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(1)19 96. 19 97. 19 98. 19 99. 20 00. 20 01. 20 02. 20 03. 20 04. 20 05. INTERIM REPORT June 30, 2005 Disclaimer This Interim Report and its constituent parts have been translated from the original French language versions. For the purposes of interpretation the French originals will take precedence over the English translation.. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. 19 95.

(2) ABC arbitrage. Management report. Key consolidated figures are presented below: June 30, 2005 IFRS. June 30, 2004 IFRS 2004(1). Dec. 31, 2004 2004 IFRS (1). Advisory revenues Proprietary trading revenues (2). 10.6. nm 8,1. nm 15,9. Net revenues. 10.6. 8,1. 15,9. Payroll costs Occupancy costs Other expenses Income before tax. (3.2) (0.4) (0.7) 6.3. (3.2) (0.3) (0.6) 4.1. (5.7) (0.6) (1.3) 8.3. 3.7. 2.8. 5.5. In EUR million. Net income nm: not material 1: Excluding IAS 32 and IAS 39, which were adopted as of January 1, 2005 2: Net gain/loss on financial instruments at fair value through profit or loss. Operating performance Net income came to EUR 3.7 million, an increase of almost 32% compared with first-half 2004. Net revenues, our key operating performance indicator, rose 31% to EUR 10.6 million, reflecting good control over operating costs. Gross return on equity (ratio of net revenues to average equity over the period) came to an excellent 40% for the six months to June 30, compared with just 1.34% for the CSFB/Tremont Hedge Fund Index, a benchmark in alternative investment. With our steady, recurring returns, we continue to outperform the main asset classes in an alternative investment universe that covers a vast array of different profiles in terms of managers, strategies and performance. Our first-half performance was quite remarkable in an environment of extremely weak market volatility and continued strong competition. Once again, the average number of arbitrages in the portfolio increased significantly from 444 in first-half 2004 to 585 in first-half 2005, reflecting the Group’s ability to apply its trading techniques on a large scale and diversify its risks.. Impact of transition to IFRS Effective January 1, 2005, the Group adopted the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB). In line with the option available under IFRS 1, the Group adopted IAS 32 and IAS 39, together with the fair value option amendment, as of January 1, 2005. This had the effect of reducing opening equity by EUR 1,152 thousand. Other adjustments, which had no material impact on the financial statements, concerned the deduction from consolidated equity of treasury shares held by the Group, and the elimination of provisions for market risks (see note 3.8 to the 2004 financial statements for details) that do not qualify for recognition as liabilities under IAS 37. At its meeting of September 19, 2005, the Management Board decided to allot 399,555 shares to employees and executive officers of the Group. This comes within the scope of IFRS 2 on share-based payments, which requires the recognition of a payroll expense equal to the fair value of services rendered by the employees in return for the equity instruments granted to them.. Interim report 2005 - Page 1 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. The proportion of arbitrages without market risks rose slightly to 75% of the average portfolio over the period..

(3) Advisory services and third party management ABC arbitrage Asset Management, which has a restricted asset manager license, had no other client but the parent company during first-half 2005. The first contractual funds, which are regulated by the AMF, were created in France and four third-party mandates were negotiated during March 2005. After reviewing the repercussions of signing a separate management mandate for each client, the Group opted to create one or several funds to house all its initial clients. Share performance In first-half 2005, trading volumes in our shares rose to a daily average of over 54,275 compared with 18,867 in the prior-year period, representing an average daily value of EUR 136 thousand against EUR 64 thousand in 2004. At the Annual General Meeting on May 31, 2005, shareholders approved a final net dividend of EUR 0.10 per share for 2004, with the option of reinvesting all or part of the dividend in shares ranking pari passu with existing shares at a price of EUR 1.89. The final dividend was paid at end July 2005 and the reinvestment rate was almost 75%. The total net dividend for 2004 therefore came to EUR 0.60 per share. After dividend reinvestments and the issuance of shares on exercise of warrants to subscribe for founder shares and/or stock options, the issued capital at July 21, 2005 came to EUR 465,591, divided into 29,099,468 ordinary shares. The free float represented 44.7% of the issued capital on that date. ABC arbitrage shares closed at EUR 1.96 on June 30, 2005. The Group’s current valuation in no way reflects its performance of the past few years nor the yield offered by the shares. Interim dividend In line with its regular dividend payout policy, the Management Board decided to pay an interim dividend of EUR 0.10 per share in respect of 2005. Shareholders have the option of reinvesting all or part of their dividend in ABC arbitrage shares at a price of EUR 1.85 per share. The interim dividend, which does not constitute an indication of future dividends, will be paid in December 2005. The actual payment date will be announced at a later stage. Outlook. We have every confidence in our ability to achieve this goal and to attract external funds, supported by a strong commitment on the part of our teams, our robust results and financial structure, and the confidence of our shareholders.. The Management Board October 6, 2005. Interim report 2005 - Page 2 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. The second half of 2005 has started well and the ABC arbitrage Group is pursuing its policy of profitable growth, based first and foremost on continued strong organic growth across all its arbitrage strategies..

