Notes to the consolidated balance sheet (page 2)

Investments in associates

The Group’s investments in associates consist of investments in the following companies:

Company name	Country	Ownership	Ownership
Company name	Country	2005	2004

The Blomfield Group	UK	18%	18%
TriNet	US	0%	49%
Fairplace Consulting Plc	UK	25%	25%
Pixid	France	33%	33%

Although Vedior holds less than 20% of the shares of The Blomfield Group, Vedior exercises significant influence by virtue of its right to appoint a director to the Board and its option to increase the shareholding to a majority stake.

	2005	2004

Cost of investment in associates	7	10
Share of post acquisition profit, net of dividends received	1	2
Total	8	12

In June 2005, the investment in TriNet was disposed of realising a net profit of €15 million after tax. The gain on the disposal was recognised in the Income statement as share of profit of associates.

Summarised financial information in respect of Vedior’s associates is set out below:

	2005	2004

Total assets	28	75
Total liabilities	-10	-45
Net assets	18	30

Sales	69	78

Profit for the period	1	4

Loans and receivables

Loans and receivables consist almost entirely of compulsory interest-free loans to French government departments (with a maturity of 15-20 years) to finance social housing projects. The amounts of the loans granted each year are dependent on the wage levels of the previous year.

Also included under Loans and receivables are the interest-free loans outstanding to a member of the Board of Management amounting to €1.1 million (2004: €1.1 million) under the Group share plans described on this page.

Deferred tax assets and liabilities

The following deferred tax assets and liabilities are recognised by Vedior, and the movements thereon, during the current and prior reporting periods.

	Deferred tax on accruals and provisions	Retirement benefit obligations	Share based payments	Tax losses	Other	Total

At 1 January 2004	13	10	2	27	4	56
Credit to equity for the year			-1			-1
Credit (charge) to profit or loss for the year	6	-6	1			1
Exchange differences	1			1		2
At 1 January 2005	20	4	2	28	4	58
Credit (charge) to profit or loss for the year	3	-1	1			3
Exchange differences	-1			1		-
Disposal of associate				-13		-13
At 31 December 2005	22	3	3	16	4	48

The following is the analysis of the deferred tax balances for balance sheet purposes:

	2005	2004

Deferred tax assets	61	68
Deferred tax liabilities	-13	-10
	48	58

At 31 December 2005, the Company had operating loss carry forwards of €35 million (2004: €51 million) which are available to offset future tax liabilities. In addition to these losses, Vedior filed tax returns for which the amount of losses is still under discussion with tax authorities amounting to €91 million. Taking into consideration the uncertainty of the timing and the amount of future profits to offset these operating losses, no deferred tax assets have been taken into account.

Trade and other receivables

	2005	2004

Trade receivables	1,444	1,288
Income tax receivable	24	19
Prepayments and accrued income	41	34
Other receivables	43	57
	1,552	1,398

Trade receivables are net of impairment losses for doubtful accounts amounting to €30 million (2004: €27 million).

Issued Capital

(in thousands)	Ordinary shares at €0.05		Preference shares A at €0.01		Preference shares B at €100
(in thousands)	2005	2004	2005	2004	2005	2004

Authorised at 31 December	320,000	320,000	-	40,000	36	36

Issued and fully paid
At 1 January	166,116	164,623	34,234	34,234	27	27
Payment in stock to shareholders	1,995	1,289
Exercise of share options	719	148
Issued under US stock purchase plan	63	56
Redeemed			-34,234
At 31 December	168,893	166,116	-	34,234	27	27

The ordinary shares for which bearer depositary receipts have been issued are held by the Foundation for ordinary Vedior shares, based in Amsterdam, the Netherlands. For further explanation click here.

The preference shares A were redeemed effective 5 July 2005. An amount of €1.47478 was paid for each preference A share. The aggregate payment for the 34,323,680 outstanding preference A shares was €51 million.

The Annual General Meeting held on 29 April 2005 also approved the redemption of the preference B shares effective 1 July 2007. The redemption price will be €100 per share.

The preference B shares for which bearer depositary receipts have been issued are held by a separate foundation.

In connection with the acquisition of Acsys Inc. in May 2000, Vedior and ING Group (‘ING’) entered into a joint-venture agreement. Until May 2005, Acsys Inc. was a wholly owned subsidiary of Tiberia B.V., in which Vedior held 14.4 million common shares and ING held 30.0 million cumulative preferred shares with a cumulative preferred dividend of €2.4 million per annum. Furthermore, ING provided an exchangeable loan of €44 million to Tiberia B.V. The cumulative preferred shares could be converted into depositary receipts of ordinary shares of Vedior at a price of €16.00 and ING also had the right to convert the loan into depositary receipts of ordinary shares of Vedior at a price of €16.00 if, simultaneously, ING would convert the cumulative preferred shares.

In May 2005, Vedior purchased the preferred shares against their par value and purchased the loan at a purchase price equal to the outstanding amount. Tiberia B.V. is now 100% owned by Vedior.