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Focus the essence in turbulence

ANNUAL REPORT 2002

4

Focus, the essence in turbulence

A word of welcome to you as reader of the Blue Fox Enterprises N.V. 2002 annual report.

For Blue Fox, focus is an unconditional item on the agenda for all different entities within thecompany. Focus at Blue Fox concerns analysis and anticipation, strategy and vision. Strongentrepreneurial skills and structural leadership form the driving force for development of focuswithin the Blue Fox company. Clear communication at Blue Fox guarantees the highest level ofinvolvement and effort of all staff members with focus on result.

The markets in which we are in have never been more volatile. We encounter turbulence in ourmarkets and on various fronts in the economy. Technological developments are taking off andcompetition is severe for every player. Mergers, takeovers and bankruptcies are key words inthe headlines of many articles from the various business magazines. Especially in these economic circumstances the strong will distinguish themselves.

Focus is essential; the essence in turbulence.

For Blue Fox, focus is an important starting point that is embedded in the management of ourwhole company. In this annual report, we present the strength and meaning of focus for BlueFox. Focus is presented in a symbolic way, four theme pages back up the build-up andcontents of the 2002 annual report of Blue Fox.

Blue Fox is a strong and healthy company, our strategy is a strong result of analysis, ingenuityand vision. We distinguish ourselves in the way in which we focus to realise our ambitious, butrealistic, objectives. Also in the future, this focus will guarantee result and success.

Blue Fox Enterprises N.V.Board of Directors

CONTENTS

I. INTRODUCTION

Announcements by the Supervisory Board 8

Company profile 9

Mission and strategy 10

Key figures 1998 – 2002 11

Supervision and Management 12

II. REPORT OF THE BOARD OF DIRECTORS

Message from the Chairman of the Board of Directors 16

Blue Fox in the past year 17

Trends in our markets 22

Staff and organisation 26

Internal control systems 27

Outlook 2003 29

III. SHAREHOLDER INFORMATION

General 32

Staff options 33

Investor Relations 34

Corporate Governance 35

Dividend policy 36

Interests 37

Important dates 37

Important events in 2002 38

Prevention of Insider Trading 39

IV. ANNUAL ACCOUNTS 2002

General information 42

Summary of accounting policies 42

Consolidated balance sheet as at 31 December 2002 47

Consolidated profit and loss account for 2002 48

Consolidated cash flow statement for 2002 49

Notes to the consolidated annual accounts 2002 50

Company balance sheet as at 31 December 2002 58

Company profit and loss account for 2002 58

Notes to the company annual accounts 2002 59

V. OTHER INFORMATION

Auditors’ report 68

Statutory provisions concerning result appropriation 69

Proposal result appropriation 2002 69

“Stichting Continuïteit Blue Fox Enterprises N.V.” 69

Group offices 70

Glossary 72

ANNUAL REPORT 2002

5

The success of the fox

The Vulpes vulpes, more commonly known as the fox, has made aremarkable comeback in the Netherlands. The success of the fox,however, is not restricted to the Netherlands. It can be found allover the world, from the polar regions to desert country. The foxmust, therefore, be regarded as a very successful creature. An important factor for this success is the animal’s adaptability, as a result of which it can even survive the hardest conditions.A fox does not depend on its habitat for its survival. True totradition, foxes are found in wooded landscapes, but nowadaysthey can also be encountered in the larger city parks, surroundingsthey have adapted to successfully. In doing this, the fox has shownhis resourcefulness.

Blue Fox has also been very successful in recent years. Thissuccess was partly the result of strong analytical work as well asanticipation of the developments in the market. This focus on theever changing conditions in the ICT market is very important inorder to be and remain successful in these turbulent times.

However, focus alone is not enough to be successful. In the end,a clear vision is needed to define the final objective. Only when theobjective is clearly defined, a strategy can be worked out in orderto realise the stated objective. The eventual realisation of theobjectives strongly depends on the co-operation and unity of thestaff members and on the leadership qualities of the management.

The past year was a year in which the market conditions in the ICTmarket forced Blue Fox to adapt and to be resourceful. Also the factthat Blue Fox has been one of the few ICT companies able to holdits own in this changing and highly turbulent market, means thatBlue Fox can look back on a successful 2002.

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I . I N T R O D U C T I O N

Announcements by the Supervisory Board

We hereby present the annual accounts for the financial year 2002, as drawn up by the Board ofDirectors and adopted by the Supervisory Board, as well as all other legally required informationconcerning Blue Fox Enterprises N.V. The annual accounts 2002 were audited by KPMGAccountants N.V., who issued an unqualified auditors’ report, which can be found on page 68.

We recommend the Annual General Meeting of Shareholders to approve the 2002 annualaccounts in accordance with the documents as presented. Furthermore, we recommend thatthe Board of Directors is discharged in respect of its management and the Supervisory Board isdischarged in respect of its supervision. We propose that you approve the proposal of the Boardof Directors concerning the result appropriation.

In spite of the depressed market situation in some areas Blue Fox Enterprises N.V. closed 2002with a satisfying result. Serious efforts were made in order to turn the merger with NedGraphicsHolding N.V. into a success. In the second half of the year the decision was made to bring theBlue Fox activities more into focus and consequently to concentrate on CAD/CAM activities.

The Supervisory Board met seven times with the Board of Directors during the year. Attentionwas given to subjects including the development of balance sheets and results, the assessmentof forecasts and budgets, the strategy and commercial development of the company, themanagement structure and management development and ICT. The basis of the policyregarding the salaries of the members of the Board of Directors is that a competitiveremuneration package should be offered.

The annual accounts, the auditors’ report and the management letter were discussed in thepresence of the external auditor. Also in 2002, a special session with the Board of Directors wassolely dedicated to the strategy of the company.

During the Annual General Meeting of Shareholders on May 17, 2002 drs. M. (Mark) KuperusRC was appointed as member of the Board of Directors and Chief Financial Officer. At the sameoccasion T. (Ton) Pannekoek was appointed as member of the Supervisory Board.

Every member of the Supervisory Board is completely independent from both the managementand the major shareholders of Blue Fox Enterprises N.V. The members of the SupervisoryBoard hold no Blue Fox shares and very modest numbers of options on Blue Fox shares. It was decided that the members of the Supervisory Board of Blue Fox Enterprises N.V. as of2003 will not receive any more options.

We would like to thank the Board of Directors and all employees for their efforts and contributionsto the result for 2002 and towards making the company a success.

Dordrecht, 17 March 2003

The Supervisory Board

Ben F.M. Knüppe, ChairmanTon PannekoekPierre A.M. Pellenaars

ANNUAL REPORT 2002

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I . INTRODUCTION

Company profile

Blue Fox Enterprises N.V. is a CAD/CAM supplier. Blue Fox supplies CAD/CAM/ERP solutionsfor the international textile and apparel industry. In addition, Blue Fox distributes CAD/CAMsoftware for engineering solutions and supplies CAD/GIS solutions for government institutions. Blue Fox also provides CAD services such as recruitment, training courses andmagazine publication.

Blue Fox has been listed on the Official Market of the Euronext Amsterdam N.V. stock exchangesince 21 May 1999 and has been a part of the NextEconomy segment since 1 January 2002.

In 2002, the operating companies had been divided in a software division and a services division.As from 2003, Blue Fox will divide its activities into internationally focused CAD/CAM/ERP activities and CAD/CAM/GIS activities targeted at the Benelux.

The software division provides marketing and distribution of almost all software for personalcomputers, including Computer Aided Design (CAD). In addition, the division specialises insupplying software licences for medium-sized and large companies. With regard to these activities, the software division mainly focuses on the Benelux. Application software for thetextile and apparel industry is developed in-house. The software solutions cover the whole"supply chain" and comprise solutions for design, product presentation, collection management,sales and production planning, machine control, monitoring and Enterprise Resource Planning(ERP). These products are sold directly and indirectly in all relevant markets in the world.

The services division supplies integrated total solutions for the market of GeographicInformation Systems (GIS). In addition, it supplies services for the CAD and telecom markets.The GIS group mainly supplies the Dutch local governments, where it is market leader. In addition, it supplies cartographic solutions for the international aviation industry.

Both for the CAD/GIS market and for the general ICT market Blue Fox recruits, selects, trains andseconds specialists, whereby the internet plays an important role. These activities are carried outfor external customers and for strengthening the organisation. Blue Fox also supplies tailor-madesoftware and network management. To support the CAD/GIS activities two specialist magazinesare published, one of which concentrates on the Benelux and the other on Europe.Via our teleport in Biddinghuizen, services are supplied for satellite communication (telephone,television and the internet) with emerging markets such as Africa, Asia, the Middle East andEastern Europe.

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Mission and strategy

Mission

It is Blue Fox's mission to create value through CAD/CAM applications; value for shareholders,customers, suppliers and staff. We realise that to create value in a listed company, more thanin a privately owned company, a certain size is required. A strong profile and liquidity of theshares are essential. Size also helps gaining orders, helps generating volume for our suppliersand helps creating career opportunities for our staff. We also aim to create stability for thecompany by investing in a portfolio of CAD/CAM activities in adjoining niche markets wherewe can either maintain or obtain leading positions. We aim to be a top three player in all ourmarkets.

The mission statement of Blue Fox is: "Growth with more value"

Strategy and Objective

Blue Fox Enterprises N.V. has decided to focus entirely on the sale of CAD/CAM solutions andrelated CAD/CAM services. Focusing on these core activities the organisation will be moretightly focused and the average quality of turnover will improve. Blue Fox accordingly intendsin the near future to seek partners to which all its non-CAD/CAM activities will be transferred.Blue Fox has taken the first step in this direction by selling its general PC software distributionactivities (Kenfil Distribution B.V. and Hitrate B.V.) to an external investment company. The CADdistribution activities (Pollux B.V.) will fully remain a part of Blue Fox. The activities of thecompanies that have been sold, will be supported in the coming years by Blue Fox operatingcompanies under a service and profit-sharing agreement. This will enable Blue Fox for severalyears to receive profit-related revenues from these businesses, which it acquired in the past.Blue Fox will also look for external investors and/or strategic partners for Nr.1 Software B.V.,Deco ICT Solutions B.V. and the teleport activities in Carrier to Carrier Telecom N.V. Thedecision to focus exclusively on CAD/CAM activities is a logical next step in the development ofBlue Fox.

In May 1999, Blue Fox obtained a stock exchange listing as a supplier of CAD software andCAD services. In the past years, its product range was broadened and deepened by acquiringseveral more general ICT software and ICT services providers. The increased scale of BlueFox’s operations enabled it last year to acquire CAD/CAM/GIS specialist NedGraphics. By transferring the non-CAD/CAM activities to third parties, turnover of Blue Fox will initiallydecrease, while margins will improve.

In line with the changed strategy Blue Fox has redefined its objectives. Blue Fox has top threepositions in all CAD/CAM segments in which it is active, and sees good opportunities tomaintain or improve these positions in existing and new geographical markets. Blue Fox will atthe same time strive to increase its net profit margin on a structural basis. Blue Fox aims toincrease its net profit margin before amortisation of goodwill to above 7%.

In addition to autonomous growth, we will continue the present acquisition policy. Mergersand joint ventures with similar (CAD/CAM) companies are also possible. We aim to make strategicacquisitions to strengthen the existing activities. In addition to quantitative and qualitativegrowth, improvement of profitability will remain a permanent point of attention.With the high level of autonomy of the operating companies, the Board of Directors remainsfree to implement the growth strategy and create the conditions for co-operation and synergy.

As from 2003, Blue Fox will divide its activities into internationally focused CAD/CAM/ERP activities and CAD/CAM/GIS activities targeted at the Benelux.

ANNUAL REPORT 2002

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I . INTRODUCTION

Key figures 1998 – 2002

ANNUAL REPORT 2002

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2002 20014) 2000 1999 1998

Results (in thousands of euros)

Net sales 85,636 72,758 55,569 40,590 20,915Operating result before amortisation of goodwill 5,408 5,901 3,646 2,466 1,313Operating result 3,998 5,615 3,646 2,466 1,313Net profit before amortisation of goodwill 3,815 3,610 2,289 1,679 882Net profit 2,405 3,324 2,289 1,679 882Cash flow 1) 6,564 4,850 2,800 1,902 1,019

Staff

Average number, including staff hired out 437 272 148 109 65

Balance sheet information

(in thousands of euros)

Balance sheet total 47,013 48,313 19,231 14,923 6,146Shareholders’ equity 23,555 20,877 1,268 3,733 818Guarantee capital 26,847 24,169 2,560 3,733 818Working capital -471 637 -572 2,875 564

Ratios (in %)

Operating result before amortisation of goodwill/net sales 6.3 8.1 6.6 6.1 6.3Operating result/net sales 4.7 7.7 6.6 6.1 6.3Net profit before amortisation of goodwill/net sales 4.5 5.0 4.1 4.1 4.2Net profit/net sales 2.8 4.6 4.1 4.1 4.2Solvency 2) 57.1 50.0 13.3 25.0 13.3

Figures per share

Number of outstanding shares 3) 3,487,241 2,255,507 1,456,319 1,164,415 938,601Earnings per share before amortisation of goodwill (in €) 1.09 1.60 1.57 1.44 0.94Earnings per share (in €) 0.69 1.47 1.57 1.44 0.94Cash flow per share (in €) 1.88 2.15 1.92 1.63 1.09Dividend per share (in €) 0 0 0 0 0

1) Net profit plus amortisation and depreciation charges.2) Guarantee capital/balance sheet total as at the balance sheet date.3) Recalculated average number of outstanding shares.4) Some accounting principles were amended in 2001.

Supervision and Management

The Board of Directors develops the strategy of the company and sets the priorities. It monitorsthe financial and operational results, is closely involved with the financing of the company andapproves investments. The Board of Directors is also closely involved with preparing andimplementing acquisitions, holds discussions with investors, shareholders, analysts andjournalists and other involved parties.

Supervisory Board

Mr. Ben F.M. Knüppe (1952), Chairman of the Supervisory Board

Mr. Knüppe graduated from Leiden University, initially working for the law firm of Dutilh, Vander Hoeven & Slager in Rotterdam. After that he worked as a lawyer at Knüppe & Groothuis,now named AKD Prinsen van Wijmen Advocaten en Notarissen. Mr. Knüppe advisescompanies in the field of corporate law. He is also frequently appointed as liquidator orreceiver. Furthermore, he is a member of the municipal council of Dordrecht and of theSupervisory Board of the Albert Schweitzer Hospital in Dordrecht.

