This remarkable performance was obtained on the account of numerous fixed price contracts signed during the first quarter and in the beginning of the second. Mainly, this figure represents a real breakthrough which implies adjustments (some have been already carried out):

- the capital raising (moderate) to support the development of contractual operations 
- the enlargement of offices envisaged in Bucharest 
- the internal and external recruitment of project managers
- the recruitment of developers and consultants 
- the installation of an export team based in Orléans.

Consequently the number of staff has already exceeded 60 persons and should soon reach 70.

The BPO operations (Business Process Outsourcing) increase and settle, together with the Third-party Maintenance Applications contracts, the new support in order to offset the risk engaged by the fixed priced contracts.

Once is not habit, so the financial statement will start with the new contracts. They are numerous and they are significant. This quarter is characterized above all by outstanding contractual achievements, such as: Aptalys (French n°1 in marketing studies in the car industry), a French expert company in the supervision of installations of water distribution, Clementz (the European leading company in inventory and physical inventory systems), Mr Bricolage (now present in 9 countries)... Several of these contracts represent a volume of work higher than 1000 working days.

To date, the volume of business leads has doubled and includes one major part that is highly probable to confirm.

The Back Log shows a historical level for February since it accounts for 65% of the total of 2004. The structuring efforts made in 2004 prove to be worth.

The quality and the quantity of the services emerging from Romania yielded a turnover per capita quite particular in the country, using tariffs that respect the offshore world market. It is thus on a high staffing ratio and on the quality of the contractual achievements that this profitability was built.

As about the annual growth, the quarterly turnover at the end of March will be minimum 20% higher than the first quarter in 2004. On the other hand, the released cash-flow has slightly fallen when comparing it with the average of 2004 (due to the efforts of structuring), but it is definitely positive. This indicator should rise again in the following quarters, much above the international average.

- at a local level, Pentalog High Tech has just signed two contracts with Hitachi (Orléans). The objective is to bring to the software architecture solutions of traceability in J2EE and solutions of Dotnet development under Windows CE. As about the second collaboration between Hitachi and the office in Orléans, Pentalog High Tech has already trained the collaborators of Hitachi on the J2EE development and on the use and the administration of SQL Server.

Still at a local level, Pentalog High Tech has just agreed to host the web services of Orléans Technopole and to provide communication solutions.

Not at last, Pentalog High Tech succeeded to be the best offer for Opcareg for a Web-marketing program. Five local companies have already taken up this training.

- at a national level, Pentalog High Tech together with Newsys put the basis of a new company called Arnaud, which will deal with the management of the Cisco routers (thanks to Pentalog’s certified specialist). In association with Atos Origin Bordeaux, we created a J2EE web service platform as well as an EJB platform for a mobile communication company. Two of our collaborators participated at the project. Read the CV of Grégory and Ludovic.

- at a European level, Pentalog High Tech has just entered on the Dutch market, which takes to five the number of European countries where Pentalog had project, and 17 the number of world wide countries. The last contract settles the development in Bucarest, but supervised from Orléans.

Apart from that, Pentalog High Tech joined an important counseling company in the attempt to start up a company whose objective will be the counseling in foreign implementation in Romania. Even if the legal process of the new company is not finished, Pentalog High Tech had already led two missions on the market. The first one had a strategic importance for the French wine economy, relates to the establishment of a wine breeding company. It is Monica Jiman, the head of the office in Bucharest, and Frederic Lasnier, President&Chief Executive Officer of Pentalog, who dealt with this delicate mission.

Conclusion of the 3rd Quarter:
Competing in Bordeaux or Orleans will not have soon much sense, as the clients take the decisions at a European level, maybe world level. Pentalog High Tech had understood it since long time ago. As a matter of fact, through the level of expertise achieved during the national or international projects, Pentalog High Tech strengthens its credibility on the local markets like Orléans and Bordeaux. During the last years, Pentalog acquired 30 client references in these two cities.

Pentalog continues the upward trend, with a short break expected during the third quarter (see also our previous financial statement).

Thus, whereas it was forecasted a slight fall during the summer (unlike the exceptional operation in the summer of 2003), the Pentalog teams succeeded in matching the 3rd quarter of 2003.

Over 9 months, the turnover increased with 8%.

It is important now that the outputs increase due to the opening of the office in Bucharest, that the recruiting process continue in Brasov and that the French technical / counseling resources increase by 6%.

On the whole, the growth in the 4th quarter should not be lower than 18% thanks to an output which could reach from 26% up to 28%.

The increase in annual turnover should thus be established between 8,3 and 10%.

The cash flow level should remain higher than 7% of the turnover for 2004 in spite of the importance of the investments in human resources that are completely self-financed.

Moreover, this a figure of sequential growth and for that reason is even more relevant.... The sales turnover has indeed increased by 9% between the first and the second quarter.

This growth is obtained with nearly with the same resources since the office in Bucharest will be open only at the end of June.

The comparison of the first quarters of this year and the previous one shows a rise in growth rate of at least 13%.

The new Romanian office (Bucharest) will now contribute to sustain the growth obtained by the two-year process of continuous improvement of productivity.
The annual growth of the offshore activity will exceed 100% at all events.

For the future, the group performance in the third quarter of 2003 (including the activity of communication) is almost unachievable as long as the performance attained was mostly due to an exceptional operation in communication.
On the other hand, we should notice a small growth in the data processing departments activity. Pentalog will thus finish the third quarter of 2004 with a slight growth for the first 9 months of the year, then will accelerate in fourth quarter (anticipated capacity of growth: 26%).

A two-digit growth figure in 2004 is now a natural result.

Concerning the ratios, the ebitda* in the first quarter is 11,5% and should remain stable. This will allow Pentalog to maintain its trend on the basis of the released cashflows.
Regarding the customers, Pentalog signed in the first half of the year 12 new contracts, among which Hitachi, Kabira Technologies, E-nnov, S3G (Groupe Sud Ouest...). With 2 new customers per month, the commercial dynamism is at its ease.

The break-even point now is ensured or exceeded for the next 4 months (until October), which allows us to approach the third and the fourth quarters with much more calmness and to continue our recruitments.

Since the begining of the year, three persons have already been employed in France and five in Romania. Two more persons could be employed in France and from five to ten in Romania, according to the acceleration criteria.

The dependence on various customers is very weak since the most important customer's share of our sales turnover should not exceed 10% in 2004.

The assessment at half length is thus on our side for the initial expectations, and also proves the strength of our strategy and of the structures disposal.