EXACOMPTA CLAIREFONTAINE 
By PR Newswire/Les Echos/
EXACOMPTA CLAIREFONTAINE
ORDINARY SHAREHOLDERS'
MEETING OF 22 MAY 2008
FISCAL YEAR 2007
REPORT OF THE BOARD OF DIRECTORS
PARENT COMPANY AND CONSOLIDATED
FINANCIAL STATEMENTS
REPORTS OF THE AUDITORS
PROPOSED RESOLUTIONS
REGISTERED OFFICE: 88480 ETIVAL CLAIREFONTAINE (VOSGES)
SHARE CAPITAL €4,525,920
Telephone: 03 29 42 42 42 Fax: 03 29 42 42 00 Internet site: http:www.exacomptaclairefontaine.fr
SAINT DIE TRADE REGISTER N° B 505 780 296 SIRET NO.: 505 780 296 NAF : 7010Z
Board of Directors
François Nusse, Chairman and Chief Executive Officer
Chairman, Exacompta
Chairman of the Management Board of Ets Charles Nusse
Jean-Claude Gilles Nusse, Executive Vice President
Manager, AFA
Member of the Management Board of Ets Charles Nusse
Jean-Marie Nusse, Executive Vice President
Chairman, Papeteries de Clairefontaine
Member of the Management Board of Ets Charles Nusse
Monique Prissard, permanent representative of Ets Charles Nusse
Member of the Management Board of Ets Charles Nusse
Guillaume Nusse
Chairman and Chief Executive Officer, Clairefontaine Rhodia
Jérôme Nusse
Chief Executive Officer, Quo Vadis
Frédéric Nusse
Chief Executive Officer, Everbal
Co-Manager, Brause
Charles Nusse
Co-Manager, Brause
Dominique Daridan
Henri de Verthamon
Auditors
KPMG S.A, 54600 Villers les Nancy
SEREC AUDIT, 75013 Paris
2
Contents: page
Agenda 4
Report of the Board to the Ordinary Shareholders' Meeting 5
Group Organisational Chart 17
Report of the Chairman of the Board on the operations of
the Board and internal control 18
Exacompta Clairefontaine Parent company financial statements 24
General Report of the Auditors 37
Special Report of the Auditors on regulated
agreements and commitments 41
Report of the Auditors on the Chairman's Report
on the operations of the Board and internal control 44
Groupe Exacompta Clairefontaine Consolidated financial statements 48
Report of the Auditors on the consolidated financial statements 83
Resolutions submitted to the Ordinary Shareholders' Meeting 87
3
Agenda:
> Report of the Board of Directors on operations and parent company financial
statements for fiscal year 2007
> Report of the Board of Directors on operations and consolidated financial statements
for fiscal year 2007
> Reports of the Auditors on the financial statements for this fiscal year and on the
transactions governed by Articles L.225-38 and L.225-235 of the French Commercial
Code
> Approval of the parent company financial statements for the year ended 31 December
2007 consisting of the balance sheet, the income statement and notes thereto
> Approval of the consolidated financial statements for the year ended 31 December
2007 consisting of the balance sheet, the income statement and the notes thereto
> Allocation of earnings
> Approval of the agreements governed by Article L.225-38 of the French Commercial
Code
> Discharge of the Directors. Approval of the directors' fees allocated to the members of
the Board of Directors
> Election of one Director and appointment of the Auditors
THE BOARD OF DIRECTORS
4
REPORT OF THE BOARD OF DIRECTORS TO
THE ORDINARY SHAREHOLDERS' MEETING
OF 22 MAY 2008
To the Shareholders,
Although it did not reach the profitability achieved earlier in this decade, fiscal
year 2007 was a marked improvement over years 2005 and 2006.
1. REVIEW AND APPROVAL OF THE PARENT COMPANY FINANCIAL
STATEMENTS
K€
Operating revenue 8,974
Operating income/loss (661)
Financial income 2,646
Net income 1,097
EXACOMPTA CLAIREFONTAINE, a holding company, serves the companies
of the group, for which it manages the sales force and certain property assets.
It is also responsible for the group's financial management, consolidation, legal
and tax services, communications and relations with shareholders.
Its operating result was a deficit of € (661,000) compared with € (510,000) in
2006.
Financial income was € 2,646,000. This includes dividends from the subsidiaries
in the amount of € 1,926,000.
The net income of the parent company EXACOMPTA CLAIREFONTAINE
was € 1,097,000 in 2007 compared with € 7,011,000 in 2006.
Net income declined because of a subsidy granted, a decrease in the tax
consolidation income, and a reduction in internal dividends.
The amount of the non-tax deductible expenses was € 10,671.31.
5
The parent company has no employee shareholders.
Since January 2003, the subsidiaries have paid EXACOMPTA CLAIREFONTAINE a
royalty equal to 0.2% of their added value for the previous year.
The companies which head sub-groups (Exacompta, Papeteries de Clairefontaine,
Clairefontaine Rhodia, AFA) guarantee all repayments of their subsidiaries which borrow
from the parent company.
INCOME FOR THE LAST FIVE YEARS IN EUROS
Closing date 31/12/2007 31/12/2006 31/12/2005 31/12/2004 31/12/2003
Duration of the year (in mos.)