(4) ABC arbitrage. Consolidated financial statements. Balance sheet - assets June 30, 2005 IFRS. Dec. 31, 2004 2004 IFRS. 15,197. 24,130. Property and equipment. 526,580. 519,149. Current financial assets. 436,953. 441,717. In EUR. Intangible assets. Deferred tax assets Total non-current assets Financial assets at fair value through profit or loss Other accounts receivable Cash and cash equivalents. 317,309. -. 1,296,038. 984,997. 248,765,058. 211,606,576. 7,861,050. 7,121,863. 299,287. 2,160,029. Total current assets. 256,925,395. 220,888,468. TOTAL ASSETS. 258,221,434. 221,873,464. June 30, 2005 IFRS. Dec. 31, 2004 2004 IFRS. Balance sheet – liabilities In EUR Equity attributable to equity holders. Paid-up share capital Additional paid-in capital Retained earnings. 447,891. 447,758. 18,866,616. 18,862,821. 1,817,689. 12,889,696. -. (12,639,806). 3,713,205. 5,532,474. 24,845,401. 25,092,943. (116). (82). Provisions for contingencies and charges. 759,857. (12,639,806). Non-current financial liabilities. 160,295. 5,683,081. Interim dividend Net income Total equity attributable to equity holders Minority interests. Non-current liabilities. 920,152. 411,746. 225,729,001. 192,769,273. Other liabilities. 4,991,868. 1,612,975. Taxes payable. 1,734,151. 1,925,817. Financial liabilities at fair value through profit or loss. Short-term debt. 977. 498. Current liabilities. 232,455,997. 196,308,563. TOTAL EQUITY AND LIABILITIES. 258,221,434. 221,873,464. The Group decided to take advantage of the option available under IFRS 1 not to adjust the opening financial statements at January 1, 2004 in accordance with IAS 32 & IAS 39 as endorsed by European Union and to apply these two standards for the first time at January 1, 2005. As a result, for comparative 2004 data, financial instruments and transactions covered by IAS 32 & IAS 39 are recognized and presented under the French accounting principles applied by the Group.. Interim report 2005 - Page 3 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. •.

(5) Statement of income In EUR Net gain/loss on financial instruments at fair value through profit or loss Other revenue Administrative expenses Taxes and duties Payroll costs Depreciation and amortisation expense OPERATING INCOME Provision expense INCOME BEFORE TAX Current taxes Deferred taxes NET INCOME Attributable to equity holders Attributable to minority interests Number of ordinary shares Earnings per ordinary share. First-half 2005 IFRS. First-half 2004 2004 IFRS. Full-year 2004 2004 IFRS. 11,141,775. 7,766,699. (15,576,104). 439,717 (1,285,278) (209,404) (3,117,298) (141,182) 6,828,329 (517,334) 6,310,995 (2,339,375) (258,450) 3,713,171. 437,635 (1,234,913) (129,807) (3,016,256) (121,007) 4,199,433 360,333 4,062,683 (1,247,820) 2,814,864. (875,159) (2,491,518) (313,774) (5,400,060) (266,291) 7,979,621 332,892 8,312,512 (2,780,180) 5,532,333. 3,713,205. 2,815,253. 5,532,474. (34). (390). (141). 27,993,194. 24,444,576. 27,984,877. 0.13. 0.12. 0.20. Interim report 2005 - Page 4 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. The Group decided to take advantage of the option available under IFRS 1 not to adjust the opening financial statements at January 1, 2004 in accordance with IAS 32 & IAS 39 as adopted by European Union and to apply these two standards for the first time at January 1, 2005. As a result, for comparative 2004 data, financial instruments and transactions covered by IAS 32 & IAS 39 are recognized and presented under the French accounting principles applied by the Group..

