 38, the same as the previous year,
  with on average 10 years of senio rity, compare to 9 years for the previous year.
  At 31 December, 2003, the average age of managerial employees was 40, compared to 39 the previous year
  ,with an average 11 years of seniority, the same as the previous fiscal year.

  Employee turnover increased to 13% in 2003 from 10% for 200, while employee training expenses increased
  to € 86,039 from € 78,311 during this time .

  Employment contracts with all of our employees are subject to the provisions of the Convention collective de la
  Métallurgie, the collective bargaining agreement applicable to employees in our industry. In addition, as is
  required by French law, our management holds periodic meetings with an employee representative. We are
  studying since May 2003 the most effective means of implementing French legislation relating to the reduction
  of the workweek to 35 hours. An agreement should be signed by the end of 2004. We do not believe that any
  workforce modifications that may be necessary will have a significant effect on our operations or financial
  results.

  We maintain good relations with our employees.

3.1.14 Company property, plant and equipment

  Our offices, manufacturing facilities and research and development facilities operate from 3,930 m2 of premises
  located in Rueil-Malmaison, Haut-de-Seine department, France. On August 30, 2001, Riber acquired the
  building and related site, of which it occupies 40%, with the remainder leased to another company. Total
  surface area amounts 15,770 m2, offering reserves of land and office space for further expansion of facilities.
  Since November 2000, Riber occupies 1,000 m2 in additional surface area, also at Rueil-Malmaison, following
  the conclusion of a lease agreement in July 2000 for a duration of 9 years, cancelable at the end of each 3-year



                                                                                                               31
  period.

   Riber Inc, our distribution subsidiary, leases office space in New Jersey (USA), carrying out no production
activity at this site.

The following three security systems are in place to protect the Rueil-Malmaison facilities:
   -   anti-intrusion through remote surveillance linked to a security monitor center when facilities are
       unoccupied;
   -    fire and water detection;
   -    access code s ystem for two external doors

3.2    RISK FACTORS

In addition to the other information contained in this Reference Document, potential buyers of
Company shares should carefully consider the following factors in their assessment of the Company
and its commercial operations

3.2.0 Risks associated with the compound semiconductor industry

Company production machine sales would be adversely affected in the event of a decrease in the
growth in demand for products incorporating compound semiconductor based devices

   The demand for MBE production machines is strongly linked to the demand for products incorporating
   compound semiconductor based devices, and our success in selling MBE productio n machines depends on the
   growth in demand for applications currently using compound semiconductor based devices, which include:

   •    wireless communications applications such as cellular telephones, hand sets for personal communications
       services, pagers, point-to-point communications equipment used to link the cells of a wireless cellular
       network together, and equipment for wireless local area networks for data communications in schools,
       offices and businesses;

   •    data communications applications such as equipment for submarine and terrestrial high-speed fiber optic
       networks, which are systems of glass or plastic wires that carry information in the form of light impulses;

   •   consumer electronic applications such as DVD players, GPS receivers, modems adapted for the transfer of
       data by cable, as well as receivers for direct TV by satellite (or DBS receivers); and

   •   applications used in conducting measurements and trials of high speed equipment that in turn are used to
       test the performance of silicon semiconductor devices.

   Although these applications that incorporate compound semiconductor devices and their related end-user
   markets have experienced significant growth in recent years, the rate of this growth could slow as a result of
   market saturation, changes in technology or consumer preferences, or a decline in disposable income resulting
   from a global economic downturn. A decline in the growth of demand for applications currently using
   compound semiconductor devices would negatively affect the demand for these devices and consequently
   adversely affect sales of our MBE production machines, reducing our revenues and profitability.

   Lack of development and commercial production of new applications that use compound
   semiconductor devices could reduce the growth of MBE production machines and lower our
   profitability.

   In the medium term, we believe that the most significant potential for future growth in the demand for MBE
   production machines will be in new applications that use compound semiconductor devices that are currently in
   the process of commercial development, which include notably:

   • applications for the wireless communications market such as cellular telephones designed for Internet access
      and equipment for video distribution systems, including microwave video distribution systems, for use in
      interactive television and receiving real-time multimedia from the Internet;

   • applications for the data communications market such as equipment for dense wave -division multiplexing
     systems, which are used in transmitting information over fiber optic networks;

   • applications for the automotive electronics market such as advanced collision avoidance radar and electronic



                                                                                                               32
      tolling and

  •    applications for the consumer electronics market, such as interactive set-top boxes for television Internet
      services.

  The commercial markets for these applications are emerging and are still in their formative stages. If these
  and other potential applications using compound semiconductor devices do not develo p, we may have
  difficulties in selling new MBE production machines and our growth and profitability would be adversely
  affected.

  If we do not respond quickly enough to rapid technological change and evolving standards in the
  compound semiconductor industry, we may have difficulties selling MBE machines and related
  components

  The compound semiconductor industry is characterized by rapidly evolving technology that affects the kinds of
  compound semiconductor devices that electronic applications manufacturers demand. Our success is highly
  dependent upon our ability to:

  • successfully implement our research and development strategy to expand the applications of MBE technology;

  • design and sell new MBE machines and components in order to remain competitive in both operating
   costs and technical performance;

  • meet demand for MBE machines and components with adequate assembly capacity and introduce new models
    to the marketplace on a timely basis; and

  • manage research and development to meet evolving industry standards.

  Commitments to developing any new MBE machine must be made well in advance of sales, and technology and
  standards may change while we are developing new models, making our machines outdated or uncompetitive
  before their market introduction. To meet these commitments, we will continue to incur significant capital
  expenditures and investments in research and development. We must therefore anticipate both future demand
  and the technology our customers will require. If we experience delays in developing new MBE machines and
  related components to meet our customers' demands, our business could be adversely affected

  Sales of our MBE production machines could suffer from periodic downturns in the compound
  semiconductor industry

  Our sales depend on our customers' decisions to incur additional fixed costs with the purchase of one or more
  of our MBE production machines.

  By analogy with the highly cyclical silicon semiconductor industry, as the compound semiconductor industry
  develops and compound semiconductor devices become increasingly standard commodity products, the
  compound semiconductor industry could face downturns involving periods of production ove rcapacity,
  oversupply, lower prices and lower revenues. Downturns in the compound semiconductor industry could be
  severe and could significantly reduce demand for capital equipment, including MBE production machines. The
  timing, duration and severity of any future downturn cannot be predicted. However, a prolonged downturn in
  the compound semiconductor industry would adversely affect our ability to sell our MBE production machines,
  which, in turn, would mean that our sales and profits would suffer.

3.2.1 Risks associated with the Company’s operations

  Our reliance on a small number of customers for a large portion of our sales and relatively
  infrequent purchases by those customers could substantially depress our operating profitability.

  Our customer base has been and continues to be highly concentrated. If we were to lose one of our major
  customers, or if a major customer was to decrease its orders, our sales would be significantly reduced.

  We estimate that sales to a small number of customers will continue to represent a significant percentage of
  our future sales. The market for MBE production machines is currently limited to approximately 40 potential
  customers. Accordingly, our future business prospects depend on both the financial condition of our largest
  customers and our success in selling MBE machines and related components to them.

  We do not have long-term or other non-cancelable commitments from our customers to purchase our machines


                                                                                                               33
and related components. Because our MBE machines are capable of operating for many years without being
replaced, our current customers may not place orders with us for a considerable time following the purchase of
one of our machines. The loss of one or more significant customers would hurt sales of our MBE machines and
would have a negative impact on our profitability and business prospects. Please see section 3.1.7 "Company
customers" for more detailed information about our customer base

Riber operates in a very competitive market.

Competition in the market for MBE machines and related components is intense. We compete with several
companies primarily engaged in the business of designing, manufacturing and selling MBE machines and
related components. Our principal competitors in the market for MBE machines and related components are
VG Semicon, a United Kingdom-based division of Oxford Instruments, and Veeco , which does business as
"Applied Epi Inc." and is based in the United States. The principal elements of marketplace differentiation are
quality, delivery timeframe and range of products. Our ability to remain competitive will depend upon
improving the performance standards of our MBE machines and introducing new products on a timely basis to
meet customer demands. Our competitors may enhance their existing or future generation MBE machines,
thereby offering price, delivery timetables and performance features that are superior to those of our products.
Increased competitive pressure could lead to intensified price-based competition, resulting in lower prices and
margins, which would reduce our operating income and, in turn, our ability to invest, which is necessary for us
to remain competitive. In addition, a competitor with sufficient capital resources could acquire expertise in the
are a of MBE technology. If a new competitor enters the market for MBE machines and components, we could
experience a sharp increase in competition and our share of the MBE machine market could decrease.

We are dependent on MBE technology, and advances in alternative compound semiconductor
manufacturing technologies may reduce our competitiveness and reduce demand for our products

Substantially all of our products are tie d to MBE technology, which is one of several competing technologies
used in the compound semiconductor manufacturing process. Our customers may prefer products that employ
these competing technologies. For example, MOCVD technology is currently more cost effective and permits
higher production volumes than MBE technology for the manufacture of certain kinds of compound
semiconductor devices, such as LEDs, and solar cells. In addition, advances in silicon germanium technology
have made it increasingly probable that, within the next few years, compound semiconductor devices
composed of silicon germanium, which are not manufactured with MBE technology, will offer a competitive
alternative to some of the compound semiconductor devices used in applications for wireless communications
and computers that are manufactured with MBE technology. If MOCVD technology, silicon germanium
technology or any other compound semiconductor manufacturing technology develops further and reduces or
eliminates the comparative advantages of MBE, the demand for MBE machines will decline and we may have
difficulty selling new MBE machines, components and parts.

Competition to attract staff in our business sector is such that our business could be adversely
affected if we cannot attract and retain qualified staff.

Our success is dependent on the efforts of some of our key employees, including Michel Picault, the Chairman
of Riber's Executive Board, and Catherine Chaix, Director of Applications. These individuals have many years of
experience at Riber and would be very difficult to replace. If any of these individuals were to leave Riber,
particularly Michel Picault, the loss of their services could adversely affect the development and implementation
of our long-term strategy, customer relationships, operations and growth. It is also important to our future
success that we attract and retain qualified scientific, technical, operational, and management personnel. The
competition for attracting and retaining these employees, especially research scientists, is intense. Because of
this intense competition, we have sometimes experienced difficulty in hiring and retaining highly skilled
employees with appropriate qualifications and expect similar difficulties in the future. If we do not succeed in
attracting new personnel and retaining current personnel, our business could be adversely impacted.

We may experience lengthy delays in receiving orders for the sale of our MBE machines, and we
may invest a substantial amount of time and money for which we may never receive orders and
payment.

Sales of our MBE production machines depend primarily upon the decision of a prospective customer to
increase its manufacturing capacity, which typically involves a significant capital commitment by the customer.
For example, first-time customers of our MBE production machines place orders with us on average eight
months to a year after our initial contact with them. Once they have made a preliminary decision to increase
manufacturing capacity, it takes time for our customers to evaluate and receive internal approvals for the
purchase of our MBE machines. During this period, we spend funds on marketing activities and use substantial
amounts of sales and management efforts. These expenditures and efforts may not result in sales of new MBE


                                                                                                              34
machines, adversely affecting our profitability.

We rely upon a limited number of suppliers for the purchase of materials, and our production
capacity could suffer if the supply of their products were disrupted.

We purchase raw materials from a limited number of, or sole source, suppliers, including Plansee AG and HC
Starck Inc. Our manufacturing activities depend upon obtaining adequate supplies of these materials on a
timely basis, and our operations and ability to satisfy our customer obligations would suffer if our relationships
with these outside suppliers were disrupted.

Centralization of our manufacturing facilities increases our exposure to business interruptions that
could adversely affect our operations.

We manufacture all of our MBE machines and related components at our facility in Rueil-Malmaison, (Hauts de
Seine), France. Due to this centralization of our manufacturing activities, we are susceptible to business
interruptions resulting from power outages, natural disasters, equipment failures and other localized problems.
Prolonged business interruptions could harm our relationships with our customers and result in the loss of sales
of some or all of our MBE machines. We provide more details about our facility in Section 3.1.14 "Company
property, plant and equipment.

Our operating results may fluctuate significantly because of the low volume, high sales price and
irregular timing of orders for our MBE machines, thereby resulting in lower growth rates

Sales, net profit, and other operating revenues realized by Riber have varied significantly in the past and may
vary in the same manner in the future as a result of selected factors relating to its own operations. Riber does
not control all of these factors, which include:

• low annual volumes, irregular billing patterns and high sales unit prices of MBE machines (see section 4.1.0
   “Operating Profit”). In addition, orders are not received in a regular manner throughout the year;

•   limited manufacturing capacities, as well as constraints limiting our ability to develop, manufacture and
    deliver MBE machines that respond to the needs of our customers during periods of high demand.

As a result of these different factors, Riber’s operating performances in future periods could be less than
estimates made by financial analysts and investors, thereby resulting in a possible decline in the share price

We face long lead times in the manufacture of our MBE machines, and we may assume forward
purchasing risks by beginning manufacture of an MBE machine before we receive a customer's
order and payment.

Because we have lengthy manufacturing cycles, which can be seven months for our MBE production machines,
we may assume forward purchasing risks by outsourcing the manufacture of mechanical parts and electronic
assemblies to our subcontractors and dedicating substantial production capacity to the manufacture of new
MBE machines prior to any commitment to purchase by a customer and without generating any revenues. If
we are unable to obtain the necessary working capital to finance our expenditures related to anticipated sales
on acceptable terms, our costs will increase and our profitability will suffer.

We have limited resources to protect our intellectual property and could be accused of infringing
the intellectual property rights of third parties.

We believe that our success and competitive position depend significantly on our ability to maintain and protect
our proprietary technology, manufacturing processes and know-how, rather than on patents. Although we
currently hold six patents in various jurisdictions, these intellectual property rig hts do not protect any material
aspects of either existing or planned versions of our MBE machines or related components. While we outsource
the manufacture of most mechanical parts, our strategy is to keep key production stages and manufacturing
know-how within Riber, to protect our proprietary information for the critical aspects of our manufacturing
process. We place reliance on trade secrets and take other measures to safeguard our confidential and
proprietary information, including entering into formal and informal non-disclosure agreements with our
employees and suppliers. If parties breach these agreements or if the measures we take to safeguard our
proprietary information are not properly implemented, we may not have an adequate remedy and our
competitiveness may suffer.

Competitors may also develop technologies that are protected by patents and other intellectual property rights.
These technologies may therefore either be unavailable to us or be made available to us only on unfavorable


                                                                                                                 35
  terms and conditions. Litigation, which could cost us financial and management resources, may be necessary
  to defend against claims of infringement of intellectual property rights brought against us by third parties

  Riber’s business is subject to exchange rate movements.

  Our operating results can be affected by changes in exchange rates, particularly between the euro and the U.S.
  dollar. Most of our operating expenses are denominated in Euros, while a significant percentage of our sales
  are denominated in US Dollars (30% in 2003). Our policy is to monitor and reduce our exchange rate exposure,
  and we manage our operations to mitigate, but not eliminate, the positive or negative impact of exchange rate
  fluctuations. Foreign exchange contracts are concluded each time a system sales order is processed.

  Unsuccessful control of hazardous materials used in our manufacturing process or handled when
  conducting maintenance on our products may expose us to liability and increase our costs.

  Although we do not currently face potential liability under most environmental regulations, generally due to the
  very small volume of hazardous materials handled or hazardous wastes generated, we maintain a surface
  treatment laboratory at our facility in Rueil-Malmaison in which we are permitted by a 1985 ordinance to use
  mineral acids and other chemical agents for the treatment of mechanical parts. In addition, at the customer's
  request we provide chemical decontamination and cleaning services on MBE machines and components that
  involve the handling, and in some cases disposal, of arsenic or phosphorous-based compounds and other
  hazardous materials. If our control systems and safety procedures are unsuccessful in preventing release of
  these materials into the environment or in exposing our personnel to occupational hazards, we may be subject
  to liability under environmental, health and safety laws and could incur significant expenses.

  We may be exposed to product liability for our MBE machines and related components for which we
  are not adequately insured

  We have worldwide product liability insurance for coverage amounting to €2.3 million per year for personal
  injury and damage to property. Although we believe that we have adequate product liability coverage to cover
  such risks, such as arsenic poisoning, phosphorous fire or the leak of ammonia as a result of the improper
  handling of an MBE machine, if an exceptional occurrence of damage or personal injury were to occur, this
  insurance coverage could prove to be insufficient to cover loss and such liability could significantly reduce our
  net profit.

  The Company is insured by AGF Courtage for property damage and operating losses and is also insured by the
  ZURICH company for public liability, for maximum coverage of € 26.6 million for direct damages and € 7.5
  million for operating losses. The company has civil liability insurance up to a maximum of € 7.6 million per
  claim and post-delivery civil liability insurance up to a maximum of € 2.3 million per year per claim. The
  Company also has insurance coverage for transported goods, its vehicle fleet and employee travel.

  The Company estimated it paid € 170,000 in insurance premiums in 2003 for all of the above coverage.

3.2.2 Risks associated with the Company’s share price

  An active trading market for our shares may not develop and the price of our shares may be very
  volatile.

  Riber shares were the subject of an SEC 144A private placement and a listing on the Euronext New Market on
  the Paris Stock Exchange on May 25, 2000.

  The market price of the shares may be highly volatile. For example, a shortfall in revenue or net income could
  have an immediate and significant adverse effect on the market price of our shares. The stock market in recent
  years has experienced extreme price and volume fluctuations that have particularly affected the share prices of
  many technology companies and small capitalization stocks that have often been unrelated to the operating
  performance of these companies. These fluctuations, as well as general economic and stock market conditions,
  may adversely affect the market price of our shares.




                                                                                                                36
3.2.3 Market risks

  3.2.3.1. Investment risks

  Riber’s portfolio of marketable securities is primarily comprised of treasury SICAVs not generating any
  significant risk on capital.

  At December 31, 2003, the Company held 284,073 shares acquired at a cost of € 1,328,056, averaging at €
  4.67 per share. These shares are the subject of a writedown provision of € 870,698, calculated on the basis of
  € 1.61 per share, reflecting the share ’s average stock market price during the month of December 2003.

  The Company also held 19,864 treasury shares acquired pursuant to a share liquidity contract. The risk is
  limited to advances paid within the framework of this contract.

  3.2.3.2. Liquidity risk

  In July 2002, Riber contracted with three banks a € 10 million, 15-year, variable rate mortgage. This financing
  follows the purchase of Riber SA’ s industrial facility in August 2001, enabling Riber to provide itself with the
  means to continue its strategy.

  This mortgage does not carry any covenants, which in the event of their non-compliance, may result in its early
  repayment.

  At December 31, 2003, the Group had net financial assets of € 9.8 million.

  Borrowings and other financial loans amounted to € 9.4 million, of which € 0.7 million was due within one year,
  € 2.6 million was due between one and five years and € 6.1 million was due after five years.

  Riber believes it is not subject to a high liquidity risk presently, given its current financial structure and net
  financial assets position.

  3.2.3.3. Interest rate risk

  The mortgage is indexed at the Euribor 3 and 6 month rates. In the event of an unfavorable swing in rates, the
  Company has the facility to enter into an interest rates swap agreement. The evolution of rates is analyzed
  each half year by the Supervisory Board.

  A hike of 1% in interest rates, calculated on year-end balances, would increase 2003 € 344 thousand financing
  charges by € 94 thousand, compared to the financing charges of € 344 thousand in 2003.

  3.2.3.4. Exchange risk

  Sales denominated in US dollars accounted for 30% of the Group’s 2003 sales.
  The Company’s policy is to systematically cover its exchange risk at the time of order placement. Accordingly,
  short term exchange contracts are entered into with banks.

  Most of the Company’s operating expenses are in euros. A natural coverage is achieved between the residual
  sales, which are not hedged, and non-euro operating expenses.


3.3   SIGNIFICANT EXCEPTIONAL EVENTS AND LITIGATION

  The Company is not involved in any other proceedings that, taken alone or in total, we expect could materially
  adversely affect our business, financial condition or operating results.

  The Company is not aware of the existence of any current or recent exceptional events or litigation that would
  have a significant impact on the financial situation, operations, profitability or net assets of the Company or of
  its subsidiary.




                                                                                                                 37
3.4   FORECASTS

  The Company does not issue quantitative or qualitative information forecasts to financial analysts or the
  financial markets other than information on sales order backlog.


3.5   RECENT DEVELOPMENTS

  During the first quarter of 2004, Riber Group (excluding Addon) realized sales of € 3.3 million, down 33% from
  the same period last year. Sales comprised one production machine, one MBE49 and two research machines.
  At June 30, 2004, sales order backlog amounted to € 8.3 million, compared to € 9.5 million at the same time
                                                                  o
  last year. Group sales for the first half of 2004 amounted t € 3.6 million when sales of its new Addon
  subsidiary from April 1, 2004 are incorporated.

  During the last twelve months, investments by our customers in production machines remained very weak due
  to excess production capacity in the current sector and economic environment, while the research machines
  market activity, which was very active in 2003, remained sustained in 2004.


3.6   PLEDGING OF ASSETS

  A first mortgage was granted in July 2002 to banks as security on a € 10 million loan received at this time. This
  mortgage covers all of the Group’s Rueil-Malmaison industrial facilities. The mortgage principal payable at
  December 31, 2003 amounted to € 9,343 thousand, amounting to 72% of the Group’s net property, plant and
  equipment assets book value on this date .


3.7   OFF-BALANCE SHEET COMMITMENTS

  All significant commitments are properly recorded either as Balance Sheet liabilities of off-Balance Sheet
  commitments on the December 31, 2003 financial statements, in accordance with accounting standards in
  force. A detailed analysis of these commitments is provided for in Notes 15 and 16 to the Consolidated
  Financial Statements in Section 4 of this Reference Document.




                                                                                                                38
SECTION 4 - FINANCIAL REPORT


4.1    4.1 MANAGEMENT DISCUSSION AND ANALYSIS ON COMPANY FINANCIAL PERFORMANCE AND
       SITUATION

  This section, concerning the Company’s financial performance and situation, should be read in conjunction with
  the consolidated financial statements, notes to the financial statements and information of a financial nature
  contained in this Reference Document. Riber SA consolidated financial statements for the fiscal year ending
  December 31, 2003 have been prepared in accordance with French Generally Accepted Accounting Principles.

  Machine sales are generally recorded at the time of shipment (Free on board). Following the shipment, the
  Company bears installation and guarantee costs. All of these costs are provided for at the moment of sales
  recognition.

  The Company also sells components for MBE machines and offers after-sales and maintenance services to its
  customers. Sales of components and services are re cognized when the components have been shipped or
  when the service has been rendered. In 2003, these sales revenues accounted for 21% of the Company’s total
  sales.

