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2002 ANNUAL REPORT

contentscontentscontentscontents

contentscontents
4 Results at a Glance
5 Letter to the Shareholders
7 Group Overview
10 Management Report
16 Auditor’s Opinion
17 Consolidated Balance Sheet
18 Consolidated Profit and Loss Statement
20 Consolidated Cash Flow Statement
22 Changes in Shareholders’ Equity
23 Notes to the Consolidated Financial Statements
36 Group Fixed Asset Movements
38 Segment Reporting
40 Report of the Supervisory Board
41 Management Principles
41 Corporate Governance
43 Corporate Information
3

Results at a Glance
4
2002 2001 2000
€ m € m € m
Revenue 210.5 220.2 169.0
EBITDA before exceptionals 0.5 4.1 6.3
EBITDA -4.7 -0.9 3.3
Operating loss -34.3 -9.4 -2.9
Net loss per share (basic and diluted) in Euro (IFRS) -3.45 -1.13 -0.76
DVFA/SG losses per share (diluted and undiluted) in Euro -3.45 -1.13 -0.76
Q4 2002 Q3 2002 Q2 2002 Q1 2002 Q4 2001
€ m € m € m € m € m
Revenue 55.2 50.5 51.3 53.5 56.7
Gross profit 19.4 17.9 18.9 19.4 21.0
Gross margin % 35.2% 35.5% 36.8% 36.2% 37.2%
Personnel expenses 11.5 11.3 12.5 12.3 12.5
Personnel % 20.8% 22.4% 24.3% 22.9% 22.1%
Operating expenses 6.7 7.1 7.0 6.7 7.4
Operating % 12.2% 14.0% 13.7% 12.6% 13.1%
EBITDA before exceptionals 1.2 -0.5 -0.6 0.4 1.1

Letter to the Shareholders
Dear Shareholder,
2002 was a difficult year. We have witnessed a sharp fall in a number of world economies and have found ourselves in the
depths of the first recession in the information technology industry. At the same time, we have seen a proliferation of
malicious attacks on corporate networks, and a dramatic increase in the number of security breaches. According to the
Computer Emergency Response Team (CERT) at Carnegie Mellon University the number of vulnerabilities reported during
2002 was 4,129 (up by almost 70% over 2001) – the equivalent of 79 new vulnerabilities every week throughout the year.
What’s more, the total number of reported security incidents increased 56% to 82,094 – primarily a result of businesses
deploying technology without an embedded security policy.
As we moved into 2002 we needed to take a fresh look at the organisation. We undertook a fundamental review of the
business, a necessary step to re-evaluate our position and change our focus for the future. This focus is now centred on
growth through gaining market share, but with costs at a level commensurate with current revenues.
The proposed sale of the Allasso business follows our strategy throughout 2002 to give Allasso more autonomy, which
enabled Allasso to focus on its own issues whilst striving towards the group objective of returning to profitability. During
our strategic review it became clear that both operating businesses needed significant investment in order to grow into the
future. Allasso, in particular, requires increasing scale to maintain profitability, since gross margins have been declining and
we believe will continue to do so.
We believe that the Group does not have funds to invest in the expansion of both businesses. As a consequence, it is
unlikely to be able to provide Allasso with the scale it requires to mitigate its gross margin problems. Therefore, the Board
of Directors believe that it would be in the best interests of shareholders and best for the profitability of both businesses, to
sell Allasso.
Another outcome of the review was the merger of our Managed Security Services (MSS) operation into the Integralis
business – a success on two counts. Not only have we grown this business 66% year on year, with revenues now at
€7.6m, but also we have turned MSS into a break-even business, before corporate costs, after losses consistently
greater than €1m each quarter. We now have a good basis for growth in 2003.
On top of this we have a world class, flexible delivery model, with unparalleled support services, which provides a valuable
recurring revenue stream.
Full year revenues in 2002 of €211m, only 4% down on 2001, were a credit to our strong management team in each
business and reflected the resilience of our underlying operation.
5

As part of the reorganisation, we drastically cut overheads, both at the corporate centre and within the operating
businesses. The loss of some 76 employees throughout the year was a difficult step, but we have managed to maintain
revenues and are confident that we have the right structure to move forward.
In 2002 we saw the development of a number of new relationships with key suppliers and partners whilst ensuring that we
delivered best of breed solutions in the market. We intend to continue to add sophisticated technologies and innovations
to our portfolio providing they yield a meaningful revenue stream, together with high-margin services with recurring
revenues, thus giving our customers the best, most up-to-date IT security solutions.
In addition to perimeter security (firewalls, intrusion detection systems, anti-virus and email filtering solutions), corporate
security will need to be underpinned in several key areas. For example, enterprise security management provides
enterprises with a holistic view of security across their entire networks, presenting correlated information from disparate
heterogeneous security devices and applications. The slow-but-sure introduction of 3G and wireless technologies
presents our customers with further challenges to continue to transact business securely.
Security is not for the faint-hearted or inexpert hand. It remains key to the success of many IT technologies and it is this
foundation that forges the basis of our future.
In common with last year, prospects for 2003 are hard to predict but we believe that the high degree of economic
uncertainty seen in 2002 will continue into at least the first half of 2003. We will continue to strengthen our market position
and do all we can to maximise shareholder value. We recognise the trust our shareholders have placed in us in these
difficult times and wish to thank them and our business partners for their support.
Finally, I would like to thank our employees for their hard work and dedication in the most difficult market any of us have
seen. They continue to inspire confidence in the future organisation. In particular, I would like to thank Ian Calcutt, Günter
Fuhrmann and Dan Collins who stepped down from the Management Board during the year, and Martyn Webster,
Dr Petra Wibbe and Klaus Gansser who retired from the Supervisory Board, for their valued contributions to the business.
6
On behalf of the Management Board

Group Overview
The Articon-Integralis Group, listed on the Neuer Markt since 28
October 1998 (Neuer Markt*: AAGN, WKN 515503) is a European
market leader in the IT security solutions sector in terms of both
revenue and geographic coverage. The company has 18 offices in 8
countries, including a presence in the USA.
There are two distinct sales channels, Integralis and Allasso, through
which the company provides a range of flexible and individual IT
Company structure
Office f locations
Corporate Solutions
* The Neuer Markt will be replaced by the Prime Standard on 24 March 2003.
Corporate Management
Managed Security Services
security solutions and a worldwide security infrastructure. With this
business model, Articon-Integralis enables companies and
organisations to conduct secure communication and e-commerce
transactions over private and public computer networks.
Articon-Integralis’ clients include numerous government organisations
and many of the largest European and US companies.
Channel Solutions
7

Integralis is the Group’s security systems integrator, which provides
Information Security Solutions to all industry sectors and governmental
sites throughout the world, allowing organisations to grow and
achieve their business goals securely. Integralis is recognised as a
leading and trusted provider of security systems integration in the IT
and e-commerce security market and employs many of the leading
technologists and most skilled engineers in the industry.
Integralis offers its customers a full service approach. The portfolio
covers security systems integration services such as consultancy,
audits, risk management and security policies and builds on the
experience that comes from implementing more security projects
than any other company in Europe. Integralis’ solutions combine
services and system integration, the deployment of “best-of-breed”
security products, and true comprehensive support 24 hours per
day, 365 days a year.
During 2002, the Articon-Integralis Group undertook a restructuring
programme, which included the integration of the Activis Managed
Security Services (MSS) operation into the Integralis business. The
MSS business currently manages over 370 devices in 32 countries
and has some 10,000 support contracts, providing an unparalleled
worldwide delivery service. Two new security services were added to
its portfolio in 2002, a Managed Intrusion Detection Service and a
range of solutions surrounding BS7799.
Integralis won a number of awards in 2002. It was voted the ‘Best
provider in Information and Communication Technology’ awarded by the
state of Baden-Württemberg for the second successive year, and
two awards were received for the MSS business: The ‘Best Email
Security Solution’ awarded by SC Magazine for the email content
management and filtering service, e:)scan and Frost & Sullivan, a
leading trade analyst group, rated the Managed Security Services
section of the business as one of the top 3 in Europe.
Integralis also signed a strategic partnership agreement with NTL, a
leading UK provider of integrated business solutions, with a 40-year
pedigree in managed network services, to combine NTL’s expertise
in network management with Integralis’ leading position in IT security.
2003 will see Integralis focus on increasing market share through the
predicted flat market, with a more dynamic sales organisation and a
more efficient marketing strategy.
8
Allasso is a specialist distributor, providing network and information
security and quality of service products and services to over 7,000
customers across Europe. Allasso is the leading European distributor
of specialist network and information security products with offices in
the UK, Germany, Italy, Spain, Benelux and France.
Allasso runs a market-leading Channel Support Programme to
aggressively grow its share of the European network security market.
The company adds value to the channel by offering network security
training, sales and marketing advice and technical support. Allasso
has an established track record of success in ‘best of breed’ IT
security distribution. It is one of the largest providers of Check Point’s
firewall systems to resellers, OEMs and VARs, and holds Authorised
Training Centre (ATC) status for Nokia’s IP Series, ISS, Stonesoft,
ClearSwift and Check Point.
During 2002, new agreements were signed with Netilla ® Networks,
the premier provider of SSL web-based VPN platforms. Under the
agreement, Allasso will distribute the Netilla network appliance to
security network and enterprise value-added resellers in Europe.
Allasso also joined the Symantec Partner Programme as a Value
Added Distributor (VAD). They will carry Symantec’s enterprise
products and services to security and enterprise resellers operating
in UK, Germany, Italy, Spain, Benelux and France.
Awards won by Allasso in 2002 include, ‘Top European Distributor
2001’, awarded by Internet Security Systems (ISS) and ‘Best
Distributor 2001’ awarded by Packeteer with recognition in both the
UK and Spanish markets. They also retained their position as one of
the largest Check Point and Nokia distributors in Europe, as well as
being the largest European MIMEsweeper distributor.
In 2003, Allasso will open a new office in Portugal and continue its
emphasis on improving logistics and service offerings in order to
combat margin pressures.

