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FINANCIAL STATEMENT AND CONSOLIDADED TWO THOUSAND AND TWELVE CPL CONCORDIA Soc. Coop. Via A. Grandi 39 - 41033 Concordia s/S. (MO) Italy - tel. +39.0535.616.111 - fax +39.0535.616.300 - info@cpl.it www.cpl.it

Financial statement

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Financial statement

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INDEX


1 CPL CONCORDIA corporate bodies pag. 6 Governance pag. 10 Control bodies pag. 12 Organisation

2 report on operation pag. 18 pag. 30

Minutes of the ordinary members’ meeting Standardised management report to the CPL CONCORDIA financial statements and Consolidated Financial Statements

3 consolidated Balance Sheet 2012 pag. 68 Consolidated balance Sheet pag. 74 Addendum pag. 116 Certification report

4 balance Sheet 2012 pag. 120 Balance Sheet pag. 126 Certification report pag. 127 UNI EN ISO 9001:2008 Certification


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|CHAPTER |1


CPL CONCORDIA corporate bodies


GOVERNANCE

CPL’s governance is a corporate system made up of different governing bodies with different functions and powers, which develop strategies and organise, monitor and improve the cooperative’s services. Through these bodies the cooperative id directed and controlled. The players involved are: the Members’ Meeting, the Board of Directors, the Executive Committee, the Board of Auditors, the Supervisory Body and the external Auditing Firm.

Members’ Meeting

All the cooperative members have the right to attend the Members’ Meeting (ordinary and extraordinary), as well as the financing and honorary members when foreseen by the resolution to convene the meeting. The Members’ Meeting is CPL’s highest governing body and, as foreseen by the cooperative’s bylaws, every year it carries out the following tasks: approval of the financial statements, election for the partial replacement of the members of the board of directors; furthermore it appoints the other corporate offices, adopts the bylaws and internal operational regulations, decides on the establishment of funds for the development of mutuality activities and on any matter submitted to the Board of Directors. The Members’ Meeting may draft specific reccomendations or ideas for the improvement of operations to be submitted to the Board of Directors. The activities of the Members’ Meeting are complemented by those of the Special Meeting of the Cooperative Shareholders, whose common representative may attend the Members' Meeting to verify the implementation of the development plans, thus safeguarding their interests.

Board of Directors

CPL is administered by the Board of Directors that represents the Members’ Meeting; an ordinary Members’ Meeting elects the Board of Directors and establishes its remunerations and responsibilities. The Board of Directors is made up of 13 members and every year it appoints the Chairman and Vice- Chairman from its members; it also has the right to appoint one or more managing directors, establishing their powers. To guarantee transparency and to share its activities with the cooperative world, two territorial representatives of Legacoop and Lega Nazionale delle Coperative have a permanent invitation to attend the meetings of the Board of Directors, without being entitled to vote; in this way CPL CONCORDIA has a direct interaction with the surrounding cooperative context. The Board of Directors has the right to perform any activities necessary to achieve the Cooperative’s purpose, including: execution of the resolutions of the Members’ Meeting, drafting of preliminary and final financial statements, preparation of annual and multi-year plans, deliberation on admission and revocation of Members, appointment of technical managers, area managers, sector managers, specialised divison managers and srvice managers and definition of their powers and duties. As part of its functions, the Board of Directors annually drafts the Cooperative’s Social Responsibility strategies and approves the social/sustainability reports; the adoption of the Organisation Model 231 and the presence of the Supervisory Body guarantee that there are no conflicts of interest at CPL. Assessment procedures and incentive based remuneration for the achivement of sustainability performancs (social and environmental) are not curretnly foreseen for the members of the Board of Directors. The only assessment process adopted concerns the economic aspect and concerns the assessment of the variation between the performance achieved and the budget objectives. All the members of the Board of Directors are employees of the cooperative.

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Roberto Casari Daniele Spaggiari

Fabio Bulgarelli

Enrico Benetti

Arturo Caracciolo

Elena Galeotti

Giulio Lancia

Alfredo Lupi

Emanuele Malavasi

Lorenzo Moscetta

Carlo Porta

Mario Guarnieri

Nicola Verrini

Members of the Board of Directors The composition and holding ratios of the Board of Directors are included in the Sustainability Report in chapter 1.7

Name Functions and tasks Role Roberto Casari Chairman of the Board Chairman of Directors - not executive Mario Guarnieri Vice-Chairman of the Management Control and Board of Directors - executive Auditing Manager Daniele Spaggiari Managing Director - executive Environment and Safety Service Manager & Building Sector Manager Enrico Benetti Director - executive Project manager Arturo Caracciolo Director - executive Area Manager Elena Galeotti Director - executive Legal Giulio Lancia Director - executive Area Manager Fabio Bulgarelli Director - executive Project Manager Alfredo Lupi Director - executive Area Manager Emanuele Malavasi Director - executive Contact Center Manager and Safety Systems Lorenzo Moscetta Director - executive Area Manager Carlo Porta Director - executive Sector Manager Nicola Verrini Director - executive Area Sales Manager

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Executive Committee

The Executive Committee is the heart of CPL's management and is responsible for the cooperative's entire strategic and operational activity. Since 1 January 2013, the Committee has been extended to 8 members with a high level of technical and specialised expertise, which represent the cooperative's "technostructure"; the Committee carries out executive tasks in specific areas. The extension of the Committee is the result of a generational turnover that has led to the gradual renewal of CPL’s managers with the arrival of younger people; at the same time, this has met the need to introduce specific skills to tackle the increasing complexity of the market. The members of the committee are assessed on an annual basis, however their incentive based remuneration is only linked to the economic performance and it is not expressly linked to the social and environmental performances achieved by the organisation.


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Mario Guarnieri

Fabrizio Tondelli

Claudio Bonettini

Andrea Ambrogi

Michele Crivellari

Pierluigi Capelli

Massimo Continati

Jenny Padula

Roberto Casari

Members of the Executive Committee Roberto Casari Chairman of the Board of Directors Mario Guarnieri Vice-Chairman of the Board of Directors Fabrizio Tondelli Executive General Manager - industrial Claudio Bonettini Executive General Manager - Italy Andrea Ambrogi Sales Director - Italy Michele Crivellari Sales Director - industrial Pierluigi Capelli Financial Director Massimo Continati Administration and IT Systems Director Jenny Padula Human Resources Director All the members of the Executive Committee are independent, i.e. they are not financially involved in the organisation and do not have other potential benefits that may lead to conflicts of interest.

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CONTROL BODIES Board of Auditors

The Board of Auditors ensures the observance of the law, bylaws, principles of proper administration and in particular it controls the adequacy of the organisational, administrative and accounting structure of the company and its actual operation. The Board of Auditors, by means of its Chairman, refers to the Members’ Meeting called for the approval of the financial statements, the criteria adopted in company management to achieve the statutory purposes. The Board is made up of three statutory members and two alternate members appointed by the Members’ Meeting, which also appoints the Chairman of the Board of Auditors.