Drs. Pierre A.M. Pellenaars (1945), Member of the Supervisory Board

Mr. Pellenaars graduated from Tilburg University in business economics. His (former) positionsinclude membership of the Executive Board of Gebr. Broere B.V. in Dordrecht and Senior Vice-President Finance & Administration of Koninklijke Pakhoed N.V. After that, Mr. Pellenaars wasChairman of the Board of Directors of Wilton-Feyenoord Holding B.V. and Chairman of the Boardof Directors of RDM Nederland B.V. Since January 2000, Mr. Pellenaars has been active ascorporate advisor and as private investor. In addition, Mr. Pellenaars is a supervisory director atthe following companies: Solution Ventures B.V., Almere (president of the Supervisory Board);Sanadome Holding N.V., Nijmegen; Winwind B.V., Terneuzen; Indus PS B.V. (holding company ofMPE B.V.), ‘s-Hertogenbosch; Thermae Holding N.V., Valkenburg aan de Geul.

Ton Pannekoek (1949), Member of the Supervisory Board

Mr. Pannekoek gained a degree in business economics from the H.E.A.O. in Arnhem andcompleted executive courses at Insead-Fontainebleau and Harvard Business School in Boston.He held several sales positions in a 9-year period with Burroughs (Unisys), and was salesdirector of Apple Computer B.V., before starting Compaq Computer B.V. in the Netherlands in1987. He was Managing Director of Compaq Nederland until 2000, with various Europeanaccreditations. Since then, he has been active as corporate consultant, private investor andChairman of the Supervisory Board of Compu’Train B.V.

ANNUAL REPORT 2002

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I . INTRODUCTION

Supervisory Board (from left to right)Pierre Pellenaars,

Ben Knüppe, Ton Pannekoek

Board of Directors

Drs. Sjoerd W. Eisma (1950), Chairman of the Board of Directors

Mr. Eisma graduated from Leiden University in organic chemistry. After completing his studies, heworked for several years as consultant engineer and plant manager at Shell Nederland Chemie, after which he joined the Board of Directors of engineering firm Dordtse Engineering Group B.V.In 1985, he started selling PC CAD systems after a management buy-out, which in 1990 led to theincorporation of Blue Fox Enterprises and a number of subsidiaries. Mr. Eisma is the ManagingDirector of Blue Fox Enterprises, as well as being responsible for Investor Relations and thedevelopment of the strategy of the company. He is also responsible for the control of the textileactivities of NedGraphics. He is also chairman of the Supervisory Board of venture capitalcompany Newion Investments B.V.

Ir. Roelof J. Brolsma (1951), Member of the Board of Directors

Mr. Brolsma graduated from Eindhoven University of Technology. After completing his study inmechanical engineering, he completed a graduate course Business Administration, after which hecompleted the NIMA-C marketing course. Subsequently, he worked for 10 years at the "Instituutvoor het Midden- en Kleinbedrijf" (IMK, the national institute for medium and small-sizedcompanies) where he advised companies on financing and acquisitions. In 1991, he joined BlueFox Enterprises as business development manager and in 1996 he became Managing Director ofBlue Fox subsidiary TOPCAD. At the IPO of Blue Fox Enterprises in 1999, Mr. Brolsma joined theBoard of Directors. He is responsible for the control of the Dutch companies. He is alsoresponsible for business development, including acquisitions.

Drs. Mark Kuperus RC (1962), Member of the Board of Directors

Mr. Kuperus graduated from Erasmus University Rotterdam in business economics, followedby the post-graduate controller course at the ‘Vrije Universiteit’ Amsterdam. After his studies,he started working with KPMG, the first two years at KPMG Accountants, followed by sevenyears at KPMG Management Consultants. After nine years at KPMG, he became controller ofReed Elsevier Nederland, while early in 2000 he became Chief Financial Officer (CFO) andmember of the Board of Directors of Devote N.V., a service provider in IT architecture and E-business solutions, listed on the official market of Euronext Amsterdam N.V. After thetakeover of Devote N.V. by Ordina N.V., Mr. Kuperus as of 1 March 2002 started working asChief Financial Officer of Blue Fox Enterprises N.V.

Other members of the management team of Blue Fox Enterprises N.V.

F.A. ten Bosch (1963), Group ControllerDrs. L.J.L.E. Beugelsdijk RA (1967), Manager Finance & Control

ANNUAL REPORT 2002

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Board of Directors (from left to right) Roelof Brolsma, Sjoerd Eisma, Mark Kuperus

Better focus through vision

It is a generally well-known fact that falcons have excellenteyesight. Falcons have binocular sight, meaning that they are ableto see straight forward with both eyes, just like we are. For thatmatter, these birds can see twice as well as we can. Binocularvision is required to be able to see both distance and depth. As aresult of this, the eyes of a falcon are relatively big compared totheir skull. The falcon’s cornea is strongly bent and the lens issituated far away from the retina. This creates a big focal distance,which makes it possible for the bird to make telescopicobservations. This enables falcons to form a total picture from agreat height. In addition, they are able to focus, if needed, on verysmall details. This quality of being able to look at things fromdifferent angles, gives these birds the ability to clearly assess theday-to-day conditions.

For Blue Fox it was very important in 2002 to be able to observeand monitor the strongly changing developments in the ICTmarkets. In doing so, it was important to keep an eye on Blue Fox’smission statement “growth with more value”. Looking at the ICTmarkets, Blue Fox’s vision is to concentrate on niche markets andthereby aim its focus on international CAD/CAM/ERP activities andon the Benelux-oriented CAD/CAM/GIS activities.

By concentrating on these core activities, the organisation willobtain a stronger focus and the profitability will improve. Alsobecause Blue Fox has a clear view on the market developments inthe ICT sector, it has been able to choose for a focus on CAD/CAM.

With the amended strategy, Blue Fox has redefined its objectives.Blue Fox has top-three positions in all CAD/CAM segments inwhich it is active and the company sees good opportunities tomaintain or improve on these positions in existing and newgeographical markets. The company thereby aims to realise a long-term improvement of the net profit margin. Blue Fox aims torealise further growth of earnings per share and a net profitmargin before amorisation of goodwill of more than 7%.

ANNUAL REPORT 2002

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I I . R E P O R T O F T H E B O A R D O F D I R E C T O R S

Message from the Chairman of the Board of Directors

Dear shareholders,

The year 2002 was an exciting year for Blue Fox Enterprises N.V. Firstly, we wanted to prove to theoutside world that the acquisition of NedGraphics, by means of a statutory merger in September2001, had been the right thing to do for all parties involved: staff members, shareholders, suppliersand customers all held their breath. In addition, for the first time in years we were confronted witha strongly weakened economy, which let us down completely in the second half of the year.

At this moment, we are able to say with confidence that the acquisition of NedGraphics is asuccess and an example of a merger, which did not fail. It is customary at Blue Fox that operatingcompanies operate autonomously and under their own names in the market. We can state that theNedGraphics companies have become true Blue Fox companies which operate according to theBlue Fox model: strong local independence with a reporting line straight to the Board of Directorsand strict financial control. This has made Blue Fox into a truly internationally operating company.

In these challenging economic times it is becoming increasingly difficult to make a confidentprediction of the results of a listed company. In the forecasts we issued together with our half-year results, we stated that we expected to make more profit in 2002 than the year before,provided that the economy would recover in the second half of the year. We now know that theeconomy has shown no recovery at all. What’s worse, for the first time in years we wereconfronted with strongly disappointing results in Europe in the second half of the year, partlyoffset by improved results in the United States and the Far East. Our traditionally very strongfourth quarter this year was a lot less strong than in previous years. Despite all this, our staffmembers fought for all they are worth in order to obtain as many sales orders as possible, as aresult of which we still managed to realise an increase of the net profit before amortisation ofgoodwill. I am truly grateful to our staff members for this effort. At the same time, we could notavoid, forced by the economic malaise, implementing reorganisations and cutting costs in ourgeneral software and services activities in the Netherlands. The margins in this segment areunder such pressure that it had a strong negative effect on the net margin of Blue Fox as awhole. As a result, we were unable this year to achieve our objective of realising a 5% net yield.

As a result of the continuous pressure on margins in the general ICT sector and after extensiveconsultations between the Board of Directors and the Supervisory Board, we have decided tofully concentrate our activities within the CAD/CAM segment. By the spread of our CAD/CAMactivities over the whole world, linked with development of in-house developed software, we areable (albeit with lower total sales) to realise better margins in this segment in which we haveleading positions in various markets. This means that we will successively desinvest all of ournon-CAD/CAM activities. It does not mean that we regret our past investments in these activities.These enabled us to reach a size and profitability level which made it possible for us to becomeand remain a leading CAD/CAM supplier. We are convinced that our decision to focus more is inthe interest of our shareholders. By selling the non-core activities we expect to obtain resourcesin order to strengthen our balance sheet. Even if the profits of all ICT stocks are under heavypressure, we remain convinced that we can stay profitable. Without making all too concretepredictions, we will keep working enthusiastically to realise better results for our shareholders.


Drs. Sjoerd W. Eisma Chairman of the Board of Directors

ANNUAL REPORT 2002

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Blue Fox in the past year

Financial developments

Blue Fox Enterprises N.V. reported a net profit before amortisation of goodwill of € 3.82 million in2002, up 6% from € 3.61 million in 2001. Net turnover increased by 18% at € 85.6 million, from € 72.8 million in 2001. The gross margin was higher in 2002 at 42%, from 33% in the previous year.Operating result before amortisation of goodwill decreased to € 5.41 million, down 8% from € 5.90million in 2001. Earnings per share before amortisation of goodwill decreased, as expected, to € 1.09, down 32% from € 1.60. This was the result of a 55% increase in the average number ofoutstanding shares in 2002, necessary to finance the acquisition of NedGraphics in September 2001.Blue Fox has in the past year implemented a successful turn-around at NedGraphics.

Notes to the results

The increase in the reported turnover and profit for 2002 can be partly attributed to theacquisition of NedGraphics. Net turnover amounted to € 85.6 million and net profit beforeamortisation of goodwill to € 3.82 million (after amortisation of goodwill € 2.41 million).Operating profit before amortisation of goodwill was € 5.41 million (€ 4.00 million afteramortisation of goodwill). The gross margin increased to 42%, from 33%. The increase in grossmargin was related to the fact that software for textile and CAD/GIS applications is developedin-house, which means margins are considerably higher than in the case of acquired software. The net margin before amortisation of goodwill dropped to 4.5% from 5.0% (to 2.8% from 4.6%after amortisation). The drop in net margin was primarily due to a higher turnover in generalPC software at very low margins, disappointing sales of general ICT services and the slowdownin turnover growth for satellite communication services. Total operating income, includingcapitalised software development, amounted to € 89.4 million in 2002, a 19% increase on the € 75.0 million in 2001.

Operating costs rose by 78% to € 33.3 million in 2002, compared with € 18.7 million in 2001.This increase exceeded turnover growth. The rise was largely due to a higher average numberof staff members (+61%) and changes in the composition of personnel, including in-housesoftware developers. This meant operating costs as a percentage of total operating revenueincreased to 37.3% in 2002, from 24.9% in 2001.

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2000

Net profit, before amortisation of goodwill

2001 2002

2.29

3.61 3.82

100.0

80.0

60.0

40.0

20.0

0.0

5.0

4.0

3.0

2.0

1.0

0.02000

Net sales

2001 2002

in m

illio

ns

of

euro

s

55.6

72.8

85.6

While the average number of outstanding shares increased by 55%, earnings per share (beforeamortisation of goodwill), as expected, dropped 32% to € 1.09 in 2002, from € 1.60 in 2001.The number of shares was expanded last year to boost capital for the acquisition ofNedGraphics. The average number of outstanding shares was 3,487,241 in 2002, while the totalnumber of outstanding shares at year-end 2002 was 3,512,120.

Notes to the balance sheet

Fixed assets increased by € 5.7 million to € 30.5 million, largely as a result of the capitalisation ofsoftware development (€ 3.8 million), deferred goodwill (€ 4.1 million) and (net) investments intangible fixed assets. The increase of goodwill was mainly related to paid earn-outs in cash aswell as shares as well as to deferred items from the acquisition of NedGraphics. Total (net)investment in tangible fixed assets in 2002 amounted to € 2.6 million, from € 1.9 million in2001. The bulk of this sum went to the expansion, launched in 2001, of the antenna park for thesatellite communication services. Shareholders equity went up to € 23.6 million at year-end2002, from € 20.9 million at year-end 2001. The guarantee capital increased to € 26.8 million atyear-end 2002, from € 24.2 million at year-end 2001.

Results per division

The Blue Fox’ operating companies are divided into a software division and a services division. The software division comprises all companies involved in the marketing and sales of softwareand licences. The other companies are part of the services division. The divisional figures arewithout reciprocal eliminations between the divisions and holding costs and exclusive softwaredevelopment, this means including salary(costs) of the in-house software developers. The divisional figures are comparable with a situation without capitalisation of softwaredevelopment. The capitalisation of software occurs on holding level and has not been dividedbetween both divisions for commercial reasons. In 2002, the software division accounted for77% and the services division for 23% of Blue Fox’s net turnover (2001: 76% and 24%respectively). In 2002, the software division contributed 73% and the services division 27% tothe operating profit (2001: 47% and 53% respectively).

ANNUAL REPORT 2002

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Net earnings per share, before amortisation of goodwill

earn

ing

s p

er s

har

e in

eu

ros

aver

age

nu

mb

er o

f o

uts

tan

din

g

shar

es in

mill

ion

s o

f eu

ros

0.94

1.441.57 1.60

1.09

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.01998 1999 2000 2001 2002

EPS per year Outstanding shares

Software division

Net sales of the software division increased by 22% to € 68.2 million in 2002, from € 55.8million in 2001, while the gross margin (sales minus material used) was up 66% at € 19.8million. This is a result of the in-house development of the software for textile applications,which yielded much higher margins than acquired software. Operating profit was up 17% at € 3.01 million, compared with € 2.57 million in 2001, despite the disappointing developmentsin the market for general PC software. The gross margin increased to 29% in 2002, from 21% in2001, largely as a result of the higher margin on the textile software.

Services division

Net sales of the services division increased by 15% to € 19.8 million in 2002, from € 17.2million in 2001, while the gross margin increased by 22% to € 14.0 million. Operating profitamounted to € 1.09 million, down 62% from the € 2.89 million reported in 2001. The drop inresults in this division was largely due to the current excess capacity for the execution of ICTprojects and general ICT outplacement, as well as the postponement of new contracts for satellite communications. The gross margin increased to 70% in 2002, from 66% in 2001.

