Form 20-F 2005

subscription rights cannot be exercised by an ADS holder, Citibank, N.A., as depositary, will, if possible, sell such shareholder’s
preferential subscription rights and distribute the net proceeds of the sale to the holder. If the depositary determines, in its discretion,
that such rights cannot be sold, the depositary may allow such rights to lapse. In either case, ADS holders’ interest in us will be
diluted and, if the depositary allows rights to lapse, holders of ADSs will not realize any value from the granting of preferential
subscription rights.
Holders of ADSs may be subject to additional risks related to holding ADSs rather than shares.
Because holders of ADSs do not hold their shares directly, they are subject to the following additional risks:
In the event of a dividend or other distribution, if exchange rates fluctuate during any period of time when the depositary
cannot convert a foreign currency into dollars, the ADS holder may lose some or all of the value of the distribution. There
can be no assurances that the depositary will be able to convert any currency at a specified exchange rate or sell any
property, rights, shares or other securities at a specified price, nor that any such transactions can be completed within a
specified time period.
In order to vote at shareholders’ meetings, ADS holders who are not registered on the books of the depositary are
required to transfer their ADSs for a certain number of days before a shareholders’ meeting into a blocked account
established for that purpose by the depositary. Any ADS transferred to this blocked account will not be available for
transfer during that time. ADS holders who are registered on the books of the depositary must give instructions to
the depositary not to transfer their ADSs during this period before the shareholders’ meeting. ADS holders must
therefore receive voting materials from the depositary sufficiently in advance in order to make these transfers or give these
instructions. There can be no guarantee that ADS holders will receive voting materials in time to instruct the depositary to
vote. It is possible that ADS holders, or persons who hold their ADSs through brokers, dealers or other third parties, will not
have the opportunity to exercise a right to vote at all.
ADS holders may not receive copies of all reports from us or the depositary. You may have to go to the depositary’s offices
to inspect any reports issued.
We and the depositary may amend or terminate the deposit agreement without ADS holders’ consent in a manner that
could prejudice ADS holders.
Cautionary Note About Forward-looking Statements
Certain of the statements contained in this Annual Report that are not historical facts, including, without limitation, under the
headings “Item 4. Information about Rhodia” and in “Item 5. Operating and Financial Review and Prospects” are statements of
future expectations and other forward-looking statements. Forward-looking statements can be identified by the use of forwardlooking
terminology such as “believe”, “expect”, “may”, “is expected to”, “will”, “will continue”, “should”, “would be”, “seeks”,
“intends”, “plans”, “estimates” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable
terminology, or by discussions of strategy, plans or intentions. These statements are based on management’s current views and
assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to
differ materially from those anticipated by such statements. Factors that could cause such differences in actual results include:
changes in raw material prices, in particular the price of oil and oil derivatives;
changes in interest rates and currency exchange rates in currencies other than the euro, principally in U.S. dollars,
Brazilian reals and U.S. dollar-influenced currencies;
our ability to introduce new products and to continue to develop our production process;
customers and market concentration;
risks and uncertainties attendant to doing business in numerous countries that may be exposed to, or may have recently
experienced, economic or governmental instability;
18 Form 20 - F 2005 - Rhodia