8986 - COUV_BVRP_Ang

6/06/03

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Annual report 2002

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Contents
Founders Statement Year 2002 Highlights A Two-Pronged Strategy Research & Development Five Types of Software OEM & e-Commerce Global Publishing Network Organization Human Resources Sustainable Growth Corporate Governance BVRP Group on the Stock Market Key Financials

- 16P - FINAL/DER/ANG

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A shared passion.

Founders' Statement
A winning strategy in 2002 and new ambitions for 2003
2002 was an unquestionably good year for the BVRP Software group, following a particularly turbulent 2001 for technology companies : profits are sustainable, with EBIT of 1.6 M and net profit of 5.4 M. The positive trends shown in the first half of the year continued into the second. BVRP Software has returned to software activity as its core focus, divesting of its services business and making important strategic investments in France, the UK and the USA, reflected in 2002 by improved margins and profits. These results prove that, even faced with an unfavorable economic climate, implementing a relevant and forwardlooking strategy is a sure way to keep a company on the right track. Throughout 2002, we have consolidated the steps taken in 2001 around two major initiatives:
We embarked upon our quest to develop our worldwide software design and publishing network by entering strategic
partnerships with MicroBasic in Germany, Questar in Italy and taking a majority ownership in Elibrium, a Californian-based software publisher with a turnover of more than $13M.
We strengthened our investments in the development of technology designed for delivery of advanced mobile
services, particularly with regard to the "Intelligent Software Project" which aims to upgrade technologies providing daily IT use for people on the move. Our goal for 2003 is to become a leading Global Publisher, offering a sufficiently innovative, global and diversified product range to promote growth and ensure sustained revenues and results for the group over the next three years. In our opinion, this is the best guarantee that our sustainable development will create value for our customers, employees and stockholders, whose loyalty after 19 years of existence and 6 years of being listed on the stock market is proven beyond a doubt.
Bruno Vanryb Chairman & CEO
Roger Politis Group General Manager

Year 2002 Highlights

1st Half-Year
Year 2002: achieving unprecedented success in the Software Publishing market, BVRP Software implements a growth strategy to change dimension in 2003.
April: Strategy: : BVRP Software sells its French Services activity to SR Teleperformance in order to concentrate on its core business activities. Partnership: BVRP and Hewlett-Packard Corporation sign agreement to offer pocket PhoneTools communication software to HP Jornada users. May: Finance: BVRP Software publishes good 1st quarter figures with revenues of 11.75 M. Product: BVRP launches PhoneTools Version 7, the network fax mailing expert, while Kommunicate launches Text Message Server, a software package that enables users to send SMS or e-mail from a computer to a mobile telephone. Due to its ease of use, this software will be extremely successful, particularly within large corporations. June: Corporate: Bruno Vanryb, President of BVRP Software, is elected President of MiddleNext, the Committee created to promote French mid-cap stocks. Products: BVRP launches PhoneTools eXPert, hailed by the press as the "all-in-one" communication software and BVRP MailWarden, the proactive solution for secure messaging.
January: Partnership: A worldwide partnership results in each NEC Packard Bell PC being delivered with BVRP's ePhoneTools software. Republishing: AB Soft unveils Virtual CD 4.0, the virtual CD and DVD player. February: Products: BVRPs Mobility Suite, which optimizes interaction between cellular telephone and PC (mobile PhoneTools) or Pocket PC (pocket PhoneTools and pocket Theme Manager), is launched at GSM World Congress. March: OEM: BVRP Software offers OEM clients a new range of diagnostic products: BVRP LAN Wizard, Modem on Hold, Modem Medic and Modem Xpert. Republishing: AB Soft announces the availability of the image viewer ACDSee 4.0, Monach data retrieval software, and leading intelligent firewall BlackICE.

h Successful launc are packages of new softw internationally ility Enhanced credib d ressources an
eller Appeal to best-s publishers software

Virtuous Circle

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Visionary.

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Research & Development
Innovate to stay on the cutting edge
Designing a new technology known as the Intelligent
With the year 2002 marked by economic uncertainty, the BVRP group has actively pursued its R&D policy, showing determination to maintain and strengthen its capacity to create and innovate, a cornerstone of the groups success. Significant progress has been made in three areas :
Completion of a number of major mobile telephone
technology projects, culminating in the release of the initial version of mobile PhoneTools. This mobile integration draws on core BVRP skills in the field of wireless technologies, including cutting-edge solutions such as GPRS connection management. This project is the fruit of partnerships with best-of-breed players in the mobile telephony industry (Hewlett Packard, Mobicom and Motorola early 2003) and the result of four years of development related to wireless data transmission and data synchronization.
Software Project. This involves implementing artificial intelligence algorithms and techniques taken from expert systems to vastly improve all aspects of installing and configuring software or hardware/software setups. From installation to utilization, operating status will be constantly monitored and analyzed to detect hardware or software errors, failure, or any other malfunction. The intelligent system then, either will solve the problem or, if this is not possible, provide clear diagnostics.
Continued development of increasingly sophisticated
Wizards and Diagnostic Tools, which now include wireless solutions - further promoting mobility - particularly with the LAN Wizard, a Wi-Fi network configuration assistant marketed in conjunction with a number of connection terminal manufacturers. The increasing convergence of different wireless communication protocols, such as Bluetooth, GPRS and 802.11, will inevitably lead to the need for integrated tools that can quickly configure and set up connections while enabling seamless transition between different modes.

Over the last few years, BVRP has made a number of major technological decisions that have required strong commitment on the part of the company. Since then, changes in the market have confirmed the soundness of these decisions. Examples of such changes include the increasing popularity of the mobile phenomenon, spurred on by the exponential growth of wireless networks, the increasing importance of providing and stabilizing this form of communication, and the need to provide simple and effective means of synchronizing data between mobile terminals (telephone or PDA) and the PC.

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Five Types of Software
Communicate : Simplicity and ease-of-use
In 1995, BVRP Software released PhoneTools. Now available globally as Classic PhoneTools this best-seller has changed the communications habits of more than 50 million users. Professionals and consumers have been able to dispense with much of the equipment cluttering up their offices and restricting their movements: the hands-free kit, answering machine, fax machine and telephone directory simply disappeared! These and other even more advanced features are all part of the Classic PhoneTools application. At a time when broadband, and particularly ADSL, is becoming a real market, PhoneTools eXPert is beginning to appeal to an increasingly wide audience. This new version of one of the world's most widely sold software solutions transforms a computer into a fully-fledged platform for internet communications: videoconferencing, telephone, answering machine, fax, SMS and e-mail everything is possible while overcoming the limitations of standard telephone lines. BVRP Software continues to supply the communications market with new products, such as SLmail, the first e-mail server tailored to small businesses, which now includes spam-blocking functions, PhoneTools Plus, which can be used to manage multi-function printers and color faxes, and NetwaitingTM, an innovative application for modems developed with Conexant, which allows users to put their Internet session on hold to make or answer a phone call.