Members of the Board of Auditors Name Role Carlo Alberto Pelliciardi Chairman Domenico Livio Trombone Statutory auditor Mauro Casari Statutory auditor Cristina Clò Statutory auditor Luca Ori Statutory auditor Updated as of 22/06/2013

Supervisory Body

The Supervisory Body is responsible for supervising the effectiveness and assessing the adequacy of the organisation, management and control model, checking it is in conformity with Legislative Decree no. 231 of 8/6/2001, of which the Ethics Code is an integral part. The CPL CONCORDIA Supervisory Body: supervises the application of the Organisation Model in relation to the different types of offences foreseen by the Decree; verifies the effectiveness of the Model and its capacity to prevent the offences foreseen by the Decree from being committed; identifies and proposes to the competent bodies (Board of Directors and Board of Auditors) updates and changes to the Model, to take into account the regulatory changes and the changes in the company’s situation. All CPL CONCORDIA employees are informed of the organisation, management and control Model. In 2012, the training policy mainly targeted 339 managers - project managers and 49 top managers. In 2012 no infringement occurred as regards corruption therefore no measures were adopted in this sense.

Members of the Supervisory Body Name Role Igor Skuk Chairman Maurizio Rinaldi Statutory auditor Luca Costa Statutory auditor Updated as of 22/06/2013

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Auditing firm

Auditing, which is the main control activity carried out on the Cooperative’s accounts, is performed by the appointed external auditing firms. Auditing is obligatory for the Cooperative because the latter issues shares for the general public (cooperative shares). The aim of the activities of the Auditing Firm is to comply with the requirements of article 15 of Law 59 of 31 January 1992 (carried out by Hermes S.p.A.) and those of article 2409 ter of the Italian Civil Code and of article 14 of Legislative Decree no. 39 of 27/01/2010 (carried out by PricewaterhouseCoopers S.p.A). Specifically the auditing firm carries out the following: regularly checks proper bookkeeping and true and fair view of the affairs in the company accounts; verifies whether the financial statements of CPL CONCORDIA and the consolidated financial statements correspond to the accounting records and whether the accounting principles issued by the Italian Accounting Standards Body and by the International Accounting Standards for the consolidated financial statements (IAS-IFRS) are correctly and continuously applied; expresses a written opinion on CPL CONCORDIA’s financial statements and on the consolidated financial statements. The certification letter issued by the Auditing firm is a fundamental element to participate in tenders and to obtain loans and financing.

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ORGANISATION Updated as of 22/06/2013

T erritorial Areas Italy

A1 • Headquarters Concordia - Emilia A2 • Rome - Tyrrhenian A3 • Milan - North West A4 • Sant'Omero - Adriatic A5 • Fano - Umbria A6 • Campania - Calabria - Sicily A7 • Padua - North East A8 • Tuscany A9 • Bologna AS • Sardinia

A7 A3

T erritorial Areas Abroad

A1

A9

A8

A5

A2 A6

A4

AS

E1 • Greece E2 • Romania E3 • Algeria E4 • Tunisia E5 • Poland

A6

A6

S ectors

NG • Natural Gas services and systems* NL • Liquid Gas N3 • Distribution N4 • Information & Communications Technology (ICT) N7 • Construction N8 • Oil & Gas and Power Service N9 • Biogas Maintenance & After Sales Cogeneration

S ervices

T1 • Technical Service - Estimates T2 • Engineering Service T3 • Product Industrialisation

S pecialised divisions

S1 • Construction of Gas, Water, Electrical Power Grids S2 • Construction of Energy Systems and District Heating Networks S3 • Grid maintenance S4 • Heat management & Global Service S5 • Public Lighting S6 • Cogeneration S9 • Photovoltaic and Renewable Sources

*From 1 January 2013 the sectors N1 Odorant & Services and N2 Technological Systems are grouped under the new sector NG

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Corporate

Board of Directors

CPL CONCORDIA SOC. COOP.

Updated as of 22/06/2013

Vice-Chairman*

Chairman*

Members and R.S.I.

Legal Affairs

Tenders

Safety and Environment

CPL ITALY

CPL

Executive General Management Italy*

•Concordia •Rome •Milan •Sant'Omero •Fano •Campania •Padua •Tuscany •Bologna •Sardinia

Engineering

•North West •North East •Tuscany •Adriatic Sea area •Tyrrhenian Sea area •South

Ex. Gen. Man. Staff

Quality

Area Managers

Sales Management Italy*

Sector Managers

Production Services

•Gas distrib. •Maintenance Biogas & After sales •Cogeneration

•Purchases •Warehouse •Vehicles

Technical Service Estimatese

Executive General Management Industrial* •Service systems For natural gas •Information & communication Technology •Oil & Gas •Liquid Gas •Product Industrialization •Rumania and Poland •Algeria and Tunisia •India •Argentina


Supervisory board

Controlling and Auditing

Communication dpt.

Chairman’s Staff

INDUSTRIAL Sales Management Industrial*

Management Board and IT systems*

HR Management*

F&A*

•SAM Impianti Servizi per il Gas Naturale e I.C.T. •SAM Nord Africa e OGP •SAM Estero

IT Systems

* Members of the Executive Committee

Administration

Recruiting And training

Treasury planning

Parent company treasury

Credit Management

Insurances, bank guarantees, leasing

Wages


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|CHAPTER |2


Report on operation


MINUTES OF THE ORDINARY MEMBER'S MEETING

Minutes of the ordinary members’ meeting

On this day, Friday twenty-first of June two thousand and thirteen, at 9:00 a.m., in the Sala Bruno Bighi of the registered office in Via A. Grandi no. 39, Concordia sulla Secchia, Italy, the Ordinary Members’ Meeting was held, following regular convocation notice published according to the corporate bylaws in the Official Gazette of the Italian Republic no. 64 of 01/06/2013, to discuss and decide on the following: AGENDA 1) Proposal of refund allocation, according to art. 62 of the bylaws; 2) Financial statements as of 31 December 2012: reports and decisions; 3) Partial renewal of the Board of Directors; 4) Any other business. Roberto Casari, Chairman of the Board of Directors was present at the registered office in Concordia sulla Secchia (MO), and he called upon Mr. Fabio Sereni – representative of the Company’s Legal Office - to assist him in drafting these minutes. The Chairman, having acknowledged that no other Member, apart from himself and Fabio Sereni, was present at the registered office, acknowledged that, according to articles 45 and 46 of the bylaws in force, the Members’ Meeting was not legally constituted. He therefore postponed the meeting to be held on second call, convened with the same notice, on 22 June 2013 at 9:00 a.m. The Secretary The Chairman (Fabio Sereni) (Roberto Casari)

