TWO THOUSAND ELEVEN ANNUAL REPORT … · TWO THOUSAND ELEVEN ANNUAL REPORT . ANOTHER MAJOR STEP ... Michel Dyens Independent Director(1) ... an additional 3 years until 30 June 2011,

BALMAINBOUCHERONBURBERRY

JIMMY CHOOLANVIN

MONTBLANCNICKEL

PAUL SMITHREPETTO

S.T. DUPONTVANCLEEF&ARPELS

TWO THOUSAND

ELEVEN ANNUALREPORT

ANOTHER MAJOR STEP

FORWARD

INTERVIEW OF THE EXECUTIVE OFFICERSCORPORATE GOVERNANCE

KEY FIGURES2011 MILESTONES AND 2012 OUTLOOK

BRANDS AND PRODUCTSTHE SELECTIVE MARKET IN 2011

ORGANIZATION AND TEAMSSHAREHOLDER INFORMATION

FINANCIALSGROUP ORGANIZATION

REGISTRATION DOCUMENT

0204060810384054565861

Interview of the Executive OfficersINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

2INTERVIEW OF THE EXECUTIVE OFFICERS

Jean Madar andPhilippe Bénacin

3

Interview of the Executive OfficersINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

Interparfums has maintained a trajectory of virtuallyuninterrupted growth for more than fifteen years... What are the keys to this performance?

“They are of several natures. First we have focused ondeveloping high quality products through an extremelyflexible operating organization. This allows us to adjust andfine-tune the olfactory orientation during the project phaseif we consider this justified. This is no doubt a reflection ofour unique company culture. While we have developedsignificantly in fifteen years, we have not lost our originalspirit as a company where people truly work together. Everylaunch is the product of a significant amount of teamwork,numerous exchanges and extensive communication between us.

We are also fortunate in being able to count on very loyalpartners, whether subcontractors or distributors. The tiesthat unite us are often long-standing but also based onfriendly relations.

And then there is our openness to the world around us. Our multi-brand and multi-market profile provides us witha constant flow of fresh ideas from the outside. This in turnstimulates our creativity and inspiration for the design offragrances, bottles, packaging...”

What trends can be expected in 2012? What ambitions are driving you forward? What challenges lay ahead?

“With few launches lined up this year, we will be able toconsolidate our gains with a development plan for projectsin 2013. In effect, next year promises to be particularlyeventful with major launches. These will include new launchesfor Jimmy Choo and Burberry well as Lanvin along with,for the first time, Balmain and Repetto. These two brandsalso have rich and promising legacies and stories to be toldthrough their fragrances.

Our goal is to pursue this growth trajectory while continuingto capitalize on and maintain this momentum to build upour existing portfolio of brands. In the last two years we signedfive new license agreements and we remain very focused onmaintaining the portfolio's balance based on optimal mix ofdesigner brands with clearly defined and well differentiatedpositions.

The challenge is now to prepare for the next five years. Inparticular we are currently in the process of defining the termsof our contractual relations with Burberry. This clarificationwill enable us to better organize our resources for this nextstage of development and the exciting adventures ahead.”

How did Interparfums do in 2011?

“We are pleased to announce an excellent performance forthe year! Three new lines were launched in the period, anda rare achievement, all met with success. These included the first Jimmy Choo line and the Montblanc Legend andBurberry Body lines. These successes drove strong growth in sales to reach nearly €400 million, up 30% on 2010.”

What were the factors behind the successes?

“Firstly, the existence of a unique universe for each product.Jimmy Choo tells a story of femininity and sensuality, a displayof glamor with multi-faceted colors. Montblanc invites us to a more sober universe expressing both masculine strength andgentleness, frankness and mystery. As for Burberry, we havecontinued in the tradition of elegance and distinction with afragrance expressing the house's image, a perfect mix betweenthe signature trench design and glamor.

Inspired by these universes, we then developed strategies foreach launch to transport customers from the image to animaginary realm through finely-crafted campaigns.

More generally, our activity has benefited from the emergenceof markets such as China and Brazil while growth in theluxury sector in the US was bolstered by a return to pre-crisisconsumer spending levels. These results have strengthenedour progress in building positions in terms of market shareand audience in different world regions.”

Corporate governanceINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

4

Board of Directors

As of December 31, 2011 the composition of the Board of Directors was as follows:

Philippe BénacinChairman-Chief Executive Officer (1)

Jean MadarDirector (1)

Maurice AlhadèveIndependent Director (1)

Michel DyensIndependent Director (1)

Jean LevyDirector (1)

Patrick ChoëlDirector (1)

Chantal RoosIndependent Director (1)

Catherine Bénard-LotzDirector (1) (2)

Philippe SantiDirector and Executive Vice President (1) (2)

Frédéric Garcia PelayoDirector and Executive Vice President (1) (2)

Management committee members

The composition of the ManagementCommittee on 31 December 2011 was as follows:

Philippe BénacinChairman and Chief Executive Officer

Philippe SantiExecutive Vice President,Chief Financial and Administrative Officer

Frédéric Garcia-PelayoExecutive Vice President,Chief International Officer

Hugues de La ChevasnerieVice President, Burberry Fragrances

Angèle Ory-GuénardVice President, Export Sales - Burberry Fragrances

Jérôme ThermozVice President, French Distribution

Axel MarotVice President, Supply Chain & Operations

(1) Term of office expiring at the close of the annual shareholders' meeting of 2014.(2) Holder of an employment contract prior to being appointed as an officer.

5

Corporate governanceINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

CORPORATE GOVERNANCE

Management committee members (from left to right):Philippe Santi, Frédéric Garcia-Pelayo, Hugues de La Chevasnerie, Angèle Ory-Guénard,Jérôme Thermoz, Axel Marot and Philippe Bénacin

Interparfums adopted theform of a société anonyme,the French equivalent of ajoint stock company, when

it was created in 1989. It is governed by a Board ofDirectors and a Management

Committee.

Key figuresINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

6KEY FIGURES

The Group's solid balance sheet has strengthenedyear after year and at December 31, 2011 had:- shareholders' equity of €216 million (61% of total assets);- cash of €17.4 million;- low net debt of €3.5 million (to be fully paidoff at the end of September 2012).

Despite a negative currency effect, the grossmargin as a percentage of sales added morethan two points reflecting the change in the Group's structure from the consolidationof the new US company Interparfums LuxuryBrands starting January 1, 2011.

Operating profit came to €46.3 million (+10%)in a year of significant increases in marketingand advertising expenses (+76%) resulting inan operating margin of 11.6%.

In light of the non-recurring financial chargefrom the 2010 currency effect, Group net incomerose for the 15th consecutive year to more than€30 million in 2011 (+13%). This performancewas achieved despite an additional tax expense(€0.6 million) from an increase in the corporateincome tax rate in France. At constant tax rates,net income rose 15%.

Balance sheet highlights (1)

89.5Non-current

assets

237.1Current assets

17.4Net cash (2)

216.0Shareholders'equity

3.5Long-term debt

124.5Current liabilities

Assets Liabilities

(1) Consolidated data in € millions.(2) Including certificates of deposits with maturities exceeding three months.

7

Key figuresINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

At December 31 (in € thousands) 2007 2008 2009 2010 2011

Sales 242,123 264,864 259,165 305,696 398,328international (%) 91% 90% 90% 91% 91%

Operating profit 31,812 34,259 33,683 42,216 46,301% of sales 13.1% 12.9% 13.0% 13.8% 11.6%

Net Income 20,193 21,119 22,647 26,807 30,300% of sales 8.3% 8.0% 8.7% 8.8% 7.6%

Shareholders' equity (attributable to the parent) 134,233 154,436 169,939 191,884 216,020

Net cash (incl. certificate of deposits with maturities >3 months) 56,113 26,304 66,201 57,668 17,395

Total assets 271,544 260,572 253,674 296,957 353,194

Workforce 145 152 171 180 227

Net sales (1) Operating profit (1) Net income(1) Total dividends (1)

08

305.7

259.2

264.9

46.3

34.3

33.7

42.2

398.3 30.3

21.1

22.6

26.8

8.6

4.8

5.1

6.3

09 10 11 08 09 10 11 08 09 10 11 08 09 10 11

2011 milestones and 2012 outlook INTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

8

JANUARYCommencement of the Boucheron license agreementWith the transfer of inventories completed,commercial activity based on the three existinglines begins in the spring.

Launch of the Jimmy Choo lineInterparfums launched its first women'sfragrance under the Jimmy Choo brand. As a symbol of the brand's luxury positioning,a Venetian Murano glass bottle was designedfor this Eau de Parfum.

MARCHLaunch of the Passenger Cruise line of S.T. DupontThis new fragrance for men and women drawsits inspiration from the origins of the brand inthe art of travel.

Interparfums receives the Great Place To Work awardFor its first participation in the Great Place to Work Awards (9th edition) Interparfumswas distinguished by the Special Award forInspiration and advances to 10th place inFrance’s Best Workplaces list for “Companieswith less than 500 employees”.

Launch of the Optimistic line of Paul SmithA new fragrance for men and women is bornunder the Paul Smith brand blending warmth,joy and energy.

APRILExtension of the ST Dupont licenseThe 11 year license agreement signed in June 1997, initially extended in 2006 for an additional 3 years until 30 June 2011, was renewed for another term of 5 1/2 yearsuntil December 31, 2016.

Completion of a new logistics warehouseMeeting HQE standards, the new logisticswarehouse is located in the Eure department in the Haute-Normandie region of France.This 30,000 m² platform with a capacity for 43,000 palettes was put into service in the summer.

MAYLaunch of the Legend line of MontblancFor this new Montblanc fragrance for men, a bottle with a rich black and silver design asan emblem of its strength, character andmasculinity.

New SAP ERP systemWithin the framework of a major company-wideproject involving a team of nearly 20, the newSAP enterprise resource planning applicationwas implemented with success.

JUNEInterparfums - Clarins Alliance in SpainThe wholly-owned subsidiary of the Frenchcompany Interparfums, Interparfums España,leading the development and marketing of allGroup brands in Spain, joins forces with Clarins'Madrid-based subsidiary, Clarins Espagne.This renewable five-year agreement providesfor sharing an expanded sales force, administrativeservices and office facilities for this market.

June: Bonus share issueIn June 2011, the company proceeded with its12th bonus issue on the basis of one new sharefor every ten shares held.

JULY

Signature of a fragrance license agreementwith BalmainOn July 7, Balmain and Interparfums signed a 12-year worldwide license agreementcommencing on January 1, 2012 for thecreation, development and distribution offragrances under the Balmain brand.(see page 13)

SEPTEMBERLaunch of the Burberry Body lineA new feminine fragrance under the Burberrybrand, a refined and seductive scent and the mosthistorically important launch of the brand to date.

Interparfums awarded the 2011 “Boldnessand Creativity Prize”On September 22, French Prime Minister,François Fillon, awarded the 2011 “Boldnessand Creativity Prize” (Prix de l’Audace Créatrice)to Philippe Bénacin at a ceremony held atHôtel Matignon, the Prime Minister's officialresidence. This prize recognizes the achievementsof a company that has successfully combinedgrowth in sales, profitability and job creation.

Midcap Corporate Governance PrizeAlso in September, Interparfums was awardedthe “Midcap Corporate Governance Prize” forits significant initiatives in this area. In particularit recognizes the Group's performance oftransparent, regular and dynamic communicationswith shareholders.

DECEMBER

Signature of a fragrance license agreementwith RepettoOn December 7, Repetto, the French maker ofdance-inspired footwear and fashion accessories,and Interparfums signed a 13-year worldwidelicense agreement starting on January 1, 2012 for the creation, development and distribution of fragrances under the Repetto brand.(see page 33)

Exercise of the Burberry optionBurberry exercises its right to evaluate thepurchase price for the unexpired term of theexisting license. Under the terms of this option,Burberry has until July 31, 2012 to determinewhether it wishes to buy out the unexpiredportion of the license or continue the existinglicense which runs through December 31, 2017.

9

2011 milestones and 2012 outlook INTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

2011 MILESTONES AND2012 OUTLOOK

OUTLOOKSuccessful launches in 2011 of Jimmy Choo,Montblanc Legend and Burberry Body lines inparticular, positive outlooks for Lanvin, VanCleef & Arpels and Boucheron fragrances anda portfolio recently strengthened by theaddition of the Balmain and Repetto brands,allow us to look to the future with optimism.

Continued growth in 2012 will be supportedby several initiatives, including notably:

- the launch of a new fragrance line under the Montblanc brand or the extension offragrance lines for the Burberry, Lanvin andBoucheron brands;- expanding distribution of Jimmy Choofragrances, particularly in the US;- thirty additional counters to be opened indepartment stores accompanied by the rolloutof new references for the Burberry Beautymake-up line.

10

11

Top notes, our missions: developing perfume

and cosmetic lines through license agreements

with leading luxury brands in close collaboration

with each of their creative and marketing teams.

Heart notes, our core values:

meriting the respect of the prestigious brands that

grant us their confidence, creativity in the service

of their image, professionalism and high standards

in product design and packaging, orchestrating

their distribution and promotion.

Base notes, underlying our vision:

a strategy based on long-term partnerships with

all stakeholders for managing the process of creation

and production and a streamlined organizational

approach with the outsourcing of packaging

and logistics.

FRAGRANCES AT THE HEART OF

A BUSINESS MODEL

Interparfums' uniqueblend of expertise

Les produits BurberryINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

12

13

BalmainINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

Maison Balmain, the couture house founded in 1945 by Pierre Balmainhas undergone a considerable transformation in recent years. By redefiningthe image of its ready-to-wear line, the brand has become a reference forstyle, while retaining its distinctive design codes from the haute coutureuniverse. Ultra glamorous and a pioneer in the expression of the aristo-rockstyle, the brand has become a major trend-setter.

In July 2011, Maison Balmain and Interparfums signed a 12-year licenseagreement to create, produce and distribute perfumes under the Balmainbrand that commenced on January 1, 2012.

The launch of a new women’s line is planned for early 2013.

Youth and boldness forthe Balmain label

In April 2011, the talented youngOlivier Rousteing became the designerof the French haute-couture fashionhouse. Previously responsible for the

label's design studio, he presentedhis first collection in September of

the same year: bold, sexy, ultra-feminine… the Balmain label

breaks new ground as a trend-setterin avant-garde fashion!

Balmain

BoucheronINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

14

In late December 2010, Boucheron and Interparfums signed a 15-yearlicense agreement to create, produce and distribute perfumes under theBoucheron brand that commenced on 1 January 2011.

Lines distributed are Boucheron Femme (1988), Boucheron pour Homme(1989), Jaïpur Homme (1998).

Boucheron fragrances' integration in the portfolio as of spring 2011generated additional sales of more than €8 million.

Sales highlights 2011

Boucheron (8 months) €8.4 MAs a % of sales 2.1%

The perpetual reinvention of excellenceThe first jeweler to open a shop on the famous Place Vendôme in 1893,for more than 150 years Boucheronhas never ceased reinventing andreinterpreting its iconic design codes.It incarnates the artistry of sculpturalcraftsmanship.

Boucheron

15



16

17

BurberryINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

In July 1993, Interparfums entered into an exclusive 10-year license,agreement with Burberry Ltd. to create and produce perfumes under the Burberry name and distribute them worldwide, followed by aninitial 3-year extension in 2000.

In October 2004, Interparfums signed a new agreement for 12.5 yearseffective July 1, 2004 with an option for an additional five years subject to mutual agreement of the parties.

In December 2010, Interparfums and Burberry extended by one yearthe length of the agreement to December 31, 2017, Burberry’s right to buythe license was advanced from December 31, 2011 to December 31, 2012and the date from which the option requiring the consent of both partiesto extend the license five years beyond 2017 becomes exercisable on 31 December 2015.

In December 2011, Interparfums and Burberry announced that theywere in discussions about the creation of a new operational structure for the fragrance and beauty business. As there can be no assurance thatan agreement will be reached, Burberry has exercised its right to evaluatethe purchase price for the unexpired term of the existing license. In thisprocess, Burberry has until July 31, 2012 to determine whether it wishesto buy out the unexpired portion of the license or continue the existinglicense which runs through December 31, 2017.

Giant billboard display for Burberry

Body in LondonFor the Burberry Body launch,

a worldwide poster campaign wasrolled out. This campaign included

giant display areas such as theLondon IMAX theater completely

covered by a Body visual.

Burberry

BurberryINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

18

Lines distributed are Burberry (1995), Burberry Week end (1997),Burberry Touch (2000), Burberry Brit (2003/2004), Burberry London(2006), Burberry The Beat (2008), Burberry The Beat Men (2009),Burberry Sport (2010) and a new make-up line Burberry Beauty (2010)and Burberry Body (2011).

Burberry fragrances had sales of €221.7 million in 2011, up 20% forthe year. Burberry fragrances has maintained a momentum of consistentgrowth since 1993 based on the strength of its well-established lines andthe particularly successful and promising launch of the Burberry Body line.

2011/2012 awards

Winner in the category “Editors Choice for the Women’s Intense Floral Fragrance”for Burberry Body in Singapore (Her World Beauty Awards 2012)

Burberry Body was distinguished by the “Innovative Star Award” in China(Elle Beauty Star Award 2012)

Winner in the category Prestige Femme for Burberry Body at the FifiRussian Fragrance Awards

Prize for Best Bottle Burberry Body (2012 International Marie ClaireFragrance Awards)

Sales highlights 2009 2010 2011

Burberry €166.2 M €184.8 M €221.7 MAs a % of total sales 64.1% 60.4% 55.6%Change -1.5% +11.2% +20.0%

The distributors seminar: a key meetingAt an event devoted to both businessdevelopment and building privilegedrelations with distributors,Interparfums presented its annualresults in Evian in February 2012.Items on the agenda included thelaunch of the Burberry Body line as well as the outlook and projectsfor the next three years.

19


19


20

21

Burberry BeautyINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

In 2011, Burberry Beauty make-up confirmed its standing and successas a new player in the Beauty sector by expanding its product offeringand distribution. Now present at one hundred points of sale worldwide,Burberry Beauty lines provide the brand with a means to expand its globaloffering, boost its fragrance sales and strengthen ties with the world of fashion.

2011/2012 awards

“Fresh Glow Best Illuminator” Tatler Beauty Award winner (UK)“Best Luxury Packaging” award by Cosmétique Mag (France)“2011 Sugar Awards” for best beauty release (Australia)“Best of Beauty” awards in eyeshadow and lipstick categories (Allure U.S.)“2011 Prix d'Excellence beauty awards” (Marie Claire Russia)“Foundation & Makeup – Summer Top 5 medal” (Marie Claire Hong Kong)“2011 Best Launch” (Holland)“2012 Best Product” for light glow, natural blush (Elle Beauty Singapore)

Styling for BeautyWendy Rowe, Burberry Beauty

Artistic Consultant, does the make-up for English fashion model

Cara Delevingne before shooting the visual for the Spring/Summer

2012 collection.

Burberry Beauty

Jimmy ChooINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

22

In early October 2009, the Jimmy Choo and Interparfums groups signeda 12-year worldwide license agreement commencing on 1 January 2010for the creation, development and distribution of fragrances under the Jimmy Choo brand.

The first fragrance of the brand, Jimmy Choo, was launched in January 2011.Very high product turnover accompanied by the extremely rapid renewalof orders at points of sale for the first women's fragrance line Jimmy Chooresulted in sales of €29 million, three times higher than initial estimates at the start of the year.

2011/2012 awards

Winner in the category “Editors Choice for the Women’s Musky FloralFragrance” for Jimmy Choo in Singapore (Her World Beauty Awards 2012)

Sales highlights 2011

Jimmy Choo €29.4 MAs a % of total sales 7.4%Change -

Must-have accessories for womenThe first Jimmy Choo fragrance is a blend of glamor and elegance. A true object of desire and symbolof Jimmy Choo luxury with a bottleinspired by the opulence of VenetianMurano class. A fragrance forwomen with a sense of style and a taste for luxury.

Jimmy Choo

23



24

25

LanvinINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

In July 2004, Interparfums entered into an exclusive 15-year licenseagreement with the company Lanvin to create, develop and distributefragrances worldwide under the Lanvin name.

At the end of July 2007, Interparfums acquired the Lanvin brand namesand international trademarks for class 3 fragrance products and make-upfrom the Jeanne Lanvin S.A. company. On the same date, the two companiesmutually agreed to terminate the existing licensing contract signed inJune 2004.

Lines distributed are Arpège (1927), Lanvin L’Homme (1997), Éclat d’Arpège (2002), Rumeur 2 Rose (2008), Jeanne Lanvin (2008),Lanvin L’Homme Sport (2009) and Marry Me ! (2010).

In a year without any major launches, Lanvin fragrances expanded furtheron steady sales from the Éclat d'Arpège line and growth by the Jeanne Lanvinand Marry Me! lines.

2011/2012 awards

Most inspiring beauty ad for Marry Me! in Singapore (Her World BeautyAwards 2011)


Lanvin €40.6 M €53.0 M €57.8 MAs a % of total sales 15.7% 17.3% 14.5%Change +4.1% +30.5% +9.1%

Alber Elbaz, a fashion designer

of exception: Alber Elbaz has been the artistic

director of the Maison Lanvinfashion house since 2001. His style isdistinguished by a meticulous attentionto detail expressed in the luxury of

materials used, grace in volumesand flawless execution in design.

Lanvin

MontblancINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

26

In early January 2010, Montblanc and Interparfums signed a 10 ½ yearlicense agreement to create, produce and distribute perfumes and ancillaryproducts under the Montblanc brand with a commencement date of 1 July 2010.

Lines distributed are Présence (2001), Présence d’une Femme (2002),Individuel (2004), Femme Individuelle (2004), Starwalker (2005), Femmede Montblanc (2006), Homme Exceptionnel (2006) and Legend (2011).

With the launch of the men's line Legend (more than €10 million for the year)and steady performances by the brand's historic lines integrated into theportfolio at the end of 2010, Montblanc fragrances had sales of more than€30 million or three times more than the starting year target.

2011/2012 awards

“Prix de Beauté 2012” in the category “Design Men” (CosmopolitanMagazine)

Sales highlights 2010(1) 2011

Montblanc €7.0 M €30.6 MAs a % of total sales - 7.7%Change - ns

(1) Six months.

A launch under the auspices of cinematic artThe Nissim de Camondo Museumof decorative arts in Paris providedthe setting for Montblanc Legend'sinternational launch. A prestigiousevent attended by many stars fromthe universe of French cinema.

Montblanc

27



28

29

NickelINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

In April 2004, Interparfums acquired a majority stake in Nickel, a companyspecialized in skincare products for men. In June 2007, Nickel became a wholly-owned subsidiary after Interparfums acquired the company'sremaining shares.

2011 sales of €2 million remained virtually stable in a difficult market for men's skincare, driven by the steady performance from the personalhygiene and shaving range and a regular rollout of innovations tailored to men's needs.


Nickel €2.3 M €2.2 M €2.0 MAs a % of total sales 1.0% 0.7% 0.5%Change -14.8% -4.3% -9.0%

Locations of exception

Three spas exclusively designed formen were created in the world.

The first was opened in Paris in1996 followed by New York in

2001 and finally London in 2005.

Nickel

Paul SmithINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

30

In December 1998, Interparfums entered into an exclusive 12-year licenseagreement with Paul Smith to create and produce perfumes and cosmeticsunder the Paul Smith brand.

In July 2008, this agreement was extended for seven years untilDecember 31, 2017 on the basis of comparable contractual terms and conditions.

Lines distributed are Paul Smith (2000), Paul Smith Extrême (2002),Paul Smith Rose (2007), Paul Smith Man 2 (2010) and Paul SmithOptimistic (2011).

With sales of €14.2 million in 2011, Paul Smith fragrances maintainedtheir solid position in the UK market on steady performances by the historicline, Paul Smith Extrême and the launch of Paul Smith Optimistic.


Paul Smith €12.8 M €14.9 M €14.2 MAs a % of total sales 4.9% 4.9% 3.6%Change -5.0% +17.0% -5.0%

Sources of inspirationPaul Smith in his London officefull of books, gadgets, souvenirs,bicycles, and also his place of work.

Paul Smith

31



32

33

RepettoINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

The history of the Maison began with Rose Repetto, who created in 1947at the request of her son, dancer and choreographer Roland Petit, danceshoes in the workshop located right near by the Paris Opera Palais Garnier.This was the birth of the Repetto house that has become a legendaryname for all dancers.

In 1956, Brigitte Bardot ordered the first pair of ballet flats from Rose Repettofor everyday use for the modern woman. Designed with the same hallmarkstitch and turn technique used for dance shoes, they became a worldwidesuccess. The Repetto legend is born.

In 2011, Repetto, the French maker of dance-inspired footwear and fashionaccessories, and Interparfums signed a 13-year worldwide license agreementstarting on January 1, 2012 for the creation, development and distributionof fragrances under the Repetto brand. The first fragrance line is plannedfor 2013.

Repetto, the universe of dance

The company was given newmomentum in 1999 when

Jean-Marc Gaucher took over the reins of the company.

Both a visionary and entrepreneur,he repositioned Repetto as an iconic

brand in the universe of dance.With an unwavering confidence inthe values of the house, he incarnatesthe energy and discipline… critical

notions for classical dance.

Repetto

S.T. DupontINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

34

In July 1997, Interparfums entered into an exclusive 11-year agreementwith S.T. Dupont to create and produce perfumes under the S.T. Dupontname and distribute them worldwide. In April 2006, this agreement wasextended for an additional three years, i.e. until June 30, 2011.

In April 2011 this license agreement was renewed for 5 ½ years to 31 December 2016.

Lines distributed are S.T. Dupont (1998), S.T. Dupont Essence Pure (2002),Passenger (2008) and Passager Cruise (2011).

S.T. Dupont fragrances had sales in 2011 of €13.2 million that includedboth declines by the brand's historic lines and the comparison base from the launch of Essence Pure Ice and Intense in the 2010 first half. The brandrepresents 3.2% of total revenue.


S.T. Dupont €11.5 M €15.8 M €13.2 MAs a % of total sales 4.4% 5.2% 3.3%Change 0.0% +37.4% -16.5%

A heritage of excellenceA master craftsman of precious metals,lacquer and luxury leather goods,since 1872, S.T. Dupont has forgeda legend from the unrivaled artistryand quality of its workmanship.The French luxury house's history is one of perpetual renewal based ona high standard of excellence in everyarea. Developed within a long tradition,each item bears signature designcombining a unique heritage andmodernity.

S.T. Dupont

35



36

37

Van Cleef & ArpelsINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

At the end of September 2006, the Van Cleef & Arpels and Interparfumsgroups signed a worldwide license agreement to manufacture and distributeperfumes and ancillary products under the Van Cleef & Arpels brandname with a 12-year term that took effect on 1 January 2007.

Lines distributed are First (1976), Van Cleef pour Homme (1978), Tsar (1989), Van Cleef (1994), First 1er Bouquet (2008), Féerie (2008), Collection Extraordinaire (2009), Oriens (2010), Midnight In Paris (2010) and Un Air de First (2011) .

After three years devoted to renewing the product range and repositioningthe brand in the exclusive high-end segment (launch of the Féerie, Oriens and Midnight in Paris lines), Van Cleef & Arpels fragrances haveconsolidated their positions with sales of €20 million.

2011/2012 awards

Best perfume set for Collection Extraordinaire in Singapore (Her WorldBeauty Awards 2011)

Most beautiful design of the year for Oriens in Sweden (CosmopolitanBeauty Awards 2011)


Van Cleef & Arpels €20.2 M €25.9 M €20.4 MAs a % of total sales 7.8% 8.5% 5.1%Change -3.8% +28.2% -21.2%

Luxury jewelry box fora precious fragrance

Media launch for the CollectionExtraordinaire in the viewing

salons and private VIP rooms ofVan Cleef Place Vendôme.

Van Cleef & Arpels

Le marché sélectif en 2011RAPPORT ANNUEL DEUX MILLE ONZE INTERPARFUMS

38

Despite the backdrop of economic crisis, the Federation of Selective Perfumery (FFPS) issued a positive report forthe industry's performance at year-end. Fragrances, boostedby the rapid expansion of men's lines and Make-up, hadparticularly good results for the period, maintaining the forward momentum of 2010.

The upturn in November for the selective perfume segment (with sales revenue up 6.4% in relation to 2010)continued in December 2011 with further gains of 7.6%from December 2010 to reach the highest level for monthlysales since 2006. For the full year, sales revenue grew 3%while volume sales remained steady (up 0.2%).

The Christmas season (November and December combined)produced very good results for perfumes (up 7.3% for sales revenue) compared with the prior year that had beenadversely affected by both unfavorable climatic conditionsand social turmoil. Perfumes grew 7.6% in relation to the endof 2010, with stronger gains for men's fragrances (up 8.5%in sales revenue compared with 6.6% for women's fragrances).

While growth in December benefited all selective distributionchannels integrated chains had the strongest gains. As a result,excluding Internet channels, sales revenue rose 8.5% fromDecember 2010 compared with 5.8% for department storesand 4.2% for independent perfumeries.

Make-up had double-digit growth for both sales revenue(up 13.1%) and volume sales (up 12.2%), driven by its threetop-selling product ranges, nail polish, lipstick and eyeshadow.

Skincare continued the upturn that began in October 2011on growth in sales revenue of 4.8% driven mainly by integratedchains. December was marked by the noteworthy performancefor skincare sets (up 29.1%) compared with gains of 12.4%for fragrances and 12.2% for make-up. These results did nothowever offset the overall negative full-year trend for Skincare(up 1% for sales revenue and down 3.1% for sales volume).

Source : FFPS

THE SELECTIVE MARKETIN FRANCE IN 2011

Positive year-endmomentum

BurberryFragrances

33employeesheaded byHugues de La Chevasnerie

Luxe & Fashion

27employeesheaded byFrédéric Garcia-Pelayo

Production & Logistics

32employeesheaded by Axel Marot

FrenchDistribution

63employeesheaded byJérômeThermoz

Finance &Corporate Affairs

35employeesheaded byPhilippe Santi

Organization and teamsINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

40

ORGANIZATION AND TEAMS

Today Interparfums has 227 employees with solid expertise covering everystage of this process. From creation to distribution, and including productionand logistics, each area works in close collaboration with the others.

If a perfume is the result of a subtle balance and perfect harmony of differentcomponents, so is our craft by combining talent and expertise to successfullyguide the process of assembly: designers, glass makers, manufacturers...

Each launch represents a new adventure. And even more, a form ofalchemy by concentrating all our energy and creativity to achieve success.

High-level expertise coveringthe entire cycle

41

Organization and teamsINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

Designing, developing and launching fragrances: thatis our core business based onexpertise acquired over morethan 20 years in the service

of our customers.

42 MARKETING

Hugues de La Chevasnerieand Frédéric Garcia-Pelayolead a team of 37 responsiblefor marketing the Balmain,Boucheron, Burberry, JimmyChoo, Lanvin, Montblanc,Nickel, Paul Smith, Repetto,S.T. Dupont and Van Cleef& Arpels Brands.

43

Les équipes MarketingRAPPORT ANNUEL DEUX MILLE ONZE INTERPARFUMS

“Marketing involves coordinating the entire cycle in the development of new projects from conception up to display at points of sale. The brandmust be managed in perfect harmony with its heritage and the vision ofits creator. In the olfactory universe, this may be expressed by references to an English garden, this artificially archaic lushness often with dominantrose notes. To this is added the uniquely British legacy, the leitmotif of theelements, exemplified by the skyscapes of the English painter, Turner. This faded atmosphere of haze and fall mist occupies an important placein the palette of colors used for our make-up.

Because we operate in the universe of luxury, we must constantly strive for perfection in execution and guarantee exceptional quality. Successfullyconveying the quintessential qualities of a mood and spirit while managingthe manifest contradiction between the ephemeral fashion collections and the lasting nature of fragrances. To achieve this, it is necessary to move beyondthe fashion dimension of a collection to capture the brand's essence as thebasis for a long-term vision.”

Hugues de La ChevasnerieVice President, Burberry Fragrances

“We must lay the groundwork, build and develop a brand on a lastingbasis within the universe of perfumes. Our specificity is starting from thebrand and its imaginary universe to define a unique territory of expressionforming the basis for a long-term approach. We focus on the essentialvalues the brand seeks to convey and its historic codes that give it meaningin the world of perfumes to build a solid foundation and basis for anarrative line. The perfume offers points of access leading the customerto a brand within another universe: beauty, self-esteem,“art de vivre”...This work is of course carried out in tandem with the parent companies:we interact, adapt, constantly looking with fresh eyes... with their support.The commercial teams, active participants in the project from its inception,intervene at this stage to implement the strategy that has been developed.

Maintaining coherence and an optimal fit throughout the developmentcycle that lasts approximately 18 months. Coherence of the productswith the future composition of the brand's offering within its main market;an optimal fit to achieve just the right balance and dosing of the keycomponents of the process up to the communication for the launch.”

Pierre DesaullesVice President for Marketing

Our expertise

The challenge

Our expertise

The challenge

Burberry Marketing

Luxe & FashionMarketing

44

“Production is based on perfectly orchestrated interaction of different componentscoordinated by a team of 26: supply chain, logistics, production planning at oursubcontractors, technical development, the producing unit for promotional items,regulatory watch for the French market and interface with export markets. We alsohave a high quality team based at one of our subcontractors overseeing strict compliancewith our specification procedures.

Starting with a product brief provided by the marketing team, between 12 and 18 monthsbefore the launch date, it is up to us to determine the processes for the manufacturingphase based on a production cost target. The supply chain coordinates the optimizationof purchasing flows from as many as 100 suppliers: glass makers, caps, pumps,cardboard packaging materials for outside boxes and inner boxes, metallic components...The fragrances are delivered in a concentrated form that we store before the filtrationand glazing/chilling phases and bottling. All our production processes are carried outin accord with the principles of ethical and environmental responsibility.

Coordinate production flows: with an increasingly large portfolio of licenses, linesand in consequence product references, we must exercise complete control over ourinventories to ensure our customers optimal delivery of supplies. This requires boththe necessary production capacity and a high degree of responsiveness by our subcontractorsto better meet customers needs. With increasingly shorter time-to-market cycles, wemust have reliable suppliers with whom we can expand together within the frameworkof true and lasting partnerships. This partnership relationship plays a critical role,notably in the area of innovation which can provide real added value for our products.”