  As the MBE production machines market offered better growth potential than MBE research machines, we
  decided in 1995 to reorient gradually our machine business towards the manufacture of production machines.
  In 1995, we undertook preparatory work regarding the marketing, development and perfection of a production
  machine, enabling us to present an improved version of the MBE 49 and to sell, for the first time, in 1996,
  three MBE production machines. Machine sales progressively increased to seven in 1999, fourteen in 2000 and
  twelve in 2001. Our marketing efforts, coupled with our experience in this market, enabled us to significantly
  reallocate our MBE research machines manufacturing capabilities to the manufacture of MBE production
  machines in accordance with our strategic reorientation. Our strategy for research machines is to pursue a
  more selective sales policy taking into account margins achieved on sales and the potential impact of these
  sales on the future sales of production machines. Nevertheless, our primary objective of the Company is the
  development, manufacture and commercialization of MBE production machines. Howeve r, Riber only sold 4
  production machines in 2002 and 2 in 2003 due to the slowdown in investments in wireless telecommunications
  and wide area networks opto-electronics.

  In France and the United-States, our machines are sold by the Company and through our subsidiary Riber Inc.
  Sales agents and independent distributors sell our machines and components in the rest of the world, and are
  remunerated through commissions or discounts calculated on machine prices. At January 1, 2001, Riber Group
  sold its German subsidiary Riber GmbH, and an agency agreement was concluded with it.


4.1.0 Financial performance

Comparison between the 2003 and 2002 fiscal years.

 Total Sales. Total Group sales decreased to € 17.3 million for 2003, from € 18.6 million for 2002.
   In 2003, Asian sales increased by 28%, driven entirely by investments in research machines. At the same
   time, European sales declined slightly by 6%, while North American sales decreased by a significant 31%,
   reflecting competitive pressure and the impact of the $US/€ exchange rate, which affects about 31% of sales
   while the number of machines sold increased.

  Production machines. Production machine sales decreased by 6   4% to € 3.7 million, comprising 1 MBE 49
  machine for opto-electronics application and 1 MBE 6000 for microelectronics applications. The weakness in
  production machine sales is due to a continuing production overcapacity in the market. Production machine
  sales accounted for 22% of Group sales.
  Research machine sales. Research machine sales increased by a significant 191% to € 9.9 million, with 18
  machines sold in 2003, compared to 4 in 2002. This strong increase in sales results from a significant increase
  in the number of research projects for new applications that will use promising materials such as GaN, and
  from the formidable success of the Compact 21 model with the world scientific community.

 Parts, components and services sales. Sales decreased by 25% to € 3.6 million.




                                                                                                              39
 Gross profit margins. Gross profit before inventory writedown provision charges amounted to € 3.6 million or
 21% of sales, down from 36% of sales for 2002. This decrease in margin was as a result of the negative impact
 arising from the $US/€ exchange rate for € 1 million, the increase in the share of Group sales by research
 machines for € 1 million, and to the deterioration of the average sales price of machines in a very competitive
 environment where supply exceeds demands.

 Other operating expenses
 Sales and marketing expenses. Sales and marketing expenses decreased to € 2,997,000 from € 3,501,000 for
 2002, as a result of the implementation of cost control measures, a decrease in sales activity and the
 reclassification of certain development costs as cost of sales.
 Administrative expenses. Administrative expenses decreased to € 1,563,000 from € 1,766,000 for 2002, as a
 result of a reduction in fees arising from exceptional transactions in 2002 (purchase of Rueil site) and the
 performance of some legal work internally.
 Research and Development expenses. Net research and development expenses significantly increased to €
 3,126,000 from € 2,281,000 for 2002, as a result of the opening during the year of two new Riber/CNRS Joint
 Laboratories, as well as the increase in costs relating to the European INVEST research program. Gross research
 and development expenses that is before their allocation to cost of sales of new machines or specific requests
 relating to a sales order, increased to € 3,500,000 from € 3,300,000 for 2002.
 Other operating net income/expense. For 2003, other operating net income amounted to € 193,000, compared
 with another operating net expense of € 1,199,000 for 2002, primarily due to the establishment of a
 € 1,052,000 provision for a trade receivable, whose collection was doubtful in 2002, which was not renewed in
 2003.
 Net finance income. Net finance income increased to € 260,000 from € 42,000 for 2002.
 Income tax credit. Riber continued to use a tax loss carryback option, enabling it to recognize an income tax
 credit of € 117,199 for 2003, compared to income tax credits of € 2,941,000 for Riber SA.

Comparison between the 2001 and 2002 fiscal years.

 Total Sales. Total Group sales decreased to € 18.6 million for 2002, from € 34.2 million for 2001. Production
 machine sales comprised 3 MBE 49, including 2 dual MBE 49 sold to Sharp.
 In 2002, Asia’s share of Group sales increased by 25% as a result of DVD opto-electronic applications. At the
 same time, sales in Europe declined and those in North America decreased significantly, reflecting the stoppage
 of investments in wide area optical networks, with the major manufacturers concentrated in these two regions of
 the world.
 Production machines. Production machine sales decreased by 61% to € 10.2 million, reflecting the continued
 low investments in the wireless telecommunications sector and the stoppage of investments in opto-electronics
 wide area networks. Production machines accounted for 54.8% of sales..
 Research machine sales. Research machine sales increased by 31% to € 3.4 million.
 Parts, components and services sales. Parts, components and services sales decreased by 11.9% to € 5 million.
 Gross profit margins. Gross profit before inventory writedown provision charges amounted to € 6.7 million or
 36.1% of sales, down from 41.7% of sales for 2001. This decrease in margin was as a result of a lower level of
 activity of productive personnel, valued at € 1 million. This lower level of activity was used to reorganize
 production, enabling us to reduce the machine manufacturing cycle to seven months. Gross profit after inventory
 writedown provision charges decreased to less than € 3.2 million, reflecting a € 10 million increase in the
 provision for inventory writedown, which only amounted to € 1.7 million for 2001. These provisions arise from
 the Group’s inventory writedown method and from the accrual of an exceptional provision for work-in-progress,
 reflecting the lack of visibility regarding our customers’ production machines purchasing decisions.

Other operating expenses
 Sales and marketing expenses. Sales and marketing expenses decreased to € 3,501,000 from € 3,801,000 for
 2001, as a result of the non-recurrence of operating expenses incurred in the previous fiscal year.
 Administrative expenses. Administrative expenses decreased to € 1,766,000 from € 2,156,000 for 2001, as a
 result of a reduction in fees and recognition of rental income on a full-year basis.
 Research and Development expenses. Net research and development expenses significantly increased to €
 2,281,000 from € 1,961,000 for 2001, as a result of the recognition on a full-year basis of the cost of operating
 the Lille Laboratory. Gross research and development expenses that is befo re their allocation to cost of sales of



                                                                                                                40
 new machines or specific requests relating to a sales order, decreased to € 3,300,000 from € 3,626,000 for
 2001.
 Other operating net income/expense. For 2002, other operating net expense amounted to € 1,199,000,
 compared with another operating net income of € 263,000 for 2001, primarily due to the establishment of a €
 1,052,000 provision for a trade receivable, whose collection is doubtful. This provision was recorded as an
 exceptional item due to the credit terms granted to the customer.
 Net finance expense/income. For 2002, net finance income was € 42,000, compared with net finance expense
 of € 41,000 for 2001. The 2001 result was affected by a € 585,000 foreign exchange loss on the cancellation of
 an order denominated in $US dollars, which was the subject of forward coverage. For 2002, the € 216,000 in
 interest expenses arising from the € 10 million mortgage was covered by € 319,000 in income from marketable
 securities.

 Income tax. Riber used the tax loss carryback option, enabling it to recognize an income tax credit of
 € 2,941,000 for Riber SA.

4.1.1 Financial situation

  For 2003, the Group had net cash used in operating activities of € 5.4 million, compared with net cash used in
  operating activities of € 2.0 million for 2002. This decrease results from significant billings during the last 2
  months of 2003, resulting in an increase in trade receivables, while trade payables decreased significantly
  following the resolution of an important litigation.

  At December 31, 2003, cash and cash equivalents amounted to € 9.8 million, down from last year’s € 16.7
  million, with most of these funds held by Riber SA.

 Property, plant and equipment investments increased to € 1.0 million from € 0.7 million for 2002, with these
 investments being financed from internally generated cash flows (see Section 4.1.2 - “Investment Policy”).

4.1.2 Investment policy

  Property, plant and equipment investments increased to € 973,000 from € 720,000. An analysis of the nature
  and financing mode of such investments during the last three fiscal years is provided in Notes 4 and 5 of
  section 4.2.1 in the Consolidated Financial Statements.

  At January 31, 2000, Riber SA owned in full two commercial subsidiaries, Riber Inc and Riber GmbH.               In
  December 2000, Riber SA sold its German subsidiary for 1 deutschmark, with effect from January 1, 2001.

  On March 31, 2004, Riber acquired in full the French company Addon.

  These investments were essentially financed through the Group’s cash and cash equivalent resources, and for
  the remaining balance, through the use of lease financing. Other than its equity investment in its US
  subsidiary, all investments undertaken by Riber during the period were in France.

  Investments primarily related to Research and Development investments (establishment of Joint Riber/CNRS
  Laboratories, software, prototypes, etc..), computer systems investments and investments in equipment and
  plant in order to ensure the renewal or improvement of existing equipment.
  Riber currently has sufficient production capacity to handle increased sales volume.

4.1.3 Sales order backlog

  At December 31, 2003, Group sales order backlog amounted to € 5.0 million, down 51% from December 31.
  2002 sales order backlog of € 10.2 million. This reduction in sales order backlog arises from significant
  invoicing during the 4 th quarter of 2003 and the deferral of multiple sales order decisions until the beginning of
  2004. At June 30, 2003, the Company’s sales order backlog amounted to € 8.3 million.




                                                                                                                  41
4.2   FINANCIAL STATEMENTS AND NOTES

4.2.1 Consolidated financial statements and notes

                                     INDEPENDENT AUDITORS’ REPORT
                                              ON RIBER GROUP
                                  CONSOLIDATED FINANCIAL STATEMENTS
                                  (Fiscal year ending December 31, 2003)

To the Shareholders of Riber SA
133, boulevard National
92500 Rueil Malmaison, France

Ladies and gentlemen,

In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report to you for
the fiscal year ended December 31, 2003, on the audit of the consolidated financial statements of the Riber Group,
as attached to the present report.

The consolidated financial statements have been prepared by the Executive Board.        Our role is to express an
opinion on these financial statements based on our audit.

Opinion on the consolidated financial statements

We conducted our audit in accordance with the accepted professional standards in France. These standards
require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements
are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and the significant estimates made by management, as well as evaluating the overall financial statements
presentation. We believe our audit provides a reasonable basis for our opinion.

In our opinion, the Group’s consolidated financial statements, prepared in accordance with French GAAP, give a
true and fair view of the consolidated financial position, assets and liabilities, and net loss of Riber SA and its
subsidiary.

Justification of our assessments

In application of the provision of Article L.225-235 of the Commercial Code regarding the justification of our
assessments, we bring to your attention the following matters: your Company establishes provisions for inventory
writedowns that are discussed in Note 2.6. Within the context of our assessment of the accounting principles and
methods, we have conducted a review of the appropriateness of the inventory writedown procedures in relation to
actual market conditions. We have also ensure d ourselves of the correct application and the appropriateness of the
nature of the information provided in the Note in this regard. The assessments we have made are within the
framework of our audit approach that focuses on the annual financial statements as a whole, and accordingly
contributes to the formation of the opinion expressed in the first part of this report.

Specific verifications

We have also performed specific verification of information relating to the Group in the management report. We
have no observations to make concerning the fairness of the information and its consistency with the consolidated
financial statements.

Paris, May 18, 2004

                                           The Independent Auditors

             PricewaterhouseCoopers Audit                              BOISSIERE EXPERTISE AUDIT
                     Joel ROMEI                                             Tita A. ZEÏTOUN




                                                                                                                42
                                            Consolidated Balance Sheet
                                                      Assets



(€ thousands)                                Notes   Dec. 31, 2003     Dec. 31, 2002   Dec. 31, 2001
                                                          Net                Net              Net

NON-CURRENT ASSETS

Intangible assets                              (4)               99              239               398
Property, plant and equipment
Land                                           (5)            5,734            5,734             5,734
Buildings                                      (5)            3,418            3,612             3,805
Machinery and industrial equipment             (5)            2,470            2,361             2,304
Motor vehicles                                 (5)               46               23                51
Office equipment and furniture                 (5)              268              291               299
Other non-current assets                       (5)            1,035            1,120             1,261
Assets under construction                      (5)                0                0                 0

                                                             12,972           13,140            13,453

Investments                                    (6)               35               37                   52


TOTAL NON-CURENT ASSETS                                      13,105           13,417            13,903


CURRENT ASSETS

Inventories                                    (7)           14,714           18,552            28,903
Advances and prepayments on orders                                 8             191               533
Trade receivables                              (8)            6 ,123           4,322             7,808
Other receivables and deferred tax assets      (9)            4,812            5,386             2,278
Cash and marketable securities                (11)            9,765           16,733             9,613


TOTAL CURRENT ASSETS                                         35,422           45,184            49,135


TOTAL ASSETS                                                 48,527           58,601            63,038




                                                                                                            43
                                         Consolidated Balance Sheet
                                            Equity and Liabilities



(€ thousands)                              Note   Dec. 31, 2003       Dec. 31, 2002       Dec. 31, 2001

EQUITY

Share capital                                               3,036               3,012                3,012
Share premiums                                             33,555              33,555               33,555
Reserves                                                    1,556              10,841                7,672
Translation adjustments                                        77                  30                    9
Net profit/(loss)                                          (3,808)             (9,284)               3,167


GROUP EQUITY                               (20)            34,416              38,154               47,415

MINORITY INTERESTS                                                0                   0                         0


TOTAL EQUITY                                               34,416              38,154               47,415

Provisions for liabilities and charges     (12)               617                 612                     511

LIABILITIES

Borrowings
Bank loans and debts                       (11)                 0                   0
Other borrowings                           (13)             9,527              10,100                     39

Operating liabilities
Advances and prepayments on orders                            273               2,764                5,546
Trade liabilities                           (8)             1,968               4,264                7,042
Other liabilities                          (10)             1,725               2,706                2,485

TOTAL LIABILITIES                                          13,494              19,835               15,113

TOTAL EQUITY AND LIABILITIES
                                                           48,527              58,601               63,038




                                                                                                                44
                                          Consolidated Income Statement




(€ thousands)                                Note         2003           2002           2001
                                                      (12 months)    (12 months)    (12 months)

Sales                                         (17)         17,228         18,634         34,240
Cost of sales                                             (13,564)       (11,903)       (19,970)

GROSS PROFIT                                               3,663          6,731          14,270

Inventory writedown                                          (409)        (9,980)         (1,681)
Sales and marketing expenses                               (2,997)        (3,501)         (3,801)
Research and Development expenses                          (3,126)        (2,281)         (1,961)
Administrative expenses                                    (1,563)        (1,766)         (2,156)
Net other operating revenues/(expenses)       (23)            193         (1,199)            263

OPERATING PROFIT/(LOSS)                                    (4,239)       (11,997)         4,933

Net finance income/(cost)                     (24)           260             42              (41)

PROFIT/(LOSS) BEFORE TAX                                   (3,979)       (11,955)         4,892

Income tax credit/(expense))                  (14)           170          2,672           (1,725)

GROUP PROFIT/LOSS)                                         (3,808)        (9,284)         (3,167)


PROFIT/(LOSS) BEFORE MINORITY INTERESTS                    (3,808)        (9,284)         (3,167)

Minority interest                                              0              0               0

NET PROFIT/(LOSS)                                          (3,808)        (9,284)         3,167

Basic Earnings/(Loss) Per Share              (2.15)         (0.21)         (0.50)          0.17
Diluted Earnings/(Loss) Per Share            (2.15)         (0.20)         (0.48)          0.17




                                                                                                    45
                                                   Consolidated Cash Flow Statement
                                                             (€ thousands)

Cash flows from/(used in) operating activities
                                                                          2003        2002        2001

Net profit/(loss)                                                         (3,808)     (9,284)      3,167

Elimination of items not having an impact on cash flow
Depreciation/amortization and provision charges                           1,358        2,880         (22)
Deferred tax movements                                                        0       (1,022)        378
Government grants allocation to income                                        0            0           0
Capital gains on disposals, net of taxes                                     28            1           5

Cash flow from/(used in) operations before working capital                (2,423)     (7,424)    (3,527)

Working capital movements
        Inventories                                                        3 ,838     10,351      (12,214)
       Receivables                                                        (1,503)        827        9,590
       Liabilities                                                        (5,309)     (5,798)     (13,834)
                                                            Sub total    (2,974)       5,380     (16,458)

Net cash from/(used in) operating activities                              (5,396)     (2,044)    (12,931)


Cash flows used in investing activities

Non-current assets acquisitions
        Intangible assets                                                    (96)       (180)       (259)
                                                                           (973)        (720)    (11,783)
           Property, plant and equipment
Non-current assets disposals                                                  0           13             0

Net movement in borrowings and financial receivables                          3          (57)         78

Net cash used in investing activities                                     (1,067)       (944)    (11,964)

Cash flows from/(used in) financing activities

Proceeds from borrowings                                                    111       10,114           3
Borrowings repayments                                                      (684)         (54)        (52)
Treasury shares disposal/(acquisition)                                        0            2      (1,325)
Proceeds from share capital increases and share premiums                     22            0           1

Net cash from/(used in) investing activities                               (551)      10,063      (1,374)

Translation differences                                                      46           44         (18)
Change in Group structure                                                     0            0          (3)

Net increase/(decrease) in cash and cash equivalents                      (6,968)      7,119    (26,290)

Cash and cash equivalents – beginning of the year                        16,733        9,613      35,903

Cash and cash equivalents – end of the year                               9,765        16,733     9,613


(1) excluding current asset writedown provisions




                                                                                                             46
                                     Consolidated Statement of Changes in Equity

                                                                     (€ t h o u s a n d s )



                                           Share          Share       Group           N et Profit                       Other                      Total Equity
                                           Capital       Premium     Reserves         (Loss)            Translation    Treasury       Total
                                                                                                        Adjustment      Shares

December 31, 2000                             3,010         33,555        1,984                7,042            (10)              0       (10)            45,582

Allocation of 2000 net profit                                              7,042             (7,042)                                                            0
2001 net profit                                                                               3,1 6 7                                                       3,167
Share capital increase                               2                                                                                                          2
Treasury share acquisitions/disposals                                                                                     (1,325)     (1,325)              (1,325)
Translation adjustment                                                      (28)                                19                        19                   (9)
Other movements                                                              (1)                                                                               (1)

December 31, 2001                             3,012         33,555        8,997                3,167              9        (1,325)     (1,316)            4 7 , 4 15

Allocation of 2001 net profit                                             3,167              (3,167)                                           0                0
2002 net loss                                                                                (9,284)                                           0          (9,284)
Share capital increase                               0                                                                                         0                0
Treasury share acquisitions/disposals                                                                                             2            2                2
Translation adjustment                                                           0                              21                            21              21
Other movements                                                                  0                                                             0                0

D e c e m b e r 3 1, 2 0 0 2                  3,012         33,555       12,164               (9,284)           30         (1,323)     (1,293)            38,154

Allocation of 2002 net loss                                              (9,284)              9,284                                            0                0
2003 net loss                                                                                (3,808)                                           0           (3,808)
Share capital increase                           23                             (1)                                                            0               22
Treasury share acquisitions/disposals                                                                                                          0                0
T r a ns l a t i o n a d j u s t m e n t                                                                        48                            48               48
Other movements                                                                                                                                0                0

December 31, 2003                             3,036         33,555        2,879              (3,808)            78       ( 1,323)       9,246             34,416




                                                                                                                                                                       47
                             NOTES TO THE DECEMBER 31, 2003
                          CONSOLIDATED FINANCIAL STATEMENTS


1.       BUSINESS OVERVIEW AND ACCOUNTING PRINCIPLES

1.1      Business overview and company background

RIBER SA and its subsidiaries (“the Group”) are engaged in the development, manufacture and sale of epitaxial
machines and related components for the compound semiconductor industry, using molecular beam epitaxy (MBE)
technology.

1.2      Consolidation principles

The consolidated financial statements have been prepared in accordance with French legal requirements,
particularly Accounting Regulatory Committee Regulation 99-02 dated April 29, 1999.

Subsidiaries in which RIBER SA exercises exclusive control are consolidated using the full consolidation method.

From January 1, 2001, RIBER SA consolidates its only sales subsidiary, Riber Inc, using the full consolidation
method.

The financial statements of those companies included in the consolidatio n have been prepared in accordance with
the accounting principles and methods in force for those countries, and, where necessary, have been restated in
order to apply the Group accounting principles and methods.

All Group companies have a December 31 fiscal year-end.

1.3      Translation of foreign currency denominated financial statements

The financial statements of the US subsidiary Riber Inc. have been translated as follows:

-     Income Statement items were translated at the average rate for the fiscal year,
-     Balance Sheet assets and liabilities were translated at the closing rate,
-     Translation differences arising have been recorded as a “Translation Adjustment” in the Equity section of the
      Balance Sheet




                                                                                                                   48
2.      VALUATION PRINCIPLES AND METHODS

2.1     Revenue recognition

System sales are recognized as realized at the moment when risk and ownership are transferred to the customer,
which is generally at the time of shipping. Subsequent to shipping, the Group bears installation and guarantee
costs. All of these costs are provided for, either as expense payable or provisions for liabilities and charges at the
moment of revenue recognition.

2.2     Research and Development costs

Research and development costs are expensed as they are incurred.

                                                    2003          2002             2001
                                                                 (€ millions)
Gross costs                                             3.5         3.3              3.6
Costs allocated to machine production costs             0.4         1.0              1.7


2.3     Other intangible assets

Other intangible assets relate primarily to acquired software amortized on a 1-year or 3-year basis.

2.4     Property, plant and equipment

Property, plant and equipment items are carried on the Balance Sheet at their acquisition cost or production cost.
Depreciation is calculated using the straight-line or declining balance method, based on the estimated useful life of
the asset.

                                           Estimated Life                   Method
Buildings                                20 years                   Straight-line
    Machinery and industrial equipment      3 to 10 years           Straight-line
                                            5 to 10 years           Declining balance
Improvements and fittings                10 years                   Straight-line
Motor Vehicles                           5 years                    Straight-line
Computer equipment                       3 to 5 years               Straight-line or Declining balance
Furniture                                10 years                   Straight-line

2.5     Finance leases
When the Group is the lessee of an asset pursuant to a long-term lease contract or a finance lease contract whose
features are similar to those of a purchase, the fair market value of the asset is capitalized and depreciated in
accordance with the above-described method(s), with the offsetting debt recorded as a liability.