Products and Services
Articon-Integralis offers a comprehensive range of security products
and services through relationships with leading technology vendors
including:
■ ActivCard
■ Aladdin
■ Blue Coat
■ Check Point
■ Cisco
■ Clearswift
■ F-Secure
■ F5
■ Finjan
■ Foundstone
■ ISS
■ Netilla ®
■ Nokia
■ Packeteer
■ Pentasafe
■ Radware
■ RSA
■ Sanctum
■ Sonicwall
■ Stonesoft
■ Symantec
■ Trend Micro
■ Top Layer
■ Websense
■ Webtrends
Product Segments
■ Anti-Virus
■ Authentication
■ Content Security
■ Encryption
■ Firewalls/VPN
■ Intrusion Detection
■ Quality of Service
■ Security Management
■ Vulnerability Assessment
Service Segments
■ Managed Security Services
including complete 24x7
management
– Email content
management and filtering
– Firewall Management
– Managed Intrusion
Detection
– Vulnerability Assessment
■ Technical Support
– 24x7 System Support
– Hotline Support
– Product Software Updates
■ Professional Services
– Configuration and Testing
– Implementation
– Network Forensics
– Project Management
– System Integration
– Systems Security (S3)
■ Consulting
– BS7799 – Certification of
Security Practices
– Penetration Testing
– Risk Analysis
– Security Audits
– Security Information
Advisory
– Security Policy
Formulation
■ Training
– Authorised Training
for Nokia’s IP Series
of products, ISS,
Stonesoft, Clearswift
and Check Point
9

Management Report
Consolidated Management Report for the Consolidated Financial Statements
of Articon-Integralis AG for the year ended December 31, 2002
Introduction
The Articon-Integralis Group is a global IT-security company with
offices throughout Europe and in the United States of America.
Articon-Integralis solutions enable businesses to conduct secure
communication and e-commerce transactions over private and
public computer networks. Under its brand names Integralis and
Allasso, the company offers comprehensive security solutions, which
include first-class IT security products and a range of consulting,
system integration and Managed Security Services.
2002 was a difficult year for the Group. As a result of bleak market
conditions, the Group undertook a substantial strategic review of the
business followed by a programme of reorganisation. Despite this,
the Group managed to achieve revenues approaching those of 2001.
Total Group revenue for 2002 was €210.5m, compared with
€220.2m last year.
Development of the Articon-Integralis Group
and market conditions
At the start of the year, Articon-Integralis had robust operating
businesses, but the company’s strategic vision needed to reflect the
weakening market conditions. In addition, Activis – the Group’s
Managed Security Services (MSS) business – was losing in excess of
€1m per quarter before corporate overheads and head office costs
were inappropriate for an environment which was not expected to
see significant growth. As a result, the Group undertook a strategic
review during the first half of 2002. The review forged a new Group
structure, providing the two main operating businesses, Allasso and
Integralis, with more autonomy, thus enabling them to focus on their
own business issues whilst striving towards the group objective of
achieving profitability in 2003. The Group’s MSS brand, Activis,
which was launched in 2000, was merged into Integralis to provide a
focused security systems integration company, where Activis exists
as the delivery brand. This has provided synergy benefits in the
delivery of security and yielded economies in areas such as shared
marketing spend. With the integration of Activis into the Integralis
business, the Group has been able to turn the provision of managed
security services into a break-even operation in Q4 at EBITDA before
corporate overheads.
10
In addition, the Group needed to cut its cost base, but in a way
that would allow it to grow in difficult market conditions. Previous
reorganisations within the Group had been focussed on cutting
operating costs. However the emphasis in 2002 was to re-position
the organisation for growth. The reorganisation meant some hard
decisions in terms of cutting headcount, with a reduction from
645 employees at the start of the year (the highest position had been
740 in 2001) to 569 at the year-end. A significant proportion of costs
were also removed from the Articon-Integralis corporate centre.
Restructuring measures resulted in changes to the Management
Board. Mark Silver, former COO was appointed CEO and Philippe
Dambrine was appointed President of the Allasso Group. In light of
the restructuring, Dan Collins, COO Integralis, left the group in June
and Ian Calcutt, Executive Chairman, and Günter Fuhrmann left the
Management Board at the end of December 2002, reducing this to
two members. In addition, Lawrence Wolman was appointed CFO
Designate in September. In June, Martyn Webster, Dr Petra Wibbe
and Klaus Gansser retired from the Supervisory Board and Jochen
Tschunke joined.
In terms of trading, the Group benefited from its diverse geographic
presence with markets in Italy, France and Netherlands growing 17%
over the previous year. Revenues in Germany were adversely
affected by very difficult economic conditions leading to a downturn
in investment, especially in the field of network security. However, the
volume of our security solutions business combined with the
balanced ratio of our product and service mix, is one of our key
strengths for surviving in such a tough environment.
Firewalls and VPNs remain our biggest selling products, although our
dependence on them has fallen from 62% of Group product
revenues in 2001 to 59% in 2002. Because of competitive pressures,
gross margins have been under pressure, falling from 38.3% in 2001
to 35.9% in 2002. As a result, despite an overhead reduction of 9%
in 2002 compared with 2001, the overall EBITDA was €0.5m (2001
€4.1m) before exceptional items of €5.2m (2001€5.0m).

Results at a glance
Revenue and business development in the individual company divisions
Allasso delivered €116.9m, 55.5% of Group revenue
Allasso is the Group’s value added distributor and Europe’s largest
pure play security distributor. With offices in six European countries,
Allasso adds value to the channel by offering information security
training, sales and marketing advice and technical support to more
than 7,000 resellers in Europe. Allasso has an established track
record of success in ‘best of breed’ IT security product distribution,
including Check Point, Nokia, Websense, Clearswift, Blue Coat
Systems, RSA Security, Stonesoft, Finjan, F-Secure, Aladdin, Internet
Security Systems (ISS) and many others. In October 2002, Allasso
signed a pan-European distribution agreement with Symantec. Allasso
is also an Authorised Training Centre (ATC) for Nokia’s IP Series of
products, ISS, Stonesoft, Clearswift and Check Point.
The strategic review process gave Allasso more autonomy as a
business, which led to a greater focus on improving marketing and
logistics. This was highlighted with the appointment of two key
2002 2001 2000
€ m € m € m
Revenue 210.5 220.2 169.0
EBITDA before exceptionals 0.5 4.1 6.3
EBITDA -4.7 -0.9 3.3
Operating loss -34.3 -9.4 -2.9
Net loss per share (basic and diluted) in Euro -3.45 -1.13 -0.76
Q4 2002 Q3 2002 Q2 2002 Q1 2002 Q4 2001
€ m € m € m € m € m
Revenue 55.2 50.5 51.3 53.5 56.7
Gross profit 19.4 17.9 18.9 19.4 21.0
Gross margin % 35.2% 35.5% 36.8% 36.2% 37.2%
Personnel expenses 11.5 11.3 12.5 12.3 12.5
Personnel % 20.8% 22.4% 24.3% 22.9% 22.1%
Operating expenses 6.7 7.1 7.0 6.7 7.4
Operating % 12.2% 14.0% 13.7% 12.6% 13.1%
EBITDA before exceptionals 1.2 -0.5 -0.6 0.4 1.1
directors in these areas. Allasso revenue in 2002 increased by 3.0%
over 2001.
Integralis delivered €93.6m, 44.5% of Group revenue
Integralis is a leading European Security Systems Integrator offering a
broad selection of security services, security products and Managed
Security Services (MSS) and has 12 offices in five countries across
Europe and in the United States. The integration of the Activis
business into Integralis has provided the company with a renewed
focus on MSS as well as economies of scale in marketing and
delivery, and has resulted in its biggest order to date in Q4. The
company manages devices in 32 countries.
11

2002 was a difficult year with market pressures leading to a decline in
revenues and it was necessary for Integralis to take strong decisions
to meet these difficulties. The reorganisation of the business meant
both a reduction in operating costs and more importantly, a stronger
sales and marketing and technical team, which will position the
company for future growth. The appointment of a new Sales and
Marketing Director in Q3 endorsed this strategy.
Distribution of product and service revenue
Total Group revenues in 2002 were €210.5m, 4% lower than in
2001 (€220.2m). The downturn in sales was principally in products
(down €25.9m to €127.5m) a consequence of cutbacks in the
market. This was particularly prevalent in Germany, our second
largest region, as the downturn in the German economy took effect.
Total revenue from services increased in a challenging market by
€16.2m (up 24%) in line with the Group’s strategy to increase the
proportion of revenue arising from services, this despite a €2.0m
reduction in training revenue.
12
Revenue split 2002 – security product technology
Intrusion Detection 3%
Quality of
Service 10%
Other 7%
Authentication 8%
Content Security 11%
Anti-Virus 2%
Trends in geographical revenue distribution
Firewall &
VPN 59%
In 2002, revenue from the Group’s two core markets (the UK and
Germany) represented 63% of total Group revenue (2001: 66%).
Significant growth was recorded in Italy (up 35%) and in the
Netherlands from a small base (up 190%). Revenue in France grew 7%
to €34.5m supported in particular by strong growth in Allasso France.
UK 44%
Netherlands 2% Switzerland 3%
USA 5%
Spain 5%
Italy 6%
Germany 19%
Revenue Distribution 2002 2001
France 16%
€ m % € m %
Technical support contracts 60.6 28.8 44.4 20.2
Training 4.4 2.1 6.4 2.9
Implementation, integration and services 10.4 4.9 11.4 5.2
Managed Security Services 7.6 3.6 4.6 2.1
Total services revenue 83.0 39.4 66.8 30.4
Security product technology 127.5 60.6 153.4 69.6
Total Revenue 210.5 100.0 220.2 100.0

Gross margins and operating costs
The Group’s full year margin was 35.9%, compared with 38.3% in
2001, as a result of continued margin pressure on product sales.
Additionally, the weak economic climate led to the reluctance of large
industry customers to invest in IT capital projects, which also
affected high margin training and professional services revenues.
Gross margin progression
37.2% 36.2% 36.8%
21.0
Q4 01
19.4 18.9
35.5% 35.2%
17.9
19.4
Q1 02 Q2 02 Q3 02 Q4 02
Gross Margin % Gross Margin € m
Employee costs
The Group’s restructuring programme was starting to show some
return in Q4, with employee costs reduced to 20.8% of revenues,
compared with 22.4% in Q3 and 24.3% in Q2. Full year employee
costs of €47.6m represented 22.6% of sales.
Development of workforce
22.1% 22.9% 24.3% 22.4% 20.8%
12.5
Q4 01
12.3
12.5
Q1 02 Q2 02 Q3 02 Q4 02
Employee Costs in € m
Employee Costs/Revenue
11.3
11.5
645 651 650 637 569
Employee numbers
Employee Numbers
The average number of employees in the reporting year was 638. At
the end of the year, the Group had 569 employees, in eight countries.
Split of employees Dec 2002 Dec 2001
Integralis 322 377
Allasso 213 214
Corporate 34 54
Total 569 645
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Exceptional items and provisions, net results
Articon-Integralis delivered positive EBITDA in Q4 of €1.2m, after
two negative quarters. However, the cost of restructuring during
2002 meant the Group incurred exceptional charges for the full year
totalling €5.2m.
Total depreciation and amortisation for 2002 was €29.6m, including
an exceptional amortisation charge of €19.2m. The Group has
undertaken a fair value review of its remaining investments and
considers there to be no further impairment to their carrying value.
The net loss for FY 2002 was €35.5m, compared to a net loss of
€11.6m in 2001. Losses per share under IFRS for 2002 were €3.45,
as compared to a loss of €1.13 for FY 2001.
Assets and financial position
At 31 December 2002, Shareholders’ Equity stood at €35.4m (2001:
€70.7m). Deferred revenues, which will be recognised over the next
12 months, were €36.2m (€31.7m at 31 December 2001) and the
order backlog was €14.6m at the year-end (€15.0m at prior year
end). The increase in deferred income reflects the Group’s success in
selling MSS and technical support contracts.
Debtor management and better control on
cash and working capital
During the year, gross cash increased from €18.3m to €23.6m due
to a significant reduction in debtor days. The Group took out a
Confidential Invoice Discounting facility in Q2, with Eurofactor (UK)
Limited and drew down €5.9m of debt factoring funds from this
facility. Net cash for the year decreased by €0.7m to €17.6m. Cash
inflow from improvements in working capital amounted to €8.4m in
the year. Cash outflows during the year were principally related to the
restructuring (€3.9m), commitments arising in 2001 for the
Foundstone investment (€1.7m) and capital expenditure (€3.0m).
Working Capital at year-end totalled €8.9m.
14
Research and development
Our research and development activities are focussed on services
within the MSS business of Integralis. Total R&D costs in the financial
year 2002 were €1.2m.
Risks for future development
■ Employee motivation
The Group has some of the best people in the industry and recognises
the importance of its people to the success of the business. It has
undertaken a number of initiatives in order to retain and motivate
employees such as an investment in a performance management
system and the issuance of stock options. Additionally, an assessment
has been made of training requirements to ensure the necessary
skills exist for the future growth of the organisation.
Throughout the year, a big effort was put into improving
communications, especially in light of the restructuring programme.
This included the introduction of regular communications from the
Management Board which were transmitted by webcast simultaneously
around the world; the introduction of a Group newsletter – AI-Way,
and a strategy roadshow, hosted by the Management Board.
■ Weak IT-security sector
The downturn in the IT-security industry continued in 2002 as we
expected, and is likely to continue throughout the first half of 2003.
Despite the extremely difficult market conditions, the Group’s total
revenues were only marginally down from the previous year, which
supports the difficult decisions made throughout 2002. The business
has been reorganised for growth in this flat market, but if the market
were to take a further downturn, then we would have to look at the
cost base again.