Axel MarotVice President, Supply Chain & Operations

“Our core mission is managing inventories of finished products. To do this, we workvery closely with the sales and production teams, supported by sales forecasts to defineour annual production plan. We must also ensure the traceability of our products,transport and shipment as well as handle any disputes that might arise…

The new logistics platform meets the needs resulting from growth in our sales. Its management has been assigned to a specialized service provider with a team of 50 on-site while we organize upstream and downstream logistics flows. As a sitesubject to regulatory authorizations governing the use of alcohol-based products, thebuilding is fully compliant with security requirements for property and safety. It alsomeets HQE (Haute Qualité Environnementale) high quality environmental standardfor green building in France.

We have a permanent requirement: meeting deadlines in honoring orders for Franceand avoiding stock outages. The objective is to lower inventory levels despite growthin sales of between 15% and 20% per year. For this reason, we are in a permanentplanning mode for requirements in terms of workforce, materials, etc. The logisticsplatform itself is also subject to ongoing transformations as regulations evolve.”

Sophie MoullierLogistics and Inventories Manager

Our expertise

The challenge

Our expertise

The challenge

Production

Logistics

45PRODUCTION &

LOGISTICS

The production processcombines high quality and strict compliance

with deadlines essential forproducing several millionunits a year. A team of 32under Axel Marot managessourcing, supplier relations,quality assurance and costcontrol and operations.

46EXPORT DISTRIBUTION

The international distribution of Balmain,Boucheron, Burberry,Jimmy Choo, Lanvin,Montblanc, Nickel, Paul Smith, Repetto, S.T.Dupont and Van Cleef &Arpels brands is spearheadedby a team of 28 headed upby Angèle Ory-Guénardand Frédéric Garcia-Pelayo.

47


“Our mission is to coordinate a network of distributors and guide the budgetsfor sales and sales expenses while ensuring strict compliance with the brand'sselective positioning. For that reason, we must be very careful about choicesrelating to distribution network, the pricing policy, merchandising, productplacement for the brand in each point-of-sale with approaches specificallyadapted for each country.

This has often provided us with opportunities to develop long-termpartnerships with our distributors, some of whom have grown in tandemwith Interparfums.

Ensuring responsibility for a network of distributors, themselvesresponsible for retail networks. There are thus two levels of intermediariesbetween us and the end customer about which we must have as muchknowledge as possible. For make-up, the approach is different and muchmore personalized as well as much more technical, involving a very largenumber of product references and requiring a more direct contact witheach point-of-sale.”

François RiantBurberry Export Manager

“For each brand that we manage, we closely monitor its distribution atevery level: budget, communications, development of the brand accordingto geographical market -- some worldwide , others regional. We alsoensure the optimal targeting of the right distribution segment, refiningthe criteria of selective distribution according to the country. This demandsa real sensitivity to the brand identity and the product that is acquiredover time.

With our development intimately linked to theirs, we maintain privilegedrelationships with our distributors through relationships of confidencebuilt up over the years. Our areas have been established on the basis ofboth historic and subjective criteria to achieve just the right balance betweenvery developed markets and others with a more adventurous profile. Asthe interface between marketing and sales, we are constantly involved inupstream development. This is one of the key characteristics of Interparfumsand ensures that we exploit the full potential of our brands.

With the globalization of distribution and major retailers now operatingeverywhere, the qualitative dimension of this business depends on an abilityto develop completely different cultural approaches on a case-by-case basis.Each brand is a universe in itself requiring a particular cultural sensitivityin each country conveying the right message to the right audience.”

Christophe AlbertLuxe & Fashion Export Manager

Our expertise

The challenge

Our expertise

The challenge

BurberryExport

Luxe & FashionExport

Les équipes MarketingRAPPORT ANNUEL DEUX MILLE ONZE INTERPARFUMS

48

A wholly-owned subsidiary of Interparfums, Interparfums Luxury Brands is responsiblefor leading the development and marketing of Boucheron, Burberry, Jimmy Choo,Lanvin, Montblanc and Van Cleef & Arpels brands in the US market under the directionof Stanislas Archambault. Based in New York, it is supported by a team of twelveemployees and an alliance with Clarins USA providing for the sharing of commercial,logistics and administrative resources.

“The launches of Jimmy Choo and Burberry Body, combined with the steady performancesby top-selling lines of the Burberry, Boucheron, Lanvin and Van Cleef & Arpels brands,contributed to a year-end performance for Interparfums Luxury Brands, exceedingexpectations and establishing its position as a major player in the US market. Theoutlook for 2012 is particularly encouraging with positive momentum anticipated forBurberry Body and Jimmy Choo and the promising launch of Montblanc Legend.”

Stanislas ArchambaultManaging Director, Interparfums Luxury Brands

A wholly-owned subsidiary of Interparfums with a team of nine headed by RenaudBoisson, Interparfums Singapore coordinates the development of operations in theregion for all the Group’s brands.

“2011 was an eventful year with many significant developments for Interparfums inthe Asia-Pacific region. With the new organization adopted in Singapore, we wereable to create the optimal conditions for the launches of Body, Legend and Jimmy Choo,while continuing the development of Burberry Beauty with the opening of 12 newcounters. While 2012 is expected to be challenging, we are confident in the outlook:we must both deliver another good annual performance while consolidating thesuccessful launches of 2011 and pursue our expansion in the travel retail segmentand, of course, the launch of new brands.”

Renaud BoissonManaging Director, Interparfums Singapore

In the US

In Asia

Interparfums Luxury Brands team

49

Our teamsRAPPORT ANNUEL DEUX MILLE ONZE INTERPARFUMS

EXPORT DISTRIBUTION

To cover a market accountingfor 15% of Group revenue,

Interparfums created Interparfums Luxury

Brands as a distributionsubsidiary for the US thatbegan operations in 2011.

To improve coverage of Asianmarkets that offer significantgrowth potential, in June

2010 Interparfums decidedto create a distribution

subsidiary for this region,Interparfums Singapore.

Interparfums Singapore team

50FRENCH DISTRIBUTION

Jérôme Thermoz’s team of 67 handles the company’sdistribution strategy andmanagement and monitorsprofit margins and advertisingexpenditures in France.

51

“Distribution is based on partnerships with retailers. For that reason wefocus on building quality and even privileged relations with these partners.Every launch is prepared as upstream as possible.

Our action plans are presented in June-July for implementation in thebeginning of the following year. We deploy a particularly fine-tune methodinvolving specific strategies for each brand, seeking to preserve the territoryfor each while developing custom-design approaches for retailers and adaptingourselves to their own strategies And each time, we must create the emotion,generate interest... Each success is the result of a perfect alchemy of manydifferent components.

Our main objective: rendering the brands so attractive that consumerscome to the stores specifically for them. To do this, we must reach themthrough campaigns with a strong impact and launch strategies that standout. And because distributors have many brands to support we must providethem with effective drivers of differentiation starting with the addedvalue of the product. To do this, we must innovate each time by creatingthe event.”

Jérôme ThermozVice President, French Distribution

Our expertise

The challenge

52

“In an increasingly complex and regulated environment, certain strategicchoices can have very significant consequences in all these areas. To ensurevisibility and security for our decision-making process, we have adoptedover the years highly effective tools for reporting and internal control. These tools, that are regularly enhanced and tested, ensure that we meet our regulatory requirements as a publicly traded company listed in France(French Financial Security Act) and those of our parent companyInterparfums Inc. listed in New York (Sarbanes Oxley Act).

We must maintain just the right balance between this disciplined approachand certain principles that have and continue to drive our success: ethics,fostering team accountability, quality relations with partners, transparencyand pragmatism. This is the strength of our business model…”

Philippe SantiChief Financial and Administrative Officer

Our expertise

The challenge

53FINANCE &

CORPORATE AFFAIRS

Philippe Santi heads a staff of 38 responsible for financial strategy andcommunications, investor

relations, accounting, budgets, cost accounting,

labor relations, tax and legalservices, cash management

and collection.

Securities market information

Market: NYSE Euronext ParisMarket segment: Compartment B (Mid Caps)IPO date: November 1995ISIN code: FR0004024222 ITPStock market indexes: CAC Mid & SmallMarket maker: Oddo Midcap

Financial research

Institutions providing financial research on Interparfums:CA Cheuvreux, CM-CIC Securities, Exane BNP Paribas,Gilbert Dupont, HSBC Securities, ID Midcaps, NatixisSecurities and Oddo Securities.

Shareholder base as of December 31, 2011

Interparfums has more than 6,750 individual shareholdersand 300 institutional shareholders (with foreign investorsrepresenting more than one third).

Shareholder informationINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

54

SHAREHOLDERINFORMATIONThe Interparfums share

Following the announcement in December 2010 of the extension of certain terms of the license agreement signed with the Burberry brand in 2004, Interparfums' share experienced downward momentum throughout the first quarter of 2011.With the publication of results in early April 2011, the share partially regained lost ground, moving back up to a price levelof €28 in May-June. After the steep downturn in financial markets in the summer, the share traded within the €19-€21 range.With the publication of a new press release in December on the license agreement with Burberry, the share declined furtherto €16-€17. At year-end, the market capitalization was €325 million. Trading volume has continued to grow year afteryear to reach an average of 20,000 shares per day.

March MarchMay MayJuly JulySept. Sept.Nov. Nov.Jan. Jan. March

600,00035

500,00030

Trading activity: Interparfums vs. the CAC Mid & Small index

400,00025

300,00020

200,00010

100,0000

0-10

2010 2011 2012

Dividends

Dividend for fiscal year: 2007 2008 2009 2010Paid in: 2008 2009 2010 2011

Dividends per share €0.38 €0.38 €0.39 €0.48Dividend adjusted for bonus share issues €0.26 €0.29 €0.35 €0.44Annual change for the adjusted dividend +10% +10% +23% +35%

Interparfums Inc. 74%

Free float 26%

2012 second-quarter sales End of July 20122012 first-half sales and earnings Mid-September 20122012 third-quarter sales End of October 20122012 Letter to shareholders Mid-November 20122012 sales End of January 20132012 annual results Mid-March 2013

MidCap Event trade show Paris September 24 & 25, 2012Actionaria trade show, Paris November 23 & 24, 2012

55

Shareholder informationINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

Transparency and fair presentation of information

These principles have formed the basis of its financial communications policy since it was listed on the Paris stock exchangein November 1995. This approach is strengthened by a commitment to dialogue and proximity with a range of both targetedand diversified tools: the annual report included with the registration document, half-year report, letter to shareholders,press releases and financial notices. These publications are supplemented by interactive tools and a platform for online exchangewww.interparfums.fr as well as individual and group meetings with shareholders, analysts, journalists, fund managers…Highlighting the quality of these measures, in 2011, Interparfums, was awarded the “Midcap Corporate Governance Prize”that recognizes significant initiatives in the area of corporate governance, notably through applying the code of Middlenext,an independent French association representing listed SMEs and midcaps.

Upcoming publications and events Forms and trade shows

2011 awards

In March, for its first participation in the Great Place to Work Awards (9th edition) Interparfums was distinguished by the“Special Award for Inspiration” and ranked 10th in France’s Best Workplaces list for “Companies with less than 500 employees”. This award recognizes the company’s distinct corporate culture marked by a strong sense of belonging, shared ethical valuesand solidarity and accountability among all employees. It is granted on the basis of an in-depth study of the companyaccording to five criteria (credibility, respect, fairness, pride and camaraderie) and an anonymous questionnaire sent to all employees.

In September, French Prime Minister, François Fillon, awarded the 2011 “Boldness and Creativity Prize” (Prix de l’AudaceCréatrice) to Philippe Bénacin at a ceremony held at Hôtel Matignon, the Prime Minister's official residence On September22. Founded in 1995 by Marc Ladreit de Lacharrière, Chairman of Fimalac, and awarded by a jury of business leaders, this prize recognizes the achievements of a company that has successfully combined growth in sales, profitability and jobcreation. Philippe Bénacin commented: “It is a great honor to have been chosen as a recipient of the Prix de l’Audace Créatrice.While our success is of course linked to the quality and notoriety of our brands it also owes a great deal to the creativity of ourproduct lines and the intelligence and motivation of our teams and partners”.

Condensed financial statementsINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

56

CONDENSED FINANCIAL STATEMENTSConsolidated income statement

In € thousands,except per share data which is in units 2010 2011

Sales 305,696 398,328

Cost of sales (118,931) (145,602)

Gross margin 186,765 252,726

% of sales 61.1% 63.4%

Selling and administrative expenses (144,549) (205,822)

Current operating income 42,216 46,904

% of sales 13.8% 11.8%

Other operating income and expenses - (603)

Operating profit 42,216 46,301

% of sales 13.8% 11.6%

Net financial expense (2,278) 566

Income before income tax 39,938 46,867

% of sales 13.1% 11.8%

Income tax (13,287) (16,661)Effective tax rate 33.3% 35.5%

Net income before non-controlling interest 26,651 30,206

% of sales 8.7% 7.6%

Attributable to non-controlling shareholders (156) (94)Net income 26,807 30,300

% of sales 8.8% 7.6%

57

Condensed financial statementsINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

Consolidated balance sheet

Assets

In € thousands 2010 2011

Non-current assets Net trademarks and other intangible assets 73,427 73,059Net property, plant, equipment 7,066 9,057Financial and other non-current assets 1,690 1,560Deferred tax assets 5,109 5,777

Total non-current assets 87,292 89,453

Current assets Inventory and work in progress 66,813 101,167Trade receivables and related accounts 74,399 129,109Other receivables and deferred tax assets 6,838 6,865Cash and cash equivalents 61,615 26,600

Total current assets 209,665 263,741

Total assets 296,957 353,194

Shareholders' equity & liabilities


Shareholders’ equity Share capital 53,780 59,602Additional paid-in capital and reserves 110,912 125,841Net income for the year 26,807 30,300

Equity attributable to parent company shareholders 191,499 215,743

Non-controlling interests 385 277

Total shareholders’ equity 191,884 216,020

Non-current liabilities Provisions for non-current commitments 2,280 2,127Non-current borrowings 3,443 12Deferred tax liabilities 1,510 1,472

Total non-current liabilities 7,233 3,611

Current liabilities Trade payables and related accounts 53,320 96,238Current borrowings 8,627 3,450Bank facilities 3,947 9,205Provisions for contingencies and expenses 412 49Other payables and deferred tax liabilities 31,534 24,621

Total current liabilities 97,840 133,563

Total shareholders’ equity and liabilities 296,957 353,194

GROUP ORGANIZATION

INTERPARFUMS

SINGAPORE

Singapore

INTERPARFUMS

LUXURY BRANDS

United States

INTER ESPAÑA

PARFUMS &

COSMETIQUES SL

Spain

INTERPARFUMS

DEUTSCHLAND

GMBH

Germany

INTERPARFUMS

SRL

Italy

PHILIPPE BÉNACINJEAN MADAR

INTERPARFUMS INC.Nasdaq - New York

INTERPARFUMS

LTD.

United Kingdom

INTERPARFUMS SAEuronext Paris

FREE FLOAT

FREE FLOAT

46%

74%

51%

INTERPARFUMS

SUISSE SARL

Switzerland

100%51% 100% 100% 100%71%

26%

54%

Interparfums and its subsidiaries

Commercial operations are conducted largely through Interparfums S.A. To pursue its international development, Interparfumsset up four new subsidiaries on January 1, 2007 in the key European markets in partnership with its local distributors:Germany (51%), United Kingdom (51%), Italy (71%) and Spain (100%). Interparfums also created a wholly-owned subsidiaryin Switzerland, Interparfums Suisse Sarl. This subsidiary is the owner of the Lanvin brand name for class 3 products. In 2010,Interparfums S.A. further strengthened its presence in markets and major regions by creating wholly-owned distributionsubsidiaries in Singapore (Interparfums Singapore) and the United States (Interparfums Luxury Brands) respectively.

58

Group organizationINTERPARFUMS ANNUAL REPORT TWO THOUSAND ELEVEN

TWO THOUSAND

ELEVEN REGISTRATIONDOCUMENT

CONSOLIDATED MANAGEMENT REPORTCONSOLIDATED FINANCIAL STATEMENTS

CORPORATE GOVERNANCESHAREHOLDER INFORMATIONHISTORY OF THE COMPANY

AUDITORS AND RESPONSIBILITY STATEMENTS

This original French language version of the registration document (Document de référence) was filed with the French financialmarket authority (Autorité des Marchés Financiers or AMF) on April 6, 2012 in compliance with article 212-13 of the AMF

General Regulation. It may be used in connection with a financial transaction only if accompanied by a memorandum approvedby the AMF. The original French language version of this document was prepared by the issuer and is binding on its signatories.

6274104126142144

62

Consolidated management reportTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

CONSOLIDATEDMANAGEMENTREPORTORGANIZATION OF THE COMPANY P. 63CONSOLIDATED FINANCIALS P. 66RISK FACTORS P. 67SOCIAL RESPONSIBILITY P. 69ENVIRONMENTAL RESPONSIBILITY P. 70DIVIDENDS P. 72PURCHASES BY THE COMPANY OF ITS OWN SHARES P. 72GROUP ORGANIZATION P. 73MARKET SHARE AND COMPETITION P. 73POST-CLOSING EVENTS P. 732012 OUTLOOK P. 73

Historical financial information

In accordance with article 28 of Commission Regulation (EC) 809-2004 implementing the prospectus directive, the followinginformation shall be incorporated by reference in this registration document:- The consolidated financial statements for the period ended December 31, 2010 and the auditors’ report on these financialstatements, as presented in the chapter “IFRS consolidated financial statements” of the original French language version ofthe registration document filed with the AMF on April 6, 2011 under No. D.11-0244.- The consolidated financial statements for the period ended December 31, 2009 and the auditors’ report on these financialstatements, as presented in the chapter “IFRS consolidated financial statements” of the original French language version ofthe registration document filed with the AMF on April 1, 2010 under No. D.10-0203.

1. ORGANIZATION OF THE COMPANY

1.1. Business overview

The company creates, manufactures and distributes prestigeperfumes through license agreements with leading brands in the high-end ready-to-wear, high fashion, jewelry andaccessories sectors. This business model is based onobtaining rights granted by a brand name company toInterparfums to use its brand name in exchange for royaltypayments typically indexed to sales (see the list of licenses in note 6.2 of the consolidated financial statements).

The product design cycle of between 12 and 18 months is assured by the company’s marketing and developmentteams in partnership with the licensor.

In this business model Interparfums outsources the entireproduction process to manufacturing partners ensuringoptimal expertise in their respective areas. These includeproducers of juice, glass, caps and cardboard boxes andpackaging companies.

The company distributes its products worldwide (seenote 5.2 of the consolidated financial statements) throughwholly-owned distribution subsidiaries or joint ventures,independent companies, subsidiaries of major luxury goodcorporations and duty free operators.

Product promotion and advertising are assured byInterparfums’ marketing departments.

1.2. The environment

Despite the backdrop of economic crisis, the Federation of Selective Perfumery (FFPS) issued a positive report forthe industry’s performance at year-end. Fragrances, boostedby the rapid expansion of men’s lines and make-up, hadparticularly good results for the period, maintaining theforward momentum of 2010.

The upturn in November for the selected perfume segment(with sales revenue up 6.4%(1) in relation to 2010) continuedin December 2011 with further gains of 7.6% fromDecember 2010 to reach the highest level for monthly salessince 2006. For the full year, sales revenue grew 3% whilevolume sales remained steady (up 0.2%).

The Christmas season (November and December combined)produced very good results for perfumes (up 7.3% for salesrevenue) compared with the prior year that had been adverselyaffected by both unfavorable climatic conditions and socialturmoil. Perfumes grew 7.6% in relation to the end of 2010,with stronger gains for men’s fragrances (up 8.5% in salesrevenue compared with 6.7% for women’s fragrances).

While growth in December benefited all selecteddistribution channels, integrated chains had the strongestgains. As a result, excluding Internet channels, sales revenue

rose 8.5% from December 2010 compared with 5.8% fordepartment stores and 4.2% for independent perfumeries.

Make-up had double-digit growth for both sales revenue(up 13.1%) and volume sales (up 12.2%), driven by itsthree top-selling product ranges, nail polish, lipstick andeyeshadow.

Skincare continued the upturn that began in October 2011 on growth in sales revenue of 4.8% driven mainly byintegrated chains. December was marked by thenoteworthy performance for skincare sets (up 29.1%)compared with gains of 12.4% for fragrances and 12.2%for make-up These results did not however offset the overallnegative full-year trend for skincare (up 1% for salesrevenue and down 3.1% for sales volume).

(1) Source: FFPS.

1.3. 2011 milestones

JanuaryBoucheron

Commencement of the Boucheron license agreement. Withthe transfer of inventories completed, commercial activitybased on the three existing lines began in the spring.

Launch of the Jimmy Choo line

Interparfums launched its first women’s fragrance under theJimmy Choo brand.

An Eau de Parfum as a symbol of Jimmy Choo luxury witha Venetian Murano glass bottle and jewel-encrustedsignature stilettos.

MarchLaunch of the Passenger Cruise line of S.T. Dupont

A new fragrance for men and women, drawing itsinspiration from the origins of the S.T. Dupont brand in the art of travel.

Great Place to Work award

Interparfums received the Special Award for Inspiration ofthe Great Place To Work Institute. For its first participationin the Great Place to Work Awards (9th edition) Interparfumswas distinguished by the Special Award for Inspiration andranked 10th in France’s Best Workplaces list for “Companieswith less than 500 employees”.

Launch of the Optimistic line of Paul Smith

A new fragrance for men and women under the Paul Smithbrand blending warmth, joy and energy.

AprilExtension of the ST Dupont license

The 11 year license agreement signed in June 1997, initially extended in 2006 for an additional 3 years until June 30, 2011, was renewed for another term of 5 1/2 yearsuntil December 31, 2016.

63


Completion of the new logistics warehouse

Construction of the new 30,000 m2 logistics warehouse in the Eure department was completed. This new platformthat has a capacity for 43,000 palettes and complies withHQE standards was put in the service in the summerof 2011.

MayLaunch of the Legend line of Montblanc

A new Montblanc fragrance for men with a bottleconveying strength, character and masculinity with its rich black and silver design.

New SAP ERP system

The result of a project involving the work of a team of nearly 20, the new SAP ERP system was successfullyimplemented.

JuneAlliance between Interparfums España and Clarins Spain

The wholly-owned subsidiary of the French companyInterparfums SA, Interparfums España, leading thedevelopment and marketing of all Group brands in Spain,joined forces with Clarins’ Madrid-based subsidiary, ClarinsEspagne. Under the terms of a 5-year renewable agreement,Interparfums and Clarins now share an expanded sales force,administrative services and office facilities for this market.

Bonus share issue

In June 2011, the company proceeded with its 12th bonusissue on the basis of one new share for every ten shares held.

JulySignature of a fragrance license agreement with Balmain

On July 7, Balmain and Interparfums signed a 12-yearworldwide license agreement commencing onJanuary 1, 2012 for the creation, development anddistribution of fragrances under the Balmain brand.

SeptemberLaunch of the Burberry Body line

A new feminine fragrance under the Burberry brand,refined and seductive scent and the most historicallyimportant launch of the brand to date.

2011 “Boldness and Creativity Prize” awarded by French Prime Minister, François Fillon

On September 22, French Prime Minister François Fillon,awarded the 2011 “Boldness and Creativity Prize” (Prix del’Audace Créatrice) to Philippe Bénacin at a ceremony heldat Hôtel Matignon, the Prime Minister’s official residence.This prize recognizes the achievements of a company thathas successfully combined growth in sales, profitability andjob creation.

Midcap Corporate Governance Prize

Also in September, Interparfums was awarded the “MidcapCorporate Governance Prize” for significant initiatives in thisarea. In particular it recognizes the Group’s performance oftransparent, regular and dynamic communications withshareholders.

DecemberSignature of a fragrance license agreement with Repetto

On December 7, Repetto, the French maker of dance-inspired footwear and fashion accessories, and Interparfumssigned a 13-year worldwide license agreement starting onJanuary 1, 2012 for the creation, development anddistribution of fragrances under the Repetto brand.

Exercise of the Burberry option

Burberry exercised its right to evaluate the purchase pricefor the unexpired term of the existing license. In thisprocess, Burberry has until July 31, 2012 to determinewhether it wishes to buy out the unexpired portion of thelicense or continue the existing license which runs throughDecember 31, 2017.

1.4. Operating highlights and key figuresIn 2011, against the backdrop of a more buoyant marketfor perfumes and cosmetics, Interparfums added marketshare and exceeded year-end targets, after several upwardrevisions already. Consolidated sales for the year amountedto €398.3 million, up 30% at current exchange ratesand 33% at constant change rates in relation to 2010.

64


1.6. Sales by region

In € millions 2010 2011

North America 42.9 80.3South America 24.8 36.8Asia 47.7 65.3Eastern Europe 29.7 34.7Western Europe 96.9 103.3France 27.8 33.7Middle East 33.3 39.9Africa 2.6 4.3

Total 305.7 398.3

With sales for the first time surpassing the €200 millionmilestone, up to 20% this year, Burberry fragrancescontinued its trajectory of sustained growth since 1993 onsolid performances by the brand’s historic lines and theBurberry Body line’s highly successful and promising launch.

In a year without any major launches, Lanvin fragrancesexpanded further on steady sales from the Éclat d’Arpègeline and growth by the Jeanne Lanvin andMarry Me! lines.

With the launch of the men’s line Legend (more than€10 million for the year) and steady performances by thebrand’s historic lines integrated into the portfolio at the endof 2010, Montblanc fragrances had sales of more than€30 million or three times more than the starting year target.

Very high product turnover accompanied by the extremelyrapid renewal of orders at points of sale for the firstwomen’s fragrance line Jimmy Choo resulted in sales of€29 million, again three times higher than initial estimatesat the start of the year.

After two years devoted to renewing the product range andrepositioning the brand in the exclusive high-end segment(launch of the Féerie, Oriens andMidnight in Paris lines),Van Cleef & Arpels fragrances have consolidated theirpositions with sales of €20 million.

Boucheron fragrances’ integration in the portfolio as ofspring 2011 generated additional sales of more than€8 million.

1.5. Sales by brand

In € millions 2007 2008 2009 2010 2011And as % of sales

Burberry 152.9 169.0 166.2 184.8 221.7 63.2% 63.8% 64.1% 60.4% 55.7%

Lanvin 33.3 39.0 40.6 53.0 57.8 13.8% 14.7% 15.7% 17.3% 14.5%

Montblanc - - - 7.0 30.6 - - - 2.3% 7.7%

Jimmy Choo - - - 0.6 29.4 - - - 0.2% 7.4%

Van Cleef & Arpels 11.9 21.0 20.2 25.9 20.4 4.9% 7.9% 7.8% 8.5% 5.1%

Paul Smith 18.0 13.4 12.8 14.9 14.2 7.4% 5.0% 4.9% 4.9% 3.6%

S.T. Dupont 11.1 11.5 11.5 15.8 13.2 4.6% 4.3% 4.4% 5.2% 3.3%

Boucheron - - - - 8.4 - - - - 2.1%

Nickel 3.3 2.7 2.3 2.2 2.0 1.4% 1.1% 1.0% 0.7% 0.5%

Autres 11.6 8.3 5.6 1.5 0.6 4.7% 3.2% 2.1% 0.5% 0.2%

Total 242.1 264.9 259.2 305.7 398.365


The Group’s balance sheet has strengthened year after yearwith at December 31, 2011:

- Shareholders’ equity of €216 million (61% of the total assets);

- Cash and cash equivalents of €17.4 million;

- Low net debt of €3.5 million (to be fully paid off atSeptember 30, 2012).

The Group increased inventory levels in response to stronggrowth in sales and the launch of three major lines in 2011,which led to a temporary and limited decline in operatingcash flow.

2.2. Balance sheet highlights

In € millions 2010 2011

Non-current assets 87.3 89.5Inventories 66.8 101.2Trade receivables 74.4 129.1Cash + certificates of deposit with maturities >3 months 57.7 17.4

Group shareholders’ equity 191.5 215.7Borrowings 12.1 12.6Trade payables 53.3 96.2

Despite a negative currency effect, the gross margin as apercentage of sales added more than two points reflectingthe change in the Group’s structure from the consolidationof the new US company Interparfums Luxury Brandsstarting January 1, 2011.

Operating profit came to €46.3 million (+10%) in a year of significant increases in marketing and advertisingexpenses (+76%) resulting in an operating margin of 11.6%.

In light of the non-recurring financial charge from the 2010 currency effect, Group net income rose forthe 15th consecutive year to more than €30 million in 2011(+13%). This performance was achieved despite anadditional tax expense (€0.6 million) from an increase in the corporate income tax rate in France.

At constant tax rates, net income rose 15%.

2. CONSOLIDATED FINANCIALS

2.1. Income statement highlights

In € thousands 2008 2009 2010 2011

Sales 264,864 259,199 305,696 398,326International (%) 90.0% 90.0% 91.0% 91.5%

Income from operations 34,259 33,683 42,216 46,301% of sales 12.9% 13.0% 13.8% 11.6%

Net Income 21,119 22,647 26,807 30,300% of sales 8.0% 8.7% 8.8% 7.6%

The company continued to reap benefits from its stronginternational positions and balanced sale mix:

- In North America, the creation of the US subsidiaryInterparfums Luxury Brands and the partnershiparrangement with Clarins Group since January 1, 2011contributed to more than 40% growth in unit volume;

- Trends since the start of the year in South America andAsia have continued with high growth rates for the fullperiod of 48% and 37% respectively;

- Following strong gains in 2010 (+60%), Eastern Europeconfirmed its continuing potential with further growth of 17%;

- Despite weak underlying market conditions in certaincountries, sales in Western Europe (excluding France)remained steady (7%) in a highly competitive environment,driven in particular by Jimmy Choo;

- Against the backdrop of modest growth for the perfumesand cosmetics market, France registered an excellentperformance (+21%);

- In the Middle East (+20%) growth momentum has beenback on track since the fall.

66


2.3. Cash flow statement highlights

Key changes in consolidated cash flows:

- Operating cash flow trends reflecting increased inventoriesin response to both strong sales in 2011 and launchesscheduled in 2012, an increase in trade receivables fromparticularly robust sales in the last quarter accompanied by a rise in trade payables in connection with majorproduction lines launched at the end of 2011;

- Cash flows from investing activities with the sale ofcertificates of deposits with maturities of more than threemonths used to meet needs linked to strong businessgrowth in the period as well as for the purchase of fixedassets notably relating to the creation of molds for new linesand department store stands;

- Cash flows from financing activities including therepayment of loans obtained for the acquisition of theLanvin trademarks and the Van Cleef & Arpels licenseagreement for €8.4 million, a dividend payment of€8.6 million for fiscal 2010, capital increases generated bythe exercise of stock options amounting to €2.3 million.

On this basis, net cash amounted to €17.4 million atDecember 31, 2011, compared with €57.7 million oneyear earlier.

3. RISK FACTORS

After performing a review of risks that could potentiallyhave a material adverse effect on its business, financialposition or results (or its ability to meet its targets), theCompany considers that there do not exist other risks thanthose presented below.

The risk mapping procedure launched in 2004 andregularly updated since, has made it possible to classify risksinto four categories: operating risks, risks related tointernational operations, environmental and employee-related risks and risks related to financial market conditions.

3.1. Operating risks

3.1.1. License agreements

The licensing system which is typical in the perfume and cosmetics industry consists of a brand name company (Burberry, Paul Smith, etc.) granting the licensee(Interparfums) a right to use the brand name in exchangefor royalty payments in general indexed to sales. The associated risk pertains to the potential non-renewal of agreements upon expiration.

In the case of Interparfums, several factors tend to limit or eliminate this risk:

- Length of contracts (10 years or more);

- Possibility of early renewal;

- Diversified portfolio of licensed brands;

- Factors specific to the company (sophisticated marketing,distribution network, corporate organization, etc.);

- Limited number of potential licensees with a similar profile;

- Ongoing efforts to add new licenses in order to limit the weight of existing brands in the portfolio.

Furthermore, the company is the owner of two brandnames and international trademarks for class 3 products(Lanvin and Nickel) that are not subject to a risk of non-renewal, thus reducing the overall risk of the non-renewalof license agreements.

3.1.2. Market conditions

The creation and distribution of prestige perfumes is a highly competitive sector. The quality of its productportfolio, internal market studies and privileged relationswith distributor partners maintained in each of thecountries through regular visits, product presentationssupported by marketing plans all reduce the risk of a loss of market share.

3.1.3. Sourcing and production

Sourcing of raw materials for the plants is assured byInterparfums’ Production Department. Planning for thelaunch of production lines is regularly updated andmonitored with component suppliers combined withrecourse to multiple suppliers selected by the company,limit the risk of supply chain disruptions.

Production risks result from the possibility ofmanufacturing partners being unable to manufactureproducts on time for their distribution. To reduce this risk,the company implements production plans early on in theprocess in partnership with manufacturers. These measuresare supplemented by ensuring a multiple supplies of moldsfor bottles and related items as well as a number ofproduction sites.

3.1.4. Insurance

Interparfums has always carried adequate insurance for itsactivities worldwide under conditions that comply withindustry standards, providing global coverage for importantrisks and activities.

This coverage includes:

- Property damage and business interruption;

- Inventory loss or damage;

- Contingent business income coverage;

- Civil liability;

- Directors’ and officers’ liability;

- Product liability;

- Transport;

- Professional travel and automobile insurance;

- IT equipment loss or damages;

- Specific risks linked to particular events.

67


Interparfums purchases supplemental insurance whenrequired, either in compliance with the law or morespecifically to cover business risks or risks arising fromspecific circumstances.

Insurance coverage is overseen by a specialized broker and spread among four major European insurers.

In addition, Interparfums is the named beneficiary for a lifeinsurance policy for its Chairman and Chief Executive.

To the best of the company’s knowledge, all risks areinsured. None of the risks mentioned above are self-insured.

3.2. International business risks

3.2.1. Currency risks

A significant portion of the company’s sales is in currenciesother than the euro. In consequence, the company incursrisks related to exchange rate fluctuations for these currencies,notably the US dollar (39.1% of sales) and a lesser extentthe pound sterling (7.9% of sales) and the Japanese yen(1.6% of sales).

The primary objective of the company’s foreign policy is tohedge the most probable budget exposure related primarilyto cash flows from operating activities in US dollars as wellas trade receivables in the US dollar, pound sterling andJapanese yen. To this purpose, the company has recourse to forward sale agreements according to procedures thatprohibit any transactions of speculative nature.

Financial instruments used by the Group to manage itsforeign exchange exposure are described in note 3.14.3 of the consolidated financial statements.