(6) ABC arbitrage. Statement of changes in equity between December 31, 2003 and June 30, 2005. Paid-up share capital. Equity instruments and related reserves. Elimination of treasury shares. Retained earnings & net income. Net income recognised directly in equity. Total equity. 378. 8,087. -. 27,296. -. 35,761. -. -. (326). 194. -. (132). 378. 8,087. (326). 27,490. -. 35,629. Issue of shares. 7. 961. -. -. -. 968. Elimination of treasury shares. -. -. 231. 22. -. 252. In EUR thousand At December 31, 2003 Effect of adoption of IFRSs applicable in 2004 At January 1, 2004 Movements arising from relations with shareholders. Appropriation of net income for 2003. 19. 3,236. -. (14,527). -. (11,272). 2004 interim dividend. 43. 6,579. -. (12,640). -. (6,018). Net income for the year At December 31, 2004 Effect of adoption of IFRSs applicable at January 1, 2005 At January 1, 2005. •. -. -. -. 5,532. -. 5,532. 448. 18,863. (95). 5,877. -. 25,093. -. -. -. (1,152. -. (1,152). 448. 18,863. (95). 4,726. -. 23,941. Movements arising from relations with shareholders. Issue of shares. nm. 4. -. (4). -. -. Elimination of treasury shares. -. -. 22. (32). -. (11). Appropriation of net income for 2004. -. -. -. (2,798). -. (2,798). Net income for 6 months to June 30, 2005. -. -. -. 3,713. -. 3,713. 448. 18,867. (73). 5,604. -. 24,845. At June 30, 2005 nm: not material. Interim report 2005 - Page 5 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. •.

(7) Consolidated cash flow statements. First-half 2005 IFRS. Full-year 2004 2004 IFRS. 3,713. 5,532. Provision expense, net. 448. (368). Depreciation and amortisation expense. 141. 262. In EUR thousand Net income. Change in deferred taxes. 258. -. Others. (11). (73). 4,550. 5,354. Net cash provided by operations before changes in working capital Changes in working capital. (3,478). 10,577. Net cash provided by operating activities. 1,073. 15,931. Net cash used by investing activities. (135). (319). -. 968. (2,798). (17,290). -. -. Net cash used by financing activities. (2,798). (16,321). Net change in cash and cash equivalents. (1,861). (710). 2,159. 2,869. 298. 2,159. Issuance of shares for cash Dividends paid Increase in borrowings. Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period. Interim report 2005 - Page 6 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. ABC arbitrage.

(8) ABC arbitrage. Notes to the consolidated financial statements. 1. Significant accounting principles 1.1. Introduction Under European Union regulation 1606/2002 of July 19, 2002, companies listed on a regulated stock exchange in one of the member states are required to present their consolidated financial statements for financial years beginning on or after January 1, 2005, in conformity with the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as endoresed by the European Union and in force at that date. The Group has drawn up its consolidated financial statements for the six months to June 30, 2005 in compliance with the Autorité des Marchés Financiers (AMF) general regulations on interim accounts and with CNC recommendation 99-R-01 on interim accounts, by applying the accounting and valuation principles contained in all IFRSs expected to be force at December 31, 2005. The rules applied by the Group comprise IFRS 1-5 and IAS 1-41, as well as the interpretations of these standards, as endorsed by the European Union at June 30, 2005. ABC arbitrage also applied early the following amendments, which have not yet been endorsed by the European Union: - The amendment to IAS 39 “Financial instruments, recognition and measurement” approved in December 2004 regarding the transition and initial recognition of financial assets and liabilities, - The amendment to IAS 39 approved in June 2005 on application of the fair value option. At the time the interim consolidated financial statements were drawn up it was not possible to know the IFRSs and IASs that will be in force at December 31, 2005 and it is therefore possible that the opening balance sheet and half-year income may change in the course of preparing the full-year 2005 consolidated financial statements. 1.2 Principles of first-time adoption of IFRS The ABC arbitrage Group’s consolidated financial statements for the period to December 31, 2004 were prepared in accordance with the French accounting principles contained in regulations 1999-02 of the French Accounting Regulation Committee, which differ in some respects from the IFRSs endorsed by the European Union. Comparative information for periods in 2004 (to December 31, 2004 and to June 30, 2004), originally prepared under French accounting principles, has been restated to comply with IFRS except for transactions which are under the scope of IAS 32 and IAS 39. Any such transactions in the 2004 comparative periods have been recognized and presented in these interim accounts under French accounting principles, as permitted under IFRS 1 “First-time adoption of IFRS” which allows application of IAS 32 and IAS 39 to be delayed until January 1, 2005.. The effects of this change in accounting standards on the consolidated balance sheet, consolidated equity and the consolidated income statement are described in notes 2.2. and 3. These notes describe the methods used to draw up the Group’s opening IFRS balance sheet at January 1, 2004 and present the quantitative impact on the financial statements of differences compared with the French accounting principles previously applied. Notes 2.2. and 4 describe the methods used to draw up the Group’s opening IFRS balance sheet at January 1, 2005 for transactions on financial instruments under the scope of IAS 32 and IAS 39, as endorsed by the European Union. 1.3 Principles applicable to the consolidated financial statements at June 30, 2005 The interim consolidated financial statements are presented in euros. Note 2.2. describes the IFRS recognition and measurement principles used to prepare the consolidated financial statements at June 30, 2005, and provides a comparison with the principles formerly applied under French GAAP. The French accounting principles referred to are described in the 2004 annual report. As was the case last year, the accounting principles used to prepare the interim financial statements for the six months to June 30, 2005 are identical to those used for the full year except for the tax charge, which is calculated on the basis of an estimated average rate for the year. Interim report 2005 - Page 7 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. These interim consolidated financial statements also include an opening balance sheet prepared in accordance with IFRS 1..

