Financial statements 2004

Notes to the consolidated balance sheet as at 31 December 2004

Long-term liabilities 2004 2003       Facility Tranche A 247 - Facility Tranche B 150 - Senior Credit Facility-term loan - 125 Senior Credit Facility-revolver - 328 Commitments resulting from profit sharing France 11 13 Other loans 67 91   475 557

Long-term liabilities per currency

 

Interest rates %	2004	2003
4 - <6	-	221
6 - <8	12	247
8 - <10	45	44
Floating, average 4% (2003: 3%) as at 31 December	418	45
	475	557
Redemptions
1 - 5 years	473	556
Over 5 years	2	1
	475	557

Other loans, include a €44 million exchangeable loan relating to the joint-venture with ING in connection with the acquisition of Acsys Inc. in 2000. This loan is repayable within 1 year. For more information on the joint-venture, reference is made to the 'Notes to the company balance sheet' section of this Annual Report.

Provisions	Total	Pension liabilities	Restructuring	Other
Position as at 01-01-2004	45	5	8	32
Net additions charged to income	10	2	2	6
Withdrawals	- 9	- 1	- 4	- 4
Discontinued consolidation	- 5	- 5	-	-
Position as at 31-12-2004	41	1	6	34

The majority of the provisions are short term in nature.

The other provisions relate to other risks of various kinds mainly consisting of potential third-party claims. Employee pension plans have been established in many countries in accordance with the legal requirements, customs and the local circumstances. The majority of our employees are covered by defined-contribution and similar type plans.

For employee pension schemes in The Nether­lands the defined-benefit plans are funded with plan assets that have been segregated and restricted in an insurance fund.

Off-balance sheet commitments

The Company has entered into long-term unconditional commitments for the rental of offices and leasing of operating equipment. On 31 December 2004, the present value of future commitments discounted at 5% (2003: 5%) was €225 million (2003: €209 million), including within one year €74 million (2003: €64 million), between one and five years €129 million (2003: €124 million) and after five years €22 million (2003: €21 million).Payments under these commitments will be included within operating costs.

In connection with various acquisitions, the Company has encouraged management of the acquired companies to retain minority equity interests. The Company has entered into put and call options with the holders of these minority interests, with the amounts payable determined by future performance. The aggregate liability under these arrangements that were in place as of 31 December 2004 was contractually capped at a maximum of €144 million (2003: €118 million). In the normal course of events, these options are exercisable over extended periods and generally not before a minimum of three to five years from the date of acquisition. If all the options had been exercisable at the balance sheet date, the aggregate liability would have been €44 million (2003: €44 million).

The Company is involved in a number of legal proceedings relating to normal business activities. The Company believes that sufficient provision has been made for their outcome.

With respect to obligations of Group companies, Vedior N.V. is committed to some banks as main co-debtor and has extended guarantees in addition to consolidated liabilities of subsidiaries for an amount of €406 million (2003: €397 million).

The Company has given indemnifications, representations and warranties with respect to companies disposed of in recent years.

In November 2004, the French competition authorities started investigations relating to alleged infringements of European and French competition law by Groupe Vedior France and certain competitors. The investigations are still ongoing and to date, no conclusions have been reached by the competition authorities on the outcome of their review.

Over the past few years, the Dutch tax authorities have investigated whether Dutch staffing companies comply with legal requirements to check the identities of temporary workers. Vedior in the Netherlands has also been subject to this review, which is still ongoing and, to date, no conclusions have been reached by the tax authorities on the outcome of their review.