3.2.2. Country risks

With sales in more than 100 markets, Interparfumsregularly reassesses country risks.

For the past few years, the company has incurred nosignificant default on payments in countries considered at risk.

Given our collections policies, receivables monitoring andthe quality of our distributors’ financial health, no countryrisk reserve allocations were made in the financialstatements for the year ended December 31, 2011.

3.3. Employee-related risksIn light of the company’s organizational structure, the roleof personnel is decisive. To foster personnel retention andincrease the level of expertise and service provided tocustomers, the company has developed a strong corporateculture and implemented a system of employee managementand motivation based on a combination of tools includingvariable compensation, employee profit-sharing, stockoptions available to all personnel, annual review meetings,continuing education, etc.

The company’s rate of employee turnover and absenteeismis very low (refer to the chapter “social responsibility” ofthis document).

3.4. Trade and financial risks

3.4.1. Customer risks

Trade receivable collection risks are managed from the inception of the receivable by maintaining a goodknowledge of the company’s market and customer base and limiting the volume of orders for new customers. In addition, this risk is further reduced by a diversifiedcustomer base with 100 customers accounting for 80% of sales. Balances of outstanding trade receivables aremonitored daily, and collection procedures are immediatelyimplemented.

3.4.2. Risks of default

The risk of the company not meeting its financialcommitments is extremely low given its significant net cashresources and its low debt rate.

Interest rate risks on loans are covered by interest rate swaps.

Financial instruments used by the Group to manage interestrate risk are described in note 3.14.1 of the consolidatedfinancial statements.

3.4.3. Liquidity risk and covenants

A prudent management of liquidity risk impliesmaintaining a sufficient level of liquidity and theavailability of financial resources through the appropriatetypes of credit lines. After performing a specific review of its liquidity risk, the company considers that is has the resources to honor its future payment obligations.Maturities for financial assets and liabilities are presented in note 3.14.2 of the consolidated financial statements.

Loans obtained by the company are subject to obligationsunder covenants. These ratios are calculated every year to verify compliance with these contractual obligations. A breach of these ratios could render these loan facilitiessubject to an obligation of immediate prepayment.

Covenants in force are described in note 3.10.4 of the consolidated financial statements.

3.4.4. Equity risk

Treasury shares are held exclusively in connection withthe liquidity agreement managed by a brokerage firm. They are recorded in the consolidated financial statementsat acquisition cost as a charge under shareholders’ equity.

The portfolio of marketable securities includes primarilymoney market funds that do not include an equitycomponent. The Group does not use hedging instrumentsto cover these positions.

68


3.4.5. Valuation risks

A significant share of the company’s assets consists ofintangible assets and goodwill whose value depends in largepart on future operating performances. The valuation of intangible assets and goodwill also implies recourse toobjective judgments and complex estimates concerningitems uncertain by nature. If a change occurs in theunderlying assumptions on which this valuation is based, a reduction in the value of shareholders’ equity will berecorded. The impact of such adjustment would however be extremely limited.

3.4.6. Risk associated with inadequate internal controls

Effective procedures applied by all Group companies and for all areas of financial risks identified are reassessedannually in compliance with the Financial Security Act (Loi de Sécurité Financière).

These internal controls are reinforced in France by applicationof the Sarbanes Oxley act within the framework of theregulatory obligations of Interparfums Inc. (parent companyof Interparfums SA) and its listing on NASDAQ (see thechapter on “internal control” of this registration document).

3.4.7. Information technology risks

Interparfums and its subsidiaries have an ERP applicationproviding integrated sales, production and accountingmanagement capabilities. This system makes it possible to monitor information in real-time and reduces the risk of data loss and errors from multiple entries.

The company’s computer system is subject to risks ofbreakdown, electrical power outages, computer viruses and data theft. To reduce such risks, the company has robustsecurity systems (power converters, firewalls, antivirusprograms, etc.) and has implemented business continuity andIT recovery plans. These plans will contribute to improvedcomputer performances and include a fault tolerance systemfor restoring normal operations in a few minutes.

3.4.8. Litigation and other risks

These risks are managed by regularly monitoring legal andregulatory developments and by taking measures to avoidexposure to potential criminal liability and risks related to commercial law and intellectual property rights. The company’s legal department also manages litigationand disputes in close collaboration with outside legalcounsel and attorneys, as well as drawing up and reviewingthe main contracts of the company.

Provisions for contingencies concern primarily contract-related disputes.

There are no other legal, judicial or arbitration proceedings(including any that are pending or threatened of which the company is aware), which may have or have had duringthe 12 months, a material effect on the financial position or profitability of the company and/or group.

4. SOCIAL RESPONSIBILITY

Over the years, Interparfums has developed a corporateculture based on promoting creativity, teamwork, a spirit of trust and corporate responsibility.

Interparfums management and employees share strongvalues in respect to working conditions, equal opportunityemployment, respect, fighting discrimination and employeetraining. These values that today represent the foundationsfor sustainable growth reflect the contribution of thecultural diversity and rich experience of our workforce.

2009 2010 2011

Total workforce 171 180 227Officers and managers 84 89 117Supervisory staff 9 9 14Non-management employees 78 82 96Average age 37 years 35 years 35Average seniority 6 years 6 years 6

In the year under review the number of personnelincreased 26.1%.

4.1. Workforce by department

Number of employees at 12/31/2010 12/31/2011

Executive Management 2 2Production & Logistics 25 32Burberry Fragrances 34 39Luxe & Fashion 24 26France 65 67Finance & Corporate Affairs 30 37Subsidiaries - 24

Total 180 227

4.2. Wages and benefits


Total wages and benefits (including profit sharing and social charges) 22,086 24,771

Of which Management Committee members - wages, bonuses & social charges 3,887 4,063- share based payment expenses 82 48

In addition €127 million in supplemental retirementbenefits for executive management were paid in 2011.

69


4.3. Employee representation

As required by law, elections are held every four years to select a works’ committee and employee representatives.The last elections, held in early 2011 resulted in theformation of single body of employee delegates (Délégation Unique du Personnel) comprised of four salaried management employees and two non-managementemployees.

4.4. The workweek organizationAll employees of the company work on the basis of a 35-hour workweek according to a fixed number of 218work days per year and are entitled to 9 days of reducedworking hours benefits (RTT) per year. The rate ofabsenteeism in 2011 was 3.94% (3.6% in 2010), dueprimarily to maternity leaves.

4.5. Employee compensation and benefitsInterparfums has a compensation policy, a system of jobclassifications and performance evaluations uniformlyapplied to all employees. These procedures guarantee equaltreatment of men and women employees and ensure thegeneral cohesion of personnel. Employees of the companyand its subsidiaries also benefit from variable incentivecompensation benefits linked to the Group’s performance.

Interparfums also promotes employee stock ownershipthrough annual stock option plans available to all employees.

4.6. Statutory employee profit-sharingIn accordance with applicable legislation, an employeeprofit-sharing agreement was implemented onDecember 20, 2001. The amount paid for 2011 was€1.7 million (compared to €2 million in 2010).

4.7. Promoting the acquisition of new skillsAll Interparfums employees are offered training to developtechnical, management or personal skills.

Employees also regularly exercise their rights to individualtraining benefits provided for under French law (DroitIndividuel à la Formation).

5. ENVIRONMENTAL RESPONSIBILITY

Interparfums’ business focuses principally on the creationand distribution of products. For this reason, the entireproduction process is outsourced to manufacturingpartners. These include producers of juice, glass, caps and cardboard boxes and packaging companies. With noproduction activities of its own, Interparfums does not ownlaboratories or manufacturing sites.

Even though it operates in a sector less polluting than otherindustries, Interparfums is committed to preserving theenvironment and quality of life. Even though it operates in a sector less polluting than other industries, Interparfums iscommitted to preserving the environment and quality of life.

5.1. Optimized consumption of utilitiesInterparfums’ consumption of water and energy is limitedto normal office usage in its administrative premises thathouse 163 employees. Other water and energyconsumption concerns the sales offices and commercialteams in the field that represent 64 employees out of 227.

In connection with a search for new logistics solutions, the company decided to change warehouse facilities. On this basis it entered into agreement with its lesser for the construction of a HQE certified warehouse effective as of June 1, 2011. This certification representsnotably improved insulation, a lighting system withpresence-detectors, Ecolabel finishing materials, centralizedtechnical management for energy controls, rainwaterrecovery, high-performance waste sorting installations, etc.

5.2. RecyclingTo balance product quality and aesthetics with environmentalconsiderations, Interparfums takes care to reduce packagingvolumes at the source and select the appropriate materials at each stage of production to ensure optimal conditions fortheir recycling or disposal.

The bottles of its products are made of recyclable glass and the production process provides for a system ofrecuperation, grinding and recasting of certain bottlecomponents, which generates savings in volume ofmaterials used of 20%.

In addition, Interparfums ensures that its subcontractorsalso have waste sorting and recycling systems. The companyhas for example implemented with its suppliers of perfumesets a system for the retrieval of collection bins.

Finally, Interparfums invests in measures required for thetreatment and recycling of the packages, cardboard boxes andglass left once its customers have finished using its products.With this objective, through its participation in the Eco Emballage packaging recycling program, Interparfumscontributes to waste management and recycling.

70


5.3. Minimizing environmental impactsInterparfums strives to reduce the already low impact of its business on the environment. Accordingly, Interparfumsselects partners using cutting-edge design techniques with a commitment to reduce the impact of manufacturingprocesses on the environment.

A biodegradable water-soluble solution that does not harmthe environment is used in the coloring of some of itsbottles. The coating process provides for the elimination of solvent-based coatings and the progressive adoption ofhydro-coating for the remaining lines, in compliance withthe law of 2005 for reducing emissions of Volatile OrganicCompounds (VOC) in the air. In addition, sub-contractorsfor glass making have electrostatic air filters to reduce dustand smoke emissions in addition to for wastewater recyclingand emission control monitoring systems.

Reducing CO2 rates (-4.5%), water consumption per pump(-23.4), and the number of components are importantfactors in choosing sprayer pumps for Interparfums products.

Interparfums has eliminated thermosetting plastics from its line of bath and body care products in favor of recyclableplastic.

This commitment to environmental responsibility, reducingenergy consumption and recycling are also key criteria inthe selection of subcontractors.

Interparfums is also currently exploring options to sourceFSC and PEFC certified cardboard stock for product boxesthat comply with sustainable forest management standards.

Furthermore, an ongoing priority of Interparfums’ logisticsand transportation management is to limit its carbon footprint.In this way, promotional materials manufactured in Asia areshipped directly to Asian distributors without being importedand stored in France. In addition, Interparfums ensures that its logistics service provider optimizes transportationmanagement through trucks with full loads to limit overalltime on the road. Finally, by establishing a warehousestrategically located at the crossroads for its subcontractors,Interparfums has reduced distances for raw material shipments.

Interparfums’ sourcing strategy also integrates environmentalpriorities and CO2 emission reduction goals. In this way, 70%of Interparfums’ production originates from France and 10%from nearby countries. On this basis, only 20% of its suppliesare sourced from far off destinations. Similarly, to reduce thetransfer of components, Interparfums is gradually movingtowards the integration of different production phases bysuppliers (for example glass design and plastic processing).

5.4. Launch of an organic BIO rangeIn October 2010, Interparfums launched under the Nickelbrand a line of Ecocert Greenlife and Cosmebio certifiedorganic cosmetics. This “Nickel Bio” skincare line meets allrequirements for the percentage of natural ingredients(minimum 99.1%) and those originating from organicfarming (minimum 21.7%). In addition, in compliancewith the Ecocert charter, formulations for these products usea very low quantity of synthetic preservatives (<1%).

5.5. Regulatory and environmental issuesEven though Interparfums does not manufacture itsproducts itself, it nevertheless ensures their introduction onthe market. As such it is responsible for ensuring the safetyfor human use of cosmetic products it distributes. To thispurpose, it conducts tests that include ensuring theirinnocuousness nature for the skin and eyes. In accordancewith the European Cosmetics Directive, its products are not subject to any tests on animals. Within this framework,it also ensures its products are not subject to any tests onanimals in addition to compliance with all other relevantEuropean and international regulations concerning thedesign and production of all products it distributes.

Interparfums has taken measures for the application of thenew European Community Regulation on chemicals andtheir safe use concerning the Registration, Evaluation,Authorization and Restriction of Chemical substances (EC Directive 1907/2006 of December 18, 2006), orREACH with its suppliers. All technical and organizationalmeasures to be applied following the adoption of REACHhave been implemented by the company.

The pre-registration phase of REACH ended onDecember 1, 2008. During this period, importers andmanufacturers of “phase-in” substances were required toregister the substances once volume exceeded one ton peryear. Pre-registration makes it possible to obtain additionaldelays in connection with the registration procedure.

Interparfums, as a downstream user of chemical substances,is not subject to the registration requirement. However, ithas sought to maintain an active role by ensuring that theregistration process proceeds effectively and that there existsa continuous supply for sourcing chemical substancescontained in its products.

Interparfums took the initiative to contact its differentsubcontractors to ensure they and those further down thesupply chain effectively comply with registration,notification or authorization request procedures.Interparfums has asked all its suppliers to providecommitments that they will not supply articles containingsubstances listed in appendix XIV (Substances of Very HighConcern). To date, no supplier has declared the presence inarticles provided to Interparfums of substances that arecandidates for authorization.

Information relating to REACH including notably riskmanagement measures transmitted through security datafiles will be taken into account by Interparfums or itssuppliers as they are issued.

For information, the deadlines for the implementationof REACH are spread over the period from June 1, 2008 to June 1, 2018.

Interparfums’ actions in this area as a responsible corporatecitizen thus exceed that of a simple coordinator, by pursuingmeasures to increase awareness by its partners of environmentalissues and staying informed of the business practices of itssubcontractors and suppliers to preserve the environment.

71


7. PURCHASES BY THE COMPANY OF ITS OWN SHARES

In compliance with article 241-1 et seq. of the AMF GeneralRegulation, this paragraph describes the share repurchaseprogram that will be submitted for authorization to theshareholders’ meeting of April 27, 2012.

7.1. Purpose of the new share repurchase authorization

The shareholders meeting of April 27, 2012 is called torenew through its seventh resolution, the authorizationgranted to the Board of Directors to purchase and sellshares of the company for the following purposes:

- Maintain an orderly market in the company’s sharesthrough an investment services provider within theframework of a liquidity agreement in compliance with the conduct of business rules of the French association of financial market professionals (AMAFI);

- Grant employees or officers of the company and/or theGroup stock options (articles L.225-177 et seq. of theFrench Commercial Code) and/or bonus shares (articlesL.225-197-1 et seq. of the French Commercial Code);

- Remittance of shares pursuant to the exercise of rightsattached to securities conferring rights by redemption,conversion, exchange, presentation of warrants or any othermeans to grants of the company’s shares;

- Use such shares for payment or exchange in connectionwith financial transactions or acquisitions in compliancewith the financial market regulations;

- Cancel shares to increase the return on equity andearnings per share and/or eliminate the impact of dilutionfor shareholders from capital increases subject to adoptionof the ninth resolution of the extraordinary general meetingpresented below authorizing this cancellation;

- Permit the company to buy and sell its own shares for any other authorized purpose or practice admitted by

the market or which may be subsequently authorized or admitted by applicable laws and regulations.

7.2. Maximum percentage of capitalMaximum purchase priceExtract of the seventh resolution submitted for approval to the shareholders meeting of April 27, 2012:

Shares acquired shall be subject to the following limits:

- The maximum purchase price is €40 per share, excludingexecution costs;

- The total number of shares acquired may not exceed 5%of the capital stock outstanding at any time. This 5% limitapplies to an amount of capital that will be adjusted asapplicable for corporate actions affecting the capital stockafter this meeting, whereby acquisitions by the companyshall under no circumstances increase its holding, directlyand indirectly through subsidiaries, to more than 5% of the capital stock;

- Pursuant to the above, by way of indication and withouttaking into account shares already held by the company,19,867,326 shares on December 31, 2011 wouldrepresent 5% of the capital stock corresponding to amaximum theoretical purchase price of €39,734,652 onthe basis of a maximum purchase price of €40 per share.

7.3. Duration of the share repurchase programIn compliance with the provisions of the seventh resolutionto be submitted to the shareholders meeting ofApril 27, 2012, the authorization to implement this sharerepurchase program is granted for 18 months from the dateof this meeting or no later than October 27, 2013.

If one of the characteristics of the description of thisprogram is modified during the period of its duration, thepublic shall be notified of this modification in accordancewith the provisions set forth in article L.212-13 of theAMF General Regulation.

6. DIVIDENDS

Since 1998, the company has adopted a policy of distributing dividends that today represents more than 30% of consolidatedearnings, making it possible to reward shareholders a with a high return while at the same time associating them with theGroup’s expansion. In early May 2011, a dividend of €0.48 per share was paid or a total amount of €8.6 million.

Dividends

Dividend for fiscal year: 2007 2008 2009 2010Paid in: 2008 2009 2010 2011

Dividend per share €0.38 €0.38 €0.39 €0.48Dividend adjusted for bonus share issues €0.24 €0.26 €0.32 €0.44Annual change for the adjusted dividend +10% +10% +23% +35%

72


8. GROUP ORGANIZATION

The ownership structure base of Interparfums Inc. at December 31, 2011 was as follows:

73

INTERPARFUMS

SINGAPORE

Singapore

INTERPARFUMS

LUXURY BRANDS

United States

INTER ESPAÑA

PARFUMS &

COSMETIQUES SL

Spain

INTERPARFUMS

DEUTSCHLAND

GMBH

Germany

INTERPARFUMS

SRL

Italy

PHILIPPE BÉNACINJEAN MADAR

INTERPARFUMS INC.Nasdaq - New York

INTERPARFUMS

LTD.

United Kingdom

INTERPARFUMS SAEuronext Paris

FREE FLOAT

FREE FLOAT

46%

74%

51%

INTERPARFUMS

SUISSE SARL

Switzerland

100%51% 100% 100% 100%71%

26%

54%

9. MARKET SHARE AND COMPETITION

Market share

In France, Interparfums attained roughly a 2% share of the selective distribution market of prestige perfumes. In certain countries such as the United States, the UnitedKingdom, Russia or China, the company estimates itsmarket share of total French perfume imports at between1% and 4%.

Source: Internal estimates.

Competition

Interparfums operates in a sector dominated by ten majorhistoric players in the cosmetics market that have fragrancedivisions built around a brand portfolio with billions ofeuros in sales. There exist around ten mid-size players likeInterparfums also operating in this segment with salesranging between €100 million and €1 billion.

While Interparfums has also developed a brand portfolio in the luxury universe, it has adopted a markedly differentapproach with a business model based on methodical long-term development focused on creation and buildingcustomer loyalty rather than volume and advertising.

10. POST-CLOSING EVENTS

None.

11. 2012 OUTLOOK

Continued growth in 2012 will be supported by severalinitiatives, including notably:

- The launch of new fragrance lines under the Montblancbrand or the extension of fragrance lines for the Burberry,Lanvin and Boucheron brands;

- Expanding distribution of Jimmy Choo fragrances,particularly in the US;

- Thirty additional counters to be opened in department storesaccompanied by the rollout of new references for the BurberryBeautymake-up line;

Philippe Bénacin, Chairman and CEO commented:“Results for 2011 once again highlighted the efficacy of our strategy based on building sustained growth for eachbrand, creative and coherent launches, an effective globaldistribution network, proven processes and an efficientorganization supported by nearly 20 years of experience in this business. With continuing momentum at the start of this year from sustained sales particularly by the JimmyChoo and Montblanc brands, we are able to confirm our full-year target for sales of €400 million in 2012 ”.

Philippe Santi, Executive Vice President, added:“These results also demonstrate the strength of our businessmodel that produced double-digit growth in a year of sustainedmarketing and advertising investments and a current operatingmargin of nearly 12%. Furthermore, with our solid financialposition, we have the capacity to pursue any major externalgrowth opportunities that might arise”.


CONSOLIDATEDFINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS P. 80SIGNIFICANT ACCOUNTING POLICIES P. 81PRINCIPLES OF PRESENTATION P. 85NOTES TO THE BALANCE SHEET P. 86NOTES TO THE INCOME STATEMENT P. 96SEGMENT INFORMATION P. 98OTHER INFORMATION P. 99

74

Consolidated financial statementsTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

Consolidated income statement

In € thousands,Except per share data which is in units Notes 2010 2011

Sales 4.1 305,696 398,328

Cost of sales 4.2 (118,931) (145,602)

Gross margin 186,765 252,726

% of sales 61.1% 63.4%

Selling expenses 4.3 (133,073) (193,865)Administrative expenses 4.4 (11,476) (11,957)

Current operating income (EBIT) 42,216 46,904

% of sales 13.8% 11.8%

Other operating income and expenses 4.5 - (603)

Income from operations 42,216 46,301

% of sales 13.8% 11.6%

Financial income 521 550Interest and similar expenses (1,270) (1,055)

Net finance costs (749) (505)

Other financial income 4,309 4,780Other financial expense (5,838) (3,709)

Net financial income/(expense) 4.6 (2,278) 566

Income before income tax 39,938 46,867

% of sales 13.1% 11.8%

Income tax 4.7 (13,287) (16,661)Effective tax rate 33.3% 35.5%

Net income before non-controlling interests 26,651 30,206

% of sales 8.7% 7.6%

Attributable to non-controlling shareholders (156) (94)Net income 26,807 30,300

% of sales 8.8% 7.6%

Basic earnings per share 4.8 1.49 (1) 1.69Fully diluted earnings per share 4.8 1.48 (1) 1.68

(1) Restated for bonuses issues.

75


Consolidated statement of comprehensive income and expense


Available-for-sale assets 328 362Currency hedges - -

Gross income/(expense) recognized directly in equity 328 362

Deferred tax (113) (128)

Net income/(expense) recognized directly in equity 215 234

Consolidated net profit for the period 26,651 30,206

Total recognized income and expense for the period 26,866 30,440

Attributable to non-controlling shareholders 156 94

Attributable to equity holders of the parent 27,022 30,534

76


Consolidated balance sheet

Assets

In € thousands Notes 2010 2011

Non-current assets Net trademarks and other intangible assets 3.1 70,814 71,049Goodwill, net 3.2 2,613 2,010Net property, plant, equipment 3.3 7,066 9,057Long-term investments 1,292 1,128Other non-current financial assets 398 432Deferred tax assets 3.11 5,109 5,777

Total non-current assets 87,292 89,453

Current assets Inventory and work in progress 3.4 66,813 101,167Trade receivables and related accounts 3.5 74,399 129,109Other receivables 3.6 6,838 5,780Corporate income tax - 1,085Current financial assets 3.7 35,785 0Cash and cash equivalents 3.7 25,830 26,600

Total current assets 209,665 263,741

Total assets 296,957 353,194

Shareholders’ equity & liabilities

In € thousands Notes 2010 2011

Shareholders’ equity Common stock 53,780 59,602Additional paid-in capital 408 377Retained earnings 110,504 125,464Net income for the year 26,807 30,300

Equity attributable to parent company shareholders 191,499 215,743


Total shareholders’ equity 3.8 191,884 216,020

Non-current liabilities Provisions for non-current commitments 3.9 2,280 2,127Non-current borrowings 3.10 3,443 12Deferred tax liabilities 3.11 1,510 1,472

Total non-current liabilities 7,233 3,611

Current liabilities Trade payables and related accounts 3.12 53,320 96,238Current borrowings 3.10 8,627 3,450Bank facilities 3.10 3,947 9,205Provisions for contingencies and expenses 3.9 412 49Income tax 5,858 1,016Other payables 3.12 25,676 23,605

Total current liabilities 97,840 133,563

Total shareholders’ equity and liabilities 296,957 353,194

77


Statement of changes in shareholders’ equity

In € thousands Total equity

Group share

Number Common Paid-in Retained Group Non- Total of shares stock capital earnings share controlling & net interests income

As of December 31, 2008 (1) 13,351,605 40,176 265 113,995 154,436 (166) 154,270

Bonus share issue 2,678,942 8,037 (286) (7,751) - - -Shares issued on exercise of stock options 152,591 458 1,226 - 1,684 - 1,6842009 net income - - - 22,647 22,647 145 22,7922008 dividend paid in 2009 - - - (5,061) (5,061) - (5,061)Treasury shares 3,177 - - 162 162 - 162Stock based compensation - - - 208 208 - 208Remeasurement of financial instruments at fair value - - - (4,220) (4,220) - (4,220)Changes in Group structure of consolidated operations - - - - - 135 135Other changes - - - (6) (6) (5) (11)

As of December 31, 2009 (1) 16,186,315 48,671 1,205 119,974 169,850 109 169,959

Bonus share issue 1,638,298 4,915 (3,650) (1,265) - - -Shares issued on exercise of stock options 221,534 665 3,248 3,913 - 3,913Capital decrease (157,150) (471) (395) (2,629) (3,495) (3,495)2010 net income - - - 26,807 26,807 (156) 26,6512009 dividend paid in 2010 - - - (6,338) (6,338) - (6,338)Treasury shares 13,432 - - 267 267 - 267Stock based compensation - - - 152 152 - 152Remeasurement of instruments securities at fair value - - - 215 215 - 215Changes in Group structure of consolidated operations - - - (497) (497) 497 0Effect of exchange rate fluctuations - - - 548 548 (7) 541Other changes - - - 77 77 (58) 19

As of December 31, 2010 (1) 17,902,429 53,780 408 137,311 191,499 385 191,884

Bonus share issue 1,803,851 5,412 (1,898) (3,514) - - -Shares issued on exercise of stock options 137,280 410 1,867 - 2,277 - 2,2772011 net income - - - 30,300 30,300 (94) 30,2062010 dividend paid in 2011 - - - (8,628) (8,628) - (8,628)Treasury shares (30,037) - - (420) (420) - (420)Stock based compensation - - - 135 135 - 135Remeasurement of instruments securities at fair value - - - 19 19 - 19Effect of exchange rate fluctuations - - - 561 561 (14) 547

As of December 31, 2011 (1) 19,813,523 59,602 377 155,764 215,743 277 216,020

(1) Excluding treasury shares.

78


Statement of cash flows


Cash flows from operating activities Net income 26,651 30,206Depreciation, amortization and other 16,736 10,922Net finance costs 749 505Tax charge of the period 13,287 16,661

Operating cash flows 57,423 58,294

Interest expense payments (1,571) (1,413)Tax payments (11,044) (23,094)

Cash flow after interest expense and tax 44,808 33,787

Change in inventory and work in progress (28,442) (35,997)Change in trade receivables and related accounts (10,290) (55,537)Change in other receivables (1,350) (27)Change in trade payables and related accounts 11,511 42,918Change in other current liabilities 10,721 (278)

Change in working capital needs (17,850) (48,921)

Net cash flows provided by (used in) operating activities 26,958 (15,134)

Cash flows from investing activities Net acquisitions of intangible assets (17,438) (4,302)Net acquisitions of property, plants and equipment (3,851) (5,727)Net acquisitions of marketable securities (>3 months) (35,785) 35,785Changes in investments and other non-current assets (476) 164

Net cash flows provided by (used in) investing activities (57,550) 25,920

Cash flow from financing activities Issuance of borrowings and new financial debt - -Debt repayments (8,200) (8,412)Dividend payments to shareholders (6,338) (8,628)Capital increases 3,913 2,279Capital decrease through the repurchase of shares (3,495) -Treasury shares 394 513

Net cash flows provided by (used in) financing activities (13,726) (15,274)

Change in net cash (44,318) (4,488)

Cash and cash equivalents, beginning of year 66,201 21,883

Cash and cash equivalents, end of year 21,883 17,395

The reconciliation of net cash breaks down as follows:


Cash and cash equivalents 25,830 26,600Bank facilities (3,947) (9,205)

Net cash at the end of the period 21,883 17,395

Certificates of deposit > 3 months 35,785 -

Net cash and current financial assets 57,668 17,395

79


NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

Annual highlights

JanuaryBoucheron

Commencement of the Boucheron license agreement. After the transfer of inventories was completed, commercialactivity based on the three existing lines began in the spring.

Launch of the Jimmy Choo line

Interparfums launched the first women’s fragrance underthe Jimmy Choo brand. An Eau de Parfum as a symbolJimmy Choo luxury with a Venetian Murano glass bottleand jewel-encrusted signature stilettos.

MarchLaunch of the Passenger Cruise line of S.T. Dupont

A new fragrance for men and women, drawing itsinspiration from the origins of the S.T. Dupont brand in the art of travel.

Great Place to Work award

Interparfums received the Special Award for Inspiration ofthe Great Place To Work Institute. For its first participationin the Great Place to Work Awards (9th edition) Interparfumswas distinguished by the Special Award for Inspiration andranked 10th in France’s Best Workplaces list for “Companieswith less than 500 employees”.

Launch of the Optimistic line of Paul Smith

A new fragrance for men and women under the Paul Smithbrand blending warmth, joy and energy.

AprilExtension of the ST Dupont license

The 11 year license agreement signed in June 1997, initially extended in 2006 for an additional 3 years until 30 June 2011, was renewed for another term of 5 1/2 yearsuntil December 31, 2016.

Completion of the new logistics warehouse

Construction of the new 30,000 m2 logistics warehouse in the Eure department was completed. This new platformthat has a capacity for 43,000 palettes and complies withHQE standards was put in the service in the summerof 2011.

MayLaunch of the Legend line of Montblanc

A new Montblanc fragrance for men with a bottleconveying strength, character and masculinity with its rich black and silver design.

New SAP ERP system

The result of a project involving the work of a team ofnearly 20, the new SAP ERP system was successfullyimplemented.

JuneAlliance between Interparfums España and Clarins Spain

The wholly-owned subsidiary of the French companyInterparfums SA, Interparfums España, leading thedevelopment and marketing of all Group brands in Spain,joined forces with Clarins’ Madrid-based subsidiary, ClarinsEspagne. Under the terms of a 5-year renewable agreement,Interparfums and Clarins now share an expanded salesforce, administrative services and office facilities for thismarket.

Bonus share issue

In June 2011, the company proceeded with its 12th bonusissue on the basis of one new share for every ten shares held.

JulySignature of a fragrance license agreement with Balmain

On July 7, Balmain and Interparfums signed a 12-yearworldwide license agreement commencing onJanuary 1, 2012 for the creation, development anddistribution of fragrances under the Balmain brand.

SeptemberLaunch of the Burberry Body line

A new feminine fragrance under the Burberry brand,refined and seductive scent and the most historicallyimportant launch of the brand to date.

2011 “Boldness and Creativity Prize” awarded by French Prime Minister, François Fillon

On September 22, French Prime Minister, François Fillon,awarded the 2011 “Boldness and Creativity Prize” (Prix del’Audace Créatrice) to Philippe Bénacin at a ceremony heldat Hôtel Matignon, the Prime Minister’s official residence.This prize recognizes the achievements of a company thathas successfully combined growth in sales, profitability andjob creation.

Midcap Corporate Governance Prize

Also in September, Interparfums was awarded the “MidcapCorporate Governance Prize” for significant initiatives in this area. It recognizes the Group’s performance of transparent, regular and dynamic communications with shareholders.

DecemberSignature of a fragrance license agreement with Repetto

On December 7, Repetto, the French maker of dance-inspiredfootwear and fashion accessories, and Interparfums signeda 13-year worldwide license agreement starting onJanuary 1, 2012 for the creation, development anddistribution of fragrances under the Repetto brand.

December: exercise of the Burberry option

Burberry exercised its right to evaluate the purchase pricefor the unexpired term of the existing license. In thisprocess, Burberry has until July 31, 2012 to determinewhether it wishes to buy out the unexpired portion of thelicense or continue the existing license which runs throughDecember 31, 2017.

80


Interparfums SA Ownership Controlling interest interest (%) (%)

Interparfums Suisse Sarl Switzerland 100% 100%Interparfums Deutschland GmbH Germany 51% 51%Inter España Parfums et Cosmetiques SL Spain 100% 100%Interparfums Srl Italy 71% 71%Interparfums Ltd United Kingdom 51% 51%Interparfums Luxury Brands United States 100% 100%Interparfums Singapore Singapore 100% 100%

Subsidiaries’ financial statements are prepared on the basis of the same accounting period as the parent company. The fiscalyear covers the 12 month period ending on December 31.

1. SIGNIFICANT ACCOUNTING POLICIES

1.1. Basis of presentation and compliance statement

In accordance with EC regulations 1606/2002 ofJuly 19, 2002 on international accounting standards,the 2011 consolidated financial statements of theInterparfums are established in compliance with IAS/IFRS(International Accounting Standards/InternationalFinancial Reporting Standards) applicable since 2005 asendorsed by the European Union.

Financial information presented herein has been based on:

- IFRS standards and interpretations whose application wasmandatory starting in 2005;

- Options retained and exemptions used by the Group forthe preparation of IFRS consolidated financial statements.

The consolidated financial statements at December 2011were adopted by the Board of Directors on March 8, 2012.They will become definitive only after they have beenapproved by the ordinary general meeting ofApril 27, 2012.

1.2. Changes in accounting standards

The following standards, amendments and interpretationsthat entered into force on January 1, 2011 will be appliedby the company in preparing its 2011 consolidatedfinancial statements:

- Revised IAS 24 “Related party disclosures”;

- Amendment to IFRS 7 “Disclosures – Transfers ofFinancial Assets”.

These standards, amendments and interpretations did nothave a material effect on the company’s consolidatedfinancial statements.

1.3. First-time adoption of IFRS

For the first time adoption of IFRS for the financialstatements prepared on December 31, 2005 with atransition date of January 1, 2004, as authorized underIFRS 1, Interparfums chose to apply the followingexemptions for standards applicable to the company:

- Fixed assets: the Group has chosen to continue torecognize property, plant and equipment at historical cost;

- Share-based payments and equivalents: for programsinvolving equity-settled share-based payment, the Group has elected to apply IFRS 2 for grants after November 7, 2002 and not vested before January 1, 2005.

1.4. Basis of consolidation

In March and June 2010, Interparfums created two wholly-owned distribution subsidiaries in the United Statesand Singapore respectively, “Interparfums Luxury brands”and “Interparfums Singapore”.

In October 2010, Interparfums acquired theremaining 49% share of its Spanish subsidiary “InterEspaña Parfums et Cosmetiques SL”, now in consequencewholly-owned.

In October 2010, Interparfums also acquired an additional20% stake in its Italian subsidiary “Interparfums Srl”,henceforth 71%-held.