■ Foreign exchange risks
The Group is exposed to foreign currency risk from transactions
denominated in currencies other than the Euro. The principal currencies
giving rise to this risk are US dollars and pound Sterling. In order to
manage this foreign exchange exposure, the Group uses a variety
of hedging instruments and techniques, depending on specific
market conditions.
■ Purchase and credit risks
A significant part of the business activity of the Group is based on the
resale of security products purchased from external suppliers. Their
changing terms, conditions and discounts have a direct influence on the
business success of the Group. In order to minimise the effects of such
risks, the Group maintains good relations with all important product
suppliers and has long-term partnership agreements with them.
To counter the risk of bad debt, the Allasso Group introduced credit
insurance in the second half of 2001. It is also Group policy to ensure
that credit checks are made on all new customers. As a result, in the
financial year 2002 this led to an improvement both in cash flow and
a reduction in bad debts with outstanding debtors decreasing by
€11.3m, from €51.0m to €39.7m at 31 December 2002.
■ Pressure on product margins
The Group expects to see continued downward pressure on product
margins as products mature and competitive pressures increase. To
offset this risk, the Group intends to increase the proportion of total
revenue from higher-margin services and new product technologies
in its portfolio and by continuing to seek efficiency gains.
Events after the balance sheet date
On 10 April 2003 it was announced that the Group had entered into
an agreement with InTechnology Plc to sell the Allasso division.
InTechnology Plc are experts in data storage, data management and
the protection of business critical information. The proposed sale has
the approval of the Articon-Integralis Management and Supervisory
Boards and approval is being sought from the shareholders of
Articon-Integralis AG at the Annual General Meeting on 23 June 2003.
The transaction follows the Articon-Integralis Group strategy
throughout 2002 to make the two operating businesses, Integralis
and Allasso, more autonomous. The proposed sale of Allasso which
is expected to be completed by the end of July, will increase the
financial reserves of the Group enabling it to focus on becoming the
market leading security systems integrator.
Under the terms of the agreement Articon-Integralis will receive
€25m upon completion with a further maximum €3.8m deferred
consideration payable within two years of completion, dependent on
Integralis achieving a certain level of purchases from Allasso.
Outlook
In at least the first half of 2003 we expect markets to remain very
challenging and are unlikely to see growth. This could easily be the
case throughout 2003. We will continue to monitor our cost base to
ensure that this is kept in line with revenues with the objective of
achieving profitability in 2003.
With the proposed sale of Allasso, the Group will be able to focus
exclusively on the continued recovery of the Integralis business.
Having merged the Activis business into Integralis and reduced costs
from the corporate centre, the restructuring measures are already
starting to take effect, as seen with the increased revenue in Q4. The
Group believes that its mix of revenue in products and services
combined with its new structure puts it at a competitive advantage in
a difficult market.
Additionally, the Group believes that its superior technical expertise,
support and service delivery operations ideally position it for future
growth, through increased market share.
Ismaning, 10 April 2003
The Management Board
15

Auditor’s Opinion
We have audited the consolidated financial statements, comprising
the balance sheet, the income statement and the statements of
changes in shareholders’ equity and cash flows as well as the notes
to the financial statements prepared by Articon-Integralis AG, Ismaning,
for the business year from January 1 to December 31, 2002. The
preparation and the content of the consolidated financial statements
in accordance with International Financial Reporting Standards (IFRS)
are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements
based on our audit.
We conducted our audit of the consolidated financial statements in
accordance with German auditing regulations and German generally
accepted standards for the audit of financial statements promulgated
by the Institut der Wirtschaftsprüfer (IDW). Those standards require
that we plan and perform the audit such that it can be assessed with
reasonable assurance whether the consolidated financial statements
are free of material misstatements. Knowledge of the business
activities and the economic and legal environment of the Group and
evaluations of possible misstatements are taken into account in the
determination of audit procedures. The evidence supporting the
amounts and disclosures in the consolidated financial statements are
examined on a test basis within the framework of the audit. The audit
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe
that our audit provides a reasonable basis for our opinion.
16
In our opinion, the consolidated financial statements give a true and
fair view of the net assets, financial position, results of operations and
cash flows of the Group for the business year in accordance with
International Financial Reporting Standards.
Our audit, which also extends to the Group Management Report
prepared by the Company’s management for the business year from
January 1 to December 31, 2002, has not led to any reservations. In
our opinion on the whole the Group Management Report provides a
suitable understanding of the Group’s position and suitably presents
the risks of future development. In addition, we confirm that the
consolidated financial statements and the Group Management
Report for the business year from January 1 to December 31, 2002
satisfy the conditions required for the Company’s exemption from its
duty to prepare consolidated financial statements and the Group
Management Report in accordance with German law.
Munich, 14 April 2003
KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Maurer Rahn
Wirtschaftsprüfer Wirtschaftsprüfer

Consolidated Balance Sheet (IFRS) at 31.12.2002
Assets
A CURRENT ASSETS
31.12.2002 31.12.2001
Note No. € k € k
I Cash and cash equivalents 6.2 23,582 18,320
II Trade accounts receivable 4.1, 4.5 39,666 51,090
III Inventories 4.2 4,560 9,763
IV Prepaid expenses and other current assets 4.1 25,058 21,995
Total Current Assets 92,866 101,168
B FIXED ASSETS
I Property, plant & equipment 4.3 10,148 12,340
II Intangible assets 4.3 248 1,155
III Financial assets 4.3, 4.4 2,918 2,888
IV Goodwill 4.3 14,682 37,437
Total Fixed Assets 27,996 53,820
C DEFERRED TAXES 5.7 465 135
TOTAL ASSETS 121,327 155,123
Liabilities and Shareholders’ Equity
A CURRENT LIABILITIES
31.12.2002 31.12.2001
Note No. € k € k
I Current portion of capital lease obligations 7.5 73 68
II Short term debt and current portion of long-term debt 4.5 6,212 303
III Trade accounts payable 22,199 20,295
IV Advance payments received 4 108
V Accrued expenses 4.6 12,931 22,833
VI Deferred revenues 36,194 31,723
VII Income tax payable 5.7 966 –
VIII Other current liabilities 5,414 7,273
Total Current Liabilities 83,993 82,603
B NON CURRENT LIABILITIES
I Capital lease obligations less current portion 7.5 1,849 1,808
II Long-term debt less current portion 51 9
Total Non Current Liabilities 1,900 1,817
C SHAREHOLDERS’ EQUITY
I Subscribed Capital 10,280 10,276
II Capital Reserve 19,829 86,908
III Accumulated surplus/(deficit) brought forward 40,821 -14,874
IV Result for the period -35,496 -11,607
Total Shareholders’ Equity 4.7 35,434 70,703
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY 121,327 155,123
17

Consolidated Profit and Loss Statement (IFRS)
for the period from 01.01.2002 – 31.12.2002
18
Note No.
1 Revenue 5.2
2 Cost of materials 5.3
Gross Profit
3 Personnel expenses 5.5
4 Other operating expenses 5.3, 5.4
EBITDA pre-exceptionals
5 Exceptional items 5.6
EBITDA
6 Depreciation and amortisation
7 Impairment loss
Operating profit / (loss)
8 Other interest and similar income
9 Writedown of financial asset
10 Interest and similar expense 5.8
Result before income taxes
11 Taxes on income 5.7
Net profit / (loss)
Net loss per share (basic & diluted) in Euro 5.9
Weighted average shares outstanding (basic & diluted)

01.01-31.12.2002 01.01-31.12.2001
Continuing Discontinuing Total Continuing Discontinuing Total
Operations Operations Consolidated Operations Operations Consolidated
€ k € k € k € k € k € k
93,660 116,876 210,536 106,750 113,491 220,241
53,360 81,550 134,910 60,056 75,791 135,847
40,300 35,326 75,626 46,694 37,700 84,394
33,480 14,087 47,567 34,832 15,174 50,006
17,609 9,939 27,548 18,362 11,910 30,272
-10,789 11,300 511 -6,500 10,616 4,116
4,358 847 5,205 2,648 2,388 5,036
-15,147 10,453 -4,694 -9,148 8,228 -920
5,885 4,497 10,382 5,208 3,239 8,447
12,403 6,823 19,226 – – –
-33,435 -867 -34,302 -14,356 4,989 -9,367
338 142 480 949 187 1,136
– – – 2,229 – 2,229
210 189 399 704 109 813
-33,307 -914 -34,221 -16,340 5,067 -11,273
-324 1,599 1,275 -601 935 334
-32,983 -2,513 -35,496 -15,739 4,132 -11,607
-3.45 -1.13
10,280,214 10,233,904
19

Consolidated Cash Flow Statement (IFRS)
20
Net Cash provided from/used for operating activities
Profit/Loss for the period before tax and extraordinary items
+ Depreciation of tangible fixed assets and amortisation of intangible assets
+ Amortisation of goodwill
+ (Profit)/loss on disposal of fixed assets
+ Write down of financial asset
+ Write down of trade receivables
- Interest income
+ Interest expenditure and similar expense
Operating result before changes to net working capital
(Increase)/ decrease in trade accounts receivable
(Increase)/ decrease in inventories
(Increase)/ decrease in prepayments and other assets
Net movement in inter segment trading balances
Increase/ (decrease) in short-term accruals
Increase/ (decrease) in trade accounts payable and other liabilities
Increase/ (decrease) in deferred revenues
Cash generated by operating activities
+ Taxes received
- Taxes paid
+ Interest received
- Interest paid
Net cash provided from operating activities
Net cash provided from/used for investment activities
- Cash outflow for investments in tangible & intangible fixed assets
+ Cash inflow from disposal of fixed assets
- Cash outflow for acquisitions
- Cash outflow for investments in financial assets
+ Net cash assets acquired
- Net cash assets disposed
+ Reduction in purchase price paid for Integralis
+/- Inter segmental dividends
Net cash provided from/used for investment activities
Net cash provided from/used for financing activities
+ Raising of loans
- Loan repayments
- Cash outflow for purchase of own shares
+ Cash inflow from financial leasing arrangements
- Cash outflow for financial leasing arrangements
+/- Net movement on inter segment loans
Net cash provided from/used for financing activities
Unrealised exchange gains and losses
Net increase/decrease in cash and cash substitutes
Cash and cash equivalents at start of reporting period
Cash and cash equivalents at end of reporting period
Further information on the cashflow may be found in Note 6 of the Notes to the consolidated financial statements