Being Mobile : Freedom of movement and Ability to be everywhere at once
An increasing number of company employees now work outside the traditional office, either from a home office or an office that constantly on the move. BVRP Software has extended its entire portfolio of communications software, responding to the expectations of this new generation of field operators equipped with cell phones, PDAs and laptop PCs. mobile PhoneTools is the new mobile communications solution for the PC. Its sole purpose: to enhance mobility by providing users in the field with the entire range of communications tools available in the office. It is the ideal solution for all mobile users. A tool of the future, mobile PhoneTools is compatible with GPRS and Bluetooth. pocket PhoneTools is specifically designed for the growing number of fans of Windows Pocket PC, the Microsoft operating system for pocket personal assistants. This software is already a commercial success on the international market. With pocket Theme Manager, users are able to fully customize the features of their PDA. With GPRS Manager, a click is all it takes to connect to the mobile GPRS network and obtain a high-speed e-mail connection.
Troubleshooting : Saving time, Saving money
Today's paradox is that technology is becoming increasingly complicated, yet it is being used by a growing number of less savvy users! Equipment manufacturers are investing in costly support services that do not always satisfy the most pressing needs of the general public. To respond to this very real need, BVRP Software has developed an exciting new offering for both manufacturers and end-users. Modem Medic and Modem Xpert are troubleshooting and auto-repair tools for modems, and LAN Wizard is a tool dedicated to troubleshooting both wireless and fixed network configurations. For customers, these tools result in less need for technical support, fewer unnecessary hardware returns and greater satisfaction.

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Make life easier.

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Ensuring security: Protecting the IT environment
Having mastered the latest video compression technologies (DivX, Mpeg, Flash, etc.) and audio compression technologies (MP3), and freed from constraints related to hardware and lack of universal standards, BVRP Software has designed a range of accessible tools to create, read and distribute content using all available devices: PC, DVD players, mobile telephones, PDA. BVRP DivX Video Duplicator allows users to make back-ups of DVDs and videos at the click of a button. With assembling, compression, synchronization and even labeling functions, this is an extremely effective, user-friendly application. Melody Manager, an integral part of mobile PhoneTools, allows users to create their own melodies, capture existing melodies and ensure seamless compatibility with all main mobile manufacturers (Motorola, Nokia, Siemens, Sony Ericsson, etc.). To complete its multimedia range, BVRP Software, through its subsidiary AB Soft has been awarded exclusive software distribution rights in France for Paint Shop Pro by JASC Software and ACDSee by ACD Systems, software tools that enable creating, editing and publishing online photo albums.

The OEM software activities of BVRP Software account for 35% of its software turnover. The quality and universal appeal of its products have won over major brands in IT and telecommunications : 3Com Alcatel Bosch British Telecom Conexant - Dell Computers France Telecom Hewlett Packard Intel Kortex Lexmark Microsoft Motorola NEC Packard Bell Panasonic Philips Pretec Sagem Siemens Sonic Blue US Robotics Xircom Zcom
100% of product lines sold through e-commerce
A powerful engine for increasing sales and identified as a BVRP group priority, e-commerce is meeting all expectations with annual revenues up 50% in Europe. In 2002, 90% of purchasers using our sites chose to acquire their software by downloading it directly. Internet commerce has thus become a real distribution channel, complementing other forms of retail. Having developed its own e-commerce platform in 2001, BVRP achieved further success in 2002, publishing a full online product catalog on all the groups sites. 2002 was also a year rich in innovations, with no fewer than thirty new products released. This success stems from a major sales drive, internationally and locally, based on promotion campaigns specific to geographic location, target customer and products. Enhanced by the emergence of new product lines and an increasing number of online customers, largely thanks to the broadband boom, these sales will grow further over the years to come.

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Strong publishing network.

08 / 09

Expanding internationally
In 2002, BVRP Software pursued development of its Global Publishing Network, represented both by BVRP subsidiaries in France, the UK and USA as well as companies that are part of external growth activities. The network sells both BVRP software and software developed by other publishers (republishing). Partnerships in Germany and Italy, and soon in Asia, further strengthen BVRPs position by extending an increasingly diverse and widely established product line. France : Based at company headquarters in Levallois, BVRP SA provides OEM sales in Europe and Asia, as well as e-commerce sales in France and other countries, with the exception of the USA and UK. In May 2001, it acquired 95% of AB Soft which provided an unparalleled retail network in France. AB Soft now distributes the complete BVRP product line in France and in Frenchspeaking countries. The BVRP Group employs 111 people in France, including administrative and R&D teams. United Kingdom : Two subsidiaries manage distribution in the UK : Plymouth-based Guildsoft, acquired in September 2001 distributes BVRP software along with a range of products thats covers data operation, risk analysis, data security, knowledge management, e-marketing and communication. Well established in the UK and Scandinavia, Guildsoft is responsible for sales to consumers and SMEs through IT resellers and wholesalers. Kommunicate, 100% owned by the group since December 1998, mainly deals with enterprise customers and complements BVRP Software's offering for SMEs. Kommunicate successfully markets RightFax and CallXpress. The two UK subsidiaries employ 69 people.

United States : BVRP USA Software, based in Denver, Colorado, is responsible for major OEM contracts, VAR relationships and e-commerce sales throughout North America. In December 2002, in line with its growth strategy, BVRP acquired a 52% stake in US publisher Elibrium, designer of the MySoftware suite of small business and personal productivity products. With cumulative sales of over 20 million titles, Elibrium today distributes its products to more 7,000 retail locations. This strategic investment opens the door to a distribution network that is particularly suited to BVRP products, enabling rapid distribution in North America. The BVRP group currently has 87 employees in the US. Partnerships in Germany and Italy : In September 2002, BVRP Software signed a strategic partnership agreement with MicroBasic thus benefiting from the powerful distribution network of MicroBasic GmbH in Germany, Switzerland and Austria. Founded in 1991 and located south of Munich, MicroBasic is a software republisher. The MicroBasic product line includes ACDSystems, BVRP Software, CyberLink, Crystal Decisions, Image DJ, Intel, Kaspersky, VMware and WebsitePros. In Questar, BVRP Software found an ideal partner for distributing its leading products in Italy. A partnership agreement was signed in October 2002. Founded in 1993 and located in Bergamo, Questar is a software republisher specialized in the sale, through all distribution channels, of top-end software packages tailored to the requirements of the Italian market.
a BVRP Software Group Compagny

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An organization tailored to ensure sustainable growth
Bruno Vanryb, Bruno Vanryb, Founder & Chief Executive Officer Success can only come through passion and by taking significant risks
Roger Politis, Founder & Group General Manager in charge of R&D Our goal is to always market products that we want to use ourselves
Chris Thompson, Managing Director of Guildsoft and Kommunicate I have utmost respect for all those who make up our teams: They are the leading specialists in our business
Thierry Bonnefoi, Chief Financial Officer Our group aims for profitable long-term growth: to succeed, we are confidently relying on the innovation and the quality of our teams
Bertrand Michels, Group General Manager for Business Development We are both software publisher and republisher, a winning strategy forged from two complementary models
Fabrice Le Camus, General Manager of AB Soft We feel very much in sync with BVRP. Our complementary products and networks create incredibly effective synergies

David Wright, OEM Division Director Im proud and very pleased that our products provide added value to our partners, major manufacturers of PCs, peripherals and mobile telephones

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The people behind BVRP Software.