12 12 12 12 12
CAPITAL AT YEAR END
4,525,920 4,525,920 4,525,920 4,525,920
Share capital 4,525,920
1,131,480 1,131,480 1,131,480 1,131,480
Number of shares of common stock 1,131,480
TRANSACTIONS AND RESULTS
1,155,501 395,671 253,886 231,787 224,298
Revenue before tax
Income before taxes, profit-sharing, depreciation,
(948,950) 2,660,784 4,233,376 5,419,743 3,728,096
amortisation and provisions
(2,273,317) (4,454,216) (5,072,034) (550,498) 396,772
Income taxes
320,049
226,912 104,338 236,321 61,774
Net depreciation, amortisation and provisions
1,097,455 7,010,661 9,069,090 3,269,551
5,650,192
Net income
2,262,960 3,960,180
2,262,960 2,262,960 3,960,180
Distributed income
EARNINGS PER SHARE
Income after taxes, profit-sharing and before
6 8 5 3
1
depreciation, amortisation and provisions
Income after taxes, profit-sharing, depreciation,
1 6 8 5 3
amortisation and provisions
2* 2 2 4 4
Dividend paid
PERSONNE L
61 53 62 63 65
Average number of employees
4,469,507 4,275,718 4,177,294 4,652,040 4,767,323
Payroll
Sums paid in employee benefits (social security,
1,647,595 1,758,007 1,656,715 1,700,096 1,833,570
social works, etc.)
* Dividend recommended
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2. REVIEW AND APPROVAL OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE PREVIOUS YEAR
2.1 RESULTS
(In € thousands) 2007
Income from continuing activities (Revenue) 538,113
Operating income 24,329
Net income before income taxes 20,890
Net income after income taxes 14,250
Minority interests (61)
Group share 14,311
The scope of consolidation reflects the impact of the consolidation of "Ernst
Stadelmann" and "Publiday Multidia".
The consolidated cash flow of the Exacompta Clairefontaine group was €
38,684,000 and EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortisation) amounted to € 46,293,000, compared with € 27,254,000 and €
30,429,000, respectively, in 2006.
The group had 3,364 employees, up from 3,295 in 2006.
2.2 PAPER PRODUCTION
The recovery in the printing and writing papers market, which began in 2006,
continued in 2007. Apparent consumption of printing and writing papers rose 1.3% in
2007 from the level reached in 2006, which was equal to the level of 2005.
The restructurings launched in 2006 impacted the production of last year. In 2007,
production stabilized and reached the 2006 level.
Finally, a better balance in the French and European markets led to an increase in
the selling prices for printing and writing papers, the deterioration of which was checked
in 2006.
In the uncoated papers sector, the main factor driving the improvement in the
market was the stabilisation of imports to Western Europe, particularly for office
equipment papers.
Our 5 machines specialise in writing and correspondence papers, and papers for
office, the arts and organisation.
The quality of our papers allows us to maintain good commercial positions against
large integrated pulp plants.
7
During this past year, our reeled paper production rose 2.7% to 217,515 tons.
The strong performance of the Euro in large part offset the continued increase in
prices for pulp denominated in US Dollars, but our paper selling prices rose only
slightly.
2.3 TRANSFORMATION
The entire paper articles market grew by about 2% over the first nine months of
the year in non-seasonal data. On the other hand, for the final three months of the year,
activity was relatively flat. This phenomenon was especially so for office supplies.
Our various departments specialising in paper articles benefited from this market
growth and also increased their export sales.
Our products lines were enhanced by offering a large portion of "collection" type
articles and by expansion in the organisation and creative arts segments.
The profitability of this sector also improved because of the reorganisation efforts
made in recent years.
2.4 FINANCIAL POSITION
2.4.1 Debt
At 31 December 2007, with revenue of € 538,113,000, the group's financial debt
(excluding parent company loans) was € 70,811,000, and shareholders' equity totalled €
357,971,000.
The Exacompta Clairefontaine group finances a large portion of its short-term
needs through commercial paper issued on the market and spot loans, in the amount of €
16,000,000 at the end of 2007.
In order to ensure its medium- and long-term growth, the group has negotiated a
line of credit with its bank partners. Outstandings under this line were € 38,700,000 at
31 December 2007.
With cash of € 56,084,000, allowing it to finance a portion of its investments, the
Group had a net financial debt of € 14,727,000 at 31 December 2007.
8
2.4.2 Financial instruments
The Group uses financial derivatives instruments to hedge its exposure to the
interest rate risks resulting from its operating, financial and investing activities. Under
its cash management policy, the Group does not hold or issue financial derivatives
instruments for transaction purposes.
2.4.3 Management of the financial risk
Generally, the Exacompta Clairefontaine Group does not engage in any complex
financial transactions. Financial risk management is provided by the operating units in
accordance with the policy defined by senior management.
Credit risk
Credit risks represent the risk of financial loss for the Group if a third party fails to
meet its contractual obligations.
* Trade and other receivables
The credit risk is not significant. It is distributed over a large number of
customers. The Group has set up tools to monitor outstanding amounts and, in
addition, the risk is limited by credit insurance policies.
* Investments
The Group limits its exposure to the credit risk on investments, short-term
deposits and other cash instruments by investing only in liquid securities; the
counterparties are banks with high ratings.
Liquidity risk
The Group's approach to managing this risk is to ensure that it always has
sufficient liquid assets to meet its liabilities when due without incurring unacceptable
losses or damaging its reputation. For this purpose, short-term financing arrangements
are in place along with a line for drawing that covers medium and long-term payments.
Foreign exchange risk
The Group operates internationally, but has little exposure to foreign exchange
risks because of the local presence of its main subsidiaries. The risks related to
commercial transactions are primarily those related to purchases of raw materials, which
are 50% covered by option contracts.