All Group subsidiaries are fully consolidated. These includeInterparfums Deutschland GmbH, Inter España Parfums et Cosmetiques SL, Interparfums Srl, Interparfums Ltd,Interparfums Suisse Sarl, Interparfums Luxury Brands and Interparfums Singapore.

81


1.6. Use of estimates

The preparation of consolidated financial statements requiresthe use of estimates and assumptions for the valuation ofcertain balance sheet and income statement balances. Theseconcern primarily the valuation of intangible assets, amountsto be set aside for provisions for contingencies and expenses,provisions for inventory losses and deferred tax assets.Although these estimates are based on management’s bestknowledge of current events and situations, actual resultsmay ultimately differ from these estimates.

1.7. Revenue recognition

Revenue includes principally wholesale sales to distributorsand agents and direct sales to retailers for the part registeredby Group subsidiaries.

Revenue from perfume and cosmetics products is presentednet of all forms of discounts and rebates.

Revenue is recognized on basis of conditions of transfer tothe buyer of the risks and rewards incident to ownership.Amounts invoiced at year-end when the actual transfer oftitle occurs in the following year are not recognized underrevenue of the year in progress.

1.8. Trademarks, other intangible assets and goodwill

Trademarks and other intangible assets

Trademarks and other intangible fixed assets, includingtrademarks under licensing contracts and acquiredtrademarks are recorded at cost.

These trademarks that constitute well-established legallyprotected international brand names are classified asindefinite life intangible assets and are not amortized.

Finite life intangible assets such as upfront license fees areamortized on a straight-line basis over the duration of the license.

Rights on glass molds are classified as finite life intangibleassets and amortized over a period of between three and five years.

Licenses and upfront license fees are remeasured at least oncea year or whenever there is an indication of impairment ofvalue in use defined as the present value of estimated futurecash flows expected to arise from the continuing use ofthese assets. Data used originates from the annual andmulti-year budgets for duration of the license agreementsdrawn up by Management.

Proprietary brand names are remeasured at least once a yearby comparing the net carrying value and the recoverableamount defined as the higher of value in use on the basis of the present value of estimated future cash flows derivedfrom five year budgets discounted to infinity.

The discount rate before tax applied for remeasurement is the weighted average cost of capital (WACC) of 7.74% at December 31, 2011 compared to 7.44% at December 31, 2010. This ratio is determined on thebasis of the long-term interest rate of 3.15% correspondingto the average rate for 10-year OAT French fungibletreasury bonds of the last quarter, the rate expected by aninvestor in this sector and the specific risk premium for thissector. The perpetuity growth rate used is 1.5% atDecember 31, 2011 and December 31, 2010.

A provision for impairment is recorded under income if thisvalue is lower than the carrying value.

Under IAS 38.27b revised in 2004, costs generated onacquisition analyzed as directly attributable costs areincluded in the cost of the acquired assets.

Other intangible assets are amortized over their useful livesand subject to impairment testing when an indication ofimpairment exists.

Goodwill

Goodwill is defined as the difference between the purchaseprice of shares of consolidated companies and the Group’sshare in restated net assets after measurement of the fairvalue of assets and liabilities acquired.

Positive goodwill arising from the acquisition of Nickel hasbeen recognized in the balance sheet.

1.5. Translation method

The company’s functional currency and currency for the presentation of financial statements is the euro.

Transactions in foreign currencies are translated at the exchange rate in effect on the date of the transaction. Foreign currencydenominated payables and receivables are translated at the exchange rate in effect as of December 31, 2011. Translation lossesand gains arising from the conversion of accounts denominated in foreign currencies on December 31, 2011 are recorded inthe income statement. Hedged transactions are translated at the negotiated exchange rate.

The main exchange rates applied for the translation of subsidiary accounts in relation to the euro are as follows:

Currency Closing exchange rate Average exchange rate 2010 2011 2010 2011

US dollar (USD) 1.3362 1.2939 1.3093 1.3920Pound sterling (GBP) 0.8607 0.8353 0.8578 0.8679Singapore dollar (SGD) 1.7136 1.6819 1.7540 1.7489Swiss franc (CHF) 1.2504 1.2156 1.3803 1.2326

82


This goodwill is tested annually or whenever there exists an indication of potential impairment. When the netcarrying value of this goodwill exceeds the higher of thevalue in use or market value, an impairment is recorded for the difference. Value in use is based on the present valueof future cash flows that will be generated by these assetswhile market value is determined in reference to recentcomparable transactions or valuations performed byindependent appraisers in view of their disposal.

1.9. Property, plant and equipment

Tangible fixed assets are valued at cost (purchase price plusrelated costs, excluding acquisition cost) and depreciatedover their estimated useful lives on a straight-line basis (2 to 5 years). Tangible fixed assets include molds for caps.

1.10.Inventory and work in progress

Inventories are valued at the lower of cost or probable resalevalue. A provision for impairment is recorded when theirprobable resale value is lower than the carrying value.

The cost of inventories of raw materials and supplies isvalued on the basis of average weighted prices.

The cost of finished products includes the cost of materialsused, production expenses and a share of indirect costsvalued at a standard rate.

At the end of every year, these standard rates are comparedwith the effective rate actually obtained based on actualdata at year-end.

In accordance with the amendment to IAS 38 “Intangibleassets”, expenditure on advertising and promotionalactivities is recognized when received or produced in thecase of goods or when rendered in the case of services.

1.11.Non-current financial assets

Marketable securities on initial recognition are recorded at cost and subsequently remeasured at fair valuecorresponding to the market value at the end of each period.

All Group marketable securities have been classified as “available-for-sale financial assets” and presented in“Cash and cash equivalents”.

In accordance with IAS 39.55, gains and losses on“available-for-sale financial assets” are recorded at year-endin equity. However, in accordance with IAS 39.67, a significant or prolonged decline in fair value below thecost value of the securities is recognized in profit or loss.

1.13.Accounts receivable

Accounts receivable are recorded at face value. A provisionfor impairment is recorded on a case-by-case basis when the probable recovery value is deemed to be less than thecarrying value.

1.13.Deferred tax

Timing differences between tax base and consolidated assetsand liabilities and tax on restatements on consolidation giverise to the recognition of deferred taxes under the liabilitymethod, taking the known year-end tax conditions intoaccount.

Potential tax credits resulting from loss carry forwards areonly recorded when their use in the short term is deemedlikely, and subject to depreciation when appropriate, aremaintained in the balance sheet.

1.14.Current financial assets

Current financial assets consist of investments in the formof certificates of deposits with maturities of more than threemonths.

1.15.Cash and cash equivalents

The line item “Cash and cash equivalents” includesmarketable securities, cash and cash equivalents that consistof highly liquid investments with maturities of threemonths or less and readily convert to a known cash amountand are subject to an insignificant risk of changes in value.

1.16.Treasury shares

Interparfums shares held by the Group are recorded as adeduction from equity at cost.

If sold, the proceeds are recorded directly under equity netof tax.

1.17.Provisions for contingencies and expenses

Retirement severance benefits

This reserve is maintained to honor the company’semployee pension benefit commitments and corresponds tothe present value of the payments to which employees areentitled, under the collective bargaining agreement, oncethey retire. For the measurement of severance benefitspayable on retirement for 2011, Interparfums has adoptedthe procedure for voluntary severance agreementsintroduced on July 23, 2008 extending the interprofessionalagreement of January 11, 2008. This procedure provides forthe systematic signature of a severance agreement by theemployer and the employee specifying the terms andconditions of the termination. Because last year’s methodinvolving compulsory retirement was applied, the impact ofthis change in the assumptions used for calculation wasdealt with under past service costs. The projected unitcredit was applied. This method takes into account rightsand wages projected to term, the probability of payment as

83


well as the prorated amount of seniority so thatcommitments correspond to the value of service alreadyrendered by employees.

Accordingly, the calculation of commitments for severancebenefits involves estimating the probable present value ofprojected benefit obligations (PBO), i.e. the rights ofemployees at the time of departure taking into account theprobability of departure and death of the employees beforeterm as well as the impact of revaluations and discounts.This projected benefit obligation is then prorated to takeinto account seniority of the employees of the company onthe calculation date.

Provisions for other contingencies and expenses

A provision is recognized when the company has a presentobligation (legal or constructive) as a result of a past eventwhen it is probable that an outflow or resources embodyingeconomic benefits will be required to settle an obligationand a reliable estimate can be made of the amount of theobligation.

1.18.Financial instruments

Derivative financial and hedging instruments are used bythe Group to reduce exposure to interest rate and foreignexchange risks. Such instruments are not used forspeculative purposes.

A swap to cover interest-rate risks in connection withLanvin loan of 2007 linked to 3 month Euribor wasimplemented on the date the loan agreement wasconcluded. In compliance with IAS 39, the difference in the market value of this instrument and the notionalamount is recorded in the income statement.

The company has recourse to forward exchange contractsand cash flow hedges put into place at the time receivablesare recognized. These contracts have maturities of three tosix months according to the maturities of the correspondingreceivables in foreign currencies (primarily the US dollarand Sterling pound). Currency gains and losses from theseinstruments are recognized in the income statement whenthe receivables are booked.

In addition, hedges were put into place in 2010 to coverfuture sales in US dollars. These hedges provided cover forapproximately 65% of sales in this currency in the 2010fourth quarter. In accordance with IAS 39, these hedges ofprojected cash flows were accounted for as cash flow hedges.Hedge accounting is applicable if the hedge is formallydefined and documented on inception of the hedgingrelationship and it is demonstrated that hedgingrelationship will be highly effective over the life of thehedging instrument. At year-end, hedging instrumentscorresponding to these criteria are recognized in the balancesheet at fair value. The gain or loss on the hedginginstrument determined to be effective shall be recognizeddirectly in equity. In 2010, revenue was restated toeliminate the impact of these hedges.

At December 31, 2011, no hedges were put into place tocover future sales.

1.19.Borrowings

On initial recognition, borrowings are measured at fairvalue to which are added transaction costs directlyattributable to the issuance of the liability.

At year-end, borrowings are recognized at amortized costaccording to the effective interest rate method.

1.20.Other liabilities

Other financial debt and operating liabilities are measuredat fair value on initial recognition. This amount generallycorresponds to the amount of the invoice in the case ofshort-term payables.

1.21.Stocks options

IFRS 2 requires that a charge be recorded in the incomestatement with a corresponding increase to reservesrepresenting advantages granted to beneficiaries of stocksoptions. For the measurement of these advantages, thecompany uses the Black & Scholes model. This model takesinto account the characteristics of the plans (exercise price,exercise period), market data at time of grants (risk-free rate,share price, volatility, projected dividends) and assumptionswith respect to the behavior of beneficiaries. Changesoccurring after the grant date do not have an impact on thisinitial valuation. The value of the options is related notably totheir expected lifespan that the company considers correspondsto the holding period provided for under tax provisions. Thisexpense is recognized over the duration of the vesting period.

1.22.Registration of trademarks

Under IAS 38, expenses incurred in connection with theregistration of each trademark are not capitalized and areexpensed under “research and consulting costs”.

1.23.Earnings per share

Basic earnings per share are calculated using the weightedaverage number of shares outstanding during the year andexcluding treasury shares.

Fully-diluted earnings per share are calculated based on theaverage number of shares outstanding in the period, afterexcluding only treasury shares destined to be held on along-term basis and adjusted for the effects of all dilutedpotential ordinary shares.

To ensure the comparability of information, basic anddiluted earnings per share of the prior year aresystematically recalculated to take into account bonus sharegrants in the year in progress.

84


2. PRINCIPLES OF PRESENTATION

2.1. Presentation of the income statement

The consolidated income statement of the company ispresented by function. Under this format, expenses andincome are broken down by function (cost of sales, sellingexpenses, administrative expenses) and not according to thenature of the origin of expenses and income.

2.2. Presentation of the balance sheet

The balance sheet is presented based on a classificationbetween current and non-current liabilities.

2.3. Segment reporting

Segment information presented in this report is based onthe segments used by management to monitor Groupoperations.

2.3.1. Business lines

The company is organized and focused around two profitcenters: “Perfumes” and “Skincare and Beauty”.

In the 2010 first half, Interparfums launched its first make-up lines under the Burberry brand. The results of thisbusiness are monitored by the company’s ExecutiveManagement as part of the already existing “Cosmetics”division. This segment that includes these two comparableactivities is presented under the heading “Skincare andBeauty”.

Details on these two segments for which the companypossesses performance indicators are in consequencedisclosed below.

2.3.2. Geographical segments

The company that has a significant international dimensionanalyses sales by geographical segment.

All assets necessary for the company’s operating activitiesare located in France.

85


Nickel trademark

As Interparfums is the owner of the Nickel brand, acquiredon April 1, 2004, no amortization was recognized in itsbalance sheet. The brand is tested for impairment once ayear on December 31.

Lanvin trademark

As Interparfums acquired ownership for the Lanvintrademark and brand name for class 3 products (perfumes)in July 2007 no amortization was recognized in its balancesheet. The brand is tested for impairment once a year onDecember 31.

S.T. Dupont upfront license fee

An upfront license fee of €869,000 paid on April 1, 1997is amortized over the 11-year term of the S.T. Dupontlicense agreement. An additional license fee of €350,000was paid in March 2006. At June 30, 2011, the totalupfront license fee of €1,219,000 was fully amortized.

Burberry upfront license fee

The upfront license fee of €3 million paid on July 1, 2004is amortized over the 12.5 year term of the Burberry licenseagreement. In September 2006 an additional license fee of€2 million was paid to be amortized over the remainingterm of the license agreement.

3. NOTES TO THE BALANCE SHEET

3.1. Trademarks and other intangible assets

3.1.1. Nature of intangible assets

In € thousands 2010 + - 2011

Gross value

Indefinite life intangible assets Nickel trademark 2,133 - - 2,133Lanvin trademark 36,323 - - 36,323

Finite life intangible assets S.T. Dupont upfront license fee 1,219 - - 1,219Burberry upfront license fee 5,000 - - 5,000Van Cleef & Arpels upfront license fee 18,250 - - 18,250Montblanc upfront license fee 1,000 - - 1,000Boucheron upfront license fee 15,000 - - 15,000Balmain upfront license fee - 2,050 - 2,050

Other intangible assets Rights on molds for bottles and related items 8,628 1,158 (305) 9,481Registration of trademarks 440 60 - 500Software 1,053 1,034 - 2,087Other 165 - - 165

Gross trade receivables 89,211 4,302 (305) 93,208

Amortization and impairment

Indefinite life intangible assets Nickel trademark (384) - - (384)

Finite life intangible assets S.T. Dupont upfront license fee (1,187) (32) - (1,219)Burberry upfront license fee (2,476) (450) - (2,926)Van Cleef & Arpels upfront license fee (6,084) (1,521) - (7,605)Montblanc upfront license fee (48) (100) - (148)Boucheron upfront license fee - (1,000) - (1,000)

Other intangible assets Rights on molds for bottles and related items (7,274) (684) 305 (7,653)Registration of trademarks (440) (8) - (448)Other (504) (272) - (776)

Total amortization and impairment (18,397) (4,067) 305 (22,159)

Total net 70,814 235 - 71,049

86


3.3. Property, plant and equipment

In € thousands 2010 + - 2011

Fixtures, improvements, fittings 7,843 3,889 - 11,732Office and computer equipment and furniture 1,676 86 (99) 1,663Molds for bottles and caps 6,251 1,635 - 7,886Other (1) 870 133 - 1,003

Total cost 16,640 5,743 (99) 22,284

Accumulated depreciation and impairment (1) (9,574) (3,741) 88 (13,227)

Total 7,066 2,002 (11) 9,057

(1) Including fixed assets held under finance leases (vehicles) for a gross amount of €352,000 and an accumulated depreciation of €267,000.

The increase in tangible fixed assets reflects mainly the acquisition of new stands for points of sale and the manufacture ofbottle caps for new lines.

Van Cleef & Arpels upfront license fee

An upfront license fee of €18 million paid on January 1, 2007is amortized over the 12-year term of the Van Cleef & Arpelslicense agreement.

Montblanc upfront license fee

The upfront license fee of €1 million paid on June 30, 2010is amortized over the 10.5 year term of the Montblanclicense agreement.

Boucheron upfront license fee

The upfront license fee of €15 million paid on December 17, 2010 is amortized over the 15 year term of the Boucheron license agreement.

Balmain upfront license fee

The upfront license fee of €2,050,000 was recognizedin 2011 is amortized over the term of the Balmain licenseagreement that commences on January 1, 2012.

Rights on molds for bottles and related items

Rights on molds for bottles and related items are amortizedover 5 years. Design costs are amortized over 3 years.

3.1.2. Impairment tests

Nickel trademark

A valuation was performed on December 31, 2011 basedon the method of discounting future royalty payments toinfinity. No additional provision was recorded forimpairment in the period.

Lanvin trademark

A valuation was performed on December 31, 2011 by discounting future cash flows to infinity. No provision was recorded.

Upfront license fees

All upfront license fees were measured onDecember 31, 2011 using the discounted cash flow method. No provision was recorded.

For all discounts, the weighted average cost of capital(WACC) of 7.74% is applied.

Analysis of sensitivity

A one point fluctuation in the discount rate before tax orthe perpetuity growth rate would result in the recognitionof a non-material impairment charge for trademarks andother intangible assets.

3.2. Goodwill

Goodwill from the 100% shareholding in Nickel wasrecognized in the balance sheet at December, 31 2007. This goodwill corresponds to the initial acquisition ofa 67.57% stake in June 2004 for €6,910,000 followedby 32.43% in June 2007 for €3,518,000.

This goodwill is tested for impairment each year. In 2011,an additional amount was recorded for impairment of€603,000. Changes in goodwill break down as follows:

In € thousands

Gross value 5,202Amounts for impairment before 2011 (2,589)Impairment in 2011 (603)

Net value at December 31, 2011 2,01087


3.5. Trade receivables and related accounts


Total gross amount 77,540 133,077

Impairment (3,141) (3,968)

Net total 74,399 129,109

The increase in trade receivables reflects strong billings atyear-end and relating mainly to the launch of the BurberryBody line.

The aged trial balance for trade receivables breaks down asfollows:


Not due 62,962 116,5070 – 90 days 13,882 14,98991 – 180 days 277 987181 – 360 days 54 115More than 360 days 365 479

Total gross amount 77,540 133,077

3.6. Other receivables


Prepaid expenses 1,485 2,182Holding current accounts 32 264Value-added tax 2,622 2,411Hedging instruments 799 -Other 1,900 923

Total 6,838 5,780

3.7. Current financial assets, cash and cash equivalents

3.7.1. Current financial assets

Current financial assets consist of investments in the formof certificates of deposits with maturities of more than threemonths.

In 2011, all current financial assets were used to cover needsrelating to growth in business.

3.7.2. Cash and cash equivalents


Certificates of deposit (less than 3 months) 18,991 17,387Money market mutual funds 3,103 -Bank accounts 3,736 9,213

Cash and cash equivalents 25,830 26,600

Current financial assets (certificatesof deposits > three months) 35,785 -Cash, cash equivalents and current financial assets 61,615 26,600

In 2011, the decline in cash and cash equivalents wasmainly due to the significant increase in inventories, tradereceivables and financing for the US subsidiaryInterparfums Luxury Brands.

3.4. Inventory and work in progress


Raw materials and components 26,176 40,190Finished goods 44,830 66,179

Total cost 71,006 106,369

Allowances for raw materials (917) (307)Allowances for finished goods (3,276) (4,895)

Accumulated provisions for impairment (4,193) (5,202)

Net total 66,813 101,167

The rise in inventories of components is mainly due to restocking for the new lines, Jimmy Choo and Burberry Body.

The increase of finished goods in the period reflects mainly the build up of stock for new licenses (notably Boucheron), thelaunch of new lines at the end of 2011 and early 2012 (notably Burberry Body, Montblanc Legend and Avant-garde of Lanvin)and growth in sales.

88


At December 31, 2011, the potential number ofInterparfums SA shares that may be created was 366,213.

All employees of the Group benefited in February 2008from a stock option plan created by the parent companyInterparfums Inc. This plan was recognized in accordancewith IFRIC 11 and will be charged to Interparfums SA bythe parent company.

Benefits granted to employees in the form of stock optionsrecognized as additional compensation, in accordance withIFRS 2, were calculated using the Black & Scholes model.The impact of this calculation, including the US plan,represents an expense that is recognized over the duration ofthe vesting period. This expense amounted to €346,000for 2011 and €311,000 for 2010.

The characteristics of plans currently in force are as follows:

Plans Number of Number of Grant Vesting Exercise beneficiaries shares granted/ date period price (1)

exercised at inception

Plan 2006 84 98,800 06/01/06 4 years €18.10Plan 2008 (IP Inc.) 96 84,500 02/14/08 4 years $11.30Plan 2009 135 87,000 12/17/09 4 years €14.55Plan 2010 143 114,700 10/08/10 4 years €20.85

(1) Subscription price adjusted for bonus issues.

In the period, changes in plans issued by Interparfums SA break down as follows:

Plans Options Conversions Grants Bonus Cancellations Options outstanding in the in the share in the outstanding at 12/31/10 period period grants period at 12/31/11

Plan 2005 99,943 (96,076) - - (3,867) -Plan 2006 162,947 (41,204) - 14,691 - 136,434Plan 2009 94,600 - - 9,449 (110) 103,939Plan 2010 114,700 - - 11,440 (300) 125,840

472,190 (137,280) - 35,580 (4,277) 366,213

3.8. Shareholders’ equity

3.8.1. Common stock

As of December 31, 2011, Interparfums’ capital wascomprised of 19,867,326 shares fully paid-up with a parvalue of €3, 73.81%-held by Interparfums Holding.

For the period under review, capital increases result fromthe exercise of stock options and the capital increase inconnection with the bonus issue of June 20, 2011 on thebasis of one new share for every 10 shares held.

3.8.2. Stock option plans

The managers and employees of Interparfums and itssubsidiaries benefit regularly from stock option plans.

Rules for the grant of stock options to executive officers arebased on the level of responsibilities exercised and the

performance of the company. The quantity of stock optionsgranted to officers may vary from one year to anotheraccording to the performance of the company over theperiod.

On December 17, 2009 and October 8, 2010, the Board ofDirectors decided to grant options to corporate officers onthat date whose exercise will be contingent on criteria ofinternal performance based on the company’s sales. Underthese terms, the number of options exercisable is based onthe average rate of actual growth for the company’s salesrelative to the rate of attainment of the target for averagegrowth. This objective is set by the Board of Directors for aperiod of reference corresponding to the 4 year tax waitingperiod that applies to the stock option plan established bythis Board.

The Board of Directors has decided that these officers mustretain 10% of the shares resulting from the exercise of stockoptions for the duration of their terms of office inaccordance with the provision of article L.225-185 of theFrench commercial code.

In 2011, no stock option plans were created.

89


3.8.5. Information on equity

The company is not subject to specific regulatory orcontractual obligations in respect to capital stock.

In compliance with the provisions of article L.225-123 ofthe French Commercial Code, the shareholders’ meeting ofSeptember 29, 1995 decided to create shares carrying adouble voting right. These shares must be fully paid up and

recorded in the company’s share register in registered formfor at least three years.

Since 1998, the company has adopted a policy ofdistributing dividends that today represents more than 30%of consolidated earnings to reward shareholders while at the same time associating them with the Group’s expansion.In early May 2011, a dividend of €0.49 per share was paidor a total amount of €8.6 million.

The estimation of the fair value of each stock option outstanding based on the Black & Scholes model is calculated on thegrant date on the basis of the following assumptions:

Plans Fair value of Risk free Dividend Volatility Share price the options interest yield rate retained rates for the calculation

Plan 2006 €10.37 4.60% 0.94% 25% €35.00Plan 2008 (1) $3.96 2.72% 1.20% 39% $11.59Plan 2009 €4.27 3.56% 2.67% 30% €17.60Plan 2010 €6.55 2.81% 1.81% 30% €22.95

(1) The 2008 plan has been issued by the parent company Interparfums Inc.

For all these plans, the stock options have terms of six years.

3.8.3. Treasury shares

Within the framework of the share repurchase program authorized by the General Meeting of April 29, 2011, 53,803Interparfums shares were held by the company as of December 31, 2011 or 0.27% of the share capital.

Changes in the period break down as follows:

In € thousands Number of shares Book Value

At December 31, 2010 23,766 625Acquisitions 229,988 5,317Bonus issue of June 20, 2011 2,568 -Cancellations - -Impairment - (204)Sales 202,519 (4,856)

At December 31, 2011 53,803 882

Management of the share repurchase program is assured by an investment services provider within the framework of aliquidity agreement in compliance with the conduct of business rules of the French financial markets association (AMAFI).

Purchases of shares under this program are subject to the following conditions:

- The maximum purchase price is €40 per share, excluding execution costs;

- The total number of shares acquired may not exceed 5% of the company’s capital stock.

3.8.4. Non-controlling interests

Non-controlling interests concern the percentages not held in European subsidiaries (Interparfums DeutschlandGmbH: 49%; Interparfums Srl: 29%; Interparfums Ltd: 49%) that break down as follows:

In € thousands 12/31/10 12/31/11

Reserves attributable to non-controlling interests 541 371Earnings attributable to non-controlling interests (156) (94)


Non-controlling shareholders have an irrevocable obligation and the ability to offset losses by an additional investment.

90


3.10.Borrowings

3.10.1.Borrowings by maturity and rate

In € thousands Total < 1 year 1 to 5 years > 5 years

Floating-rate (3M Euribor) 3,353 3,353 - -Fixed rate - - - -Automobile leases 109 97 12 -Bank overdrafts 9,205 9,205 - -

Total at December 31, 2011 12,667 12,655 12 -

In € thousands Total < 1 year 1 to 5 years > 5 years

Floating-rate (3M Euribor) 7,949 4,603 3,346 -Fixed rate 3,900 3,900 - -Automobile leases 221 124 97 -Bank overdrafts 3,947 3,947 - -

Total at December 31, 2010 16,017 12,574 3,443 -

All borrowings are in euros.

Since 2008, for the measurement of retirement severancebenefits, Interparfums has adopted the procedure fornegotiated terminations introduced on July 23, 2008extending the interprofessional agreement ofJanuary 11, 2008.

For 2011, the following assumptions were applied:

- A negotiated termination at age 65;

- A rate of 48% for employer payroll contributions for allemployees;

- A 5% average rate for annual salary increases;

- A 5% annual rate of turnover for all employees under 55years of age and nil above;

- The TH 00-02 mortality table for men and the TF 00-02mortality table for women;

- A discount rate for the 10-year IBOXX corporate bondindex of 4.6%.

Past service costs not recognized of €542,000 were recordedunder off-balance sheet items at December 31, 2011.

On the basis of these assumptions, the annual expense of€779,000 recorded under current income breaks down asfollows:

- Service costs: €197,000

- Financial expense: €89,000

- Amortization of past service costs: €22,000

- Actuarial losses: €471,000

Provisions for contingencies related to the favorablesettlement of sales-related disputes.

3.9. Provisions for contingencies and expenses

In € thousands 2010 Increases Provisions 2011 Used in Reversal the period of unused provisions

Provisions for retirement severance payments 1,348 779 2,127Accruals for tax 932 283 (1,215) - -

Total provisions for expenses > 1 year 2,280 1,062 (1,215) - 2,127

Provisions for contingencies < 1 year 412 500 (276) (587) 49

Total provisions for contingencies and expenses 2,692 1,562 (1,491) (587) 2,176

Significant shareholders equity and low gearing ensures thatthe Group is able to secure financing from banks in theform of medium-term loans.

In addition to the company’s commitment with lendinginstitutions to comply with contractual covenants, the level

of consolidated shareholders’ equity is regularly monitoredto ensure the company continues to have sufficient financialflexibility to take advantage of all potential opportunitiesfor external growth.

91


3.11. Deferred tax

Deferred taxes arise mainly from timing differences between financial accounting and tax accounting. Deferred taxes fromconsolidation adjustments and loss carryforwards are recovered as follows:

In € thousands 2010 Changes Changes 2011 through through reserves profit or loss

Deferred tax liabilities Timing differences between financial and tax accounting 6 (6) -Acquisition cost 612 - 20 632Forward exchange hedges - - - -Stocks options - 97 (97) -Gains (losses) on treasury shares - (93) 93 -Market value of securities 56 14 70Remeasurement gains (losses) 734 36 770Other 102 (102) -

Total deferred tax liabilities 1,510 54 (92) 1,472

Deferred tax assetsTiming differences between financial and tax accounting 1,363 - 269 1,632Forward exchange hedges 17 - 29 46Loan swap 86 - (67) 19Recognition of loss carryforwards 1,261 - (775) 486Inventory margin 2,695 - (49) 2,646Advertising and promotional costs 929 - 405 1,334Other 19 - 81 100

Total deferred tax assets before amortization 6,370 - (107) 6,263

Depreciation of deferred tax assets (1,261) - 775 (486)

Net deferred tax assets 5,109 - 668 5,777

Total net deferred tax (3,599) 54 (760) (4,305)

3.10.3.Additional disclosures

The floating-rate portion of the Lanvin debt contracted inSeptember 2007 was covered by a 4.42% fixed rate swap.

At December 31, 2011, on the basis of a notional amountof €3.3 million, a gain of €196,000 in connection withthis swap was recognized in the income statement for whichthe Group did not apply hedge accounting in accordancewith IAS 39. The market value of the swap atDecember 31, 2011 represented a negative amount for thecompany of €53,000.

3.10.4.Covenants

The loans obtained by the parent company are subject tothe following covenant ratios:

- Net debt to net equity;

- Net debt to cash flow.

These ratios are calculated by the company every year.

In 2011, these covenants were fully met. The current levelof these ratios is considerably below the contractual limits.As a result, the Group has considerable financial flexibilityin respect to these commitments.

3.10.2.Analysis of borrowings Lanvin Van Cleef & Arpels

Inception date September 28, 2007 January 1, 2007Initial amount (in € thousands) 22,000 18,000Duration 5 years 5 yearsRate Floating Rate Fixed rate 3M Euribor +0.40% 4.1%Repayment schedule quarterly quarterlyAmount payable at 12/31/2011 (in € thousands) 3,300 -

92


3.13.Financial instruments

3.13.1.Breakdown of financial assets and liabilities by category

The following table presents financial instruments in the balance sheet according to the categories provided for under IAS 39.

In € thousands Notes Carrying Fair Fair value Available- Loans & Derivatives value value through for-sale receivables profit assets or

At December 31, 2011 or loss payables

Other non-current financial assets 1,560 1,560 - 432 1,128 -Trade receivables and related accounts 3.5 129,109 129,109 - - 129,109 -Other receivables 3.6 5,780 5,780 - - 5,780 -Current financial assets 3.7 - - - - - -Cash and cash equivalents 3.7 26,600 26,600 - - 26,600 -

Assets 163,049 163,049 - 432 162,617 -

Borrowings 3.10 3,462 3,462 53 - 3,409 -Trade payables and related accounts 96,238 96,238 - - 96,238 -Bank facilities 3.10 9,205 9,205 - - 9,205 -Other payables 3.12 23,605 23,605 - - 20,875 2,730

Liabilities 132,510 132,510 53 - 129,727 2,730

In € thousands Notes Carrying Fair Fair value Available- Loans & Derivatives value value through for-sale receivables profit assets or

At December 31, 2010 or loss payables

Other non-current financial assets 1,690 1,690 - 398 1,292 -Trade receivables and related accounts 3.5 74,399 74,399 - - 74,399 Other receivables 3.6 6,838 6,838 - - 6,039 799Current financial assets 3.7 35,785 35,785 - - 35,785 -Cash and cash equivalents 3.7 25,830 25,830 - - 25,830 -

Assets 144,542 144,542 - 398 143,345 799

Borrowings 3.10 12,070 12,019 249 - 11,821 -Trade payables and related accounts 53,320 53,320 - - 53,320 -Bank facilities 3.10 3,947 3,947 - - 3,947 -Other payables 3.12 25,676 25,676 - - 25,708 (32)

Liabilities 95,013 94,962 249 - 94,796 (32)

3.12.Trade payables and other currentliabilities

3.12.1.Trade payables and related accounts

The €40 million rise in trade payables reflects mainlyincreased inventories for components and advertisingexpenses.

3.12.2.Other payables


Accrued credit notes 9,876 3,218Tax and employee-related liabilities 10,645 10,344Accrued royalties 4,105 5,927Currency hedges - 2,730Other payables 1,050 1,386

Total 25,676 23,605

The increase in accrued credit notes results mainly fromcompletion in early 2011 of the transfer of inventory of theformer US distributor to the new US subsidiary.

93


3.14.Risk management

The primary risks related to the Group’s business andorganization result from interest rate and foreign exchangerate exposures that are hedged using derivative financialinstruments. The potential impacts of other risks on thecompany’s financials are not material.

3.14.1.Interest rate risks

The Group’s interest rate exposure is related principally todebt. The objective of the Group’s policy is to ensure astable level of financial expense through the use of hedges inthe form of fixed rate swaps and the use of floor and caps.

These financial instruments are not eligible for hedgeaccounting under IAS 39. The Group neverthelessconsiders that these transactions are not speculative innature and are necessary to effectively manage its interestrate exposure.

Sensitivity to interest rates

The interest expense recorded in 2011 on medium-termdebt represents the maximum expense in light of the ceilingprovided for under the conditions for the fixed rate swap.

3.13.2.Breakdown by method for measuring financial assets and liabilities

Financial instruments are broken down according to different levels of fair value defined by the amendment to IFRS 7.

In € thousands Carrying Fair value Quoted Internal Prices not value prices model based based on (level 1) on directly observable observable market data market inputs (level 3)

At December 31, 2011 (level 2)

Other non-current financial assets 1,560 1,560 432 1,128 -Trade receivables and related accounts 129,109 129,109 - 129,109 -Other receivables 5,780 5,780 - 5,780 -Current financial assets - - - - -Cash and cash equivalents 26,600 26,600 - 26,600 -

Assets 163,049 163,049 432 162,617 -

Borrowings 3,462 3,462 - 3,462 -Trade payables and related accounts 96,238 96,238 - 96,238 -Bank facilities 9,205 9,205 - 9,205 -Other payables 23,605 23,605 - 23,605 -

Liabilities 132,510 132,510 - 132,510 -

In € thousands Carrying Fair value Quoted Internal Prices not value prices model based based on (level 1) on directly observable observable market data market inputs (level 3)

At December 31, 2010 (level 2)

Other non-current financial assets 1,690 1,690 398 1,292 -Trade receivables and related accounts 74,399 74,399 - 74,399 -Other receivables 6,838 6,838 - 6,838 -Current financial assets 35,785 35,785 - 35,785 -Cash and cash equivalents 25,830 25,830 - 25,830 -

Assets 144,542 144,542 398 144,144 -

Borrowings 12,070 12,019 - 12,070 -Trade payables and related accounts 53,320 53,320 - 53,320 -Bank facilities 3,947 3,947 - 3,947 -Other payables 25,676 25,676 25,676 -

Liabilities 95,013 94,962 - 95,013 -

94


In addition, because a significant portion of Group sales is in foreign currencies, it incurs a risk from exchange ratefluctuations, primarily from the US dollar (39.1% of sales)and to a lesser extent the pound sterling (7.9% of sales) and the Japanese yen (1.6% of sales).