Minutes of the ordinary members’ meeting 22nd june 2013

On this day, Saturday twenty-second of June two thousand and thirteen, the Ordinary Members’ Meeting of the Company CPL Concordia Soc. Coop., duly convened by notice published according to the corporate bylaws in the Official Gazette of the Italian Republic no. 64 of 01/06/2013, met on second call at 9:00 a.m. at the registered office in Via A. Grandi no. 39, Concordia sulla Secchia, Italy, to discuss and decide on the following: AGENDA 1) Proposal of refund allocation, according to art. 62 of the bylaws; 2) Financial statements as of 31 December 2012: reports and decisions; 3) Partial renewal of the Board of Directors; 4) Any other business. In compliance with the bylaws, given the temporary absence of the Chairman of the Board of Directors, the meeting was chaired by Mr. Mario Guarnieri, Vice-Chairman of the Board of Directors. The Meeting, following the proposal of the chairman of the meeting, appointed with favourable and unanimous vote of those present, the Member Fabio Sereni as Secretary, who thanked and accepted. The Chairman of the meeting, given that in the meantime the Chairman of the Board of Directors had reached the place in which the Meeting was being held, having ascertained the presence of all the Directors and of the Members of the Board of Auditors, after informing the participants that: - on the date, Cooperative Members registered in the Members’ Register totalled 719;

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- on the date, the Investor Members registered in the Members’ Register totalled 72; having verified the identity and the legitimacy of the participants, communicated that there were no. 677 members present at the meeting, legitimated by their registration in the Members’ Register, including cooperative members and investor members, personally present or represented by means of proxy; the participants are listed in the annex sub A. The Chairman pointed out that 9 of the participating members did not have right of vote as they had been registered in the Members' Register for less than 3 months. In addition the following people were present at the Meeting as guests: Salvatore Caronna Member of the European Parliament, the Chairman of Legacoop Nazionale Mr. Giuliano Poletti, the Chairman of Legacoop Modena Mr. Lauro Lugli, the Chairman of the Emilia Romagna Regional Council Palma Costi, the Head of Police of Modena Mr. Oreste Capocasa, the Emilia Romagna Regional Councillor for Production Activities Mr. Gian Carlo Muzzarelli and all the representatives of the delegations of some countries with which CPL does business or where it has operational offices. The Chairman of the meeting declared the Meeting duly formed and went on to deal with the matters on the Agenda.

FIRST ITEM •

The Chairman of the Meeting, Mr. Mario Guarnieri, welcomed the Members and thanked them for being present at the Meeting; he then opened the Meeting with a speech to remember that one year had passed since the earthquakes of 20 and 29 May 2012. He remembered the deceased and the people injured during the earthquake and those who lost their houses and jobs. There are still thousand of people in this condition. He also remembered with gratitude, all those people, companies, cooperatives, bodies and associations that offered their support to the cooperative and to the local area in those crucial moments. All the members acted and reacted as one. He also expressed a special thanks to the Members of the 10 subsidiaries in Italy who, thanks to their commitment, allowed the CPL to continue business, giving all their support and making up for the forced deficiencies of the headquarters. This year we have decided to come back to Concordia, here, the place where, even if everything is not perfectly in order yet, everything started 114 years ago. The place where business will continue also in the next years without delocalising or making cut backs; we will continue to give our support to a territory that has lived terrible moments but has not given up. We did this metaphorically under the tensile structures that for months last year protected us against the hot sun, in the same area in which we had placed most of the 130 containers that we will never forget, but which allowed us to find a bit of peace during the most difficult months last summer. Last year we had proof that in times of trouble people give the best of themselves, whole heartedly. Despite not having a home anymore, people came to work every morning to help recover material and to start up again the basic services necessary to make the company operational; the results of this commitment can be seen in the data examined here today. Today we must bear in mind that spirit because we are faced with another type of earthquake, the deep economic and political crisis that has hit this country. The only way to overcome it is to react like we did one year ago. The Company has used the earthquake as opportunity to rethink its logistic and corporate structure and has developed new spaces, including a new business unit related to technological campuses and smart cities. Thirteen months after the earthquake, we can state that CPL suffered a hard blow but thanks to the strength of its people it has reacted, safeguarding business and increasing the number of jobs. We must continue in this direction to achieve our mission to create employment and wealth in the territories in which we operate. At this point, the Chairman of the Meeting gave the floor to the Administration and Information Systems Director to discuss the item on the agenda concerning the proposal for the allocation of the refund according to art. 62 of the bylaws. Massimo Continati, Administration and Information Systems Director, informed those present that in order to continue the process of capitalization of the Cooperative, as well as to retain and reward the contribution of its members, the Board of Directors proposed, by virtue of the good results of

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the financial year, to allocate to each cooperative member, pursuant to art. 3 paragraph 2, letter b) of Law no. 142 of 3 April 2001 and subsequent amendments, by way of refund, an amount determined in relation to the quantity and quality of the work performed during the year 2012. The amount proposed by the Board of Directors to the Meeting, to be divided between the members on the basis of the above criteria amounts to Euro 1,700,000; this amount is already posted under item B9 of the Profit and Loss Account as part of personnel costs as supplement of remuneration paid to working members in 2012, 50% to be allocated to the free increase of the capital subscribed and paid and the remaining 50% to be allocated as supplement to the remuneration due to the cooperative members; both these allocations are foreseen by article 62 of the bylaws and pursuant to and by effect of art. 6, second paragraph of Decree Law no. 63/02, converted into Law No. 112/02. It should be noted that this proposal is based on the so-called "Productivity Remuneration" for the improvement in productivity and therefore profitability, considering that the Gross Operating Margin of CPL Concordia as of 31 December 2012 amounted to Euro 28,070,885 equal to 8.14 % of the production value; the Group’s same value amounted to Euro 47,548,849 showing a significant increase compared to the previous year’s amount of Euro 44,680,030. This value expresses the company’s capacity to produce income from the ordinary management (heat management, network maintenance, sale of odorant, etc...). It should also be noted that despite the major downturn of the markets, the Cooperative developed a production value of Euro 344.8 million in 2012, compared with Euro 332 million in the previous financial year. These improvements must be considered in relation to the Budget 2012 and the Preliminary Financial Statements. In some cases, the improvement is also considered in relation to the ratios of the previous financial year, net of the extraordinary effects related to the earthquakes in May 2012. Please note also that the amount of the refund was accurately verified in relation to the so-called "operating surplus"; the Cooperative’s overall operating surplus, equal to Euro 8,475,661, multiplied, for the purpose of the refund, by the percentage of prevalence equal to 61.26%, means that the operating surplus from the members’ business was of Euro 5,191,936, which is much higher than the refund of Euro 1,700,000 posted under item "B9" of the profit and loss account. To confirm what has been stated so far in terms of significant performance, we briefly analysed the main financial ratios already commented in the Management Report. As regards the financial ratios of the Parent Company, the ROI (Return on Investment > ratio between operating result and capital employed) was equal to 2.3%. This ratio expresses the profitability achieved by the Cooperative from the ordinary management (heat management, network maintenance, sale of odorant, etc...). The calculation does not include financial charges, earnings from equity holdings and taxes. Another ratio that expresses the profitability achieved ​​by the members and cooperative shareholders that subscribed the capital shares is the ROE (Return on Equity> Ratio between net income and equity), which was 5.1% in 2012 compared to 7.2% in 2011; the Net Income in 2012 was affected by extraordinary charges related to the 2012 earthquake, for a total of Euro 3.2 million (damage to property, localisation of employees, hire of motorhomes and containers), as well as a number of provisions due to the higher risk of the markets. With regard to the financial ratios of the parent company, the interest-bearing debt ratio (ratio between financial debt and net equity), which is the ratio that shows to what extent the Cooperative is financed by equity and to what extent it uses third party capital, was equal to 0.46 clearly below the "safety zone" of 1.5. This value is 1 when equity and third party capital are the same. The higher the ratio, the higher the company's debt. Finally, the ratio between financial debt and gross operating margin, commonly used by banks to assess the solvency of businesses, which measures the ability to fulfil the commitments made with the lending institutes using the liquidity generated by the core business, amounted to 2.28 in 2012, a very positive ratio as it was less than 4.5 of the "safety zone". A high value of this ratio indicates a high level of financial debt and/or weak operating cash flows. It can be seen that in the previous years, the main financial ratios remained within values of absolute balance. As regards the financial ratios of the Group, the ROI, despite being strongly influenced by provisions and by the costs resulting from the earthquake in May 2012, previously commented, was equal to 3.9% in 2012, while in the previous year it was equal to 4.4%; despite