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3. PROPOSED RESOLUTIONS
3.1 ALLOCATION OF EARNINGS
Earnings to be allocated (in euros) of:
Income for 2007 ................................................... € 1,097,454.77
We propose the following allocation:
First dividend ......................................................... 226,296.00
Second dividend .................................................... 2,036,664.00
TOTAL € 2,262,960.00
of which, use made of other reserves .................... € 1,165,505.23
As the share capital is divided into 1,131,480 shares, each share would receive a total
dividend of €2.00
The following table shows the dividends paid for the last three years:
Year Dividend Number of shares
3.50 1,131,480
2004
2.00 1,131,480
2005
2.00 1,131,480
2006
3.2 SHAREHOLDERS AND OFFICERS
3.2.1 Shares and trading
The share listed at € 150.30 on 2 January 2007 and closed the year at € 157.00. During
the same period, the SBF 250 gained +0.41% and the CAC 40 rose +1.31%. The number of
shares traded during the year was 16,807.
The capital of the parent company is composed of 1,131,480 shares, and did not change
during the year. A double voting right is granted to each fully paid-up share which has been
registered for at least two years in the name of the same shareholder.
Our principal shareholder, Ets Charles Nusse, holds 910,395 shares with double voting
rights, representing 80.46% of the capital at 31/12/2007.
"Financière de l'Echiquier", a minority shareholder, crossed the 5% ownership
threshold in 2005.
10
The companies of the group benefit from the leadership provided by Ets Charles
NUSSE and pay a fee equal to 0.6% of the value added of the previous year.
3.2.2 Directors' fees
Your Board proposes that you approve directors' fees in the amount of € 60,000 to be
paid to the directors of the company in 2008.
3.2.3 Directors
The term of François Nusse is expiring. We are proposing that you re-elect him to the
Board for a term of six years, which will end at the end of the Shareholders' Meeting called to
approve the financial statements for the year 2013.
3.2.4 Lists of the principal offices held by the member of the Board
François Nusse, Chairman and Chief Executive Officer
Chairman of Exacompta
Chairman of the Management Board of Ets Charles Nusse
Jean-Claude Gilles Nusse, Executive Vice President
Manager, AFA
Member of the Management Board of Ets Charles Nusse
Jean-Marie Nusse, Executive Vice President
Chairman, Papeteries de Clairefontaine
Member of the Management Board of Ets Charles Nusse
Guillaume Nusse
Chairman and Chief Executive Officer, Clairefontaine Rhodia
Jérôme Nusse
Chief Executive Officer, Quo Vadis
Frédéric Nusse
Chief Executive Officer, Everbal
Co-Manager, Brause
Charles Nusse
Co-Manager, Brause
Monique Prissard, permanent representative of Ets Charles Nusse
Member of the Management Board of Ets Charles Nusse
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3.2.5 Auditors
The appointments of the auditors and their alternates expire at the conclusion of the
Shareholders' Meeting of 22 May 2008.
We are proposing that you renew their appointments for a period of six years, until the
end of the Annual Shareholders' Meeting called to approve the financial statements for the
year ended 31 December 2013:
? SEREC AUDIT, with registered offices at 25, rue Charles Fourier 75013 Paris, registered
in the Paris Trade Register under No. 324 834 399, as the regular Auditor.
To replace the FAREC company, we are proposing that you appoint for a period of six
years, until the conclusion of the Annual Shareholders' Meeting called to approve the
financial statements for the year ended 31 December 2013:
? G.B.A. Audit et Finance, with registered offices at 10, rue du Docteur Finlay 75015 Paris,
registered in the Paris Trade Register under No. 342 775 137, as the alternate auditor.
To replace KPMG, we are proposing that you appoint for a period of six years, until the
end of the Annual Shareholders' Meeting called to approve the financial statements for the
year ended 31 December 2013:
? BATT AUDIT, with registered offices at 25, rue du Bois de la Champelle 54500
Vanduvre-lès-Nancy, registered in the Nancy Trade Register under No. 414 570 622, as
the regular auditor;
? The SOVEC company, with registered offices at 661, avenue de la Division Leclerc 88300
Neufchâteau, registered in the Mirecourt Trade Register under No. 328 045 711, as the
alternate auditor.
4. POST-CLOSING EVENTS
No significant event occurred between 1 January and 27 March 2008.
5. RESEARCH AND DEVELOPMENT ACTIVITY
The companies of the Group, including Papeteries de Clairefontaine, participate in
various research programs in cooperation with the Grenoble Paper Technical Centre and
various University laboratories.
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6. SAFETY AND MANAGEMENT OF PRODUCTION CONDITIONS
Thirty-eight industrial units of the Exacompta Clairefontaine Group benefit from the
consulting and support services of an engineer to guide and apply the Man and Machine
safety policy.
For these 38 units, the weighted average declared rate of occupational accidents and
illnesses rose from 2.07% to 2.51% between 2001 and 2007. These rates reflect a stable cost
of risks because the increase was essentially due to the administrative increase in the
collective rate, which rose from 2.26 to 2.62% between 2001 and 2007. Thus, the balance is
positive since the weighted average notified rate remained better than the weighted average
collective rate in 2007.
In order to improve these results, the emphasis in 2007 was placed on communication,
with the distribution of a "Safety Bulletin" that included the safety results for each unit.