(9) 2. Accounting principles and policies The accounting principles described below concern only the differences between IFRS and the French accounting principles previously used.. 2.1. Accounting policies applied to the financial statements for the year ended December 31, 2004 2.1.1. Principal adjustments Treasury shares In line with opinion 98 D published by the Urgent Issues Task Force on December 17, 1998, treasury shares purchased expressly for the purpose either of allotting them to employees or regulating the share price were previously recognised in the balance sheet as current assets and measured accordingly. In accordance with IFRSs and IASs, ABC arbitrage shares held by the Group are recorded as a deduction from consolidated equity irrespective of the purpose for which they are held. Gains on the sale of these shares is eliminated from the consolidated income statement. Provisions for contingencies and charges Provisions for market risks (see note 3.8. to the 2004 financial statements for details) do not qualify for recognition as liabilities under IAS 37. They were cancelled by adjusting retained earnings at January 1, 2004 and charges/reversals made during 2004 were eliminated from profit. Financial instruments Given the European Union’s late endorsement of IAS 32 and 39 on financial instruments, ABC arbitrage adopted these two standards for the first time on January 1, 2005. The impact was recognised in opening equity at January 1, 2005. Share-based payments The Group took advantage of the option not to apply IFRS 2 on share-based payments retrospectively in 2004. All equity instruments granted between November 7, 2002 (date of publication of the IFRS 2 exposure draft) and December 31, 2004 had fully vested at January 1, 2005. Employee benefits The Group has reviewed all retirement and other benefits covered by IAS 19. It does not provide any postemployment benefits (pension top-ups or certain healthcare costs). Other long-term benefits are provided under defined contribution plans which do not give rise to a future liability as the Group’s only obligation is to make regular contribution payments.. In view of the highly specific nature of its business, the ABC arbitrage group is probably one of the only independent firms engaged solely in arbitrage trading within a non-banking financial statement presentation. Under IAS 1, the statement of income may be presented either by nature or by function. The Group has opted for presentation by nature as this is closer to the indicators customarily published in its management report. The Group has also adopted the provisions of recommendation 2004-R02 issued by the Conseil National de la Comptabilité. The main reclassifications are as follows: - A new line item, “Net gains or losses on financial instruments at fair value through profit or loss”, has been created in the income statement as the presentation recommended by the Conseil National de la Comptabilité does not include the line items used under French GAAP to identify gains or losses on financial instruments falling within the scope of IAS 39. This item corresponds to revenues from proprietary trading activities discussed in the Group’s management report, except for provisions. It includes all expenses and costs directly related to the trading business, including: dividends; gains and losses on disposal of financial assets at fair value through profit or loss; changes in fair value of instruments held or due; Interim report 2005 - Page 8 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. 2.1.2. General presentation of the statement of income.