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Bob Lang, President of BVRP USA Our core competency in advanced communications and our global multichannel distribution have positioned us to sustain growth in the years ahead in the U.S. and around the world Christina Willett Seelye, CEO of Elibrium We are convinced that together we will offer the most comprehensive software publishing and republishing solution in the world!
2002 brought total BVRP Software employees to 267 people!
Each year brings new challenges and new opportunities for Group employees to prove their professionalism. Since its creation in 1984, BVRP Software has stayed on course despite challenges brougth on by changing economic climate, and has stuck to its principles: transparency, team spirit and local management.
Thanks to a well-oiled communication machine, all employees in all

(a 52 % owned company)

corners of the world are kept up to date with group activities and achievements in real time. There is an ongoing dialogue with management, who are always there to listen and open to any discussion. BVRP is built on a compact hierarchical structure and services structured around key skills. There is no time for over-elaborate decision-making processes, as the groups success depends on its reactivity. Because talent is precious and energy valuable, it is vital that we listen to employees views and constantly strive for improvement. This is what Management tries to do by implementing a Human Resources policy that respects the Men and Women who are BVRP Software.

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Sustainable Growth and Corporate Governance
As with any software publisher, BVRP Software activity as such has no measurable impact on the environment. However, the question of sustainable development, as it stands today, is far from simply an ecological approach: this is becoming one of the key factors in the running of a modern business, for which growth must mean progress, not only in the economic sector but also in other sectors. We understand that no company can be viable in the long term if it does not have a balanced economic and social structure that takes into account its environment. Therefore, from the outset we have endeavored to listen to our users to ensure BVRP assumes its responsibility towards all stakeholders, be they stockholders, customers, suppliers or employees. Hence our drive for sustainable development is founded on two key factors: respect for stakeholders and transparent communication. > Relationship with stockholders A quoted company since 1996, BVRP has voluntarily implemented a policy of constant information and ensures permanent dialogue with its 11,500 stockholders:

All financial updates, annual reports and main product
press releases are automatically sent to those holding more than 400 shares. Analysts, the press, financial sites and investment funds receive company press releases by e-mail or fax. The company runs a 100% bilingual communication system, which is updated in real time on the groups Web sites, which contain all published information. BVRP regularly takes part in most events enabling direct contact with individual stockholders, analysts and fund managers. Business updates are an essential part of all general meetings and analysis reviews, held at least twice a year. The company answers all requests for information from stockholders, irrespective of the number of shares they hold. By entering the Euronext NextEconomy business segment since its creation, group management also commits the company to further transparency, publishing quarterly results as of January 1, 2003, and applying International Accounting Standards as of FY2003.

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Ethics and Responsibility.

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Alex Serge Vieux

Jean-Claude Vrignaud

Gilles Quru
> Relationship with employees The founders have always tried to make BVRP Software a company that is good to work for by creating a pleasant, secure environment, independent of the economic climate or the need to remain constantly competitive. For this reason, dialogue and communication are always a priority. BVRP Software has had no major disputes with employees since its creation in 1984. A number of practices and tools have gradually been put in place to promote internal communication, improve the working environment and foster career management:
The BVRP Intranet is available to all and provides a source
> Corporate governance In addition to the two founders of the BVRP group, the Executive Committee includes the group general manager for business development and the chief financial officer. This collective operation ensures that important decisions always take into account strategic, technical, human and financial factors. A broader Executive Committee, which also includes the general managers of subsidiaries in the UK, the US and France, meets on a regular basis. Real decision-making bodies, the Executive Committees are also think-tanks for sharing and analyzing strategic information before collectively determining how the company will move ahead. The BVRP Board of Directors includes a high proportion of non-executive members: Alex Serge Vieux, President of Dasar Inc., Jean-Claude Vrignaud, General Manager of Metasolv Software, and Gilles Quru, former CEO of Workspeed. A Compensation Committee has been in place since 2002. The BVRP Software Board of Directors reflects the groups determination to grow in the USA: Alex Serge Vieux, JeanClaude Vrignaud and Gilles Quru will complement BVRP USA President Bob Lang in offering unparalleled experience of the American market, having worked there for all or part of their careers. Members of the Board of Directors have access to the same information as Group Executives through monthly activity reports provided by subsidiary general managers, and are consulted on a regular basis, each time important decisions need to be taken in real time.

of company data, including press releases, financial data, corporate information and internal events. Since 2002, BVRP in France has successfully implemented the 35-hour working week while BVRP USA actively manages a strong social benefit program for all employees. Each salaried employee is free to meet with group executives on request and takes part in an annual clearly structured career development interview to promote constructive and objective communication. Employee stock ownership was first implemented in 1996 through a series of options schemes designed to allow a large number of employees to hold a stake in the company.
BVRP Software employees as part of an activity organized by their works committee

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Geert Meulenbelt, OEM Sales Manager
I am always willing to listen to upgrade requests from our partner-customers. They are the ones who ensure we chart the right course !
> Supplier management Any company that wants to maintain margins and create value for stockholders through profits must purchase at the best possible price and obtain optimal payment terms. To do so, we have developed long-term, qualitative relationships with a wide range of service providers, based on a number of rules:
Any investment involving an amount that exceeds a given
> Relationship with customers Our long-term relationships with customers and partners have allowed us to develop and market software solutions that become best-sellers in their market, while staying abreast of the major technological changes of the last fifteen years. This quality relationship can only be set up through a process that combines sustainability, awareness and respect:
We constantly strive to update our product offering to reflect new technological developments and avoid any usability problems on release of new versions. For example, this includes upward compatibility of different software versions and ensuring smooth operation with later versions of Windows. BVRP draws on the quality of its telephone support service, which deals with 85% of customer requests satisfactorily the first time they call, and the systematic logging of user upgrade and improvement requests. Products under guarantee will be exchanged or refunded if any related issues cannot be resolved to the customers satisfaction.

threshold must be subject to an invitation to tender that gives all service providers access to the same level of information.
On a comparable basis, preference is shown to service
providers that have already worked with the group to help foster long-term partnerships.
We always seek agreement over terms of payment.
BVRP Software is a company founded on responsibility and ethics. This responsibility permeates all walks of company life: Human Resources, Customer Relations, Supplier Relations, Corporate Governance and aspects of our Civil Partnership. It is daily awareness of these priorities that is the basis of our sustainable development.
BVRP Group software solutions are primarily designed and conceived to meet customer requirements. Our development model is based on upgrade requests sent to the technical support service and the results of regular user/distributor satisfaction surveys.

