NOTES  TO  THE  PARENT  COMPANY FINANCIAL  STATEMENTS FISCAL  YEARS  ENDED  31  JANUARY  2004  AND  2003 (All amounts stated hereafter are in millions of euros) NOTE 1: PRESENTATION OF THE COMPANY Neopost SA is the holding company of the Neopost Group, and was created in 1992 through a leveraged buyout (LBO) of Alcatel’s mail processing equipment division. A second LBO took place in 1997. NOTE 2: SUMMARY OF ACCOUNTING POLICIES The  parent  company  financial  statements  are  prepared  in accordance   with   French   Generally   Accepted   Accounting Principles. The   basic   method   for   valuing   accounting   entries   is   the historical cost method. A) TANGIBLE  AND  INTANGIBLE  FIXED  ASSETS Tangible   and   intangible   fixed   assets   are   valued   at   cost (purchase  price  plus  related  expenses,  excluding  fixed  asset acquisition expenses). Assets are depreciated according to their expected useful lives. The most common depreciation periods are as follows: • Software 1 year    Straight-line • Fixtures 8 years    Straight-line • Office furniture and equipment 4 and 8 years    Straight-line B) FINANCIAL  FIXED  ASSETS Following the second LBO and with retroactive effect at 01 February 1997, financial fixed assets were valued at the sum of   restated   shareholders’   equity   and   a   multiple   of   their average operating income in 1999, 2000 and 2001. Financial  fixed  assets  are  revised  every  year  on  the  basis  of figures for the current year, the previous year and the budget. This valuation method did not lead to any provision for the year ended 31 January 2004. C) SHORT-TERM  INVESTMENTS Short-term investments are valued on a line-by-line basis at their weighted average price. 46