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the continuing economic crisis, the profitability of the ordinary management (ROI, GOM, OR) remained in line with the excellent values of the previous years with a significant improvement compared to those budgeted. The ROE of the CPL Group was equal to 7% compared to 8.4% in the previous financial year; the net profit of the group was also affected by the extraordinary costs incurred by the parent company for the post-earthquake management. As regards the financial ratios, also at Group level, the main ratios remained within values​​ of absolute balance, and they actually improved compared to the previous financial year. In general, all the ratios calculated in the financial year 2012 were positive. The balance of this data is important to obtain a positive rating by the banks that finance the Cooperative and the Group. The ratio of interest-bearing debt of the Group amounted to 0.87 (less than 1.5 is a positive value), the ratio between financial debt and GOM was 2.52 (less than 4.5 is a positive value), and the ratio between operating income and net financial charges was 7.95 (greater than 2 is positive value), confirming the improvement of productivity of CPL Group's business and of its profitability. After the presentation, Mario Guarnieri, Chairman of the Meeting submitted for approval the proposal for refund as presented by Mr. Continati, the Administration Director, and already included in the Financial Statements submitted for approval in section 2 below. The Members’ Meeting after careful revision and counter-checking, unanimously DECIDED To divide between the members, on the basis of the above criteria, the amount of Euro 1,700,000; this amount is already posted under item B9 of the Profit and Loss Account as part of personnel costs as supplement of remuneration paid to working members in 2012, 50% to be allocated to the free increase of the capital subscribed and paid and the remaining 50% to be allocated as supplement to the remuneration due to the cooperative members; both these allocations are foreseen by article 62 of the bylaws and pursuant to and by effect of art. 6, second paragraph of Decree Law no. 63/02, converted into Law No. 112/02.

SECOND ITEM • As regards this agenda item, the Chairman of the Meeting, Mr. Guarnieri took the floor and continued the meeting by showing a video to explain to all present the main activities carried out by CPL Concordia and the Group and the economic and financial results achieved in 2012. At the end of the video the Chairman of the meeting gave the floor to Mr. Massimo Continati, the Administration and Information Systems Director, for a detailed presentation of the financial statements. Mr. Continati illustrated the main figures of the financial statement as of 31/12/2012 (amounts expressed in Euro). PROFIT AND LOSS ACCOUNT Value of production Costs of production Labour cost Gross operating margin (GOM) Depreciations and devaluations Operating result PROFITS BEFORE TAX Taxes PROFIT FOR REPORTING YEAR

344.888.212 -258.453.224 -58.364.104 28.070.885 -16.295.446 11.775.439 9.338.777 -2.563.116 6.775.661

The figures indicate a very positive business trend of the Cooperative, as shown by the increase in value of production (from Euro 332,058,254 as of 31/12/2011 to Euro 344,888,212) and by the break even of the Gross Operating Margin. Mr. Continati illustrated the main figures of the financial statement of the CPL Concordia Group as of 31/12/2012 (amounts expressed in Euro).

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PROFIT AND LOSS ACCOUNT Value of production Costs of production Labour cost Gross operating margin (GOM) Depreciations and devaluations Operating result PROFITS BEFORE TAX Taxes PROFIT FOR REPORTING YEAR

411,434,833 -300,934,023 -62,951,961 47,548,849 -24,158,522 23,390,326 15,004,422 –6,286,904 8,717,518

The CPL CONCORDIA Group closed 2012 with a value of production of Euro 411.4 million, up 6% compared to the Euro 388.2 million in 2011. The Gross Operating Margin increased from Euro 44.7 million in 2011 to Euro 47.6 million in 2012, with an increased operating margin equal to 11.6%. The operating profit amounted toEuro 23.4 million, in line with the previous financial year (Euro 23.8 million in 2011). The net equity of the Group amounted to Euro 137.2 million, up 6.2% compared to the Euro129 million in 2011. At this point, the Chairman of the Meeting gave the floor to the Chairman of the Board of Directors, Roberto Casari, for his speech. Mr. Casari, the Chairman, thanked the members for being present, and started his speech remembering last year's earthquake and the negative events that followed, which caused a drastic change in our lives; despite this we have started again with new vigour and enthusiasm. The Chairman Mr. Casari joined the Vice-Chairman Mr. Guarnieri in thanking all the people, companies, bodies and institutions for their help in those terrible moments. The earthquake in figures: over 4000 square meters of offices and warehouses restored; 350 employees are back in the office; Euro 19 million of estimated damage; Euro 3 million is the cost incurred and posted in the current financial statements to deal with the damage caused by the earthquake, not to mention the cost related to the write-down of impaired assets. The Chairman, Mr. Casari, underlined that CPL closed the financial year as of 31/12/2012 with a net profit of over Euro 6.7 million and a production value of Euro 344,888,212. Although the economic crisis shows no sign of ending, CPL can count on a portfolio of works for the future that totals Euro 780 million, deriving from agreements in the heat management, odorant and gas sectors. Over Euro 200 million concern the construction of natural gas grids in Sardinia. Unfortunately the Sardinia project may have to be changed because the GALSI will probably not be built. The GALSI is the gas pipeline that should connect Algeria to Sardinia, but at the moment there is no certainty that this project will implemented for the following reasons: a) there are serious technical difficulties in its implementation because the pipe must be laid in the sea at a depth of 2,000 meters; b) the economic crisis and the general lack of financial means do not encourage Sonatrach, Snam and all other partners to allocate resources to the GALSI project. As an alternative there is a project to feed the Sardinian network by building re-gasification plants and carrying the LNG through our subsidiary Polargas S.r.l. Development of net equity in the last few years. Net equity has always increased, with the exception of year 2004. In the last ten years, net equity has increased from 90 million to 130 million, and this guarantees the soundness of the Cooperative and allows up to compensate the lack of financial resources caused by the overdue payments from the public administrations. The Chairman then pointed out that Italy is going through a serious crisis: GDP has decreased to 2.7% and unemployment has reached 12.8%, not to mention youth unemployment that is very high. In his forty years of life at CPL, of which thirty-seven as President, Mr. Casari does not remember a worse crisis and proof of this is that current energy consumption levels have gone back to those of twenty/thirty years ago! As regards the agreements executed in the gas distribution sector, CPL will develop the natural gas distribution of the towns of Favara and Procida. As regards heat management, CPL has acquired/confirmed major tenders on behalf of the Polytechnic of Milan, of ALER in Milan, ATER in Rome, and for the Health Authority of Modena and Salerno. In the renewable energy sector, to date, we have delivered more than 50 cogeneration plants and set up the district heating network in Turin, Udine and Vignola. In the town of Terranuova