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Listed for six years

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BVRP Group on the stock market
The BVRP share price was affected in 2002 by the poor economic climate and depressed market. Nonetheless, BVRP stocks significantly outperformed the leading American and European technological stock indices with a drop limited to 21.5%, compared with a drop of 52.76% in the Nouveau March.
Good performance in a strongly declining market
> Graph of CAC 40 and IT CAC 50 vs. BVRP
BVRP Software, which has always been committed to producing quality and transparent information for the market, has been part of the Next Economy segment since its creation. Our company will also apply all the specifications set by Euronext in 2003 and in advance of requirements. Given the current market climate, NextEconomy and NextPrime segment membership is a guarantee of our company's resolution and reliability and a key factor in reassuring our investors and stockholders.

BVRP CAC 40 IT CAC 50

8,15 4624,58 1401,81 6,40 / -21,47%
A stable and international body of shareholders
Today, BVRP has more than 11,500 shareholders (source: Sicovam, November 2002), a slight drop on 2001. On December 31, 2002, capital comprised 3,670,772 shares, 29% held by foreign investors (vs 24% in 2001), a development that goes hand in hand with the internationalization of the group's activities. Stock ownership remains stable, with 1% of stockholders holding 57 % of the capital, 40 % of which is held in investment funds. This stability has been strengthened by an agreement between the three main stockholder directors.
3063,91 / -33,74% 573,02 / -59,12%
02 Dc - Jan - 0 Fv - Mars - Avr - 0 Mai - Juin - Jui - 0 Ao - Sep - Oct - 0 Nov - Dc -
Recognized as one of the leading Nouveau March stocks since its listing in December 1996, BVRP boasts the 10th best performance in this market segment, and remains one of the few companies still valued at above their initial listing price.

> Capital distribution at 31/12/02 Capital share in % Stockholder directors 9.7% Fidelity* 8.5% Afer Flore* 3.6% Foothill Capital 2.6% Flotting 75.6% *estimation Voting share in 14.4% 7.9% 3.3% 2.4% 72,0%

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BVRP Group achieved all its objectives for 2002
Revenues: 37.6 M Ebit : +1.6 M Net income: +5.4 M
These impressive results, obtained in a difficult economic context, confirm the success of the strategy implemented since 2001 by the group's management, which refocuses on the core activity and favors cost reduction and investment in tomorrows growth markets.
Revenues in millions of euros

37,6 37,2 32,8

Ebit in millions of euros

3,1 1,6

Net income in millions of euros
Stockholders' equity in millions of euros

16,2 15,6

1,6 -1,1

10,8 5,4

2001* 99/2000 98/99

2,4 11,6

2001* 99/2000 98/99 97/98

6,3 -5,1

2002 98/99 97/98 2001* 99/2000 2001* 99/2000

1,5 1,1

97/98 98/99
Steady revenues despite perimeter changes (divesting of French Services activity) Note: *12 month pro-forma. 2000/2001 was an exceptional financial year of 17 months, for calendar year adjustment.
Sharp increase in profits: The development of product mix linked to the refocusing of the group on software publishing and republishing, coupled with the positive effects of restructuring since financial year 2001, has been rewarded by a net improvement in operating ratios.
The consolidated net income of BVRP Software, which includes the exceptional capital gain made on the divesting of French Services activity in April 2002, represents profit of + 5.4 M, against a net loss of + 5.1 M in 2001.
Improved cash balance: Sustainable profitability, along with strong reduction in working capital requirements and the divesting of Services activity, have helped finance the acquisition of a majority stake in Elibrium and improve the available cash balance.

Headcounts

Revenue distribution by country in 2002
Revenue distribution by activity in 2002
2002 2001* 99/2000 98/99 97/98
33,1% 33,0% 26,4% 5,2% 2,3%
France United Kingdom United States Rest of Europe Rest of the world
22,1% 34,4% 6,9% 27,0% 9,6%
OEM Retail e-commerce Services Other
With the divesting of the French Service Activity, 230 employees left BVRP Group.
The groups international expansion, already reflected by the revenues distribution for 2002, with 33 % in Great Britain and 26.4 % in the United States, should grow significantly in 2003, with more than 40 % of revenues recorded in the United States.
Successful refocusing on the groups core activity, with 63.4% of revenues generated by software sales: software publishing and republishing throughout the world.

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AB Soft 1 bis, rue de Collange 92593 Levallois-Perret Cedex - France Tel. : +33 (0) 00 Fax : +33 (0) 10 www.absoft.fr
GuildSoft The Software Centre East Way Lee Mill Industrial Estate lvybridge Devon - PL21 9GE - UK Tel. : +44 (0) Fax : +44 (0) www.guildsoft.co.uk
Kommunicate Sheridan House 40-43 Jewry Street Winchester, Hampshire, SO23 8RY - England Tel. : +44 (0) Fax : +44 (0) www.kommunicate.co.uk
To (re)discover or to download the BVRP Software group products, visit the site www.bvrp.com
BVRP Software USA 1333 W. 120th Avenue, Suite 314 Westminster, CO 80234 - USA Tel. : +1 (720) Fax : +1 (303) www.bvrpusa.com
BVRP Software Headquarters 1 bis, rue de Collange 92593 Levallois-Perret Cedex - France Tel. : +33 (0) 70 Fax : +33 (0) 71 www.bvrp.com
Elibrium, Inc. 1256 El Camino Real PMB Box 167, Menlo Park- CA 94025 USA Tel. : +1 (650) 212-9300 Fax : +1 (650) 345-2996 www.elibrium.com

(a 52% owned company)

Design / Production : INCREA - e-mail : contact@increa.fr

ANNUAL REPORT 2006

Headquarters Immeuble Vision Dfense 91, boulevard National F-92257 La Garenne Colombes Cedex Tl. : +33 (0)70 Fax : +33 (0)71 www.avanquest.com
Key dates in an uncompromising winning strategy A strategic vision combined with a strong entrepreneurial spirit.
Avanquest Software, a World Leader
BVRP Software is founded by Bruno Vanryb and Roger Politis
. A story being written in the Future Tense!
Through the takeover of Nova Development and Emme at the beginning of 2007, Avanquest Software has entered a new dimension with consolidated positions on both sides of the Atlantic.
Launch of PhoneTools, one of the first PC fax software programs and a worldwide bestseller.
BVRP gets listed on the Stock Market
Launch of Mobile PhoneTools, the convergence of mobile technologies and also a worldwide bestseller.
BVRP changes names and becomes Avanquest Software
Avanquest Software in the USA 1996 BVRP USA is founded 2002 Acquisition of Elibrium - MySoftware 2005 Acquisition of VCom 2007 Acquisition of Nova Development