01.01-31.12.2002 01.01-31.12.2001
Continuing Discontinuing Total Continuing Discontinuing Total
Operations Operations Consolidated Operations Operations Consolidated
€ k € k € k € k € k € k
-33,307 -914 -34,221 -16,340 5,067 -11,273
4,174 2,720 6,894 3,409 829 4,238
14,114 8,600 22,714 1,799 2,410 4,209
-14 99 85 – – –
– – – 2,229 – 2,229
– – – – 1,973 1,973
-338 -142 -480 -949 -187 -1,136
210 189 399 704 109 813
-15,161 10,552 -4,609 -9,148 10,201 1,053
5,375 5,147 10,522 1,303 -8,978 -7,675
-129 3,586 3,457 1,603 -3,236 -1,633
-106 -4,498 -4,604 -2,981 -5,136 -8,117
3,271 -3,271 – 2,754 -2,754 –
-839 -6,345 -7,184 -3,641 12,102 8,461
-2,024 2,583 559 -2,526 -3,800 -6,326
1,333 4,271 5,604 6,267 7,514 13,781
-8,280 12,025 3,745 -6,369 5,913 -456
919 402 1,321 – – –
-454 -805 -1,259 -2,492 -2,079 -4,571
338 142 480 949 187 1,136
-248 -189 -437 -350 -109 -459
-7,725 11,575 3,850 -8,262 3,912 -4,350
-2,608 -402 -3,010 -8,086 -925 -9,011
50 65 115 – – –
-161 – -161 -3,940 -4,941 -8,881
-1,714 – -1,714 -3,433 – -3,433
– – – 303 – 303
– – – -10 – -10
– – – 143 – 143
1,228 -1,228 – 7,775 -7,775 –
-3,205 -1,565 -4,770 -7,248 -13,641 -20,889
3,067 3,029 6,096 106 155 261
-121 -24 -145 -14 -191 -205
– – – -323 – -323
97 27 124 51 – 51
-82 -12 -94 -70 – -70
4,090 -4,090 – -4,090 4,090 –
7,051 -1,070 5,981 -4,340 4,054 -286
607 -406 201 -139 259 120
-3,272 8,534 5,262 -19,989 -5,416 -25,405
10,595 7,725 18,320 30,584 13,141 43,725
7,323 16,259 23,582 10,595 7,725 18,320
21

Consolidated Statement of Changes in Shareholders’ Equity
Number of shares issued at 31.12.2002
10,280,214 registered shares
22
Subscribed Capital Accumulated
Capital Reserves Profits/Losses Total
€ k € k € k € k
At 01.01.2001 10,188 82,095 -14,874 77,409
Own Shares* -4 -319 – -323
Increase Racer 26.06.2001 48 2,799 – 2,847
Increase Tercom 26.06.2001 11 689 – 700
Increase Abax 02.08.2001 30 1,303 – 1,333
Distribution of own shares to employees 3 – – 3
Reduction in price paid for Integralis – 143 – 143
Currency Differences – 198 – 198
Net loss for the period – – -11,607 -11,607
At 01.01.2002 10,276 86,908 -26,481 70,703
Distribution of own shares to employees 4 -4 – –
Release of capital reserve** – -67,302 67,302 –
Currency differences – 227 – 227
Net loss for the period – – -35,496 -35,496
At 31.12.2002 10,280 19,829 5,325 35,434
* Shares purchased as part of Integralis Centaur minority interest acquisition
** Release of capital reserve in the statutory accounts of Articon-Integralis AG to equalise current year loss and losses brought forward.

Notes to the Consolidated Financial Statements (IFRS)
of Articon-Integralis AG for Financial Year 2002
1 Introduction
Articon-Integralis AG, Ismaning has prepared its consolidated financial
statements under International Financial Reporting Standards (IFRS)
in accordance with § 292a HGB. The Company is therefore exempt
from compiling consolidated financial statements in accordance with
the regulations defined in §§ 290 ff. HGB.
As a Company listed on the ‘Neuer Markt’ in 2002, the Company is
subject to regulations that require financial statements to be prepared
in accordance with one of the internationally recognised standards,
either IFRS or US-GAAP or for the national HGB statement to be
converted to one of these sets of accounting principles. Articon-Integralis
AG prepares its consolidated financial statements in accordance with
International Financial Reporting Standards. In 2003 Articon-Integralis
was accepted onto the Prime Standard (the Neuer Markt replacement)
and will be listed on this exchange from 24 March 2003.
1.1 Application of International Financial Reporting
Standards (IFRS)
Articon-Integralis AG as the holding company of the Group has prepared
consolidated financial statements in line with proper accounting and
valuation principles. The standards of the International Accounting
Standards Board (IASB) valid on the effective balance sheet date,
including the interpretations of the Standing Interpretation Committee
(SIC), were applied.
1.2 Description of the Articon-Integralis Group
Articon-Integralis AG was formed out of the merger between Articon
Information Systems AG and the Integralis Group on 29 February
2000 and is a European market leader in the IT security solutions sector
in terms of both revenue and geographic coverage. At 31 December
2002, the company had 18 offices in Europe and the US and employed
a staff of 569. Articon-Integralis supports companies in setting up
secure communication links and E-commerce transactions over both
private and public networks. Comprehensive security solutions,
consulting, system integrations and also Managed Security Services
are offered under the trading names of Integralis and Allasso.
1.3 Companies included in the consolidation
The consolidated financial statements include the accounts of
Articon-Integralis AG and all of its subsidiaries that are directly or
indirectly controlled (IAS 27.11). The Group includes the following
companies, in which Articon-Integralis AG has a majority interest at
31 December 2002:
Subsidiary Registered Office Capital Share %
Activis Ltd. Reading, U.K. 100
Activis GmbH Ismaning, Germany 100
Activis Inc. Connecticut, USA 100
Allasso GmbH Munich, Germany 100
Allasso Ltd. Reading, U.K. 100
Allasso France SAS (formerly Racer Finance SA) Paris, France 100
Allasso Informatica España, S.A Madrid, Spain 100
Allasso Italia Srl. Milan, Italy 100
Allasso Benelux BV Mierlo, Netherlands 100
Articon U.S. Holdings Inc. Connecticut, USA 100
Articon-Integralis Ltd. Reading, U.K. 100
Articon-Integralis SAS Paris, France 100
Integralis Inc. Connecticut, USA 100
Integralis Ltd. Reading, U.K. 100
Integralis SA Givisiez, Switzerland 100
Integralis EURL Paris, France 100
Integralis GmbH Heilbronn, Germany 100
Nocitra AG Zurich, Switzerland 100
23

During the year, as part of the Group’s restructuring programme, Old
Activis Ltd (Reading, UK) and Integralis Information Security Systems
GmbH (Vienna, Austria) were dissolved. Allasso France SA was
merged into Racer Finance SA and renamed Allasso France SAS
and Abax Partners SAS (Paris, France) was merged into Integralis
EURL (Paris, France).
1.4 Principles of consolidation
The consolidated financial statements are based on financial
statements as at 31 December 2002 and 2001 for the incorporated
companies prepared according to uniform principles of accounting
and valuation, audited or reviewed by external auditors.
Articon-Integralis Ltd., Reading, and its subsidiaries were included in
the consolidated financial statements from 1 January 2000 using the
Uniting-of-Interest method. In consolidating the investment in
subsidiaries, the differences between the amount recorded as share
capital issued plus additional cash consideration and the amount
recorded for the share capital acquired were adjusted against equity.
For the other incorporated subsidiaries, the consolidation was
carried out using acquisition accounting. In line with IAS 22, assets
were accounted for using valuations at the time of the acquisitions.
The difference between the aggregate purchase price of the
subsidiary and the fair value of the net assets acquired is capitalised
as goodwill and amortised in accordance with IAS 22.
The effects of intercompany transactions between consolidated
companies are eliminated in the consolidated financial statements.
1.5 Foreign currency translation
The individual balance sheets of the consolidated companies show
monetary assets and liabilities in foreign currency in accordance with
IAS 21 at the rate valid on the balance sheet date. Currency
differences arising from the conversion of monetary items were
recognised as income or expense during the period. Goodwill of the
acquired companies was converted at the rate of exchange on the
effective date. The balance sheets of foreign subsidiaries were
translated at closing rates and the profit and loss accounts at
average rates for the period.
24
2. Accounting policies
2.1 Property, plant & equipment
Property, plant and equipment is recorded at acquisition cost less
depreciation, calculated on a straight-line basis. Exceptional
depreciation is charged where a decline in value other than temporary
is anticipated. Gains and losses resulting from disposals are
accounted for as other income or expense. Maintenance expenditure
is considered as expenditure for the period. The estimated useful life
ranges are principally between 1 and 10 years. Low value assets are
fully depreciated in the year which purchase took place.
2.2 Intangible assets
Intangible assets comprise software and associated licences and
capitalised development costs. Acquired intangible assets are
recorded at acquisition cost. Software and licences are subject to
straight-line depreciation over their expected useful lives of three to
four years. Exceptional depreciation is charged where a decline in
value other than temporary is anticipated.
Development costs capitalised in accordance with IAS 38 are
depreciated over a 3-year period.
2.3 Financial assets
Financial assets are valued at fair value. Where the financial assets
are not traded in an active market, fair value is deemed to be the
purchase cost less any provisions for impairment.
2.4 Goodwill
Given the long-term strategic significance of the investments,
goodwill is subject to straight-line amortisation over a 10-year period.
The amortisation of goodwill is included in the “depreciation and
amortisation” line item in the profit and loss account.
The carrying value of the Group’s assets is reviewed whenever there
is an indication that impairment may exist. If such an indication
exists, the asset’s recoverable amount is estimated. An impairment
loss is recognised whenever the carrying value of an asset or its
cash-generating unit exceeds its recoverable amount. Impairment
losses are separately recognised in the profit and loss account.