Foreign exchange risk management policy

The Group’s exchange-rate risk management policy seeks to cover exposures related mainly to monetary flowsresulting from sales in US dollars, pounds sterling andJapanese yens.

To this purpose, the Group has recourse to forward exchangesales, according to procedures that prohibit speculativetrading. On that basis, all forward currency hedging must bebacked in terms of amount and maturity by an identifiedeconomic underlying asset or budget exposure.

At December 31, 2011, the Group had hedged morethan 94% of its receivables in US dollars and morethan 96% in pound sterling for booked trade receivables.

Sensitivity to foreign exchange risk

The Group considers that a 10% fluctuation in theexchange rate of the US dollar in relation to the eurorepresents a pertinent risk factor that may reasonably occurwithin a given year. An immediate upswing in the exchangerate (US dollar and pound sterling) of 10% would result in a maximum positive currency effect of €18.9 million onsales and €14.7 million on operating income. A 10%decrease of these same exchange rates would have anequivalent negative currency effect for the same amounts.

3.14.2.Liquidity risk

The net position of financial assets and liabilities by maturity is as follows:

In € thousands < 1 year 1 to 5 years > 5 years

Financial assets 26,600 432 -Financial liabilities (12,602) (12) -

Net position before hedging 13,998 420 -

Hedging of assets and liabilities (swaps) (53) - -

Net position after hedging 13,945 420 -

Financial liabilities by year break down as follows:

In € thousandsAt December 31, 2011 2012 Total

Floating-rate debt - nominal 3,300 3,300Floating-rate debt - interest 86 86Fixed-rate debt - nominal - -Fixed-rate debt - interest - -Interest rate swaps 53 53

In € thousandsAt December 31, 2010 2011 2012 Total

Floating-rate debt - nominal 4,400 3,300 7,700Floating-rate debt - interest 314 86 400Fixed-rate debt - nominal 3,900 - 3,900Fixed-rate debt - interest 100 - 100Interest rate swaps 203 46 249

3.14.3.Foreign exchange risk

Net positions of the Group in the main foreign currencies are as follows:

In € thousands USD GBP YEN CAD

Assets 55,394 12,440 914 714Liabilities (1,732) (1,134) (244) (184)

Net position before hedging 53,662 11,306 670 557

Effects of currency hedges (2,977) (433) - -

Net position after hedging 50,685 10,873 670 557

95


3.14.1.Counterparty risk

Financial instruments used by the Group to manage interest rate and foreign exchange risks are obtained from counterpartieswith benchmark ratings. At December 31, 2011, counterparties (according to Standard & Poor’s) were rated A.

Cash is deposited with financial institutions with a rating issued by a specialized agency. At December 31, 2011, 100% ofcounterparties (according to Standard & Poor’s) were rated A.

4. NOTES TO THE INCOME STATEMENT

4.1. Breakdown of consolidated sales by brandIn € thousands 2010 2011

Burberry 184,790 221,749Lanvin 53,033 57,825Jimmy Choo 589 29,417Van Cleef & Arpels 25,917 20,399S.T. Dupont 15,756 13,164Paul Smith 14,921 14,172MontBlanc 7,001 30,610Boucheron - 8,372Nickel 2,230 2,036Other 1,459 585

Total 305,696 398,328

4.2. Cost of sales


Raw materials, trade goods and packaging (132,021) (171,677)Changes in inventory and allowances 24,366 43,479POS advertising (5,955) (10,100)Staff costs (2,566) (3,339)Subcontracting (1,656) (1,832)Transportation costs (844) (1,101)Other expenses related to the cost of sales (255) (1,032)

Total cost of sales (118,931) (145,602)

4.3. Selling expenses


Advertising (52,137) (91,910)Royalties (30,541) (35,879)Staff costs (15,354) (16,541)Subcontracting (17,339) (25,370)Transportation costs (3,580) (5,828)Commissions (2,425) (2,011)Travel expenses (2,872) (3,115)Allowances and reversals (4,345) (7,566)Other selling expenses (4,480) (6,248)

Total selling expenses (133,073) (194,468)

The increase in advertising investments is mainly the result of major launches in the period including notably the Burberry Body line.

The increase in the line item “subcontracting” is due to use by the US subsidiary InterParfums Luxury Brand of the supportservices and sales force of our partner Clarins.

96


4.4. Administrative expenses


Purchases and external costs (2,840) (4,035)Staff costs (4,166) (4,871)Tax and related expenses (784) (708)Allowances and reversals (2,318) (795)Other administrative expenses (1,368) (1,548)

Total administrative expenses (11,476) (11,957)

4.5. Other operating income and expenses

An additional goodwill impairment charge of €603,000 was recognized on the difference between the estimated marketvalue of Nickel’s business and its carrying value under “Other operating income and expenses” at December 31, 2011.

4.6. Net financial expense


Financial income 521 550Interest and similar expenses (1,270) (1,055)

Net finance costs (749) (505)

Currency losses (5,583) (2,796)Currency gains 4,013 3,910

Net currency gains (losses) (1,570) 1,114

Other financial income and expenses 41 (43)

Net financial income/(expense) (2,278) 566

4.7. Income taxes

4.7.1. Analysis of income taxes


Current income tax – France (15,958) (15,097)Current income tax – Foreign operations (814) (2,323)

Total current income tax (16,772) (17,420)

Deferred tax- France 3,118 417Deferred tax- Foreign operations 367 342

Total deferred taxes 3,485 759

Total income taxes (13,287) (16,661)

97


4.7.2. Reconciliation of the effective tax expense and theoretical tax expense

The difference between the effective tax recorded and the theoretical tax expense calculated by applying the tax ratesapplicable for fiscal 2010 and 2011 of respectively 34.3% and 36.1% to pretax income reflects the following:


Tax base 39,938 46,867Theoretical tax calculated at the parent company rate (13,751) (16,919)Effect of tax rate differences 620 1,908Recognition of tax income not previously classified as tax assets 61 810Deferred tax not recognized on losses of the period (810) (35)Permanent non-deductible differences 593 (2,425)

Income tax (13,287) (16,661)

The change in permanent differences is mainly due to the nondeductible nature of the tax on the debt waiver granted to theSpanish subsidiary.

4.8. Earnings per share

In € thousands, except number of shares and earnings per share in euros 2010 2011

Net income (1) 26,807 30,300Average number of shares 18,046,720 17,956,051

Basic earnings per share (1) 1.49 1.69

Dilutive effect of stock options: Potential fully diluted consolidated net income 76,594 70,531Potential fully diluted average number of shares outstanding 18,123,314 18,026,582

Diluted earnings per share (1) 1.48 1.68

(1) Adjusted for bonus shares granted in 2010 and 2011.

5. SEGMENT INFORMATION

5.1. Business lines


Perfumes Skincare Total Perfumes Skincare Total and Beauty and Beauty

Sales 301,401 4,295 305,696 392,436 5,892 398,328Income from operations 46,423 (4,207) 42,216 52,149 (5,848) 46,301Impairment - - - - (603) (603)

Trademarks, licenses and goodwill 69,003 4,424 73,427 69,300 3,809 73,109Inventories 63,732 3,081 66,813 96,665 4,502 101,167Other segment assets 156,023 694 156,717 179,843 766 180,359

Total segment assets 288,758 8,199 296,957 345,808 9,077 354,635

Segment liabilities 96,314 1,526 97,840 134,098 1,156 135,254

Segment assets and liabilities consist of operating assets (liabilities) used primarily in France.

98


5.2. Geographical segments

Sales by geographical sector break down as follows:


North America 42,870 80,253South America 24,801 36,759Asia 47,679 65,347Eastern Europe 29,639 34,722Western Europe 96,920 103,283France 27,819 33,702Middle East 33,346 39,942Africa 2,622 4,320

Total 305,696 398,328

6. OTHER INFORMATION

6.1. Off balance sheet commitments

The following presentation of off-balance sheet commitments is based on AMF recommendation No. 2010-14 ofDecember 6, 2010.

6.1.1. Summary of off-balance sheet commitments


Off-balance sheet commitments in connection with the company’s operating activities 270,517 312,531Off-balance sheet commitments in connection with the company’s financing activities 335 -Off balance sheet commitments 564 542

Total commitments given 271,416 313,073

6.1.2. Off-balance sheet commitments in connection with the company’s operating activities

In € thousands Main characteristics 2010 2011

Guaranteed minima on trademark royalties Guaranteed minima on royalties 247,475 254,500 regardless of sales achieved for each of the trademarks in the period.

Headquarters rental payments Rental payments due over the 4,791 3,974 remainder of the lease period (3, 6 or 9 years).

Guaranteed minima for warehousing and logistics Contractual minima for remuneration 11,970 9,180 of warehouses regardless of sales volume for the period.

Firm component orders (inventories) (1) Inventories of components on stock 6,281 44,877 with suppliers the company undertakes to purchase as required for releases.

Total commitments given in connection with operating activities 270,517 312,531

(1) The increase in firm orders for components is linked mainly to preparations for new launches in 2012 and 2013.

99


6.1.3. Off-balance sheet commitments in connection with financing activities


Bank guarantees Security for the payment of the deposit 335 0 guarantee for a new warehousing facility due on the inception date of the lease, expected in June 2011

Total commitments given in connection with financing activities 335 0

Commitments with respect to forward currency sales at December 31, 2011 amounted to $67,322,000 and £10,001,000.

In compliance with obligations under German law, under the terms of a comfort letter issued at the end of June 2007,Interparfums SA provided a guarantee without restrictions to ensure that its German subsidiary Interparfums GmbH, ismanaged and funded to honor at all times its payment obligations to all creditors.

6.1.4. Other off-balance sheet commitments


Pension liabilities The portion of past service costs deferred 564 542 as an off-balance sheet item pursuant to application of the closing of July 23, 2008 and amortized over 28 years

Total other commitments given 564 542

Act No. 2004-391 of May 4, 2005 on lifelong vocational training and social dialogue established an individual trainingbenefit for employees in France (Droit Individuel à la Formation or DIF). Pursuant to this measure, the company providesfor training benefits of the basis of 21 hours per year and per employee. The number of training benefits vested by Groupemployees totaled 9,850 hours at December 31, 2011 and 1,251 of training hours under this provision were used by Groupemployees in the year.

6.1.5. Commitments given by maturity at December 31, 2011

In € thousands Total Up to 1 to 5 5 years 1 year years or more

Guaranteed minima on trademark royalties 254,500 30,300 140,850 83,350Headquarters rental payments 3,974 1,321 2,188 465Guaranteed minima for warehousing and logistics 9,180 1,080 1,080 7,020Firm component orders (inventories) 44,877 44,877 - -

Commitments given in connection with operating activities 312,531 77,578 144,118 90,835

Bank guarantees - - - -

Commitments given in connection with financing activities - - - -

Pension liabilities 542 22 87 433

Other commitments given 542 22 87 433

Total commitments given 313,073 77,601 144,205 91,268

Maturities are defined on the basis of the contract terms (license agreements, leases, logistic agreements, etc.)

6.1.6. Commitments received

Commitments received in connection with forward currency sales at December 31, 2011 amounted to €49,791,000 for USdollar hedges and €11,609,000 for Pound Sterling hedges representing total commitments of €61,400,000.d’engagementsde 61 400 milliers d’euros.

100


The renewal of the Burberry license agreement onJuly 1, 2004 was accompanied by an option to extend thelicense by an additional five years and an option byBurberry Ltd to acquire the license at its market value atDecember 31, 2011.

On December 21, Burberry Group plc and Interparfums SA

extended by one year certain terms of their fragrancelicense, including the length of the agreement toDecember 31, 2017. Burberry’s option to buy the licensewas moreover moved from December 31, 2011 toDecember 31, 2012, and the option requiring the consentof both parties to extend the license five years beyond 2017is now exercisable at December 31, 2015.

On December 20, 2011, Burberry exercised its right toevaluate the purchase price for the unexpired term of the existing license. In this process, Burberry has untilJuly 31, 2012 to determine whether it wishes to buy out the unexpired portion of the license or continue the existinglicense which runs through December 31, 2017.

On December 17, 2011, Balmain and Interparfums signeda 12-year worldwide license agreement commencing on January 1, 2012 for the creation, development anddistribution of fragrances under the Balmain brand.

On December 7, Repetto, the French maker of dance-inspired footwear and fashion accessories, and Interparfumssigned a 13-year worldwide license agreement starting onJanuary 1, 2012 for the creation, development anddistribution of fragrances under the Repetto brand.

6.3. Proprietary brands

Lanvin

In June 2004, Interparfums signed an exclusive worldwidelicense agreement with Lanvin effective July 1, 2004 tocreate, develop and distribute fragrance lines under theLanvin brand name for 15 years.

At the end of July 2007, Interparfums SA acquired theLanvin brand names and international trademarks forfragrance and make-up products from the Jeanne Lanvincompany.

Interparfums SA and Lanvin also mutually agreed withimmediate effect to terminate the license agreement signedin July 2004 and at the same time concluded a technicaland creative assistance agreement in view of developing newperfumes until June 30, 2019 and based on net sales. TheJeanne Lanvin company holds a buy back option for thebrands which will be exercisable on July 1, 2025.

Nickel

In April 2004, Interparfums SA acquired a majority stake inNickel, a company specialized in skincare products for men.In June 2007, Nickel became a wholly-owned subsidiary.

6.4. InsuranceInterparfums SA is named as beneficiary under a€15 million life insurance policy for Philippe Bénacin.

6.5. Employee-related data

6.5.1. Employees by category


Executive officers and management 89 118Supervisory staff 9 14Employees 82 95

Total 180 227

6.2. License agreements Nature License Duration Expiration date of license inception date

Burberry Original July 1993 13 years and 6 months - Renewal July 2004 12 years and 6 months December 2017

S.T. Dupont Original July 1997 11 years - Renewal January 2006 5 years and 6 months - Renewal January 2011 6 years December 2016

Paul Smith Original January 1999 12 years - Renewal July 2008 7 years December 2017

Van Cleef & Arpels Original January 2007 12 years December 2018

Jimmy Choo Original January 2010 12 years December 2021

MontBlanc Original July 2010 10 years and 6 months December 2020

Boucheron Original January 2011 15 years December 2025

Balmain Original January 2012 12 years December 2023

Repetto Original January 2012 13 years December 2024

101


6.5.2. Employees by department


Executive Management 2 2Production & Operations 25 32Burberry Fragrances 34 39Luxe & Fashion 24 26France 65 67Finance & Corporate Affairs 30 37Subsidiaries - 24

Total 180 227

The increase in headcount reflects mainly the addition ofemployees from subsidiaries (Interparfums Luxury Brands,Interparfums Singapore and Interparfums Espagne).

6.5.3. Wages and benefits


Staff costs 13,262 15,963Social security charges 6,142 6,680Profit-sharing 2,370 1,782Stock option costs 312 346

Total wages and benefits 22,086 24,771

In addition €127 million in supplemental retirementbenefits for executive management were paid in 2011.

6.6. Information on related parties

6.6.1. Management Committee

The seven members of the Management Committeeexercise responsibilities in the areas of strategy, themanagement and oversight. They have employmentcontracts and receive compensation as follows:


Wages, bonuses & social charges 3,887 4,063Share based payment expenses 82 48

The executive officers Philippe Bénacin and Jean Madar,co-founders of Interparfums SA are also executive officersand majority shareholders of the parent companyInterparfums Inc.

6.6.2. Board of Directors

The ten members of the Board of Directors exerciseresponsibilities in the areas of strategy, management consulting,acquisitions and oversight. Only outside directors are paiddirectors’ fees that break down as follows:


Directors’ fees(1) 68 63

(1) Calculated on the basis of actual Board meeting attendance.

6.6.3. Relations with the parent company

The accounts of Interparfums SA and its subsidiaries,through Interparfums Holding, are fully consolidated intothe accounts of Interparfums Inc., whose registered office is located at 551 Fifth Avenue, New York, NY 10176,United-States. No material transaction exists betweenInterparfums SA and Interparfums Inc.

6.6.4. Relations with subsidiaries

The financial statements of its subsidiaries InterparfumsDeutschland GmbH, Inter España Parfums et CosmetiquesSL, Interparfums Srl, Interparfums Ltd, Interparfums SuisseSarl, Interparfums Luxury Brands et Interparfums SingaporePte. Ltd are fully consolidated by Interparfums SA. The maintransactions between these entities are of a commercialnature and concern the sale of products of the parentcompany to subsidiaries that assure the distribution in theirrespective markets. These transactions also generate cashflows between the subsidiaries and the parent company.Subsidiary sales represent approximately 15% of Grouprevenue.

102


6.7. Auditors’ feesTotal auditors’ fees expensed in the income statement relating to their engagement as statutory auditors break down asfollows:

In € thousands Mazars 2010 % 2011 %

Work as statutory auditors and certification of separate and consolidated financial statements:Of the Issuer 274 78% 320 80%Of fully consolidated subsidiaries 79 22% 81 20%Other directly related assignments - - - -

Other services rendered by members of the auditor’s network to fully consolidated subsidiaries - - - -

Total 353 100% 401 100%

In € thousands SFECO & Fiducia Audit 2010 % 2011 %

Work as statutory auditors and certification of separate and consolidated financial statements: 102 97% 100 98%Of the Issuer - - - -Of fully consolidated subsidiaries 3 3% 2 2%Other directly related assignments

Other services rendered by members of the auditor’s network to fully consolidated subsidiaries - - - -

Total 105 100% 102 100%

6.8. Post-closing eventsNone.

103


CORPORATE GOVERNANCEBOARD OF DIRECTORS P. 105COMPOSITION OF THE BOARD OF DIRECTORS P. 107ROLE OF THE BOARD OF DIRECTORS P. 107PROCEDURES FOR EXERCISING EXECUTIVE MANAGEMENT P. 108FUNCTIONING OF THE BOARD OF DIRECTORS P. 108CODE OF CONDUCT OF DIRECTORS P. 109COMPENSATION P. 110MODIFICATION THE BOARD CHARTER P. 110MANAGEMENT COMMITTEE P. 111COMPENSATION OF EXECUTIVE OFFICERS P. 111SPECIAL REPORT OF THE BOARD OF DIRECTORS ON STOCK OPTIONS P. 114CHAIRMAN’ REPORT ON CORPORATE GOVERNANCE AND INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES P. 116

104

Corporate governanceTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

1. BOARD OF DIRECTORS

Interparfums adopted the form of a société anonyme, the French equivalent of a joint stock company, when it wascreated in 1989. It is governed by a Board of Directors and a Management Committee.

On March 8, 2010, the Board of Directors of the companydecided to refer to the Middlenext Code of December 2009designed for Small and Mid Caps, after reviewing the pointsrequiring special attention (points de vigilance) set forththerein, duly noting the main issues relating to effectivecorporate governance.

Composition of the Board of Directors

To strengthen the Board of Directors of initially fourmembers by drawing on an expanded range of expertise and experience, new members originating from the luxury industry sector were appointed in 2004. On December 31, 2011 the Board of Directors had 10 members.

When the terms of office of the Directors were up forrenewal, the General Meeting of April 23, 2010 decided to set terms of office of four years to comply withrecommendations of the Middlenext Code. This decisionseeks to reconcile the objective of assuring the independenceof the directors by preventing terms that are too long, andtheir commitment to the company by preventing terms thatare too short.

The Board ensures that at least 30% of its members areindependent directors. A director is considered to beindependent according to the criteria of the MiddlenextCode when there exists no material financial, contractual or family relationship that could compromise their freeexercise of judgment whereby the director may not:

- Be a current employee or corporate officer (mandatairesocial) of the company or a company of its group or havebeen so within the past three years;

- Be a significant customer or supplier of the company orits group, or for which the company or its group representsa significant part of its business;

- Be the main shareholder of the company;

- Be related by close family ties to a corporate officer or a main shareholder;

- Have been an auditor of the company within the previousthree years.

On the basis of these criteria, the Board includes threeindependent directors, Chantal Roos, Maurice Aladhèveand Michel Dyens.

To date, the Board has three members having the status of employee resulting from an employment contractspredating their appointment as directors.

As a general rule, members of the Board of Directors have anin-depth or multidisciplinary experience of the business worldin international markets. They are subject to conduct ofbusiness rules, specified in the Board Charter (RèglementIntérieur) that includes notably obligations of secrecy and duediligence in the performance of their duties ensuring theeffective collegial work of the Board. Directors are provided

not only with information before each meeting but also on apermanent basis concerning all strategic and financial mattersnecessary to perform their duties in the most effective manner.

The Board Charter adopted on March 3, 2009 has beenrevised to incorporate the recommendations of the MiddlenextCode of December 2009 and is reproduced below in full.

Composition of the Board and profiles

As of December 31, 2011 the composition of the Board of Directors was as follows:

Philippe BénacinChairman and Chief Executive Officer of Interparfums

Date of 1st appointment: January 3, 1989

Date of last renewal: Annual General Meeting of April 23, 2010

Professional address: 4, rond-point des Champs Elysées,75008 Paris, France

Philippe Bénacin, 53, a graduate of the ESSEC businessschool and co-founder of the company with his partnerJean Madar, has served as Chairman and Chief ExecutiveOfficer of Interparfums SA since its creation in 1989.

Other offices: Chairman of the Board of Directors ofInterparfums Holding, President and Vice Chairman of the Board of Interparfums Inc. (United States)

Jean MadarDirector

Date of 1st appointment: December 23, 1993



Jean Madar, 51, a graduate of the ESSEC business school, is the co-founder of the company with his partner Philippe Bénacin.

Other offices: Chairman of the Board of Directors ofInterparfums Holding, Chief Executive Officer and ViceChairman of the Board of Interparfums Inc. (United States)

Maurice AlhadèveIndependent director

Date of 1st appointment: Annual General Meeting of April 23, 2004


Professional address: 16 rue de Molitor 75016 Paris, France

Other offices: none

Patrick ChoëlDirector

Date of 1st appointment: General Meeting of December 1, 2004


Professional address: 7 rue de Talleyrand, 75007 Paris, France

105


Other offices: Director of Interparfums Inc. (United States),Director of Parfums Christian Dior, Director of Guerlain,Director of Modelabs

Michel DyensIndependent director



Professional address: Michel Dyens & Co, 17 avenue Montaigne, 75008 Paris, France

Other offices: Chairman of Michel Dyens & Co.,Managing Partner of Varenne Entreprises

Previous offices: Director of Direct Panel

Frédéric Garcia-PelayoDirector and Executive Vice President




Frédéric Garcia Pelayo, 53, EPSCI international exchangeprogram graduate of the ESSEC Business School, has beenVice President for Export Sales of Interparfums since 1994and Executive Vice President since 2004.

Other offices: none

Jean LevyDirector



Professional address: 17 rue de Margueritte,75017 Paris, France

Other offices: Director of Interparfums Inc. (United States),Director of Axcess Groupe SA, Director of Rallye SA,

Previous offices: Director of Price Minister SA, Director of MoM SAS

Chantal RoosIndependent director


Date of last renewal: Annual General Meeting ofApril 23, 2010

Professional address: CREA, 168 avenue Charles deGaulle, 92200 Neuilly sur seine, France

Other offices: Managing Partner of CREA

Previous offices: Chairman and Chief Executive Officer of Yves Saint Laurent Beauté

Philippe SantiDirector and Executive Vice President




Philippe Santi, 50, graduate of the Ecole Supérieure deCommerce of Reims and a public accountant has served as the Chief Financial and Administrative Officer ofInterparfums SA since 1995 and as Executive Vice Presidentsince 2004.

Other offices: Director of the parent company Interparfums Inc.

Catherine Bénard-LotzDirector




Catherine Bénard-Lotz, with an advanced degree inbusiness law from the University of a Paris, has served as Interparfums’ Chief Legal Officer since 1994.

Other offices: none

The terms of office of all directors will expire at the end of the Ordinary General Meeting of 2014.

Absence of condemnations

To the best of the Company’s knowledge, in the last five yearsnone of the members of the Board of Directors have been:

- Convicted for fraud or penalties for infractions renderedby statutory or regulatory authorities;

- Been a party in a bankruptcy, receivership or liquidationproceeding as a director or officer;

- Disqualified from serving as a director or officer or participating in the management of the operations of an issuer.

Absence of potential conflicts of interest

To the best of the Company’s knowledge, there exist nopotential conflicts of interest between the duties towardsthe company and the personal interests and/or other dutiesof one of the members of the board.

Absence of service contracts with Board members

To the best of the Company’s knowledge, none of theBoard members is bound by service agreements with thecompany or one of its subsidiaries providing for the grant of benefits under its terms.

106


This Charter or ‘Rules of Procedure’ (RèglementIntérieur), previously entitled “Charter of the Board of Directors” adopted by the Board on March 3, 2009, was updated by the Board on March 8, 2010, in order to take into account the provisions of the MiddlenextCode of December 2009 to which the Board has opted to refer instead of the AFEP/MEDEF Codepreviously used.

The full text of the Middlenext Code is attached to thisCharter.

Applicable to all current and future directors, and in linewith the Middlenext Code, this Charter, is destined tosupplement the provisions of the law, regulations and thecompany’s bylaws, in the interest of the company and itsshareholders in order to specify:

- The composition of the Board/criteria of independencefor members;- The role the Board in the performance of its duties and powers;- Board procedures (meetings, discussions, informationprovided to members);- Board procedures (meetings, discussions, informationprovided to members);- The duties of Board members (code of conduct:loyalty, confidentiality, abstention, etc.).

1. COMPOSITION OF THEBOARD OF DIRECTORS

The Board of Directors includes a maximum of 18members with at least three selected from independentpersons having no ties of interest with the company sothat they are entirely free in the exercise of their judgment.

A director is considered to be independent according to the criteria of the Middlenext Code when there existsno material financial, contractual or family relationshipthat could compromise his or her free exercise ofjudgment whereby the director may not:

- Be a current employee or corporate officer (mandatairesocial) of the company or a company of its group or havebeen so within the past three years;

- Be a significant customer or supplier of the companyor its group, or for which the company or its grouprepresents a significant part of its business;

- Be the main shareholder of the company;

- Be related by close family ties to a corporate officer or amain shareholder;

- Have been an auditor of the company within theprevious three years.

The Board may consider that one of its members, eventhough fulfilling the above criteria, should not beconsidered as independent, in light of his or herparticular situation or that of the company, with respectto its shareholder structure or for any other reason.Conversely, the Board may also consider that one of itsmembers not fulfilling these criteria to be independent.

2. ROLE OF THE BOARD OF DIRECTORS

2.1. Strategic bodyThe mission of the Board of Directors is to determinethe strategy of the company and ensure that this strategyis implemented. Subject to the powers granted toshareholders’ meetings and within the limits of thecompany’s corporate purpose, the Board may address any matter pertaining to the proper management of thecompany and settle all items of business relating thereto.

In addition to the attributes provided for by law andregulations, the Board may be called to address and grantits approval for, in particular, the following matters:

- Assessing the environment of the company andanalyzing opportunities for external growth throughacquisitions;

- The creation of a company or acquiring controllinginterest in all forms in any company or undertakingoutside the group;

- Reviewing projects involving material investments or not relating to the company’s ordinary operatingactivities;

- Analyzing major strategic projects presented toexecutive management and their impact on theeconomic and financial situation of the company;

- Analyzing the annual budget submitted by executivemanagement;

- Implementing procedures for control or verification it considers appropriate.

And in general, the Board ensures the merits of anymeasure adopted for the strategic development of thecompany and the solidity of the company’s balance sheet.

2.2. Audit committee functionOn March 3, 2009 the Board of Directors decided thatin light of the company’s organization and structure, anindependent audit committee would not be establishedand that in consequence, in accordance with theprovisions provided for under article L. 823-20 of theFrench Commercial Code, it would exercise thefunctions of audit committee in plenary session.

In connection with a performance of the functions of audit committee, the primary tasks of the Board of Directors are to:

- Ensure compliance with accounting regulations andthe correct application of the principles for preparing the company’s accounts;

- Ensure that the process for producing financial

107


information is based on internal procedures for thecollection and control of information that guarantee itsquality and exhaustive nature;

- Assess the performance of internal control systems byevaluating the organization principles and functioning ofinternal audit and by verifying the process for identifyingrisks; Review the audit missions and evaluations of theinternal control system carried out by the FinanceDepartment;

- Monitor the application of the rules of independenceand objectivity of the auditors in the performance oftheir duties, the conditions for the renewal of their termsof office and setting their fees.

3. PROCEDURES FOR EXERCISING EXECUTIVEMANAGEMENT

3.1. The Chairman of the Board of DirectorsThe Chairman, appointed by the Board of Directorsfrom among its members, organizes and manages thework of the Board on which he reports to the GeneralMeeting of the shareholders. He ensures thatmanagement bodies of the company are effectively runand, in particular, that directors are able to perform theirduties. The Chairman may request any documents orspecific information to assist the Board of Directors inconnection with preparing its meetings.

The Chairman actively contributes to the performanceof the duties of directors by serving as an intermediarybetween the latter and the main parties involved inimplementing the company’s strategic objectives.

3.2. Executive ManagementThe Board of Directors determines the manner that Executive Management is exercised, under itsresponsibility, either by the Chairman of the Board ofDirectors, or by a person appointed by the latter withthe title of Chief Executive Officer (Directeur Général).

The Board of Directors’ meeting of December 19, 2002decided not to separate the functions of Chairman of the Board of Directors from those of Chief ExecutiveOfficer. In this respect, and subject to the powersgranted by law to general meetings and the limitationsprovided for by the provisions of the Charter, theChairman of the Board of Directors exercises thefunctions of Chief Executive Officer and is vested withthe broadest powers to act in all circumstances in thename of the company with the exception of thefollowing strategic decisions that are submitted forapproval to the Board of Directors:

- Any financial commitment (immediate or deferred) for an amount exceeding €10 million per transactionand having a material impact on the company’s scope of consolidation, including mainly the acquisition ordisposal of assets or equity investments in companies;

- Any decision, regardless of the amount involved, that could potentially materially affect the strategy of the company or materially modify the scope of itsnormal activity.

On proposals by the Chief Executive Officer, the Boardof Directors may appoint one or more individuals toassist the Chief Executive Officer with the title ofExecutive Vice President (Directeur Général Délégué).

4. FUNCTIONING OF THEBOARD OF DIRECTORS

4.1. Calling and holding of Board meetingsNotice of meetings may be issued by any means includingorally and may be transmitted by the Secretary of theBoard within at least eight days before each meeting.

The Board meets as often as the interests of the companyrequire, and in general, at least five times a year, withthree of these meetings devoted to reviewing the budget,strategy and the activity of the company. Decisions bythe Board are adopted on the basis of a simple majority.In the case of split vote, the Chairman of the meetinghas the casting vote.

The Board establishes for the year according to theproposal of the Chairman a schedule for its meetings,with the exception of extraordinary meetings.

4.2. Participation in meetings through videoconferencing or telecommunications mediaIn accordance with applicable regulations and article 14of the company’s bylaws, directors who participate inBoard meetings through videoconferencing ortelecommunications technology are considered presentfor calculating the quorum and majority.

The Chairman ensures that videoconferencing andtelecommunications technologies used guarantee theeffective participation of all parties in the meetings. The proceedings must be broadcast without interruption.Measures necessary to identify each party and verify thequorum must be assured. Failing this, the Board meetingmay be adjourned.

The attendance register and the minutes must indicatethe names of directors having participated through

108


videoconferencing or telecommunications means.

Remote participation using the technologies is expresslyprohibited for proceedings concerning the followingdecisions:

- The approval of the company’s statutory andconsolidated financial statements;

- Preparing the management report to be included in theGroup’s management report.

4.3. Transmission of information to directorsAll directors are provided with the documents andinformation required to make decisions on the items of business on the agenda on an informed basis.

It is the responsibility of all directors to ensure that theypossess all information they consider necessary for theeffective conduct of proceedings of the Board and, whenapplicable, request this information when they considerthat it has not been made available.

Furthermore, directors are kept regularly informed,between the meetings of all events or transactions ofa material nature for the strategic priorities of thecompany and provided with all relevant informationwhen warranted by events concerning the company.

4.4. Evaluation of the work of the BoardOnce a year, the Chairman of the Board invites theBoard members to express their views on the functioningof this body and on the preparation of its work for thepurpose of:

- Preparing a report on the Board’s work;- Examining the composition of the Board;- Ensuring the quality and effective conduct ofdiscussions on matters of importance.

The discussions are recorded in the minutes of themeeting.

5. CODE OF CONDUCT OF DIRECTORS

5.1. Obligations of discretion and secrecyConcerning non-public information acquired inconnection with their duties, directors shall beconsidered subject to a true obligation of professional

secrecy that exceeds the obligation of discretion providedfor by article L.225-37 subsection 5 of the FrenchCommercial Code.

In general, directors shall refrain from speakingindividually outside the collegial framework of the Boardof Directors about matters considered therein. Outsidethe company, directors undertake to respect the collegialnature on any oral or written communication that theymay issue.

5.2. Duties of independenceDirectors have a duty to act in all circumstances in theinterest of the company and all shareholders. To thispurpose, they are subject to an obligation of informing theBoard of any situation involving a conflict of interest, evena potential conflict of interest, and must refrain fromvoting in the proceedings relating thereto, and if necessary,resign. Absence of information thereon constitutesconfirmation of that no conflict of interest exists.

And in general, directors shall be prohibited fromengaging in transactions in the shares of the companyand/or the group if they possess privileged information.Each party is personally responsible for assessing theprivileged nature of information in his or her possession,and, in consequence, to authorize or prohibit any use ortransmission of such information, and to engage in anytransactions in the company’s shares.

And in any case, directors undertake to comply withtheir obligation to refrain from any dealings in thecompany’s shares for a period of 15 days prior to:

- The publication of the interim consolidated or annualresults, according to the calendar available to theDirector;

- The publication of quarterly, interim and annual sales,according to the calendar available to the Director.