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Bracciolini, we recently inaugurated a biomass district heating plant. The Chairman pointed out that a few days ago, an important agreement was signed with the City of Ravenna for the management of the council’s public lighting, traffic lights and technological systems for a period of 20 years and a value of over Euro 74 million. The Agreement foresees important investments for Euro 8-10 million which in return will offer cost savings thanks to the reduction in costs and the efficiency of upgraded technological systems. CPL Concordia has received much appreciation for the upgrading and containment of energy loss carried out in relation to the public lighting system of the town of San Benedetto del Tronto. Regarding the international markets, CPL’s strategy is to make its products known on a new market before penetrating it. For this reason CPL Industrial has been created, which groups different sectors of CPL and makes it possible to rationalise and favour the sale of products to new channels and sales networks. In 2012 we achieved a turnover of Euro 23 million abroad and the objective is to reach Euro 30 million in 2013. In Algeria, in the Oil & Gas sector, CPL is responsible for the maintenance and revamping of the turbines of a power plant for the production of electricity. In Poland, in collaboration with the Polish company JOKA we have won two tenders for the construction of cogeneration plants. Upcoming developments and prospects are expected in Cuba, Mexico, Chile, Croatia, Dubai and United Arab Emirates. Finally Mr. Casari, the Chairman, underlined that the companies of the Group that distinguished themselves in 2012 for a good economic result are: CPL Distribuzione S.r.l., Coopgas S.r.l., Cristoforetti SER S.r.l., Energia della Concordia S.p.A. that deals with renewable energy, AI Power S.p.A. incorporated under Algerian law and Serio Energia S.r.l., a special purpose company created for the management of the systems of the Bolognini Hospital in Seriate. At the end of 2012, the cooperative employed 1,278 workers, with a slight increase over the previous year, while in the first 5 months of 2013 over 40 people have been employed and another twenty positions are open to designers and graduates in IT, engineering and management. In 2012, the cooperative increased the specialization of its technicians through 25,000 hours of training. CPL Concordia, underlined the Chairman Mr. Casari, also focuses on the research and development of new products and new services, without which no business can have growth prospects or continue to compete on the market. The Chairman, Mr. Casari concluded his speech by highlighting the slow pace of the state and of the Italian bureaucracy, which continue to hinder the development of companies and do not create the conditions to get out of the economic crisis. The most important problem concerns payments: the state does not pay its suppliers or payments are very long term. Law no. 122/2012, a conversion of Decree no. 74 of 6 June 2012, requires the public administration, including the regions, local authorities and the National Health Service, to pay within sixty days certain, liquid and enforceable receivables from companies that supply goods and services or which perform public works, located in the territories affected by the earthquake in May 2012. Despite the state law and following our reminders, the answers we have received from public bodies are daunting: “we do not have the financial resources to pay you”. What trust and prospects can one have in a country where the state disregards its own laws? Then there are the “indirect” taxes: last year CPL had a cost of Euro 600,000 for the payment of motorway tolls. A German company does not have this cost because motorways are free. Another "obstacle" created by the Italian bureaucracy regards the recent anti-mafia regulation introduced by Legislative Decree no. 159/2011 and by the subsequent supplementary and corrective Legislative Decree 218/2012. The so-called anti-mafia checks, which aim to check that a company is not subject to infiltration attempts by the mafia, must be made by ​​ all the Local Authorities before making a payment to a company. The anti-mafia law provides that, following the request for the anti-mafia declaration to the competent prefecture, if this is not received within 45 days, the rule of tacit consent applies, therefore the operations can continue. However, there are certain Local Authorities that do not comply with the law and continue to demand the anti-mafia declaration even after the above mentioned 45 days. In addition, the Prefecture of Modena is not able to issue any measures because it is carrying out the checks only for companies engaged in post-earthquake reconstruction. In conclusion, there are many problems with the local authorities and this stimulates companies to work abroad. At the end of the Chairman’s (Mr. Casari) speech, the MEP Salvatore Caronna, took the floor and from his position in the

