‘‘Dear shareholders,

Hologram Industries has grown to become an acknowledged world leader in the fight against counterfeiting.

Over the years, we have developed and gained skills in the optical, material engineering and digital fields. Every year, we continue to devote 10% of our turnover to R&D investments. We have invested €25m over the past 10 years and lodged close to 45 patents.

Our teams continually strive for excellence in designing solutions, combining technologies, and industrial processes - areas where quality and safety are key concerns - as well as in their sales and marketing approach where they have intensified the network of local intermediaries.

Numerous governments use our optical and digital security solutions and some of the biggest brands authenticate their products using our visual elements. Every year we gain new, prestigious clients, for example we produce solutions for Chinese and Mexican passports, as well as Philippino bank notes for which we won two awards for the first application in the world of a 3rd generation DID® holographic patch.

In 2012 we posted 13% growth, marked by a 22% increase in identity documents and a notably good performance by our fiduciary documents which grew 53%. We finished the year with operational profits of over 20%.

The year was also marked by many new business accounts totalling €7.1m, more than doubling our business in two years. This performance gives us great confidence in the future.

To support our development and improve our performance, we have strengthened our presence in the US by acquiring a new factory at Trumbull in order to create a second industrial platform dedicated to complex holographic labels and reflective stickers. This acquisition represented an investment of $4m. In addition, we are in the process of acquiring an industrial platform at the Bussy site which should enable us to double our production capacity in France. This ambitious programme aims to support our expected strong growth over the next few years.

For 2013, we again expect a year of two-figure growth with an operating margin over 20%. We aim to achieve €75m in turnover by 2015.

Finally, I would like mention the prestigious Audace Créatrice (creative daring) award we received from the French President last September in acknowledgement of our growth and profitability."

Hugues SOUPARIS

Founder and CEO of Group Hologram Industries