5.3. Obligations of due diligenceAt the time they assume their office, every Boardmember duly notes the obligations resulting therefromand notably those relating to legal rules governingholding multiple offices and before accepting, signs theBoard Charter. To this purpose, it is recommended that a Director, when exercising the function of “executiveofficer”, does not accept more than three offices as adirector of a listed company, including companiesoutside of his or her own group.

The Directors must devote to their duties the necessarytime and attention. To this purpose, they will limit theoffices that they hold to a reasonable number to ensuretheir regular participation in the meetings of the Board.

Directors have an obligation to obtain and requestwithin the appropriate delays from the Chairmaninformation necessary to effectively participate in theitems of business to be addressed by the Board ofDirectors’ meetings.

109


5.4. Obligation to report dealings in the company’s sharesDirectors and persons with whom they have close relationsmust report to the AMF the purchase, sale, subscriptionor exchange of shares of the Company when the amountexceeds €5,000 for the calendar year in progress.

To this purpose, they will send their declaration to the AMF by electronic means within five trading daysfollowing the transactions and send at the same time a copy of the declaration to the Secretary of the Board of Directors of the company.

6. COMPENSATION

6.1. Directors’ feesThe Board of Directors freely sets the amount of fees for attendance for which the General Meeting fixes theannual amount. It allocates this amount equally amongmembers on basis of their attendance and the amount of time they devote to their duties.

By express waiver of the Directors concerned, directors’fees are allocated exclusively to directors selected fromoutside the company.

6.2. Compensation of directors for special assignmentsThe Board of Directors may entrust one of its memberswith a mission, for which it determines the conditionsand terms that are subject to approval by the Board,except by the Board member designated for this mission.The Board will determine notably the amount ofcompensation, the duration of the mission as well as the procedures for payment and the reimbursement ofexpenses incurred in the performance of this mission.The Chairman is responsible for ensuring that thismission is properly carried out according to theconditions approved by the Board to whom it regularlyreports thereon.

7. MODIFICATION THE BOARD CHARTER

This Charter may be adapted or modified by decision of the Board of Directors.

Every new member of the Board of Directors shall beprovided with a copy of this Charter as well as thecompany’s bylaws (statuts).

110


2. MANAGEMENT COMMITTEE

Mission

The purpose of the Management Committee, led by theChairman and Chief Executive Officer, is to addressoperational issues related to the development of thecompany.

Composition as of December 31, 2011

Philippe Bénacin, Chairman and Chief Executive Officer.

Philippe Santi, Executive Vice President, Chief Financialand Administrative Officer.

Frédéric Garcia-Pelayo, Executive Vice President, Chief International Officer.

Hugues de la Chevasnerie, Vice President, Burberry Fragrances.

Angèle Ory-Guénard, Vice President, Export Sales -Burberry Fragrances.

Jérôme Thermoz, Vice President, French Distribution.

Axel Marot, Vice President, Production & Logistics.

The Management Committee met seven times in 2011(five times in 2010) and discussed the following items of business:

March: expansion of make-up distribution, external growthprojects, Jimmy Choo and Montblanc Legend launches,subsidiaries, 2011 budget update, SAP ERP;

April: first quarter sales, second quarter sales forecasts, SAP ERP, new warehouse;

May: launch of the SAP ERP, preparations for the launch of Burberry Body;

July: 2011 first-half sales, 2011 second-half salesforecasts, 2011 first-half earnings forecasts, developments in progress, new licenses, Burberry license discussions;

September: summary of 2011 first-half results, 2012budget, Burberry Body launch, 2012-2013 launches,progress in SAP ERP project implementation;

November: new warehouse, update on the French marketsituation, 2011 internal controls;

December: 2012 budget, Burberry license, Balmain andRepetto licenses, 2012-2013 outlook; launch plans.

3. COMPENSATION OF EXECUTIVE OFFICERS

In connection with the preparation of this registrationdocument, the Board of Directors has analyzed the differentcomponents of compensation and benefits for corporateofficers in light of the principles set forth in the MiddlenextCode recommendations of December 2009. It reviewed the procedures in place for determining cash compensationand benefits of all kinds granted to corporate officers thatare presented below in detail.

In general, the Board of Directors sets the compensationpolicy for officers both in reference to market practice in comparable sectors and the size of the company notablyin respect to sales and the number personnel.

111


Compensation of officers for fiscal 2011

Compensation of officers consists of both fixed and variable components. Fixed compensation takes into account the level ofresponsibilities, experience and performance. Variable compensation is determined in relation to the company’s achievementof overall performance objectives and events related to each fiscal year.

One half of variable compensation is determined in accordance with net sales, operating income and net profit, and half in relation to qualitative criteria of performance. This latter criteria is evaluated in respect to the contribution of corporateofficers to achieving the objectives of the company and results actually obtained.

On this basis, compensation paid to executives as officers or salaried employees in connection with employment contractsconcluded prior to becoming officers is disclosed below.

Fiscal 2010 Fiscal 2011

Compensation Compensation Compensation Compensation due for paid in due for paid in the year the year the year the year

Philippe Bénacin (1)

Chairman and Chief Executive Officer Net fixed compensation €208,320 €208,320 216,960 216,960Net variable compensation €222,400 €190,400 186,400 206,400Benefits in-kind and net housing allowances €134,800 €134,800 106,800 106,800Supplemental executive retirement plans €8,300 €8,300 8,500 8,500

Philippe Santi (2)

Director - Executive Vice President Net fixed compensation €208,320 €208,320 216,960 216,960Net variable compensation €214,400 €190,400 198,800 198,800Supplemental executive retirement plans €8,300 €8,300 8,500 8,500

Frédéric Garcia-Pelayo (3)

Director - Executive Vice President Net fixed compensation €208,320 €208,320 216,960 216,960Net variable compensation €214,400 €190,400 198,800 198,800Benefits in-kind €6,840 €6,840 6,840 6,840Supplemental executive retirement plans €8,300 €8,300 8,500 8,500

Catherine Bénard-Lotz (4)

Director Net fixed compensation €89,040 €89,040 93,600 93,600Net variable compensation €66,000 €52,400 60,400 60,000Supplemental executive retirement plans €8,300 €8,300 8,500 8,500

Jean Madar (5)

Director Gross fixed compensation $380,000 $380,000 $380,000 $380,000Gross bonus - - - -

(1) Philippe Bénacin does not have an employment contract with the company. He exercises his functions as Chairman and Chief Executive Officer

pursuant to his appointment as a corporate officer by the Board of Directors.

(2) Compensation paid to Philippe Santi as a salaried employee with the position of Chief Financial and Administrative Officer under the terms of

an employment contract predating his appointment as Executive Vice President (Directeur Général Délégué) and Director of the Company that

remained in force. Philippe Santi receives no compensation of any nature in connection with his appointment as an officer of the company.

(3) Compensation paid to Frédéric Garcia Pelayo as a salaried employee with the position of Chief International Officer under the terms of an

employment contract predating his appointment as Executive Vice President (Directeur Général Délégué) and Director of the Company that remained

in force. Frédéric Garcia Pelayo receives no compensation of any nature in connection with his appointment as an officer of the company.

(4) Compensation paid to Catherine Bénard-Lotz as a salaried employee with the position of Chief Legal Officer under the terms of an employment

contract predating her appointment as Director of the Company that remained in force. Catherine Bénard-Lotz receives no compensation of any

nature in connection with her appointment as a company director.

(5) Compensation paid to Jean Madar by the parent company of the Group, Interparfums Inc. (United States) as the Chief Executive Officer of this

company. Jean Madar receives no compensation of any nature from Interparfums SA.

112


Directors’ fees for 2011

Directors’ fees are allocated to the Board of Directors by the shareholders’ meeting and distributed by the Board to directorsthat are not salaried employees for a set amount per meeting attended of €3,000 for fiscal 2011. The fifth resolution of theshareholders’ meeting of April 29, 2011 set the total amount of directors’ attendance fees for the year at €120,000.

On this basis, for fiscal 2011 a total of €63,000 was paid to the five non-salaried directors for their attendance at meetings.The other directors expressly waived their rights to receive attendance fees.

Directors Directors’ fees Directors’ fees paid in 2010 paid in 2011

Maurice Alhadève €17,500 €15,000Patrick Choël €15,000 €12,000Michel Dyens €10,000 €9,000Jean Levy €12,500 €15,000Jean Madar - -Chantal Roos €12,500 €12,000

Stock-options and other compensation

- Stock-options

Rules for the grant of stock options to officers are based on the level of responsibilities and the performance of the company’s share. The quantity of stock options granted to officers may vary from one year to another according to the performance of the company over this period.

On December 17, 2009 and October 8, 2010, the Boards of Directors decided to grant options to corporate officers onthose dates whose exercise will be contingent on criteria of internal performance based on the company’s sales. Under theseterms, the number of options exercisable is based on the average rate of actual growth for the company’s sales relative to the rate of attainment of the target for average growth. This objective is set by the Board of Directors for a period ofreference corresponding to the 4 year tax waiting period that applies to the stock option plan established by this Board.

The Board of Directors has decided that these officers must retain 10% of the shares resulting from the exercise of stockoptions for the duration of their terms of office in accordance with the provision of article L.225-185 of the FrenchCommercial Code.

- Benefits in-kind

Philippe Bénacin receives benefits in-kind for the costs of a company car representing a total amount of €10,800.

Frédéric Garcia-Pelayo receives benefits in-kind for the costs of a company car for an amount of €6,840.

- Executive retirement plans

Senior executives benefit from a supplemental retirement plan in the form of a defined contribution annuity fund. The benefitsof this defined benefit plan were subsequently extended to senior management of the company. This contribution to a privatedefined contribution pension fund is paid in part by the beneficiaries and in part by the employer for an amount equal fourtimes French Social Security ceiling. The annual contribution per beneficiary is approximately €8,500. The supplementalretirement plan is part of the overall compensation policy adopted by the company for senior executives and managers.

- Other types of benefits

No executives benefit from forms of remuneration, indemnities or benefits owed or which could be owed resulting from the assumption, termination or change of functions of corporate officer of the company or subsequent to these events.

113


4. SPECIAL REPORT OF THE BOARD OF DIRECTORS ON STOCK OPTIONS

In compliance with article L. 225-184 of the French Commercial Code, this report is produced by the Board of Directors to inform the combined shareholders’ meeting of April 27, 2012 of transactions carried out in fiscal 2011 by virtue of theprovisions under articles L.225-177 to L. 225-186 of said Code.

Options granted on inception by Interparfums SA under plans in force to each corporate officer in connection with offices held

Plan 2006 Plan 2009 Plan 2010

Grant date 06/01/06 17/12/09 10/08/10Expiration date 06/01/12 12/17/15 10/08/16Subscription price 31.80 17.60 22.95Adjusted subscription price (1) 18.1 14.55 20.85

Options granted at inception Philippe Bénacin 10,000 6,000 7,000Jean Madar 10,000 6,000 7,000Philippe Santi 6,000 6,000 7,000Frédéric Garcia-Pelayo 10,000 6,000 7,000Catherine Bénard-Lotz 2,000 2,500 3,000

Options outstanding at December 31, 2011 (1) Philippe Bénacin 19,327 7,260 7,700Jean Madar 19,327 7,260 7,700Philippe Santi 0 7,260 7,700Frédéric Garcia-Pelayo 19,327 7,260 7,700Catherine Bénard-Lotz 2,367 3,025 3,300

(1) Adjusted for bonus share grants.

Options granted on inception by Interparfums Inc. under plans in force to each corporate officerin connection with offices held

Plan 2007 Plan 2008-1 Plan 2008-2 Plan 2009 Plan 2010-1 Plan 2010-2 Plan 2011

Grant date 12/26/07 02/13/08 12/30/08 12/30/09 03/28/10 12/30/10 12/29/11Subscription price $18.87 $16.95 $6.93 $12.14 $15.62 $19.03 $15.59Adjusted subscription price (1) $12.58 $11.30 $6.93 $12.14 $15.62 $19.03 $15.59

Options granted at inception Philippe Bénacin 19,000 9,250 19,000 19,000 - 19,000 19,000Jean Madar 19,000 9,250 19,000 19,000 - 19,000 19,000Philippe Santi 0 8,500 0 0 3,000 3,000 3,000Frédéric Garcia-Pelayo 0 8,500 0 0 3,000 3,000 3,000

Options outstanding at December 31, 2011 Philippe Bénacin 28,500 13,875 19,000 19,000 - 19,000 19,000Jean Madar 28,500 13,875 19,000 19,000 - 19,000 19,000Philippe Santi 0 12,750 0 0 3,000 3,000 3,000Frédéric Garcia-Pelayo 0 12,750 0 0 3,000 3,000 3,000

(1) Adjusted for bonus share grants.

114


Valuation of options granted

In fiscal 2010 In fiscal 2011

IPSA Options Black & Value of Options Black & Value of Granted Scholes options granted Scholes options valuation valuation

Philippe Bénacin 7,000 €6.55 €45,850 - - -Jean Madar 7,000 €6.55 €45,850 - - -Philippe Santi 7,000 €6.55 €45,850 - - -Frédéric Garcia-Pelayo 7,000 €6.55 €45,850 - - -Catherine Bénard-Lotz 3,000 €6.55 €19,650 - - -

Total - - €203,050 - - -

IP Inc.

Philippe Bénacin 19,000 $5.62 $106,780 19,000 $4.59 $87,210Jean Madar 19,000 $5.62 $106,780 19,000 $4.59 $87,210Philippe Santi 3,000 $5.62 $16,860 3,000 $4.59 $13,770Frédéric Garcia-Pelayo 3,000 $5.62 $16,860 3,000 $4.59 $13,770

Total - - $247,280 - - $201,960

Options exercised by each corporate officer of the company in 2011 received in connection with offices held

Number of shares Subscription Expiration granted/exercised price date

IP Inc. options exercised in the period by officersPhilippe Bénacin - - -Jean Madar - - -Philippe Santi - - -

IPSA options exercised in the period by officers (1)

Philippe Bénacin Plan of March 26, 2005 19,327 €15.65 05/26/11

Jean Madar Plan of March 26, 2005 19,327 €15.65 05/26/11

Philippe Santi Plan of March 26, 2005 5,582 €15.65 05/26/11Plan of June 1, 2006 10,543 €19.90 06/01/12

Frédéric Garcia-Pelayo Plan of May 26, 2005 11,597 €15.65 05/26/11

Catherine Bénard-Lotz Plan of June 1, 2006 1,500 €18.10 06/01/12

(1) Number and subscription price adjusted for the grant of new bonus shares (1 for 10) of June 20, 2011.

Stock options granted to the top 10 employed beneficiaries of the company who are not officers and options exercised bythe 10 employees of the company having exercised the greatest number in 2011.

Number of shares Subscription Expiration granted/exercised price date

Options exercised by the 10 employees exercising the greatest number (1)

Plan of May 26, 2005 25,001 €15.65 05/26/11Plan of June 1, 2006 16,083 €18.10 06/01/12

Total 41,084

(1) Number and subscription price adjusted for the grant of new bonus shares (1 for 10) of June 20, 2011.

115


5. CHAIRMAN’ REPORT ONCORPORATE GOVERNANCEAND INTERNAL CONTROLAND RISK MANAGEMENTPROCEDURES

Pursuant to the provisions of paragraph 6, article L.225-37,of the French Commercial Code the Chairman of theBoard of Directors hereby reports on the:

- The Board’s composition and application of the principlewith respect to the representation of women and men;

- Preparation and organization of the Board’s work;

- Limitations on the powers of the Chief Executive Officer(Directeur Général) that may exist;

- Internal controls and risk management proceduresimplemented by the company.

This report has been produced on the basis of workundertaken by the Finance and Corporate AffairsDepartment, in collaboration with the operatingdepartments of the company and exchanges with thestatutory auditors.

This report was submitted for approval to the Board of Directors on March 8, 2012.

5.1. Preparation and organization of the Board’s work

5.1.1. The company’s corporate governance code

For the development of its corporate governance policy and notably the report of the Chairman provided for by article 225-37 of the French Commercial Code, onMarch 8 the Board of Directors decided to refer to the codeof corporate governance of December 2009 for Small andMid Caps developed by Middlenext and approved by theAMF as the code of reference. Board members also dulynoted the points requiring special attention set forth thereinhighlighting the main questions that must be raised toensure effective governance. The full text of this corporategovernance code may be consulted at Middlenext’s website:www.middlenext.com.

Among the 15 recommendations proposed under theMiddlenext Code and followed by the company, it has beendecided to partially apply the provisions of recommendationNo. 12. on the adoption of committees for reasons set forthbelow in the section devoted to this topic.

5.1.2. Procedures for exercising Executive ManagementLimitations on the powers of the ChiefExecutive Officer

In line with the option adopted by the Board of Directorson December 29, 2002, to take into account the changingand competitive environment of the sector in which the

company operates and the active participation of thefounder in its management, the Board decided not toseparate the functions of Chairman of the Board ofDirectors with that of Chief Executive Officer (DirecteurGénéral). This form of corporate governance ensuresconsistency between strategy and operating activities forgreater responsiveness and efficiency in decision-makingprocesses. In consequence Philippe Bénacin, who exercisesthe functions of Chairman of the Board of Directors, alsoserves as the Chief Executive Officer of the company. Assuch he is vested with all powers in respect to third partiesto act under all circumstances in the name of the companyand within the limitations expressly provided by lawgranted to the Board of Directors or shareholders meetings,and in compliance with the general and strategicorientations defined by the Board of Directors.

Decisions having a material impact on the scope ofconsolidation or that could materially affect the company’sstrategy must be submitted to the Board of Directors forapproval or subject to a delegation of authority for thispurpose by the Board. This limitation is specified in theBoard Charter.

5.1.3. Composition of the Board of Directors

Under the company’s bylaws, the Board of Directors mayhave three to eighteen members.

At December 31, 2011, corporate governance of thecompany was overseen by a Board that included tendirectors three of which qualified as independent directors.In addition to their financial and managerial expertise, theirknowledge of the luxury sector contributes to the qualityand professionalism of the Board’s discussions. Detailedinformation on the composition of the Board of Directorsand their offices is disclosed in Section 4 registrationdocument (annual report) under the heading “corporategovernance”.

Following the adoption of the twenty fifth resolution of theGeneral Meeting of April 23, 2010 that voted to reduce theterms of Directors when their terms of office were renewedat this meeting, Directors are appointed for terms of officeof four years.

5.1.4. Gender diversity in Board membership

The French law of January 27, 2011 on the balancedrepresentation of men and women on Boards of Directorsand Supervisory Boards and professional gender equalityprovides for provisions requiring that listed companies meetmembership targets for women on Boards of Directors. At the end of 2011, the Board of Directors had 2 womanmembers or a rate of 20% as required under this law for thefirst threshold to be achieved by 2014.

5.1.5. Independence of directors and rules of business conduct

The Company adheres to the criteria of independence ofrecommendation No. 8 of the Middlenext Code defined asthe absence of any material financial, contractual or familyrelationship that could affect their independence of

116


judgment. The Middlenext Code recommends that theBoard has at least 2 independent members. On the basis of these criteria, 3 members of the Board of Directors areconsidered to meet the definition of independent directors,namely Chantal Roos, Maurice Aladhève and Michel Dyens.

In accordance with recommendation No. 7 of theMiddlenext Code, each director is made aware of theobligations arising from his or her appointment andencouraged to adhere to the rules of conduct relating to his or her appointment and set forth in the Board Charter.To this purpose, directors are provided with a copy of thisCharter that describes the rules of procedure and provisionsof the bylaws that apply to them.

5.1.6. Charter of the Board of Directors

In compliance with recommendation No. 6 of theMiddlenext corporate governance code, the Board ofDirectors established a charter (rules of procedure) definingthe operating rules of the Board and the terms of a code of conduct for directors that supplement the provisionsprovided for by the law and the company’s bylaws. The main provisions of this charter are as follows:

- The composition, role, organization and operatingprocedures of the board;

- The functions of audit committee exercised by the Boardof Directors in plenary session;

- The rules of conduct applicable to members of the Boardof Directors;

- Compensation of Directors;

- Rules governing transactions involving the company’sshares in accordance with the provisions of the FrenchMonetary and Financial Code and the AMF GeneralRegulation.

This Board Charter is destined to regularly evolve to takeaccount into the application of new regulations andrecommendations in force and in response to proposals by directors in order to ensure the optimal effectiveness ofthe Board’s work. Modifications were made to this Charterfor the first time by the Board on March 8, 2010.

The full text of this Board Charter is reproduced in theregistration document of the company.

5.2. Charter of the Board of Directors

5.2.1. Meetings

The number of meetings held is in compliance with theprovisions of recommendation No. 13 of the MiddlenextCode. It meets as often as the interests of the companyrequire and at least five times a year at the request of theChairman and according to a calendar jointly establishedthat may be modified at the request of directors or whenjustified by unforeseen events.

The Chairman represents the Board of Directors. He organizes the work of the Board and reports on thiswork to the General Meeting. The work of the Board iscarried out in a collegial framework and in a manner that

complies with the laws, regulations and recommendations.Accordingly, the Chairman of the Board of Directorsensures directors are provided with information in advanceand on a regular basis, that constitutes an essentialcondition for the performance of their duties.

5.2.2. Committees

The Board has not deemed it necessary to date to formspecial committees, and notably nominating or compensationcommittees, in part because of the nature of the company’sorganization and characteristics, and in part because ofthe extensive in-depth experience directors have in respectto the world of business and the international markets ofcompetitors. Their input is thus solicited on a collectivebasis for all significant items relating to the company’smanagement.

With respect to the Audit Committee, the new Article L. 823-20resulting from the ordinance of December 8, 2008 providesfor an exemption to create an independent Audit Committeefor companies with a corporate body that fulfills the functionsof this committee “that may be the Board of Directors, oncondition that use of this option is made public along withthe composition of its membership”.

The Board of Directors of the Company has consequentlydecided to opt for application of this exemption permittedby the new Article L. 823-20 and to assume the tasksnormally assured by the Audit Committee themselves. In this way, all directors will be able to contribute tomonitoring the preparation of financial information andthe effectiveness of internal control procedures and, in lightof their responsibilities in this area.

5.2.3. Evaluation of the Board’s work

In accordance with the recommendation No. 15 of theMiddlenext Code that is included in the Board charter,on March 7,2011, for the first time members evaluatedBoard practices and the preparation of its work through a questionnaire sent to each Director on notably:

- The missions assigned to the Board;

- The functioning and composition of the Board;

- The meetings and quality of the discussions;

- Directors’ access to information;

- The functions of the Board of Directors.

At the Board meeting of March 8, 2012, the questionnairescompleted by the Directors and comments exchangedduring the meeting indicated a favorable assessment of the functioning of the Board, in line with the spirit of theMiddlenext’s recommendations and the environment inwhich the Directors actually exercise their functions andresponsibilities.

The Company is attentive to the issue of gender diversityon the Board and the need to increase, to the extentpossible, representation of women serving on the Board. At the meeting of March 8, 2012, particular attention waspaid to the timetable for complying with the newthresholds with respect to Board representation that willenter into effect starting in 2014 and 2017.

117


5.3. Powers and missions of the Board of DirectorsThe Board of Directors determines strategic, economic,social and financial priorities of the company and ensuresthat they are implemented. Subject to the powers granted to shareholders’ meetings and within the limits of thecompany’s charter, the Board considers any matter relatingto the proper management of the company.

It issues decisions concerning the holding of multipleoffices or the separation of the offices of Chief ExecutiveOfficer (Directeur Général) and Chairman of the Board,appoints corporate officers, imposes possible limits on theauthorities of the Chief Executive Officer, approves thedraft report of the Chairman, performs controls andverifications it considers appropriate, in respect tomanagement control and the fair presentation of accounts,reviews and approves the financial statements, and ensuresthe quality of financial information provided toshareholders and the market.

For the fiscal year ended December 31, 2011, the Board of Directors met nine times with an attendance rate of 73%for meetings lasting on average three hours. These meetingsaddressed the following items of business:

- Review of the parent company statutory and consolidatedfinancial statements for the fiscal year endedDecember 31, 2010 and the interim financial statementsand the notice of the Annual General Meeting;

- Review of the fiscal year 2011 budget and outlook;

- Capital increase through the capitalization of reserves;

- Setting the Chairman’s remuneration;

- Authorizations concerning agreements in accordance withArticles L. 225-38 et seq. of the French Commercial Code;

- Analysis of financial information disclosed by thecompany to shareholders and the market;

- Analysis of the major strategic, economic and financialpriorities of the company;

- Discussion and monitoring the project to develop a jointentity with Burberry;

- Examination and authorization of external growthprojects, notably license agreements for brands;

- Monitoring the implementation of the new informationsystem and the construction of a new warehouse;

Auditors attend Board of Directors’ meetings held toconsider the company’s accounts or any other mattersregarding which they may provide Board members aninformed opinion.

In order to maintain the effectiveness of the decision-making process, the Board decided to apply the exemptionprovided for under the provisions of Article L. 823-20 ofthe French Commercial Code for exercising the AuditCommittee functions when operating in a plenary session.On that basis, in 2011 the Board of Directors reviewed thefollowing points relating to the audit of the annual andinterim consolidated financial statements:

- Review of implementation of the financial statement auditprograms and financial information defined with respect

to risks identified in connection with the evaluation of accounting systems, internal control and in particular, a review of the following items:

- Impairment tests for long-term assets and brands: review of the assumptions underlying the business plans,discount rates and terminal values used;- Review of provisions;- Review of legal risks and coverage;- Treatment of specific technical problems relating inparticular to foreign exchange and financial instruments;- Monitoring risk management on the basis of Group riskmapping;- Validation and review of separate and consolidatedfinancial information;- Valuation tests for the company’s assets;- Accounting treatment for currency hedges;- Review of the separate financial statements of subsidiaries.

The exercise of the functions of audit committee by theBoard is assured by two members specifically appointedwhose task is to lead the discussions within the frameworkof monitoring the preparation of accounting and financialinformation. Patrick Choël, Director, serves as theChairman and Maurice Alhadève, Independent Director.

5.4. Transmission of information to directorsDirectors are provided with all relevant documents andinformation to effectively perform their duties. Before eachBoard meeting, directors receive:

- A meeting agenda established by the Chairman incoordination with Executive Management and, whenapplicable, directors proposing items to be discussed;

- An information file concerning issues to be addressedunder the agenda requiring particular analysis for thepurpose of an informed discussion, during which directorsmay ask relevant questions to ensure their adequateunderstanding of the matters addressed;

- And, when useful, press releases that have been publishedby the company as well as significant press articles andreports of financial analysts.

In compliance with Middlenext Code recommendationNo.11, outside of Board meetings, and when justified byevents of the Company, directors are regularly providedwith all important information about the company thatcould have an impact on its commitments and financialposition. They may request any explanation or the issuanceof additional information, and in general, formulate anyrequests for access to information they may consider useful.

5.5. Directors’ feesDirectors’ fees are allocated exclusively to outside non-executive officers of the Board of Directors, namely,Chantal Roos, Jean Levy, Patrick Choël, Maurice Alhadèveand Michel Dyens. The total amount granted by theGeneral Meeting is freely allocated by the Board ofDirectors to each member on the basis of his/her rate of attendance.

118


5.6. Shareholder participation in general meetingsUnder the terms of article 19 of the company’s bylaws all shareholders have a right to participate in GeneralMeetings, personally or through a proxy, regardless of the number of shares they hold, upon simple justification of their identity and ownership of the shares.

5.7. Disclosures provided for under article L. 225-100-3 of the FrenchCommercial CodeTo the best of the company’s knowledge there exist noitems, and notably those relating to the structure of theshare capital that could have a potential impact in the eventof a public offering. The structure of the share capital aswell as the equity interest that have been brought to thecompany’s attention and any other information relatingthereto are described in chapter 2 of the section onshareholder information of this registration document.Similarly, rules concerning the appointment and revocationof members of the Board of Directors are subject to therules of common law.

5.8.Internal control and risk management procedures

5.8.1. Definition

The company’s internal control procedures have in largepart been based on the guidelines established by article 404of the Sarbanes Oxley Act that applies to the US parentcompany because it is listed on a New York StockExchange. The principles described therein are in partprovided for under the AMF guidelines of January 2007completed by the guidelines for Small and Mid Caps of January 9, 2008 and updated on June 14, 2010.

The internal control and risk management systemconstitutes a set of procedures defined and implementedby the company under the responsibility of ExecutiveManagement for the purpose of ensuring:

- Compliance with laws and regulations as well as theframework defined by the company’s internal values;

- The application of instructions and priorities set bygeneral management;

- The effective application of internal processes notablyconcerning the protection of corporate assets;

- The reliability of financial information;

- And, more generally, it contributes to the effectivemanagement of its activities and operations and theefficient use of resources.

The aim of this system is to prevent and manage risksresulting from the activity of the company and risks of

errors or fraud, particularly in areas relating to the protectionof the company’s assets as well as accounting and finance.

However, no system of internal control can provide anabsolute guarantee of achieving these objectives. Theprobability of achieving such objectives is subject to limitsinherent in any system of internal control, related notablyto uncertainties concerning the external environment, theexercise of judgment or problems that may arise in responseto human error or simple error, and the need to performcost-benefit analysis before implementing any controls.

5.8.2. Components of the internal control system

The Company’s internal control system is based on thefollowing principles:

- Clearly defined responsibilities in preparing,implementing and ensuring the management of internalcontrol procedures;

- Identifying, analyzing and handling risks;

- Ad hoc tests conducted on a periodic basis of theeffectiveness of internal controls.

5.8.3. The internal control environment

5.8.3.1. Organization of the company

The company is organized around two divisions. The operating division encompasses the departments forExport Sales and French Sales, Marketing and Productionand Development whereas the division including thesupport functions is placed under the management ofFinance and Corporate Affairs.

The line management departments, assisted by the technicalexpertise provided by the support functions, coordinate the implementation of objectives and achievement of theoperating results set by Executive Management. To thispurpose, they participate in the internal control proceduresand risk management when key operating processesassociated with sales to distributors and the management ofthe company’s image have an impact on assets and/or results.

Support function departments cover all processes relating to the management of resources (cash management, humanresources, compliance with tax obligations, settlement of trade payables, the processing and communication of accounting and financial information, monitoring legaland regulatory developments, etc.). They also have a role in defining and communicating policies and informationabout good practices for the Company’s activity and ensuretheir effective application in compliance with applicablelaws and regulations, maintaining a safe environment andthe reliability of financial information.

This organization has demonstrated its strength andrelevance based on the achievement of real synergiesbetween the Operating and Functional Departments. It is also based on an objective of promoting theconvergence of the resources of the different divisionsinvolved and the principle of a decentralized organizationcombining the advantages of flexibility and the delegation

119


of responsibilities necessary for ensuring the optimal and coherent application of the strategic objectives set bygeneral management.

The Company also consolidates seven foreign subsidiariesthat apply the Group’s internal procedures relating to thepreparation and processing of accounting and financialinformation. The US subsidiary Interparfums LuxuryBrand Inc., formed in September 2010, in light of the sizeof this operating entity, was included in the scope of testsconducted on the effectiveness of the internal controlsystem in 2011.

5.8.3.2. Key components of the internal control system

These features are based on rules and procedures as well as initiatives undertaken to raise awareness amongmanagement bodies and staff about the internal control and risk management principles adopted within theCompany. These rules and procedures make it possible toensure that the instructions of Executive Management areconcretely implemented at the level of the operating andsupport function activities.

The Internal Procedures Manual:

This tool formalizes a certain number of internalprocedures considered essential for the effective operationsof the company in a secure environment. This manualdetails the main operating and financial processes coveringnotably sales/customers, sourcing/suppliers, inventory, cash management/budget, accounting procedures, IT systems and personnel/payrolL. This manual alsodescribes the procedure for expense requests and bankaccounts signature authorizations. The Internal ProceduresManual is accompanied by guidelines for key controlsspecific to the company that are subject to annual self-assessments according to procedures described below.

Self-assessment questionnaire:

This questionnaire has been drafted according to principlesof internal control that are consistent with the Company’sactivities. It is reviewed annually by line management bothfor operating and support function departments. Thisquestionnaire covers notably:

- Corporate governance practices: the internal controlenvironment reflecting the general tone set by ExecutiveManagement, the level of awareness of the Board ofDirectors and the Management Committee concerningpriorities for control, procedures and methods and theorganization of the Company as well as the resulting actions;

- The analysis of risks: this covers the identification andanalysis of major risks incurred in implementing objectivesset by the Company to subsequently determine the riskmanagement approach to be adopted;

- Information and communication systems: these systemspermit the identification, input and exchange of informationaccording to the conditions that enable management andstaff concerned to exercise their responsibilities.

Code of Good Conduct:

A priority for managing human resources is to ensure thatprofiles effectively match the corresponding responsibilities

while adhering to the key values: prudence, pragmatism,responsiveness, high standards, transparency and loyalty.Contributing to the expertise and know-how of a team of men and women sharing a common culture ofcommitment to integrity and high standards thatdistinguish the Company thus constitutes an importantpart of internal controL. These values are set forth in a codeof good conduct that provides guidelines on professionalconduct to be adopted, notably in the areas of compliancewith laws and regulations, preventing conflicts of interestand financial transparency in order to prevent situations of fraud. This code is signed by the recipient and remittedto all new employees who join the Company.

Information System Charter:

This document defines the rights and obligations ofemployees, users of the information system, to ensure thatthe information technology resources are used in a secureenvironment complying with the procedures of internalcontroL. It is signed by all users and made available to all newemployees who undertake to comply with its provisions.

5.8.4. Key participants in internal control procedures

5.8.4.1. The Board of Directors

In connection with information provided to the Board, itsmembers review all the main characteristics of the internalcontrol procedures and system and more particularly examinethem in accordance with their audit committee functionsexercised in plenary session. The Board may exercise itsauthority to request verifications and controls it considersappropriate to ensure the transparency, effectiveness andsecurity of the internal control environment.

5.8.4.2. Executive Management

This includes the Chairman and Chief Executive Officer,assisted by two Executive Vice Presidents. They define themajor strategic priorities, discussed and approved by theBoard of Directors, to achieve the commercial and financialobjectives of the company. This is done by providing clearlydefined internal procedures and an internal control systemfor which they are directly responsible. They define thegeneral principles and ensure the implementation of thedifferent components of internal control.