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European Parliament he confirmed that the European crisis is extremely serious: there are 120 million people in Europe who live on the edge of the poverty line and some 40 million people are below the food subsistence threshold. To finally see a serious economic recovery, Mr. Caronna believes that a radical departure from the policies of austerity that we have seen so far is necessary. The President of the Emilia Romagna Regional Council, Mr. Palma Costi, referring to the criticism of Mr. Casari towards the state and the bureaucracy, pointed out to those present that the Emilia Romagna Region immediately adopted policies to support businesses after the earthquake. Unlike the central government, the region tries to recognise and concretely solve the problems caused by the earthquake and the economic crisis. In the opinion of the President of the Regional Council, it is necessary to focus on real industrial policies that the Region can’t certainly make, and with reference to Cispadana, the state must decide on which infrastructure to invest. The Regional Councillor for Production Activities, Mr. Gian Carlo Muzzarelli, in his speech expressed great admiration for CPL, which one year after the earthquake has shown great strength in carrying on despite all the difficulties. According to the Councillor Muzzarelli, considering the succession of numerous natural disasters and the big problems related to the procedures for aid and awarding of damage compensation, a Law on natural disasters is necessary to define the competences and criteria to provide, in a fast and fair way, the support measures necessary as well as damage compensation to people and companies. The floor was then taken by Giuliano Poletti, President of the Alleanza Cooperative Italiane (Alliance of Italian Cooperatives). The Alleanza Cooperative Italiane is a new body made up of three cooperative organisations: GCI, Confcooperative and Legacoop. The cooperative movement represents more than 43,000 cooperatives, with 1,300,000 employees, Euro 140 billion sales (equal to 8% of the GDP) and more than 12 million members. The President, Mr. Poletti, explained to those present that the movement has responded well to the crisis because it has taken action in a concrete way and with great spirit of sacrifice by implementing job-security agreements and reducing salaries; these measures have allowed the cooperatives to remain competitive on the market. According to Mr. Poletti, the present crisis is due to the unequal distribution of wealth: the establishment of the Alleanza delle Cooperative Italiane aims to establish a critical mass able to make its voice heard. Cooperation is an important tool to support the social fabric in which we live. At this point, the Chairman of the meeting gave the floor to, Mr. Michele Crivellari, Commercial Director of CPL Industrial, who illustrated the activities of the new Division of CPL and presented the distinguished guests from abroad that collaborate with CPL. Mr. Crivellari explained that CPL Industrial, encompasses the NG sector - Natural Gas sector that offers products and services for gas distribution networks - the LN sector related to Liquefied Natural Gas, the Oil & Gas and Power sector as regards the service offered to the O & G industry. Mr. Crivellari believes that a sector that will have a strong expansion in the near future is shale gas. The following people took the floor to greet those present: Argentine Minister of Agriculture, Constantine Ortez from the company Corsital in Mexico, Andrzej Drodz President of the company JOKA in Poland, Mr. Gristina representative of the company CPL Concordia USA. Then it was the turn of the member Francesco Manicardi to speak. Following the earthquake, his house in the old town centre of Concordia is uninhabitable. Manicardi, also on behalf of all his family, expressed his deep gratitude to all members of the cooperative for the moral and material support provided. The senior Director Mr. Giulio Lancia then greeted all those present, the Board of Directors, the Management and expressed great appreciation for CPL’s achievements in the last financial year. The Chairman of the Meeting, Mario Guarnieri then proposed to those present, on the basis of the results obtained and after having heard the reasoned opinion of the Special Meeting of the Cooperative Shareholders, the approval of the investments for the year 2012 and the allocation of the net profit for the year of Euro 6,775,661 = as follows:

per Euro 357.427,29 = Cooperative Shareholders (subscribers) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00 % per share with a nominal value of Euro 51.64 (code IT00011295960) as of 31/12/2012, payable from 3 July 2013;

per Euro 11.435,16 = Cooperative Shareholders (Stock Option) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00 % per share with a nominal value of Euro 51.64 (code IT00011295960 ) as of 31/12/2012, payable from 3 July 2013;

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per Euro 160.000,00 = Cooperative Shareholders (subscribers) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00 % per share with a nominal value of Euro 500.00 (code IT0003794788) as of 31/12/2012, payable from 3 July 2013;;

per Euro 117.200,00 = Cooperative Shareholders subscribers) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00 % per share with a nominal value of Euro 500.00 (code IT0004431083) as of 31/12/2012, payable from 3 July 2013; per Euro 653.546,19 = as dividend to cooperative members and investor members at the gross rate of 6.00% compared to the capital actually paid, payable from 3 July 2013; per Euro 326.772,84 = 3.00% free capital increase (under Law no. 59/92) of the share capital actually paid, that can be capitalized; per Euro 203.269,83 = 3.00% (three percent) Mutuality Funds for the Promotion and Development of cooperatives pursuant to art. 11 of Law no. 59 of 31.01.1992; per Euro 2.032.698,30 = 30% to the indivisible Legal Reserve Fund, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/02/77; per Euro 2.913.311,39 = o the Ordinary Reserve Fund indivisible between the members during the life of the Cooperative and upon its dissolution, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/02/77; The Chairman of the Meeting, Mario Guarnieri, put the following to the open vote by show of hands: a) the financial statements as of 31/12/2012 and the addendum which forms an integral part; b) the Management Report on the Financial Statements as of 31/12/2012, including the detailed description of the total amount of the refund, already posted in the profit and loss account, as well as the rules for allocation to cooperative members; c) Report of the Board of Auditors on the Financial Statements as of 31/12/2012; d) the allocation of the profit for the reporting year as proposed. The above were approved with unanimous vote by show of hands, after having thoroughly revised and counter-checked all data.

THIRD ITEM • With regard to the third item on the agenda, the Chairman informed the members present of the need to proceed to the partial renewal of the offices. In particular, he specified that for 8 directors the term of office expired with this Meeting; taking into account the provisions of the Election Regulations, as approved in the Meeting held on 23 April 2010, the Chairman proposed to have 13 (thirteen) members of the Board of Directors, with the need therefore to appoint 8 new directors. The Chairman of the Meeting, Mr. Guarnieri then gave the floor to the Coordinator of the Electoral Commission, Alessandra Grisanti, who thanked for the trust and thanked colleagues of the Electoral Commission, and then presented the work of the Commission, explaining the method of voting for the members as provided by the bylaws and by the electoral rules just described by the Chairman. First of all, the Coordinator of the Electoral Commission stated that of the directors to be elected in this election, 6 are of the Headquarters Section, while the remaining 2 directors to be elected are of the External Offices Section. With regard to the list of candidates proposed by the Electoral Committee, the Coordinator Ms. Grisanti pointed out that the outgoing Director Roberto Loschi expressed to the Electoral Commission the desire not to stand as he will be busy in New York City for a year, following the activities that CPL Concordia has recently undertaken through the company CPL Concordia USA. CPL Concordia USA is the new company of the CPL group which has the maintenance agreements of 40 major buildings including the Empire State Building. The electoral coordinator then presented the self-nominations received for the renewal of the Board of Directors and the nominations of candidates independently assessed by the Electoral Commission (in addition to the outgoing Directors who expressed their desire not to stand again); Ms. Grisanti then read out the complete list of candidates: 26

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For the Concordia area - Emilia Romagna: • Bulgarelli Fabio • Casari Roberto • Coppola Paolo • Ferraresi Fausto • Galeotti Elena • Guarnieri Mario

• Malavasi Emanuele • Pini Valentina • Porta Carlo • Resti Andrea • Strazzi Stefano • Zocchi Tiziano Domenico

For external offices: • De Palo Giovanni • Capasso Alessandro

• Lupi Alfredo • Moscetta Lorenzo

At this point, the Chairman of the meeting called on the participants at the meeting to vote the list of candidates proposed by the Electoral Commission. The participants at the meeting approved the list of candidates with unanimous vote by show of hands, after having thoroughly revised and counter-checked the information. Then, the Coordinator of the Electoral Commission, after having heard the members, read out the list of candidates in order of decreasing preference expressed by the members entitled to vot: • Guarnieri Mario • Casari Roberto • Lupi Alfredo (E) • Bulgarelli Fabio • Moscetta Lorenzo (E) • Galeotti Elena • Malavasi Emanuele • Porta Carlo

• Zocchi Tiziano Domenico • Pini Valentina • Ferraresi Fausto • De Palo Giovanni (E) • Coppola Paolo • Capasso Alessandro (E) • Strazzi Stefano • Resti Andrea