2.5 Inventories
Inventories are valued at acquisition cost. Inventories are stated net
of provisions for slow-moving and obsolete items. The cost of goods
or services for specific projects is assigned by using specific
identification of their individual costs. The cost of other inventories is
assigned by using the first-in first-out (‘FIFO’) cost formula.
2.6 Receivables and other assets
Receivables and other assets are valued at their nominal value, less
allowances based on the specific interest and credit risk. Trade
receivables do not include receivables due after more than one year.
2.7 Cash and cash equivalents
For the purposes of the cash flow statement as defined by IAS 7, all
liquid assets with an original maturity date of up to three months are
treated as cash or cash equivalents. This line item consists of bank
balances, cheques, cash-on-hand and shares in money market funds.
2.8 Prepaid expenses
Prepaid expenses principally include payments to suppliers relating
to technical support contracts. Prepayments are expensed over the
remaining duration of the contracts.
2.9 Shareholders’ equity
The composition and movements in equity are shown in the
Consolidated Statement of Changes in Shareholders’ Equity and
where applicable in the notes to the balance sheet.
2.10 Accrued expenses
Accruals account for all identifiable obligations in respect of third
parties in accordance with IAS 37 and are recorded at their most
probable amounts.
2.11 Liabilities
Liabilities are valued at the fulfilment and/or repayment amount.
2.12 Deferred income
Deferred income represents income received from customers in
respect of technical support contracts, which will be deferred over
the remaining duration of the contracts.
2.13 Revenue recognition
Revenue from sales is recognised in the income statement when
goods are shipped or services are provided and the significant risks
and rewards of ownership have been transferred to the buyer.
Revenue from technical support contracts is recognised in the
income statement on a straight-line basis over the duration of the
contract. No revenue is recognised if there are significant
uncertainties regarding recovery of the consideration due, associated
costs or the possible return of goods.
2.14 Leasing contracts
Rentals from operating lease contracts are expensed in the profit and
loss account. Assets acquired under finance lease arrangements are
capitalised on the balance sheet in accordance with IAS 17 and
depreciated over their useful life.
2.15 Income taxes
Taxes are calculated in accordance with the tax conditions prevailing
in the country in which the Company operates. Deferred tax assets
and liabilities are recognised for all temporary differences between
the tax-related valuations and the book values of assets and liabilities
and also for tax-related losses brought forward, where there is
reasonable certainty that a future benefit will arise.
2.16 Derivative financial instruments
The group uses forward exchange contracts and over-the-counter
options to hedge its exposure to foreign exchange risks arising from
operational activities. In accordance with IAS 39, forward exchange
contracts and options are recorded at fair value. The fair value of
forward exchange contracts is the quoted market price at the
balance sheet date, being the current value of the forward quoted
price. The resultant gain or loss is recognised in the income
statement. The fair value of the options is the quoted market price
from the market maker, based on option pricing models including
current market data.
2.17 Borrowing costs
Borrowing costs are expensed in the period in which they are
incurred (IAS 23).
25

3 Details in accordance with § 292a,
subsection II No. 4b HGB
The following significant differences exist between the consolidated
financial statements prepared according to IFRS and the individual
financial statements prepared according to HGB.
3.1 Foreign currency translation
The individual balance sheets of the consolidated companies show
monetary positions in foreign currency in accordance with IAS 21 at
the rate valid on the effective balance sheet date, whilst under HGB,
the “Imparitätsprinzip” is applied. This results in non-realised foreign
exchange gains.
3.2 Deferred taxes
The “Temporary” balance sheet-based concept is applied. According
to this concept, the period over which timing differences may be
recognised as deferred tax assets or liabilities is defined more widely
under IAS 12 (rev 1996) than HGB. In addition, in contrast to HGB,
tax claims on losses carried forward must be recognised as deferred
tax assets, provided that future realisation of such assets is
considered probable.
3.3 Finance leasing
The regulations for the capitalisation of leased assets deviate
between IFRS and HGB. According to IAS 17, assets acquired under
finance lease arrangements are capitalised on the balance sheet and
depreciated, whilst those under HGB are usually capitalised by the
lessor.
3.4 Derivative financial instruments
Under IAS 39, all derivative instruments are measured at fair value
and recognised on the balance sheet. Changes in the fair value of
derivatives that do not meet the criteria for hedge accounting are
recognised in the income statement. Under HGB, unrealised losses
on derivatives are recognised in the income statement while
unrealised gains are not recognised in the financial statements.
26
4. Notes to the Consolidated
Balance Sheet
4.1 Accounts receivable and other assets
Trade accounts receivable are shown net of allowances for doubtful
receivables. Accounts receivable and other assets are receivable
within one year.
4.2 Inventories
Inventories are sub-divided as follows:
31.12.2002 31.12.2001
€ k € k
Finished goods
Less: provision for slow moving
5,066 9,959
and obsolete inventories -506 -196
Total inventories 4,560 9,763
4.3 Fixed assets
Changes in the book value of fixed assets are disclosed in the fixed
asset movement schedule (see Appendix to the Notes). During the
year the Group carried out a fair value review of the goodwill arising
from its investments and other fixed assets resulting in the
recognition of an impairment loss totalling €19,226k in the profit and
loss account.
4.4 Financial assets
Financial assets are analysed as follows:
31.12.2002 31.12.2001
€ k € k
Equity securities 5,147 5,117
Provision for impairment -2,229 -2,229
Fair Value 2,918 2,888
A provision for impairment was made in full against the Telenisus
investment in 2001.

4.5 Short term debt
During the year, the Articon-Integralis Group entered into confidential
invoice discounting agreements with Eurofactor (UK) Ltd with respect
to certain UK trade receivables. The Group retains responsibility for
collecting the receivables as an agent for Eurofactor and holds the
monies on trust prior to remitting them to Eurofactor. In accordance
with IAS 39, the receivables have been recognised in the balance
sheet. The liability resulting from funds received under the
agreements (€5,901k as at 31 December 2002) is presented under
the short-term debt caption in the balance sheet.
The loan from Eurofactor is secured by way of a debenture over all
the existing and future assets of Integralis Limited and Allasso Limited.
The maximum facility available under the agreement is £7,500k
(€11,542k equivalent at 31 December 2002). The assets secured
under the facility amounted to €70,813k at 31 December 2002.
Borrowing costs are expensed in the period in which they are incurred.
4.6 Accrued expenses
Accrued expenses cover uncertain risks and recognisable liabilities.
The balances are analysed as follows:
Deferred
31.12.2001 Additions Utilised Released 31.12.2002
€ k € k € k € k € k
consideration
Accruals for
outstanding
2,001 30 1,875 – 156
invoices
Accruals for
commission
14,644 5,725 14,644 – 5,725
and bonus 836 944 836 – 944
Holiday accruals
Accruals for audit
and preparation
of financial
591 474 591 – 474
statements 387 360 387 – 360
Other accruals 4,374 5,272 4,374 – 5,272
22,833 12,805 22,707 – 12,931
It is expected that all of the expenditure will be incurred in the next
financial year.
4.7 Shareholders’ equity
4.7.1 Subscribed capital, authorised capital
and conditional capital
At 31 December 2002, the subscribed capital totalled €10,280k (31
December 2001: €10,280k of which €4k was held in the Company’s
own name). The movements in the subscribed capital are detailed in
the Consolidated Statement of Changes in Shareholders’ Equity.
At 31 December 2002, the authorised share capital including the
amounts available for future use was categorised as follows:
■ Authorised capital I:
At the Annual General Meeting of Shareholders held on 29 May 2002
a new authorised capital I was created and the previous authorised
capital I was simultaneously cancelled. A resolution was passed
authorising the Management Board, with the approval of the Supervisory
Board, to increase the subscribed capital of the Company either
once or in several stages before 31 May 2005, by €4,900k through
issuing a maximum of 4,900,000 new registered shares in exchange
for cash or a contribution in kind. At 31 December 2002, the balance
of shares remaining for future use was 4,900,000.
■ Authorised capital II:
The Management Board has been authorised, with the approval of
the Supervisory Board, to increase the subscribed capital of the
Company, either once or repeatedly before 31 May 2005, by €100k
through issuing a maximum of 100,000 new registered shares against
cash. At 31 December 2002, the balance of shares remaining for
future use was 100,000.
■ Authorised capital III:
At the Annual General Meeting of Shareholders held on 29 May 2002
a new authorised capital III was created and a resolution passed
authorising the Management Board, with the approval of the
Supervisory Board, to increase the subscribed capital of the
Company either once or repeatedly before 31 May 2005, by €120k
through issuing a maximum of 120,000 new registered shares
against cash. At 31 December 2002, the balance of shares
remaining for future use was 120,000.
27

■ Conditional capital I:
At the Annual General Meeting of Shareholders held on 29 May
2002, the conditional capital I was reduced from €90k to €55k. The
subscribed capital may be increased by €55k through issuing up to
55,000 shares. The conditional capital increase is carried out only in
as far as holders of option rights, which are issued by the Company
on the basis of authorisation from the Annual General Meeting of
Shareholders on 8 June 2000 to 8 June 2004, exercise these rights
(Stock Option Programme I). The new shares are entitled to
dividends for the entire financial year, in which the exercising of the
option right becomes effective. At 31 December 2002, no option
rights relating to this conditional capital had been exercised.
■ Conditional capital II:
At the Annual General Meeting of Shareholders held on 29 May
2002, the conditional capital II was reduced from €860k to €450k.
The subscribed capital may be increased by €450k by issuing up to
450,000 shares. The conditional capital is used to guarantee the
option rights to members of the Board and employees of the
Company and its associated companies and also management of
other organisations associated with the Company (Stock Option
Programme II). The new shares shall participate in the profit of the
Company from the start of the financial year, in which they are
issued. At 31 December 2002 no option rights relating to this
conditional capital had been exercised.
■ Conditional capital III:
At the Annual General Meeting of Shareholders held on 29 May 2002
a new conditional capital III was created. The subscribed capital may
be increased by €520k through issuing up to 520,000 shares. The
conditional capital is used to guarantee the option rights to members
of the Board and employees of the Company and its associated
companies and also management of other organisations associated
with the Company (Stock Option Programme III). The new shares
shall participate in the profit of the Company from the start of the
financial year, in which they are issued. At 31 December 2002 no
option rights relating to this conditional capital had been exercised.
■ Conditional capital IV:
At the Annual General Meeting of Shareholders held on 29 May
2002, the Management Board was authorised, with the approval of
the Supervisory Board, to issue by 29 May 2007, registered
convertible bonds and/or bonds with warrants (hereinafter called
“Bonds”) with a total nominal value of up to €4,000k with a
maximum term of ten years. For this purpose, a new conditional
capital IV was created. The Management Board was also given
28
authority to grant the holders of the Bonds with conversion or option
rights for new shares in the Company with a pro-rata amount of
subscribed capital of up to a total of €4,000k in accordance with the
detailed terms of the convertible bonds or bonds with warrants.
The subscribed capital may be conditionally increased by up to
€4,000k through the issue of a maximum of 4,000,000 no-par
shares. In the case of conversion or option rights being exercised,
the issue price of a share in the Company through the exercise of the
conversion or subscription right shall be based on the average of the
closing Xetra price of the Company shares for the last 20 trading
days prior to the date of the issue of the Bond. The minimum
exercise price shall be the pro-rata amount of subscribed capital
attributable to one share. The new shares shall participate in the
profit from the beginning of the fiscal year in which they are
established following the exercising of conversion or option rights or
fulfilment of conversion obligations. At 31 December 2002 no option
rights relating to this conditional capital had been exercised.
4.7.2 Annual deficit and surplus/(deficit) carried forward
The annual deficit of €35,496k for financial year 2002 shown on the
balance sheet is carried forward.
5. Notes to the consolidated
profit and loss account
5.1 Discontinuing Operations
On 10 April 2003 it was announced that the Articon-Integralis Group
had entered in to an agreement with InTechnology Plc to sell 100%
of the shares in the Allasso group of companies.
Allasso is the Group’s value added distributor of specialist network
and information security products and is Europe’s largest pure play
security distributor.
The sale, which is subject to approval from the shareholders of Articon-
Integralis AG, is anticipated to be completed by July 2003. Under the
terms of the sale and purchase agreement, Articon-Integralis will
receive €25m on completion, with a further maximum €3.8m deferred
consideration payable within two years of completion, dependent on
Integralis achieving a certain level of purchases from Allasso. The net
pre-tax result arising from the disposal of Allasso to be recognised in the
consolidated accounts is estimated to vary between minus €3.3m
and plus €0.5m after deducting anticipated expenses of €3.5m.
The amounts of revenue, expenses and pre-tax profit from the
ordinary activities attributable to the Allasso group of companies are
shown on the face of the consolidated profit and loss statement.
The amounts of net cash flows attributable to the operating, investing
and financing activities of Allasso are shown on the face of the