Contents

P01 The Unique Global Publisher P02 Avanquest Software in a Few Figures P04 Year 2006 Highlights P05 2007: Change of Dimension P06 Results and Perspectives P08 New Company Organization P10 R&D Organization - Avanquest Software Technology P12 Avanquest Software OEM P14 Avanquest Software Online P16 Avanquest Software in North America P18 Avanquest Software in Europe P20 Avanquest Software in Asia P22 Corporate Government and Sustainable Development P24 vanquest Software on the Stock Market A Avanquest Software in Europe 1998 Avanquest UK is founded through the acquisition of Kommunicate 2001 Takeover of ABsoft to back the creation of Avanquest France 2003 Launch of Avanquest Deutschland through the acquisition of MediaGold 2004 Launch of Avanquest Iberica through the acquisition of Outsource 2005 Avanquest Italia is founded 2007 Friendly takeover of Emme to consolidate company position in Europe
The Unique Global Publisher

Company Profile

ava n q u est s o f t wa r e A n n ua l R ep o r t 6 - 01
The only software publisher present on three continents and in all sales channels
Avanquest Software is unique among software publishers in being able to market such a wide range of best-selling programs developed both in-house and by development partners throughout all territories and sales channels. With more than 1,500 software titles, the Group now possesses one of the most extensive catalogs in the world and boasts unparalleled marketing power. With a strong presence in North America, Europe, and Asia, Avanquest Software markets its products to three distinct customer segments: 1) individuals and small businesses via the retail, online and direct-to-consumer channels; 2) large enterprises via the corporate channel; and 3) major players in the mobile telephone and computer industry through licensing partnerships with Original Equipment Manufacturers (OEMs). Built on a foundation of dynamic innovation, Avanquest Software has over 650 employees and relies on a talented staff of nearly 200 Research and Development engineers based in France, China and the United States.
Changing dimension in 2007
The acquisition of Nova Development and Emme at the beginning of 2007 marked a new step forward and a new era in the strategic growth of Avanquest Software. Both these investments have catapulted Avanquest Software to a new level of success:

Avanquest Ranks N 5

in the retail consumer software market in the USA (apart from Microsoft);

Avanquest Ranks N 3

in Europe (apart from Microsoft).
Our Goal: to be a global publisher while staying close to our clients locally

With a Global Publishing strategy, Avanquest Software aims to leverage its innovation and global network to benefit the greatest number of clients in all territories. To strengthen its leadership position, the Group has structured its activities around two divisions: Avanquest Software Technology develops leading-edge software programs that make up the intellectual property of the Group. vanquest Software Publishing is uniquely positioned as the one and only global publisher A for developers around the world seeking an experienced partner to market their software programs in all sales channels and territories.
Avanquest Software in Asia 2002/2003 R&D Center in Shanghai, China and Avanquest China as a sales office are founded 2005 Avanquest BB is founded, a joint venture with Softbank BB in Tokyo, Japan
Our Expertise: the combined know-how of a software developer and publisher
Benefiting from over 20 years experience, Avanquest Software has mobilized efforts around research for software solutions that are adapted to future technologies and the specific requirements of each country. The publishing activities of the Group and the R&D department are focused around 5 lines of software: The Mobility and Communications line, enabling mobile professionals to benefit from the convergence of new technologies (Mobile PhoneTools; Connection Manager, etc.) he Productivity line for small businesses (Business Plan Writer, My Invoices & Estimates, etc.) T he Utilities line, offering solutions for system security, PC diagnostics, file management, and website T development (Fix-It Utilities, Partition Commander, Web Easy Professional, etc.) he Digital Media line, for photo software (Photo Explosion, SendPhotos), and interactive content T (Encyclopaedia Britannica, virtual museum tours, etc.) he Lifestyle and Educational Games software line T (Scrapbook Factory, Hallmark Card Studio, Berlitz language learning, educational games for children, etc).

Founders Statement

ava n q u est s o f t wa r e A n n ua l R ep o r t 6 - 0 2- 0 3
Avanquest Software in a Few Figures
New Horizons to Launch New Ambitions
In the six years since 2001, Avanquest Software has completely transformed itself into a global technology and publishing powerhouse. With a strong presence in the United States, Europe and Asia, coupled with explosive growth in Internet commerce, our corporation has emerged as one of the worlds most diversified software publishers with more than 300 active products available in up to 27 languages. Strengthened by the success of these ambitious projects and keenly aware that there can be no growth in the software industry without innovation and risk-taking, we were convinced that the time had come for our Groupwhich had already proven the solidity of its profitable growth modelto break through into a new dimension. With regards to technology, the arrival of Vista in 2007, the new version of Microsoft Windows, along with the profusion of new software opportunities in digital photography and multimedia has created the perfect environment for us to develop pioneering new software projects destined to become tomorrows standards.

h200 Million

Three-year objective! An objective made possible by the arrival of Nova and Emme, which joined the Group at the start of 2007, and the introduction of a development plan to reach these new heights

h74.3 Million

2006 Annual Sales 87% of which are outside the domestic (French) market
As regards the markets, thanks to our solid position as a contender over most of the territories where we are present, for the first time in our history we had the opportunity of ranking among the top 5 software publishers in the world. This is the reason we devoted a great deal of our energy in the past year to the implementation of a new strategy, intended to promote Avanquest to the position of world leader in software publishing:

50% 47%

Portion of Annual Sales generated in the US, the worlds Number 1 market

Close to

With two major acquisitions concluded at the beginning of 2007: Nova Development in the United States and EMME in Europe, thereby enabling our company to double in size. As a result, we now rank No. 5 in retail sales revenue in the USA and No. 3 in retail sales in Europe (excluding Microsoft); By investing massively in the development of new innovative applications for Windows Vista, such as SendPhotos software, which enables users to manage and share photos over the Internet.
Portion of software sales based on proprietary intellectual property
Presence on 3 continents: America, Europe and Asia A portfolio of over 1,500 software programs
For the 2007 fiscal year, we will easily surpass our initial revenue forecast of e100 million and we now foresee exceeding e130 million, which represents a more than 75% increase over 2006. The Groups renewed ambition, supported by our new development strategy, enables us to aim for the e200 million annual sales threshold in the next three years. The critical success formula in promoting the Avanquest brand and making our corporation a world leader will be a continued emphasis on innovation, product excellence, and proximity to our customers. We promise to maintain our focus on these core values and keep you apprised of our progress. We thank you for your confidence. Bruno VANRYBRoger POLITIS
President & CEO,Chief Technical Officer, Avanquest Software Avanquest Software