Manual operations, pedestrian and machinery traffic, and operations on machinery were
the causes of the main occupational accidents and illnesses.
In order to improve risk prevention, measures were taken primarily in the following areas:
? Manual operations
? Machine with manual starts (presses, cutters and compactors)
? The use of general work equipment
The various actions taken were the result of recommendations to improve the technical,
organisations and human aspects for handling safety in their unit. Several units now benefit
from permanent support from a safety officer to coordinate actions.
7. EMPLOYMENT INFORMATION
The Exacompta Clairefontaine Group had 3,364 employees at 31 December 2007, up
from 3,295 in 2006.
The companies apply the collective agreement for the production of papers, cardboard
and cellulose, or the collective agreement for paper articles.
The group committee, which met 18 June 2007, commented on the activity and the
economic and employment outlook for the year.
13
8. ENVIRONMENTAL INFORMATION
Monitoring of carbon dioxide (CO2) emissions at French paper sites
PNAQ 1 (2005-2007) PNAQ 2 (2008-2012)
Site 2007 net emissions (t
CO2)
Annual allocation (t CO2) Annual allocation (t CO2)
CLAIREFONTAINE 108,010 79,992 * 92,804
MANDEURE 14,538 9,663 12,491
EVERBAL 31,581 17,336 27,135
Total 154,129 106,991 132,430
* Gross emissions from Papeteries de Clairefontaine totalled 91,612 t. A portion of the CO2 emitted by the boilers is exported
to the OMYA company for the production of Precipitate Calcium Carbonate (PCC).
For 2007, the quota surplus was 47,138 tons of CO2. Despite the allocation decrease,
the balance should remain in surplus for the period 2008-2012.
Several short-term measures are planned to reduce fossil-based CO2 emissions,
including:
? in 2008, the modernisation and reduction of capacity of the current co-generation of
Papeteries de Clairefontaine;
? Two biomass boiler projects are being studied at Everbal and Papeteries de
Clairefontaine. In the second case, the boiler would also feed a steam turbine for
combined production of steam and electricity.
Reduction of surface water draw-offs
In 2007, Papeteries de Clairefontaine implemented a new water recovery unit in order to
limit draw-offs from the river. In slightly more than eight months, this project will have saved
nearly 80,000 cubic meters of water.
Environmental certifications
Four sites are currently ISO 14 001 certified:
S Papeteries de Clairefontaine (2001) - Etival-Clairefontaine (88)
S Papeterie de Mandeure (2003) - Mandeure (25)
S Everbal (2006) - Evergnicourt (02)
S Quo-Vadis (2007) - Carquefou (44)
In addition, Papeteries Sill - Wizernes (62) should be certified in 2008.
14
? Forestry certifications : The production sites and some transformation sites are certified
PEFC and/or FSC :
? NF Environnement: Papeteries Sill and Châtelles Transformation - Raon l'Etape (88) have
obtained the right to use the NF Environnement market for notebooks, and Papeteries de
Clairefontaine for envelopes.
9. OUTLOOK
In the Paper sector, the outlook continues to be uncertain. There is still upward pressure
on raw materials (pulp, starches, additives), and energy and employee benefits are still under
pressure.
The scenario is the same in 2008 for sales prices. Global competition makes price
increases difficult for the more common products like white or recycled reams.
Imports of these items from the emerging countries make the situation complicated,
particularly for European and French industry.
Only the specialty products allow the Exacompta Clairefontaine Group to maintain the
margins necessary for growth and the investments that ensure its competitiveness.
Exacompta Clairefontaine, a global buyer, but a producer that works primarily in the
European market, benefits from the impact of favourable fluctuations in the euro. This
situation is cyclical.
The non-integrated paper industry, which is a heavy power consumer, is penalised by
continued increases in the price of electricity. Clairefontaine's participation in the Exeltium
project and the investments planned in biomass are expected to smooth out energy costs.
15
On the Transformation side, the outlook is mixed. The Group's logistics organisation, its
diversification into the areas of organisation, agendas and the arts sector, and continued
improvements in sourcing will win market share and improve the group's productivity.
On the other hand, or as a result, the transformation sector is being impacted by
restructurings that are costly for the Group.
The transformation sector will experience more changes than the paper sector, through
internal or external growth or restructurings that have become unavoidable to remain in step
with a market that is rapidly changing and extremely competitive because of imports.
[Insert Organisational Chart]
REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON THE OPERATION
OF THE BOARD AND INTERNAL CONTROL
Year ended 31 December 2007
Dear Shareholders,
The Financial Security Act of 1 August 2003 now requires that the Chairman of the Board provide a
report on the conditions for the preparation and organisation of the work of the Board of Directors, the
scope of the powers of the executive officers, and the internal control procedures established by the
company.
It is in compliance with this obligation set forth in Article L. 225-37 of the French Commercial Code
that I provide you with the following information:
1. Preparation and organisation of the work of the Board of Directors
As I remind you, the Board has ten members:
François Nusse, whose term expires in 2008
Jean-Claude Gilles Nusse, whose term expires in 2009
Jean-Marie Nusse, whose term expires in 2011
Guillaume Nusse, whose term expires in 2010
Jérôme Nusse, whose term expires in 2010
Frédéric Nusse, whose term expires in 2010
Charles Nusse, whose term expires in 2012
Dominique Daridan, whose term expires in 2011
Henri de Verthamon, whose term expires in 2013
Ets Charles Nusse, represented by Monique Prissard, whose term expires in
2010
The Chairman and Chief Executive Officer, who is the Chairman of the family holding company Ets
Charles Nusse and of SAS Exacompta and its subsidiaries, is backed by two Executive Vice Presidents
and directors, and a non-director Executive Vice President.