The Chairman put to the vote the list of candidates, as drafted by the Electoral Commission. The participants at the meeting unanimously determined as 13 the total number of members of the Board of Directors and approved the list of candidates for the partial renewal of the Board of Directors. The Chairman, therefore, declared the election of the following members as Directors: • Guarnieri Mario • Casari Roberto • Lupi Alfredo (E) • Bulgarelli Fabio

• Moscetta Lorenzo (E) • Galeotti Elena • Malavasi Emanuele • Porta Carlo

who were present at the meeting and declared to accept the office assigned to them. The Chairman pointed out that the Board of Directors of CPL Concordia Soc. Coop., following a partial replacement following today’s meeting shall be as follows: • Benetti Enrico • Bulgarelli Fabio • Caracciolo Arturo • Casari Roberto • Galeotti Elena • Guarnieri Mario • Lancia Giulio

• Lupi Alfredo • Malavasi Emanuele • Moscetta Lorenzo • Porta Carlo • Spaggiari Daniele • Verrini Nicola

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Any other business

Although not included in the agenda, the Chairman asked to discuss the following topic; no Member objected, declaring that they were sufficiently informed. The Chairman of the Meeting, Mario Guarnieri, took the floor; following the resolution of 10 October 2008 the Members' Meeting approved the multi-annual investment plan for the period 01/01/2009 - 31/12/2013, aimed at business development through a targeted investment policy, to be financed in part by issuing new Cooperative Shares, for a total of 10 million. The Cooperative Shares, as provided for in art. 5, fifth paragraph, Law no. 59/1992, must be offered as option – for an amount not less than half the issue value - to cooperative members , honorary members and employees. Therefore, the Regulations for the 2008 issue envisaged an option reserved for cooperative members, honorary members and employees, to the extent of 50% of the total issue and the remaining 50 % of the issue was reserved as option to institutional investors. Institutional investors were also reserved the right to subscribe any shares unsubscribed by cooperative members, honorary members and employees. In particular art. 2) of the Regulations approved by the Meeting, provides that: «The Cooperative Shares must be offered as option – for an amount not less than half the issue value - to cooperative members, honorary members and employees (art. 5, fifth paragraph, Law no. 59/1992). Consequently, this issue includes an option to subscribe, reserved to those entitled (cooperative members, honorary members and employees), 50% of the total issue, i.e. no. 10,000 (ten thousand) newly issued cooperative shares; the remaining 50 %, corresponding to no. 10,000 (ten thousand) newly issued cooperative shares is reserved for institutional investors. If within 5 (five) days from the date of issuance of the new cooperative shares that right is not exercised by those entitled, as explained in the previous paragraph, all unsubscribed shares will be reserved by the issuing Cooperative exclusively for “institutional investors”». Given the fact that a number of requests have been received from Cooperative members and employees, to subscribe the unsubscribed Cooperative Shares, it is necessary to modify the wording of the Regulations adopted by resolution dated 10/10/2008, establishing, as final deadline for subscription by shareholders and employees, the 30/09/2013. The Members’ Meeting after careful revision and counter-checking, unanimously

DECIDED to approve the change to the Regulations for the issue of cooperative shares approved by the Members’ Meeting on 10 October 2008, as proposed and, consequently, the new text of art. 2) of the Regulations shall be as follows: «The Cooperative Shares must be offered as option – for an amount not less than half the issue value - to cooperative members, honorary members and employees (art. 5, fifth paragraph, Law no. 59/1992).

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Consequently, also this issue includes an option to subscribe, reserved to those entitled (cooperative members, honorary members and employees ), 50% of the total issue, i.e. no. 10,000 (ten thousand) newly issued cooperative shares; the remaining 50 %, corresponding to no. 10,000 (ten thousand) newly issued cooperative shares is reserved for institutional investors. If within 30 September 2013 the right is not exercised by those entitled, as explained in the previous paragraph, all unsubscribed shares will be reserved by the issuing Cooperative exclusively for "institutional investors� . Since all the items on the agenda had been discussed in full and no-one else requested to speak, the chairman of the meeting declared the meeting closed at the time of 15:45 pm, following the immediate drafting, reading, and unanimous approval of these minutes.

The Chairman The Secretary Mario Guarnieri Fabio Sereni


STANDARDISED MANAGEMENT REPORT TO THE CPL CONCORDIA FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDING 31/12/2012

Dear Members, the Financial Statements for the year ended 31/12/2012 submitted for your approval show a Profit of Euro 6,775,661, net of taxes for the year and of ordinary and extraordinary provisions; this result can be considered as very positive because it exceeded what had been foreseen and because it was obtained in a macroeconomic situation of deep crisis, in particular at national level. The crisis was aggravated in this case by the earthquakes that hit our area on 20 and 29 May 2012, which have put a strain on the Cooperative, its people and the whole territory in which it operates. As regards this, it should be noted that direct costs deriving from the devaluation of fixed assets and costs for relocation generated by the earthquake in May 2012, amounting to Euro 3,244,800, contributed to the determination of the operating result. Production executed in the financial year amounted to Euro 344,888,213, essentially unchanged from the previous year. Total assets equalled Euro 516,893,156, net equity amounted to Euro 139,128,329, the Funds for risks amounted to Euro 6,563,231, the Severance pay for employment termination amounted to Euro 4,230,090 and the total payables, accrued expenses and deferred income amounted to Euro 366,971,506. As always, the directors of the Cooperative performed, in accordance with art. 2 of Law no. 59/92, their duties with the desire of allowing the Cooperative to achieve the mutuality purposes provided for by law and the bylaws, with the aim of providing continuity of employment and achieving the best economic, social and professional conditions possible. For these reasons, the Cooperative acted to maintain full employment of its members, rewarding their work performance with the best terms and conditions possible, taking into account the market conditions and those of the specific sector in which it operates. The company also worked to improve the professional and cultural qualifications of its members, investing to ensure the best conditions in the work environment and in training courses. In order to continue the process of capitalisation of the Cooperative, as well as to retain and reward the contribution of its members, the Board of Directors proposed, by virtue of the good results of the financial year, to allocate to each cooperative member, pursuant to art. 3, paragraph 2, letter b) of Law no. 142 of 3 April 2001 and subsequent amendments, by way of refund, an amount determined in relation to the quantity and quality of the work performed during the financial year 2012. The amount proposed by the Board of Directors to the Meeting, to be divided between the members on the basis of the above criteria amounts to Euro 1,700,000; this amount is already posted under item B9 of the Profit and Loss Account as part of personnel costs as supplement of remuneration paid to working members in 2012, 50% to be allocated to the free increase of the capital subscribed and paid and the remaining 50% to be allocated as supplement to the remuneration due to the cooperative members; both these allocations are foreseen by article 62 of the bylaws and pursuant to and by effect of art. 6, second paragraph of Decree Law no.