670 Employees

Portion of Annual Sales generated in the UK, Europes Number 1 market
Portion of online software sales Growth of 35% in e-commerce activities

year 2006 hiGhliGhTs

1st half-year JanUary Partnership expands in europe with hP HP chooses FaxTools and Classic PhoneTools software to enhance their new multifunction printers for main European markets. march worldwide agreement signed with intel Avanquest Software launches Mobile Phone Suite, mobility software designed in close collaboration with Intel Corporation for laptop computer users equipped with Centrino Duo technology. first Publishing agreement in Japan for avanquest bb Avanquest BB, a subsidiary of Avanquest Software and SoftBank BB, Japans leading IT distributor and provider of broadband infrastructure, signs an agreement to publish hard drive defragmentation software developed by the German company, Ashampoo, and marketed in partnership with the powerful Japanese distributor, SourceNext.

a sTronGer marKeT PosiTion on all conTinenTs nUmeroUs bUsiness and TechnoloGical sUccesses

2007 chanGe of dimension

OCTOBER signature of a Global major oem Partnership agreement Avanquest announces the signing of a major contract with one of the leading players in the world mobile telephone industry; the partners name was not disclosed, however, because of a confidentiality clause binding the two groups. this key agreement goes into effect in 2007.
ava n q u est s o f t wa r e a n n ua l r ep o r t 6 - - 0 5
Two maJor ValUe-enhancinG acqUisiTions an indUsTrial GrowTh ProJecT on all conTinenTs eXPloiTinG The sTrenGThs of synerGy To achieVe shared ambiTions
a licensing contract is signed with GsPda This contract involves the supply of Mobile Phone Tools to equip the SmartPhone line of GSPDA, a major Asian mobile telephone manufacturer based in Hong Kong. After opening a branch dedicated to OEM sales in 2005, Avanquest China in Shanghai, the Company pursues its expansion strategy in Asia. 2nd half-year JUly collaboration extended with optimus This partnership formalizes the development of a universal connection tool, Cellular Connection Manager, by Avanquest Software, designed to enable roaming users in Portugal who subscribe to Optimus (a member of Orange network) to access high speed Internet from their mobile phones. sePTember agreement signed with T&a mobile Phones T&A Mobile Phones, one of the leading Chinese telephone manufacturers, equips their latest generation cellular phones for China, East-Asia, Europe and the American continent, with Avanquest Softwares Mobile Phone Tools. Beneting from an R&D center in China, Avanquest Software engineers demonstrate their ability to successfully adapt their software to the expectations of the main OEM suppliers in the Far East.
noVember Partnership with rogers communications in canada Avanquest Software developed a customized version of its Connection Manager software for Canadas leading wireless and cable communications provider. It will eliminate various Internet connection problems encountered by business professionals while on the road. licensing deal with datang mobile Signing this agreement with Datang Mobile, one of the wireless technology leaders in China, is a good example of how Avanquest Software has been successful in the worlds fastest growing industrial market. Datang Mobile will integrate the adapted version of the Avanquest Mobile PhoneTools software into their own PC card model for subscribers of the 3G telephony network.

december avanquest made its debut on the Paris stock exchange on december 5, 1996. In the 10 years since, the small French business that originally employed a staff of 30 with 4 million euros in annual sales has emerged as a global force of more than 600 employeeswell on its way to achieving its ambition to be one of the world leaders in software publishing.

resUlTs and PersPecTiVes

clear rebound of activity after a retail market slowdown in 2006
ava n q u est s o f t wa r e a n n ua l r ep o r t 6 - - 07
Two strategic investments for a change in company dimension
Two strategic investments The acquisition of EMMEwhose strengths are complementary to those of Nova Development in terms of catalogue products, management teams and distribution networksmeant nearly doubling the Avanquest Groups revenue base.
despite a slump in the retail market in the 2nd quarter and microsoft postponing the launch of Vista, in 2006 we pursued our growth and investment strategy. strengthening our structure dedicated to e-commerce, acquiring imr and fastTrak in the UK, as well as signing a number of contracts on three continents effectively demonstrate our loyalty to the industrial project we set for ourselves since the creation of the Group: to build a world leader. from this point of view, acquiring nova development and emme represent real growth accelerators for avanquest software. The similarities in economic models and the extent to which the two catalogues complete each other will enable us to fully exploit our synergy.
Thierry bonnefoi, chief financial officer, avanquest software.

breakdown of 2006 sales

United states: 47%
Other European countries: 4%
Rest of the world: 2% France: 12%
These two investments have enabled Avanquest to reach a major milestone in its growth strategy aimed at creating a world software publishing leader, not only in terms of software portfolios but also in market power and territorial coverage. Thanks to its acquisition of Nova, the Avanquest Software Group is already positioned among the top 5 publishers of software for the general public in the United States (other than Microsoft). The combination of Avanquest and Emme will immediately catapult the Group to a ranking among the top 3 software publishers in Europe (other than Microsoft) - Source NPD, GFK, Chartrack. harmonization of financial years closing dates Avanquest Software shareholders meeting held on May 30, 2007 approved the change of the groups fiscal year end date to match it with that of EMME which is set at March 31. This date better corresponds to the retail activity which, once integrated, will represent over 50% of the groups annual sales. objectives for 2007: integrate emme and nova and exploit the synergy Integrating Nova and EMME provides Avanquest Software with the means to achieve strong growth over the next 3 years, with an objective to exceed, as soon as possible, 200 million in annual sales and an average profit margin over 10% Developing all areas of possible synergy is the Groups priority in 2007: Exploit the synergy between R&D teams Open up Avanquests American marketing network with EMME products Open up the General Public network and EMMEs European Education network to Avanquest and Nova products Combine all the Groups software catalogues to develop software distribution via the Internet, on a common downloading platform Develop an expanded Direct to Consumer sales channel. For the 12-month period from April 1st, 2007 to March 31st, 2008, integrating both EMME and Nova, the group management team expects annual sales between 130 and 135 million (compared to e74.3 million in 2006), and operating profitability between 8 and 10%, before taking into account the non-recurring items resulting from setting up a new organization.