consolidated cash flow statement. Allasso has operations in six
European countries and its results are reported in each of the primary
geographical segments.
At the balance sheet date, the carrying values of the total assets and
total liabilities (excluding intercompany balances with the Integralis group
of companies) of Allasso were €72,838k and €48,712k respectively.
5.2 Segment reporting
5.2.1 Primary segment reporting
Articon-Integralis AG is organised into four geographic sectors,
Germany, UK, France and “Rest of World”, which are split according
to the location of customers. Goods and services supplied between
sectors for ultimate delivery to end customers are charged at arms
length. The table on primary segment reporting can be found in the
Appendix to the Notes.
5.2.2 Secondary segment reporting
In the secondary segment reporting, revenues are split according to
the Company’s two business segments, Allasso and Integralis.
Following the restructuring in 2002, Activis was incorporated into
Integralis and prior year segment reporting has been restated to
reflect this change. The table is presented in the Appendix to the
Notes.
Allasso is the Group’s security product distribution channel, and
Europe’s largest specialist provider of information security and quality
of service solutions to the channel, with 6 offices in 6 European
countries. Telcos, large-scale integrators, and resellers constitute the
market for these services.
Integralis has 12 branch offices in 5 countries. It offers supplierindependent
integration solutions to more than 1,400 enterprise
clients.
5.3 Exchange gains and losses
Exchange gains and losses of €773k (loss) arising from settling
forward currency contracts and options taken out in 2001 and arising
from the conversion of monetary items are included within cost of
sales and other operating expenses. The losses, which have arisen
from Group treasury activities have been allocated to continuing
Group operations in the segmental analysis on the face of the
consolidated profit and loss account.
5.4 Other operating expenses
Other operating expenses comprise the following:
2002 2001
€ k € k
Recruitment costs 803 1,641
Company cars
Other personnel costs
3,291 3,457
(e.g. training, travel costs etc.) 4,726 5,495
Rent, repairs, maintenance 4,766 4,388
Marketing 3,594 5,582
Legal and consultancy fees 3,178 2,833
Insurance 1,045 744
Finance charges 1,886 1,108
Other operational expenses 4,259 5,024
5.5 Personnel expenses
During the year, wages and salaries totalled €41,298k (2001:
€42,771k). Social security charges were €6,269k (2001: €7,235k),
including pension costs of €230k (2001: €286k).
5.6 Exceptional items
Exceptional items are analysed as follows:
27,548 30,272
2002 2001
€ k € k
Write down of trade receivables – 1,973
Restructuring costs 5,205 3,063
5,205 5,036
29

5.7 Income taxes
Income taxes are accounted for in accordance with IAS 12.
Accordingly, all income taxes, tax liabilities or claims accrued during
the course of the financial year are incorporated into the annual
statement in accordance with the tax laws applicable to the group
companies. Deferred tax assets and liabilities are provided in respect
of timing differences between the tax basis of an asset or liability and
its reported amount in the consolidated financial statements and for
the tax effects of loss carry forwards. Deferred tax liabilities are
calculated using anticipated tax rates for those years in which the
timing differences are expected to reverse.
During 2002 the Company carried on its restructuring programme to
ensure that subsidiaries resident in the same tax jurisdiction can
benefit from group tax relief arrangements. Income taxes are incurred
primarily within the group companies in the UK, Germany, France,
Italy and Spain.
The income tax expense for financial years 2002 and 2001 is
analysed as follows:
30
2002 2001
€ k € k
Current tax expense 1,267 725
Under/(over) provided in prior years 338 -98
Deferred tax (credit)/charge -330 -293
1,275 334
The result before tax is reconciled to the income tax charge as
follows:
2002 2001
€ k € k
Loss before tax
Income tax expense/(credit)
34,221 11,273
using domestic corporation tax rate -13,346 -4,284
Effect of tax rates in foreign jurisdictions 576 -131
Effect of non-deductible business expenses 656 434
Effect of non-deductible goodwill amortisation 8,847 1,599
Effect of tax losses not provided 5,089 2,814
Utilisation of prior year tax losses -885 –
Under/(over) provided in prior years 338 -98
Income tax expense 1,275 334
Deferred tax assets/(liabilities) are made up of timing differences as
follows:
31.12.2002 31.12.2001
€ k € k
Fixed assets 465 137
Accounts receivable – -15
Other provisions – 18
Other assets – -5
5.8 Interest and similar expense
Interest and similar expense is analysed as follows:
465 135
2002 2001
€ k € k
Interest payable
Unrealised exchange losses on
399 459
forward exchange contracts
Provision for negative market
– 171
value of options – 183
399 813

5.9 Earnings per share
Earnings per share (“Basic Earnings per share”) in accordance with
IAS 33 are derived by dividing the consolidated Group result after
taxes by the average number of shares outstanding during the year.
The average number of shares for the financial year amounted to
10,280,214 (2001: 10,233,904).
Losses per share in accordance with IAS 33 as per 31 December
2002 amounted to €3.45 (2001: €1.13).
6. Notes to the consolidated
cash flow statement
6.1 Introduction
The cash flow statement has been prepared using the indirect
method as allowed under IAS 7, excluding the effects of investing
and financing transactions which did not require the use of cash or
cash equivalents.
Cash and cash equivalents comprise cash in hand, bank balances,
short-term deposits and current marketable securities but exclude
bank overdrafts.
6.2 Restrictions
Included in cash is an amount of €361k representing cash held by
banks as security for rental obligations.
7. Other disclosures
7.1 Financial instruments
Exposure to credit and currency risk arises in the normal course of
the Group’s business. Derivative financial instruments are used to
reduce exposure to fluctuations in foreign exchange rates. While
these are subject to the risk of market rates changing subsequent to
acquisition, such changes are generally offset by opposite effects of
the items being hedged.
7.2 Foreign currency risk
The Group incurs foreign currency risks on sales, purchases and
borrowings that are denominated in a currency other than the Euro.
The principal currencies giving rise to this risk are US dollars and
pound Sterling. The Group uses forward exchange contracts and
options to hedge its foreign currency risk. At the balance sheet date
the Group did not have any foreign currency contracts in place.
The Group neither holds nor issues any derivative financial
instruments for speculative purposes.
7.3 Credit risk
Management has a credit policy in place and the exposure to credit
risk is monitored on an ongoing basis with credit evaluations being
performed as appropriate. In 2001, credit insurance was introduced
to cover the majority of business in the Allasso group.
At the balance sheet date there were no significant concentrations of
credit risk that have not been provided for. The maximum exposure
to credit risk is represented by the carrying amount of each financial
asset in the balance sheet.
7.4 Stock option programme
The Articon-Integralis Group has implemented stock option
programmes with a view to management and employees
participating in the success of the company:
7.4.1 Stock option programme I (“SOP I”)
Under stock option programme I, approved at the Annual General
Meeting of Shareholders on 8 June 1999, a total of 24,500 options
were held by employees of the Articon-Integralis Group at 31
December 2002. Options may only be exercised during a period of
up to four weeks within a three-month time frame following the
Annual General Meeting of Shareholders of Articon Integralis AG, at
which the financial statements for year-ending 31 December 2002
are presented. As of 31 December 2002, the value of each option
amounted to €0.00, based on the Xetra stock price for Articon-
Integralis shares of €1.30 on 30 December 2002 and a Neuer Markt
index of 358.79 on the same day. The value of each option is derived
as the difference between the value trend for Articon-Integralis shares
and the trend for the Neuer Markt index based on the two reference
periods of 20 days, each following the granting and preceding the
exercising of the option.
31

The stock options from the first programme are sub-divided on the
effective balance sheet date as follows:
7.4.2 Stock option programme II (“SOP II”)
The second employee stock option programme was approved at the
Annual General Meeting of Shareholders on 8 June 2000. As at the
balance sheet date, employees and management held 321,140
options. The stock options may be exercised in 3 parts: 50% after 2
years (Tranche I), 20% after 3 years (Tranche II) and 30% after 4
years (Tranche III). Options may be exercised within a 3-month period
(“exercise window”) following the end of the vesting period of each
Tranche. To exercise an option, the stock market price (Xetra rate) for
Articon-Integralis shares must exceed the grant price on at least one
trading day within the exercise window by 10% for Tranche I, 15%
for Tranche II and 20% for Tranche III.
32
Quantity
Outstanding options at 1.1.2002 52,340
Offered options in 2002 –
Exercised options –
Lapsed options 27,840
Outstanding options at 31.12.2002 24,500
The outstanding options are sub-divided as follows:
Quantity
Board and Managing Directors of subsidiaries 3,600
Employees 20,900
24,500
In October 2001, Articon-Integralis offered its employees the
opportunity to exchange the options granted under SOP II in
September 2000 and March 2001 (Issue 1 and Issue 2) with new
options, which have a new granting date and granting price. As of 31
December 2002, the value of an option, based on the Xetra key rate
on 30th December 2002 of €1.30, was €0.00 for all Tranches.
The stock options from the second programme as at 31 December
2002 are sub-divided as follows:
Quantity
Outstanding options at 1.1.2002 420,475
Accepted options –
Exercised options –
Lapsed options 99,335
Outstanding options at 31.12.2002 321,140
The outstanding options are sub-divided as follows:
Quantity
Board and Managing Directors of subsidiaries 72,400
Employees 248,740
321,140