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(in thousands of euros) 2002 2001 Change

Net sales 68,243 55,836 22%Gross margin 19,837 11,949 66%Cost 65,232 54,335 20%Operating result 3,011 2,566 17%

Gross margin/net sales 29% 21%Operating result/net sales 4.41% 4.60%Staff 238 123 93%

Excluding sofware development and intercompany eliminations between the divisions and holding costs.


Net sales 19,843 17,242 15%Gross margin 13,982 11,429 22%Cost 18,749 14,363 31%Operating result 1,094 2,893 -62%

Gross margin/net sales 70% 66%Operating result/net sales 5.51% 16.78%Staff 170 142 20%

Excluding sofware development and intercompany eliminations between the divisions and holding costs.

Developments in 2002

Market developments

In 2002, sales opportunities in the general ICT market deteriorated compared to 2001. In thesecond half of 2002, the market in Europe developed disappointingly, while market demand inthe Far East and the United States increased. Owing to the increasing deterioration of themarket in the second half of 2002, the fourth quarter, which is traditionally Blue Fox’ bestquarter, was far less good than expected.

Demand continued to decrease, particularly in the market for general ICT services and generalsoftware in the Netherlands. Growth in demand for satellite communications services stagnatedin 2002. At present this had lead to postponement of contracts. Uncertainty in this market alsoincreased following poor results from various players in the market.

Blue Fox managed to increase its market share in 2002 in the international market for CAD/CAM software for the textile and apparel industry, compared with the previous year. At thesame time, price competition in this market has sharpened. The demand for ERP software inthis market did not increase. The demand for CAD/GIS solutions and CAD products and services was slightly below last year.

Software division

The distribution of CAD software in the Benelux region once again made a considerablecontribution to the software division’s result.

The reorganisation of NedGraphics has led to an improved insight in the results of the varioussoftware products. This has increased the effectiveness of the management, with a greaterfocus on each product line. As a result it was possible to turn NedGraphics’ losses in 2001 intoa considerable contribution to Blue Fox’ profits in 2002, while sales were down on the previousyear. Loss-making sales have been divested, partly through the closure of offices. At themoment, we are working hard to tap into new markets and further expand existing markets,partly through the appointment of new agents. The demand for ERP solutions in the market isrecovering more slowly than expected, partly due to the longer sales cycles. Although thereorganisation has been completed, we continue to work on further cost reductions, efficiencyimprovements and internal communications.

Sales of general software continued to deteriorate in the second half of 2002, which led todisappointing results. A further drop in PC sales has further sharpened price competition forsoftware.

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Software & services - comparison

(in thousands of euros) 2002 % 2001 %

Net sales

Software 68,243 77 55,836 76 Services 19,843 23 17,242 24

Operating result

Software 3,011 73 2,566 47 Services 1,094 27 2,893 53

Services division

The services Blue Fox provides in the CAD/CAM market (recruitment, training and magazines)and the supply of CAD/GIS solutions to government institutions faced deteriorating salesopportunities in especially the second half of 2002 due to the growing uncertainty in the market.This resulted in pressure on volumes and margins, which was greater than in the previousyear, which in turn led to a lower capacity utilisation and a drop in the number of placements.This entirely negated the slight upturn at the end of 2001. The integration of the magazines intoa single organisation has further reduced costs and could compensate to some extent the dropin advertising income. In 2002, Blue Fox was for the first time confronted with thepostponement of contracts in satellite communications with emerging markets such as Africa,Asia and Central and Eastern Europe. This is related to the general malaise in the worldwidetelecom market. Despite the hesitation in the market the expansion of the antenna park andassociated technical facilities was finalised in 2002.

Focus on CAD/CAM

Blue Fox Enterprises N.V. has decided to focus entirely on CAD/CAM solutions and relatedCAD/CAM services. Focusing on these core activities will on average improve the quality ofsales, resulting in expected higher margins. Blue Fox accordingly intends in the near future toseek partners to which all its non-CAD/CAM activities will be transferred. Blue Fox has takenthe first step in this direction by selling its general PC software distribution activities to anexternal investment company at the end of 2002. The CAD distribution activities will fullyremain a part of Blue Fox. The activities of the companies that have been sold will be supportedin the coming years by Blue Fox operating companies under a service and profit-sharing agreement. For several years this will enable Blue Fox to receive profit-related revenues fromthese businesses that it acquired in the past. The decision to focus exclusively on CAD/CAMactivities is a logical next step in the development of Blue Fox.

As from 2003, Blue Fox will therefore divide its activities into internationally focusedCAD/CAM/ERP activities and CAD/CAM/GIS activities targeted at the Benelux. Blue Fox willtherefore also report its results in line with this new division of activities from 2003 onwards.

Sales of the CAD/CAM activities in 2002 amounted to € 40.5 million, while operating resultbefore amortisation of goodwill of all CAD/CAM activities amounted to € 5.30 million. At year-end 2002, the CAD/CAM activities employed 350 staff members including Blue Foxholding. The net profit before amortisation of goodwill of the core activities in 2002 amountedto € 3.85 million.

The following tables show only the core activities in 2002, divided into the new activitycategories.

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21

Results international CAD/CAM/ERP activities

(in thousands of euros) 2002

Net sales 16,734Gross margin 15,354Cost 14,425Operating result 2,309

Gross margin/net sales 92%Operating result/net sales 13.80%Staff 184

Including all development costs,excluding capitalisation of softwaredevelopment and reciprocaleliminations and holding costs.

Trends in our markets

Product and market focus

Blue Fox is an ICT services provider focusing on three connected niche markets:• Distribution of third-party CAD software and related CAD services namely recruitment and

selection, training and the publishing of CAD/CAM and GIS magazines;• Development, marketing, implementation and maintenance of integrated CAD/GIS solutions

for the national CAD/GIS industry, formerly part of NedGraphics;• Development, marketing, implementation and maintenance of integrated CAD/CAM and ERP

solutions for the international textile and apparel industry, formerly part of NedGraphics.

Distribution of third-party CAD software and related CAD services

Blue Fox is market leader in distribution of AutoCAD software in the Benelux. We work via adedicated reseller network serving the Benelux market. The related CAD services like

recruitment, training and the publishing oftechnical magazines support the development ofour specialised market. AutoCAD is used forproduct design in a variety of markets includingmechanical, architectural, engineering, process andpower, Geographical Information Systems (GIS),road design, industrial design, etc. The primaryrole of a distributor is marketing and channeldevelopment, the secondary role is logistics.

National ICT solutions and services for the CAD/GIS industry

Blue Fox provides software and services for design, registration, management and analyses oflarge scale geo-referenced phenomena. The software applications enable our clients in government-related industries to computerise map data and link these map data to technical,legal and administrative databases. In doing this, government bodies can manage theirinfrastructures more efficiently.

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Results CAD/CAM/GIS activities Benelux

(in thousands of euros) 2002

Net sales 24,347Gross margin 10,946Cost 22,658Operating result 1,689

Gross margin/net sales 45%Operating result/net sales 6.94%Staff 154

AutoCAD

Including all development costs,excluding capitalisation of softwaredevelopment and reciprocaleliminations and holding costs.

We provide software and solutions for the client’s back office, mid office and front office. The back office focuses on design and registration of objects in the field. To develop solutionswe use our own CAD engines like IGOS and InfoCAD or third-party engines like AutoCAD andMicrostation. This open-systems approach buildson client’s existing investments. In all cases we cansupply the customer with an uniform GIS user-interface, NedCT, which improves ease of useand increases productivity. The mid office is theplace where all geographical data come together ina Geographical Database Management System.

We developed a strong database and retrieval system called NedGeodata Manager based onthe leading Oracle technology. To view all the stored data we developed front office systemslike NedView, used as Windows viewer, and NedBrowser, used as internet viewer. The more we shift from stand-alone products to integrated products the more we shift to aconsultancy organisation with in-depth knowledge of the client’s organisation and primaryprocesses. To link with administrative and logistic processes we work together with specialisedpartners.

Blue Fox is market leader in CAD/GIS solutions for municipalities in the Netherlands and as aprovider of CAD systems for provincial and central governments in the Netherlands. Blue Foxalso supplies solutions to water boards and engineering agencies. Blue Fox has a development centre for the CAD/GIS industry in Vianen and sales offices inVianen, Dordrecht, Emmeloord and Apeldoorn.

International ICT solutions and services for the textile and apparel industry

Blue Fox is a provider of integrated ICT solutions for the international textile and apparelindustry in all stages of the design and production process, covering CAD/CAM solutions,Product Data Management (PDM), networking, production-monitoring, colour management,fabrics simulation, collection management, 3D presentation and Enterprise Resource Planning(ERP) solutions. Like in the GIS market the textile and apparel market develops from stand-alone solutions to integrated solutions due to rapid changes in apparel collections andshorter time to market cycles. Another trend is the growing demand for internal, companywide and external communications through the web. We concentrate on four markets all withspecific demands: floor coverings, woven fabrics, printed fabrics and apparel.

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Geographic Information Systems (GIS)

The floor covering industry is a concentrated market of generally conglomerate manufacturers.To continue our dominant position in the CAD/CAM product line, compatibility between designand production is essential so an excellent relationship with all relevant carpet machine

suppliers is very important. To improve the designmanagement and design communication weintroduced DesignCOM. This web-enabledapplication is ideally positioned in a multiCAD/CAM environment. In the woven fabricsindustry we are the only supplier that offers a fullyintegrated start-to-finish solution.

Strong productivity gain can be achieved through integration of CAD/CAM solutions, networking,monitoring and fabric inspection. By using DesignCOM, customers can get machine performanceinformation via the web, link CAD/CAM data to existing sales support systems or productionplanning systems and create web-enabled product sheets. The biggest opportunity in thewoven industry is the integration of above mentioned solutions with ERP solutions like thesoftware of Porini. The key success factor is to offer open, modular and scalable software for asmall commissioning weaver up to a multi plant, multinational weaving conglomerate. In the printed fabrics industry we continue to maintain our international leadership as solution

provider. Our Vision Printing Studio modules offera complete and customisable solution for evenworld’s largest textile mills. The apparel marketoffers great potential for our Fashion Studio, amodular solution to accommodate the large CADstudio of the big names in the apparel industry aswell as a tailored solution for the independentdesigner.

Blue Fox has development centres for the textile and apparel industry in the Netherlands(Vianen), France (Paris), Italy (Milan) and Romania (Bucharest) and sales offices in theNetherlands (Vianen), France (Paris, Lyon), Italy (Milan), the United States (New York,Chattanooga). In Asia Pacific, Blue Fox has stationed various staff members. In addition, agentsare increasingly used all over the world.

Services

Our strategy is to deliver one-stop integrated ICT solutions, which means that services becomemore important. Services include distribution of (update) software via internet, installation,implementation, integration, project management, training and helpdesk.

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Fashion studio

Loom, making carpets

Information technology and product innovation

Blue Fox aims to occupy leading positions in the market segments it serves. In order to obtainthese positions, Blue Fox each year invests several millions of euros in research anddevelopment, whereby it follows the leading suppliers and standards in the software industry.The success of this strategy is proved by the leading role played by Blue Fox in CADdistribution, in the development and marketing of software for the textile and apparel marketsand in the market for Geographic Information Systems (GIS).

Open architecture

For the distribution of CAD software, Blue Fox 15 years ago opted to use Autodesk software,the present number one in the world in the field of generic design software on the PC. In thelong period that Blue Fox has distributed Autodesk products, many CAD software suppliershave disappeared, while Autodesk has developed into the market leader. Blue Fox is theleading distributor of CAD software in the Benelux. The basis of the success of Autodesk is the open architecture of its software, as a result ofwhich developers may tailor the software to the specific needs of local markets. As a result,supplier, developers, distributors and dealers form a successful virtual company.NedGraphics for its own software has also opted for an open architecture. As a result of this,the software can work with most of the software packages already used by customers, as aresult of which earlier investments can remain profitable.

Modularity and scalability

Our software products have a modular architecture and are highly scalable. This means thatthe software can grow in accordance to customers needs. Implementation time can be shortand project management can be relatively easy. The integration of proven, modularapplications results in stable ICT solutions, which fit the client’s primary processes.

System integration

Where CAD systems used to be operated mostly as stand-alone systems, these systems arenow part of an integrated information system. The (design) information made with the CAD

system can be used further on in the productionprocess, for instance for the control of productionmachines (CAM). The development of high qualitymachine interfaces is therefore a crucial part of thedesign.

To protect investments of existing clients, application software is made, which links upseamlessly with the own CAD engines and with those of other suppliers such as Autodesk andBentley. Customers that work with several CAD engines in a hybrid environment can thereforealso be served. In order to realise user-friendly techniques and a short learning period, muchattention is given to the uniformisation and the creation of intuitive actions of the “graphicaluser interface”.

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Monitoring

The decentrally, in the back office, produced CAD information is centrally stored in the mid office in a data management system. This system must be open and platformindependent, so that all information is readily available and easily accessible for the peopleinvolved through the whole organisation. These data management systems are based on thestandards of Oracle and Microsoft. In order to realise such implementations, knowledge of theorganisation and project management skills are of great importance. In sales, the focus isswitching from the product to consultancy and services.

Presentation and visualisation

The information systems developed by us have internal and external users who consultinformation via the intranet and the internet. In connection with the “Overheidsloket 2000”initiative, institutions must make certain information available to citizens through the so-called “digital window”. Transactions must also be completed electronically as much as possible. In the interactive front office applications we have developed, this information can be disclosed. This application is database independent and supports database standards such as MS Access,Oracle, DBII and AS/400. In view of our 25 years of graphic experience, we aim to presentinformation graphically where possible.

For the on-line product visualisation of designs, we have developed a state-of-the-art softwaretool based on the technology of texture mapping. By means of an advanced web portal, clothcan be shown photo realistically on bent surfaces, such as appear in the textile and apparelmarkets and in the automotive industry.

Staff and organisation

The average number of staff members increased by 61% in 2002 to an average of 437, from anaverage of 272 in 2001. This increase in the average number of staff members was the result ofthe acquisition of NedGraphics as of September 2001. At year-end 2002, Blue Fox had 420employees, compared with 464 a year earlier. The drop in the number of staff members in 2002was primarily due to reorganisation measures and the sale of the distribution activities forgeneral software. The average wage costs per staff member increased by approximately 8.5%in 2002 compared with 2001, due to salary adjustments to inflation and the higher averagewage costs of NedGraphics due to the staff composition of NedGraphics with its in-housesoftware developers.

Training and development

Individual attention is paid in each operating company to training and development of the staffmembers. Training courses are given for groups of staff members, both internally and externally.In addition, staff members are encouraged to follow external training courses in the interest ofthe position they hold. For this, they can also receive a financial contribution by the company.