(10) securities carrying or lending costs; exchange gains and losses. -. “Expense transfers”: under IFRS, expense transfers are deducted from the original expense account and added to the new expense account, whereas in the French GAAP accounts the transfers were recognised in two steps by recording a revenue entry.. -. “Provisions”: under French GAAP, provisions are written back to income when the risk occurs or the expense is incurred, in accordance with regulation CRC 99-03 on financial statement presentation. The corresponding expense is booked to the relevant expense account. Under IFRS, the provision does not qualify as income as it does not result in a net increase in equity. It is therefore recognised as a reduction of the expense concerned. If the actual expense is lower than the provision and the balance of the provision is no longer required, the surplus then qualifies as income and is booked under the same line item as the original provision charge.. -. “Exceptional items”: the concept of exceptional items does not exist under IFRS.. Note 3.1 “Reconciliation of the first-half 2004 statement of income” shows the reclassifications made between French GAAP and IFRS line items. 2.1.3. General presentation of the balance sheet The Group decided to take advantage of the option available under IFRS 1 not to restate the opening balance sheet at January 1, 2004 in accordance with IAS 32 & IAS 39 as endorsed by European Union and to apply these two standards for the first time at January 1, 2005. As a result, for comparative 2004 data, financial instruments and transactions covered by IAS 32 & IAS 39 are recognized and presented under the French accounting principles applied by the Group (cf. 2004 Annual Report ). First-time adoption of IFRS does not give rise to any major differences in balance sheet presentation compared with ABC arbitrage’s previous practice. The distinction between current and non-current items required under IAS 1 is broadly consistent with the split of assets (fixed/current) and liabilities (long-term/current) used in the French GAAP financial statements. However, in the French GAAP financial statements, current taxes were classified under “Other liabilities” and “Other receivables” depending on the position of each taxable entity, while deferred tax assets and liabilities were broken down into a long-term and short-term portion. As required by IAS 12, current taxes are now presented on a specific line item under current assets or liabilities, while deferred taxes are shown on a specific line item under non-current assets or liabilities.. The vast majority of the Group’s arbitrage positions concern equities or equity derivatives, such as warrants, put warrants and convertible bonds. The securities are recorded in the balance sheet at cost, net of brokerage fees. Since 2004, the Group also trades in swaps for which the underlyings are assets listed on regulated markets. Financial instruments are held solely for trading purposes, and are recognised in the IFRS accounts at fair value through profit or loss. Until December 31, 2004, these instruments were recognised and measured in accordance with the principles described in note 2.1. to the 2004 financial statements. From January 1, 2005, the fair value of financial assets and liabilities is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. The primary basis for determining the fair value of a financial instrument is the quoted price in an active market. If the instrument is not traded on an active market, fair value is determined using valuation techniques. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The market price used is usually the bid price for an asset held or a liability to be issued and the ask price for an asset to be purchased or a liability held.. Interim report 2005 - Page 9 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. 2.2. Accounting policies applied with effect from January 1, 2005 2.2.1. Determining the fair value of financial instruments.

(11) The principle of netting financial assets and liabilities described in note 2.1. to the 2004 financial statements has been maintained. All securities and currencies held for trading purposes, which were previously broken down into “Marketable securities” and “Other assets”, are now recognised under a new line item called “Financial assets and liabilities at fair value through profit or loss”. These financial assets and liabilities held for trading purposes are recognized on the balance sheet at fair value under “Financial assets or liabilities at faire value through profit or loss”. Changes in fair value are recorded in the statement of income for the period as “Net gains or losses on financial instruments at fair value through profit or loss”. The impact of first-time adoption of IAS 39 and IAS 32 as of January 1, 2005 is described in note 4.3. “Consolidated equity”. 2.2.2. Share-based payment ABC arbitrage has granted stock options to employees. Under French GAAP, no expense is recognized in connection with the granting of stock options. The Group also plans to make share grants. On exercise of stock options, ABC arbitrage issues new shares or sells to employees shares previously acquired by the Group. Only the gain or loss arising on the sale of these shares is recognized in the financial statements. By contrast, IFRS 2 “Share-Based Payment”, requires that an expense be recognized equal to the fair value of the services rendered by the employees in return for the equity instruments granted to them.. Interim report 2005 - Page 10 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. Under the first-time adoption requirements set out in IFRS 1 in relation to IFRS 2, only plans concerning options granted after November 7, 2002 and not fully vested at January 1, 2005 are required to be restated. The Group did not make any share-based payments during first-half 2005..

(12) 3. Effects of first-time adoption of IFRS 3.1. Reconciliation of the first-half 2004 statement of income. First-half 2004 Reclassifications French GAAP. In EUR thousands. Restatements. First-half 2004 2004 IFRS. -. 7 767. Net gain/loss on financial instruments at fair value through profit or loss. (1). -. REVENUES. (2). 15. - 15. -. -. Provisions written back and expense transfers Other revenues Administrative expenses Taxes and duties Payroll costs Allocations to depreciation and amortisation Other expenses. (2). 99 423 - 1 998 - 173 - 2 999 - 186 - 17. - 99 15 764 43 - 17 65 17. -. 438 - 1 235 - 130 - 3 016 - 121 -. - 4 837. 8 539. -. 3 702. - 28 694 - 402 - 16 372 42 35 594. - 518 195 200 -. -. (2). OPERATING INCOME. 7 767. Other financial income Allowances & reserves written back & expense transfers Exchange gains Net gains on disposals of marketable securities Allocations to provisions Interest and related expenses. (2). (2). 28 694 920 16 177 - 242 - 35 594. Exchange losses. (2). - 920. 920. -. NET FINANCIAL INCOME. (2). 9 036. - 8 912. - 123. -. Provisions. (1). -. 360. -. 360. PRE TAX INCOME. (2). 4 199. - 13. - 123. 4 063. NET NON-OPERATING (EXPENSE)/INCOME. (2). - 13. 13. -. -. 4 186. -. - 123. 4 063. - 1 248 - 35. -. 35. - 1 248 -. INCOME BEFORE TAX Current taxes Deferred taxes. (2) (2) (2) (2). NET INCOME BEFORE MINORITY INTERESTS. 2 903. -. - 88. 2 815. Net income. 2 903. -. - 88. 2 815. nm. -. -. nm. Minority interests. Main reclassifications made to comply with 2004 IFRS: * Reclassification of various items of financial income and expense as “Net gains or losses on financial instruments at fair value through profit or loss”: EUR 8,552 thousand. * Reclassification of settlement/delivery costs and external charges as “Net gains or losses on financial instruments at fair value through profit or loss”: EUR (764) thousand. * Reclassification of exceptional items as “Net gains or losses on financial instruments at fair value through profit or loss”: EUR (20) thousand. * Reclassification of provision reversals as a reduction in the corresponding expense or, in the case of a surplus provision no longer required, under the same line item as the original provision charge.. Interim report 2005 - Page 11 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. nm: not material (1) New line in the IFRS statement of income (2) Line not included in the IFRS balance sheet.