The Board has placed no limitations on the powers of the Chairman and Chief Executive officer and
the Executive Vice Presidents.
The compensation and benefits of all kinds granted to the corporate officers are set on the basis of the
following principles:
* salaries: based on the experience and the responsibilities of the position held;
* directors' fees: equally among the members of the Board.
The auditors are called to the meetings of the Board of Directors that draw up the annual and interim
financial statements and to all meetings that review the financial statements.
Notices are given in writing at least eight days in advance. Meetings are held at the registered offices
or at the offices of a subsidiary in Paris.
The Board has met five times since 1 January 2007. The March meeting of the Board drew up the
financial statements for the previous year and prepared for the Shareholders' Meeting. The August
meeting reviewed the interim position, particularly the economic environment at the beginning of the
year and the interim operating statements and other specific items.
One or more Board meetings are held if circumstances require, particularly in the event of possibilities
for significant acquisitions. Indeed, decisions are made by consensus under these circumstances, even
if this approach is not expressly stipulated in the bylaws; this is also the case for the main industrial
investments.
The March and August Board meetings are followed by an announcement to all shareholders.
Board members must be physically present at Board meetings, as there is no provision for
videoconferencing.
The members of the Board had a very high attendance rate, with no absenteeism.
No meetings were called at the initiative of the directors or the Executive Vice Presidents.
To allow Board members to make the necessary preparations for meetings, the Chairman provides
them with all necessary information or documents prior to the meeting.
At the Board meeting following the half-year and annual closing of the accounts, each company of the
group is required to submit a management report that must contain the following elements, in addition
to its financial statements:
* raw materials (pulp in particular)
* sales results
* finishing and logistics
* technical services
* industrial result
* accounting and financial management
* investments
* outlook and risks
At the March and August Board meetings, the directors review the consolidated financial statements of
the group and the consolidated statements of the sub-groups. These consolidated statements contain a
number of analyses:
* change in shareholders' equity,
* contribution to consolidated results by company,
* contribution to consolidated reserves by company,
* contribution to shareholders' equity by company,
* consolidated SIG.
The draft of the annual financial statements is transmitted to Board members at least eight days before
the Board meeting called to prepare the final financial statements.
Whenever a member of the Board requests it, the Chairman shall immediately or rapidly transmit any
additional information or documents requested.
2. Internal control procedures established by the company
2.1 Definition of internal control
Internal control is defined as a process implemented simultaneously by the Board of Directors,
Management and the employees of a group, which is designed to provide reasonable assurance that
objectives are reached in the following areas:
x effectiveness and efficiency of the operations;
x reliability of the financial information;
x compliance with the laws and regulations in force.
Internal control consists of all methods which management has implemented to provide reasonable
assurance that objectives are reached and to prevent the occurrence of damaging events.
2.2 Purposes and limits
Internal control ensures control of the company's operations and protects it from various types of risks,
including:
x irregularities and fraud;
x a significant omission or inaccuracy in the processing of information and, therefore, in the
financial statements;
x failure to comply with the company's legal and contractual obligations;
x destruction, deterioration or disappearance of assets, or incorrect valuation of assets.
An internal control systems, as good as it may be, can provide only reasonable assurance and not an
absolute guarantee as to the achievement of the company's objectives, both because of the limits
inherent in any process implemented by human beings and because of the limits on resources which
must be taken into account.
The group relies on four types of information to guide its operations:
x the parent company financial statements (twice yearly),
x the consolidated financial statements (twice yearly),
x the quarterly accounts (not published),
x the provisional accounts (not published).
2.3 Procedures
The procedures that are applied in the various companies of the group may be summarised as follows:
x accounting and financial
-> establishment of the provisional accounts
-> budget monitoring
-> monitoring of intra-group revenue
-> intra-group accounting reconciliations
-> monitoring of monthly and year-to-date interim management balances
-> monthly and year-to-date cash position
-> composition and performance of the investment portfolio
-> monthly monitoring of the short and medium-term commitments of the subsidiaries,
with transmission and control of working capital requirements
Systematic identification of risks is the first step in internal control. Mapping the group's risks presents
no specific problems, and the principal challenges are as follows:
x control of raw materials purchases,
x control of manufacturing processes,
x environmental risks,
x protection of industrial assets and sites,
x control of the use of financial instruments and hedging currency risk.
The internal control of financial instruments is specifically monitored by Management, both with
regard to the types of instruments used and the maximum risk levels incurred, which are measured
daily. These financial instruments (contracts or options) are of two types. They are either a hedging
transaction to reduce the risk of a change in the value of an asset or liability or a commitment or future
transaction not yet realised with which they are correlated, or they are purely financial in nature in the
case of an additional amount outstanding.
x in other areas, a number of regular reports are published
-> production reports,
-> monitoring of monthly and year-to-date industrial results,
-> ISO 9000 and ISO 14000 certification,
-> safety,
-> PEFC and FSC audits.
The company has no organised department dedicated to internal control that is responsible for
conducting verifications on its behalf (either in the parent company or in the companies it controls).
The transactions contributing to the corporate activities of the group and their presentation in the
financial statements are verified, though not necessarily through the application of formalised
procedures, by management or its delegates or agents, with the general goal of complying or ensuring
compliance with the laws, regulations and standards in force, and of making every effort to prevent the
occurrence of losses that could affect the group's ability to continue operations.