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2002 2001

Average number of staff members 437 272

Average wage costs per staff member (in thousands of euros) 44 40

Average contribution to gross margin (in thousands of euros) 85 89

Culture

The operating companies of Blue Fox mostly hold positions at the top of their market segment.Our aim is to be a top-three player in all our markets. Entrepreneurship is stimulated withinBlue Fox as the operating companies work in small units under their own name and have ahigh level of autonomy. The directors of the operating companies are responsible for thecommercial and financial developments in their company and report to the Board of Directors. This creates a mentality of speed, flexibility and leadership with short lines of communication,whereby the best possible use is made of the knowledge and know-how of our people and thequality and reputation of our products.

Internal control systems

Planning & control cycle

The planning & control cycle starts with the drawing up of the budget per operating company. The main control variable for Blue Fox is the net result before taxation, the EBT (“EarningsBefore Tax”). The directors of the various operating companies have a high level of autonomyfor realising the budgeted EBT within the agreed framework. Other important control variablesare net sales, the gross margin and operating result. In addition, Blue Fox controls andmanages its operating companies on a number of company specific key figures, which mayvary per operating company. The operating companies report monthly in accordance with afixed reporting format. After each quarter quarterly meetings are organised by the Board ofDirectors with the directors of the operating companies. In these quarterly meetings theoperating developments and the linked subsequent adjustments are discussed in particular, in addition to the financial developments.

International activities and currency risks

The activities of Blue Fox are subject to the risks of international operations, such as currencymovements, general economic developments in certain countries, meeting the requirements ofvarious fiscal and legal regimes, organisational aspects, unexpected changes in locallegislation, restricted protection of intellectual property, various payment terms of debtors,trade restrictions and changes in import and freight rates.

Blue Fox Enterprises N.V. carries out part of its activities outside the countries, which haveadopted the euro, especially the United States. The management monitors the currencypositions and follows a limited hedge policy, whereby transaction risks are covered whiletranslation risks are not. Movements in the exchange rates of various foreign currencies,especially the US dollar, therefore influence the result and financial position of the company.

Working capital

The accounts receivable are relatively large compared to the other current assets of Blue FoxEnterprises N.V. Blue Fox gives much attention to the payment track records of debtorsthrough permanent credit management. Insolvency of debtors is partly covered by a creditinsurance policy of the “Nederlandse Credietverzekerings Maatschappij N.V.” (“NCM”), as well as by the use of letters of credit at the signing of contracts.

Protection of intellectual property rights

Blue Fox Enterprises N.V. aims to protect its intellectual property rights as far as it regards thisas economically justified. Protection of intellectual property rights is done by registering tradenames, by using confidentiality agreements and anti competition clauses in agreements and bykey-locks for protecting software against illegal use.

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Value Based Management

For some years Blue Fox has been managed with the aim of creating shareholder value.Managing for shareholder value is important in the assessment of the profitability of existingparts of the company and in the assessment of acquisitions and divestments. For themanagement aimed at creating shareholder value, Blue Fox uses the concept of EconomicValue Added (EVA™).

An important part of our ambitious growth strategy is making acquisitions. Almost always, thepurchase price of a company taken over is higher than its net asset value, as a result of whichgoodwill ensues. Up to the year 2001, goodwill was charged in full to the shareholders’ equity.The shareholders’ equity was subsequently adjusted for goodwill for the purpose of calculatingEVA. In previous years, amortisation of goodwill was also taken into account. In this annualreport, we concur with the more common practice of not amortising goodwill, at least for thepurpose of calculating EVA. The comparative figures for the previous years have been adjustedto this method.

Return on Equity is calculated using the weighted average cost of capital (WACC). The WACC iscalculated on the basis of the required cost of shareholders’ equity and the interest-bearingpart of the loan capital. Blue Fox’s calculations are based on a WACC of 10%.

Economic Value Added

WACC = Weighted Average Cost of Capital.NOPAT = Net Operating Profit After Tax (before amortisation of goodwill).NOC = Net Operating Capital = Invested capital augmented by goodwill paid.EVA = NOPAT - (NOC * WACC).

Development of EVA™ and operating result

Contrary to 2001 (+ € 0.92 million), no shareholder value was added in the year 2002 (- € 0.23million). This was mainly due to the higher invested capital as a result of the goodwill paid forNedGraphics and the deferred goodwill of € 4.13 million in 2002 in connection with the costsfor the reorganisation of NedGraphics. In the year 2003, the application of value basedmanagement within the Blue Fox companies will be implemented further.

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7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.02000

Operating result, before amortisation of goodwill

2001 2002

in m

illio

ns

of

euro

s

3.65

5.905.41

Outlook 2003

In 2002, Blue Fox showed that it was able to react alertly to the economically difficult times,which resulted in increased sales and profit before amortisation of goodwill. In addition, theloss-making acquired activities of NedGraphics were turned into profitable activities. Partlybecause of this decisiveness and the strong spread of the activities over various specialisedniche markets, Blue Fox was able to distinguish itself, as a result of which our top-threepositions in all relevant CAD/CAM markets could be maintained or strengthened.

As a result of the focus on CAD/CAM and the connected divestments of the non-CAD/CAMactivities, the financial position of Blue Fox will be strengthened while the number of staffmembers will be further reduced to approximately 350. Blue Fox will keep actively looking tonew acquisition opportunities within the CAD/CAM segment.

Blue Fox continues to strive for a rise in net profit before amortisation of goodwill and inearnings per share and to improve the net profit margin (before amortisation of goodwill). The result for 2003 and the net profit margin will be strongly influenced by the timing of theplanned divestments and the market developments and sales opportunities within theinternational CAD/CAM/ERP activities and the Benelux oriented CAD/CAM/GIS activities.However, given the current uncertain outlook for the future, it is impossible to make a concreteforecast for the year 2003 at this moment.

Dordrecht, 17 March 2003Board of Directors of Blue Fox Enterprises N.V.

Drs. Sjoerd W. Eisma, ChairmanIr. Roelof J. BrolsmaDrs. Mark Kuperus RC

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The road to…… success!

There are many similarities between managing a company andplaying chess. Prior to playing a game of chess, a strategy must beselected that will in the end lead to achievement of the chosenobjective. This strategy must subsequently be carried out, which isdone by way of a succession of moves. It is of the utmostimportance that these moves are in line with and are consistentlymade within the parameters of the earlier chosen strategy. If unexpected developments take place, the player will have toimprovise, and his or her adaptability will be tested. Especially inthese circumstances it is imperative that a chess player does notlose sight of his or her chosen strategy and objective.

As in a game of chess, there is a constant need for the making of(policy) choices within a company. In making these choices, thetargeted objectives and the chosen strategy should always be botha stronghold and a guiding light. The focus on the eventualobjective as well as the chosen way towards this objective musttherefore be kept in sight. Assessing and making choices are partof being an entrepreneur, whereby companies must continuouslyask themselves which road to take in order to achieve theirobjectives. Companies must have sufficient flexibility to be able todeal with unexpected conditions. Furthermore, implementingstrategic choices requires plenty of power and stamina fromentrepreneurs. The implementation of a new strategy and goingthrough the connected transformation processes do cost a lot ofattention.

Blue Fox’ decision to only focus on CAD/CAM activities from nowon is a logical next step in the development of Blue Fox. Blue Fox,as a result of this strategic reconsideration, intends in the nearfuture to look for partners to divest all non-CAD/CAM activities. As a result, sales of Blue Fox will initially decline, but profitmargins will improve, which is one of the company’s objectives.Blue Fox has taken the first step in this direction by selling itsdistribution activities of general PC software. It may be clear thatBlue Fox is finding itself in the middle of a transformation process,which is expected to be completed in the course of 2003. This process is one of the moves that must lead to the successful

realisation of its objectives. Blue Fox will further increase its focuson this process in 2003.

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I I I . S H A R E H O L D E R I N F O R M AT I O N

General

Blue Fox Enterprises N.V. shares have been listed on the official market of EuronextAmsterdam N.V. since 21 May 1999. The nominal value of the shares is € 2.As at 31 December 2002, the number of outstanding ordinary Blue Fox Enterprises N.V. shareswas 3,512,120. This is an increase of 49,895 compared to year-end 2001, as a result of thefollowing share issue: 1 July 2002 (49,895 shares) in connection with the earn-out commitmentto former shareholders of Carrier to Carrier Telecom N.V., Deco ICT Solutions B.V. and Logos B.V.

No shares were issued for the exercising of options by staff members. As far as we canascertain, most of the shares are held by Dutch institutional and private investors.

Change in number of shares

The table below states the change in the number of issued and listed shares, as well asinformation on market capitalisation, transactions and trade volume:

Key figures per share

ANNUAL REPORT 2002

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2002

Issued as at 1 January 2002 3,462,225

Private issue 1 July 2002 49,895Issued as at 31 december 2002 3,512,120

Share price as at 31 December 2002 5.90Market capitalisation as at 31 December 2002 20,721,508Number of transactions in 2002 2,162Average trading volume per day in 2002 3,795

(in euros) 2002 2001

Net profit before amortisation of goodwill 1) 1.09 1.60Net profit after amortisation of goodwill 1) 0.69 1.47Cash flow 1) 1.88 2.15Shareholders’ equity 6.71 6.02Guarantee capital 7.64 6.98Dividend - -Highest share price 12.65 16.80Lowest share price 5.24 6.00Close 5.90 7.05P/E ratio as at 31 December 2002 1) 2) 5.4 4.4P/E ratio as at 31 December 2002 1) 3) 8.6 4.8

1) Based on recalculated average number of outstanding shares 2) Before amortisation of goodwill3) After amortisation of goodwill

Share price development

The diagram below shows the relative performance of the Blue Fox Enterprises N.V. sharecompared to the close of the AEX index, the NASDAQ index and the NextEconomy index onthe same moments.

Staff options

Each year, Blue Fox issues staff options to staff members with permanent contracts, up to amaximum of 2% of the number of outstanding shares. The options are meant as motivation ofstaff members and to strengthen their bond with the company. The options may be exercisedduring a 5-year period. In the Netherlands, 20% of the value of the granted options is, at thechoice of the holder, subject to taxation directly when the options are granted (the so-calledtaxation at the source), or by realisation of the profit at the exercising of the options. Duringthe first three years, taxation is on the option gains less this taxation at the source. In addition,the person exercising the options must repay part of the proceeds to Blue Fox in the first threeyears. In the fourth and the fifth year after granting, in case of taxation at the source, theproceeds are tax-exempt, while no repayments will have to be made to Blue Fox. Option rightsthat are not exercised are cancelled when the person leaves the company and after five yearsthe options will expire without value.

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Price performance 2002- March 2003

80

60

40

20

0

-20

-40

-60

-80January 02 March 02 May 02 July 02 September 02 November 02 January 03 March 03

AEX

NASDAQ 100

NextEconomy

BlueFox Enterprises

The management of foreign operating companies is responsible for the fiscal settlement ofshare options granted to staff members outside the Netherlands.

Options granted to NedGraphics employees in the past have been converted to Blue Foxoptions. Tax regimes for these options may differ from country to country. NedGraphicsoptions were issued according to the NedGraphics options regulations. These regulations arein some parts different from the Blue Fox Enterprises options regulations.

The table below shows a review of the situation of granted option rights and outstandingoptions as at year-end 2002 (including options granted to members of the Board of Directorsand the Supervisory Board). It has been decided that the members of the Supervisory Board ofBlue Fox Enterprises N.V. will no longer receive share options as from 2003 (these options, forthat matter, were granted in very modest numbers).

In chapter IV, the number of outstanding options of the Board of Directors and the SupervisoryBoard are stated under "Notes to the company annual accounts for 2002".

Investor Relations

Blue Fox Enterprises N.V. greatly values having a good relationship with its shareholders. Thatis why the Board of Directors of Blue Fox Enterprises N.V. gives much attention tocommunications with its shareholders through the timely and simultaneous sending of pressreleases concerning relevant issues concerning Blue Fox to all parties involved.

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Date granted Term Issued Outstanding Exercised/ Exercise price

options options Cancelled (€)

January 1999 2003 12,500 12,500 - 28.00April 1999 2003 5,000 5,000 - 32.20May 1999 2004 21,990 15,131 6,859 14.00June 1999 2003 120,000 80,000 40,000 28.14September 1999 2003 2,500 2,500 - 32.60January 2000 2004 1,250 1,250 - 42.00February 2000 2004 5,000 5,000 - 43.42April 2000 2004 3,750 3,750 - 43.42May 2000 2005 20,720 9,370 11,350 20.75July 2000 2004 1,250 1,250 - 43.90November 2000 2004 1,250 1,250 - 33.08December 2000 2004 16,168 13,716 2,452 29.00December 2000 2004 17,400 17,400 - 33.66March 2001 2005 5,250 5,250 - 22.60May 2001 2006 20,100 15,474 4,626 13.80May 2002 2007 42,010 38,180 3,830 9.65

Total 296,138 227,021 69,117

In order to improve the communication with and the information supply to shareholders, BlueFox in 2001 published its growing annual report on the internet. The growing annual reportcontains all information announced and published by Blue Fox, up-to-date, in the form andstructure of an annual report.

Each year, on the day of publication of the full-year results, a press conference, analyst meetingand meeting for major shareholders are held. Also, on the day of publication of the half-yearresults, Blue Fox Enterprises organises an analyst meeting and a meeting for majorshareholders. At these meetings, the Chairman of the Board of Directors and the ChiefFinancial Officer make the presentations.

When invited, the Chairman of the Board of Directors also regularly makes presentations onthe company and the markets in which it operates to various groups of people, includinginvestors, investment clubs, entrepreneurs and bankers.Blue Fox Enterprises N.V. uses three liquidity providers (as from 15 April 2003 two liquidityproviders): Amsterdams Effectenkantoor Kantoor (AEK), Fortis Bank and SNS Securities. Eachliquidity provider publishes research reports about Blue Fox at least twice a year. You can contact the liquidity providers of Blue Fox Enterprises N.V. as follows:• Amsterdams Effecten Kantoor (AEK), Herengracht 208-214, 1016 BS Amsterdam,

tel. + 31 (0)20-5306300.• Fortis Bank (until 15 April 2003), Rokin 55, 1012 KK Amsterdam, tel. + 31 (0)20-5272357.• SNS Securities, Nieuwezijds Voorburgwal 162, P.O. Box 235, 1000 AE Amsterdam,

tel. + 31 (0)20-5508500.The contact for Investor Relations is drs. Sjoerd W. Eisma, Chairman of the Board of Directors(tel. +31 (0)78 6492999; e-mail: [email protected]).