5.8.4.3. Management Committee

This Committee includes management from the operatingand support function departments who report directly tothe Chairman and Chief Executive Officer. This bodyfocuses on strategic issues, monitoring performance andproceedings covering important issues relating to thecompany’s organization and projects. It ensures that thepolicy for internal control is effectively implemented andmonitors the work carried out for this purpose as well as thecorresponding action plans. Each Management Committeemember is responsible for ensuring that the common rulesand principles comprising the framework of the internal

120


control system are applied and understood in thedepartments under his or her responsibility.

5.8.4.4. The Finance and Corporate Affairs Department

Operating under the responsibility of ExecutiveManagement, this Division is comprised of differentdepartments including notably Consolidation, Accounting,Management Control, Information Systems, HumanResources and Legal Affairs. It is responsible forimplementing the internal control to prevent and managerisks resulting from the Company’s activities, and notablyrisks of accounting errors and fraud in the area of accountingand finance. To this purpose, it must ensure that the ongoingcontrols implemented are necessary and adequate and arecorrectly applied and effective in safeguarding the Company’sassets against all potential incidents.

It also provides technical support to operating departmentsby establishing operating procedures, defining andpromoting the use of tools, procedures and good practicesessential for the effective application of the objectivesdefined by Executive Management.

It centralizes and consolidates financial and accountinginformation for all Group entities. It furthermore ensures the consistent nature of this information in relation to thebudget approved by Executive Management and the Board ofDirectors and that such information is adequately supported.

It is also responsible for ensuring that ExecutiveManagement and the operating departments are aware oflegal issues. To this purpose, it monitors legal and regulatorydevelopments and takes measures to avoid exposure topotential criminal risks and risks related to commercial lawand intellectual property rights. It is also responsible formanaging litigation and disputes in close collaboration withoutside legal counsel and attorneys, as well as drawing upand reviewing the main contracts of the Company.

5.8.4.5. Internal Audit

In light of the company’s size and organization and in orderto maintain the current flexibility of the organization ofInternal Control department, a full-fledged internal auditdepartment has not been established. In contrast, the headof Internal Control carries out, with the consent of theFinance Division assessments of internal control to evaluateits effectiveness for which detail is presented below.

5.8.5. Internal control procedures

Internal control procedures, established by the FinanceDepartment and approved by Executive Management, aredesigned to secure the different processes used to achievethe objectives set by the Company. To this purpose,controls performed at every level of responsibility, are basedprimarily on the application of standards and procedures.In 2011, the internal control guidelines were reviewed in light of the migration to the new information system. In effect, the implementation of the SAP ERP has made it possible to automate certain controls and in this waystrengthened their effectiveness.

These procedures are organized around the following keyareas identified as areas of potential risk:

5.8.5.1. Operating processes

Sales/trade receivables management/collection: this processensures that all deliveries made and/or services rendered areinvoiced within the specified period and invoices areproperly recorded in the trade receivables accounts. It alsodetermines procedures for issuing credits which must bejustified and controlled before being booked. Thisprocedure makes it possible to identify potential doubtfultrade receivables and anticipate risks of default.

Purchasing/management of trade payables: this process is formalized by procedures based, on the one hand, on the separation of the functions for placing orders and forauthorizing orders, acceptance, the recording of thetransactions in the accounts and payment of suppliers, and on the other hand a process for monitoring and reconcilingpurchase orders, receiving slips and invoices (quantity, price,terms of payment) supplemented by a procedure forpreventing dual recognition/payment of supplier invoices.Anomalies that may be identified are analyzed and monitored.

5.8.5.2. Accounting and financial processes

Cash management:

Controls in place are destined to ensure that bank accountsare reconciled on a regular basis with information receivedfrom the banks and reviewed periodically in order todocument and explain eventual variances; The Companyhas also implemented a system for hedging foreignexchange risk related notably to transactions conducted in US dollars. The amount of hedges as well as theexchange rate targets are the subject of regular discussionsbetween the Finance Department and ExecutiveManagement and are reported to the Board of Directors.

Budget process:

Control, in this context, consists of ensuring that annualbudget is established according to the instructions ofExecutive Management and that actual performances aremonitored through regular reporting tools based on dataobtained from the operating departments with the primaryobjective of analyzing actual performances in relation toforecast and prior periods. This review of “forecasts versusactual” makes it possible to identify potentialinconsistencies, errors or omissions and make theappropriate management decisions to correct thecorresponding data (revenue, operating expenses, etc.).

Process for preparing accounting and financial information:

This process consists in ensuring the reliable and consistentnature of consolidation of data collected and submitted tothe Finance Department.

Information systems management:

This process is destined to ensure the development andmaintenance of computer applications and the network, the logical and physical security of the information system,

121


providing for a backup plan to guarantee confidentiality of information and ensure the security of systems andapplications for to maintain operating continuity in theevent of an incident.

5.8.5.3. Identifying, analyzing and managing risks

Risk management constitutes an integral part of the internalcontrol process.

Risk management responsibilities are exercised at everyreporting level of the Company. Staff, line management and support function management actively intervene asparticipants with a direct stake in an approach focused oninternal controls of the processes they supervise, within theframework of missions defined by Executive Management,their organization and contributions to critical decisions. To this purpose, they possess the knowledge and informationnecessary to establish, operate and oversee the internalcontrol procedures in relation to the objectives that havebeen set for them. An in-depth analysis of the separation ofoperational and control tasks was undertaken to effectivelyaddress the objectives of control.

The mapping of Group risks launched in 2004 and regularlyupdated since, has made it possible to classify risks into fourcategories: operating risks, risks related to internationaloperations, environmental and employee-related risks andrisks related to the financial environment that are presentedin detail in Chapter 1 of the management report under theheading “Risk Factors”. As the company’s activity andorganization evolves, this risk mapping is regularly updated.

This mapping constitutes a basis for analysis for verifyingthe validity of the measures taken to improve and strengtheninternal control procedures. This makes it possible tohighlight risk areas, and for each of these areas, the risksthat could have a potential financial impact. Risks thusidentified are then evaluated to determine their potentialimpact and likelihood of occurrence. Each risk identifiedand tested is monitored to ensure that all action plansdestined to reduce its scope are correctly implemented.

The Board of Directors noted the features of this riskmapping as well as the remedial action plans.

5.8.6. Activities of control

These controls are carried out within the framework of the plan for the self-assessment of internal procedures tocontribute to a better understanding and the appropriationof internal control procedures, ensure their correctapplication and, if necessary, improve procedures currentlyin force. These periodic reviews make it possible to measureprogress in implementing programmed actions, changessince the previous self-assessment and adopt new proceduresthat may be identified as necessary through this process.

This process of self-assessment is undertaken annually with the assistance of an outside independent audit firm.

This involves identifying assets of key importance of thecompany, analyzing potential risks, existing or emerging, by type of task assigned to each department concerned and meetings with the operating departments concerned.

Internal control procedures have been carried out inaccordance with the provisions of US law of the SarbanesOxley Act.

If processes and the associated controls are not formalizedor are considered insufficient, remediation plans orcorrective actions are implemented and monitored by themanager concerned.

On completion of this self-assessment process, the FinanceDepartment submits executive summaries on this work to the Executive Management and the Board of Directors.It also reports the results of this self-assessment to theManagement Committee so its members can ensure thatmanagement of the respective divisions are aware of theresults of the work and the issues at stake in implementingremediation plans in response to the dysfunctions identifiedor those that could result from inadequate controls.

Within the framework of Interparfums SA, the new toolsavailable to the company to conduct these tests of internalcontrol procedures made it possible to strengthen methodsfor carrying out its work in 2011. On this basis, 132controls were carried out focusing on 47 areas of riskrelating to sales and purchasing activity, license royalties,advertising expenses, inventory, cash management, closingactivities, payroll management and information systems.In 2011, based on a comparable scope for testing, 51additional controls were carried out in relation to 2010.

For the US company Interparfums Luxury Brands 44 itemsof control were subject to these same tests. The guidelinesfor internal control and evaluation for the subsidiary were implemented in collaboration with the outside auditfirm Esner.

Self-assessments carried out within Interparfums SA

Group did not indicate any incidents of a significant or noteworthy nature that might call into question therelevance of internal controls. In line with its policy ofstrengthening internal control procedures, the Companyhas continued to analyze priorities for improving existingprocedures and developing remediation plans whoseimplementation is regularly monitored by the ManagementCommittee.

This work also concerns the organization of InformationSystems Department, the evaluation of general IT controls,the management of operations, projects and security andthe policy for ensuring the availability and continuity ofservice of systems. Weaknesses detected at the level of themanagement of security in the 2010 audit were completelycorrected in 2011.

Following the implementation of the SAP ERP, a detailedreview on this new application was carried out concerningnotably and the separation of tasks. Results indicated thatthe separation of tasks in place were satisfactory.

122


5.9. Internal control procedures relating to accounting and financial information

5.9.1. Process for managing the accounting and financial organization

5.9.1.1. Organization

Internal control procedures applicable to accounting andfinancial data are prepared and implemented under theresponsibility of the Finance Department and the oversightof Executive Management in the following areas: financialcommunications, accounting, consolidation, managementcontrol, cash management, information systems andcompliance with laws and regulations. To achieve thisobjective, it is supported by the managers of the differentteams of the Finance Department (Finance, Accounting,Management Control, Consolidation, Human Resources,Cash Management, Information Systems and Legal Affairs).

5.9.1.2. Relations with statutory auditors

In connection with the half yearly and annual closings of the accounts, the statutory auditors organize their workby undertaking:

- A prior review of procedures and internal control tests;

- A meeting prior to the approval of the accounts to definethe program of reviews and the calendar and organizationof their work;

- A limited review or audit of the financial statementsprepared by the Finance Department;

- A meeting presenting a summary of their work toExecutive Management.

On this basis, the statutory auditors certify the fairpresentation of the separate parent company andconsolidated financial statements.

5.9.1.3. Application of accounting standards

The accounting department has a process for identifyingand processing changes in accounting standards and the approval of the resulting procedures for accountingtreatment. Similarly, there exist procedures to ensure theaccounting department is informed of changes in Grouppractices that could affect the methodology or proceduresfor recording transactions. The scope of accountingmanagement is constantly updated.

5.9.1.4. Organization and security of information systems

The organization of the Information Systems Departmentwas designed to ensure in particular management ofauthorization for access to Information Systems group

a rigorous control of compliance of the principle of theseparation of tasks and the management of infrastructureservices and IT governance.

The company uses an ERP application that integrates salesmanagement, production, financial accounting, subsidiaryaccounts and cost accounting capabilities. The organizationand operating of the entire information system is subject tomeasures that limit the conditions of access to the system,the validation of processing and closing procedures,conservation of data, and verification of entries.

To ensure continuity in processing accounting data, backupsystems and a continuity plan have been implemented in the event of a sudden dysfunction. In addition, all data is backed up daily and a copy kept in a secure location. In terms of conservation and protection of data, a procedurefor secure access to accounting and financial data has beendeveloped involving the designation of individual andpersonal rights assigned to specific persons accompanied by passwords.

In 2009, a Business Continuity Planning (BCP) wasimplemented involving the use of virtualization technologyon internal servers in order to ensure efficient backupsystem in the event of any equipment failure. In 2010 andearly 2011, an IT recovery plan was deployed to strengthenthese measures to secure the information system,duplicating computer data at an external “dormant site” as a precaution in the event of malfunctions.

In order to meet the needs resulting from its growth, the company decided to revamp its information systemby deploying the SAP enterprise application that coversvirtually all the operating and functional processes of itsbusiness (finance, sales, inventory and production planning).This application that has been operational since May 2011meets the following objectives:

- Systematizing internal procedures;

- Shortening the logistics cycle for improved customer service;

- Strict monitoring of flows for the sourcing, inventoriesand real-time access to physical inventory;

- Reinforcing the decision-making processes and costaccounting for optimized management accounting;

- Ensuring compliance with the rules of traceability andsecurity through the harmonization of informationprocessing tools.

5.9.2. Process contributing to the preparation of accounting and financial information

5.9.2.1. Operating process for producing the accounting information

Internal control processes at this level have been implementedthrough the following measures based on previously definedprocedures and approval mechanisms:

- A planned program for account closings subsequentlycommunicated to operating departments;

- Close collaboration between the different managers of thesupport function and operating departments;

123


- Analysis of the relevance of information reported particularlyconcerning sales, orders and the examination of margins;

- A detailed review of the accounts by Executive Managementin view of their approval before the final closing.

Meetings are organized to coordinate activity with the differentdepartments concerned in order to ensure the exhaustivenature of information provided to prepare the accounts.

5.9.2.2. Process for account closings and the production of consolidated financial statements

Account cut-off procedures are subject to preciseinstructions provided by the Finance Department in respectto the closing process, indicating information to be entered,restatements required, the timetable of activity as well as the planning for precise tasks for each party participating inthis process. These procedures are accompanied by a processfor validating key items of the consolidation process andnotably the reconciliation of separate financial statementswith restated financial statements included inconsolidation, the consistency of management data andaccounting, the identification and analysis of changesin consolidated net equity.

Half-year and annual financial statements are prepared in accordance with International Financial ReportingStandards (IFRS).

At the level of subsidiaries, local management providesdetailed reporting that includes financial statements,audited by local outside auditors, and analysis of businessperformances. This information is in turn subject to in-depthanalysis by Executive Management with the technicalsupport of the Finance Department.

5.9.2.3. Financial communications

The financial communications process is subject to a clearlydefined reporting schedule for information destined forfinancial markets and market authorities. This scheduleensures that communications complies with therequirements of applicable laws and regulations relating to financial disclosures both concerning the nature of information to be disclosed, the required deadlines and compliance with the principle of equal access toinformation by all shareholders.

5.10. Trend forecasts for 2012The company assures permanent oversight of allorganizational changes to anticipate, adapt and optimizeinternal control procedures in real time and to facilitate the appropriation of these procedures by operational teams.Its internal control procedures are also designed to respondto both regulatory requirements and future issues facing the company.

Implementation of the SAP ERP, whose modules(Purchasing, Sales, Finance) are fully integrated, makes itpossible to strengthen existing internal control procedures.

The new information system will in particular make itpossible to:

- Ensure the widespread use of EDI (Electronic DataInterchange) with customers and suppliers;

- Improve interfaces with warehousing logistics;

- Implement more automatic controls.

Priorities for the Company for the year 2012 include:

- Improve the retrieval of information originating from the SAP ERP;

- Implement a committee responsible for overseeingthe recovery plan;

- Implement the Exchange 2010 application for theautomatic storage of data.

124


125


SHAREHOLDERINFORMATIONSTATUTORY INFORMATION P. 127CAPITAL STOCK P. 129ANNUAL GENERAL MEETING: RESOLUTIONS SUBMITTED TO THE EXTRAORDINARY AND ORDINARY SHAREHOLDERS’MEETING OF APRIL 27, 2012 P. 134

126

Shareholder informationTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

1.STATUTORY INFORMATION

1.1.The Company

1.1.1. General information

Company name: Interparfums

Registered office:4, rond-point des Champs-Élysées, 75008 Paris. Tel.: +33 (0)1 53 77 00 00Date of incorporation: April 5, 1989Date of expiration: April 5, 2088

Legal form: French corporation (société anonyme) with aBoard of Directors governed by the provisions of Livre II of the French Commercial Code and Companies ActNo. 67-236 of March 23, 1967.

Corporate charter: The company’s business purpose inFrance and all other countries includes:

- The purchase, sale, manufacture, import and export of allproducts related to perfumes and cosmetics;

- The use of license agreements;

- Providing all services related to the above-mentionedactivities;

- The company’s participation by all means, directly orindirectly, in all transactions that may relate to its businesspurpose through the creation of new companies, thecontribution, subscription or purchase of company sharesor rights, mergers or other, through the creation, acquisition,rental or lease management of all rights to conduct businessor establishments, and through the acquisition, operationor disposal of all procedures and patents related to theseactivities;

- And, generally, all commercial, industrial, financial, civil,securities and real estate transactions that relate directly orindirectly to the company’s business purpose or to anysimilar and related activities.

Fiscal year: January 1 - December 31Siret No.: 350 219 382 00032Trade register No (RCS): 1989 B 04913Place of registration Registrar of the Commercial Court of Paris.Activity code 46.45 Z Wholesale perfume and beauty product.

1.1.2. Share account registration

At the option of their owners, shares in France are registeredin a standard personal account (compte nominatif pur),an administered personal account (compte nominatifadministré) or to the bearer identifiable at an authorizedintermediary. Euro Emetteurs Finances handles shareservices and management exclusively for personal accounts.Questions may be addressed to the registered office.

1.2. Main legal provisions and bylaws

1.2.1. Shareholders’ meetings (article 19 of the bylaws)

All shareholders have the right to participate in shareholders’meetings or to be represented, regardless of the number ofshares owned, provided the shares are fully paid up andregistered in the shareholder’s name for at least three daysprior to the shareholders’ meeting upon presentation of acertificate filed by an approved intermediary at the sitesmentioned in the Meeting notice, confirming that the sharesare not available up until the date of the Meeting.

All shareholders may be represented by a spouse or anothershareholder. All shareholders may vote by correspondenceusing a proxy statement that complies with legal provisionsand is obtainable by returning the Meeting notice.

1.2.2. Special shareholder disclosure obligations (article 20 of the bylaws)

In accordance with the provisions of L.233-7 of the FrenchCommercial Code (Code de Commerce), all shareholders,natural persons or legal entities, acting alone or in concert,who cross thresholds in either direction in respect to thenumber of shares owned representing more than onetwentieth, one tenth, three twentieths, one fifth, onequarter, one third, one half, two thirds, eighteen twentiethsor nineteen twentieths of the capital or voting rights ofthe Company they hold, must notify the Company byregistered mail with return receipt of the number of sharesand voting rights they hold within five trading days. The disclosure requirement referred to in the precedingparagraph is also mandatory within the same time limitswhenever the percentage of capital or voting rights held fallsbelow one of the thresholds mentioned above.

Under article L. 233-7 subsection VII of the FrenchCommercial Code, said shareholders must also state theirintentions with regard to share ownership for the nexttwelve months whenever the thresholds of one tenth or onefifth of the capital or voting rights have been crossed.

1.2.3. Appropriation and distribution of earnings(article 24 of the bylaws)

If the financial statements approved by the shareholders’meeting show a distributable profit as defined by law, theshareholders’ meeting decides whether to makeappropriations to one or more retained earnings or reserveaccounts under its control, to carry it forward or todistribute it. The shareholders’ meeting may grantshareholders the choice of receiving a dividend in cash or inshares for all or part of the dividend or interim dividends tobe distributed, subject to the applicable legal provisions.

Following the approval of the financial statements by theGeneral Meeting of the shareholders, any losses that mayoccur are carried forward to be offset against future earningsuntil these losses have been fully used.

127


1.2.4. Double voting rights (article 11 of the bylaws)

In accordance with the provisions of article L. 225-123 of the French Commercial Code, the extraordinaryshareholders’ meeting of September 29, 1995 created shareswith double voting rights. These shares must be fully paidup and recorded in the company’s share register inregistered form for at least three years.

1.2.5. Documents on display

The bylaws, minutes and other company documents areavailable at Interparfums’ registered office.

1.2.6. Legal jurisdiction

In the event of litigation, the courts having jurisdiction arethose of the registered office in cases where the company is adefendant. They are designated according to the nature ofthe litigation, barring any contrary provisions of the newCivil Procedure Code.

128


2.CAPITAL STOCK

2.1. Five-year history of capital stock transactionsYear Transaction type Number Shares Total Share of shares created shares capital (in €)

2007 Exercise of 2000 stock options 33,028 33,028 10,914,108 32,742,324 Exercise of 2001 stock options 29,039 29,039 10,943,147 32,829,441 Exercise of 2002 stock options 22,878 22,878 10,966,025 32,898,075 Exercise of 2003 stock options 7,809 7,809 10,973,834 32,921,502 Exercise of 2004 stock options 4,429 4,429 10,978,263 32,934,789 Exercise of 2005 stock options 24,563 24,563 11,002,826 33,008,478 Bonus share issue 1,097,541 1,097,541 12,100,367 36,301,101

2008 Exercise of 2001 stock options 39,857 39,857 12,140,224 36,420,672 Exercise of 2002 stock options 26,638 26,638 12,166,862 36,500,586 Exercise of 2003 stock options 8,711 8,711 12,175,573 36,526,719 Exercise of 2004 stock options 1,862 1,862 12,177,435 36,532,305 Bonus share issue 1,214,545 1,214,545 13,391,980 40,175,940

2009 Exercise of 2002 stock options 51,368 51,368 13,443,348 40,330,044 Exercise of 2003 stock options 99,828 99,828 13,543,176 40,629,528 Exercise of 2004 stock options 987 987 13,544,163 40,632,489 Exercise of 2005 stock options 408 408 13,544,571 40,633,713 Bonus share issue 2,678,942 2,678,942 16,223,513 48,670,539

2010 Exercise of 2004 stock options 148,464 148,464 16,371,977 49,115,931 Exercise of 2005 stock options 68,347 68,347 16,440,324 49,320,972 Exercise of 2006 stock options 4,723 4,723 16,445,047 49,335,141 Capital decrease (157,150) (157,150) 16,287,897 48,863,691 Bonus share issue 1,638,298 1,638,298 17,926,195 53,778,585

2011 Exercise of 2005 stock options 96,076 96,076 18,022,271 54,066,813 Exercise of 2006 stock options 41,204 41,204 18,063,475 54,190,425 Bonus share issue 1,803,851 1,803,851 19,867,326 59,601,978

As of December 31, 2011, Interparfums’ capital was composed of 19,867,326 shares with a par value of €3.

129


2.2.2. Breakdown of option holders as of December 31, 2011

Plan 6 Plan 9 Plan 10

Management committee members 49,868 33,880 36,300Employees 86,566 70,056 89,540

Total 136,434 103,939 125,840

2.3. Ownership of Interparfums capital stock and voting rights

2.3.1. Situation at February 29, 2012

Shares % of Voting % of voting held capital rights rights

Interparfums Holding SA 14,624,597 73.6% 29,171,757 84.8%French investors 1,869,872 9.4% 1,871,897 5.4%Foreign investors 1,819,246 9.2% 1,819,246 5.3%Individuals 1,503,109 7.6% 1,533,459 4.5%Treasury shares 50,502 0.2% - -

Total 19,867,326 100% 34,396,359 100.00%

Based on a survey of shareholder ownership, there were 7,040 shareholders at February 29, 2012. Excluding InterparfumsHolding, Interparfums’ shareholder base breaks down as follows:

- 200 French investors and mutual funds owning 3.6% of the capital stock compared with 260 in 2010 owning 9.3%;

- 90 foreign investors, located mainly in the U.K., Switzerland, the U.S. and Luxembourg, who own 3.5% of the capitalstock compared with 150 in 2010 with 9.2%;- 6,750 individuals owning 3% of the capital stock compared with 9,350 in 2010 owning 7.6%.

To the Company’s knowledge, there are no other shareholders that possess directly, indirectly or together, 5% or more of thecapital or voting rights.

Three independent directors serve on the Board of Directors providing a mechanism for preventing an abusive exercise ofcontrol of the company.

2.2. Authorized capital

2.2.1. Previous authorizations

The shareholders’ meeting of April 23, 2010 authorized theBoard of Directors to increase the capital stock by issuingordinary shares with or without shareholders’ pre-emptiverights for maximum nominal amounts respectively of€25 million. These authorizations are valid for a periodof 26 months. To date, the Board of Directors has not madeuse of these authorizations.

The shareholders’ meeting of April 29, 2011 also authorizedthe Board of Directors to increase the capital by an amountnot exceeding €50 million through the capitalization ofearnings, additional paid-in capital and reserves. The Boardof Directors made use of this authorization:

- Pursuant to its decisions of June 14, 2011 to increase the capital stock by €5,411,533 through the creationof 1,803,851 new bonus shares granted to shareholders on the basis of one new share for every ten shares held.

The maximum amount of present or future capital increases that may result from all issues authorized by the shareholders’ meeting of 23 April 2010 is €75,500,000that includes the €500,000 authorized in connection withthe capital increase reserved for employees proposed in theresolution that was rejected by this meeting.

130


2.3.2. Changes in Interparfums Holding’s ownership over four years

At December 31, 2008 2009 2010 2011

Interparfums Holding 75.32% 74.56% 74.15% 73.81%Free float and employees 24.68% 25.44% 25.85% 26.19%

Total 100.00% 100.00% 100.00% 100.00%

2.4. Breakdown of Interparfums Holding’s capital stock as of December 31, 2011Interparfums Holding, whose sole equity holding is Interparfums, is itself wholly owned by Interparfums Inc., listed onNASDAQ in the United States with approximately 3,100 shareholders. As of December 31, 2011 it had the followingownership structure:

- Philippe Bénacin and Jean Madar: 46.30%;- Free float: 53.70%.

2.5. DividendSince 1998, the company has adopted a policy of distributing dividends that today represents more than 30% of consolidatedearnings, making it possible to reward shareholders a with a high return while at the same time associating them with theGroup’s expansion. In early May 2011, a dividend of €0.49 per share was paid or a total amount of €8.6 million.

2.6. Shareholders’ agreementsNo shareholders’ agreements exist at the level of Interparfums Holding.

2.7. Special shareholder disclosure obligationsIn compliance with article L. 233-7 of the French Commercial Code, all shareholders acquiring a number of shares thatincreases above or below certain statutory disclosure thresholds are required to notify the French financial market authority(Autorité des Marchés Financiers) within five trading days. If such notifications are not made in accordance with the applicablelegal provisions, the company will apply the provisions of article L. 233-14 relating to the cancellation of voting rights. In 2011,the company was not informed of any changes in share ownership involving the crossing of these statutory thresholds.

131


2.8. Key stock market dataIn number of shares and euros 2007 2008 2009 2010 2011

Shares outstanding as of December 31 12,100,367 13,391,980 16,223,513 17,926,195 19,867,326Market capitalization as of December 31 380m 242m 292m 490m 325mHigh (1) 38.00 31.55 20.49 27.84 28.12Low (1) 25.82 17.00 13.06 17.19 16.25Average (1) 34.04 23.63 16.67 23.05 23.41Year-end (1) 31.32 18.05 18.01 27.35 16.38Average daily volume (1) 11,204 6,220 6,022 10,146 19,414Earnings per share (1) 1.76 1.66 1.52 1.57 1.69Dividend per share (1) 0.38 0.38 0.39 0.48 0.50Average number of shares outstanding (2) 11,480,164 12,719,676 14,880,583 17,089,880 17,956,051

(1) Historical data (not restated for bonus share issues undertaken each year).

(2) Excluding treasury shares.

2.9. Share priceFollowing the announcement in December 2010 of the extension of certain terms of the license agreement signed with the Burberry brand in 2004, Interparfums’ share experienced downward momentum throughout the first quarter of 2011.

With the publication of results in early April 2011, the share partially regained lost ground, moving back up to a price levelof €28 in May-June.

After the steep downturn in financial markets in the summer, the share traded within the €19-€21 range. With thepublication of a new press release in December on the license agreement with Burberry, the share declined further to €16-€17.At year-end, the market capitalization was €325 million.

Trading volume has continued to grow year after year to reach an average of 20,000 shares per day.

132


2.10. Share price and trading activity trends since 2009In euros High Low Trading Trading volume volume (number of (€ millions) shares)

2009 January 18.70 15.40 58,359 968February 15.75 14.95 62,188 961March 16.34 14.32 63,169 979April 17.20 15.29 122,492 1,999May 18.50 16.57 55,915 975June 18.93 14.27 94,351 1,416July 14.86 13.06 159,945 2,241August 15.60 14.50 111,347 1,685September 19.20 15.16 331,382 5,731October 20.49 19.35 197,296 3,895November 19.40 17.23 107,910 1,944December 18.01 17.10 171,186 2,997

2010 January 18.90 17.55 140,550 2,555February 18.22 17.19 138,609 2,463March 21.47 18.11 395,479 8,056April 24.20 21.59 299,489 6,905May 24.10 21.30 143,032 3,290June 25.15 23.35 256,451 6,119July 24.30 22.10 196,903 4,611August 23.70 22.49 112,060 2,595September 24.95 23.30 231,283 5,622October 27.23 23.79 258,428 6,741November 27.84 26.30 219,711 5,981December 27.69 25.85 245,845 6,641

2011 January 28.12 23.83 1,255,044 31,756February 26.27 24.45 446,906 11,431March 25.45 22.63 350,561 13,056April 27.18 24.70 248,530 11,891May 27.83 26.30 240,610 9,943June 27.62 23.43 287,176 12,311July 26.43 24.10 393,953 18,760August 24.10 19.27 248,758 10,816September 21.50 18.90 240,598 10,936October 22.28 18.80 319,309 15,205November 21.99 18.85 281,591 12,800December 19.96 16.25 676,414 32,210

2012 January 17.75 16.00 593,682 10,144February 19.24 17.90 269,187 5,090

Historical data (not restated for bonus share issues undertaken between 2000 and 2011).

A capital increase through a bonus share issue on the basis of one new share for five existing shares in June 2009 resulted inthe automatic division of the share price from this date by 1.20.

A capital increase through a bonus share issue on the basis of one new share for ten existing shares in June 2010 resulted inthe automatic division of the share price from this date by 1.10.

A capital increase through a bonus share issue on the basis of one new share for ten existing shares in June 2011 resulted inthe automatic division of the share price from this date by 1.10.

133


3. ANNUAL GENERALMEETING: RESOLUTIONSSUBMITTED TO THE EXTRAORDINARY AND ORDINARY SHAREHOLDERS’MEETING OF APRIL 27, 2012

3.1.Ordinary resolutions

First resolution

Review and approval of the Parent Company separate Financial Statements for the period endedDecember 31, 2011 and the grant of discharge to Directors

The shareholders, in accordance with the conditions of quorum and majority that apply at ordinary generalmeetings, after reviewing the Board of Directors’ report,including the Chairman’s report on the functioning of the Board of Directors and balanced representation of men and women on the Board and on internal control and risk management procedures, as well as the Auditors’ report on the financial statements for the period endedDecember 31, 2011, approve the annual financial statements,as presented showing a net income of €25,538,847. Theyalso approve the transactions described in the accounts andsummarized in these reports. In consequence, the shareholdersgrant discharge for the period ended December 31, 2011 to all directors for their management.

They furthermore approve the total amount of disalloweddeductions under article 39-4 of the French General TaxCode of €20,301 for 2011.

Second resolution

Review and approval of the Consolidated FinancialStatements for the period ended December 31, 2011

The shareholders, in accordance with the conditions of quorum and majority that apply at ordinary generalmeetings, after reviewing the report of the Board ofDirectors and the Auditors’ report on the consolidatedfinancial statements of the Group for the period endedDecember 31, 2011, approve the financial statements aspresented showing an IFRS net income of €30,300,000.They also approve the transactions described in theaccounts and summarized in these reports.

Third resolution

Approval of the appropriation of net income, setting the dividend

The shareholders, in accordance with the conditions of quorum and majority that apply at ordinary generalmeetings, approving the Board of Directors’ proposal,

decide to appropriate net income of the period of€25,538,047 as follows:

Net income of the period €25,538,047

Appropriation to the legal reserve €582,340Retained earnings €15,049,745Dividend (1) €9,906,762

Total appropriation €25,538,847

(1) According to a price of €0.50 per share, this amount takes into

account the number of treasury shares held at December 31, 2011 that

will be adjusted in the case of a change to reflect the actual number of

shares held on the dividend payment date and stock options exercised

by beneficiaries.

Shareholders accordingly set, for all qualifying sharescomprising the capital stock a dividend of €0.50 per share.This amount thus allocated among shareholders shallqualify for the full 40% tax allowance provided for underarticle 158.3.2 of the French General Tax Code toindividuals with their tax residence in France.

The dividend payment date is May 7, 2012.

If on the dividend payment date the company holds treasuryshares, the amount corresponding to dividends not distributedfor said shares will be allocated to retained earnings.

As required by law the shareholders duly note thatdividends for the last three periods were as follows:

Year Number Dividend of shares

2010 17,926,195 €0.482009 16,223,513 €0.392008 13,391,980 €0.38

Fourth resolution

Approval of regulated agreements under articles L.225-38et seq. of the French Commercial Code

The shareholders, in accordance with the conditions ofquorum and majority that apply at ordinary general meetingsand after reviewing the Auditors’ special report on related-partyagreements governed by articles L. 225-38 et seq. of the French Commercial Code, duly noting the informationprovided on agreements concluded and commitmentsauthorized in prior periods and in fiscal 2011, includingthose authorized in the period in progress, approve thetransactions and agreements described in this report.

Fifth resolution

Appointment of Dominique Cyrot to the office of Director

The shareholders, in accordance with the conditions of quorum and majority applicable to ordinary generalmeetings, after having reviewed the Board of Directors’report, decide to appoint Ms. Dominique Cyrot as directorto serve on the Board for a term of office of four years thatwill expire at the end of the General Meeting called toapprove the financial statements for the financial yearending December 31, 2015.

134


Sixth resolution

Setting of Directors’ fees

The shareholders, in accordance with the conditions of quorum and majority applicable to ordinary generalmeetings, after having reviewed the Board of Directors’report, set annual directors fees for the year in progress at€120,000 and grant full power to the Board of Directors to determine the criteria for allocating these fees amongboard members within the limit of this amount and thedate of their payment for the fiscal year commencing on January 1, 2012.

Seventh resolution

Renewal of the authorization for the Company to purchaseand sell its own shares on the market within the frameworkof article L. 225-209 of the French Commercial Code

The shareholders, in accordance with the conditions ofquorum and majority that apply at ordinary meetings and after reviewing the report of the Board of Directors and in accordance with the provisions of article L. 225-209of the French Commercial Code et seq. and the provisionsof articles 241-1 to 241-6 of the AMF General Regulation,grant the Board of Directors the authority, which it mayfurther delegate, to acquire or sell shares of the company in connection with a share buyback program to beimplemented and according to the terms and conditions set forth below.

The purpose of this authorization is to permit the companyto purchase and sell its own shares for uses provided for bylaw. On this basis, the shareholders decide that this sharerepurchase program may be used for the following purposes:

- Maintain an orderly market in the company’s sharesthrough an investment services provider within theframework of a liquidity agreement in compliance with the conduct of business rules of the French association of financial market professionals (AMAFI);

- Grant employees or officers of the company and/or the Group stock options (articles L.225-177 et seq. of the French Commercial Code) and/or bonus shares (articles L. 225-197-1 et seq. of the French Commercial Code);

- Remittance of shares pursuant to the exercise of rightsattached to securities conferring rights by redemption,conversion, exchange, presentation of warrants or any othermeans to grants of the company’s shares;

- Use such shares for payment or exchange in connectionwith financial transactions or acquisitions in compliancewith the financial market regulations;

- Cancel shares to increase the return on equity andearnings per share and/or eliminate the impact of dilutionfor shareholders from capital increases subject to adoptionof the ninth resolution of the extraordinary general meetingpresented below authorizing this cancellation;

- Permit the company to buy and sell its own shares for any other authorized purpose or practice admitted by the market or which may be subsequently authorized or admitted by applicable laws and regulations.