7.4.3 Stock option programme III (“SOP III”)
The third employee stock option programme was approved at the
Annual General Meeting of Shareholders on 29 May 2002. At the
balance sheet date, the employees and management held 267,375
options. The period of time to tender stock options had not expired
at the balance sheet date. After a waiting period, as defined in the
stock option programme, the stock options can be exercised in 3
parts within a 3-month period. The issue price shall be based on the
average of the closing Xetra price of the Company’s shares for the
last 20 trading days prior to the issue date, but no less than the prorata
amount of capital stock attributable to one share. As of 31
December 2002, the value of an option, based on the Xetra key rate
on 30th December 2002 of €1.30, was €0.00 for all Tranches.
The share options from the third programme as at 31 December
2002 are sub-divided as follows:
Quantity
Outstanding options at 1.1.2002 –
Accepted options 267,375
Exercised options –
Lapsed options –
Outstanding options at 31.12.2002 267,375
The outstanding options are sub-divided as follows:
Quantity
Board and Managing Directors of subsidiaries 247,500
Employees 19,875
267,375
7.4.4 Options granted to the Management Board
The Supervisory Board granted 190,000 options from stock option
programme III to the Management Board. The options can be
exercised from October 2004 onwards.
7.5 Financial obligations, potential liabilities
and contingencies
Finance lease agreements comprise principally leased land and two
buildings for which purchase options exist in 2010 and 2017
respectively. In accordance with IAS 17 the assets are capitalised at
their fair value. The depreciation rate is 4%. The interest expense
associated with the finance lease contracts amounted to €117k
(interest rate: 6.17%). The net book value of assets held under finance
leases amounted to €1,765k (€1,804k at 31 December 2001).
The operating leases comprise contracts for the leasing of office
buildings and company vehicles. The leasing and/or rental
expenditure for financial year 2002 and 2001 was €4,883k and
€4,876k respectively.
Future lease payments at 31 December 2002 over the appropriate
terms amount to:
Term Operating Leases Finance Leases
€ k € k
Up to 1 year 4,072 73
Between 1 and 5 years 9,136 338
Over 5 years 18,196 1,511
31,404 1,922
33

The Group is defending a claim in respect of an acquisition by the
Group in 1999. While liability is not admitted, if defence against the
claim is unsuccessful, settlement and legal costs will be incurred.
Based on legal advice, the Directors do not expect the claim will
have a material effect on the Group’s financial position.
The Group has in place guarantees in favour of banks totalling
€466k as security for rental obligations. Furthermore, the Company’s
UK subsidiaries, Allasso Limited and Integralis Limited have in place
guarantees in favour of HM Customs and Excise amounting to
€931k to cover duty payments on importation of stock.
7.6 Income tax losses
The Group has not recognised deferred tax assets on tax losses
incurred in certain jurisdictions due to the uncertainty of being able to
utilise these losses.
The unrecognised income tax losses are analysed in terms of expiry
date as follows:
Expiry 31.12.2002 31.12.2001
34
€ k € k
Up to 1 year 454 –
Between 1 and 5 years 5,410 3,518
Between 6 and 20 years 6,111 3,616
No expiry date 32,575 24,320
44,550 31,454
7.7 Employees
The average number of employees during the reporting year was 638
(2001: 681), categorised as follows:
2002 2001
Sales and marketing 233 251
Technical 267 270
Administration & management 138 160
638 681
7.8 Pension contributions for employees
The Company’s UK subsidiaries operate a defined contribution
pension scheme. All employees within the UK have the option to join
the scheme and the company pays a fixed percentage of their basic
salary into a pension fund in the employee’s name. The Group’s
liability is restricted to the fixed percentage contribution and no
further obligation exists for the Group. There are no pension liabilities
included in the balance sheet. The expense recognised during the
year in the profit and loss account amounts to €230k (2001: €286k).
There were no other pension programmes in place for employees
elsewhere in the Articon-Integralis Group.
7.9 Related party transactions
“Related parties” within the sense of IAS 24 include the Management
Board and the Supervisory Board of Articon-Integralis AG, as well as
major shareholders.
Management Board members are awarded annual remuneration with
both a fixed and a variable element. During the reporting year, the
total remuneration received by the Management Board amounted to
€2,299k (2001: €1,176k). Supervisory Board Members were
reimbursed with expenses of €49k (2001: €52k).

The number of Articon-Integralis shares held by the Management
Board, Supervisory Board and Managing Directors of subsidiaries on
the effective balance sheet date is as follows:
Name No. of shares % of nominal capital
Mark Silver 5,000 0.05
Philippe Dambrine 4,570 0.04
Total for Management Board 9,570 0.09
Arnd Wolpers 443,069 4.31
Jochen Tschunke – –
James Sanger 682 0.01
Total for Supervisory Board
Total for Managing Directors
443,751 4.32
of subsidiaries 125,649 1.22
578,970 5.63
In addition to their activities for the Supervisory Board, James Sanger
and Martyn Webster provided consultancy services to the
Management Board of Articon-Integralis AG, for which they received
remuneration of €40k and €23k respectively plus travel expenses
during financial year 2002.
7.10 Corporate board structure
During the past financial year, Management Board Members included:
■ Mark Silver (Chairman), Richmond, Surrey, UK
■ Ian Calcutt, Harwell, Oxfordshire, UK (to 31 December 2002)
■ Daniel Collins, Finchampstead, Berkshire, UK (to 30 June 2002)
■ Günter Fuhrmann, Neufraunhofen, Germany (to 31 December 2002)
■ Philippe Dambrine, Le Chasney, France (from 12 February 2002)
During the past financial year, Supervisory Board Members included:
■ Arnd Wolpers (Chaiman), Businessman in Münsing/Ammerland,
Germany
■ James Gerald Sanger, Businessman in Oxfordshire, United Kingdom
■ Prof. Dr. Jochen Tschunke, Professor in Munich, Germany (from
12 September 2002)
■ Dr. Petra Wibbe, Lawyer in Munich, Germany (to 10 July 2002)
■ Klaus Gansser, Consultant in Starnberg (to 10 July 2002)
■ Martyn Webster, Businessman in Berkshire, UK (to 26 July 2002)
7.11 Declaration on compliance with the German
Corporate Governance Codex
The Management and the Supervisory Board have declared
compliance with the Corporate Governance Codex as required by §
161 of the Companies Act. The content of this declaration has been
made permanently available to the shareholders on the Internet page
of the Company under http://www.articon-integralis.de/investor_
relations_de/corporate_governance
7.12 Domicile, address
Articon-Integralis AG is a public limited company based in 85737
Ismaning, Gutenbergstraße 1, Germany. The company is registered
with the Registry Court in Munich under HRB No. 121 349.
Ismaning, 10 April 2003
The Management Board
35

Group Fixed Asset Movements for the year ended 31 December 2002
I. PROPERTY, PLANT & EQUIPMENT
36
Costs of Acquisition or Production
Situation
01.01.2002 Additions Disposals Transfers
€ k € k € k € k
1. Property and leasehold rights including buildings on non-owned land 2,104 26 – -187
2. Other equipment, fixtures, fittings and equipment* 19,173 4,416 -857 -172
II. INTANGIBLE ASSETS
21,277 4,442 -857 -359
1. Industrial property right and similar rights and licences to such rights 2,003 61 -51 83
2. Self developed intangible assets 332 – – –
III. FINANCIAL ASSETS
2,335 61 -51 83
1. Equity securities 5,117 30 – –
IV. GOODWILL
5,117 30 – –
1. Goodwill** 45,376 5 – –
45,376 5 – –
74,105 4,538 -908 -276
* Property plant & equipment additions include €1,493k of demonstration equipment reclassified from stock. Demonstration equipment will
be treated as fixed assets going forward and will be depreciated over a period of 1 year.
** The Goodwill amortisation charge for the period of €22,714k includes an impairment loss of €19,226k arising from a review of the carrying
value of the Group’s investments which was completed in Quarter 3 2002 and which represents the difference between the book value and
the estimated value in use.

Accumulated Depreciation and Amortisation
Currency Situation Situation Charge for Currency Situation Book value Book value
Conversion 31.12.2002 01.01.2002 the year Disposals Transfers Conversion 31.12.2002 31.12.2002 31.12.2001
€ k € k € k € k € k € k € k € k € k € k
– 1,943 251 114 – -187 – 178 1,765 1,853
-764 21,796 8,786 5,852 -694 -172 -359 13,413 8,383 10,487
-764 23,739 9,037 5,966 -694 -359 -359 13,591 10,148 12,340
-10 2,086 905 845 -14 83 19 1,838 248 1,072
– 332 249 83 – – – 332 – 83
-10 2,418 1,154 928 -14 83 19 2,170 248 1,155
– 5,147 2,229 – – – – 2,229 2,918 2,888
– 5,147 2,229 – – – – 2,229 2,918 2,888
-105 45,276 7,916 22,714 – – -36 30,594 14,682 37,437
-105 45,276 7,916 22,714 – – -36 30,594 14,682 37,437
-879 76,580 20,336 29,608 -708 -276 -376 48,584 27,996 53,820
37

Segment Reporting of Articon-Integralis AG, Ismaning
PRIMARY SEGMENT
38
Germany UK
2002 2001 2002 2001
€ k € k € k € k
External revenue 39,439 46,637 92,894 98,604
Revenue between segments 473 1,157 19,904 16,781
Segment revenue 39,912 47,794 112,798 115,385
Segment gross profit 15,929 19,298 37,261 40,930
Personnel expenses 11,329 12,910 22,480 22,117
Other operating expenses 7,383 6,942 11,672 14,737
Segment EBITDA before exceptional items -2,783 -554 3,109 4,076
Exceptional items 1,485 814 3,168 439
EBITDA -4,268 -1,368 -59 3,637
Depreciation and amortisation 1,796 1,202 4,544 2,359
Impairment loss 1,112 – – –
EBIT -7,176 -2,570 -4,603 1,278
Other interest and similar income
Writedown of financial assets
Interest and similar expense
Financial result
Taxes on income
Net consolidated loss for the year
Assets 63,319 84,143 56,597 48,476
Liabilities 19,341 20,477 53,336 48,986
Capital expenditure & investments 655 696 1,926 6,966
SECONDARY SEGMENT
Allasso Integralis
2002 2001 2002 2001
External revenue 116,876 113,491 93,660 106,750
Assets 78,161 88,750 51,266 82,513
Capital expenditure & investments 402 2,817 2,608 15,859

France Rest of World Eliminations Total
2002 2001 2002 2001 2002 2001 2002 2001
€ k € k € k € k € k € k € k € k
34,533 32,213 43,670 42,787 210,536 220,241
414 1,339 1,103 134 -21,894 -19,411 – –
34,947 33,552 44,773 42,921 -21,894 -19,411 210,536 220,241
9,510 10,690 12,926 13,476 – – 75,626 84,394
4,952 6,097 8,806 8,882 – – 47,567 50,006
3,470 3,206 5,023 5,387 – – 27,548 30,272
1,088 1,387 -903 -793 – – 511 4,116
296 3,406 256 377 – – 5,205 5,036
792 -2,019 -1,159 -1,170 – – -4,694 -920
2,888 3,266 1,154 1,620 – – 10,382 8,447
10,358 – 7,756 – – – 19,226 –
-12,454 -5,285 -10,069 -2,790 – – -34,302 -9,367
480 1,136
– 2,229
399 813
-34,221 -11,273
1,275 334
-35,496 -11,607
30,755 41,511 27,072 43,984 -56,416 -62,991 121,327 155,123
48,368 48,065 21,264 29,883 -56,416 -62,991 85,893 84,420
119 4,718 310 6,296 3,010 18,676
Eliminations Total
2002 2001 2002 2001
210,536 220,241
-8,100 -16,140 121,327 155,123
3,010 18,676
39