Corporate Governance

Corporate Governance is one of today’s hot topics. Also at Blue Fox Enterprises N.V. Blue Fox is continuously looking for the best form of implementation of Corporate Governancefor the company. At the time of the IPO in 1999, Blue Fox Enterprises N.V. in 1999 first studiedthe developments in the field of Corporate Governance and the forty recommendations of thePeters Committee. The opinions of the Board of Directors and the Supervisory Board regardingthese recommendations were stated in the 1999 annual report. The opinion was that most ofthe recommendations of the Peters Committee were endorsed, on the understanding that withregard to certain recommendations, the Board of Directors and the Supervisory Board madesome short comments. The continually changing opinions on Corporate Governance and supervision in society, therecent accounting scandals, the discussions with shareholders on influence and shareholderparticipation and the increasingly international scope of Blue Fox after the statutory mergerwith NedGraphics in September 2001, make it necessary to regularly review the company’sCorporate Governance policy and to discuss whether, and if so which, changes must be made. The government and the pension funds now also demand that companies are moreaccountable to their shareholders. The most important pension funds, which together managemore than 80% of the total Dutch pension capital, have recorded their requirements in theHandbook Corporate Governance of the “Stichting Corporate Governance Onderzoek voorPensioenfondsen” (SCGOP). This handbook gives attention to shareholder rights, protectiveconstructions, management structure and transparency. In their vision, protective constructionsshould be restricted or abolished, more transparency is required, while the managementshould be required to submit changes of the strategy and major acquisitions in advance to theshareholders’ meeting.

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Blue Fox also aims to follow a modern Corporate Governance policy, which takes intoaccount the interests of all our stakeholders. The objective of Blue Fox is to achieve abalanced Corporate Governance structure that is fair to all Blue Fox stakeholders. The eighteen yardsticks described by the pension funds were extensively discussed in ameeting of the Board of Directors and the Supervisory Board of Blue Fox Enterprises N.V.with the outcome that the contents of the Handbook Corporate Governance of the SCGOP isendorsed. Below, we make some comments with regard to three yardsticks from thehandbook.

(the numbers of the yardsticks as used in the Handbook Corporate Governance of the SCGOPare given below).

Shareholders’ rights

5. Major decisions should be approved at the annual general meeting of shareholders. Thisdemonstrates how the interest of shareholders is weighted in relation to other interests, andalso in relation to the interests of any major shareholder.

We endorse this yardstick, on the understanding that the meaning of the word “major” can bestated in more than one way.

Management structure

13 b. The remuneration of supervisory board members shall not be linked to the company’sprofits. Supervisory board members must therefore not receive options.

It has been decided that the members of the Supervisory Board of Blue Fox Enterprises N.V. asfrom 2003 will receive no more options (these options, for that matter, were granted in verymodest numbers).

13 c. The tenure of supervisory board members should generally be limited to two terms of fouryears. Only in extraordinary cases, for instance when it is imperative to retain someknow-how within the Supervisory Board, there can be a motive for reappointment for athird term.

The tenure of a member of the Supervisory Board at Blue Fox Enterprises N.V. is currentlythree years. The members of the Supervisory Board are prepared to resign after two terms ofthree years. We do not believe it is useful to change the term to a four-year period.

Dividend policy

In view of the growth strategy of Blue Fox, partly by acquisitions and as a consequence theneed for capital, the company has paid no dividends in the past years. Investors, however, areincreasingly interested in dividend yields, while as a result of the changed fiscal regime privateinvestors receive their dividends tax-free. The dividend yield will therefore have an increasinginfluence on investors’ decision in favour or against investing in certain shares. This effectbecomes even stronger in case of low interest rates. However, paying a dividend is at odds with the company’s ambitions to grow. Paying anoptional dividend can help to solve this matter. By making a stock dividend available at a smalldiscount, the investor could possibly be persuaded to opt for payment in new shares, as aresult of which the cash could remain with the company.

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Blue Fox is positive about future (optional) dividend payments, but the company is currentlylimited in such actions by the preconditions set by the institutions that have grantedsubordinated loans. As soon as the subordinated loans have been repaid, the company willconsider to change its dividend policy, so that it can offer a dividend yield to its capitalproviders.

Interests

Pursuant to the "Wet Melding Zeggenschap" (WMZ, the Act on Disclosure of Major Holdings inListed Companies), an interest of 5% or more in the capital of Dutch listed companies must bereported to the company involved. In addition, the passing of certain boundaries of percentageranges in share holdings must be reported.

The following table is a review of the most recent known interests.

Important dates

Annual General Meeting of Shareholders 2003 16 May 2003

Presentation half-year results 2003 1 September 2003 *)

Presentation full-year results 2003 15 March 2004 *)

Annual General Meeting of Shareholders 2004 14 May 2004 **)

Presentation half-year results 2004 30 August 2004 **)

*) Before trading**) Provisional

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Shareholder %

S.W. Eisma (through Oces Holding B.V.) 14.61%Todlin N.V. 13.79%Friesland Bank N.V. 10.00%Beleggingsmij West-End B.V. 5.60%Driessen Beleggingen B.V. 5.53%J.H. de Groen 5.28%

Important events in 2002

January 2002

Blue Fox announces changes in its Board of Directors.

Blue Fox announces that it has reached agreement with Mr. M. Kuperus to become ChiefFinancial Officer (CFO) as of 1 March 2002. Blue Fox also announces that, following thesuccessful completion of the reorganisation of NedGraphics and the successful furtherintegration with Blue Fox, Mr. A. van Marion (member of the Board of Directors) has resignedin order to undertake a new challenge elsewhere.

March 2002

Blue Fox reports results for 2001 with a profit increase of 58% compared to 2000, before

amortisation of goodwill.

Net profit of Blue Fox Enterprises N.V., before amortisation of goodwill, increased by 58% to € 3.6 million in 2001, against € 2.3 million in 2000. Net profit after amortisation of goodwillincreased by 45% to € 3.3 million. Net sales increased by 31%, from € 55.6 million in 2000 to € 72.8 million in 2001. The operating result before amortisation of goodwill amounted to € 5.9million against € 3.6 million in 2000, an increase of 61%. The gross margin increased in 2001from 23% to 32%. Profit per share before amortisation of goodwill showed an increase of 2%,from € 1.57 to € 1.60, despite an increase of the average number of outstanding shares of 55%.

May 2002

Blue Fox maintains expected profit growth 2002.

Blue Fox will today report to its Annual General Meeting of Shareholders not only the good resultsreported in 2001, but also the expected developments in 2002. Blue Fox maintains its earlierexpectations that, barring unforeseen circumstances, net profit will continue to rise this year.Appointment new Supervisory Board member and new member of the Board of Directors. Duringthe Annual General Meeting of Shareholders on 17 May 2002, the proposal to appoint Mr. T. Pannekoek to the Supervisory Board and Mr. M. Kuperus to the Board of Directors has beenapproved.

September 2002

Blue Fox decides to combine its distribution activities of CAD software (Pollux) and general

software (Kenfil Distribution) into one organisation in Apeldoorn effective 1 October 2002.

Blue Fox reports 2002 half-year results with a profit increase before amortisation of goodwill

of 95% compared to the first half of 2001. 'Turn-around' NedGraphics successful.

Net profits of Blue Fox, before amortisation of goodwill, increased by 95% in the first half of2002 to EUR 1.59 million, against EUR 0.81 million in the first half of 2001. The profit increase ispartly attributable to the acquisition of NedGraphics.Net sales increased by 26% in the first half of 2002, from EUR 28.5 million in the first half of2001 to EUR 36.0 million. The gross margin increased from 26% to 52% in the first half of 2002.Earnings per share before amortisation of goodwill, as expected, fell by 6% from EUR 0.49 toEUR 0.46, as a result of an increase of the average number of outstanding shares of 107%,which was necessary for the financing of the acquisition of NedGraphics. In the first half-year of 2002, Blue Fox has implemented a ‘turn-around’ at NedGraphics.

December 2002

Blue Fox concentrates on CAD/CAM activities, resulting in increased focus.

General software distribution activities sold.

Blue Fox has decided to devote itself fully to marketing CAD/CAM solutions and relatedCAD/CAM services. By concentrating on these core activities, the organisation will be moretightly focused and the quality of sales will improve.Blue Fox accordingly intends to divest all non-CAD/CAM activities.

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Prevention of Insider Trading

Blue Fox Enterprises N.V. has drawn up Insider Trading Regulations ("ReglementVoorwetenschap"), in accordance with the model of the VEUO ("Vereniging van EffectenUitgevende Organisaties", the association of share issuing organisations), which has beenapproved by the Authority Financial Markets (AFM).

Blue Fox Enterprises N.V. has made a large group of staff members and advisers sign the"Insider Trading Regulations". The Insider Trading Regulations of Blue Fox include a ban ontrading in Blue Fox Enterprises N.V. shares during an 8-week period prior to the firstpublication of full-year results and a 3-week period prior to the publication of half-year results.There is also a ban on reversing a transaction within six months, in order to reduce oreliminate the risk of the first transaction. An exemption in writing from this ban can be givenby the Compliance Officer. The position of Compliance Officer is held by Roelof J. Brolsma(Member of the Board of Directors). No exemptions were given during the year 2002.

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Co-operation as focus

Knowing which road to take does not automatically mean that theobjective is also achieved. This is literally proved by migratingbirds. Twice a year these birds travel large distances to brood or tospend the winter in a warmer climate. For these birds, these two(world) journeys per year require an enormous effort, plus eachyear a recurring danger. Through the years, these birds haveadapted themselves to this form of life. The best and mostsymbolic example of this is the migration of the geese. Flyingneatly lined up in formation, side by side and with all ‘noses’ in thesame direction. This co-operation has major advantages. The birdflying at the head of the formation is the leader, having becomethat way through experience and strength. The rest of the birdswill follow in its slipstream. The drag is strongly reduced by flyingbehind each other, as a result of which efficiency and synergy areachieved and the journey demands less energy from everyindividual. The advantages of a shared objective, to which eachindividual commits him or herself, results in a joint focus.

Blue Fox depends on its staff members for achieving its objectives.It is of great importance that a strong co-operation exists betweenall staff members, so that the desired efficiency and synergy can berealised in the best possible way. The co-operation must not berestricted to operating company level only, but the operatingcompanies should also focus on co-operation between operatingcompanies. In this way, (cost) savings can be realised, while themostly company specific know-how of CAD/CAM software andsoftware development are used in the best possible way, as aresult of which the shared objectives can be achieved.

In order to realise this co-operation within Blue Fox, it is importantthat all staff members realise which visions and objectives BlueFox has. For this, it is extremely important that communication

from the management to staff members travels via short lines andthat all staff members have a clear picture of their tasks andresponsibilities. A good example of communication isNetpresenter, a “screen saver” giving staff members of Blue Foxinformation all over the world on the most diverse subjects withinthe organisation. The Board of Directors devotes much time topresenting the joint visions and objectives to management andstaff members, whereby it tries to create the best conditions for co-operation. In this way, co-operation will eventually lead to animprovement of the results with the smallest effort. This co-operation is what the Board of Directors will focus on inthe year 2003.

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I V. A N N U A L A C C O U N T S 2 0 0 2

General information

The company

The company was incorporated on 10 May 1999. Founders were the shareholders of Blue FoxEnterprises B.V., who brought in the share capital of Blue Fox Enterprises B.V. Blue Fox Enterprises N.V. is a holding company, which mostly holds 100% participations in anumber of companies.

Share issues

The shares of Blue Fox Enterprises N.V. are listed on the Official Market of EuronextAmsterdam N.V. since 21 May 1999. As at 31 December 2002, the number of outstanding BlueFox Enterprises N.V. shares was 3,512,120 (2001: 3,462,225). This increase of 49,895 sharescompared to the situation as at 31 December 2001 was the result of the issue of shares inconnection with earn-out arrangements.

Changes group companies in 2002

Divestment of distribution companies general software

Blue Fox Enterprises N.V. has decided to focus on CAD/CAM activities. Blue Fox has taken thefirst step in this direction by selling its general PC software distribution activities, KenfilDistribution B.V. and Hitrate B.V., to an external investment company at the end of 2002. The activities of the companies that have been sold will be supported by Blue Fox operatingcompanies in the coming years under a service and profit-sharing agreement. For several years this will enable Blue Fox to receive profit-related revenues from thesebusinesses that it acquired in the past. The results of Kenfil Distribution B.V. and Hitrate B.V.have been included in the consolidated result of the group up to and including 31 October 2002.

Other divestments and deconsolidations

Mid-2002, Blue Fox divested its share in NedGraphics Virtual Reality B.V. This company hadalmost ceased to carry out any activities in 2002. In addition, Porini International Lda, Turkeywas sold late in 2002. This fits with the policy of Blue Fox of working intensively with agents.

Blue Fox has instigated liquidation proceedings for a number of participations, which had nomore (profitable) activities, to further streamline the organisation in the future as well asmaking it more transparent.

Summary of accounting policies

Consolidation criteria

Consolidated are the financial information of Blue Fox Enterprises N.V. (hereafter "thecompany") and its participations, also operating companies, in which the company has amajority holding or otherwise has a controlling interest. The financial information of thecompany, together with that of the operating companies, are included on the basis of fullconsolidation. Transactions and current account relations between consolidated companieshave been eliminated.

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With regard to the comparative figures included in the consolidated annual accounts it isremarked that NedGraphics is included in the consolidation as of 1 September 2001, andtherefore is included in the consolidated result of the group as of that date.