Shares acquired shall be subject to the following limits:

- The maximum purchase price is €40 per share, excludingexecution costs;

- The total number of shares acquired may not exceed 5%of the capital stock outstanding at any time. This 5% limitapplies to an amount of capital that will be adjusted asapplicable for corporate actions affecting the capital stockafter this meeting, whereby acquisitions by the companyshall under no circumstances increase its holding, directlyand indirectly through subsidiaries, to more than 5% of thecapital stock;

- Pursuant to the above, by way of indication and withouttaking into account shares already held by the company,19,867,326 shares on December 31, 2011 wouldrepresent 5% of the capital stock corresponding to amaximum theoretical purchase price of €39,734,652 onthe basis of a maximum purchase price of €40 per share.

The Board of Directors may adjust the above-mentionedprices pursuant to modifications in the par value of theshare, the capitalization of retained earnings and bonusissues, stock splits or reverse splits, repayment or reductionof capital, distribution of retained earnings or other assetsand any other transactions involving the company’s capitalstock, to reflect the impact of these transactions on theshare’s value.

In accordance with applicable regulations, said shares maybe purchased, held, sold or transferred, according to thecase, through one or more transactions, at any time theBoard of Directors so chooses including when tender offersare in effect subject to applicable regulations, by any means,on or off market, and notably through block trades.

Shares purchased and held by the Company must, incompliance with the law, be maintained in registered form.In addition said shares that will not confer pre-emptiverights or entitlement to dividends shall be deprived ofvoting rights.

The shareholders grant all powers to the Board of Directorsthat may in turn delegate such authority to:

- Place all stock orders on or off the market;

- Sign any agreements notably with a view to maintainingregisters of purchases and sales;

- Submit all declarations to the Autorité des MarchésFinanciers (AMF) or any other such entity, carry out allformalities and, in general, make all necessaryarrangements.

The shareholders decide that this authorization:

- Shall take effect from the date of the Board of Directors’meeting that decides to implement this decision that willautomatically result in the expiration of the previousauthorization granted under the sixth resolution of theshareholders’ meeting of April 29, 2011;

- Will expire after a period of 18 months from the date of this meeting, i.e. on October 27, 2013.

The Board of Directors will notify the general meeting of all transactions carried out under this resolution.

Eighth resolution

Powers

All powers are granted to the bearer of copies or extracts of the minutes of this shareholders’ meeting ruling inaccordance with the conditions of quorum and majority

135


that apply at ordinary general meetings to perform all legalformalities relating to the above resolutions.

Extraordinary resolutions

Ninth resolution

Authority granted to the Board of Directors to reduce the capital through the cancellation of treasury shares

The shareholders, in accordance with the conditions of quorum and majority that apply at extraordinaryshareholders meetings, and after reviewing the report of the Board of Directors and the special report of theAuditors and the sixteenth resolution of the ordinarygeneral meeting of this day authorizing the company topurchase its own shares:

- Authorize the Board of Directors to cancel, at its owndiscretion, through one or more transactions, at amountsand times of its choosing, treasury shares acquired withinthe framework of article L. 225-209 of the FrenchCommercial Code, not to exceed 5% of the common stockoutstanding and by period of 24 months, reducing theauthorized capital in due proportion, in accordance withapplicable laws and regulations;

- This authorization is for eighteen months from thismeeting, or until October 27, 2013, and replaces theprevious authorization by the shareholders’ meeting of April 29, 2011, that was not used;

- Grant full authority to the Board of Directors, with thepossibility of further delegating to any person so authorizedby law, to reduce the capital through one or moretransactions, to notably determine the final amount of the capital reduction and the terms and procedures and record the completion of the capital reduction,amending in consequence the bylaws, performing allnecessary formalities, and notably filings with all bodies and in general doing everything necessary.

Tenth resolution

Authority granted to the Board of Directors to issuesecurities giving access to shares of the Company,immediately or in the future, maintaining shareholders’preemptive rights (€25,000,000)

The shareholders, in accordance with the conditions of quorum and majority that apply at extraordinaryshareholders meetings, after having reviewed the Board of Directors’ report, and in compliance with the provisionsof articles L.225-129-2 of the French Commercial Code:

1. Vest the Board of Directors, with the authority, whichthe latter may further delegate in accordance with the law,to increase the capital, through one or several tranches, inFrance or in other countries, in amounts and at such timesit chooses, by issuing in euros or other currencies at thechoice of the Board of Directors (i) ordinary shares as wellas any other securities of any nature giving access to theshare capital of the company by all means, immediatelyand/or in future, or (ii) securities conferring rights to the allotment of debt securities;

2. Resolve that the maximum nominal amount of capitalincreases that may be carried out immediately or in the

future under this authority may not exceed €25 million,whereby this amount may however be increased asnecessary by the nominal amount of additional securitiesthat must be issued to preserve, as required by law, therights of holders of securities giving access to the shares of the company; It is furthermore specified that thenominal amount of capital increases that may be carriedout, immediately or in the future, under this authorizationshall be included under the maximum authorized amountfor capital increases provided for under the fourteenthresolution of this Meeting;

3. Resolve that the maximum nominal amount of debtsecurities of the company that may be issued and givingaccess to share capital of the company, immediately or inthe future, shall not exceed €100 million, it being specifiedthat this maximum amount covers all debt securities thatmay be issued under the authority granted to the Board ofDirectors by this and the eleventh and twelfth resolutions;

4. Decide that shareholders qualify in proportion to the number of shares they hold for preemptive rights to subscribe for new shares or securities issued under thisauthorization on the basis of irrevocable entitlement (à titreirréductible). In addition, the Board of Directors may grantshareholders the right to subscribe to excess shares withouttrading rights (à titre réductible) over and above the numberof the shares they were entitled to by exercising theirirrevocable entitlement, in proportion to said rights andwithin the limit of their demand;

5. Resolve that if applications for shares on the basis ofirrevocable entitlement and for excess shares without tradingrights fail to account for the entire issue of shares orsecurities provided for under this resolution, the Board ofDirectors may at its initiative allocate all or part of the sharesor securities not taken up, offer to the public all or part ofthe securities not taken up or limit the capital increase to theamount of taken up provided that the take-up accounts forat least three quarters of the amount initially set;

6. Grant the authorization provided for under this resolutionfor 26 months or until June 27, 2014 on which date it shallbe considered to have lapsed if not used by the Board ofDirectors and duly note that this authorization cancels fromthis date onwards the previous authorization granted by the eighteenth resolution of the shareholders’ meeting onApril 23, 2010 with this same purpose, i.e. authorizations to issue stock maintaining shareholders’ preemptive rights;

7. Duly note that the grant of authority under this resolutionentails the automatic waiver in favor of holders of securitiessubsequently giving access to share capital, of their preferentialright to subscribe for those shares to which said securitieswould confer rights, in accordance with the provisions ofarticle L. 225-132 of the French Commercial Code;

8. Decide that the Board of Directors shall be granted the authority, which the latter may further delegate inaccordance with the law, to implement this resolution foreach of the capital increases concerned, and notably to:

- Set the characteristics, amount and procedures for eachissue as well as the securities issued;

- Determine the category of securities issued and set thesubscription price, with or without issue premium, theprocedures for their payment, their date of record, whichmay be retroactive or the conditions according to whichshall be temporarily suspended, in accordance with the

136


applicable legal provisions, the preferential rights of theholders giving access to ordinary shares;

- Set the procedures to maintain, if necessary, the rights of holders of securities giving access to ordinary shares of the company;

- Charge, as necessary, and notably issue expenses incurred,to issue premium;

- And in general, take all useful measures and conclude allagreements to successfully undertake the proposed issues;

- Take all measures and perform all formalities useful for the issue, the listing of the securities and the agencyagreement for the servicing of securities issued under thisauthority as well as for the exercise of rights attached to thesecurities or resulting from capital increases carried out;

- And record the capital increase(s) resulting from the issuecarried out under this authority and amend the articles ofincorporation and bylaws in consequence;

9. Resolve, in the event of the issue of debt instruments(including securities conferring rights the allotment of thedebt securities provided for under article L. 228-91 of theFrench Commercial Code), whether they are subordinatedor not, set their interest rate, stipulate their term and theother terms of issuance and/or redemption/repayment, setthe conditions whereby these securities shall give access toshare capital of the company or for the allotment of debtsecurities, amend during the life of the securities, the aboveterms, in compliance with applicable formalities.

Eleventh resolution

Authority granted to the Board of Directors to issue ordinaryshares and/or securities giving access to the share capital of the Company, immediately or in the future, entailing thecancellation of shareholders’ preemptive rights (€25,000,000)

The shareholders, in accordance with the conditions ofquorum and majority applicable to extraordinaryshareholders meetings, and after reviewing the report of theBoard of Directors and the special report of the Auditorsand in accordance with provisions of Articles L. 225-129-2and L. 225-135 et seq. of the French Commercial Code:

1. Vest the Board of Directors, with the authority, whichthe latter may further delegate in accordance with the law,to increase the capital, through one or several tranches, inFrance or in other countries, in amounts and at such timesit chooses, by issuing in euros or other currencies at thechoice of the Board of Directors (i) ordinary shares as wellas any other securities giving rights to the share capital ofthe company, immediately and/or in future, or (ii) securitiesconferring rights to the allotment of debt securities bysubscription, conversion, exchange, redemption,presentation of warrants or any other means;

2. Resolve that the maximum nominal amount of capitalincreases that may be carried out immediately or in thefuture under this authority may not exceed €25 million.This amount may nevertheless be increased as necessary, by the nominal amount of additional securities to be issuedto preserve, as required by law, the rights of holders ofsecurities conferring rights to equity securities of thecompany. It is furthermore specified that the nominalamount of capital increases that may be carried out,immediately or in the future, under this authorization shall

be included under the maximum authorized amount for capital increases provided for under the fourteenthresolution of this Meeting.

3. Resolve that the maximum nominal amount of debtsecurities of the company that may be issued and givingaccess to shares of the company, immediately or in thefuture, shall not exceed €100 million, it being specifiedthat this maximum amount covers all debt securities thatmay be issued under the authority granted to the Board of Directors by this resolution and the tenth and twelfthresolutions;

4. Resolve to cancel shareholders’ preemptive rights tosecurities to be issued, it being specified that, in compliancewith the provisions of article L. 225-135 of the FrenchCommercial Code, the Board of Directors may establish in favor of shareholders, a subscription priority for all orpart of the issue for a period and subject to conditions set in accordance with applicable laws and regulations. This priority period shall not give rise to the creation of negotiable rights but may be exercised on the basis of irrevocable entitlement (à titre irréductible) according to the exact rights or on a non-preferential basis (à titreréductible) for the excess amounts without trading rights;

5. Duly note that the grant of authority under thisresolution entails the automatic waiver in favor of holdersof securities subsequently giving access to the share capitalof the company, of their preferential right to subscribe forthose shares to which said securities would confer rights, in accordance with the provisions of article L. 225-132 ofthe French Commercial Code;

6. Resolve that capital increases may be carried out for the purpose of payment of shares tendered to the Companyin connection with public exchange offers in accordancewith the provisions of Article L. 225-148 of the FrenchCommercial Code. It is furthermore specified that the totalnominal amount of capital increases under thisauthorization shall be included under the maximumauthorized amount for capital increases provided for underthe fourteenth resolution of this Meeting;

7. Resolve that if applications for shares, including, ifapplicable, those of shareholders, fail to account for theentire issue of shares or securities provided for under this resolution, the Board of Directors may at its initiativeallocate all or part of the shares or securities not taken up,offer to the public all or part of the securities not taken upor limit the capital increase to the amount of taken upprovided that the take-up accounts for at least threequarters of the amount initially set;

8. Grant the authorization provided for under thisresolution for 26 months or until June 27, 2014 on whichdate it shall be considered to have lapsed if not used by theBoard of Directors and duly note that this authorizationcancels from this date onwards the previous authorizationgranted by the nineteenth resolution of the shareholders’meeting on April 23, 2010 with this same purpose, i.e.authorizations to issue stock suspending shareholders’preemptive rights;

9. Resolve in compliance with L.225-136 of the FrenchCommercial Code, that the issue price of shares directlyissued shall be at least equal to the minimum amountprovided for by laws and regulations in force when thisauthorization is used, it being specified that on this date,

137


the minimum price provided for under article R. 225-119of the French Commercial Code equals the weightedaverage price of the last three trading sessions preceding thefixing, that may be subject to a discount not to exceed 5%;

10. Resolve that the Board of Directors shall be granted,which the latter may further delegate in accordance with thelaw, the powers necessary to implement this authority, foreach of the capital increases, for the purpose of notably settingthe terms and conditions of the issue, subscription, payment,recording the completion of the resulting capital increases,and amending the articles of incorporation and bylaws inconsequence, and notably making the same decisions as thosereferred to in point 8 of the tenth resolution;

11. Resolve, in the event of the issue of debt instruments(including securities conferring rights the allotment of debtsecurities provided for under article L. 228-91 of the FrenchCommercial Code), whether they are subordinated or not,set their interest rate, stipulate their term and the otherterms of issuance and/or redemption/repayment, set theconditions whereby these securities shall give access to sharecapital of the company or the allotment of debt securities,amend during the life of the securities, the above terms, incompliance with applicable formalities.

Twelfth resolution

Authority granted to the Board of Directors to issueordinary shares and/or securities giving access to the sharecapital of the Company, immediately or in the future,without maintaining shareholders’ preemptive rights byway of an offer as referred to under paragraph ii of articleL.411-2 of the French Monetary and Financial Code

The shareholders, in accordance with the conditionsof quorum and majority applicable to extraordinaryshareholders meetings, and after reviewing the report of theBoard of Directors and the special report of the Auditorsand in accordance with provisions of article L. 225-129 of the French Commercial Code and Paragraph II of ArticleL.411-2 of the French Monetary and Financial Code:

1. Vest the Board of Directors, which the latter may furtherdelegate in accordance with the law, with all authorities toincrease the capital, entailing the suspension of shareholders’preemptive rights, through a “private placement” destinedexclusively for qualified investors or a restricted circle ofinvestors as provided for in subsection II of article L. 441-2of the French Monetary and Financial Code, through oneor several tranches, in France or in other countries, inamounts and at such times it chooses, by issuing in euros orother currencies, at the choice of the Board of Directors (i)ordinary shares as well as any other securities of any naturegiving access by all means, immediately and/or in future toshare capital of the company, or (ii) securities conferringrights to the allotment of debt securities by subscription,conversion, exchange, redemption, presentation of warrantsor any other means;

2. Resolve that the maximum nominal amount of capitalincreases that may be carried out immediately or in thefuture, entailing the suspension of shareholders’ preemptiverights, under this authority may not exceed 15% of theshare capital at the time of the issue. This amount maynevertheless be increased as necessary, by the nominalamount of additional ordinary shares to be issued to

preserve, as required by law, the rights of holders ofsecurities conferring rights to equity securities of thecompany. It is furthermore specified that the nominalamount of capital increases that may be carried out,immediately or in the future, under this authorization shall be included under the maximum authorized amountfor capital increases provided for under the fourteenthresolution of this Meeting;

3. Resolve that the maximum nominal amount of debtsecurities of the company that may be issued shall notexceed €100 million or equivalent consideration for thisamount that may be issued and giving immediate or futureaccess to the share capital of the company, it being specifiedthat this maximum amount covers the total for all debtsecurities that may be issued under the authority granted tothe Board of Directors by this and the tenth and eleventhresolutions;

4. Resolve to cancel shareholders’ preemptive rights tosecurities to be issued, it being specified that, in compliancewith the provisions of article L. 225-135 of the FrenchCommercial Code, that the Board of Directors may establishin favor of shareholders, a subscription priority for all or partof the issue for a period and subject to conditions it shall set in accordance with applicable laws and regulations. This priority period result shall not give rise to the creation of negotiable rights but may be exercised on the basis ofirrevocable entitlement (à titre irréductible) according to theexact rights or on a non-preferential basis (à titre réductible)for the excess amounts without trading rights;

5. Duly note that the grant of authority under this resolutionentails the automatic waiver in favor of holders of securitiesgiving future access to the share capital, of their preferentialright to subscribe for those shares to which said securitieswould confer rights, in accordance with the provisions ofarticle L. 225-132 of the French Commercial Code;

6. Decide that the amount reverting, or that should revert,to the Company for each of the shares issued under thisdelegation of authority, after taking into account, in thecase of the issue of new equity warrants, the issue price ofthese warrants, shall at least equal the minimum requiredby law and regulations applicable on the issue date;

7. Grant the authorization provided for under thisresolution for 26 months or until June 27, 2014 on whichdate it shall be considered to have lapsed if not used by the Board of Directors and duly note that this authorizationcancels from this date onwards the previous authorizationgranted by the twentieth resolution of the shareholders’meeting on April 23, 2010 unused to date and destinedfor the same purpose;

8. Resolve in compliance with L. 225-136 of the FrenchCommercial Code, that the issue price of shares directlyissued shall be at least equal to the minimum amountprovided for by laws and regulations in force when thisauthorization is used, it being specified that on this date,the minimum price provided for under article R. 225-119of the French Commercial Code equals the weightedaverage price of the last three trading sessions preceding thefixing, that may be subject to a discount not to exceed 5%;

9. Resolve that the Board of Directors shall be granted, whichthe latter may further delegate in accordance with the law,the powers necessary to implement this authority, for each of the capital increases, for the purpose of notably setting the

138


terms and conditions of the issue, subscription, payment,recording the completion of the resulting capital increases,and amending the articles of incorporation and bylaws inconsequence, and notably making the same decisions as thosereferred to in point 8 of the tenth resolution;

10. Resolve, in the event of the issue of debt instruments(including securities conferring rights the allotment of thedebt securities provided for under article L. 228-91 of theFrench Commercial Code), whether they are subordinatedor not, set their interest rate, stipulate their term and theother terms of issuance and/or redemption/repayment, set the conditions whereby the securities shall give access tothe share capital of the company or the allotment of debtsecurities, amend during the life of the securities, the aboveterms, in compliance with applicable formalities.

Thirteenth resolution

Authority granted to the Board of Directors to increasethe number of shares to meet excess demand

The shareholders, in accordance with the conditions of quorum and majority applicable to extraordinaryshareholders meetings, and after reviewing the report of theBoard of Directors and the special report of the Auditorsand in accordance with provisions of Articles L. 225-135-1and R. 225-118 of the French Commercial Code:

- Vest the Board of Directors, which the latter may furtherdelegate according to the law, with the authority to increasethe amount of each issue, with or without shareholders’preemptive rights, as provided for above by the ninth,eleventh and twelfth resolutions, at the same price retainedfor the initial issue, subject to the periods and limitsprovided for by applicable regulation on the date of theissue (today, within 30 days from the end of the subscriptionperiod and within the limit of 15% of the initial issue);

- Decide that the nominal amount of the capital increasedecided by virtue of this resolution shall be included underthe maximum amount provided for under the fourteenthresolution as well as the specific limit of the resolution usedfor the initial issue;

- Grant the authorization provided for under this resolutionfor 26 months or until June 27, 2014 on which date it shallbe considered to have lapsed if not used by the Board ofDirectors;

- Duly note that this authorization cancels as of today andreplaces the previous authorization granted by the twentyfirst resolution of the shareholders’ meeting of April 23, 2010,unused to date and destined for the same purpose.

Fourteenth resolution

Maximum aggregate amount of capital increases givingpresent or future rights to the share capital underauthorizations granted

The shareholders, in accordance with the conditions of quorum and majority that apply at extraordinaryshareholders meetings, and after having reviewed the Boardof Directors’ report, and in compliance with the provisionsof articles L. 225-129-2 of the French Commercial Code setthe maximum aggregate amount of present or future capitalincreases at:

1. €75,500,000, for issues authorized by resolutions 10, 11,12 and 15, it being specified that this amount may beincreased, as necessary, by the nominal amount of additionalshares to be issued to preserve the rights of holders ofsecurities giving access to shares of the company;

2. €300 million as the maximum total amount for bondsor other debt securities giving access to the share capitalthat may be issued by virtue of authorizations thereof.

All these amounts that remain subject to the maximumauthorized capital increase do not take into account theconsequences of adjustments that might be made, incompliance with the law pursuant to issuance of securitiesgiving future rights to the share capital.

Fifteenth resolution

Authority granted to the Board of Directors to proceedwith capital increases reserved for employees participatingin a Company savings plan in accordance with articleL. 225-129-6 of the French Commercial Code andentailing the suspension of shareholders’ pre-emptiverights in favor of employees

The shareholders by virtue of the preceding resolutions, in accordance with the conditions of quorum and majorityapplicable to extraordinary shareholders’ meetings and afterreviewing the Board of Directors’ report and the Auditors’report in accordance with articles L.225-129-6 and L.225-138-1 of the French Commercial Code and articlesL.3332-18 et seq. of the French Labor Code:

- Grant authority to the Board of Directors, which thelatter may further delegate as permitted by law, at its solediscretion, to increase the capital, in one or moretransactions in amounts and at times of its choosingthrough the issue of common stock reserved for employeesof the company or affiliated companies in accordance withapplicable laws belonging to a company savings plan;

- Cancel in favor of employees entitled to benefit fromrights issues that may be decided by virtue of thisauthorization, the preemptive rights of shareholders to new shares that shall be issued in consequence;

- Resolve that the maximum nominal amount of capitalincrease(s) that may be carried out by virtue of thisresolution shall be €500,000, whereby this amount mayhowever be increased as necessary by the amount ofadditional securities that must be issued to preserve, asrequired by law the rights of holders of securities, givingaccess to the shares of the company;

- Grant full authority to the Board of Directors within the above limits and conditions for the purpose ofimplementing the authority hereby granted, includingnotably to:

- Determine the list of grantees benefiting from thesuspension of preemptive subscription rights, the numberof shares to be granted to each qualifying employee andthe issue price subject to the limits imposed by articlesL.225-138-1 of the French Commercial Code and articlesL.3332-19 et seq. of the French Labor Code;- Determine the dates and procedures for the capitalincrease(s); - Receive applications for shares and determine theprocedures for their payment;

139


- Produce a supplemental report describing the final termsof the offering, and in general, take all measures andundertake all formalities required for the issue, the listingof the securities and custodial and related services forsecurities covered by this authorization, and amend thearticles of the bylaws in consequence;

- Grant the authorization provided for under this resolutionfor 26 months from the date of this meeting or untilJune 27, 2014.

Sixteenth resolution

Modification Article 18 of the bylaws relating to regulated agreements

The shareholders, in accordance with the conditions of quorum and majority that apply at extraordinaryshareholders meetings, after having reviewed the Board ofDirectors’ report, decide to modify Article 18 of the bylawsfor the purpose of harmonizing its provisions on currentoperations and transactions concluded under normalconditions with applicable laws pursuant to the law of May 17, 2011.

In consequence, Article 18 shall be replaced in full by the following text:

“Any agreement that is entered into, either directly or throughanother person, between the Company and a member of itsBoard of Directors, its Chief Executive Officer, one of itsDeputy Chief Executive Officers or a shareholder holding apercentage of the voting power above the applicable threshold(if such shareholder is a legal entity, the company that controlsit within the meaning of Article L. 233-3 of the FrenchCommercial Code) must be submitted to the prior approval of the Board of Directors.

The same procedure shall stands for agreements in which oneof the persons mentioned in the preceding paragraph has anindirect interest, as well as agreements entered into between the Company and another company, if a director, the ChiefExecutive Officer or a Deputy Chief Executive Officer of theCompany has an ownership interest in the latter; is an unlimitedpartner, manager or trustee; is a member of its supervisory board;or, in general, is a director and/or officer therein.

The foregoing provisions do not apply to agreements entered intoin the ordinary course of business and on arms’ length terms.”

Seventeenth resolution

Modification Article 19 of the bylaws relating to general meetings

The shareholders, in accordance with the conditions of quorum and majority that apply at extraordinaryshareholders meetings, after having reviewed the Board of Directors’ report, decide to modify Article 19 of thebylaws relating to “General Meetings” for the purpose ofharmonizing its provisions with laws and regulations and in particular new regulations on the electronic signature of forms for voting by mail and proxy forms issued inconnection with general meetings of French limitedcompanies (sociétés anonymes), resulting from DecreeNo. 2011-1473 of November 9, 2011 on formalitiesgoverning communications under French company law.

In consequence, Article 19 shall be replaced in full by the following text:

“THE CALLING OF MEETINGS.

Shareholders’ meetings are called and conduct proceedingsaccording to the conditions set by law.

Meetings will be held at the registered office or at any otherplace indicated in the notice of meeting.

Collective decisions of shareholders are adopted in Ordinary,Extraordinary or Special General Meetings depending on thenature of the decisions involved.

Shareholders are called by the Board of Directors to attendGeneral Shareholders’ Meetings or by the Statutory Auditors, or by a court-appointed trustee according to the terms andconditions provided for by law.

General shareholders’ meetings are called by a notice placed ina publication for legal announcements in the department of theregistered office in addition to the French national publicationfor legal announcements (Bulletin des Annonces LégalesObligatoires or BALO) at least fifteen days before the date of the Meeting.

Shareholders holding registered shares for at least one monthfrom the date of publication of the notice of meeting will alsobe called to attend any meeting by ordinary mail, or, uponrequest and at their expense by registered letter.

When the shareholders’ meeting was unable to conductproceedings due to the absence of the required quorum, thesecond meeting, and where applicable, the postponed secondmeeting, is called at least six days in advance in the samemanner used for the first meeting. The notice of and letterscalling the second meeting shall repeat the date and the agendaof the first meeting notice.

ACCESS TO MEETINGS - REPRESENTATION

Any shareholder may attend meetings in person or by proxyregardless of the number of shares owned, subject to proof ofidentity and ownership of shares, either in registered form in thename of the shareholder, or by a certificate issued by theauthorized financial intermediary maintaining the securitiesaccount confirming that the bearer shares are nontransferable, no later than the third business day preceding the date of theShareholders’ Meeting at midnight, Paris time.

All shareholders may be represented at meetings in accordance withthe provisions provided for by law. A shareholder may only berepresented by his/her spouse, or by another shareholder holding a valid proxy. Shareholders may also vote by mail according toconditions provided for by law and set forth in the Meeting notice.

Any shareholder may also, if the Board of Directors decides whencalling the meeting, participate through videoconferencing or by any means of telecommunications or remote transmissionincluding online participation through the Internet, under theconditions provided by regulations in force at that time. Whenapplicable, this decision will be announced in a meeting noticepublished in the French publication for legal announcements(Bulletin des Annonces Légales Obligatoires or BALO).

Those shareholders using, within the specified time periods, the electronic voting form made available on the website by thecentralizing entity for the shareholders’ meeting, are considered asshareholders that are present or represented. Electronic forms maybe completed and signed directly in accordance with the first line

140


of the second subsection of Article 1316-4 of the French CivilCode (Code Civil), notably by means of an identifier andpassword. The proxy or voting forms completed electronicallyprior to the meeting, as well as the acknowledgment of receiptthat will be given in reply, will be considered as irrevocablewritten proof and binding on all parties. Notwithstanding theforegoing, in the event shares are sold or otherwise legallytransferred before the third business day preceding theShareholders’ Meeting at midnight (Paris time), the Companyshall invalidate or modify accordingly, as the case may be, the voteby proxy or voting form before this date and time.

RECORD OF ATTENDANCE - COMMITTEE -MINUTES

An attendance sheet, duly signed by the shareholders presentand the proxies to which are attached the powers given to eachproxy and, where applicable, the mail voting forms, is certifiedas authentic by the officers of the Meeting.

Shareholders’ Meetings are chaired by the Chairman of theBoard of Directors or, in his/her absence, by a Directorspecifically appointed for this purpose by the Board. Otherwise,the Meeting itself shall elect a Chairman.

Vote counting shall be performed by the two shareholders whoare present and accept such duties, representing, either on theirown behalf or as proxies, the greatest number of votes.

The officers of the Meeting shall appoint a secretary who is notrequired to be a shareholder.

The minutes shall be prepared, and copies or excerpts of theproceedings shall be issued and certified as required by law.

QUORUM – VOTE

Ordinary and Extraordinary General Shareholders Meetingsissue decisions according to the conditions of quorum andmajority required by the provisions which govern themrespectively.

Voting rights attached to the capital shares and dividend-right(bonus) shares are proportional to the percentage of the sharecapital that such shares represent. Each share confers one votingrights.

Fully paid up shares registered in the name of the sameshareholder for at least three years carry a double voting right.The conditions for exercising this double voting right aredefined above in Article 11”.

Eighteenth resolution

Powers

All powers are granted to the bearer of copies or extracts of the minutes of this shareholders’ meeting ruling inaccordance with the conditions of quorum and majoritythat apply at extraordinary general meetings to perform all legal formalities relating to the above resolutions.

141


HISTORY OF THE COMPANY

142

History of the companyTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

1982

Creation of Interparfums SA in France by Philippe Bénacin and Jean Madar

1985

Creation of Interparfums Inc. in the United States, parent company of Interparfums SA

1988

Beginning of the selective perfume activity with the signature of a license agreement for the Régine’s brand

Initial public offering of Interparfums Inc. on NASDAQ in New York

1993

Signature of a license agreement to create and produce perfumes under the Burberry name and distribute them worldwide

1994

Listing of Interparfums SA on the over-the-counter market of the Paris stock exchange

Acquisition of the Molyneux and Weil brands

1995

Transfer of the company from the over-the-counter market to the Second Market of Paris stock exchange with a rights issue

1997

Signature of a license agreement to create and produce perfumes under the S.T. Dupont name and distribute them worldwide

1998

Signature of a license agreement to create and produce perfumes under the Paul Smith and distribute them worldwide

1999

Signature of a license agreement to create and produce perfumes under the Christian Lacroix and distribute them worldwide

2000

Extension of the license agreement for the Burberry brand

2004

Signature of a new Burberry license agreement for the Burberry brand

2006

Extension of the S.T. Dupont license agreement

Signature of a license agreement for the Quiksilver and Roxy brands

2007

Signature of a license agreement to create and produce perfumes under the Van Cleef & Arpels brand and distribute them

worldwide

2008

Extension of the Paul Smith license agreement

2009

Signature of a license agreement to create and produce perfumes under the Jimmy Choo brand and distribute them worldwide

2010

Signature of a license agreement to create and produce perfumes under the Montblanc brand and distribute them worldwide

Extension of the license agreement for the Burberry brand

Signature of a worldwide license agreement to create and manage new and existing fragrances under the Boucheron brand

2011

Signature of a license agreement to create and produce perfumes under the Balmain brand and distribute them worldwide

Signature of a license agreement to create and produce perfumes under the Repetto brand and distribute them worldwide

Extension of the S.T. Dupont license agreement

143

History of the companyTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

AUDITORS AND RESPONSIBILITY STATEMENTS

144

Auditors and responsibility statementsTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

AuditorsThe statutory auditors having issued reports on the parent company and consolidated financial statements are:

Mazars SFECO & Fiducia Audit

61 rue Henri Regnault 50 rue de Picpus92400 Courbevoie 75012 Parisrepresented by Simon Beillevaire represented by Gilbert Métoudiappointed by the AGM of December 1, 2004 appointed by the AGM of May 19, 1995reappointed by the AGM of April 20, 2007 reappointed by the AGM of April 20, 2007expiration date: 2013 AGM expiration date: 2013 AGM

The alternate auditors are respectively:

M. Guillaume Potel M. Serge Azan

61 rue Henri Regnault 16 rue Daubigny92400 Courbevoie 75017 PARISappointed by the AGM of December 1, 2004 appointed by the AGM of May 19, 1995reappointed by the AGM of April 20, 2007 reappointed by the AGM of April 20, 2007expiration date: 2013 AGM expiration date: 2013 AGM

Auditors’ fees are described in section 6.7 of the notes to the consolidated financial statements.

Responsibility statement for the registration documentI hereby certify that, to my knowledge and after all due diligence, the information contained in this registration document istrue and accurate and contains no omissions likely to affect the import thereof.

I declare that, to the best of my knowledge, the financial statements have been prepared in accordance with the applicablefinancial reporting standards and give a true and fair view of the assets and liabilities, financial position and results of theoperations of the Company and consolidated companies and that the management report included this Registration Documentfaithfully presents business trends, the results and financial position of the company and the description of the main risks anduncertainties.

The Statutory Auditors’ Report on the original French language version of the consolidated and separate financialstatements for the fiscal year ended 2011 for which they issued unqualified opinions without reservations are presented inthis document on page 47 and page 67.

I have obtained a completion of work letter from the statutory auditors indicating that they have read this document in its entiretyand reviewed the information contained herein regarding the company’s financial position and financial statements.

The statutory auditors have issued reports on the historical financial information for 2010 and 2009, included on respectivelypages 47 and 67 of the French language original of the registration document (document de référence) filed with the AMF onApril 6, 2011 and pages 43 and 62 of the 2009 registration document filed with the AMF on April 1, 2010, without qualifiedopinions or comments.

Philippe BénacinChairman & Chief Executive Officer

Executive officer responsible for financial informationPhilippe SantiChief Financial and Administrative [email protected] (33)1 53 77 00 00

145

Auditors and responsibility statementsTWO THOUSAND ELEVEN REGISTRATION DOCUMENT INTERPARFUMS

Requests for informationTo receive information or be added to the company’s financial communications mailing list contact the Investor Relations department (attention: Karine Marty):

Telephone: +33 800 47 47 47Fax: +33 (0)1 40 74 08 42Via the website: www.interparfums.fr

146

Design: Agence Marc PraquinPHOTOS: PHÉNOMÈNE / PHILIPPE JACOB, ENGUERRAN OUVRAY

This annual report is printed on 100% recyclable and biodegradable coated paper, manufactured from ECF(Elemental Chlorine Free) bleached pulp in a European factory certified ISO 9001 (for its quality management),ISO 14001 (for its environmental management), CoC PEFC (for the use of paper from sustainably managed forests)and is EMAS-accredited (for its environmental performance).

PEFC/10-31-2043

INTERPARFUMS.FR

4 ROND-POINT DES CHAMPS ÉLYSÉES75008 PARISTEL. +33 1 53 77 00 00