2.6     Inventories

Manufactured products, whether in a finished or semi-finished state, are valued at their manufacturing cost,
comprising the cost of materials used, direct and indirect manufacturing costs, and the allocation of depreciation
expenses of equipment and machines used during the manufacturing process. A provision for write -downs is
established when their gross book value exceeds their net realizable value.
The gross book value of materials and components includes the purchase price and related costs. The Group uses
the weighted average cost method.
A provision for write-downs is established for materials and components to take into account their value in use,
determined in particular by their consumption. This provision is determined as a function of a rate of turnover
representing the previous consumption.
RIBER SA held an inventory of metals (tantalum and molybdenum) at December 31, 2003 amounting to €5
million. This inventory represents several years’ supply, and has not been written down due to its strategic
importance to RIBER SA’s manufacturing activities.
An € 2.8 million exceptional provision, established in 2002 in order to provide for the risk of postponed sales of
certain production machines, was retained at December 31, 2003.



                                                                                                                   49
2.7        Foreign currency denominated transactions

Foreign currency denominated transactions are translated at their transaction date rate. Assets and liabilities’
balances denominated in foreign currencies are translated at the closing rate, with any unrealized foreign
exchange gains or losses arising recorded in the Income Statement.

The Group realized a net foreign exchange gain of € 361 thousand for 2003.

2.8        Trade receivables

Trade receivables are valued at their net realizable value.

A provision for write -downs is established for doubtful accounts and those that are the subject of litigation, in the
amount of the estimated loss.

2.9        Provisions for liabilities and charges

Provisions for liabilities and charges at the year end cover liabilities and charges whose amount and subject are
clearly identifiable, that events in the process of occurring or having occurred have rendered probable that there
will be an outflow of resources to third parties, with no counterpart expected from them.

Provisions for guarantees
Systems sold benefit from a one-year guarantee from the date of their effective commissioning. In this regard,
the Group recognizes an estimated liability on all products covered by a guarantee at the end of the fiscal year.
This estimated liability is determined in the following manner: a coefficient, corresponding to the ratio of fiscal
year guarantee costs to sales that generated these expenses, is applied to sales covered by the guarantee at fiscal
year-end.

Provision for litigation
The Company and its subsidiary may be a party to certain contentious procedures that are the subject of a
provision based on the estimated risk involved. The Group considers that the outcome of such litigation and
procedures, when it occurs, will have no impact on the Group’s financial situation, its net profit and its financing.

2.10       Deferred taxes

Deferred taxes are calculated using the liability method for all temporary differences arising from the temporary
differences between the tax and accounting treatment of assets and liabilities. Tax rates enshrined in law are
used in the calculation of deferred taxes.

A provision for deferred tax liabilities has been established for an amount equal to deferred tax assets in
application of the prudence concept.

The main temporary differences arise from non-tax-deductible provisions, pension benefit provisions and other
employment benefit provisions, as well as tax losses carried forward.

2.11       Pension benefits and other employee commitments

The Group’s commitments in the areas of pensions, supplementary pension benefits, and retirement indemnities
are accounted for as provisions whose value is estimated on the basis of actuarial valuations. Benefits arising
from these provisions are payable at the time an employee retires, on condition that he/she was employed within
the Group on his/her retirement date.

Commitments are calculated in accordance with the retrospective method, using the following actuarial
assumptions and salary projections:

       -     Retirement benefits discount rate         5.00%
       -     Médailles discount rate                   4.20%
       -     Inflation rate                            2.00%
       -     Annual salary inflation rate              3.50%

The following table enables a reconciliation of the valuation of commitments and the provision accrued in the
“provision for liabilities and charges” section of the December 31, 2003 financial statements:



                                                                                                                   50
                                        Present value of   Transition and deferred
                                      future commitments    actuarial differences     Accrued provision
                                                                 (€ thousands)
December 31, 2000                                393                       (32)                 425
Cost of services                                   23                          -                  23
Interest expenses                                  22                          -                  22
Transition difference amortization                 22                          -                  22
Net actuarial gain amortization                   (3)                          -                 (3)
Benefits paid                                     (3)                                            (3)
Actuarial losses                                 (22)                     (22)                     -
December 31, 2001                                433                     (54)                   487
Cost of services                                  46                         -                   46
Interest expenses                                 24                         -                   24
Transition difference amortization                 -                      (19)                   19
Net actuarial gain amortization                    -                       (1)                    1
Benefits paid                                      -                         -                    -
Actuarial losses                                   4                         4                     -
December 31, 2002                                507                     (70)                   577
Cost of services                                   26                       -                     26
Interest expenses                                  16                       -                     16
Transition difference amortization                  -                                              -
Net actuarial gain amortization                     -                        3                   (3)
Benefits paid                                    (63)                        -                  (63)
Actuarial losses                                    -                       (7)                    7
December 31, 2003                                486                     (74)                   560



2.12    Employee profit sharing and employee savings plan

The application of the legal formula for the incentive remuneration resulted in a liability of € 22,575 at December
31, 2001, and no liability for 2002 and 2003.

Riber Inc. has instituted a savings plan for its full-time employees. This plan offers eligible employees the
possibility of saving part of their remuneration, to which Riber Inc contributes. On an annual basis, Riber Inc’s
Board of Directors sets the amount of its contribution, which for the 2003 fiscal year was insignificant.

2.13    Estimates

The consolidated financial statements are prepared in accordance with French Generally Accepted Accounting
Principles, which require that management make estimates that will impact on the value of some Balance Sheet
assets and liabilities and some Income Statement items, as well as on the value of some items disclosed in the
Notes. It is possible that actual outcomes could differ from these estimates.

2.14    Exceptional items

Items not relating to the ordinary activities of the Group are treated as exceptional items. Items relating to
ordinary activities that are exceptional by their frequency or amount are included in the results from ordinary
activities.




                                                                                                                51
2.15    Earnings per share

Basic earnings per share are calculated by dividing the net income by the weighted average number of common
shares outstanding during the fiscal year. Diluted earnings per share is calculated using the weighted average
number of common shares outstanding, adjusted to take into account the conversion into potentially dilutive
common shares of options that have been granted.

                                                  December 31,     December 31,        December 31,
                                                      2003             2002                2001
Weighted average number of common shares
outstanding used to compute basic earnings         18,623,869      18,519,999           18,523,709
per share
Potential common shares, assuming the
complete exercise of share subscription              793,813          831,540              566,937
warrants/options                                   _________         ________             ________
Weighted average number of common shares,
including those arising from the exercise of       19,417,682      19,351,539           19,090,646
warrants/options, used to calculate the diluted   ========        =========            =========
earnings per share figure

Treasury shares deducted from consolidated equity have been excluded from the weighted average number of
common shares outstanding at December 31, 2003, that is 284,073 shares, as well as 19,864 treasury shares
held through a liquidity contract.

This calculation is based on the assumption that funds were collected on the date of issuance of share subscription
warrants and are assumed to be allocated to the purchase of shares at market price.

3.      CONSOLIDATION SCOPE INFORMATION

Companies consolidated using the full consolidation method

     Company             Registered office                         % share        % voting
                                                                 capital owned interest owned

Riber SA              133 boulevard National                        Parent            Parent
                      92500 RUEIL MALMAISON
                      France
Riber Inc             3880 Park Avenue, Edison                        100                100
                      NJ 08820
                      USA
                      New address from January 19, 2004:
                      15 Liberty Street, Metuchen
                      NJ 08840
                      USA




                                                                                                                52
4.      INTANGIBLE ASSETS
Intangible assets solely comprise software.
                                                  Dec. 31, 2003        Dec. 31, 2002          Dec. 31, 2001
                                                                      (€ thousands)
Gross book value at January, 1                          1,207               1,027                 771
Accumulated amortization at January 1                   (968)               (629)                (237)
Net book value at January, 1                             239                 398                  534
Change in group structure                                  0                  0                    (1)
Additions                                                 96                 180                  259
Disposals                                                  0                  0                    (1)
Amortization charges                                    (236)               (339)                (394)
Amortization reversals                                     0                  0                     1
Gross book value at December, 31                        1,303               1,207                1,027
Net book value at December 31                             99                 239                  398



5.      PROPERTY, PLANT AND EQUIPMENT
                                           Land &       Machinery &   Fittings &    Motor      Office         Total
(€ thousands)                           Buildings (1)   ind. equip.    fixtures    vehicles    equipment
Jan. 1, 2001 – gross book value                   0        1,013        2,463         68             479         4,023
Jan. 1, 2001 – acc. depreciation                (0)        (598)      (1,130)       (24)           (169)       (1,920)
Jan. 1, 2001 - net book value                     0          415       1,333         44             311         2,103

Translation differences                          0              0           0          0              1              1
Additions                                   9,604          1,982           84         21             93         11,784
Disposals                                      (0)          (148)        (15)        (0)           (20)          (183)
Depreciation charges                          (65)           (94)       (155)       (14)          (101)          (429)
Depreciation reversals                           0            148          14          0             16            178
Dec. 31, 2001 - net book value              9,539          2,303       1,261         51            299         13,453

Dec. 31, 2001 – gross book value            9,604          2,844        2,531         89            553         15,621
Dec. 31, 2001 – acc. depreciation             (65)          (541)     (1,270)       (38)          (254)        (2,168)
Dec. 31, 2001 - net book value              9,539          2,303       1,261         51            299         13,453

Translation differences                          0               0          0          0             (2)            (2)
Additions                                        0            593          18          0            109            720
Disposals                                      (0)             (0)        (0)       (25)             (5)          (30)
Depreciation charges                         (193)          (535)       (159)       (15)          (115)        (1,017)
Depreciation reversals                           0               0          0         11               5             16
Dec. 31, 2002 - net book value              9,346          2,361       1,120         22            291         13,140


Dec. 31, 2003 – gross book value            9,604           3,437       2,549         64            651         16,305
Dec. 31, 2003 – acc. Depreciation            (258)        (1,076)     (1,429)       (42)          (360)        (3,165)
Dec. 31, 2002- net book value               9,346          2,361       1,120         22            291         13,140

Translation differences                          0              0           0          0             (1)            (1)
Additions                                        0            745          79         34            116            974
Disposals                                        0           (18)           0       (25)           (42)           (85)
Depreciation charges                         (194)          (628)       (164)       (10)          (118)        (1.114)
Depreciation reversals                           0             10           0         25              23             58
Dec. 31, 2003 - net book value              9.152          2.470       1.035         46            268         12.972

Dec. 31, 2003 – gross book value            9.604           4.164       2.628         73            720         17.189
Dec. 31, 2003 – acc. depreciation            (452)        (1.694)     (1.593)       (27)          (452)        (4.217)
Dec. 31, 2003- net book value               9,152          2,470       1,035         46            268         12,972

Including finance leases
Dec. 31, 2001 – gross book value                                                      50             55                105
Dec. 31, 2001 – acc. Depreciation                                                   (26)           (20)               (46)

Dec. 31, 2002 – gross book value                                                      50             55                105
Dec. 31, 2002 – acc. Depreciation                                                   (33)           (28)               (61)

Dec. 31, 2003 – gross book value                                                      58             93                151
Dec. 31, 2003 – acc. Depreciation                                                   (14)           (18)               (32)




                                                                                                                             53
(1) acquisition of Rueil-Malmaison site in August 2001
6.     INVESTMENTS

                                 2003             2002           2001
                                  Net              Net            Net
                                           (€ thousands)
Financial investment                 5              257            200
Deposits and guarantees             30               30             30
Provision for write -downs           0            (250)          (178)
TOTAL                               35               37             52

At December 31, 2003, Riber SA held 19,864 treasury shares and cash, pursuant to an existing stock liquidity
contract, with a gross value of € 450 thousand. These treasury shares and cash were recorded as other
receivables, having been recorded in previous years as a financial investment of € 250 thousand.


7.       INVENTORIES

                                                     2003              2002         2001
                                                              (€ thousands)
Finished goods                                       4,836             5,199         3,749
Provision for write -downs                         (2,811)           (2,666)          (592)
Net                                                  2,025             2,533         3,157
Work in process                                      9,743            11,893        12,599
Provision for write -downs                         (2,838)           (2,838)              0
Net                                                  6,905             9,055       12,599
Materials and components                            12,993            14,000        15,694
Provision for write -downs                         (7,209)           (7,036)       (2,547)
Net                                                  5,784             6,964       13,147
Total – Gross                                       27,572            31,092        32,042
Total – Provisions                                (12,858)          (12,540)       (3,139)
Total - Net                                        14,714            18,552        28,903



8.      TRADE RECEIVABLES AND TRADE PAYABLES
                                                    2003              2002           2001
                                                                  (€ thousands)
Trade Receivables

Gross book value                                    7,343            5,494            7,966
Write-down provisions                             (1,220)          (1,172)             (158)
Total                                              6,123            4,322             7,808

Trade Payables

Trade payables - operations                         1,968            4,264             7,042
Total                                               1,968            4,264            7,042



9.      OTHER RECEIVABLES AND PREPAID EXPENSES

                                                    2003              2002           2001
                                                     Net               Net            Net
                                                               (€ thousands)
State receivables – VAT                                 403              610            226
Deferred tax assets                                   2,969            1,811            351
Deferred tax liabilities (1)                          (407)                -              -
Deferred tax assets provision                       (2,562)          (1,352)              0
Prepaid expenses                                        825              365            809
State receivables – income tax                        3,150            3,576            677
Other                                                   434              376            215
TOTAL                                                4,812             5,386          2,278

(1) At December 31, 2003, deferred tax liabilities amounting to € 407 thousand were netted against deferred tax
assets.



                                                                                                            54
10.     OTHER OPERATING LIABILITIES
                                                     2003               2002           2001
                                                      Net                Net            Net
                                                                (€ thousands)
Personnel remuneration and benefits                   478               516            766
Social security                                       644               686            700
Deferred tax liabilities                                0               459              0
Grants                                                  0               294            294
State – VAT and related taxes                         213               435            269
State – income tax                                      0                 0              0
Commissions payable to agents                         389               315            455
Other liabilities and accruals                          1                 1              1
Total                                               1,725             2,706          2,485

11.     CASH AND MARKETABLE SECURITIES
                                                     2003               2002           2001
                                                      Net                Net            Net
                                                                (€ thousands)
Cash                                                  558                741         2,587
Marketable securities                               9,213             15,992         7,026
Bank overdraft                                         (6)                (0)           (0)
Total                                               9,765            16,733          9,613

The Group invests its surplus cash balances in highly liquid marketable securities (SICAV). These securities are
valued at acquisition cost, reduced as need be by a provision representing the difference between acquisition cost
and fair market value.

12.     PROVISIONS FOR LIABILITIES AND CHARGES
                                         Pension                         Doubtful
                                                        Guarantee                       Other
(€ thousands)                           benefits                         accounts                  TOTAL
                                                        provision                     provisions
                                        provision                        provision
            December 31, 2000             425                  48           112          775       1.360
Charges                                    62                  11            0             0         73
Reversals – provision used                  0                 (48)           0             0        (48)
Reversals – provision not required          0                   0          (112)        (762)      (874)
December 31, 2001                         487                  11            0            13        511
Charges                                    90                  25            0             0        115
Reversals – provision used                  0                 (11)           0            (3)       (14)
Reversals – provision not required          0                   0            0             0         0
            December 31, 2002             577                  25            0            10        612
Charges                                    48                  47            0             0         95
Reversals – provision used                (65)                (25)           0             0        (90)
Reversals – provision not required          0                   0            0             0         0
December 31, 2003                         560                  47            0            10        617

13.     OTHER BORROWINGS

                                      Other financial        Finance   Guarantee
(€ thousands)                                                                        Total
                                      loans and debts        leases    deposits
December 31, 2001                                 10            29          0              39
Less than 1 year                                    2            12         0               14
From 1 to 5 years                                   8            17         0               25
More than 5 years                                   0             0         0                0
December 31, 2002                            10,079             17          4            10,100
Less than 1 year                                 723             11         0              734
From 1 to 5 years                              2,518              6         4             2,528
More than 5 years                              6,838              0         0             6,838
December 31, 2003                              9,422           101          4             9,527
Less than 1 year                                 703             21         0              724
From 1 to 5 years                              2,588             71         4             2,663
More than 5 years                              6,131              9         0             6,140




                                                                                                               55
In July 2002, RIBER SA obtained a € 10 million variable-rate mortgage, repayable over 15 years. This financing
follows the purchase of an industrial site in August 2001.

14.    INCOME TAXES AND DEFERRED TAXES

Analysis of fiscal year tax credit/(charge)

                                                  Dec. 31, 2003       Dec. 31, 2002       Dec. 31, 2001
                                                                     (€ thousands)
Income taxes                                               163                3,002            (1,348)
Deferred taxes                                           1,227                1,022              (377)
Total                                                   1,390               4,024             (1,725)
Deferred tax provision                                 (1,220)             (1,352)                  0
Total – Income Statement Amount                           170               2,672             (1,725)

Analysis of deferred tax balance

                                                 Dec. 31, 2003       Dec. 31, 2002       Dec. 31, 2001
                                                                      (€ thousands)
Pension benefit commitments                                198                 204                 178
Tax loss carrybacks                                      1,246                   0                   0
Non-deductible provisions                                1,414               1,409                   0
Other deferred tax assets                                  111                 198                 173
Other deferred tax liabilities                           (407)               (459)                   0
Total – Gross Deferred Tax                              2,562               1,352                  351
Deferred tax asset provision                           (2,562)             (1,352)                   0
Total – Balance Sheet Amount                                 0                   0                 351

Deferred tax assets recognized do not exceed deferred tax liabilities, in application of the prudence principle.

Reconciliation of theoretical income tax expense and Income Statement income tax expense

                                                 Dec. 31, 2003       Dec. 31, 2002       Dec. 31, 2001
                                                                   (€ thousands)
(Loss)/profit before tax                             (3,979)            (11,955)              4,895
Theoretical income tax expense
(using applicable rate for consolidating               1,410               4,236             (1,783)
company)
Differences between the income tax rates                   2               (211)                 (6)
Other differences                                       (22)                  (1)                 64
Sub total                                              1,390               4,024             (1,725)
Provision for deferred tax assets                    (1,220)             (1,352)                   0
TOTAL                                                   170               2,672             (1,725)


15.    FINANCIAL INSTRUMENTS
A significant portion of international sales is realized in US dollars, whereas the majority of the costs incurred are
in Euros.
In order to shield itself from foreign exchange rate movements, the Group avails itself of foreign exchange futures
hedge contracts, whose details are listed in the table below
These agreements are concluded at the moment a system sales order is received, based on the payment timetable
specified in the sales contract. The resultant guaranteed rate is used to value the system sale and its
corresponding receivable.


                                                       2003                 2002            2001
                                                                     (€ thousands)
Notional value                                            2,386              3,435          6,571
Market value at exchange rate on December                 2,571              3,645          6,543
31, 2003
Latent position at December 31                              185                210            (28)




                                                                                                                   56
16.      OTHER COMMITMENTS

                                          Dec. 31, 2003         Dec. 31, 2002          Dec. 31, 2001

                                                                 (€ thousands)
Guarantees granted to customers                 879                    895                 3,927
Miscellaneous banking guarantees                  0                      0                     0
Guarantee for the benefit of ISA Inc.             0                      0                     0
Futures hedge commitments                     2,386                  3,435                     0
Mortgage                                      9,343                  9,961                     0
Other                                           689                  1,161                     0
Materials purchasing commitments                  0                      0                 1,534



17.      SEGMENT INFORMATION

17.1     Significant events arisen during the fiscal year
   $US/€ exchange rates fluctuations reduced sales, and similarly net profitability, by € 1 million.

17.2     Segment and geographic information
The Group operates in a single business segment. Therefore, sales and profitability information by business
segment is not applicable. However, the following analyses of sales by product line and geographic region is of
relevance:


Analysis of sales by product line

(€ thousands)                                         2003                  2002                       2001
Production machines                                     3,680                 10,208                     25,913
Research and development machines                       9,903                    3,373                    2,594
Accessories and components                              3,645                    5,053                    5,733
                                                      _______                 _______                   ______
Total                                                  17,228                  18,634                   34,240


Analysis of sales by geographic region

(€ thousands)                                     2003                    2002                     2001
North America                                         4,200                   6,189                 19,539
Asia                                                  6,423                   4,989                    3,950
Europe                                                6,422                   6,843                 10,203
Others                                                  183                      613                     548
                                                 _______                  _______                  _______
TOTAL                                             17,228                   18,634                   34,240

18.      WORKFORCE SIZE AND PERSONNEL COSTS

Analysis of workforce size by position

                                        Dec. 31, 2003         Dec. 31, 2002        Dec. 31, 2001
Managers and engineers                       38                   36                     32
Supervisors                                  17                   16                     13
Employees and technicians                    61                   71                     82
Operatives                                    4                     6                     6
                                        ______                 _____                 _____
TOTAL                                      120                   129                   133

Group personnel costs for 2003 amounted to € 6,629 thousand, compared with € 6,827 thousand for 2002,
excluding mandatory contributions to employees’ incentive remuneration plans.




                                                                                                                  57
19.       REMUNERATION OF EXECUTIVE BOARD AND SUPERVISORY BOARD

€ 920,099 in remuneration was paid to members of the Executive Board and senior management, comprising ten
individuals, for services rendered in 2003, compared with € 845,095 for 2002 and € 859,115 for 2001.
Members of the Supervisory Board received no remuneration for the years 2003, 2002 and 2001.
Members of the Executive Board do not benefit from a specific pension scheme different from the statutory
management pension plan.


20.       SHARE CAPITAL

On March 14, 2000, the parent company converted the par value of its shares into Euros, resulting in an increase
in share capital of € 113,250.

On May 24, 2000, the parent company issued 3,720,930 shares with a par value each of € 0.16 at a price of €10
per share, within the framework of an international private share placement and the listing of its share on the
Nouveau Marché. The new share issuance transaction resulted in proceeds of € 37,209,300 (including €
595,348.8 allocated to share capital), less € 3,517,375 in after-tax transaction costs incurred.

During 2001, the Company’s share capital increased by € 1,517 following the is sue of 9,480 new shares arising
from the exercise of subscription warrants relating to the first plan.

During 2002, the Company’s share capital increased by € 379 following the issue of 2,370 new shares arising from
the exercise of subscription warrants relating to the first plan.