(13) Main restatements made to comply with 2004 IFRS: * Elimination in the consolidated income statement of gains or losses on treasury shares held by the Group (net impairment provision reversal of EUR 218 thousand and capital loss on disposal of EUR 195 thousand). * Elimination of provision charges/reversals made in the income statement during 2004 and the related deferred taxes in respect of provisions that do not qualify for recognition as liabilities under IAS 37 and which were reclassified in retained earnings at January 1, 2004 (EUR 65 thousand).. 3.2. Reconciliation of the balance sheet at June 30, 2004 Balance sheet - assets In EUR thousands. Dec. 31, 2004 Reclassifications French GAAP. Dec. 31, 2004 2004 IFRS. Restatements. 24. -. -. 24. Property and equipment. 519. -. -. 519. Non-current financial assets. 442. -. -. 442. Total non current-assets. 985. -. -. 985. -. 211,607. -. 211,607. Intangible assets. Financial assets at fair value through profit or loss Trade accounts receivable. 274. (274). -. -. Other accounts receivable. 9,125. (1,968). (35). 7,122. 209,460. (209,365). (95). -. 2,160. -. -. 2,160. Total current assets. 221,019. -. (130). 220,888. TOTAL ASSETS. 222,004. -. (130). 221,873. Marketable securities Cash and cash equivalents. Balance sheet - liabilities In EUR thousands. Dec. 31, 2004 Reclassifications French GAAP. Dec. 31, 2004 2004 IFRS. Restatements. 448. -. Additional paid-in capital. 18,863. Retained earnings. 12,769. Interim dividend Net income Total equity attributable to equity holders. -. 448. -. -. 18,863. -. 121. 12,890. (12,640). -. -. (12,640). 5,683. -. (151). 5,532. 25,123. -. (30). 23,941. Minority interests. nm. -. -. nm. Provisions for contingencies and charges. 412. -. (100). 312. Non-current liabilities. 160. -. -. 160. Total non-current liabilities. 572. -. (100). 472. Financial liabilities at fair value through profit or loss. 192,769. -. 192,769. 172. (172). -. -. Other liabilities. 196,136. (194,523). -. 1,613. Taxes payable. -. 1,926. -. 1,926. nm. Trade accounts payable. Short term debt. -. -. nm. Total current liabilities. 196,309. -. -. 196,309. TOTAL EQUITY AND LIABILITIES. 222,004. -. (130 ). 221,873. nm: not material. Interim report 2005 - Page 12 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. Equity attributable to equity holders Paid-up share capital.

(14) 4. Notes to the financial statements – first half 2005 4.1. Consolidation principles All group subsidiaries are fully consolidated. Company. Proportion of capital held directly or indirectly. ABC arbitrage. Parent company. BC Finanzberatung GmbH. 100.00%. ABCA Global Fund. 100.00%. ABC arbitrage Asset Management. 99.99%. 4.2. Other non-current financial assets At June 30, 2005, this item included EUR 276 thousand in deposits and EUR 161 thousand in employee advances. These exceptional advances were granted in May 2004, by unanimous decision of the Management Board, to holders of warrants to subscribe for founders shares and holders of stock options, to enable them to exercise their warrants or options. Under no circumstances may the advances be used for any other purpose.. 4.3. Consolidated equity Reduction of equity on transition to IAS 32 and IAS 39 at January 1, 2005 Until December 31, 2004, if the historical cost convention provided for in section L.123-14 of the Code de Commerce (Commercial Code) had been applied to the balance sheet items corresponding to market transactions conducted by the Group, the financial statements would not have given a true and fair view of the Group’s assets and liabilities, nor the financial position and results of operations. Consequently, the Group applied an alternative method as explained in note 2.1. in the 2004 Annual Report. Following the adoption of IAS 32 and IAS 39, and in line with the option available under IFRS 1, the Group measured its financial assets and liabilities at fair value as of January 1, 2005. This had the effect of reducing equity by EUR 1,152 thousand, broken down as follows: In EUR thousands Impact of the difference between the portfolio valuation price and a median price (closing price) Impact of the difference between the median price and the best bid price. (1,126) (601). Deferred tax effect. 575 (1,152). Capital increase arising on adjustment of option holders’ rights On March 10, 2005, the Board of Directors decided to adjust the rights of option holders. This resulted in the issuance of 8,317 new shares, including 2,866 shares on exercise of warrants to subscribe for founder shares and 3,876 shares on exercise of stock options, together with 1,575 shares issued upon reinvestment in shares of dividends due on the 6,742 shares issued on exercise of warrants and options. These share issues led to a capital increase of EUR 133.07, paid up by transferring to the capital account EUR 107.87 from “Additional paid-in capital” and EUR 25.20 from “Retained earnings”. At the same time, EUR 3,902.67 were transferred from “Retained earnings” to “Additional paid-in capital”. At June 30, 2005, the Parent Company’s share capital was represented by 27,993,194 ordinary shares with a par value of EUR 0.016 each, all fully paid.. Interim report 2005 - Page 13 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. Total.