The consolidation (fully) includes the company and the following group companies:

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2002 2001

Blue Fox Enterprises B.V. The Netherlands (Dordrecht) 100% 100%TOPCAD B.V The Netherlands (Dordrecht) 100% 100%Reset C&T B.V. The Netherlands (Dordrecht) 100% 100%Reset Techniek B.V. The Netherlands (Dordrecht) 100% 100%CMedia Productions B.V. The Netherlands (Dordrecht) 100% 100%Hitrate B.V. The Netherlands (Dordrecht) - 100%Kenfil Distribution B.V. The Netherlands (Apeldoorn) - 100%Pollux B.V. The Netherlands (Apeldoorn) 100% 100%Deco ICT Solutions B.V. The Netherlands (Apeldoorn) 100% 100%Nr.1 Software B.V. The Netherlands (Amstelveen) 100% 100%Carrier to Carrier Telecom N.V. The Netherlands (Biddinghuizen) 100% 100%Legro B.V. The Netherlands (Emmeloord) 100% 100%NedGraphics CAD/GIS B.V. The Netherlands (Vianen) 100% 100%NedGraphics Textile & Apparel B.V. The Netherlands (Vianen) 100% -NedGraphics SA France (Paris) 100% 100%NedGraphics Srl Romania (Bucharest) 100% 100%NedGraphics Inc. USA (New York) 100% 100%NedGraphics Inc. USA (Chattanooga) 100% 100%NedGraphics UK Ltd. UK (Manchester) 100% 100%Porini Srl Italy (Lomazzo) 100% 100%Porini International Ltda Brazil (Sao Paulo) 51% 51%Porini International Ltda Portugal (Matosinhos) 51% 51%Porini International Lda Turkey (Istanbul) - 60%NedGraphics Virtual Reality B.V. The Netherlands (Utrecht) - 70%

the following companies have not been included in the consolidation because of their limited activities:

Deco Automatisering B.V. The Netherlands (Apeldoorn) - 100%Deco Werving & Selectie B.V. The Netherlands (Apeldoorn) - 100%Deco Infra Design B.V. The Netherlands (Apeldoorn) - 100%NedGraphics Ltd. * Hong Kong - 100%NedGraphics Germany GmbH * Germany (Bocholt) - 100%NedGraphics Switzerland AG * Switzerland (Wetzikon) - 100%NedGraphics Belgium N.V. * Belgium (Kortrijk) - 100%NedGraphics Holdings UK Ltd. UK (Dukinfield) - 100%NedGraphics Carpets Ltd. (liquidated) UK (Dukinfield) - 100%

* in liquidation

General

The principles, which are used for the valuation of assets, liabilities and result determination,are based on historic costs.When not otherwise stated, assets and liabilities are stated at nominal value. The income andcosts are attributed to the period to which they relate. All amounts in these annual accountsare stated in thousands of euros, unless otherwise stated.

Translation of foreign currencies

Items on the consolidated balance sheet in foreign currencies are translated at the officialexchange rates as at the balance sheet date. Transactions in foreign currencies are translated atthe exchange rate on the transaction date. Subsequent exchange rate differences are statedunder ’Other operating costs’ in the result for the reporting period ended on the balance sheetdate.

Balance sheet items of independent foreign subsidiaries stated in foreign currencies aretranslated at the exchange rate as of the balance sheet date. Items in the profit and lossaccount of independent foreign participating interests stated in foreign currencies aretranslated at the exchange rate as of the transaction date. If this exchange rate is not available,the average exchange rate for the reporting period is used. Exchange rate differences resultingfrom the translation of foreign subsidiaries are brought directly to the shareholders’ equity ofBlue Fox Enterprises N.V.

Intangible fixed assets

Intangible fixed assets are valued at cost or production price, less straight-line depreciation,based on the expected economic life of the assets.

Goodwill is determined as the balance of the purchase price and the net asset value of theparticipating interest, in accordance with the accounting principles as used by Blue FoxEnterprises N.V. at the time of the acquisition, less straight line amortisation and permanentimpairments. The amortisation period is based on the expected useful economic life of thegoodwill.

Costs for software development are capitalised as far as they relate to projects deemedcommercially viable. The valuation includes direct wage costs as well as extra charges forindirect fixed and variable costs. A legal reserve will be formed for the part of the capitalisedcosts for in-house developed software that is not yet written off.

Tangible fixed assets

Tangible fixed assets are valued at cost, less straight-line depreciation, based on the expecteduseful economic life of the assets.

Financial fixed assets

Participations in which the company has a controlling influence on the business and financialpolicy are valued according to the equity method on the basis of the net asset value. The accounting principles of Blue Fox Enterprises N.V. are used in the determination of the net asset value. Loans are stated at their nominal value less provisions deemed necessary. The other financial fixed assets are valued at nominal value or cost, less permanentimpairments.

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Stocks

The valuation of work in progress includes the costs of materials, as well as directly andindirectly attributable wage and overhead costs plus a mark-up for profit pro rata to theprogress of the project, less provisions for expected losses. Profit on work in progress is takenpro rata to the progress of the project ("percentage of completion method"). The extent ofcompletion of the projects is determined on the basis of the factual delivery of services andproducts.The terms billed relating to work in progress are deducted from work in progress. Any possiblyresulting negative balance of work in progress is shown as a liability under short-term debts.

Trade goods are valued at historic cost, on the basis of "first-in, first-out" less a provision forobsolescence, or lower market value.

Accounts receivable

Accounts receivable are stated at their nominal value less provisions for bad debts if deemednecessary.

Minority Interests

Minority Interests are valued at the third party interest in the net asset value, determined inaccordance with the accounting principles of Blue Fox Enterprises N.V.

Provisions

Provisions are calculated at nominal value. The commitments for pensions and forsupplementary payments regarding invalidity (pursuant to the WAO) have been insured. Thepremiums for 2002 have been included in the annual accounts.

Taxation

When valuations for tax purposes are different from those of the stated accounting principles,resulting in fiscal obligations, a provision for deferred taxation is made, calculated at thecurrent tax rate. Deferred tax assets are valued conservatively if it can be reasonably assumedthat realisation can take place within a reasonable timeframe.

Net sales

Net sales include the income from sales and supply of goods and services less discounts,agents’ commissions, bonuses and sales taxes. Profit on work in progress is taken pro rata tothe progress of the project ("percentage of completion method"). The performance achievedduring the year under review, in this case the costs of supplied raw materials, directly andindirectly attributable wage and overhead costs as well as a mark-up for profit pro rata to theprogress of the project are stated as sales. The actual delivery of goods and software isregarded as realisation moment.

Income from long-term maintenance and licence agreements is attributed to the periods towhich this income relates.

Other operating income

The other operating income mainly concerns contributions from suppliers regarding marketingefforts. As of 2002, the above mentioned contributions are no longer stated under otheroperating income, but will be deducted from the marketing costs. The comparative figures for2001 have not been adjusted accordingly.

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Capitalised production for own company

The income from capitalised production for own company relates to the capitalisation ofdevelopment costs with regard to in-house developed software.

Costs of trade goods and other external costs

These include the costs directly attributable to net sales. With regard to work in progress, a provision will be made as soon as losses are expected.

Interest income and charges

The interest income and charges in the reporting period relate to the interest received from orpaid to third parties.

Corporate income tax

Taxation on the result is calculated based on the commercial result before taxation, allowingfor fiscal facilities and non-deductible costs.

Information per share

The information per share is based on the average number of outstanding (ordinary) shares inthe financial year.

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Consolidated balance sheet as at 31 December 2002

(after appropriation of result)

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(in thousands of euros) 31 Dec. 2002 31 Dec. 2001

Fixed assets

Intangible fixed assets 24,884 19,507Tangible fixed assets 5,570 5,255Total fixed assets 30,454 24,762

Current assets

Inventories 2,276 3,825Accounts receivable 14,256 19,700Liquid assets 27 26Total current assets 16,559 23,551

Current liabilities, accruals and deferred income -17,030 -22,914

Current assets less current liabilities -471 637

Assets less current liabilities 29,983 25,399

Long-term liabilities -5,566 -3,577

Provisions -806 -1,033

Minority Interest -56 88

Shareholders’ equity 23,555 20,877

Guarantee capital

Long-term (subordinated) liabilities 3,292 3,292Shareholders’ equity 23,555 20,877Total guarantee capital 26,847 24,169

Consolidated profit and loss account for 2002

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(in thousands of euros) 2002 2001

Net sales 85,636 72,758Other operating income - 1,065Capitalised production 3,803 1,164Total operating income 89,439 74,987

Costs of goods sold and other external costs 52,106 50,677Wages and salaries 16,515 9,668Social security charges 2,571 1,286Amortisation and depreciation 4,159 1,526Other operating costs 10,090 6,215Total operating costs 85,441 69,372

Operating result 3,998 5,615

Interest income - - Interest charges -542 -447

Result from ordinary activities before taxation 3,456 5,168

Corporate income tax -1,215 -1,766

Result from ordinary activities after taxation 2,241 3,402

Extraordinary expenses -159 -Taxation on extraordinary result 298 -Extraordinary result after taxation 139 -

Result after taxation 2,380 3,402

Share in result of minority interest 25 -78

Net Result 2,405 3,324

Net Result before amortisation of goodwill 3,815 3,610

Profit per share (in €) 0.69 1.47

Diluted profit per share (in €) 0.64 1.26

Profit per share before amortisation of goodwill (in €) 1.09 1.60

Diluted profit per share before amortisation

of goodwill (in €) 1.01 1.37

Consolidated cash flow statement for 2002

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(in thousands of euros) 2002 2001 2000

Operating result 3,998 5,615 3,646Depreciation and amortisation 4,159 1,526 511Changes in working capital (excluding effectof acquisition of participating interests) -1,526 -4,103 -1,033

Interest received - 9 114Interest paid -506 -353 -161Corporate income tax 1,126 -370 -335Extraordinary result after taxation 139 - -

Cash flow from operating activities 7,390 2,324 2,742

Investments:Intangible fixed assets -3,866 -1,150 -481Tangible fixed assets -2,732 -2,279 -2,063

Acquisition of participating interests (including acquired liquid assets) - -2,892 -337Goodwill paid -4,207 -5,636 -9,528Sale of participating interests (including sold liquid assets) 444 - -

Disposals:Intangible fixed assets 297 - -Tangible fixed assets 132 330 12

Exchange rate differences 21 - -

Cash flow from investment activities -9,911 -11,627 -12,397

Net proceeds from issue of shares 19 5,866 5,583Granted subordinated long-term loans - 2,000 -Granted long-term loans 2,500 - -Redemption long-term loans -513 - -

Cash flow from financing activities 2,006 7,866 5,583

Change in liquid assets -515 -1,437 -4,072

Notes to the consolidated annual accounts 2002

General

The company profit and loss account is limited in accordance with article 402 Book 2 of theNetherlands Civil Code.

Consolidated balance sheet as at 31 December 2002


Movements were as follows:

The following amortisation/depreciation percentages are used:

The depreciation period of the goodwill following from the acquisition of NedGraphics isdetermined to be 20 years. This estimate was based on strategic considerations. The increaseof the goodwill was mainly related to paid earn-outs in cash as well as shares (€ 1.1 million),as well as to deferred items from the acquisition of NedGraphics (€ 3.0 million).

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(in thousands of euros) Cost of Cost of

software obtained

develop- rights and

Goodwill ment patents Total

Cost 1 January 2002 16,324 3,579 52 19,955Accumulated amortisation 1 January 2002 -286 -152 -10 -448

Book value as at 1 January 2002 16,038 3,427 42 19,507

Changes:Investments 4,130 3,803 62 7,995Deconsolidations - -265 -32 -297Amortisation -936 -889 -22 -1,847Additional diminution in value -474 - - -474

2,720 2,649 8 5,377

Cost 31 December 2002 20,454 6,953 62 27,469Accumulated amortisation 31 December 2002 -1,696 -877 -12 -2,585

Book value as at 31 December 2002 18,758 6,076 50 24,884

Goodwill 5%

Cost of software development 10-20%

Cost of obtaining rights and patents 20%

As no reliable estimate can be made of possible extra payments in shares or in cash, whichdepend on the results of parts of the company and companies acquired by Blue Fox orNedGraphics in the past, these are not taken into account in the determination of goodwill. Such extra payments will be stated as goodwill at the time they are made.

The costs of software development include an amount of € 2.0 million (fair value at acquisitiondate), relating to the software obtained by the acquisition of NedGraphics. Contrary to in-housedeveloped software, this third-party obtained software is depreciated in 10 years.



The following depreciation percentages are used:

The investments in tangible fixed assets for € 2.1 million relate to investments in high-qualityinformation technology and satellite dishes by telecom activities required infrastructure.

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Cost 1 January 2002 9,047Accumulated depreciation 1 January 2002 -3,792

Book value as at 1 January 2002 5,255

Changes:Investments 2,732Disposals -132Depreciation -1,838Currency influences -99Deconsolidations -348

315

Cost 31 December 2002 10,996Accumulated depreciation 31 December 2002 -5,426

Book value as at 31 December 2002 5,570

%

Refurbishing 10 - 12 1/2

Fixtures and fittings 10 - 20Computer equipment and programmes 33 1/3

Other assets 33 1/3

Inventories

The valuation of work in progress includes losses and possible future losses, as far as thesecan be foreseen as at balance sheet date.The valuation of stocks on the basis of current value is not materially different from thevaluation above.

Accounts receivable

A credit limit has been agreed with a credit insurance company for most of the Dutch debtors,with the exception of (semi-) government institutions. Within this limit, 90% of the accountsreceivable are covered for insolvency, with an own risk of € 2,269 per debtor. A provision hasbeen made if deemed necessary for the uncovered part of bad debts.

With the exception of an amount of € 0.7 million (2001: € 0.8 million), all accounts receivablehave a term of less than one year.

Cash

Cash and accounts payable on demand by banks.

ANNUAL REPORT 2002

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Gross work in progress 12,285 2,913Billed terms -11,068 -2,518Net work in progress 1,217 395

Trade goods 1,184 3,617Provision for obsolescence -125 -187Net trade goods 1,059 3,430

Total inventories 2,276 3,825


Trade debtors 11,256 15,190Deferred tax - 771Corporate income tax 1,162 1,927To be invoiced 532 604Receivable on sale participations 667 -Other accounts receivable, prepayments and accrued income 639 1,208

14,256 19,700

Current liabilities, accruals and deferred income

All short-term debts have a term of less than one year.

Credit institutions

As at 31 December 2002, the group has current account credit facilities from Fortis Bank of€ 9,000,000. The following securities were granted for this current account facility:• Lien on all stocks and receivables;• Joint and several liability of all Dutch group companies.In connection with the granted credit facility, the bank has set solvency requirements, whichwere met at year-end 2002.

Long-term liabilities

The long-term subordinated convertible loan, is granted by a number of former shareholdersof Carrier to Carrier Telecom N.V. The term of this interest-free loan is 7 years, as of 1 July2000. Blue Fox Enterprises N.V. has the right of early settlement of this loan, if and to theextent that the average closing price of the Blue Fox Enterprises N.V. shares has been at least€ 36.43 during a continuous period of 20 trading days.On 1 July 2003, the grantors of the loan have the right to convert the whole loan into Blue FoxEnterprises N.V. ordinary shares at a fixed price of € 29.14.

Fortis Bank has granted Blue Fox Enterprises N.V. a long-term subordinated loan of € 2.0million. This facility must be paid back on 31 January 2004, and is subordinated to all otherdebts of the company. The interest on this subordinated loan on an annual basis is 2.5% abovethe 1-month EURIBOR rate. The company may not pay dividends as long as the abovementioned subordinated loan is not fully repaid.