During 2003, the Company’s share capital increased by € 23,274 following the issue of 145,460 new shares arising
from the exercise of subscription warrants relating to the first plan.


21.       SHARE SUBSCRIPTION WARRANTS AND OPTIONS

The timetable at December 31, 2003 of share subscription warrants granted by the Combined Meeting of June 29,
1998 is as follows:

      Share          Total number    June 1998         June 1999        June 2000      June 2001      June 2002
      subscription                  to June 1999      to June 2000     to June 2001   to June 2002   to June 2003
      warrants
Issued                  630,255        126,051           126,051          126,051        126,051          126,051
Exercised              (251,090)       (50,218)         (50,218)          (50,218)      (50,218)          (50,218)
Cancelled              (379,165)       (75,833)         (75,833)          (75,833)      (75,833)          (75,833)
Total                          0          0                0                 0             0                 0

Each warrant grants a subscription right to one (1) new share, pursuant to the payment of a price equal to one
French Franc (FRF 1) or € 0.15 per share. These warrants expired on June 29, 2003. During 2003, the Company
received € 22,175 from the exercise of these warrants.

The timetable at December 31, 2003 of share subscription warrants granted by the Combined Meeting of March
14, 2000 is as follows:

    Share              Total        May 2000       March 2001      March 2002   March 2003   March 2004
    subscription      number        to March        to March        to March     to March     to March
    warrants                          2001            2002            2003         2004         2005
Issued                 350,000       117,000        134,000           38,000       38,000       23,000
Exercised                    --            --              --              --           --           --
Total                  350,000       117,000        134,000           38,000       38,000       23,000

Each warrant grants a subscription right to one (1) new share with a par value each of € 0.16, pursuant to the
payment of a price equal to ten euros (€ 10) per share, with these warrants expiring on March 14, 2005. The
maximum increase in share capital arising from the exercise of these warrants is € 56,000 being 350,000 shares
with a part value each of € 0.16.

The 300,000 stock subscription options allocated by the Executive Board on October 19, 2001 at an exercise price
of € 3.08 may only be exercised in three equal installments four years after their allocation, which is with effect




                                                                                                                     58
from October 20, 2005. The maximum increase in share capital arising from the exercise of these warrants is €
48,000 being 300,000 shares with a part value each of € 0.16.

The Executive Board allocated 100,000 subscription warrants on August 26, 2002 at an exercise price of €0.99. A
third of these warrants may be exercised each year, starting four years after they were granted, that is from
August 2006 to August 25, 2009. The maximum increase in share capital increase arising from the exercise of
these warrants is € 16,000, being of 100,000 shares with a par value each of € 0.16.

No new subscription warrants were allocated during the 2003 fiscal year.


22.     TREASURY SHARES

A share buyback plan was established by the Executive Board pursuant to the authorization granted to it by the
Combined General Meeting of June 13, 2002, confirmed by the Combined General Meeting of
June 13, 2003. Information note 03-482 describing this share buyback plan was approved on May 26, 2003 by
the Commission des Opérations de Bourse.

At December 31, 2003, a € 870,698 writedown provision was established, based on the Company’s holding of
284,073 treasury shares on that date valued at € 1.61, equivalent to its December 2003 average share price.
These treasury shares were recorded as Company investments at Dece mber 31, 2003, with a gross value of €
1,328,056.

In addition, Riber SA also owns, within the framework of a share liquidity contract, € 203,534 in treasury shares
(19,864), for which a writedown provision of € 216,424 was established, based on the December 31 share price of
€ 1.52. Taking into account the large number of transactions carried out with these shares and the objective of
the contract, these treasury shares were recorded as other receivables at their net book value of € 233,576 (gross
book value: € 450,000).


23.     NET OTHER OPERATING REVENUES/(EXPENSES)

The Group realized net other operating revenues of € 193 thousand for 2003, compared to net other operating
expenses of € 1,199 thousand for 2002 and net other operating revenues of € 263 thousand for 2001.


24.     NET FINANCE INCOME(COST)

(€ thousands)                                             2003             2002          2001
Marketable securities income                                353              319        1,039
Interest expenses                                         (349)            (216)            0
Other financial expenses                                  (105)            (201)        (495)
Net exchange gain/loss                                      361              140        (585)
Total                                                      260                42         (41)



25.     POST-BALANCE SHEET EVENTS

No post-Balance Sheet event occurred having a significant impact on the financial statements for the fiscal year
ending December 31, 2003.




                                                                                                               59
     4.2.2   Parent Company Financial Statements and Notes


                                      INDEPENDENT AUDITORS’ REPORT
                                                 ON RIBER SA
                                  PARENT COMPANY FINANCIAL STATEMENTS
                                   (Fiscal year ending December 31, 2003)

To the Shareholders of Riber SA
133, boulevard National
92500 Rueil Malmaison, France

Ladies and gentlemen,
In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report to you for
the fiscal year ended December 31, 2003, on the:
     •    audit of the parent company financial statements of the Riber SA company, as attached to the present
          report,
   •   specific verifications and information required by law.
The parent company financial statements have been prepared by the Executive Board. Our role is to express an
opinion on these financial statements based on our audit.

1.       OPINION ON THE ANNUAL FINANCIAL STATEMENTS
                                                                                     n
We conducted our audit in accordance with the accepted professional standards i France. These standards
require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
the significant estimates made by management, as well as evaluating the overall financial statements
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the parent company financial statements give a true and fair view of the financial position, assets
and liabilities, and net loss of Riber SA for the fiscal year ending December 31, 2003.

2.       JUSTIFICATION OF OUR ASSESSMENTS
In application of the provision of Article L.225-235 of the Commercial Code regarding the justification of our
assessments, we bring to your attention the following matters: your Company establishes provisions for inventory
writedowns that are discussed in Note 3.2. Within the context of our assessment of the accounting principles and
methods, we have conducted a review of the appropriateness of the inventory writedown procedures in relation to
actual market conditions. We have also ensured ourselves of the correct application and the appro priateness of the
nature of the information provided in the Note in this regard. The assessments we have made are within the
framework of our audit approach that focuses on the annual financial statements as a whole, and accordingly
contributes to the formation of the opinion expressed in the first part of this report.

3.       SPECIFIC VERIFICATIONS AND INFORMATION
We have also performed, in accordance with professional standards, the specific verifications required by law.
We have no observations to make concerning the fairness of the information given in the Executive Board Report
and in the documents addressed to shareholders regarding the financial situation and financial statements of the
company.
Pursuant to the law, we have assured ourselves that the various information concerning the identity of holders of
share capital and voting rights have been communicated to you in the Executive Board Report.

Paris, May 18, 2004
                                           The Independent Auditors

               PricewaterhouseCoopers Audit                            BOISSIERE EXPERTISE AUDIT
                       Joel ROMEI                                           Tita A. ZEÏTOUN




                                                                                                                60
                                           PARENT COMPANY BALANCE SHEET

(€)                                                 Dec. 31,           Acc.        Dec. 31,        Dec. 31,
                                                     2003          Dep/Amort &      2003            2002
ASSETS                                               Gross          Provisions       Net             Net
INTANGIBLE ASSETS
Concessions, patents and similar rights              1,226,793        1,135,014       91,779,            95,670
Other intangible assets .................               76,619           69,471         7,148           143,671
                                                     1,303,412        1,204,485        98,927           239,341
PROPERTY, PLANT AND EQUIPMENT
Land                                                 5,733,814                0    5,733,814        5   733   814
Buildings                                           3,870,474,          452,093    3,418,381        3   611   905
Plant, equipment and tools                           4,164,219        1,693,778    2,470,441        2   361   266
Other.........................................       3,237,947        2,023,972    1,213,975        1   381   071
Assets in progress........................                   0                0            0
                                                    17,006,454        4,169,843   12,836,611      13 088 056
INVESTMENTS
Equity holdings                                              912           912                0
                                                                                                            912
Receivables relating to equity holdings                633,412          160,501      472,911            190 712
Financial receivables                                    4,246                         4,246              6 910
Other investments                                    1,358,545          870,698      487,847            296 112
                                                     1,997,115        1,032,111      965,004
                                                                                                      494 646
TOTAL NON-CURRENT ASSETS                           20,306,981        6,406,439    13,900,542      13 822 043

INVENTORIES
Materials ....................................     12,762,382         7,124,505     5,637,877
                                                                                                   6    720   258
Work-in-process..........................            9,742,734        2,838,157    6,904,577       9    054   685
Intermediate and finished products.                  4,835,933        2,810,517    2,025,416       2    533   343
                                                    27,341,049       12,773,179   14,567,870      18    308   286
RECEIVABLES
Advances and prepayments on accounts                    81,518           79,621         1,897         190 596
                                                     7,254,377        1,219,944     6,034,433       4 471 839
Trade receivables ........................
Other receivables.........................           3,650,676            1,890     3,648,786       4 501 607
                                                    10,986,571        1,301,455     9,685,116       9 164 042
CASH AND PREPAID EXPENSES
Cash                                                 9,662,515          216,424    9,446,091      15 991 627
Marketable securities....................              523,498                0      523,498         704 685
Prepaid expenses.........................              825,382                0      825,382         365 026
                                                    11,011,395          216,424   10,794,971

TOTAL CURRENT ASSETS                               49,339,015       14,291,058    35,047,957      44,533,666

Deferred Translation Gain                              276,430                        276,430         224 694
TOTAL ASSETS....................................   69,922,426       20,697,497    49,224,929      58 580 403




                                                        61
(€)                                                                                 Dec. 31,       Dec. 31,
EQUITY AND LIABILITIES                                                               2003           2002
EQUITY.........................................................................
 Share capital                                                                       3,035,523      3,012,250
 Share issuance, merger and contribution premiums............                       33,555,418     31,420,575
 Legal reserve...............................................................          301,187        301,187
 Regulated reserves                                                                  1,332,795      1,333,893
 Retained earnings ........................................................            701,213     12,984,223
 Net profit.....................................................................   (3,336,212)   (10,148,167)
TOTAL EQUITY.............................................................          35,589,924     38,903,961

PROVISIONS FOR LIABILITIES AND CHARGES.....................                           333,713        258,977
BORROWINGS
 Borrowings and loans from financial institutions                                    9,425,193    10,072,607
 Other borrowings and loans ............................................                 9,127        11,650
                                                                                     9,434,320    10,084,257
ADVANCES AND PREPAYMENTS RECEIVED ON ORDERS IN PROCESS                                 273,333     2,635,964
OPERATING LIABILITIES ................................................
 Trade liabilities                                                                   1,850,886     4,278,402
 Tax and social security liabilities ......................................          1,349,869     1,799,909
 Other liabilities .............................................................       389,469       315,547
                                                                                     3,590,224     6,393,858
Deferred revenues                                                                          162             0
TOTAL LIABILITIES......................................................            13,298,201    19,114,079

Deferred translation loss..................................................             3,253        303,386
TOTAL EQUITY AND LIABILITIES..................................                     49,224,929    58,580,403




                                                                    62
                Supplementary information to the Parent Company Balance Sheet:

                In order to conform to Notice 00-D dated December 21, 2000, published on January 16, 2001, issued
                by the French National Accounting Council Emerging Issues Committee, the expensing of share issue
                costs should have been recorded net of income tax for the 2000 fiscal year. The corresponding income
                tax amounted to € 2,134,843.
                The table below reconciles the pro -forma equity balances with their historical’ book balances.
                The December 31, 2002 equity book balances should correspond to their pro -forma balances.

                                              PARENT COMPANY STATEMENT OF EQUITY MOVEMENTS


                                                       Share        Share         Legal    Restricted      Retained      Net profit/      Total
€)                                                     capital     premium       reserve   reserves        earnings       (loss)         equity


December 31, 2001 - historical                         3,011,870   31,420,575 301,035             3,978    10,851,735      3,462,572     49,051,765
Restatement of listing costs tax impact                             2,134,843                              (2,134,843)
December 31, 2001 - proforma                           3,011,870   33,555,418 301,035             3,978     8,716,892      3,462,572     49,051,765


Allocation of 2001 net loss (AGM June 13, 2002)                                      152     1,329,932      2,132,488     (3,462,572)
Share capital increase                                       380                                   (18)                                           362
2002 net loss                                                                                                            (10,148,167)   (10,148,167
December 31, 2002 - proforma                           3,012,250   33,555,418 301,187        1,333,892     10,849,380 (10,148,167)       38,903,960
Restatement of listing costs tax impact                            (2,134,843)                              2,134,843
December 31, 2002 - historical                         3,012,250   31,420,575 301,187        1,333,892     12,984,223 (10,148,167)       38,903,960


Allocation of 2001 net loss (AGM June 13, 2003)                                                           (10,148,167)    10,148,167
2003 net loss                                                                                                             (3,336,212)    (3,336,212
Restatement of listing costs tax impact                             2,134,843                              (2,134,843)
Share capital increase                                   23,273                                 (1,097)                                      22,176
December 31, 2003 - historical                         3,035,523   33,555,418 301,187        1,332,795        701,213     (3,336,212)    35,589,924




                Pursuant to Resolution 4bis, the Combined General Meeting of June 13, 2003 authorized the reclassification
                of € 2,134,842.68 in tax savings generated by the stock exchange listing costs to share premium from
                retained earnings, in order to conform with Notice 00-D dated December 21, 2000, as issued by the French
                National Accounting Council Emerging Issues Committee.




                                                                      63
                                     Parent Company Income Statement



        (€)                                         France           International       2003             2002

        Machines sales.....................           918,746              15,569,661    16,488,407       17,344,336
        Services sales ......................         280,146                 145,549       425,695          644,938
        TOTAL SALES.....................           1,198,892              15,715,210    16,914,102       17,989,274

Inventoried production ..........................................                         (2,513,072)         743,328
Capitalized production ...........................................                            764,195         637,709
Operating grants ..................................................                           473,707         247,241
Reversals of amortization/depreciation/provisions and charges transfer                        507,489         159,104
Other operating revenues.......................................                                11,453          27,130
TOTAL OPERATING REVENUES............................                                      16,157,874      19,803,786

EXTERNAL EXPENSES
Raw materials and other procurement expenses                                                7,356,864       6,469,567
Inventory movements [raw materials and procurement]                                           818,304       1,502,272
Other purchases and external expenses....................                                   3,760,635       4,286,392
                                                                                           11,935,803      12,258,231
TAXES, DUTIES AND RELATED CHARGES                                                             403,554         527,331
PERSONNEL COSTS
Wages and remuneration .......................................                              4,149,631       4,256,854
Social security charges ..........................................                          2,055,797       2,097,778
                                                                                            6,205,428       6,354,632
DEPRECIATION, AMORTIZATION AND PROVISION CHARGES
Non-current assets depreciation and amortization charges                                    1,335,756       1,333,750
Current assets provision charges.............................                                 444,807      11,051,651
Provisions for liabilities and charges increases............                                   23,000          14,000
                                                                                            1,803,563      12,399,401
OTHER OPERATING EXPENSES............................................                            6,232         164,632

TOTAL OPERATING EXPENSES........................................                          20,354,580      31,704,227

OPERATING LOSS...........................................................                (4,196,706)     (11,900,441)

FINANCE INCOME
Interest and other investment income ...................                                       46,946         114,218
Reversal of provisions and transfers of charges .......                                       450,006         117,515
Translation gains...............................................                            1,078,244         256,173
Gain on disposal of marketable securities...............                                      312,098         298,639
                                                                                            1,887,294         786,545
FINANCE COSTS
Financial amortization and provision charges ..........                                       451,969        1,413,631
Interest and other financial expenses....................                                     349,926          216,856
Translation losses..............................................                              351,602          301,409
                                                                                            1,153,497        1,931,896
NET FINANCE INCOME/(EXPENSES) .......................                                        733,797      (1,145,351)

PROFIT FROM ORDINARY ACTIVITIES BEFORE TAX                                               (3,462,909)     (13,045,793)

EXCEPTIONAL INCOME
Exceptional income arising from operations ............                                         18,704            5,765
Exceptional income arising from share capital exceptional transactions                               0           12,506
                                                                                                18,704           18,271
EXCEPTIONAL EXPENSES
Exceptional expenses arising from operations.........                                              708           16,024
Exceptional expenses arising from share capital exceptional transactions                         8,497           45,864
                                                                                                9,205          61,888
NET EXCEPTIONAL INCOME/(EXPENSES)                                                               9,499        (43,617)

Employee profit sharing plans allocation .......................                                    0               0
Income tax credits ....................................................                       117,199       2,941,244

NET LOSS...............................................................                  (3,336,211)     (10,148,167)




                                                                          64
13
                                                 Parent Company Cash Flow Statement
                                                                         (€ thousands)
Cash flows used in operating activities                                                                  2003                   2002

Net loss                                                                                                (3,336)                  (10,148

Elimination of items not impacting on cash flow (1)
Depreciation, amortization and provision charges                                                           1,380                 2,558
Government grant allocation to income                                                                          0                      0
Capital gains on disposal, net of taxes                                                                        8                      1

Cash flows from/(used in) operations before working capital                                               (1,948)                (7,589)

Working capital changes arising from:                             (2)
       Inventories                                                                                       3,740                   10,197
       Receivables                                                                                         (819)                 ) 398
       Liabilities                                                                                       (5,914)                  (4,996)

Net cash used in operating activities                                                                     (4,940)                (1,990)

Cash flows used in investing activities

Non-current assets acquisition
       Intangible assets                                                                                     (96)                   180)
       Property, plant and equipment                                                                         (856)                 (717)

Non-current assets disposal                                                                                   0                         13

Net movement in borrowings and financial receivables                                                         440                       603

Net cash used in investing activities                                                                     (1,392)                  (281)

Cash flows from/(used in) financing activities

Issue of long-term borrowings and bank overdrafts                                                        0                       10,114
Repayment of long-term borrowings and bank overdrafts                                                        (657)                     (42)
Treasury shares acquisition                                                                                    0                        (2)
Proceeds from share capital increases and share premiums                                                     22                          0

Net cash from/(used in) financing activities                                                              (634)                   10,075


Net increase/(decrease) in cash and cash equivalents                                                      (6.967)                7,804

Cash and cash equivalents at the beginning of the year                                                     16,695                 8,891

Cash and cash equivalents at the end of the year                                                          9,728    (3)          16,695

(1) excluding current asset provisions
(2) net change
(3) excluding Riber SA shares held per share management contract, amounting to € 234 thousand and reclassified as receivables




                                                                               65
                     NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS



NOTE 1 — FISCAL YEAR HIGHLIGHTS

An appreciation of the Euro relative to the US dollar reduced Company sales and increased the net loss by
about € 1 million.


NOTE 2 — ACCOUNTING PRINCIPLES AND METHODS

The RIBER SA parent company financial statements were approved by the Executive Board at its meeting of March
23, 2004, which ensured that they were prepared in accordance with the provisions of PCG 99.
In addition, the application of these methods is in accordance with the principles of going concern and independent
fiscal years.
The financial statements are prepared using historic costs.

The Company has adopted the following accounting methods:

2.1   Revenue recognition

   Systems sales are recognized as realized at the moment when risk and ownership are transferred to the
   customer, which is generally at the time of shipping. Subsequent to shipping, the Group bears installation and
   guarantee costs. All of these costs are provided for, either as expenses payable or provisions for liabilities and
   charges at the moment of revenue recognition.

2.2   Research and Development costs

   Research and development costs are expensed as they are incurred.
   Total Research and Development costs incurred in the fiscal year amounted to € 3.5 million.

2.3   Property, plant and equipment

   Property, plant and equipment items are carried on the Balance Sheet at their acquisition cost (purchase cost
   and related costs) or production cost.

2.4   Inventories

   Manufactured products, whether in a finished or semi-finished state, are valued at their manufacturing cost,
   comprising the cost of materials used, direct and indirect manufacturing cost, and the allocation of depreciation
   expenses of equipment and machines used during the manufacturing process. A provision for writedowns is
   established when their gross book value exceeds their net realizable value.

   The gross book value of materials and components includes the purchase price and related costs, valued in
   accordance with the weighted average cost method

2.5   Receivables and liabilities

   Receivables and liabilities are recorded at their transaction date rate. Foreign currency denominated
   receivables and liabilities are translated using the December 31, 2003 year-end rate.

   A provision for writedowns is established, in the amount of the probable loss, when the value of a receivable
   has been impaired or when full or partial non-recovery is apparent.

2.6   Foreign currency denominated transactions
   Foreign currency denominated receivables and liabilities are initially translated at their historical rate. They are
   again translated at the fiscal year-end rate, with any gain or loss arising being treated as a foreign exchange
   asset or liability. A provision is established to take into account the risk of foreign exchange loss.

2.7   Marketable securities
   The Company invests its surplus cash balances in highly liquid marketable securities (SICAV). These securities
   are valued at their acquisition cost, reduced as need be by a provision representing the difference between



                                                          66
   acquisition cost and fair market value.
2.8 Financial instruments
   The Company uses forward hedge contracts to reduce its foreign exchange risks.
   These agreements are concluded in order to manage exposure to fluctuations in the US Dollar and are
   established at the moment an order is received, based on the payment timetable specified in the sales
   contract.
   The notional value of these forward foreign exchange contracts at December 31, 2003 was € 2,385,728.

2.9     Pension benefits
   The value of the Company’s commitments in the areas of pensions, supplementary pension benefits and
   retirement indemnities is treated as off-Balance Sheet commitments.
   Commitments are calculated in accordance with the retrospective method using the following actuarial
   assumptions and salary projections:

      IFC discount rate..............................................      5.00%
      Médailles discount rate .....................................        4.20%
      Inflation rate....................................................   2.00%
      Annual salary inflation rate...............................          3.50%


NOTE 3 — DEPRECIATION, AMORTIZATION AND PROVISIONS

3.1     Intangible assets and property, plant and equipment

   Depreciation is calculated using the straight-line or declining balance method, based on the estimated useful
   life of the asset.
                                                                Estimated Life     Method
      Software                                                  1 or 3 years       Straight-line
      Buildings................................................ 20 years           Straight-line
      Machinery and industrial equipment……………………. 10 years      3 to               Straight-line
                                                                5 to 10 years      Declining balance
      Fittings and improvements                                 10 years           Straight-line
      Motor vehicles                                            5 years            Straight-line
      Computer equipment                                        3 to 5 years       Straight-line or declining balance
      Furniture                                                 10 years           Straight-line

3.2     Provision for inventory writedowns
   A provision for writedowns is established for materials and components to take into account their utility value,
   determined in particular by their consumption. This provision is determined as a function of a rate of turnover
   representing the previous consumption.
   RIBER SA held an inventory of metals (tantalum and molybdenum) at December 31, 2003 amounting to € 5.0
   million. This inventory represents several years’ supply, and has not been written down due to its strategic
   importance to RIBER SA’s manufacturing activities.
   An exceptional provision for € 2.8 million that was established at December 31, 2002 in order to provide for the
   risk of postponed sales of certain production machines has been maintained.