(15) Capital increase resulting from reinvestment of dividends The Annual Shareholders’ Meeting of May 31, 2005 decided to pay a final dividend for 2004 in a net amount of EUR 0.10 per share and to offer shareholders the option of receiving the final 2004 dividend either in cash or in new shares. At June 30, 2005, equity was reduced by EUR 2,798 thousand to take account of the dividend payment. At the end of the option period, taking account of reinvested dividends and treasury shares: - cash dividends were paid in the amount of EUR 707 thousand, - 1,106,274 new ordinary shares, ranking pari passu with existing shares, were issued at a price of EUR 1.89 per share. The total issue proceeds included EUR 17,700.38 credited to paid-up capital and EUR 2,073,157.48 credited to additional paid-in capital. The 1,106,274 new ordinary shares are fully paid. At July 21, 2005, the Parent Company’s share capital was represented by 29,099,468 ordinary shares with a par value of EUR 0.016 each, all fully paid. Treasury stock During first-half 2005, ABC arbitrage sold 114,934 of its own shares in compliance with COB regulation 90-04. At the same time, 120,095 shares were purchased under the market-making agreement with Fortis. At June 30, 2005, ABC arbitrage held 38,397 of its own shares, acquired at a total cost of EUR 73 thousand. 4.4. Financial assets/liabilities at fair value through profit or loss The Group holds financial instruments for trading purposes only. Details of securities to be received and delivered are provided in note 4.6. Risks. Cash reserves earn interest at variable rates indexed to benchmark market rates. Until December 31, 2004, securities were recognised and measured in accordance with the principles described in note 2.1. to the 2004 financial statements. From January 1, 2005, fair value of financial assets and liabilities is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. The primary basis for determining the fair value of a financial instrument is the quoted price in an active market. If the instrument is not traded on an active market, fair value is determined using valuation techniques. The new standards, as applied to the portfolio at June 30, 2005, had the effect of reducing net income by EUR 635 thousand compared with the standards used until December 31, 2004, as follows:. (65). Impact of the difference between the portfolio valuation price and a median price (closing price) Impact of the difference between the median price and the best bid price. (887). Deferred tax effect. 317. Total. (635). After taking account of the EUR 1,152 thousand reduction in opening equity at January 1, 2005 (see note 4.3.), the adoption of IAS 32 and IAS 39 led to a net gain of EUR 517 thousand in first-half 2005. 4.5. Other receivables and payables All receivables and payables are due within less than one year. In EUR thousands Trade receivables/payables. Other receivables 262. Balance of dividend payable Accrued income/expenses. Other payables (134) (2 798). 478. (388). Accrued taxes and payroll costs. 7,121. (1 672). Total. 7,861. (4 992). Interim report 2005 - Page 14 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. In EUR thousands.