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Credit institutions 4,391 3,875 Trade creditors 8,558 14,914 Tax and social security charges 876 402 Goodwill and earn-outs payable 243 334 Accrued staff expenses 2,030 2,211 Other debts and accruals and deferred income 932 1,178

17,030 22,914


Long-term subordinated convertible loan 1,292 1,292 Long-term subordinated loan 2,000 2,000 Other long-term liabilities 2,274 285

5,566 3,577

The other long-term debts include a medium-term loan for an amount of € 2.5 million. The term of this loan is four years, whereby quarterly repayments are required. The short-termrepayment commitments are carried under the short-term debts. The interest on this medium-term loan on an annual basis is 5.31%. The following securities were granted for this loan: • Lien on the satellite dishes and accessories; • Lien on the contracts of Carrier to Carrier Telecom N.V. with its customers.

Provisions

The provisions for reorganisation costs stated at year-end 2001 related to the reorganisationalready started at NedGraphics at the time of the acquisition as well as with the costs ofintegrating the activities of NedGraphics in the Blue Fox organisation.

The provision for deferred tax liabilities relates to the deviation between the commercial andfiscal valuation of in-house developed software, where possible less fiscal losses carry forward.

All amounts stated under the provisions have a term of more than one year. In addition, anamount of € 0.4 million has a term of more than 5 years.

All commitments for pensions and supplementary payments have been included in the annualaccounts.

Shareholders’ equity

For a review of the composition of the shareholders’ equity, we refer to the notes to thecompany balance sheet.

Off-balance sheet commitments

As at 31 December 2002, banker’s guarantees were issued to third parties to an amount of € 624,000 (year-end 2001: € 372,000). In addition, the company is severally liable forcommitments of some divested participations, which guarantee amounted to approximately € 1.6 million on 31 December 2002. Against this guarantee, securities were obtained from thesaid divested participations in the form of possessory lien on debtors. The guarantee will bereduced in 2003.

The group has entered into lease agreements whereby the total annual costs amount to € 870,000 (year-end 2001: € 903,000) and rents of office buildings, the total annual costs ofwhich amount to € 1,769,000 (year-end 2001: € 1,352,000). The average remaining term of thelease agreements amounts to 1.8 years, and of the rental agreements concern 3.5 years.

ANNUAL REPORT 2002

54



Provision for reorganisation - 1,033 Deferred tax liabilities 806 -

806 1,033

As no reliable estimate can be made of possible extra payments in shares or in cash, whichdepend on the results of parts of the company and companies acquired by Blue FoxEnterprises or NedGraphics in the past, these are not taken into account in the determinationof goodwill.

As a result of the acquisition of various participations by Blue Fox the company has a profit-related, conditional commitment, which comprises extra payments in shares of Blue FoxEnterprises N.V. in the year 2003. On account of this conditional commitment, the company willissue 12,331 shares in 2003.

Consolidated profit and loss account for 2002

Net sales

Net sales relate to the sales of delivered software packages, in-house developed software withconnected services and support and specialist hardware in combination with services such asinternet, satellite communication, training, tailor-made software, infrastructure, softwaremanagement, secondment, recruiting and selection and the issue of magazines.

The division of sales with regard to activities is as follows:

Wages and salaries

ANNUAL REPORT 2002

55


Net sales software division 68,243 55,836 22%Net sales services division 19,843 17,242 15%Eliminations -2,450 -320

Total net sales 85,636 72,758 18%


Wages and salaries 16,515 9,668 Social security charges 1,907 1,032 Pension premiums 664 254 Other staff costs 1,173 856

Total staff costs 20,259 11,810

Staff

During 2002, the group had an average of 437 staff members (2001: 272). This staff can be divided as follows over the various divisions:

Amortisation

The amortisation of goodwill also comprises a permanent impairment of € 0.5 million, which relates to non-core activities.

Corporate income tax

Taxation in the profit and loss account for 2002 amounted to € 1.2 million or 25.0% (2001:32.4%) of the result from operating activities before amortisation of goodwill. In 2002,incidental tax income of € 0.5 million was stated as a result of too much payable corporateincome tax in previous years. Consequently, the adjusted taxcharge amounts to 34.2%.

Furthermore, the corporate income tax rate for the period under review deviates from thenominal corporate income tax rate as a result of different corporate income tax rates outsidethe Netherlands as well as limited deductible costs.

Deferred tax assets have been fully valued in the annual accounts, as far as they can bereasonably expected to be realised within the foreseeable future.

Extraordinary result after taxation

The stated extraordinary result in 2002 relates to the reorganisation and preparation fordivestment of companies no longer regarded as belonging to the core business of Blue Fox, aswell as realised results at divestment of participations and the costs connected with thesedivestments. Taxation on the extraordinary result is calculated according to the nominal taxrate.

Profit per share

Profit per share declined from € 1.47 in 2001 to € 0.69 in 2002. Profit per share beforeamortisation of goodwill declined from € 1.60 to € 1.09.

The fully diluted net profit per share in 2002 amounted to € 0.64 (2001: € 1.26). The fullydiluted profit per share before amortisation of goodwill in 2002 amounted to € 1.01 (2001: € 1.37).

The fully diluted earnings per share is calculated on the basis of the average number ofoutstanding shares during the financial year, augmented by the maximum number of shares tobe issued on account of options, earn-out arrangements and conversion of subordinated loans,which have been agreed at the acquisition of participations. The placing of the sharesconcerned partly depends on the profits realised at these participations.

ANNUAL REPORT 2002

56


2002 2001

Management and holding company 12 7 software division 251 123 services division 174 142

Total number of staff members 437 272

Consolidated cash flow statement for 2002

The cash flow statement was drawn up using the indirect method, and can be illustrated asfollows:

Cash flow from operating activities

The cash flow from operating activities amounted to € 7.4 million (2001: € 2.3 million). The operating result and depreciations resulted in a cash in-flow of € 8.1 million (2001: € 7.1 million). In addition, a balance of € 1.1 million taxation was received in 2002.

Cash flow from investment activities

The cash flow from investment activities was, on balance, € 9.9 million negative against € 11.6 million negative in 2001. Some important deferred goodwill payments were madeduring 2002. These payments for approximately € 1.1 million related to paid earn-outs and for€ 3.1 million to extra items with regard to the acquisition of NedGraphics. The investments intangible and intangible fixed assets amounted to € 2.7 million (2001: € 2.3 million) and € 3.8 million (2001: € 1.15 million), respectively. The investments in intangible fixed assets relate to the in-house developed software. The investments in tangible fixed assets mainly relate to investments in satellite dishes at Carrier to Carrier Telecom N.V.

Cash flow from financing activities

The above cash flows resulted in a financing deficit of € 2.5 million. Against this, a mediumterm loan of € 2.5 million was taken out in 2002 for financing of the investments made atCarrier to Carrier Telecom N.V., which loan is to be repaid over a 4-year period. At year-end2002, € 0.5 million of repayments was stated under short-term debts.

ANNUAL REPORT 2002

57


Liquid assets 26 10Debts to credit institutions -3,875 -2,422Opening balance -3,849 -2,412

Liquid assets 27 26Debts to credit institutions -4,391 -3,875Balance as at year-end -4,364 -3,849

Change in liquid assets -515 -1,437

Company balance sheet as at 31 December 2002

(after appropriation of result)

Company profit and loss account for 2002

ANNUAL REPORT 2002

58



Company result -384 -986Result from participating interests 2,789 4,310

Net result 2,405 3,324


Fixed assets

Intangible fixed assets 20,489 17,447Tangible fixed assets 271 317Financial fixed assets 9,707 11,210Total fixed assets 30,467 28,974

Current assets

Accounts receivable 5,088 4,611Liquid assets - - Total current assets 5,088 4,611

Current liabilities, accruals and deferred income -7,880 -8,466

Current assets less current liabilities -2,792 -3,855Assets less current liabilities 27,675 25,119

Long-term liabilities -3,292 -1,292

Provisions -828 -2,950Shareholders’ equity 23,555 20,877

Issued capital 7,024 6,924Share premium reserve 22,128 21,761Legal reserve 4,343 1,493Other reserves -9,940 -9,301

23,555 20,877

Notes to the company annual accounts 2002

General

The consolidated annual accounts are part of the annual accounts of Blue Fox Enterprises N.V.The principles for valuation of assets and liabilities and determination of results are the sameas for the consolidated balance sheet and profit and loss account.

Where items from the balance sheet and profit and loss account are not explained in detailbelow, reference is made to the notes to the consolidated balance sheet and profit and lossaccount.

Company balance sheet as at 31 December 2002



The amortisation period of the goodwill following from the acquisition of NedGraphics isdetermined to be 20 years. This estimate was based on strategic considerations. The increaseof the goodwill was mainly related to paid earn-outs in cash as well as shares (€ 1.1 million),as well as to deferred items from the acquisition of NedGraphics (€ 3.0 million).

ANNUAL REPORT 2002

59

(in thousands of euros) Cost of Cost of

software obtaining

develop- rights and

Goodwill ment patents Total

Cost 1 January 2002 15,406 2,429 52 17,887Accumulated amortisation 1 January 2002 -278 -152 -10 -440

Book value as at 1 January 2002 15,128 2,277 42 17,447

Changes:Earn-outs regarding acquisitions previous years 1,128 - - 1,128Additions 2,997 - - 2,997Transferred from group companies 910 - - 910Deconsolidations - -265 -32 -297Amortisation -933 -279 -10 -1,222Additional diminution in value -474 - - -474

3,628 -544 -42 3,042

Cost 31 December 2002 20,441 2,000 - 22,441Accumulated amortisation 31 December 2002 -1,685 -267 - -1,952

Book value as at 31 December 2002 18,756 1,733 - 20,489

As no reliable estimate can be made of possible extra payments in shares or in cash, whichdepend on the results of parts of the company and companies acquired by Blue Fox orNedGraphics in the past, these are not taken into account in the determination of goodwill.Such extra payments will be stated as goodwill at the time they are made.

The costs of software development include an amount of € 2.0 million (fair value at acquisitiondate), relating to the software obtained by the acquisition of NedGraphics. Contrary to in-housedeveloped software, which is depreciated in 5 years, this third-party obtained software isdepreciated in 10 years.



The following rates of depreciation are used:

ANNUAL REPORT 2002

60



Cost 1 January 2002 470Accumulated depreciation 1 January 2002 -153

Book value as at 1 January 2002 317

Changes:Investments 73Disposals -15Depreciation -104

-46

Cost 31 December 2002 519Accumulated depreciation 31 December 2002 -249

Book value as at 31 December 2002 271

%

Refurbishing 12 1/2

Fixtures and fittings 20Computer equipment 33 1/3

Other assets 33 1/3

Financial fixed assets

Movements of the item participations were as follows:

In 2002, a restructuring and refinancing of especially a number of former NedGraphicscompanies took place. In addition, Blue Fox instigated liquidation proceedings for a number ofparticipations which had no more activities. This fits the strategy of Blue Fox to work withindependent agents where this is possible.

Participating interests in group companies are valued at their net asset value. If the net assetvalue of a group company is negative, this participation is valued at nil. A provision for thenegative value, to the amount of € 2.0 million in total, is subsequently deducted from theaccounts receivable from the group company concerned. To the extent that the negative valueexceeds the amount of the receivable, the remainder of the negative net asset value is includedunder provisions. At year-end 2002, such provision, of a total amount of € 0.2 million (2001: € 2.9 million), is therefore included.

Accounts receivable

With the exception of an amount of € 0.7 million all accounts receivable have a term of lessthan one year.

ANNUAL REPORT 2002

61


Net asset value as at 1 January 11,210 3,718

Acquisition of group companies - -5,350Sale/deconsolidation of group companies 232 -Participations sold to group companies - -487Capital injections 7,956 20Dividend received -5,766 -Result from participations 2,789 4,310Currency results on group companies -36 94Change in provisions for negative net asset value -6,678 8,905

Net asset value as at 31 December 9,707 11,210


Receivables from group companies 1,935 1,953Corporate tax 2,123 1,681Deferred taxation 69 - Receivable on sale of participations 667 - Other accounts receivable, prepayments and accrued income 294 977

5,088 4,611

Current liabilities, accruals and deferred income

All short-term debts have a term of less than one year.

As at 31 December 2002, the group has current account credit facilities from Fortis Bank of€ 9,000,000. The following securities were granted for this current account facility:• Lien on all stocks and receivables;• Joint and several liability of all Dutch group companies.In connection with the granted credit facility, the bank has set solvency requirements, whichwere met at year-end 2002.

Provisions

All amounts stated under the provisions have a term of more than one year. In addition, an amount of € 0.3 million has a term of more than 5 years.

ANNUAL REPORT 2002

62



Credit institutions 6,440 6,076Trade creditors 179 1,335Debts to group companies 401 651Taxation and social security charges 68 60Extra goodwill payments 243 334Other debts and accruals and deferred income 549 10

7,880 8,466


Provision for negative equity group companies 230 2,950Deferred tax liabilities 598 -

828 2,950

Shareholders’ equity

Movements of the shareholders’ equity can be stated as follows:

Issued capital

The authorised share capital consists of 10,000,000 ordinary shares and 5,000,000 preferenceshares of € 2 nominal value. As at 31 December 2002, 3,512,120 ordinary shares were issuedand paid up (2001: 3,462,225).

The company may not pay dividends as long as the subordinated loan of € 2.0 million, granted by Fortis Bank, is not repaid in full.

The formed legal reserve is made on account of the capitalisation of costs of in-housedeveloped software.

Off-balance sheet commitments

The group has entered into lease agreements whereby the total annual costs amount to € 76,000 (year-end 2001: € 39,000). The average remaining term of the lease agreementsamounts to 1.9 years.

In addition, the company is severally liable for commitments of some divested participations,which guarantee amounted to approximately € 1.6 million on 31 December 2002. Against thisguarantee, securities were obtained from the said divested participations in the form ofpossessory lien on debtors. The guarantee will be reduced in 2003.