3.3     Provision for receivables writedowns
   A provision for writedowns is established for doubtful accounts and those that are the subject of litigation, in
   the amount of the estimated loss.

3.4     Provision for guarantees
   Systems sold benefit from a one-year guarantee from the date of their effective commissioning. In this regard,
   the Group recognizes an estimated liability on all products covered by a guarantee at the end of the fiscal year.
   This estimated liability is determined in the following manner: a coefficient, corresponding to the ratio of fiscal
   year guarantee costs to sales that generated these expenses, is applied to sales covered by the guarantee at
   fiscal year-end.




                                                                            67
 NOTE 4 — BALANCE SHEET AND INCOME STATEMENT ITEMS

 4.1 Finance leases – assets and payment commitments

 Assets
 (€ thousands)        Gross book value                Depreciation               Net book value
                                            2003            cumulative
 Motor vehicles                59              6                15                     44
 Computer hardware             93              10               18                     75
 Total                      151                17               32                    119


 Payment commitments
 (€ thousands)               Previously paid                               Outstanding payment commitments
                            2003         cumulative        within 1 year           1 to 5 years      after 5 years       total
 Motor vehicles                  2             57                6                     45                 0               51
 Computer hardware             17              68               23                     39                 19              80
 Total                       19             125                 29                     83                 19             131

 4.2     Borrowings

    In July 2002, Riber SA entered into a € 10 million 15-year mortgage, following its acquisition of an industrial
    site in August 2001.

    At December 31, 2003, the outstanding principal of this mortgage amounted to € 9,343,233.


 4.3      Evolution of share subscription warrants issued in current and previous fiscal years

    The timetable at December 31, 2002 of share subscription warrants granted by the Combined Meeting of June
    29, 1998 is as follows:

       Share              Total           June 1998         June 1999          June 2000          June 2001         June 2002
       subscription      number          to June 1999      to June 2000       to June 2001    to June 2002         to June 2003
       warrants
    Issued                630,255          126,051            126,051           126,051            126,051           126,051
     Exercised          (251,090)          (50,218)           (50,218)          (50,218)           (50,218)          (50,218)
     Cancelled          (379,165)          (75,833)           (75,833)          (75,833)           (75,833)          (75,833)
        Total                   0                 0                  0                 0                  0                 0

    Each warrant grants a subscription right to one (1) new share pursuant to the payment of a price equal to one
    French Franc (FRF 1) per share. These warrants expire d on June 29, 2003. € 21,819 was received in 2003
    pursuant to the exercise of these warrants.

    The time table at December 31, 2001 of share subscription warrants granted by the Combined Meeting of March
    14, 2000 is as follows:

   Share               Total           May 2000           March 2001           March 2002           March 2003           March 2004
   subscription       number         to March 2001       to March 2002        to March 2003        to March 2004        to March 2005
   warrants
Issued                350,000            117,000              134,000               38,000               38,000                  23,000
Exercised                   --                 --                   --                   --                   --                      --
Total                 350,000            117,000              134,000               38,000               38,000                  23,000

    Each warrant grants a subscription right to one (1) new share pursuant to the payment of a price equal to ten
    euros (€ 10) per share. These warrants will expire on March 14, 2005. The maximum potential increase in
    share capital arising from the exercise of these warrants is 350,000 shares with a par value of € 0.16, or €
    56,000.
    The 300,000 share subscription options allocated by the Executive Board on October 19, 2001 at an exercise
    price of € 3.08 may only be exercised by one-third segments after the expiration of a four-year period following
    their allocation from October 20, 2005, the date of their allocation. The maximum potential increase in share
    capital arising from the exercise of these warrants is 300,000 shares with a par value of € 0.16, or € 48,000.



                                                                68
      The 100,000 subscription options allocated by the Executive Board on August 26, 2002 at an exercise price of
      € 0.99 per share may only be exercised by one-third segments after the expiration of a four-year period
      following their allocation from August 2006, the date of their allocation, until August 25, 2009. The maximum
      potential increase in share capital arising from the exercise of these warrants is 100,000 shares with a par
      value of € 0.16, or € 16,000.

      There was no new allocation of share subscription options in 2003.

4.4      Treasury shares

      A share buyback plan was established by the Executive Board, pursuant to the authorization granted to it by
      the Combined General Meeting of June 13, 2002 and confirmed by the Combined General Meeting of June 13,
      2003. Information note 03-482 describing this share buyback plan was approved on May 26, 2003 by the
      Commission des Opérations de Bourse.

      At December 31, 2003, there were 284,073 treasury shares, which were subject to a € 870,698 provision for
      writedowns, determined based on the share’s average December 2003 market price of € 1.61. The book value
      of the treasury shares, € 1,328,056, was recorded as an investme nt at December 31, 2002.

      Furthermore , within the framework of a current share price management contract, Riber Sa also held 19,864
      shares as marketable securities worth € 203,534 that were also subject to a writedown provision of € 216,424
      based on the share’s December 31, 2003 closing price of € 1.52. In light of the significant movements
      concerning the trading of these shares, they are classified, together with uninvested available proceeds, as
      cash and marketable securities (€ 450,000 - gross book value and € 233,576 net book value).


4.5      Management, Executive Board and Supervisory Board remuneration

      The Company paid remuneration of € 408,735 to Executive Board members, compared to € 493,799 paid in
      2002 when the Board comprised one more member. The Company did not pay any remuneration to its
      Supervisory Board members during 2003 or 2002.


4.6       Income tax

      The Company’s income tax expense can be analyzed as follows:

                              Profit before tax                 Income tax                         Net loss
(€)
                                                  theoretical   compensated     due      theoretical          actual
Profit from ordinary activities
                                  (3,462,909)     1,154,188          (3,166)   117,199   (2,308,721)    (3,345,710)
Exceptional income
(excluding profit sharing)          9,499          (3,166)           3,166       0         6,333              9,499
Total
(excluding profit sharing)        (3,453,410)      151,022              0      117,199   (2,302,388)    (3,336,211)

      The Company availed itself of a loss carryback provision, enabling it to recognize tax loss credits of € 117,199.

4.7      Net finance income

      The € 1,062,433 writedown provision established in 2003 on the Company’s 284,073 treasury shares was
      reduced to € 870,698, generating finance income of € 191,735.
      Investment income of € 359,053 was generated from marketable securities.
      Interest expense of € 348,901 was incurred on the mortgage put into place in July 2002.
      The Company incurred a net foreign exchange gain of € 674,907.
      A € 161,413 writedown provision was established for receivables due from our subsidiary Riber Inc, as well as
      on our shareholdings in this company, in light of its negative equity situation.


NOTE 5 — POST BALANCE SHEET EVENTS

  No post-Balance Sheet event occurred having a significant impact on the financial statements for the fiscal year
  ending December 31, 2003.




                                                                69
                                NON-CURRENT ASSETS – GROSS BOOK VALUES


(€)                                                      Jan. 1,     Additions    Disposals         Dec. 31,
                                                          2003                                       2003

INTANGIBLE ASSETS
 Other intangibles.......................              1,207,220         96,192                     1,303,412

                                                       1,207,220         96,192                     1,303,412

PROPERTY, PLANT AND EQUIPMENT
 Land........................................          5,733,814                                    5,733,814
 Buildings..................................           3,870,474                                    3,870,474
 Machinery, equipment and tools........                3,437,641        745,099         18,521      4,164,219
 Other PPE......................................       3,128,724        111,103          1,880      3,237,947

                                                      16,170,653        856,202         20,401   17,006,454

INVESTMENTS
 Equity holdings and related                             191,624        442,700                        634,324
receivables.................................
 Loans and other investments .......                   1,615,455        200,000        452,664      1,362,791

                                                       1,807,079        642,700        452,664      1,997,115

Total.............................................    19,184,952     1,595,094         473,065   20,306,981




       NON-CURRENT ASSETS – ACCUMULATED DEPRECIATION AND AMORTIZATION


(€)                                                      Jan. 1,        Charges         Reversals        Dec. 31,
                                                          2003                                            2003
INTANGIBLE ASSETS
 Other intangibles.......................                 898,408           236,606                      1,135 014

                                                          898,408           236,606                      1,135,014

PROPERTY, PLANT AND EQUIPMENT
 Buildings..................................               258,569          193,524                        452,093
 Machinery, equipment and tools........                  1,076,375          627,623           10,220     1,693,778
 Other PPE......................................         1,747,653          278,004            1,684     2,023,973

                                                         3,082,597         1,099,151          11,904     4,169,844

Total..............................................     3,981,005         1,333,757           11,904    5,304,858




                                                               70
                                                                        PROVISIONS


(€)                                                  Jan 1,               Charges               Reversals       Transfers          Dec. 31,
                                                      2003                                                                          2003

Provisions for guarantees given to
customers...................................            25,000                   23,000                                                 48,000
Provisions for foreign exchange                        224,694                  276,430             224,694                            276,430
losses
Provisions for income tax
Other provisions                                          9,283                                                                          9,283

Provisions for liabilities and                        258,977                  238,694             117,515                  0          333,713
charges

Prov. for writedowns - intangible                        69,471                                                                         69,471
assets
Prov. For writedowns – marketable                                                      912                                                 912
securities
Prov. for writedowns – other                         1,312,433                  160,501             191,734       (250,000)           1,031,200
investments
Prov. for writedowns - inventories                 12,364,140                   409,039                                              12,773,179
Prov. for writedowns – trade                        1,171,941                    48,003                                               1,219,944
receivables
Prov. for writedowns – other                           527,505                     1,890            481,460           250,000          297,935

Provisions for writedowns .........               15,445,490                   620,345             673,194                  0      15,392,641

Total .........................................   15,704,467                   919,775             897,888                  0      15,726,354




                                                   RECEIVABLES AND PREPAID EXPENSES


                  (€)                                                                    Dec. 31,        Due within    Due after
                                                                                          2003             1 year       1 year
                                                                                          Gross

                  NON-CURRENT RECEIVABLES
                  Receivables relating to equity holdings ................                     633,412                     633,412
                  Loans ............................................................             4,246        2,670          1,576
                  Other investment receivables.............................                  1,358,545                   1,358,545

                                                                                             1,996,203        2,670      1,993,533

                  CURRENT RECEIVABLES
                  Trade receivables - doubtful or in dispute............                     1,619,944                   1,619,944
                  Other trade receivables.....................................               5,634,433    5,634,433
                  Personnel and related receivables.......................                      19,644        4,445         15,199
                  State - income tax..........................................               3,095,943       37,500      3,058,443
                  State - VAT.....................................................             402,981      402,981
                  State - miscellaneous.......................................                 113,063      113,063
                  Miscellaneous..................................................               19,045       19,045

                                                                                         10,905,053       6,211,467      4,693,586

                  PREPAID EXPENSES .........................................                  825,382       825,382

                  Total.............................................................    13,726,638       7,039,519      6,687,119




                                                                                 71
                                                             LIABILITIES


(€)                                                        Dec. 31,            Due within       Due within     Due after
                                                            2003                 1 year         1 to 5 years    5 years
                                                            Gross

Borrowings from financial institutions                      9,425,193               712,717        2,581,160    6,131,316
Other borrowings.........................                       9,127                 2,658            6,469
Trade payables............................                  1,850,886             1,850,886
Payroll and related liabilities ..........                    445,618               445,618
Social security liabilities ................                  644,402               644,402
State – VAT liability                                         150,032               150,032
State – other taxes and duties .......                        109,817               109,817
Other liabilities............................                 389,469               389,469
Deferred income                                                   162                   162

Total.........................................           13,024,706              4,305,761        2,587,629    6,131,316




                                                       ACCRUED EXPENSES


      (€)                                                                                        Dec. 31,
                                                                                                   2003
      Borrowings from financial institutions .......................................                73,601
      Other borrowings                                                                                   91
      Trade payables.....................................................................          626,364
      Tax and social security liabilities..............................................            751,114
      Bank financial charges...........................................................               2,858
      Other liabilities.....................................................................            119

      Total .................................................................................    1,454,147


                                                      ACCRUED REVENUES


      (€)                                                                                        Dec. 31,
                                                                                                  2003
      Trade receivables..................................................................           14,252
      State receivables ..................................................................         113,063
      Other receivables..................................................................             6,539
      Cash and marketable securities...............................................                      12

      Total .................................................................................      133,866


                                PREPAID EXPENSES AND DEFERRED REVENUES


      (€)                                                       Prepaid expenses                Deferred revenues
                                                                    Dec 31, 2003                  Dec. 31, 2003
                                                                                825,382
      Operating activities...............................................................                     162
      Financing activities................................................................0                     0
      Exceptional items ................................................................ 0                      0

      Total ................................................................      825,382                      162




                                                                      72
                                             SHARE CAPITAL COMPOSITION


     (Units)
     Shares at January 1, 2003 .....................................................            18,826,560
     Shares issued during 2003 .....................................................               145,460
     Shares bought back during 2003.............................................
     Shares at December 31, 2003.............................................                   18,972,020

Share par value is set at € 0.16. There is only 1 class of shares. The share capital is fully paid-up.

Other share capital movements: Pursuant to the terms of resolution 4bis, the Combined General Meeting of June 13,
2003 authorized the reclassification of the tax savings generated by the stock exchange listing costs, amounting to
€ 2,134,842.68, from share premiums to retained earnings, in order to conform with Notice 00-D of December 21, 2000
of the Comité d’urgence du Conseil National de la Comptabilité.




                                           FINANCIAL COMMITMENTS GIVEN


     (€)                                                                                         Dec 31, 2003
     Guarantees and securities                                                                          878,849
     Pension and retirement benefit commitments ............................                            560,092
     Other commitments given......................................................                   12,417,797
     - € 2,385,728 in forward coverage...........................................
     - € 688,836 - Citycorp leasing.................................................
     - € 9,343,233 in mortgages....................................................

     Total..................................................................................        13,856,738


                       INTER-GROUP TRANSACTIONS BALANCE SHEET BALANCES

    (€)                                                                                        Related companies   Commercial note s
                                                                                                 Dec 31, 2003        Dec 31, 2003
    Equity holdings.....................................................................                 912
    Receivables from equity holdings .............................................                   633,412
    Trade receivables ..................................................................           1,989,107              9,063
    Advances and prepayments on sales orders...............................                              504            799,230




                                                AVERAGE WORKFORCE SIZE

    (number of full-time employees)                                                              Dec 31, 2003
    Managers.............................................................................             35
    Supervisors and technicians ....................................................                  15
    Non-manual employees..........................................................                    61
    Manual employees.................................................................                   4
    Total ..................................................................................         115




                                                                     73
                                                                     SEGMENT INFORMATION


                                         ANALYSIS OF SALES BY ACTIVITY                                                                 2003
                      System sales .......................................................................                            13,333,428
                      Component sales ..................................................................                               2,920,218
                      After-sales-service sales ........................................................                                 264,251
                      Services revenues.................................................................                                 396,205

                      Total..................................................................................                         16,914,102


                              ANALYSIS OF SALES BY GEOGRAPHIC REGION                                                                      2003
                      France................................................................................                           1,198,891
                      Rest of European Union..........................................................                                 3,808,841
                      Rest of World .......................................................................                           11,906,370

                      Total..................................................................................                         16,914,102

                                      FUTURE INCOME TAX REDUCTIONS AND INCREASES


                                                                                                                                            2003
                      Reductions
                       - provision for writedown – work-in-process ............................                                        2,838,157
                       - provision for writedown – trade receivables                                                                   1,219,944
                       - 2003 translation difference liability ......................................                                      3,253
                       - 2003 construction and Organic provisions .............................                                           40,130
                       - Funds liquidation value difference........................................                                          822

                      Total reductions.................................................................                                4,102,306

                      Tax losses carried forward                                                                                       3,431,093
                      Capital losses carried forward .................................................                                    26,479

                                       BREAKDOWN OF NET EXCEPTIONAL INCOME

                        Exceptional income                                                                                                          2003
                        - cancellation of Delalande 1995 contribution provision..................                                                  13,716
                        - cancellation of agent commissions ..........................................                                              2,439
                        - cancellation of wage garner....................................................                                           1,381
                        - income from computer equipement sale ...................................                                                    699
                        - cancellation of uncashed cheques ...........................................                                                469

                        TOTAL EXCEPTIONAL INCOME ..............................................                                                18,704

                        Exceptional expenses                                                                                                        2003
                        - VAT settlement ....................................................................                                         708
                        - net book value of assets disposed ...........................................                                             8,496

                        TOTAL EXCEPTIONAL EXPENSES...........................................                                                       9,204



                                     INFORMATION ON SUBSIDIARIES AND ASSOCIATE COMPANIES
                                                     AT DECEMBER 31, 2003
    (€)


                     Share                                               Shares held –                                Guarantees &
                                                 Other                                                 Loans/advances                                               Dividends
                     capital       Share                   % ownership    gross book     Shares held                       sureties                 2003 net loss
     Company                       capital (€)   equity                                  - net book     received from                  2003 sales                   paid to
                     (Local                                                  value                                    received from
                     Currency)                                                              value         Riber SA                                                   Riber SA
                                                                                                                         Riber SA

    Subsidiaries > 50% ownership

    Riber Inc          1,000           792       (8,134)      100%          912           0               633,413                      4,094,853      (170,426 )        0




    Associate companies > 50% ownership

    N/A



The advance granted to Riber Inc has been the object of a € 160,501 writedown provision in light of that subsidiary’s net
negative equity position at December 31, 2003.




                                                                                         74
                                INDEPENDENT AUDITORS’ SPECIAL REPORT
                                       ON REGULATED AGREEMENTS
                                  (Fiscal year ending December 31, 2003)

To the Shareholders of Riber SA
133, boulevard National
92500 Rueil Malmaison, France
Ladies and gentlemen,
As Independent Auditors of your Company’s financial statements, we hereby present to you our report on the
regulated agreements
It is not our responsibility to search for other agreements that may exist, but only to inform you of the essential
features and details of those agreements that we have been made aware of, on the basis of the information given
to us and without having to pass judgment on their usefulness and validity. According to the provisions of Article
L.117 of the decree of March 23, 1967, it is your responsibility to assess whether it is in your interests to enter
into these agreements before approving them.
We have performed our work in accordance with the applicable standards in France; these standards require the
implementation of diligence procedures in order to verify the consistency of information provided to us with the
source documents from which they arise.
Agreements authorized during the course of the 2003 fiscal year
In application of Article L.225-86 of the Commercial Code, we have been advised of the following agreements that
have been the object of a previous authorization by your Supervisory Board:
•   Pursuant to September 29, 2003 agreement between your Company and the Lavedrine Finance & Stratégie,
    Company, your Company has confided the study and realization of the disposal of some or all of its head office
    site at Rueil Malmaison, which its plans to dispose. The corresponding remuneration comprises a fixed fee of €
    30,000 (ex-VAT) payable 6 months after the signature of an agreement to which is added a variable fee
    constituted by an increasing percentage as a function of a disposal price in excess of € 10 million, going from
    1% for that portion of the disposal price between € 10 million and € 12 million to 5% for that portion
    exceeding € 15 million.
    Mr. Lavedrine is Chairman of the Lavedrine Finance & Stratégie company and is a me mber of the Supervisory
    Board of your Company.
    This agre ement, which did not have any impact on the Group’s 2003 fiscal year results, was approved by the
    Supervisory Board at its meeting of September 26, 2003.
•   From July 3, 2003, Mr. Picault receives a gross monthly remuneration of € 3,000 for his services as Chairman
    of the Executive Board. From this same date, his remuneration for his services as Marketing Director has been
    reduced 15%, to a gross monthly amount of € 16, 114.28.
This agreement was approved by the Supervisory Board at its meeting of June 13, 2003.

Agreements approved in prior years and which continued to be executed during the 2003 fiscal year
In addition, pursuant to the decree of March 23 1967, we have been informed that the implementation of the
following agreements, approved during previous fiscal years, continued during this fiscal year.
•   Riber Inc benefits from an € 8 million maximum total commitment in the form of security, guarantee or surety
    that your Executive Board is authorized to grant, upon presentation of a supporting letter of credit. This
    authorization was not exercised as of December 31, 2003.
•   No amount was billed during 2003 by your Company to its Riber Inc subsidiary concerning the provision of
    administrative services, in light of the loss-making results of this subsidiary.
•   Pursuant to an agreement concluded on September 17, 2001 between your Company and the Lavédrine
    Finance & Stratégie company, represented by its Chairman, Olivier Lavédrine, your Company benefited from
    the services of Olivier Lavédrine for the study and establishment of a € 10 million mortgage regarding the
    acquisition of the Rueil-Malmaison site on August 30, 2001.
    In payment for this service, the Lavédrine Finance & Stratégie company was paid in 2002 a fixed remuneration
    amount set at € 3,049 (ex-VAT), in addition to € 18,308 (ex-VAT), corresponding to 10% of the present value




                                                        75
    of savings achieved on the total cost of financing incurred, given a fixed annual reference rate of 5.5%.
                                               Paris, May 18, 2004
                                             The Independent Auditors

             PricewaterhouseCoopers Audit                                  Boissière Expertise Audit
                      Joel ROMEI                                               Tita A. ZEÏTOUN


4.3 EXECUTIVE BOARD REPORT TO THE COMBINED GENERAL MEETING OF JUNE 17, 2004

Dear shareholders,

We have convened you to the Ordinary and Extraordinary sessions of the Combined General Meeting, in
accordance with the legal, regulatory and bylaw provisions, in order to present to you the results of our
management of the Company and the Group for the fiscal year ending December 31, 2003, and to submit for your
approval the related financial statements.


During the Meeting, you will also be presented with the reports of the Independent Auditors.


In addition, we wish to avail ourselves of this Meeting of shareholders to submit the following operations before
you for your approval:
        ü   Authorization granted to the Executive Board to buyback a portion of the Company’s shares, pursuant
            to legal conditions and the authorization given to the Executive Board to cancel the said buyback
            shares;
        ü   Delegation given to the Executive Board to issue marketable securities and setting of maximum limits
            for marketable securities that can be issued without maintenance of preferred subscription rights;
        ü   Delegation govern to the Executive Board to realize an increase in share capital for the benefit of
            employees within the framework of Article L.225-129 VII;
        ü   Authorization to use these delegations during a public takeover bid ;
        ü   Authorization given to the Executive Board to allocate duties and fees costs resulting from a share
            capital increase or issue of marketable securities to share premium arising from such operations;
        ü   Bylaws modification proposals.