(16) 4.6. Risks The Group's risks are the same as those described in the notes to the consolidated financial statements for the year ended December 31, 2004. The following table summarizes the positions taken on the markets at June 30, 2005: Type of arbitrage (in EUR thousands). Total long positions. Total short positions. Securities borrowed and not yet sold or symmetrical exposures. 124,241. 124,241. Arbitrages without market risks. 187,277. 208,390. 80,414. 44,775. 391,932. 377,406. 75. -. 392,007. 377,406. Arbitrages with market risks Total for arbitrage transactions Money market mutual funds Total. 4.7. Guarantees given Most financial instruments recorded under “Financial assets at fair value through profit or loss” have been given as collateral to the institutions that provide the financing.. 4.8. Note to the statement of income “Net gains on financial instruments at fair value through profit or loss” amounted to EUR 11,142 thousand, as follows: - “Other financial income” for EUR 177,546 thousand, corresponding to dividend and interest income received on the portfolio of marketable securities, together with interest income on collateral placed with lenders of securities; - “Net gains on disposals of marketable securities” for EUR 173,904 thousand, representing net changes in long and short positions on marketable securities; - “Interest and related expenses” for EUR 340,368 thousand. This item includes the cost of securities borrowing transactions and net gains and losses on swaps and futures contracts;. - “Settlement/delivery expenses” for EUR (1,077) thousand, comprising fees billed by financial intermediaries for trading in financial instruments.. Interim report 2005 - Page 15 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. - “Exchange losses” for EUR 1,137 thousand: this item includes income and expense from currency hedging through the use of financing or the investment of surplus cash, as well as the impact of currency fluctuations;.

(17) 4.9. Note to the statement of cash flows The change in net cash and cash equivalents reflects the cash flows arising from the administrative management of Group companies. Cash flows relating to operating activities and their financing appear as changes in working capital.. 5. Segment information Revenues by business segment All revenues are derived from proprietary transactions. The Group had no external advisory activity during the first half of 2005.. Note: In the following tables, positions correspond to long positions valued at the convergence price, adjusted for the value of any payments to be made or received to close out the transaction. Breakdown of arbitrage transactions by type of risk Average number of arbitrage transactions. Average positions (value). Arbitrages without market risks. 74%. 75%. Arbitrages with market risks. 26%. 25%. 100%. 100%. First half 2005. Total. Breakdown of arbitrage transactions by geographic area Average number of arbitrage transactions. Average positions (value). 20%. 29%. 8%. 9%. USA. 58%. 53%. Other markets. 14%. 9%. 100%. 100%. First half 2005 Euro zone (excluding France) France. Total. First half 2005 Euro zone (excluding France) France USA Other markets Total. Arbitrages without market risks. Arbitrages with market risks. Total. 22%. 7%. 29%. 7%. 2%. 9%. 43%. 10%. 53%. 3%. 6%. 9%. 74%. 26%. 100%. Interim report 2005 - Page 16 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. Breakdown of arbitrage transactions by geographic area and type of risk.

(18) ABC arbitrage. Statutory auditors’ review report on the interim consolidated financial statements for the six months ended June 30, 2005. To the shareholders, In our capacity as statutory auditors and in accordance with article L.232-7 of the Code de Commerce, we have performed a limited review of the accompanying interim consolidated financial statements of ABC arbitrage for the period from January 1 to June 30, 2005. We have also reviewed the information contained in the interim report. These financial statements are the responsibility of the Management Board. Our responsibility is to report our conclusions on these financial statements based on our limited review. As described in note 1 to the financial statements, the interim consolidated financial statements have been prepared for the first time in accordance with the International Financial Reporting Standards applicable within the European Union from 2005 and which will be used by the company to prepare its 2005 financial statements. They also comply with the interim reporting requirements set out in the AMF’s general regulations. They include comparative data for 2004 and the first half of 2004 restated on the same basis. We conducted our limited review in accordance with the standards generally accepted in France. Those standards require that we perform limited procedures to obtain reasonable assurance, below the level resulting from a full audit, that the interim financial statements do not contain any material errors. A limited review of interim financial statements is substantially less in scope than an audit and consists principally of applying analytical procedures Based on our limited review, nothing has come to our attention that causes us to believe that the interim consolidated financial statements are not presented fairly, in all material respects, in accordance with the International Financial Reporting Standards endorsed by the European Union and the interim reporting requirements set out in the AMF’s general regulations. Without qualifying our opinion, we would draw your attention to the fact that the company has taken advantage of the exemption offered by IFRS 1 not to provide comparative data with respect to financial instruments governed by IAS 32 and IAS 39, which were adopted as of January 1, 2005. We also reviewed, in accordance with the standards generally accepted in France, the information given in the interim report on the interim consolidated financial statements that were the subject of our limited review. We are satisfied that this information is fairly stated and agrees with the interim consolidated financial statements.. The statutory auditors CONSTANTIN ASSOCIES Brigitte Drême. BARBIER FRINAULT & AUTRES Ernst & Young Olivier Durand. Interim report 2005 - Page 17 on 17. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. Paris/Neuilly-sur-Seine, October 7, 2005.

(19) Web: www.abc-arbitrage.com. WorldReginfo - b2f9adbc-0c63-4ee3-9d00-d2e1de5103de. 40, rue Notre Dame des Victoires - 75002 Paris - France Tel.: +33 1 53 00 55 00 – Fax: +33 1 53 00 55 01 E-mail: abc@abc-arbitrage.com.

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