Report of the Supervisory Board
During the course of the business year under review, the Supervisory
Board performed the duties incumbent upon it in accordance with
the law and the Articles of Incorporation, and monitored and advised
the Company’s management on an ongoing basis. With the help of
written and oral reports submitted by the Management Board, the
Supervisory Board scrutinised the Company’s situation, the compliance
with Corporate Governance principles, its business policy and strategic
planning at a total of eight meetings. All key investment decisions
and all leading decisions were examined and approved by the
Supervisory Board.
The 2002 Annual General Meeting passed a resolution to reduce the
size of the Supervisory Board to only three members. After this
reduction, the cooperation between the Management Board and the
Supervisory Board increased further. In particular, regular and in-depth
discussions regarding the business strategy also took place outside
of the meetings.
The Annual Accounts for the 2002 reporting year, the Consolidated
Accounts and the Management Report on the position of the Company
and the Group have been audited and approved without qualification
by the auditors of KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft, Munich.
Within the framework of their audit, the auditors had to assess whether
the Management Board had complied with legal requirements,
40
in particular whether it had put in place a monitoring and control
system capable of identifying in advance any developments that might
threaten the continued existence of the Company or of the Group.
Furthermore, the Supervisory Board reviewed the Annual Accounts
and the Management Report of Articon-Integralis AG and approved
the findings of the audit by KPMG at a meeting on 28 April 2003.
The Annual Accounts are herewith adopted.
In the course of reducing the size of the Supervisory Board during the
year, Supervisory Board members Dr. Petra Wibbe and Klaus Gansser
renounced their positions ahead of schedule and Martyn Webster
retired. We would like to thank them for their valuable contribution.
According to a resolution taken on 12 September 2002 upon request
of the Management Board and with the support of the remaining
Supervisory Board members, Professor Jochen Tschunke was
appointed by the Amtsgericht Munich as a new member of the
Supervisory Board.
The Supervisory Board would like to thank all employees of
Articon-Integralis AG as well as the members of the Management
Board for their performance and achievements in the year under review.
Arnd Wolpers
Chairman of the Supervisory Board

Management Principles
In order to manage the company for the benefit of our shareholders,
customers, partners and employees we have set ourselves high
standards and tough objectives. These include socially responsible
and environmentally sound business practices, risk management
principles, and the equal treatment of all employees.
Employees
We recognise the importance of our employees – their expertise and
commitment is essential for the quality of our services and our
reputation. Management assigns the highest priority to creating a
work environment where development is actively experienced and
promoted. Individuality and creativity are supported by giving
employees both responsibility and autonomy and we attach great
importance to open communication.
Communication has been even more important recently, especially in
light of the restructuring programme. All employees are kept
informed of news and developments through a monthly newsletter,
AI-Way, as well as through regular communications briefings held by
the Management Board, which are webcast to every office
simultaneously. Furthermore, staff can put questions to any Board
member through the one-to-one and kitchen clinics, which are held
in each of the offices. This open communication encourages a
positive atmosphere and enhances the problem-solving culture.
Motivating employees throughout a cost cutting and change process
is always going to be difficult. With this in mind, the Group invested in
a Performance Management System in order to retain and motivate
staff and continues with its policy of issuing stock options.
Additionally, an assessment has been made of employee training
requirements to ensure the necessary skills exist for the future growth
of the organisation.
Corporate Governance
Corporate Governance safeguards the ongoing development of a
company’s values in the interests of its shareholders, customers,
partners, employees and stakeholders. It describes the division of
rights and duties among the various groups within a company.
Articon-Integralis AG is a public limited company under German law,
with a two-tier structure that consists of an executive Management
Board and a Supervisory board. It is therefore subject to the
requirements of the relevant German laws, in particular those of
limited companies, as well as the recommendations of the German
Corporate Governance Codex, as set out in on 7 November 2002.
Corporate Governance is taken very seriously within Articon-Integralis
and both the Management Board and the Supervisory Board are
committed to meet national and international Corporate Governance
standards as well as statutory requirements. Active Corporate
Governance should promote and heighten the confidence of our
present and future shareholders, clients, suppliers and employees.
From an Articon-Integralis AG perspective, Corporate Governance
covers the following:
■ Fairness: protection of shareholder rights including equitable
treatment of all shareholders, including minority and foreign
shareholders;
■ Transparency: timely and accurate disclosure of all material matters
as well as information about share ownership and voting rights;
■ Accountability: directors are in a fiduciary or trust relationship to
shareholders and/or the Company and have duties to avoid
self-interest in their decisions and to act diligently and on a fully
informed basis;
■ Responsibility: acting ethically, the corporation respects the rights
of stakeholders and the laws and regulations in which they operate.
41

Corporate Governance – implementation
The Management Board is responsible for the overall management of
Articon-Integralis and conducts its business in accordance with the
applicable laws and in conformance with the Group’s articles of
association. It is mandated to safeguard the interests of the
Company and to secure a sustainable increase in its enterprise value.
The members of the Management Board are appointed by the
Supervisory Board and keep each other regularly and comprehensively
informed of all matters relevant to the Company’s planning, business
development, risk position and risk management. The Management
Board co-ordinates the Company’s strategic orientation with the
Supervisory Board and meets with it at regular intervals to discuss
the extent to which those strategies have been implemented. The
Management Board is held accountable to ensure that:
■ all risks are assessed and minimised as far as possible,
■ the corporation pursues common goals,
■ corporate sectors are clearly positioned,
■ changes on the market are flexibly and speedily responded to, and
■ a constant and up-to-date flow of information is guaranteed
The Supervisory Board supervises the Management Board and
company development without making executive decisions in relation
to the Group. Management and Supervisory Board members work
closely together for the good of the Company.
The experience and knowledge of the Supervisory Board complement
those of the Management Board and they act in accordance with
the principle that good management depends on open discussion.
The maintenance of total confidentiality is of crucial importance.
42
Ethics
The Group has an ethics policy that outlines a wide range of
business practices and procedures by setting out basic principles to
guide all employees. The code of ethics contains the specific
corporate policies adopted by the Management and Supervisory
Boards and relates to the legal and ethical standards of conduct of
employees and agents of the company. It includes guidance on
conflicts of interest, insider trading, discrimination and harassment,
record keeping and confidentiality.
Risk management
Risk management and risk control are among the items that appear
on the agenda of the Management Board meetings. To limit risk,
Articon-Integralis has established a risk management committee
consisting of the CEO, CFO, and representatives from Information
Technology, Human Resources and both operating businesses.
The result of the committee is the production of a risk management
policy, which allows for regular meetings to consider and assess
risks, as well as providing an opportunity for all employees to have an
input. The risk committee develops solution strategies and allocates
responsibility for individual risks. A responsible attitude towards risks
and their assessment is incumbent on all Articon-Integralis employees.

Corporate Information
Management Board
■ Mark Silver became Chief Executive Officer of Articon-Integralis
AG in May 2002 after previously being COO, and is responsible
for Group Operations and Investor Relations. His career spans 18
years and he has held senior positions in several industry and
service organisations both in the new and the old economy,
including Knowledge pool, the e-learning subsidiary of ICL plc;
Pearson Professional Ltd., a subsidiary of Pearson PLC; Aegis
Group plc and Price Waterhouse.
■ Philippe Dambrine joined the board on 12th February 2002, is
President of Allasso and responsible for the strategic development
of this division. He was a member of the management board of
Newlink (which the Group acquired in July 2000 and integrated
into Allasso). With post-graduate degrees in engineering and
business administration, he brings over 20 years of IT sector
experience to the Group.
During the past financial year, the Management Board also included:
■ Daniel Collins, Finchampstead, Berkshire, UK (to 30 June 2002)
■ Ian Calcutt, Harwell, Oxfordshire, UK (to 31 December 2002)
■ Günter Fuhrmann, Neufraunhofen, Germany
(to 31 December 2002)
Supervisory Board
■ Arnd Wolpers (Chairman), Businessman,
Münsing/Ammerland, Germany
■ James Sanger (Deputy Chairman), Businessman, Oxfordshire, UK
■ Prof. Dr. Jochen Tschunke (Member), Professor,
Munich, Germany (from 12 September 2002)
During the past financial year, the Supervisory Board also included:
■ Dr. Petra Wibbe (Member), Lawyer, Munich, Germany
(to 10 July 2002)
■ Klaus Gansser (Member), Consultant, Starnberg, Germany
(to 10 July 2002)
■ Martyn Webster (Member), Businessman, Maidenhead, Berkshire,
UK (to 26 July 2002)
Shareholder information
Articon-Integralis AG is a public limited company based at the
following addresses:
Gutenbergstraße 1
85737 Ismaning
Germany
Tel: +49 (0) 89 94573 0
Fax: +49 (0) 89 94573 199
Email: info@articon-integralis.de
Theale House, Brunel Road
Theale, Reading, Berkshire
RG7 4AQ, UK
Tel: +44 (0) 118 930 6060
Fax: +44 (0) 118 930 2800
Email: info@articon-integralis.com
The company is registered with the Registry Court in Munich under
HRB No.121349.
Investor relations
To receive up-to-date Articon-Integralis financial information you can
subscribe by emailing ir@articon-integralis.com. You can also use
this address to order any other financial information, for example
quarterly reports, or to ask investment-oriented questions. Or write to
the address below:
Articon-Integralis AG
The Investor Relations Department
Theale House, Brunel Road
Theale, Reading, Berkshire
RG7 4AQ, UK
Tel: +44 (0) 118 930 6060
Fax: +44 (0) 118 930 2800
Email: ir@articon-integralis.com
Our most recent financial statements and company information can
be found by visiting www.articon-integralis.com
Financial calendar 2003
Quarterly Report 1 – 2003 7 May 2003
AGM 2003 23 June 2003
Quarterly Report 2 – 2003 7 August 2003
Quarterly Report 3 – 2003 6 November 2003
Independent auditors
KPMG
KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Ganghoferstrasse 29
80339 Munich
Germany
Common stock
The company’s stock is traded on the Neuer Markt under the ticker
symbol AAGN, Security Code Number 515503. (The Neuer Markt will
be replaced by the Prime Standard on 24 March 2003).
43

44
Meet the Management Board
Mark Silver
Chief Executive Officer
Philippe Dambrine
President of Allasso
Attends Management Board Meetings
Lawrence Wolman
Chief Financial Officer,
(Designate)
Meet the Supervisory Board
Arnd Wolpers
Chairman
James Sanger
Deputy Chairman
Jochen Tschunke
Member

Articon-Integralis AG
Gutenbergstr. 1
85737 Ismaning
Germany
Tel: +49 (0) 89 94573 0
Fax: +49 (0) 89 94573 199
www.articon-integralis.com
Articon-Integralis AG
Theale House, Brunel Road,
Theale, Berkshire RG7 4AQ
United Kingdom
Tel: +44 (0) 118 930 6060
Fax: +44 (0) 118 930 2800