The present report can be divided into two parts:


-   Part I presents an overview by the Executive Board of the management of the Group and Company for the
    fiscal year ending December 31, 2003 ;


-   Part II presents the motives, terms and conditions of other operations submitted to you for your approval.
                                                              ***




                                                         76
                        PART I – MANAGEMENT REPORT OF THE EXECUTIVE BOARD
                           FOR THE FISCAL YEAR ENDING DECEMBER 31, 2003

The financial statements have been prepared in accordance with the same principles and methods as those
adopted in the previous fiscal year, in conformity with the provisions of the French Accounting Plan and adhering
to the principles of fairness and prudence.


                            I – COMPANY AND GROUP FINANCIAL PERFORMANCE


1 -Company and Group 2003 fiscal year results

   Company sales decreased by about 6% to € 16,914,102 from € 17,989,273 for the previous fiscal year.


   Group sales decreased by 7.5% to € 17,227,604 from € 18,633,665 for the previous fiscal year.


   Production machine sales decreased by 64% to € 3.7 million, comprising 1 MBE 49 machine for opto-electronics
   application and 1 MBE 6000 for microelectronics applications. The weakness in production machine sales is due
   to a continuing production overcapacity in the market.


   Research machine sales increased by a significant 191% to € 9.9 million, with 18 machines sold in 2003,
   compared to 4 in 2002.     This strong increase in sales results from a significant increase in the number of
   research projects for new applications that will use promising materials such as GaN, and from the formidable
   success of the Compact 21 model with the world scientific community.


   Parts, components and services sales decreased by 30%


   In 2003, Asian sales increased by 28%, driven entirely by investments in research machines. At the same
   time, European sales declined slightly by 6%, while North American sales decreased by a significant 31%,
   reflecting competitive pressure and the impact of the $US/€ exchange rate, which affect about 31% of sales
   while the number of machines sold increased.


   Riber SA’s commercial subsidiary, Riber Inc, posted 2003 fiscal year sales of € 4,094,853, down from €
   6,436,853 for the previous fiscal year.


   More information concerning the results and operations of this subsidiary is included in the appendix attached
   to this report


2 -Significant events arising during 2003 that impacted on the Company and the Group

In June 2003, Riber and two CNRS laboratories signed separately agreements to establish Joint Laboratories:

   -   The first of these laboratories comprises a RIBER Technology Process Center (TPC) located at the CNRS-
       CREHA facilities in Sophia -Antipolis, France, which will focus on the epitaxy of nitride base (GaN) semi-
       conductor compounds for use in Defense electronics, base stations, high-power electronics and blue lasers.
       This TPC will enable the supply of epiwafers to Riber customers and to train operators in this type of
       process. A Compact21 Research machine was delivered to this TPC in November 2003.

   -   The second of these laboratories comprises a RIBER Technology Process Center (TPC) located at the CNRS-
       CRMN facilities in Ma rseille, France. This TPC will focus on the realization of ultra -thin oxides that will
       become necessary in future generation different electronic circuits such as memory magnetic devices and




                                                        77
        various audio -video read heads. This TPC will enable , after the realization of preliminary works, to supply
        demonstration epiwafers to Riber customers and to train operators in this process.


In September 2003, RIBER delivered a MBE49 OX machine to the IBM Research Center in Zurich, Switzerland,
within the framework of the INVEST European Project on HK oxides (high dielectric constants), which should
enable a considerable improvement in silicon chips in the future.


3 -Anticipated developments and future prospects for the Company and Group

(i)     Production machine market
        The production machine market concerns commercially mature applications such as mobile phones (power
        amplification and reception), terrestria l radio -frequencies networks (LAN, WLAN, WIFI, LDMS, Multipoint),
        automobiles (Hall effect sensors), data storage (DVD lasers ) and fiber optic WANs (hunting and
        transmission lasers), which are relatively diversified in terms of activity level, while remaining growth
        markets, for which certain applications are experiencing today excess machine production capacities that
        are slowly being absorbed. In this context, the Company forecasts that it may deliver many machines that
        will be used by certain customers in the increase of their production resources.


        The production machine market also concerns applications in their commercial development phase, such
        as blank LEDs for mobile phone screens or PDAs, VCSEL type lasers for fiber optic LANs and MANs, anti-
        collision radars for automobiles, all of which are experiencing slower than forecasted growth given the
        longer than expected qualification and certification processes. In this context, the Company forecasts that
        it may deliver multiple machines that will serve in the increase of the production resources of certain
        customers.


(ii)    Research machine market:
        This market continues to be very active following the continuation of new projects financing, both for
        the development of new applications and in response of new technological challenges.
        The new applications concern:
        - GaN semiconductor components based devices for microwave frequencies for anticipated use in cars,
        base stations, electrical power supplies, and for opto-electronics, blue lasers for the storage of data on HD-
        DVD                                                                                                      disks;
        - InSb components based devices in order to produce infrared sensors and far-infrared sensors with an
        anticipated use in biotechnologies, environme nt and security.
        - Research activities to realize ultra -fast electronic devices.


        New technological challenges comprise the realization of very fine stable oxide structures for most future
        generations of semiconductor devices such as CMOS memories for PCs, and the realization of
        semiconductor compound wire or quantum island nano-technological devices.


        The research machines should significantly contribute to 2004 sales, notably through the success enjoyed
        by the Compact21 machine within the scientific community.


(iii)   Components market
        The commercialization of innovative or higher performing components, developed over these last
         few years, for research and production machines, should enable an increase in sales.




                                                            78
4 -Significant post Balance Sheet events for the Company and Group
   No information to report.

5 -Company and Group 2003 Research and Development activities
   Gross Research and Development costs increased to € 3.5 million from € 3.3 million for the previous fiscal year,
   of which € 0.4 million was allocated to the manufacturing cost of systems arising from new business or specific
   requests relating to a sales order, compared with € 1.0 million for 2002.


   Net Research and Development costs increased to € 3.1 million from € 2.3 million for 2002.

6 -Personnel matters

   Workforce status

   At December 31, 2003, the Company employed a workforce of 113, including 3 employees on fixed-term
   contracts and 1 employee working in the United Kingdom. Riber’s US subsidiary, Riber Inc, employs a
   workforce of 6 employees.
   In 2002, the Company            proceeded   with   21     hirings,   consisting   of   4   engineers/managers ,   7
   technicians/employees, 3 apprentices and 6 seasonal contract workers in order to handle excess activity during
   holiday periods. These hirings compensated 27 departures, including 6 resignations, 4 retirements and 4 non-
   renewed fixed term contracts.
   At the end of 2003, the average workforce age was 40.3 years, with an average seniority of 11 years.
   Outsourced labor, primarily used to handle excess activity, accounted for 1.6% of the average total workforce.
   The Company’s workforce was called upon to work 1,044 hours of overtime in excess of the regular 38 ½ hour
   workweek during 2003.
   Finally, in 2003, 5 employees were dismissed from the Company and 1 was made redundant..


   Workweek organization

   A workweek reduction agreement was proposed to employees to employees in November 2001, which was not
   implemented. New negotiations regarding a reduction in workweek were initiated during the 2 nd half of 2003.
   The Company’s normal workweek is 38.5 hours long, with 3 employees employed on a part time basis (2
   working a 4 day-week and 1 working a 25-hour workweek).
   The Company has a 2.7% absenteeism rate, amounting to 10 workdays per calendar year.                    Excluding
   maternity leave, work accident and illness not requiring hospitalization, the Company’s absenteeism rate is
   1.1%, amounting to 4 workdays per year.


   Personnel remuneration policy

   Company payroll decreased to € 4.1 million from € 4.3 million for 2002.
   Social security contributions as a percentage of payroll increased to 49.4% from 49.3% for 2002.
   The slight decrease in payroll is due to the non-replacement of certain employees (27 departures compared to
   21 hirings) and the non-renewal of 3 fixed-term contracts. Salary increases were one-off.
   A profit sharing agreement and a Company savings plan were signed in December 2001.
   Women accounted for 24% of the workforce (20% of managers, 7% of supervisors and 31% of employees),
   with remuneration differences between men and women being insignificant and in line with the market.


   Company committees and agreements

   The Company has a Works Council and a Health, Safety and Safe Work Practices Committee. No Company
   agreements were signed during 2003.

   No new RIBER share subscription options plan was approved by the Executive Board in 2003 given the financial
   results for that year.




                                                        79
  Health and safety

  The implementation of health and safety measures is part of the mandate of the Company’s Health, Safety and
  Safe Work Practices Committee, which meets monthly. The employee awareness program on the dangers and
  on safe work practices, which was initiated in 2002 with special emphasis on appropriate clothing and safety
  measures to be followed by employees performing high safety risk jobs, was pursued in 2003.
  There were 3 workplace accidents in 2003, of which 1 was non-industrial in nature, compared to 7 workplace
  accidents in 2002.


  Training

  For 2003, training costs accounted for 2.1% of the Company’s gross payroll costs, resulting in the delivery of
  129 days of training. 42 employees participated in 48 in-service training sessions. The Company’s training plan
  is determined based on the specific needs of individuals and departments.


  Handicapped employees

  The Company employs one handicapped person, recognized as such by COTOREP, representing 0.65 units of its
  6 obligation units. The Company made a € 11,389 contribution to the AGEFIPH during 2003.


  Charitable works

  All charitable works are handled through the Works Council.


  Importance of sub- contracting

  The Company avails itself of sub-contractors for the performance of production works that it is unable to
  perform on site, as well as the development of software.
  It also avails itself of outsourced labor for non-core activities, including site security, cleaning, green spaces
  management and information syste ms maintenance.


7 -Environmental matters


  MBE machines as well as components and accessories produced by Riber are assembled and tested at the
  Group’s sole manufacturing facility located in Rueil-Malmaison, France. The Group’s US subsidiary, Riber Inc,
  does not have any impact on the environment given its commercial nature.


  Riber avails itself of subcontractors for the majority of parts used in the assembly of machines and other
  products. Certain parts are fine-machined by Riber’s mechanical department. Once manufactured, mechanical
  parts are chemically treated in order that Riber machines are able to achieve the required ultra-high vacuum
  levels. This surface treatment makes use of mineral acids and other chemical agents.


  The Company in addition offers, for the maintenance phases of its machines, chemical decontamination and
  cleaning services for MBE machines and related parts that require the use of, and sometimes discharge arsenic
  or phosphorus based compounds and other dangerous substances. Toxic substances are recycled by certified
  entities.


  For the chemical treatment of parts, the Company avails itself of a surface treatment installation that is subject
  to regulatory authorization and reporting, and which conforms with the provisions of the January 4, 1985
  French Ministerial Decree regarding controls of nuisance generated waste elimination facilities. It uses only a
  very limited volume of dangerous substances and generates a very small quantity of toxic wastes that are




                                                        80
  eliminated by certified environmental companies. This installation is regularly monitored by the responsible
  authorities.
  The Group’s policy on natural resources consumption management has led to the following results:
  - Water: water consumed by the Company is essentially used for the thermal cooling of machines.             The
  Company has implemented a water consumption reduction program that was initiated with the acquisition of
  two wate r coolers, enabling the use of this resource in a closed circuit. Water consumption declined by 30% in
  2003 compared to 2002.
  - Electricity: this energy is used for motor power and thermal energy production. The improvement in thermal
  insulation through the use of new materials should enable a reduction in electricity consumption.


  Before the acquisition of its industrial facility in August 2001, Riber conducted a buildings and soil analysis,
  which revealed no asbestos, or soil and subsoil contamination.


  The Company’s operations had no impact on the environment as regards air emissions and water and solid
  waste discharges.


  In addition, the Company’s Health, Safety and Safe Work Practices Committee meets monthly, and is
  particularly concerned with ensuring that proper health and safety conditions exist for both people and the
  environment.

                               II - SUBSIDIARY AND ASSOCIATE COMPANIES

1 -Acquisition of significant equity interest in companies with registered offices in France and
   acquisition of control of such companies
   No information to report.

2 - Notice given to another company arising from the Company’s holding exceeding more than 10% of
   its share capital
  No information to report.

3 -Transfer of shares arising from the regularization of cross ownerships
  No information to report.

4 -Treasury shares
  No information to report.

                                      III - ALLOCATION OF NET LOSS

1 -Review of Company 2003 fiscal year results

  The presentation of the parent company’s financial statements was consistent with that of the previous year.
  Company sales decreased by 6% to € 16,914,102 from € 17,989,273 for the previous fiscal year.
  Company operating expenses decreased to € 20,354,580 from € 31,704,227 for the fiscal year ending
  December 31, 2002, primarily as a result of a decrease in current assets writedown provision charges to
  € 444,806 from € 11,051,651 during this time .
  The Company realized an operating loss of € 4,196,706, compared with an operating loss of € 11,900,441 in 2002.
  The Company realized a loss from ordinary activities before taxes of € 3,462,909, incorporating                €
  733,796 in net finance income , compared with a loss from ordinary activities before taxes of € 13,045,793 for
  2002.
  The Company reported a net loss of € 3,336,211, compared with a net loss of 10,148,167 for the fiscal year
  ending December 31, 2002, after taking into account

  -     net exceptional income of € 9,499, compared with net exceptional expenses of € 43,167 for the 2002,




                                                        81
  -     an income tax credit of € 117,199, compared with an income tax credit of € 2,941,244 for 2002,
  -     € 0 in employees’ profit sharing plan contributions, the same as last year.

2 -Resolutions regarding the approval of financial statements and allocation of net loss

  We propose that you approve the parent company’s annual financial statements (Balance Sheet, Income
  Statement and Notes) as presented, which reported a net loss of € 3,336,211 and discharge the Executive
  Board members for their management (Resolution 1).
  We also propose to allocate the net loss of € 3,336,211 to retained earnings (Resolution 2).

  §   Dividend distribution during the last three fiscal years
  No distribution of dividends occurred during the last three fiscal years. We propose that you take note of this
  (Resolution 3).


3 -Consolidated financial statements


  The presentation of the consolidated financial statement was consistent with that of the previous year.
  Group sales decreased by 7.5% to € 17,227,604 from € 18,633,665 for the previous fiscal year ending
  December 31, 2002.
  The Group reported an operating loss of € 4,238,501 for 2003, compared with an operating loss of €
  11,996,996 for 2002.
  The Group reported a net loss of € 3,808,364 for 2003, compared with a net loss of € 9,283,508 for 2002.
  Group equity, after allocation of consolidated net profit, amounted to € 34,415,863 at December 31, 2003.



  4 - Resolution to approve consolidated financial statements

  In accordance with the law, we propose that you approve the Group’s annual consolidated financial statements
  (Balance Sheet, Income Statement and Notes) as presented, which reported a net loss of € 3,808,364
  (Resolution 7).


5 -Five-Year Financial Performance Highlights Table

  A table presenting the financial results achieved by the Company during its last five completed fiscal years is
  attached as an Appendix to this Executive Board Report, in accordance with the provisions of Article 148 of the
  Decree of March 23, 1967.


7 –Transition to IFRS accounting standards

  EU regulation N°1606/2002 from the European Parliament and the Council of July 19, 2002 on the application
  of international accounting standards requires publicly listed European companies to issue their consolidated
  financial statements in accordance with IFRS standards for fiscal years beginning from January 1, 2005.


  As a company belonging to the Euronext Next Economy segment, Riber will be required to issue its 2004
  interim financial statements indicating the major impacts on the opening and closing balances of equity items
  arising from the transition to IFRS standards. All appropriate explanations of these impacts on equity items,
  including major adjustments, must be described as well as exemptions authorized by IFRS1 and adopted by the
  Company.

  In light of these obligations, Riber has commenced a p reliminary review of the accounting and financial impacts
  arising from this change in accounting basis. This analysis will be purs ued in detail during the 2nd quarter of




                                                       82
   2004. In addition, an accounting personnel training program has been launched and will be given during the 2 nd
   quarter of 2004.


   This current preliminary analysis has identified the followed matters :
    •   Riber, having adopted for many years now recommended methods prescribed by Regulation 99-02 of the
        Comité de Réglementation Comptable regarding the preparation of consolidated financial statements, with
        many sources of divergence between French standards and IFRS standards are now ta ken into account in
        the consolidated accounts for the fiscal year ending December 31, 2003. These are:
                    §   The establishment of a pension and related services p rovision
                    §   The capitalization of finance lease contracts
                    §   The recognition of translation differences arising from foreign currency denominated
                       receivables and liabilities.
    •   The following major financial statement items may be affected by the change in accounting basis:
            o   Intangible assets: Riber has never capitalized before any Research and Development costs. IAS38
                requires capitalization if certain conditions are met. A detailed review of R&D projects will be
                undertaken in order to determine if some of these costs should be capitalized.
            o   Property, plant and equipment: IFRS requires the use of the components approach, which
                stipulates the separate accounting of components whose life expectancy is less than the asset taken
                as a whole. The implementation of this approach may have an impact on the financial statements,
                notably in regard to the industrial building acquired in 2001.
            o   Inventories: Riber will be required to ensure that its inventory production costs calculation
                method only incorporates those costs permitted by IFRS standards. The Company must also
                ensure that the calculation method it uses for slow moving inventory satisfies the requirements of
                IFRS standards.
            o   Share subscription warrants: As Riber has not issued an share subscription or purchase plan
                after November 7, 2002, the proposed change in accounting method for these plans will have no
                impact on opening Balance Sheet values at January 1, 2004.
            o   Financial instruments: Riber uses term exchange contracts for sales orders received in US
                dollars. The application of IAS 39 standard concerning cash flow movements may lead to the
                modification of the accounting of these transactions.


As IFRS standards that will become applicable from January 1, 2005 are not fully definitive as of now, the present
list of identified differences may not be considered as exhaustive or final.
We have not encountered to date any m     ajor difficulties arising from the implementation of this change in
accounting basis and we foresee being able to meet our obligations as a Company listed on the Next Economy
segment of the Euronext within the prescribed timetable.


                     IV - AGREEMENTS COVERED BY ARTICLE L 225-86 AND SUBSEQUENT
                                       OF THE COMMERCIAL CODE

We inform you, pursuant to Article L. 225-86 of the Commercial Code, that 2 new agreements were concluded
during 2003 and that previous agreements were continued. These agreements are presented in an Independent
Auditors ’ Special Report and are submitted to you for your approval. (Resolutions 4 to 6).



                  V - NON-DEDUCTIBLE EXPENSES FOR FRENCH INCOME TAX PURPOSES

The financial statements do not incorporate any expenses that are non-deductible for income tax purposes,
pursuant to the provisions of Article 223(c) of the French General Income Tax Code.




                                                          83
                      VI - CORPORATE GOVERNANCE AND CONTROL OF THE COMPANY
1 -Administration

  §    Changes to the Executive Board, Supervisory Board and Independent Auditors
      The Annual General Meeting of June 13, 2003 ratified the cooption of Axa Investment Managers Private
      Equity Europe company as a member of the Supervisory Board, in replacement of SI Finance, which
      resigned. This same AGM also renewed the terms of Erich Spitz, Olivier Lavedrine and the Axa Investment
      Managers Private Equity Europe company as members of the Supervisory Board.
      At the AGM of June 13, 2003, the term of the Supervisory Board member of Michel Baudron was not
      renewed pursuant to his expressed wish by letter date May 27, 2003.
      On January 27, 2004, Agnès Gobeau resigned from Executive Board, with her successor to be decided upon
      by the Supervisory Board meeting of March 23, 2004.


  §    Reappointments proposed to the Meeting

      The terms of the following Supervisory Board members expire at the end of this meeting: Paul Belin, Gjalt
      Smit and the IDI company. We propose that you reappoint them for a further period of two years ending at
      the end the Annual General Meeting called to approve the financial statements for the year ended December
      31, 2005 (Resolutions 8 to 10).


  2 - Share capital ownership and movements

  §    Share capital ownership
      The Company is aware of the following shareholders having a significant shareholding in the Company as of
      March 31, 2004:
      Axa Investments Managers         10.10 %     Meryll Lynch Pierce F&S          7. 0 %
      Barclays Bank                     6.20 %     Michel Picault                   5.20 %
      ADI Alternative Investment        5.00 %     Spiner Global Technology Fund    4.90 %
      IDI                               3.81 %     Finove Limited                   2.87 %


  §    Share capital changes

      Erich Spitz exercised in January 2003 62,520 of his 156,300 subscription options that he had subscribed to
      on September 11, 1998 pursuant to the Combined General Meeting of June 29, 1998. As Erich Spitz had
      already exercised 93,780 such options on September 28, 2000, he no longer holds any share subscription
      options. The number of new shares issued pursuant to the exercise of these options totaled 62,520. As a
                                                      2,
      result, the Executive Board meeting on January 2 2003, decided to increase the share capital by €
      10,003.20 to € 3,022,252.80 from € 3,012,249.60, and to accordingly modify Article 6 of the bylaws.



      Catherine Chaix exercised in May 2003 all of her 35,545 subscription options that she had subscribed to on
      September 9, 1998 pursuant to the Combined General Meeting of June 29, 1998. She no longer holds any
      share subscription options. The number of new shares issued pursuant to the exercise of these options
      totaled 35,545. As a result, the Executive Board meeting on June 12, 2003, decided to increase the share
      capital by € 5,687.20 to € 3,027,940.00 from € 3,022,252.80, and to accordingly modify Article 6 of the
      bylaws.



      Paul Dargan exercised in June 2003 all of his 47,395 subscription options that he had subscribed to on
      August 18, 1998 pursuant to the Combined General Meeting of June 29, 1998. He no longer holds any share
      subscription options.   The number of new shares issued pursuant to the exercise of these options totaled




                                                       84
          47,395. As a result, the Executive Board meeting on June 26, 2003, decided to increase the share capital
          by € 7,583.20 to € 3,035,523.20 from € 3,027,940.00, and to accordingly modify Article 6 of the bylaws.


   3 -Company Share Ownership by Employees

      §    Proportion of share capital held by Company employees on December 31, 2003
          At December 31, 2003, there were no Riber shares held collectively by Company employees (through a
          Company Savings Plan or Company Mutual Investment Fund).

      §     Acquisition of shares to be allocated to employees through a share option plan as a result of the growth of
          the Company
          No information to report.

      §    Transactions undertaken regarding share purchase or subscription options reserved for the benefit of
          Company employees
          No transactions were undertaken in 2003.