^ The company uses the following accounting software or applications:
x ETAFI (tax management)
x REFLEX (consolidation)
x SAP, MOVEX (accounting & finance)
x ZADIG HYPERVISION (personnel management)
x EXCALIBUR (intranet set up in 2007 at the accounting and finance level).
^ The companies of the group carry the following insurance policies:
x industrial multi-risk
x insurance for machine breakdowns, costs and financial losses on co-generation
x comprehensive real property
x general civil liability
x environmental damage liability
x automobile fleet and work vehicles insurance
The Chairman of the Board of Directors
Exacompta Clairefontaine S.A.
Parent Company Financial Statements
as at 31 December 2007
BALANCE SHEET AND INCOME STATEMENT
ASSETS in 000s of € 31/12/2007 31/12/2006
Non-current intangible assets
10
97
Concessions, patents, licenses, trademarks
37
Intangible assets in progress
Property, plant and equipment
1,529
2,601
Land
1,400
15,199
Buildings
31
29
Other tangible assets
Fixed assets in progress
Non-current financial assets
289,219
289,218
Equity interests
229
Other non-current securities
35,999
34,730
Loans
4
4
Other non-current financial assets
TOTAL NON-CURRENT ASSETS 341,878 328,459
Inventories 15 15
Advances and progress payments made on orders 60 69
Receivables
Trade and related receivables 2,937 2,335
Other receivables 77,597 90,991
Prepaid expenses 455 393
743 845
Cash and cash equivalents
TOTAL CURRENT ASSETS 81,807 94,648
Currency translation adjustment 303 205
TOTAL ASSETS 423,988 423,312
LIABILITIES AND SHAREHOLDERS' EQUITY 31/12/2007 31/12/2006
in 000s of €
Share capital 4,526 4,526
Share, merger and contribution premiums 162,566 162,566
Revaluation discrepancy 485 485
Reserves
Statutory reserve 453 453
Other reserves 138,238 133,047
Retained earnings
Profit or (loss) for the year 1,097 7,011
Regulated provisions 1 719 269
SHAREHOLDERS' EQUITY 309,084 308,799
Provisions
For contingent liabilities 820 867
For charges 225 247
TOTAL PROVISIONS 1,045 1,114
Financial debt
Loans and debt with credit institutions 77,386
56,208
Operating payables
Trade and related payables 1,191 961
Taxes and social contributions payable 2,913 1,255
Other payables 53,191 33,499
Prepaid income 145 126
TOTAL DEBT 113,648 113,227
Currency translation adjustment 211 172
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 423,988 423,312
INCOME STATEMENT in 000s of € 31/12/2007 31/12/2006
Revenues 1,156 396
Operating subsidies 31 33
Reversals of depreciation, amortisation and provisions, transfer of 7,388 7,115
charges 399 409
Other income
REVENUE FROM OPERATIONS 8,974 7,952
Purchases and other supplies 16 20
Other purchases and external expenses 2,556 2,052
Taxes, duties and similar payments 661 231
Salaries and wages 4,470 4,276
Social expenses 1,648 1,758
Increases in depreciation/amortisation of non-current assets 219 61
Other expenses 65 64
OPERATING EXPENSES 9,635 8,462
OPERATING PROFIT/(LOSS) -661 -510
Financial income from equity investments 1,926 3,162
Income from other securities and non-current assets 1,608 1,481
Other interest and similar income 4,538 2,697
Reversals of provisions, expense transfers 141 142
Positive currency translation adjustments
Net profit on sales of marketable securities
FINANCIAL INCOME 8,213 7,482
Increases in depreciation, amortisation and provisions 92 232
Interest expense and similar expenses 5,255 3,955
Negative currency translation adjustments 220 221
Net expenses on sales of marketable securities
FINANCIAL EXPENSES 5,567 4,407
FINANCIAL INCOME/(EXPENSE) 2,646 3,074
INCOME BEFORE TAXES 1,985 2,565
Extraordinary income
On operating transactions 121 14
On capital transactions 229 11
Reversals of provisions, expense transfers 5 5
EXTRAORDINARY INCOME 355 29
Extraordinary expenses
On operating transactions 3,200
On capital transactions 231 9
Increases in depreciation, amortisation and provisions 85 29
EXTRAORDINARY EXPENSES 3,516 37
EXTRAORDINARY INCOME/(EXPENSE) -3,161 -8
Income tax -2,273 -4,454
NET INCOME FOR THE YEAR 1,097 7,011
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2007
KEY EVENTS OF THE YEAR
Introduction
Note to the balance sheet prior to appropriate for the year ended 31/12/2007, for which:
Total assets were: € 423,988,099.04
Net income was: € 1,097,454.77
Principal events of the year
Exacompta Clairefontaine took over its subsidiary SCI du Rhin on 1 December 2007, through
a transfer of all assets.
The company granted a subsidy of € 3,200,000 in the context of the reorganisation of Brause
GmbH and its subsidiaries.
Accounting principles, rules and methods
The annual financial statements were prepared and are presented in accordance with the
French regulations in effect, as set forth in the decrees of the Comité de la Réglementation
Comptable (CRC) [Accounting Regulatory Committee].
Comparability of the financial statements
The fiscal year is a period of 12 months that runs from 1 January 2007 through 31 December
2007.
The notes provided below form an integral part of these annual financial statements.