ANNUAL REPORT 2002

63

(in thousands of euros) Share

Issued premium Legal Other

capital reserves reserves reserves Total

Balance as at 1 January 2001 3,341 9,282 429 -11,784 1,268

Proceeds of shares at merger with NedGraphics Holding N.V. 2,474 7,471 9,945Proceeds of other share issues 1,109 5,008 6,117Other movements 129 129Exchange rate differences participating interests 94 94Transfer to other reserves -86 86 0Result financial year 1,150 2,174 3,324

Balance as at 31 December 2001 6,924 21,761 1,493 -9,301 20,877

Proceeds of share issues 1 18 19Earn-outs 99 349 448Other movements -158 -158Exchange rate differences participating interests -36 -36Transfer from other reserves 445 -445 0Result financial year 2,405 2,405

Balance as at 31 December 2002 7,024 22,128 4,343 -9,940 23,555

As no reliable estimate can be made of possible extra payments in shares or in cash, whichdepend on the results of parts of the company and companies acquired by Blue FoxEnterprises or NedGraphics in the past, these are not taken into account in the determinationof goodwill.

As a result of the acquisition of various participations by Blue Fox the company has a profit-related, conditional commitment, which comprises extra payments in shares of Blue FoxEnterprises N.V. in the year 2003. On account of this conditional commitment, the company willissue 12,331 shares in 2003.

Fiscal entity

Blue Fox Enterprises N.V. heads a fiscal entity for corporate income tax purposes, to which allthe Dutch 100% participating interests at year-end 2002 belong. On this basis, the company iswholly and severally liable for the tax commitments of the fiscal entity as a whole.

Options

At year-end 2002, the company had a total of 227,021 outstanding options. As in previousyears, all staff members with permanent employment contracts qualified for obtaining staffoptions. In 2002, a total of 42,010 options were issued with an exercise price of € 9.65. No options were exercised in 2002.

A total of 16,490 options were issued to the Board of Directors, 4,940 of which in 2002.A total of 3,160 options were issued to the Supervisory Board, 300 of which in 2002.

ANNUAL REPORT 2002

64


Date granted Issued Outstanding Exercised/ Exercise price

Term options options Cancelled (€)

January 1999 2003 12,500 12,500 - 28.00April 1999 2003 5,000 5,000 - 32.20May 1999 2004 21,990 15,131 6,859 14.00June 1999 2003 120,000 80,000 40,000 28.14September 1999 2003 2,500 2,500 - 32.60January 2000 2004 1,250 1,250 - 42.00February 2000 2004 5,000 5,000 - 43.42April 2000 2004 3,750 3,750 - 43.42May 2000 2005 20,720 9,370 11,350 20.75July 2000 2004 1,250 1,250 - 43.90November 2000 2004 1,250 1,250 - 33.08December 2000 2004 16,168 13,716 2,452 29.00December 2000 2004 17,400 17,400 - 33.66March 2001 2005 5,250 5,250 - 22.60May 2001 2006 20,100 15,474 4,626 13.80May 2002 2007 42,010 38,180 3,830 9.65

Total 296,138 227,021 69,117

Company profit and loss account for 2002

Staff

In 2002, the company had an average of 12 staff members (2001: 7 staff members).

Remuneration directors and supervisory directors

The remuneration in 2002 of directors and supervisory directors was as follows:

ANNUAL REPORT 2002

65

Issued Outstanding Exercised/ Exercise

Date granted Term options options Cancelled price (€)

S.W. Eisma May 1999 2004 1,760 1,760 - 14.00May 2000 2005 2,640 2,640 - 20.75May 2001 2006 2,200 2,200 - 13.80May 2002 2007 1,980 1,980 - 9.65

R.J. Brolsma May 1999 2004 1,320 1,320 - 14.00May 2000 2005 1,980 1,980 - 20.75May 2001 2006 1,650 1,650 - 13.80May 2002 2007 1,480 1,480 - 9.65

M. Kuperus May 2002 2007 1,480 1,480 - 9.65B.F.M. Knüppe May 1999 2004 880 880 - 14.00

May 2000 2005 300 300 - 20.75May 2001 2006 250 250 - 13.80May 2002 2007 150 150 - 9.65

P.A.M. Pellenaars May 1999 2004 880 880 - 14.00May 2000 2005 300 300 - 20.75May 2001 2006 250 250 - 13.80May 2002 2007 150 150 - 9.65

T. Pannekoek - - - - -

Total 19,650 19,650 0

Pension Options

Remuneration expenses granted

Supervisory Board

Ben F.M. Knüppe, Chairman 18,450 - 150Pierre A.M. Pellenaars 18,450 - 150Ton Pannekoek 12,100 - -

49,000 - 300

Board of Directors

Sjoerd W. Eisma, Chairman 202,276 19,500 1,980Roelof J. Brolsma 163,742 10,340 1,480Mark Kuperus 136,310 13,720 1,480Ab van Marion* 453,780 - -

956,108 43,560 4,940

* The remuneration of A. van Marion completely relates to a payment at the termination ofhis employment. A. van Marion resigned from the Board of Directors as of 7 January 2002.

T. Pannekoek was appointed member of the Supervisory Board as of 17 May 2002 in theAnnual General Meeting of Shareholders. In that same meeting, M. Kuperus was appointedmember of the Board of Directors.

The joint remuneration of the Supervisory Board for 2001 amounted to € 36,000.The joint remuneration of the Board of Directors for 2001 amounted to € 455,000.


The Board of Directors: Drs. Sjoerd W. Eisma, ChairmanIr. Roelof J. BrolsmaDrs. Mark Kuperus RC

The Supervisory Board: Mr. Ben F.M. Knüppe, ChairmanTon PannekoekDrs. Pierre A.M. Pellenaars

ANNUAL REPORT 2002

66


ANNUAL REPORT 2002

67

V. O T H E R I N F O R M AT I O N

Auditors’ report

Introduction

We have audited the 2002 annual accounts of Blue Fox Enterprises N.V. in Dordrecht. Theseannual accounts are the responsibility of the Board of Directors. It is our responsibility toexpress an opinion on these annual accounts based on our audit.

Scope

We conducted our audit in accordance with auditing standards generally accepted in theNetherlands. These standards require that we plan and perform the audit to obtain reasonableassurance about whether the annual accounts are free from material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in theannual accounts. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall presentation ofthe annual accounts. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, the annual accounts give a true and fair view of the financial position of thecompany as at 31 December 2002 and of the result for the year then ended in accordance withaccounting principles generally accepted in the Netherlands and comply with the financialreporting requirements as included in Part 9, Book 2 of the Netherlands Civil Code.

Rotterdam, 17 March 2003

KPMG Accountants N.V.

ANNUAL REPORT 2002

68


Statutory provisions concerning result appropriation

Pursuant to article 28 of the Articles of Association, the profit is at the disposal of the AnnualGeneral Meeting of Shareholders.

Proposal result appropriation 2002

As a result of the capitalisation of the costs of in-house development of software, the wholeresult of € 2,405,000, must be added to the legal reserve. This proposal has as such beenincorporated in the presented annual accounts.

“Stichting Continuïteit Blue Fox Enterprises N.V.”

The "Stichting Continuïteit Blue Fox Enterprises N.V." aims to guard the interests of thecompany and its associated companies in such a way that the interests of the company andthese associated companies are guaranteed and that influences are resisted which could affectthe independence and/or the continuity and/or the identity of the company and theseassociated companies, contrary to those interests.

The possibility of placing preference shares in the capital of the company with the "StichtingContinuïteit Blue Fox Enterprises N.V." is a protective measure against hostile takeovers. The"Stichting Continuïteit" has entered into an option agreement with the company. Pursuant tothis option agreement, the company has the right to issue preference shares of the companyfor a maximum of 50% of the total nominal amount of the ordinary shares in the capital of thecompany issued at that time.

On the basis of this option agreement, the "Stichting Continuïteit" also has the right to requirethe company to issue preference shares to it for the nominal amount of the ordinary shares inthe capital of the company issued at that time. Issuance of preference shares pursuant to theoption agreement may only be done to serve the aim of the "Stichting Continuïteit" asmentioned above.

The board of the "Stichting Continuïteit Blue Fox Enterprises N.V." consists of three members:two members who are independent in the meaning of Appendix X of the Listing and IssuingRules of Euronext Amsterdam N.V. and one member who is a member of the Board ofDirectors of the company. This last member is S.W. Eisma. The independent members are D.R.Hooft Graafland and S.J.B. van der Burg. S.W. Eisma, in his capacity of Chairman of the Boardof Directors of the company, is also Chairman of the "Stichting Continuïteit Blue FoxEnterprises N.V."

ANNUAL REPORT 2002

69

Group offices

The following offices with operating activities are part of the group:

Company Based in Address details Managing Directors

Blue Fox Enterprises N.V. the Netherlands Spuiboulevard 314 Sjoerd W. Eisma (1950)

(Dordrecht) 3311 GR Dordrecht Roelof J. Brolsma (1951)

Tel. +31 78 649 29 99 Mark Kuperus (1962)

Fax. +31 78 613 92 09

Blue Fox Enterprises B.V. the Netherlands Spuiboulevard 314 Sjoerd W. Eisma (1950)

(Dordrecht) 3311 GR Dordrecht Roelof J. Brolsma (1951)

Tel. +31 78 649 29 99 Mark Kuperus (1962)

Fax. +31 78 613 92 09

TOPCAD B.V. the Netherlands Spuiboulevard 314 Gerard J.M. Evers (1946)

(Dordrecht) 3311 GR Dordrecht

Tel. +31 78 649 29 00

Fax. + 31 78 614 67 89

Reset C&T B.V. the Netherlands Spuiboulevard 314 Sven W.S.E. Boender (1968)


Tel. +31 78 649 29 80

Fax. +31 78 613 91 15

Reset Techniek B.V. the Netherlands Spuiboulevard 314 Sven W.S.E. Boender (1968)


Tel. +31 78 649 29 88

Fax. +31 78 613 91 15

CMedia Productions B.V. the Netherlands Noordzijde 2 b Ruud Groothuis (1966)

(Emmeloord) 8302 GL Emmeloord Koos van der Lei (1963)

Tel. +31 527 61 90 00

Fax. +31 527 62 09 89

Pollux B.V. the Netherlands Steenbokstraat 33 George J. Gerritsen (1951)

(Apeldoorn) 7324 AZ Apeldoorn

Tel. +31 55 368 06 00

Fax. +31 55 368 06 01

Deco ICT Solutions B.V. the Netherlands Steenbokstraat 33 Han Klaasen (1958)

(Apeldoorn) 7324 AZ Apeldoorn

Tel. +31 55 579 12 55

Fax. +31 55 579 09 99

Nr.1 Software B.V. the Netherlands Kuiperij 1 Jan van den Hoven (1962)

(Amstelveen) 1185 XS Amstelveen

Tel. +31 20 647 51 34

Fax. +31 20 645 46 51

Carrier to Carrier the Netherlands Plantweg 52 Chris van Beusekom (1951)

Telecom N.V. (Biddinghuizen) 8256 SH Biddinghuizen

Tel. +31 321 33 05 10

Fax. +31 321 33 00 65

NedGraphics the Netherlands Ir. D.S. Tuynmanweg 10 Richard Goossens (1959)

CAD/GIS B.V. (Vianen) 4131 PN Vianen

Tel. +31 347 32 96 00

Fax. +31 347 32 96 66

ANNUAL REPORT 2002

70


NedGraphics the Netherlands Ir. D.S. Tuynmanweg 10 Cor van Stam (1961)

Textile & Apparel B.V. (Vianen) 4131 PN Vianen

Tel. +31 347 32 96 96

Fax. +31 347 32 96 99

NedGraphics SA France (Paris) 11, Rue de L’Escaut Nicolas Hounto (1960)

75019 Paris

Tel. +33 1 53 26 26 26

Fax. +33 1 53 26 26 10

NedGraphics Srl Romania (Bucharest) Str. Badea Cartan nr. 15 Otilia Anghel (1960)

Sector 2 Bucharest

Tel. +4021 212 24 17

Fax. +4021 212 21 74

NedGraphics Inc. USA (New York) 104 West 40th Street Eric Vimont (1961)

12th Floor Mary Sherman (1968)

New York, NY 10018

Tel. +1 212 921 2727

Fax. +1 212 768 4488

NedGraphics USA (Chattanooga) 6086 Shallowford Road Cor van Stam (1961)

of Tennessee Inc. Suite 101 Ezechiele Porini (1934)

Chattanooga

Tenessee 37421

Tel. +1 423 892 0389

Fax. +1 423 892 1532

NedGraphics UK Ltd. UK (Dukinfield) 8 Parkin Close Cor van Stam (1961)

Dukinfield

Cheshire, SK16 4DD

Tel. +44 161 343 8401

Fax. +44 161 343 8401

NedGraphics Hong Kong 8th Floor, Princes Building Cor van Stam (1961)

(representative office) 10 Chater Road

Central Hong Kong

Tel. +852 91 82 4945

Fax. +852 3121 0060

Porini Srl. Italy (Lomazzo) Via Trento 7 Ezechiele Porini (1934)

22074 Lomazzo CO

Italy

Tel. +39 02 96 94 101

Fax. +39 02 96 77 94 66

Porini Ltda Brazil (Sao Paulo) Rua Cacapava 49 Tarcisio Di Girolamo (1935)

Conj. 138-jd.Paulista

01408-010 Sao Paulo/SP

Brazil

Tel. +55 11 3082 8275

Fax. +55 11 3088 2688

Porini Ltda Portugal (Matosinhos) Praceta D. Nuno Fernando Perreira (1966)

Alvares Pereira 20

4450218 Matosinhos

Portugal

Tel. +351 22 937 15 17

Fax. +351 22 937 39 63

ANNUAL REPORT 2002

71

Glossary

Blue Fox Blue Fox Enterprises N.V. and/or its operating companies.

Blue Fox Enterprises Blue Fox Enterprises N.V. and/or its operating companies.

Group Blue Fox Enterprises N.V. and/or its operating companies.

The company Blue Fox Enterprises N.V.

ICT Information Communication Technology.

CAD Computer Aided Design.

CAM Computer Aided Manufacturing.

Business software Software used in businesses.

Retail software Software for private use, mainly sold in shops.

ERP system Enterprise Resource Planning system, system for planning the use of resources within the company.

GIS Geographic Information System.

Monitoring Total solution quality control for the textile and apparel industry.

Networking Integrated information supply in the production process for the textileand apparel industry.

Ordinary shares The ordinary bearer shares with a nominal value of € 2 each in the capital of the company.

Preference shares Shares to which the Articles of Association give some sort of preference.

Board of Directors The Board of executive directors of the company.

Supervisory Board The Board of supervisory directors of the company.

WEB portal Entrance to the World Wide Web, whereby various sources of information are categorised.

AutoCad, Autodesk, Bentley, Microsoft, Microstation, AS/400, Windows, Oracle, DBII, MSAccess, etc. are the names of suppliers or trade marks or products of suppliers.

ANNUAL REPORT 2002

72


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