   4 -Audit and Remuneration Committees

      As part of the admission of Riber to the “Next Economy” segment of Euronext, the Supervisory Board on March
      28, 2002 established and adopted regulations for Audit and Remuneration Committees.
      Riber is a component of the Euronext “Next Economy” index since December 19, 2001.
      The Audit Committee met three times in 2003 , with a full attendance.
      The Remuneration Committee met twice in 2003, with a full attendance




                      VII – EXECUTIVE BOARD AND SUPERVISORY BOARD COMPENSATION

      Executive Board
      The following table lists the compensation and benefits paid to each member of the Executive Board by the
      Company and by the subsidiaries it controls, pursuant to Article L. 233-16 of the Commercial Code, during
      2003:


     Name           Executive      Compensation            Aggregate        Compensation         Aggregate
                    Board position paid by the            benefits paid        paid by         benefits paid by
                                   Company (€)               by the          subsidiaries      subsidiaries (€)
                                                          Company (€)            (€)
Michel Picault        Chairman                 250,985         7,495              0                    0
Catherine Chaix       Member                    82,024          0                 0                    0
Agnès Gobeau          Member                    68,231          0                 0                    0

   Executive Board members are not paid any variable remuneration. Michel Picault benefits from the use of a
   company car. Executive Board members do not benefit from a specific retirement plan other than from a
   retirement plan for authorized managers.

   Supervisory Board
   Supervisory Board members were not paid any compensation or benefits by the Company or by the
   subsidiaries it controls.




                                                            85
VIII – EXECUTIVE BOARD AND SUPERVISORY BOARD MEMBERS

The following tables list all of the Corporate Governance positions held during 2003 by members of the Executive
Board and Supervisory Board:

                                  Executive Board Members
         Name               Corporate Governance Company in which                Company
                             position held           position held              jurisdiction
     Michel Picault                 Chairman           Riber Inc.               United States
    Catherine Chaix
                                      None                       N/A                 N/A
    Agnès Gobeau




                                Supervisory Board Members
         Name              Corporate Governance Company in which                  Company
                            position held            position held               jurisdiction
      Erich Spitz          Supervisory      Board        Valéo
                         member
                               Chairman - CEO         Thales Avionics LCD
                                                                                    France

                               Member of the                  Moduloptic
                              Board of Directors
                                  Director                 Thales Corp orate
                                                               Ventures

                           Executive Board member                ERA            Czech Republic

    Michel Baudron                Deputy CEO                Horiba Jobin Yvon
   (January 1, 2003                                              SAS
   to June 13, 2003)
                                    Director                   ISAFILA
                                                                                    France
                                    Director                    Ryman

                               General Manager                 SC CCLJ
                               General Manager                 SC CMB
                                 Co Chairman                    JY Inc

                                 Co Chairman                     MSI             United States
                                  Board member                  CBSAI
                               and Vice President
                                    Director                    JY UK           United Kingdom
                                    Director                   JY Italie             Italy

       Gjalt Smit                     CEO                      Tims bv           Netherlands

                               Supervisory Board             Tecnotion bv          Almelo
                                   member                                        Netherlands
                                     CEO                       PROGNA             Düsseldorf
                                                                                   Germany

                                 Supervisory Board Members




                                                      86
     Name           Corporate Governance   Company in which         Company
                     position held            position held        jurisdiction
Olivier Lavédrine         Chairman         Lavédrine Finance et
                                              Stratégie SAS
                          Chairman         Pennel Industries SAS

                      General Manager             OL93 SARL
                                                                     France
                     Supervisory Board             ADI SA
                         member

                          Director           ADI Participations


                     Supervisory Board       Financière Atlas
                         member

                     Supervisory Board       Jouve & Associés
                         member

                     Managing Director               SLF           Luxemburg



   Paul Belin       No positions held               -------           -------

       IDI                                          IPBM

                                                  IDI Kaïros         France
                          Director
                                                    Euridi
                                                   Coparis




                                             87
                             Supervisory Board Members
      Name            Corporate Governance     Company in which                Company
                           position held         position held                jurisdiction



    Christian                                      Ancelle et Associés SA
Langlois -Meurinne
                         Chairman - CEO                  MARCO POLO
                                                       INVESTISSEMENTS
                                                           EURIDI SA

                     Supervisory Board member          GRANDVISION SA           France

                           Deputy CEO                     IDIFINE SA

                               CEO                       COPARIS SA
                                                           IPBM SA
                                                      OGI ALBAN (SAS)
                                                        AUDIRIS (SAS)
                                                  Financière Neuilly-Madrid
                                                            (SAS)
                                                     Financière Bagatelle
                                                            (SAS)
                                                       Avenir Entreprise
                                                           (SICAV)
                                                      Partner Midcap US
                                                           (SICAV)
                       Censor to the Board of                Euris              France
                              Directors
                     Permanent representative
                      of Ancelle et Associés on           IDI Kaïros
                       the Board of Directors
                     Permanent representative
                     of EURIDI on the Board of
                              Directors                IMV Technologies         France
                     Permanent representative
                     of Idifine on the Board of
                              Directors           Financière Beuilly-Barres




                                                  88
                                   Supervisory Board Members
      Name             Corporate Governance           Company in which                  Company
                           position held                position held                  jurisdiction



 AXA Investment                                                 W-Tech-Fi
 Managers Private
  Equity Europe                                                Bonna Sabla

                         Supervisory Board            Société Financière Daum Tétart
                              member                             CFC Daum

                                                                 TAGSYS

                                                               PHS MEMS
                                                                                         France
                                                            HOLFRA FINANCES

                                                            Genopole 1 er jour

                                                            CORNHILL FRANCE

                                                           I-SOURCE GESTION

                                                                FINSECUR

                                                             FINANCIERE PLS

                                                                MANREO

                                                                WINWISE

                                                              CONSO RT NT

                                                                  ILIAD

                                                               PIKANTER 3
                              Director
                                                                 EURIDI

                                                      MATIGNON INVESTISSEMENT ET
                                                               GESTION
                         Supervisory Board                   PARTAPEF 11
                             member
François Jerphagnon   Permanent representative                    ILIAD
                            of AIMPEE

                       Deputy-Chairman of the                Financière Daum
                         Supervisory Board                                               France

                      Supervisory Board member                  CFC Daum




                                                 89
                 X – SUPPLEMENTARY INFORMATION REGARDING QUOTED COMPANIES


1 - Information concerning market risks arising from interest rate, foreign exchange rate and share
price movements


  The Group uses forward foreign currency contracts to manage its foreign exchange risks. These agreements
  are concluded and implemented at the moment an order is received, based on the payment timetable specified
  in the sales contract.
  The value of these forward foreign exchange contracts is based on the market price at December 31 year-end.
  A foreign exchange gain of € 185,216 was noted for the outstanding contracts at December 31, 2003. The
  notional value of these forward foreign exchange contracts at December 31, 2003 was € 2,385,728.
  In July 2002 the Company entered into a variable rate loan for € 10 million. This loan is repayable over a
  period of 15 years. The evolution of interest rates was favorable during 2003. Riber nevertheless reserves
  itself the right to convert this variable rate loan to a fixed rate loan through the use of an interest rate swap.
  Marketable securities primarily comprise standard liquid investment instruments.



2 -Information on the purchase and sale of treasury shares


  The Company concluded a market promotion contract with Société Générale on December 5, 2000. In this
  regard, and within the framework of authorizations to purchase its own shares conferred on it by the Combined
  General Meetings of June 13, 2001, June 13, 2002 and June 13, 2003, the Company purchased 90,760
  treasury shares at an average price of € 1.22 per share and sold 92,099 treasury shares at an average price of
  € 1.17 per share. Riber already held 21,203 shares at December 31, 2002, acquired at an average price of
  € 1.80 per share
  At December 31, 2003, Riber held 19,864 treasury shares at an average price of € 1.56 per share , representing
  0.105% of its share capital.
  Pursuant to the mandate to purchase shares signed on March 22, 2001 and July 23, 2001 with Société
  Générale, Riber did not acquire or sell any shares during 2003. At December 31, 2003, Riber held 284,073
  treasury shares under this arrangement, representing 1.50% of its share capital.
  Pursuant to Article L.225-211, section 2 of the Commercial Code, the following information is presented
  regarding the use of the aforementioned authorization:



  Number of treasury shares purchased by the Company                                      90,760
  Average purchase price (€)                                                                1.22
  Number of treasury shares sold by the Company                                           92,099
  Average sales price (€)                                                                   1.17
  Total transaction costs (€)                                                             23,000
  Number of treasury shares held by the Company at December 31, 2001                      303,937
  Treasury shares as a % of share capital at December 31, 2001                            1.60 %
  Treasury shares acquisition value (€)                                                  1,359,062
  Average par value per treasury share (€)                                                  0.16

  Motives for acquiring Company shares                                                Share liquidity
                                                                                      Multiple objectives




                                                         90
                     PART II – EXECUTIVE BOARD REPORT ON OTHER OPERATIONS
                           PROPOSED TO THE COMBINED GENERAL MEETING



 I – AUTHORIZATION GRANTING POWERS TO THE EXECUTIVE BOARD ENABLING IT TO BUY AND SELL
                         SHARES IN THE COMPANY, IN ACCORDANCE WITH THE LAW

1 -Authorization to buyback shares


  We propose that you renew the authorization granted to the Executive Board by the Combined General Meeting
  of June 13, 2003, which expiries at the present Meeting, to enable the Company to buyback its own shares,
  pursuant to Article L.225-209 of the Commercial Code (Resolution 11).


  This share buyback program will have the following objectives:


  -    ensuring the stabilization of the Company’s share price;


  -    facilitating the undertaking of Company growth and financial transactions, with acquired shares being
       used for any purposes and in particular, in full or in part, being retained, disposed of, transferred or
       exchanged;


  -    allocating purchased Company shares to employees and managers in accordance with the terms,
       conditions and provisions established by law, in particular within the framework of a profit sharing plan
       borne from the expansion of the Company, a share option plan or Company Savings Plan;


  -    canceling such shares up to a maximum limit of 10% of the Company’s share capital, over a period of
       twenty-four months, contingent upon the adoption by the Meeting in Extraordinary Session of the
       resolution presented to the Meeting concerning the authorization granted to the Executive Board to cancel
       shares purchased pursuant to the present authorization.


  The shares may, at any time, within the limits of the regulations in force, including the period of a takeover bid,
  be acquired, disposed of, transferred or exchanged, by any means, including particularly block transfers, option
  transactions and the use of derivative financial instruments. The maximum amount of share capital acquired or
  transferred through block transfers may be the full amount of the program.


  The Meeting sets the following conditions of implementation of this authorization:


  -   the maximum number of Company shares that may be acquired pursuant to the present resolution may
      not exceed 10% of the shares comprising the share capital at the date this share purchase program is
      implemented;


  -   the total maximum value of Company s hares that may be purchased may not exceed               € 9,000,000;


  -   the maximum purchase price and minimum sale price (as adjusted, where need be, to take into account
      transactions concerning the Company’s share capital) are set as follows:


      - maximum share purchase price: € 5;

      - minimum share sale price: € 0.2.




                                                        91
      This share buyback authorization shall be granted for a period of time expiring at the time of the General
      Meeting called to approve the financial statements for the fiscal year ending December 31, 2004, and may not
      in any event exceed 18 months. It supersedes, from today, the authorization granted to the Company by the
      Combined General Meeting of June 13, 2003 pursuant to the 11th resolution to purchase its own shares.


      We propose that you confer the necessary powers to the Executive Board to implement this share buyback
      program.


      The Executive Board shall provide shareholders, in its Report to the Annual General Meeting, with information
      relating to the transactions on shares thus acquired during the fiscal year2.



2 -Authorization to cancel acquired shares

      The share buyback program for which we are seeking your authorization notably provides for the possibility for
      the Company to cancel the purchased shares, which implies the realization of a share capital reduction.


      Consequently, as a complement to the share buyback program, we request that you grant the authorization to
      the Executive Board to cancel all or some of the of the treasury shares acquired within the framework of the
      share buyback program prescribed in the preceding paragraph and in preceding programs, up to a maximum
      limit of 10% of the Company’s share capital, over a period of twenty four months, and to reduce the share
      capital accordingly (Resolution 12).


      In addition, we propose that you authorize the Executive Board to allocate the difference in value between the
      purchase price of the cancelled shares and their par value to share premium and available reserves and to
      grant it all necessary powers within the framework of this share capital reduction.


      This authorization is granted for a period of time expiring at the time of the General Meeting called to approve
      the financial statements for the fiscal year ending December 31, 2004, and may not in any event exceed 18
      months.



3 – AMF Note

      In accordance with COB Regulation N°98-02 as modified by Regulation 2000-06, this share buyback program is
      the object of an Information Note approved by the AMF, which is available for your review at our registered
      office.




2
    The report of the preceding authorization is included in section X 2.



                                                                   92
        II - AUTHORIZATION TO ISSUE MARKETABLE SECURITIES GIVING ACCESS TO CAPITAL

1- Global delegation with maintenance of pre-emption right of subscription for shareholders


  We propose to substitute the global delegation conferred by the Extraordinary General Meeting of June 13,
  2002 to the Executive Board, with a new global delegation that will enable it to issue, with maintenance of pre-
  emption right of subscription for shareholders, of various multiple securities (shares with or without share
  subscription warrants attached, marketable securities giving right to allocation of securities that are issued in
  representation of a quota of the share capital of the Company, warrants that confer the right to subscribe to
  shares representing a quota of the share capital of the Company) (Resolution 13).


  The increases in share capital resulting from these issues may notably arise from the incorporation into share
  capital of all or some reserves, net profit, share premiums, merger and contribution premiums, available
  provisions or charges, to be realized by the creation and free distributio n of shares or though the increase in
  the par value of existing shares, or by the utilization of both these processes, whether in kind or in cash.


  We propose to set the maximum nominal amount of the share capital increases realized pursuant to this
  delegation at € 1,500,000, subject to adjustments susceptible of occurring pursuant to the law, and the
  maximum nominal amount of bonds and other borrowing securities that may be issued pursuant to this
  delegation at a ceiling of € 160,000.


  We propose to exclude from this delegation the issue of investment certificates and preferred shares.


  We propose to specify that:


  -     shareholders will benefit from a non-divisible subscription right proportional to the number of shares that
        they will hold, to marketable securities issued pursuant to this delegation, with the conditions and
        modalities of the exercise of this right of subscription that has been set by the Executive Board during
        each issue;


  -     the Executive Board may decide to institute a divisible right of subscription.


  This delegation carries the expressed renunciation, or according to the case, carries with it the full right, for the
  benefit of holders of marketable securities issued pursuant to this delegation, for shareholders to their pre-
  emption right of subscription to shares to which these marketable securities give right. In particular, the pre-
  emption right of subscription of shares issued by the conversion of bonds or by the exercise of share
  subscription warrants is expressly renounced.


  We propose to grant all necessary powers to the Executive Board to implement this delegation and notably to
  proceed with the modification of Bylaws that will be rendered necessary by the utilization of this delegation.



  Finally, we propose to decide that this delegation supersedes the delegation conferred by the Extraordinary
  General Meeting of June 13, 2002 and to set the duration of the present delegation at 26 months from the date
  of the Meeting, that is until August 16, 2006, inclusive.




                                                         93
2 -Ceiling for share capital increases that may be realized with cancellation of pre-emption right of
   subscription for shareholders


  We propose, in accordance with the Law, to set by separate resolution (Resolution 14) the nominal amount of
  the issue of the various marketable securities discussed above that may be realized by the Executive Board,
  with cancellation of pre -emption right of subscription for shareholders, within the same conditions and the
  same period as the issues with maintenance of pre -emption right of subscription for shareholders, at €
  1,500,000.


  We also propose to set the nominal amount of bonds and all other borrowing securities that may be issued
  within the framework of the global delegation, with cancellation of pre -emption right of subscription for
  shareholders, at € 160,000.


  The amounts of € 1,500,000 and € 160,000 will be in addition to the proposed nominal amount of € 1,500,000
  pursuant to this global delegation.


  Consequently, you will be asked to cancel the pre-emption right of subscription for share holders to marketable
  securities prescribed in Section 1 above, and, to take note that this decision comprises the expressed
  renunciation, or according to the case, carries with it the full right, to pre -emption right of subscription to
  shares to which these marketable securities give right, and in particular, to decide to cancel the pre-emption
  right of subscription of shares issued by the conversion of bonds and to securities to which subscription
  warrants give right to.


  The Executive Board may also confer to shareholders a priority period to subscribe to the various marketable
  securities thus issued.


  In the event of the full or partial utilization of the powers thus delegated, the Executive Board will be required
  to specify the procedures for setting the subscription price of marketable securities issued and to issue a
  complementary report prescribed by law.



3 -Report on utilization of the preceding delegation


  We inform you that the Executive Board did not make use of the authorization conferred t it by the 9th
                                                                                         o
  resolution of the Extraordinary General Meeting of June 13, 2002.




                                                        94
4 -Proposal to increase share capital reserved for employees and managers


                                                                                               o
  Pursuant to the provisions of Article L. 225-129 VII of the Commercial Code, we are required t decide on a
  draft resolution regarding a share capital increase realized in accordance with the conditions prescribed by
  Article L.443-5 of the French Labor Code, which is for the benefit of Company employees and managers within
  the framework of a Company Savings Plan.


  Without this proposal, your decisions relative to delegations granted to the Executive Board to issue various
  marketable securities would be void.


  Consequently, we propose that you give the Executive Board the necessary powers to enable an increase in
  share capital to Company managers and employees belonging to the Company Savings Plan of the Company,
  not exceeding a maximum amount o f € 40,000 (Resolution 15).


  The issue price of these shares thus issued may not be more/less than 20% of the average publicly traded
  share price for the 20 trading days preceding the date of the Executive Board’s decision to set the opening date
  of subscription.


  This authorization will require the cancellation, for the benefit of employees and managers for which the share
  capital increase is reserved, of the pre -emption right of subscription of shareholders to the shares thus created.


  In the event of a share capital increase realized following the utilization of delegations granted by the present
  Meeting, the exercise of subscription options and other marketable securities giving access to share capital, the
  Executive Board will be required to decide on the opportunity to realize a share capital increase realized within
  the conditions prescribed in Article L.443-5 of the French Labor Code, to proceed with increases in share capital
  reserved for employees and managers.


  The Meeting will give the necessary powers to the Executive Board in order to implement this authorization.


  The Executive Board will prepare, at the moment it makes use of this authorization, a complementary report
  describing the final conditions of the operation and comprising, in addition, the conditions relative to the impact
  on the position of each shareholder of the issue, in particular their pro -rata share of equity.


  This authorization will be granted for the same duration as the delegation for the issue of various marketable
  securities in sections 1 and 2 above that is until August 16, 2006, inclusive.


  We would like to point out that your Executive Board views the establishment of a Salary Savings Plan as
  inopportune at this moment and accordingly advises that you vote against the related resolution.




                                                         95
5 -Renewal of authorization granted to the Executive Board to increase the share capital of the
   Company during a takeover bid


  Article L 225-129 IV of the Commercial Code prescribes that all delegations by the General Meeting are
  suspended during a takeover bid or share exchange offer concerning the Company, unless the General Meeting,
  prior to the bid/offer, expressly authorized an increase in share capital during the time of this takeover bid or
  exchange offer and if the envisaged increase was not reserved.


  The authorization conferred to the Executive Board by the Extraordinary General Meeting of June 13, 2003 to
  increase the share capital of the Company during a takeover bid expires at the end of the present Meeting.


  This is why we propose to renew this authorization that will expire at the end of the Annual General Meeting of
  shareholders called to approve the financial statements for the fiscal year ending December 31, 2004
  (Resolution 16).


  Consequently, we propose to confer to the Executive Board the discretion to use all powers of delegation
  prescribed in the preceding paragraphs, as regards the increases in share capital, in the event of a takeover bid
  or share exchange offer concerning marketable securities issued by the Company.




  6- Authorization to allocate costs, duties and fees resulting from share capital increases realized
  pursuant to the preceding resolution to share premiums arising from these operations

  We propose that you authorize the Executive Board to allocate costs, duties and fees arising from the share
  capital increases realized pursuant to powers whose delegation was the object of preceding paragraphs, to the
  share premium amounts relating to these operations and to transfer from these share premium amounts the
  necessary amounts to increase the legal reserve to one-tenth of the new share capital following this operation
  (Resolution 17).

  This measure enables the non-recognition of these costs as expenses that would reduce the net profit for the
  fiscal year ending December 31, 2004.




                                                       96
III- BYLAWS MODIFICATIONS


  We remind you that the Law of August 1, 2003, otherwise known as the Financial Security Law, reduced the
  period by which, pursuant to the terms of Article L233-7 of the Commercial Code, declarations of threshold
  crossing must be made to the issuing company and regulatory authority. The period for the declaration of the
  issuing company is now five trading days from the moment of threshold crossing instead of fifteen days.


  The Bylaws of Riber SA provide in Article 10 an additional obligation to declare to the company the crossing of
  all share capital or voting rights multiples of 5% thresholds. This notification must me made, pursuant to the
  terms of this article, within eight days.


  We propose that you reduce this period to five trading days, for the purpose of harmonization and
  simplification.


  Consequently, we propose that you modify the 4th paragraph of Article 10 of the Bylaws of the Company as
  follows (Resolution 18):


       “All individuals and entities, all legal entities acting alone or in concert, that acquire or cease to hold a
       number of shares or voting rights equal to or greater than 5% or a multiple of 5%, and this including and
       beyond the legal threshold of 5% up to 100%, will be required to notify the Company, by registered letter
       with notice of confirmation of receipt, addressed to the head office within 5 days from the date of crossing
       of threshold, the total number of shares, voting rights and securities giving potential access to share
       capital held directly, indirectly or in concert.”


  We also propose that you grant all powers to the holder of copies or extracts of the current minutes to
  complete all legal formalities and notably with regard to the Gazette du Palais (Resolution 19).




  We are at your disposal to provide you with any additional information or clarifications that you require.


  Noting that the resolution proposals encompass the matters discussed in this report, we would appreciate that
  you approve them and we would wish to thank you for your confidence and support.