ACCOUNTING RULES AND METHODS
General accounting conventions have been applied, in compliance with the principle of
prudence, according to the following basic assumptions:
? continuity of operations;
? constant accounting methods from one year to the next;
? independence of years;
and in accordance with the general rules regarding the preparation and presentation of
annual financial statements.
The basic method used to value the items recorded is the historical cost method.
The principal methods used are as follows:
Non-current intangible assets
Amortisation was calculated using the straight line method, based on the probable useful life:
? Software 1 to 3 years
Property, plant and equipment
Valuation:
Property, plant and equipment were valued at their acquisition cost (purchase price excluding
ancillary expenses) or production cost.
Depreciation:
Depreciation was calculated using the straight line method, based on the estimated useful
life for each component of a fixed asset, on the following bases:
? Buildings 25 to 50 years
? Furnishings and fixtures of buildings 10 to 20 years
? Office and computer equipment 3 to 10 years
Writedowns:
At the end of each year, the company assesses the value of its fixed assets to determine
whether there are indications of a loss in value. If so, the recoverable value of the asset is
estimated. If the recoverable value is less than the book value, a writedown is taken for the
amount of the difference.
Non-current financial assets
The gross value consists of the purchase cost, excluding ancillary expenses.
If the asset value is less than the gross value, a writedown is recognised for the amount of
the difference.
The asset value is assessed on the basis of the net position, which may be consolidated in
the case of a group of subsidiaries, and on the prospects of each subsidiary or group of
subsidiaries.
Inventories
The purchase made in 1997 of resinous wood is held in stock. A writedown of € 183,000 was
taken because of the effects of the storm of 26 December 1999.
Receivables and payables
Valuation and impairment:
Receivables and payables are valued at their nominal amount. A writedown is taken against
receivables when their inventory value is less than their book value.
Receivables and payables denominated in foreign currencies:
These items are valued using the last exchange rate as at the close of the fiscal year.
Differences resulting from this valuation are recorded as currency translation adjustments, in
assets or liabilities. Provisions for foreign exchange losses are recognised for positive
currency translation adjustments.
Cash
Short-term cash:
Short-term needs are financed by commercial paper issued in the market and spot loans.
These totalled € 16 million at year-end.
The commercial paper issued by Exacompta Clairefontaine has a fixed maturity and a
maximum term of 365 days. It bears a fixed rate determined at the time of issuance. The
outstanding paper totalled € 125 million at year-end.
Drawing line:
A drawing line is in place with several banks for a maximum amount of € 95,000, with
maturities falling between 1 and 2 years from the end of the fiscal year.
The outstanding amount on this line was € 38,700 as at year-end.
Accelerated depreciation
Accelerated depreciation consisted of the difference between the depreciation calculated
according to tax practices and that calculated according to the straight line method based on
the probable useful life.
Accelerated depreciation totalled € 1,719,000 at year-end.
Provisions for contingent liabilities and charges
Provision for pensions:
The method used to calculate this provision is the projected credit units method. The
calculation is based on the following main assumptions:
? payments received pursuant to the collective agreement ?Production of papers,
cardboard and cellulose?;
? discount rate: 3.28%;
? social security contributions rate: 40%
The amount of the retirement commitment?including social security contributions?has been
provisioned in full as at year-end and totalled € 225,000.
Other provisions:
A provision for risks on financial instruments has been established, in the amount of €
728,000 as at year-end.
Other information
Identity of the parent company consolidating the company's financial statements:
Ets Charles NUSSE, S.A., with a Board of Directors and a Supervisory Board, authorized
capital of € 1,632,000, at 15, rue des Ecluses St Martin 75010 PARIS.
Percentage held: 80.46%
Tax consolidation:
All the subsidiaries consolidated by full consolidation are consolidated for tax purposes,
except for the foreign companies and Belem Editions, Pelissier MI and Châtelles
Transformation.
The parent company of the tax group is Exacompta Clairefontaine.
The tax savings realised by the parent company are returned to the subsidiaries when they
become profitable and can charge their own losses.
The tax savings realised in 2007 totalled € 2,273,000.
Individual training rights:
No request was made by employees. The volume acquired is 3,784 hours as at year-end.
Staff:
The staff of the parent company totalled 61 persons at 31 December 2007 (2 administrative
managers and 59 sales managers), compared to 53 persons at 31 December 2006.
Compensation of administrative bodies and management:
The members of the Board of Directors receive no remuneration from the company.
The remuneration granted to the members of the Board of Directors as directors' fees
totalled
€60,000 in 2007, and was awarded by a decision of the Shareholders' Meeting of 24 May
2007.