Net income per share in e
2007 New Company Organization: an Organization to Foster and Serve Ambition

Geographic distribution:

Germany: 49 USA: 203 China: 64 Spanish: 11
ava n q u est s o f t wa r e A n n ua l R ep o r t 6 - - 0 9
670 Employees Motivated by a Shared Passion for Innovation and Strong Values, such as Ethics, Respect for the Individual and Responsibility.
Strengthened International Management, at the Heart of a New Organization Avanquest Softwares strong development efforts are accompanied by a new organizational structure whose mission is to integrate recently acquired companies and capture broader market share. Avanquest Technology, Avanquest OEM and Avanquest Online operate across all geographic regions, while Avanquest Publishing is divided into three main divisions, corresponding to the three continents they cover: North America, Europe and Asia.
Group's General Management

US Operations

European Operations

Global Divisions

Japan: 3 Italy: 4 France: 192 UK: 145
B. Vanryb President & CEO R. Politis General Manager & CTO T. Bonnefoi Chief Financial Officer O. Wright CEO Europe

R.Bloxberg CEO USA

T. Helfstein President USA

O. Wright CEO Europe

A.Goldstein VP Europe

B. McNinch e-Commerce

D. Wright Technology & OEM
C. Thompson Corporate Solutions
Nova Development and Emme Executives join the Group: Olivier Wright, CEO of Emme, is appointed CEO of Avanquest Software Europe and becomes part of the Executive Board with Bruno Vanryb (CEO), Roger Politis (CTO) and Thierry Bonnefoi (CFO). The founders of Nova Development, Roger Bloxberg and Todd Helfstein, join the expanded Executive Board which also includes Andy Goldstein.
Roger Politis Thierry Bonnefoi Roger Bloxberg Chris Thompson Andy Goldstein David Wright Todd Helfstein Bob McNinch

Olivier Wright

Bruno Vanryb
r&d orGanizaTion aVanqUesT sofTware TechnoloGy
sPecTacUlar GrowTh of The own-iP line and new TechnoloGical challenGes
a v a n q u e s t s o f t w a r e a n n u a l r e p o r t - - 11
in our industry, the arrival of a new version of windows is always a major event, accompanied by its share of risks and opportunities: risks linked to technical difficulties resulting from incompatibilities with existing software and hardware, which consequently make its adoption slower than anticipated; but also a wonderful opportunity with the implementation of the new platform offering new possibilities and opening new technological horizons, which has never failed, in the end, to boost users interest and whet their appetites! windows Vista, arriving six years after windows XP, is no exception to the rule.

In 2006, our online business continued to grow at multiples of our traditional business.
Avanquest Software online
ava n q u e s t s o f t w a r e A n n u a l R e p o r t - 14 -15
We have two constituencies to make happy; customers in our target markets who want online help to buy the right software and services the way they want to; and our software developers who want to use the latest e/commerce technologies and internet based marketing to present their solutions to these customers in the most compelling ways.
Bob McNinch, General Manager, Global e-Commerce, Avanquest Software.
As a development strategy, e-commerce activities satisfied expectations, generating growth of over 35% in 2006 and representing 13% of total software sales.
Extending our market reach The Web enables customers to buy our software in remote areas where they are not served by strong retail channels, or where the full extensive catalogue of Avanquest and our partner software titles may not be available to buy. It is a very cost effective way of broadening our market and building our brand. In 2006 we opened new stores to cater to customers in Spain, Italy and Japan. In 2007 we plan to expand both geographically and into target markets. Expanding our product range and appeal As we have seen in music publishing, limited shelf space in traditional retailers means that many customers dont have access to speciality titles with focused appeal, yet these products can add up to significant sales if they can be delivered through the Internets virtual shelf space. As Global E-Commerce General Manager Bob McNinch points out, Because we offer electronic software download over the Internet we enable publishers in the long tail to access markets not available through traditional channels - and customers access to a broader range of solutions for their particular needs. We expect the growth through this strategy to continue throughout 2007. Some customers are deterred from buying Online because of concerns about payment security. In 2006 we expanded the range of payment methods from standard credit cards so that we now offer our customers the ability to pay with other methods such as PayPal, bank transfer, and checks. This has increased sales to those customers who prefer these other Online purchasing options. We will increase these methods further in 2007 to broaden the appeal of Avanquest as a place to buy software Online.

Profitable growth Results from the e-commerce team have delivered incremental growth to supplement our success in traditional channels. 2006 saw sales on the Web grow at a rate more than 3x greater than traditional channels. This growth rate is expected to continue for the foreseeable future. As we build the relationship with our customers it is also our goal to translate this already substantial, and growing, community into increased shareholder value. The Internet marketing of all Avanquest Software Group products in all territories is now directed by a single international Web division. Based on a powerful e-commerce platform developed in-house, Avanquest offers a unified, global master catalogue of all Avanquest Software titles worldwide, and yet enables Online shoppers to access a product catalogue localized to the language and needs of each local customer. We continue to invest in this infrastructure, global tools and systems that can be used across all countries during 2007 to multiply sales globally but divide costs across multiple countries. The objectives of these strategies are to improve how we communicate with our customers, to deliver operating efficiencies, and to provide a consistent customer experience around the world. In 2007 we plan an increased contribution from the Online team to company profitability.
aVanqUesT sofTware in norTh america
aVanqUesT sofTware increases marKeT Presence and eXPands ProdUcT PorTfolio
ava n q u e s t s o f t w a r e a n n u a l r e p o r t - 16 -17
The addition of nova development to avanquest softwares north american operations will create significant new revenue and publishing opportunities that will help the group deliver even more innovative, next-generation software solutions in the future. we plan to leverage each others attributes to expand our retail and direct-to-consumer coverage, and also to more effectively meet the demands of our consumer and small business customers.
Todd helfstein, President, nova development, now avanquest north america.
a Groundbreaking Union Avanquest Softwares North American market presence expanded dramatically in 2007. This expansion was achieved both as a result of organic growth within the Avanquest USA division, as well as through the acquisition of U.S. software publisher Nova Development, led by CEO Roger Bloxberg and President Todd Helfstein. together, these two strategic divisions give Avanquest Software unprecedented strength in the North American software marketplace, particularly in such key areas as desktop publishing, small business productivity solutions, utility products, clip art, and home graphics. Poised for continued Growth With both a shared strategic vision and complementary areas of experience, Avanquest USA and Nova Development are well positioned to leverage each others strengths and take Avanquest Software to new heights in the North American software arena. Avanquest USA and Nova Development have already begun taking advantage of synergies by selling each others products in each others specialized distribution channels. Additionally, the two divisions are achieving substantial cost savings through intensive collaboration and collective purchasing programs. Avanquest Softwares North American operations will continue to grow through an aggressive strategy focused on direct-to-consumer marketing campaigns, online sales, as well as enhanced partnerships with retailers and third-party developers. As an even more vigorous and powerful force in North America, Avanquest Software is poised to provide a greater level of service and support to its customer base than ever before.