                                                                                                     ___________
                                                                                               The Executive Board




                                                           97
                                                                       RIBER SA
                                                  FIVE-YEAR FINANCIAL PERFORMANCE HIGHLIGHTS TABLE


                                                                                        1999              2000          2000 pro-forma*     2001            2002              2003
SHARE CAPITAL
Share capital                                                                             2,286,735        3,010,354          3,010,354     3,011,870        3,012,250         3,035,523
Number of common shares                                                                  15,000,000       18,814,710         18,814,710    18,824,190       18,826,560        18,972,020
Number of preferred shares                                                                        0                0                  0             0                0                 0
Maximum number of shares that can be created in the future:
through the conversion of bonds                                                                   0                0                  0             0                0                 0
through the exercise of subscription rights                                                 630,255          507,310            507,310       797,830          895,460           750,000


SALES AND PROFITS
Sales (ex-VAT)                                                                           17,785,917       40,292,245         40,292,245    33,107,215       17,989,273         16,914,102
Profit/(loss) before income taxes, employee profit sharing plan allocations and           2,445,825       13,633,280         13,633,280     6,607,461          447,003        (2,095,768)
depreciation, amortization and provision charges
Employee profit plan allocations payable at fiscal year end                                   5,336         2,066,123         4,200,965     1,307,488      (2,941,244)          (117,199)
Net profit/(loss)                                                                                 0           207,840           207,840        22,575                0                  0
Dividend payments                                                                         2,112,872         9,604,177         7,469,334     3,462,572     (10,148,167)        (3,336,211)
Sales (ex-VAT)                                                                                    0                 0                 0             0                0


EARNINGS/(LOSS) PER SHARE
Earnings /loss) per share after income tax and employee profit sharing plan                     0.16             0.60              0.49            0.28            0.18              (0.10)
allocations but before depreciation, amortization and provision charges
Basic earnings /(loss) per share
Dividend per share                                                                              0.14             0.51              0.40            0.18            (0.54             (0.18)
Earnings /loss) per share after income tax and employee profit sharing plan
allocations but before depreciation, amortization and provision charges
Basic earnings /(loss) per share                                                                  0                 0                 0              0                0


WORKFORCE SIZE AND PERSONNEL COSTS
Average workforce size during the year                                                                 84                103                103       128           124                119
Fiscal year payroll expense                                                                   2,680,172           4,115,424           4,115,424 4,491,277    4,256,854           4,263,631
Fiscal year social security expenses                                                          1,275,011           1,753,187           1,753,187 2,194,218    2,097,778           2,107,097
             * December 31, 2000 accounts: in order to confirm with Note 00-D of December 21, 2000, issued on January 16, 2001 by the Comité d’urgence du Conseil National de la
                                                         Comptabilité, the allocation of securities issue costs was realized net of taxes.




                                                                                           98
                               SECTION 5 — CORPORATE GOVERNANCE


5.1.0 REPORT OF THE CHAIRMAN OF THE SUPERVISORY BOARD ON THE CONDITIONS OF
PREPARATION AND ORGANIZATION OF THE WORK OF THE SUPERVISORY BOARD AS WELL AS ON THE
INTERNAL CONTROL PROCEDURES IMPLEMENTED BY THE COMPANY

PART 1: CONDITIONS OF PREPARATION AND ORGANIZATION OF THE WORK OF THE SUPERVISORY BOARD

     A Executive Board – Supervisory Board governance structure was adopted by the Extraordinary General
     Meeting of July 16, 1997. Prior to then, the Company was governed by a Board of Directors.

     Executive Board
     Riber bylaws stipulate the Executive B  oard must comprise between two and five members. In 2003, it
     comprised three members. Members are appointed for 6-year terms, which are renewable. Executive Board
     meetings are at least once monthly, and are convened by the Chairman or at least half of its members.
     Riber bylaws also stipulate that the Executive Board may not approve loans or asset acquisitions/disposals in
     excess of € 150,000 without the authorization of the Supervisory Board.

     Supervisory Board
     Riber bylaws stipulate the Supervisory Board must comprise between 3 and 18 members. It comprised 7
     members until May 27, 2003 and 6 members there afterwards.
     The Supervisory Board met six times during 2003 to review Riber SA’s quarterly accounts and Riber Group’s
     interim and full year consolidated accounts, as well as other matters, with an attendance rate in excess of
     70%.
     Five of the six members of the Supervisory Board satisfy the independence criteria prescribed in the September
     2002 Bouton report2.
     No attendance fees were paid to members of the Supervisory Board during 2003. Each member of the
     Supervisory Board must own one share. The Supervisory Board does not comprise any members elected by the
     workforce.

     Corporate governance committees
     Following Riber shares listing on the Next Economy segment of Euronext, the Supervisory Board meeting on
     March 28, 2002 proceeded with the creation of an Audit Committee and a Remuneration Committee.
     In carrying out its responsibilities, the Audit Committee must notably review accounting and financial
     documents and participate in internal and external control procedures.
     The Remuneration Committee’s major missions are to recomme nd to the Supervisory Board the remuneration
     of members of the Executive Board, examine the remuneration of the key managers of the Company and its
     subsidiary, as well examine all share capital increase projects reserved for employees, as well as share
     purchase and subscription option plans.
     These committees meet as often as required for the best interest of the Company, and at least twice yearly,
     prior to the approval of the annual and interim accounts. These committees report to the Supervisory Board on
     their work in the form of an issued opinion.
     Each committee is governed by a specific internal regulation specifying its responsibilities and terms and
     conditions of operations. These committees are comprised by Supervisory Board members.

    Organization and operation of these committees for the 2003 fiscal year:
    The Audit Committee met three times in 2003 and twice during the 1 st quarter of 2004, with a 100% attendance
    rate. It reviewed the 2002 and 2003 annual accounts, as well as the 2003 interim accounts. It also reviewed
    cash flow forecasts, certain inventory related issues, the 2002 Reference Document and the Company’s
    compliance with Financial Security Law requirements.


3
 Note, a person who “has no relationship whatever with the Company, the Group or its management, that may compromise the
exercise of their freedom of judgment”



                                                           99
    The Remuneration Committee met twice in 2003, with a 100% attendance rate. It reviewed the remuneration of
    executive managers, as well as potential share capital increases for employees and share purchase and
    subscription option plans.

  PART 2: INTERNAL CONTROL PROCEDURES IMPLEMENTED BY THE COMPANY

    Internal control is a process that is put into place by senior management, other managers and personnel in order
    to provide reasonable assurance that the following objectives are met:
      •   Performances optimization
      •   Resources and assets safeguarding
      •   Financial information reliability
      •   Regulations and laws compliance

  GENERAL ORGANIZATION OF INTERNAL CONTROL

  The Company’s official corporate governance bodies are described in Part 1 of this report. Their respective roles in
  implementing internal control are as follow:

  Executive Board: It is responsible for establishing internal control procedures and the means to apply these
  controls and ensure their application. It reviews and approves the Company and consolidated accounts, as well as
  the whole contents of all financial information documents before their presentation to the Supervisory Board. The
  Chairman of the Executive Board also exercises the duties of Operations Director.

  Supervisory Board: It ensures that the Executive Board has properly implemented all necessary procedures in
  order to achieve the above listed objectives: performances optimization, resources and assets safeguarding, financial
  information reliability and regulations and laws compliance . The Supervisory Board verifies and controls the annual
  accounts prepared by the Executive Board.

  Audit Committee: It notably is responsible for reviewing accounts before their presentation to the Supervisory
  Board, in particular assessments and accounting choices made, as well reviewing the quality of internal control, and
  monitoring the quality of information communicated to shareholders. It issues an opinion on the annual accounts
  before their submission to the Supervisory Board for their approval. The Independent Auditors are invited to
  participate at Audit Committee meetings and generally do so.

  Remuneration Committee: Its main mission is to submit to the Supervisory Board proposals for senior
  management remuneration and to examine employee remuneration schemes in the form of the Company’s shares.

  Two other internal players have an important role on the definition and implementation of internal control
  procedures. They are :

  Quality Assurance and IS Department: The Quality Assurance Unit is responsible for the implementation of the
  ISO9000 certification and to this effect validates procedures established by operational departments, while the IS
  Unit is responsible for implementing data security procedures as well as the control of data access rights.

  Finance and Administration Department : It is responsible that procedures before the accounting of
  transactions are properly complied with. It implements permanent procedures as well as a posteriori controls that
  enable the Company to produce reliable financial information.


INTERNAL CONTROL MAJOR SUPPORTS

  ISO 9000 program

  Since July 1999, the Company has undertaken the implementation of a work organization in conformity with the
  provisions described in ISO 9000 standard version 2000.
  Current objectives are focused on the implementation of a computerized document management system based on
  the formalization of all of the processes, procedures and forms and their accessibility to all employees through the
  Company’s intranet site.




                                                          100
Information systems security
The Company’s information system, which is based on a client-server architecture, is organized on the principle of
the centralization of relevant data over a group of servers, with client terminals considered as peripherals.
In terms of data security, the implementation from the beginning of a daily back-up procedure for all data
guarantees their safekeeping and their restitution in the event of a disaster.
A limited review of computer environment was conducted by the Independent Auditors in March 2000. No major
deficiencies in computer security were detected. Minor deficiencies for the most part were either rectified or taken
into account in information systems computer security enhancements in the coming months. The Company’s
information system has remained globally stable since this date.
Access rights management (viewing, editing) to data is managed by the Quality Assurance - Information Systems
department.


Tools used in the preparation of accounting and financial information

        •   Information systems
Riber SA’s book of accounts and those of Riber Inc are maintained using standard accounting software , that provides
comprehensive general and support accounting, as well as analysis.
Sales and purchasing data are generated by an interface with the MAPICS commercial management and production
management system.
Riber SA also uses fully compatible complementary financial software.
The Group’s structure of 2 companies does not pose any complexity in the preparation of consolidated accounts.

        •   Accounting bases
Riber SA company accounts and Riber Group consolidated accounts are prepared in accordance with the following
accounting bases: Commercial Code, French General Accounting Plan, CRC regulations, CNC recommendations, and
AMF governing rules and recommendations.

Preferred methods recommended in CRC Regulation 99-02 on consolidated accounts were also taken into account
in the preparation of these documents.

        •   Audit and control
Riber does not have a function exclusively dedicated to internal audit or control.

A complete audit of annual financial statements is conducted annually by the Independent Auditors. Interim
accounts are subject to a limited review. Quarterly sales figures are also reviewed by the Independent Auditors
prior to their publication.

SIGNIFICANT CONTROL PROCEDURES

Review of offers
Commercial offers are realized in accordance with terms and conditions described in the commercial contract
review procedure. Contract documents communicated to prospective commercial parties are validated by the
Marketing Director and the Geographic Area Manager.

Purchasing
Production requirements purchases are generated by the GPAO system, which issues procurement proposals on the
basis of product specifications and available inventory levels. Only authorized persons may convert these proposals
into firm orders.
An expense commitment procedure applies to all other purchase requirements.
These procedures, in conformity with the provisions described in the document control procedure, are verified and
approved by the Chairman of the Executive Board and the Quality Assurance Director.




                                                          101
Contracts
All contracts are validated and signed by the Chairman of the Executive Board, notably commercial representation
contracts, collaboration contracts, services contracts and employment contracts.

Signatures and delegations
The signatures of 4 directors have been filed with the Chamber of Commerce and Industry enabling these persons to
act on behalf of the Company.

Exchange risk
It is company policy to systematically cover any exchange risk arising from the placement of a system’s sales order
with it. Accordingly, term exchange contracts are entered into with banks.

Environment
Riber complies with all legally required environmental requirements and has developed a policy to manage its
consumption of natural resources.

FINANCIAL INFORMATION PREPARATION PROCEDURES

Financial statements are prepared in order to regularly and fairly present the financial situation and financial results
of Riber SA and Riber Group. Financial statements are prepared in accordance with the prudence and consistency
principles.

In addition to the procedures mentioned previously, the reliability of data contained in the financial statements is
guaranteed by the application of internal procedures in the daily processing of accounting information and by specific
control procedures implemented a posteriori on data generated from the daily processing.

Indeed, the Company’s size allows for a direct and detailed supervision of items accounted.

The accounts of the Group’s s ubsidiary, Riber Inc, were audited before they were incorporated into the consolidated
accounts.

Financial information is communicated in accordance with a legal shareholders’ agenda established at the beginning
of each fiscal year and which is disclosed on the Company’s web site and those of other companies including SFAF,
AMF and Euronext.

This information is simultaneously disclosed on the Company’s web site, with analysts, investors, shareholders,
investors, private, public existing and potential shareholders, as well with the press, using specific files that are
regularly updated by the Company.

APPROACH RETAINED AND ACTION PLAN:
Given the very short time period between the promulgation of the Financial Security Law and the end of the 2003
fiscal year, this report has essentially been prepared from meetings with me mbers of the Executive Board and Audit
Committee, as well with some members of the Company’s Executive Management Committee. The Independent
Auditors were also consulted on this matter.

For fiscal year 2004, Riber anticipates finalizing the issue of its internal procedures and to put into place an approach
that will lead to an appreciation of the adequacy and effectiveness of its internal control.




                                                           102
5.1.1 Report of the Independent Auditors, pursuant to the last paragraph of Article L.225-235 of the
Commercial Code, on the Chairman of the Supervisory Board’s Report describing internal control
procedures concerning the preparation and processing of accounting and financial information
(December 31, 2003 fiscal year)

To the Shareholders of Riber SA
133, boulevard National
92500 Rueil Malmaison, France

Ladies and gentlemen,

As auditors of Riber SA accounts and in application of the provisions of the last paragraph of Article L.225-235 of
the Commercial Code, we hereby present to you our report on the report prepared by your chairman in
accordance with the provisions of Article L.225-68 of the Commercial Code for the fiscal year ending December 31,
2003.

Under the responsibility of the Supervisory Board, it is the Executive Board that defines and implements adequate
and effective internal control procedures. It is the Chairman who reports on, in his report, notably the conditions
of preparation and organization of the work of the Supervisory Board and the internal control procedures in place
within the Company.

It is our responsibility to communicate the information contained in the Chairman’s report concerning internal
control procedures relative to the preparation and processing of financial and accounting information. This
diligence work notably consists in:
     - Acquiring knowledge of the general organization and objectives of internal control, as well those
        internal control procedures relative to the preparation and processing of accounting and
        financial information, presented in the Chairman’s report;
     -   Acquiring knowledge of the work underlying the information provided in the report.

On the basis of our work, we have no observation to formulate on the information provided concerning internal
controls relative to the preparation and processing of accounting and financial information contained in the report
of the Chairman of the Supervisory Board, prepared in accordance with the last paragraph of Article L.225-68 of
the Commercial Code.

Paris, May 18, 2004

                                            The Independent Auditors

                   PricewaterhouseCoopers Audit                  BOISSIERE EXPERTISE AUDIT
                           Joel Romei                                  Tita A.Zeitoun




                                                       103
5.2     EXECUTIVE BOARD, SUPERVISORY BOARD AND MANAGEMENT COMMITTEE MEMBERS

5.2.0 Executive Board

    Riber Executive Board members in 2003 were as follow:

                 Name               Age                   Current Position                   Executive Board
                                                                                        Appointment    Expiry Date
                                                                                        Date
         Michel Picault                     Executive Board Chairman                    2003           2009
                                    50      and Marketing and Sales Director

         Catherine Chaix                    Executive Board member                      2003           2009
                                    55      and Applications Director

         Agnès Gobeau                       Executive Board member                      2003           2009
                                    38      and Chief Financial Officer

    Michel Picault has served as Chairman of the Executive Board and Director of Industrial Operations since 1997.
    From 1982 to 1996, he held different positions at Riber and was notably responsible for technical services in
    the United States. In 1991 he was named to the position of Manufacturing Director at Riber, before becoming
    an Executive Director in 1995. Before joining Riber, Michel was a micro-electronic engineer specialist employed
    with the Philips group. He is an engineering graduate from the National Institute of Applied Sciences (Lyon,
    France) and holds a masters degree in metallurgy physics from the Claude Bernard University (Lyon, France).

    Catherine Chaix joined Riber in 1981 where she held different positions in the area of applications
    development. In 1983 she created the Company’s applications laboratory, before joining the production
    machines department in 1988 and being assigned overall responsibility for the development of components in
    1994. Catherine was appointed to the position of Director of Applications in 1996, and became a member of
    the Executive Board in 1997. She holds a doctorate in metallurgy physics from the University of Orsay at Paris
    XI.

    Agnès Gobeau has been employed at Riber since 1997 as its Accounting, Finance and Personnel manager. She
    was promoted to the position of Director of Finance and Administration following the appointment of Olivier
    Lavédrine to the Supervisory Board at the General Meeting of June 13 2001. Previously, she had been
    employed for six years with the audit firm Concorde Européenne Audit-France. Agnès holds a DESS degree in
    banking and finance from the University of Strasbourg, France as well as a DESCF degree and a masters in
    business law

5.2.1 Supervisory Board

    Riber Supervisory Board members are as follows:

 Name                                                     Age     Current Supervisory       Appointment        Expiry
                                                                  Board position            Date               Date*

 Erich Spitz...........................................   73      Chairman                      2003           2004
 Michel Baudron (1)................................       64      Member                        2001           2002
 AXA Investment Managers Equity Europe                    —       Member                        2003           2004
 (represented by François Jerphagnon) (2)
 Olivier Lavédrine................................        56      Member                        2003           2004
 Gjalt R. Smit.....................................       65      Member                        2004           2005
 Paul Belin.........................................      65      Member                        2004           2005
 IDI SCA (represented by Christian Langlois-                      Member                        2004           2005
     Meurinne until March 2, 2004 and then                —
     afterwards by Paul Charrin)..............
__________
  (1)     Michel Baudron resigned from the Board on May 27, 2003
  (2)     Axa Investment Managers Private Equity Europe was appointed by cooption in substitution for SI Finance, which
          resigned on November 15, 2002, by the Supervisory Board, for the duration of the latter’s term.
    * pursuant to the General Meeting considering the financial statements for the fiscal years listed in this column.




                                                                          104
5.2.2 Management Committees


   The Audit Committee is comprised of the following Supervisory Board members:
      -    Erich Spitz, Chairman;
      -    Gjalt Smit;
      -    Olivier Lavédrine.

   The Remuneration Committee is comprised of the following Supervisory Board members:
      -    Paul Belin, Chairman;
      -    IDI, whose permanent representative is Christian Langlois -Meurinne until March 2, 2004, and then Paul
           Charrin.


5.3   MANAGEMENT COMPENSATION AND BENEFITS

5.3.0 Management remuneration

   During the 2003 f  iscal year, the Company paid € 920,099 in remuneration (excluding benefits in kind) to
   members of the Executive Board and other senior managers of Riber SA, comprising the following ten persons:
   Michel Picault, Catherine Chaix, Rino Contini, Michel Delgue, Jean-Pierre Garnier, Agnès Gobeau, Pierre
   Laurendeau, Gilles Ménétrier, Gilbert Riou and Paul Schmitt.

   Members of the Supervisory Board were not paid any remuneration during the 2003 fiscal year

   Benefits in kind dispensed to management were not significant. Executive Board members do not benefit from
   a specific pension plan other than the standard management pension plan.


5.3.1 Share option subscription plans

   No share subscription options were granted during the 2003 fiscal year.

                            SHARE SUBSCRIPTION OPTIONS EXERCISED DURING 2003

Number of shares purchased or subscribed to by executive management pursuant to their exercise of a subscription
option: 0.
Number of shares purchased or subscribed to by the 10 non-executive senior managers, whose number of shares
purchased or subscribed to is the greatest, pursuant to their exercise of a subscription option: 0.



5.3.2 Regulated agreements

   Regulated agreements in force during the course of the fiscal year are listed in the Independent Auditors’
   Special Report on Regulated Agreements in Section 4.2.2 of this report.

   To date, no new regulated agreement has been concluded.

   No assets used by the Group are directly or indirectly owned by executive officers or their close relatives.


5.3.3 Loans and guarantees provided to members of the Executive Board and Supervisory Board

   None.




                                                          105
5.4   GROUP AUDITORS’ FEES


                                         PricewaterhouseCoopers Audit                Boissière Expertise Audit

                                               (€)                     %                     (€)                     %

                                        2003         2002       2003       2002   2003             2002       2003       2002
                                        2            1
   Audit
   Planning/Execution/Reporting,
   Parent company and consolidated
   accounts                              62,300      83,300     100%        93%   50,500           43,000     100%       100%
                                         300                                                       000
   Related work                                0            0     0%         0%          0                0     0%         0%

                           Subtotal     62,300       83,300     100%        93%   50,500           43,000     100%       100%

   Other services
   prestations
   Legal, tax, administrative …           0           6,100       0%         7%          0                0     0%         0%


                           Subtotal      0            6,100       0%         7%          0                0     0%         0%

   Total                                 62,300      89,400     100%       100%   50,500           43,000     100%        100%
                                                     4000


5.5   EMPLOYEE STOCK OPTION AND PROFIT SHARING PLANS

5.5.0 Employee stock option and profit sharing plans

  A profit sharing plan was signed on June 24, 1998 by Riber SA. The duration of this agreement is three years,
  from January 1, 1998, its initial date of application, to December 31, 2000, its date of termination. This
  agreement was not renewed for 2001.
  An employee profit sharing plan was signed on December 13, 2001 between Riber SA and representatives of
  the Company’s Works Council. Benefits of € 207,839 and € 22,575 were respectively provided for the 2000
  and 2001 fiscal years, based on profits realized then. No benefits were paid for 2002 or 2003.

  The amounts so provided are used in full to acquire shares in a Company Mutual Plan and allocated to a
  Company Savings Plan.


5.6        SHAREHOLDERS’ DIARY



             March 24, 2004           2003 annual results
               April 22, 2004         2004 1 st quarter Group sales results
               June 17, 2004          Combined General Meeting

               July 22, 2004          2004 2 nd quarter Group sales results
      September 27, 2004              2004 half-year results
            October 21, 2004          2004 3 rd quarter Group sales results




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                                           GLOSSARY OF TERMS


Compound semiconductors        Chemical elements alloy that has semiconductor properties enabling the transfer or
                               non-transfer of electrical currents.

Electronic Devices             Active electronic component with complex functions such as a transistor.
                               Electronic devices are different from passive electronic components say, for
                               example, by their resistances.

Epitaxy                        Process consisting of the realization of a crystalline growth through the deposit of
                               very fine layers on the surface of a crystalline material of semiconductor materials
                               called substrate. If the chemical composition of molecular flows is compatible with
                               the crystalline structure of the substrate, the layers thereby deposited will form a
                               mono-crystalline structure identical to that of the substrate material.

HEMT                           High electron mobility transistor, a transistor in which the speed of electrons is
                               very high.

LED                            Light emitting diode

LPE                            Liquid phase epitaxy (See Section 3.1.4 description)

MBE                            Molecular Beam Epitaxy (See definition below)

MOCVD                          Metal organic chemical vapor deposition (See Section 3.1.4 description)

MOMBE                          Metal organic molecular beam epitaxy, in which c     ertain molecular beams are
                               composed of organic molecules containing a metallic element.

Molecular Beam Deposit (MBD)   Deposit by molecular beams

Molecular Beam Epitaxy (MBE)   Epitaxy process realized within an ultra vacuum reactor whereby source materials
                               that will compose the epiwafers such as gallium, arsenic and aluminum are
                               introduced by simultaneous molecular beams.

Silicon                        Base chemical element of the electronic industry.

VPE                            Vapor phase epitaxy (See Section 3.1.4 description).




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