INFORMATION ON THE BALANCE SHEET
AND THE INCOME STATEMENT
Authorized capital
Number of shares Par value
At 1 January 1,131,480 €4
At 31 December 1,131,480 €4
Change in shareholders' equity (in 000s of €)
Shareholders' equity at 31/12/2006 308,799
Dividends distributed -2,263
Change in regulated provisions 1,451
Income for fiscal year 2007 1,097
Shareholders' equity at 31/12/2007 309,084
Change in gross non-current assets
in 000s of € Gross Gross
amount at Purchases Sales Other amount at
beginning of changes end of
year year
Concessions, patents, licenses 63 68 37 168
Intangible assets in progress 37 -37
100 68 168
Non-current intangible
assets
Land 1,529 1,072 2,601
Buildings and fittings 1,921 5,231 13,630 20,782
Other tangible assets 79 9 42 46
Fixed assets in progress
3,529 5,250 42 14,702 23,429
Property, plant and
equipment
Equity investments 289,219 -1 289,218
Other non-current securities 231 231
Loans 35,999 7,711 8,980 34,730
Other non-current financial 4 4
assets
325,453 7 ,711 9,211 -1 323,952
Non-current financial assets
Inventory of securities held in the portfolio
Number of % stake Net inventory
Company name shares value
Papeteries de Clairefontaine 5,700,000 100% 103,001,491
Exacompta 135,000 100% 115,692,905
Ateliers de Fabrication d'Agendas 90,000 100% 49,633,434
Clairefontaine Rhodia 161,892 100% 20,889,921
Coopérative Forestière Lorraine 1 insignificant 178
Change in depreciation/amortisation of non-current assets
Amount at Other Amount
in 000s of € beginning Additions Reversals changes at end of
of year year
Concessions, patents, licenses 53 18 71
53 18 71
Intangible assets
Land
Buildings and fixtures 521 190 4,872 5,583
Other tangible assets 48 11 42 17
569 201 42 4,872 5,600
Property, plant and equipment
Change in provisions and writedowns
Amount at Other Amount
in 000s of € beginning Increases Reversals changes at end of
of year year
Accelerated depreciation/amortisation 269 85 5 1,370 1,719
269 85 5 1 ,370 1,719
Regulated provisions
Risks on financial instruments 834 106 728
Foreign exchange losses 33 92 33 92
Pensions and similar obligations 247 22 225
1,114 92 161 1,045
Provisions for contingent liabilities
and charges
Other non-current securities 2 2
Writedown of stocks 183 183
183 2 183
Writedowns
Increases and reversals
? operating 22
92 141
? financial
85 5
? extraordinary
Total 177 168
Receivables schedule
Gross Less than 1 More than 1
Receivables due in 000s of € amounts year year
Receivables from non-current
10,260
34,730 24,470
assets
Loans 4 4
Other non-current financial
assets 2,937 2,937
10 10
Receivables from current assets
Trade receivables 8 8
Personnel and related
Social entities 150 150
Income taxes 77,429 77,429
Value added tax
455 455
Group and associates
Other receivables
Prepaid expenses
Total 115,723 91,249 24,474
Payables Schedule
Payables due in 000s of € Gross Less than 1 From 1 to 5 More than
amounts year years 5 years
Loans and debts Credit institutions 56,208 55,592 616
Suppliers and related 1,191 1,191
Personnel and related 627 627
Social entities 391 391
Income taxes 1,713 1,713
Value added tax 154 154
Other taxes, duties and similar items 28 28
Liabilities on non-current assets 1 1
Group and associates 53,190 53,190
Deferred income 145 145
Total 113,648 113,032 616
Breakdown of prepaid expenses and deferred income
in 000s of € Prepaid Deferred income
expenses
External expenses 154
Financial transactions 301 145
Total 455 145
Breakdown of accrued liabilities and accrued income
in 000s of € Accrued liabilities Accrued income
Invoices not received / to be 159 148
established 725 8
Tax and social payables /receivables 23 53
Financial transactions
Total 907 209
Breakdown of transfer of charges
in 000s of € Transfer of
charges
Transfer of external charges 1,562
Transfer of personnel charges 5,804
Total 7,366
Extraordinary income and expenses
in 000s of € 31/12/2007 31/12/2006
Sale of property, plant and equipment 6
Sale of non-current financial assets 229 5
Reversal of accelerated depreciation 5 5
Other income 121 13
Total extraordinary income 355 29
Sale of property, plant and equipment 6
Sale of non-current financial assets 231 2
Increase in accelerated depreciation 85 29
Other expenses 3,200
Total extraordinary expenses 3,516 37
Breakdown of income taxes
Breakdown in 000s of € Income Taxes owed Net income
before tax after tax
Current income 1,985 1,985
Extraordinary income -3,161 -3,161
Tax receivable due to previous -2,273 2,273
taxable profits charged
Total -1,176 -2,273 1,097
Deferred and contingent tax position
in 000s of € Amount
Tax on:
Accelerated depreciation/amortisation 573
Total increases 573
Prepaid tax on:
Paid holidays 109
Other 79
Total reductions 188
Net deferred tax position 385
Net contingent tax position 0
Financial instruments
Valuation:
The company uses derivatives products mainly to hedge against rate risks. Transactions
carried out to hedge foreign exchange risks are not significant.
The valuation of the financial instruments was € 690 000 at 31/12/2007.
Interest rate risks
In order to protect itself against changes in interest rates, the group executed hedges in the
form of interest rate, swap, cap and floor contracts.
The types of instruments that may be used, and the maximum level of risk incurred, are
determined by senior management. The risk is monitored daily.
Portfolio of financial instruments at 31/12/2007:
Time to maturity in 000s of € Less than 1 to 5 More than Total
1 year years 5 years
Rate swaps 24,954 16,301 3,692 44,947
Caps purchased 14,250 687 14,937
Floors sold 7,125 344 7,469
Total 46,329 17,332 3,692 67,353
Off-balance sheet commitments
The sub-group head companies (Exacompta, Papeteries de Clairefontaine, Clairefontaine
Rhodia and AFA) guarantee all repayments of the subsidiaries that borrow from the parent
company.
There are no commitments to related companies.
Amounts concerning related companies
in 000s of € Related
EXACOMPTA CLAIREFO : 2007 Annual Report
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