The future of Avanquest Software in Europe: Multi-channel market leadership, and an expansion of the Avanquest brand to become a multi category leader The very high cost of launching new software on the global market prevents the majority of software publishers from launching new products in a complete and thorough manner. By leveraging the Avanquest network and global access to developers, we are now poised to become not only market leaders in the individual countries, but moreover, category leaders throughout Europe and globally. Olivier Wright: In my eight years as CEO of the Emme group, we have taken a very strong category approach that resulted in our becoming the undisputed leader in Europe in categories such as Multimedia, and cultural software. With the greatly enhanced power of the newly formed Avanquest Software group, I am certain that the application of these proven methods will result in a leadership position in many new categories. With the launch of Avanquest as a software brand name, retailers, corporate, online and OEM clients recognize that a new force in the software industry has emerged. These channel partners understand that as the software market matures, fewer and fewer companies will be able to invest in properly servicing these various channels. Thus, the expansion of Avanquest Software in all channels has been warmly welcomed by our many existing partners and the numbers are increasing steadily. In a market known for its fast pace and highly demanding economic parameters, Avanquest Software has earned a reputation as a partner to bank on.
There is no other company today in Europe with a more deeply established network of channel partners, or a broader publishing portfolio of products than Avanquest Software. Moreover, through the Emme integration, Avanquest Software has strengthened its commitment to global reach and local expertise. In each of the individual Avanquest territories in Europe we have strengthened our local knowledge, market share and category coverage. This unique combination of true local specialization across the major European markets is what makes the future for Avanquest Software so bright and sets a standard that no competitor today can live up to.

Turenne Capital Partenaires and Euridi, companies who joined the Board of Directors as a result of the increase in capital in September 2003, represent the financial realm. Andy Goldstein, founder of MediaGold now Avanquest Deutschland, Roger Bloxberg and Todd Helfstein, respectively CEO and President of Nova Development are all American; Gilles Quru and Jean-Claude Vrignaud both spent all or most of their careers in the United States. Regular and Transparent Financial Information In order to be in compliance with the best practices in financial reporting, Avanquest Software has participated in Euronexts NextEconomy segment right from its formation. The Company publishes quarterly results and has adopted IAS European accounting standards. Avanquests shareholders, analysts and investors have free access to the Groups complete and transparent financial data. The companys communication is bilingual; all information is published and updated in real time on the Groups websites, as well as on the main financial sites. A ny request for information made by a shareholder of the corporation is granted as soon as reasonably possible, no matter how many or few shares the individual may own. F inancial and institutional memos, the Annual Report, and the main memos regarding Avanquests line of business are systematically sent to all shareholders who hold more than 500 shares. A n update on activity is systematically made during General Assemblies and meetings with the financial community that are held at least twice a year.
Ethics, Respect and Responsibility: Values Synonymous with Sustainable Performance Ethical business conduct, respect for the individual, and corporate responsibility form an integral part of the winning spirit promoted by Avanquest Software. The 650 employees throughout the world are mobilized around a unifying corporate mission and all share a passion for innovation. In this way, every success the group experiences is the fruit of a collective dynamic wherein each person is encouraged to give the best of himself. Avanquest Software executives are vigilant in giving all team members enough responsibility to make them feel an integral part of the overall groups success. In a constantly evolving environment, training is naturally one of Avanquests priorities. By being well-trained, each employee is able to better satisfy customers needs, both internal and external, and is able to participate more effectively in the development of the corporation. For Avanquest Software, every supplier is considered to be a partner who is likely to support the groups growth. In soliciting bids for new business projects, bidding process, prospective suppliers and vendors are afforded access to the same level of information. All things being equal, an advantage is given to providers who are existing suppliers for the group, so as to foster development of long-term partnerships. Avanquest Software demonstrates its ethical development by adhering to the highest standards of responsible business conduct in its dealings with shareholders, customers, suppliers, and affiliates alike. Through this strong ethical framework, the performance of the corporation is only made more sustainable.

Shareholders Space

Market: Euronext Paris Eurolist (Segment C) Mnemo Code: AVQ ISIN Code: FR0004026714 Indices: SBF 250, MIDCAC, ITCAC 50, IT CAC, NextEconomy, CAC Small90, CAC Mid&Small190, CAC AllShares Number of shares: 10,069,891
1996-2006: 10 Years on the Stock Exchange! Avanquest Software made its debut on the New Market of the Paris Stock Exchange in 1996. Throughout its 10 years on the stock exchange, the Group has always vigilantly provided clear and transparent communication to shareholders, even during difficult periods, such as the internet bubble collapsed of 2000-2001. From the creation of the Next Economy segment in 2002, Avanquest Software has adopted industry - leading financial communication and disclosure practices (publication of quarterly results, adherence to IAS standards as of 2004, etc.). Following the April 2005 consolidation of the three markets regulated from la Place de Paris, into a single list, Avanquest Software has been quoted on Eurolist Segment C. The dual acquisition of Nova and EMME at the beginning of 2007, adds a new dimension to the Group and opens new horizons for its shareholders.
Our friendly takeover of EMME is complementary to the acquisition of Nova Development in the United States and is a key element in our strategic vision: to become the most important independent and multispecialized software publisher in the world. We are convinced that the dynamic for profitable growth which will result from these operations will create value for all our shareholders-both the new ones who are joining us as a result of EMME takeover, and the existing ones, who have been our partners for more than ten years.
Bruno Vanryb, Founder and CEO of Avanquest Software Group.
Welcome New Shareholders! Following the alternative public offering initiated on Emme stock, Avanquest Software declared its ownership of 2,168,700 shares of Emme stock, representing 95.21% of its capital and voting power. This high percentage attests to the great confidence Emme shareholders have in joining forces with Avanquest Software. We would like to thank our shareholders for the interest they have shown for the future development of a global industrial project that will create added value over the medium term. Strengthened by this success, we will reach a new level and will now proceed with the integration of structures and development of expected synergies.

Olivier Wright, former Emme CEO, today CEO Europe, Avanquest Software
Actively Participate in the Life of the Group Shareholders and future shareholders, Avanquest has made quality information tools available to you, including a bilingual Internet site (www.avanquest.com) that combines all Avanquest Softwares current events, along with the dates of upcoming announcements for its financial calendar. You will find all the information you need to actively participate in the life of the Group. Avanquest Software has more than ten thousands individual and numerous institutional shareholders who have been loyal for many years. Avanquest Software received the ANVAR Prize, today known as OSEO Innovation, in 2003 and 2006.
Capital Structure on 05/31/2007

*Estimates.

Avanquest Shareholders Agreement (Board of Directors + Turenne + Idi) 15% Groups employees and managers 11% Fidelity* 3% Edmond de Rothschild Investment Partners* 2% SGAM 3% Alto Invest 3%

Other investors 63%

Analyst & Investor Relations: Thierry Bonnefoi Tel. : +33 (0) 74 tbonnefoi@avanquest.com Corporate Communications: Christine Sauvaget Tel. : +33 (0) 82 csauvaget@avanquest.com Design: lecerclerouge Tel. : +33 (0) 00 Photography: graphicObsession