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63/02, converted into Law No. 112/02. The Cooperative in its role of parent company of a number of companies operating in the same business sector or in the integration and completion of the production chain of the construction and management of methane gas and LPG distribution networks, including the sale, construction and management of heating or cooling systems, district heating networks and the construction and management of photovoltaic plants, public lighting and high-efficiency cogeneration plants, has drawn up its Consolidated Financial Statements as of 31 December 2012 pursuant to Legislative Decree no. 127 of 09/04/1991. The consolidated financial statements as of 31 December 2012 show a consolidated value of production of Euro 411,434,833, with a 6% increase over the previous year. The Group’s results generated by this production show pre-tax Profits for the period ofEuro 15,004,422 which, net of current, deferred and advanced taxes of Euro 6,286,904 and of minority losses (or Group profit) ofEuro 212,006, generated a net profit of Euro 8,929,524, which also in this case is to be considered extremely satisfactory and better than foreseen. Total assets equalled Euro 596,022,046, the Group’s net equity amounted to Euro 137,230,158, minority net equity amounted to Euro 1,822,703, Funds for risks amounted to Euro 11,406,311, Severance pay for employment termination amounted to Euro 4,906,855 and total payables, accrued expenses and deferred income amounted to Euro 440,656,019..

Personnel and corporate social values 1 Personnel

Our cooperative’s mission is to create real work, respecting individuals and their growth. Development, turnover and innovation have been possible thanks to the irreplaceable work of our men and women. Without the contribution of those who have worked within the Co-operative and its group, the results discussed herein would not have been possible. The human component of a company is the true added and intangible value. The employees, with an average age of about 38 years, are the stakeholders that obtain from the Cooperative the largest portion of added value. The value allocated to the workforce is a tangible sign that the cooperative remains true to its mission "to create real work" in the respective areas. The added value allocated to workers is divided into two cost categories for the company: direct and indirect remunerations.

Direct remunerations Direct remunerations include all the components (financial or in kind) that contribute to measure the benefit (immediate or deferred) that the employees receive from their relationship with the company; direct remunerations include: directpay(correspondingtothe"WagesandSalaries"itemofstatutoryfinancialstatements); severance pay for employment termination; other expenses for workers, including all those costs that the Cooperative incurs in favour of its personnel (insurance, canteens, travel, training courses, medical examinations and clothing). The significant increase in personnel costs in the last five years, can be attributed to the new corporate structure which, together with the acquisition of important work orders, still creates the need for human resources. The cost of personnel is a fundamental and characteristic element for a production and work cooperative. This cost must be compensated by positive economic results arising from production. In recent years, in a situation of clear macroeconomic recession, the CPL Group, has gone against the trend, also in terms of employment. In 2012 the level of employment, of the parent company and of the group, remained almost unchanged compared to the previous year. The relevant data is analysed in the tables below:

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31


Average number of employees of the Parent Company NUMBER

2012

2011

Top management

32

Executives

28

25

White collar

580

563

Blue collar

652

680

1.292

1.300

TOTAL

32

The table above shows the data concerning the average workforce of 2012 in comparison to 2011. The table shows an annual decrease of only 8 employees, to which the increase of 56 employees in the previous year must be added as well as the increase of 120 employees in 2010. In the last three difficult years of economic crisis, the Cooperative has increased its average workforce by 168 people. The situation at Group level is shown in the table below:

Average number of employees of the Group NUMERO

2012

2011

Top management

37

Executives

33

27

693

638

White collar Blue collar

TOTAL

35

765

760

1.528

1.460

The above table shows that in 2012 there was an average increase in employment of 68 employees, mainly in Italy, with the remainder working in our subsidiaries in Romania, Algiers and Argentina and in Cristoforetti Servizi Energia. In the last financial year, the average employment increase was of 42 employees. As regards labour contracts applied to the Group, four national agreements are applied: Cooperative Building Agreement, Cooperative Metalworkers' Agreement, Gas Fitters Agreement and Cooperative Managers’ Agreement. By analysing only the Parent Company’s data and taking into account the average workforce on 31 December 2012, the breakdown is as follows:

Engineering workers Blue collars White collars

Gas operators

Cleaners

162

490

53

511

Cooperative managers

Apprentices

TOTALS

570 32

8

32

20

28

External professionals

4

Apprentices Total

223

1.021

TOTALI 652

6

Top Managers Executives

Project agreements

6

32

4

4 6

6

6

1.292

As regards the National Building Agreement, it should be noted that it is integrated with provincial agreements, while a supplementary company agreement is required for all agreements.

2 Corporate social values

The two tables below analyse the variations in the members in the last two years and in social lending in the last five years.

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Personnel turnover in the last 2 years Cooperative members

31/12/2010

Employments

Withdrawals 31/12/2011

Withdrawals

Employments

Withdrawals 31/12/2012

Withdrawals

Blue collars

284

25

-9

300

19

-13

306

White collars

314

46

-8

352

30

-9

373

Top Managers

Total

28

2

0

30

0

0

30

626

73

-17

682

49

-22

709

The table shows that as of 31/12/2012 the cooperative members had grown to 709, with an increase of 27 members only in 2012 and of 83 members in two years, equal to an increase of 13.3%. Thanks to the effects of the increasing loyalty of the members, the cost ratio of members and non-members, which is necessary to be considered a prevalent mutuality cooperative, was 62.34 % compared to 37.66% of non-members, which includes the cost of self-employment professionals and collaborators. The amount of the loans from members in the last five years is shown below: Year 2012 Year 2011 Year 2010 Year 2009 Year 2008

Euro Euro Euro Euro Euro

9.380.143 8.150.246 7.057.188 5.654.737 4.258.627

These loans are paid on the basis of normal market rates, but never higher than those set down by the Ministry of Finance, increased by 2.5%; in 2012 they were paid at the gross annual rate of 5.125% (4.10 % net). An extremely important characteristic of a mutuality Cooperative is that also "non-members" are involved; CPL reserves a portion of its income for initiatives of particular social value, expressing its "social citizenship". The pursuit of the sense and motivation of social action occurs through a process in constant evolution, with the synthesis and integration of many elements that can be found both inside and outside the organization. The Cooperative has distributed to the community part of the wealth it has generated; these contributions have been used to finance associations, non-profit cultural and sports associations, cultural sports and folklore events. CPL Concordia pays particular interest in the activities of the town’s authorities – as regards the organization of events - and of sports associations, especially regarding activities for young people.

FINANCIAL STATEMENTS OF THE PARENT COMPANY A1. Economic analysis

The following section analyses the profit and loss accounts of the last five years reclassified according to the value added method:

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CPL Concordia Soc. Coop.: Profit and Loss Accounts reclassified according to Added Value method

(Values expressed in Euro)

Company data 31/12/2012 Income from sales and performances

%

31/12/2011

%

31/12/2010

%

31/12/2009

%

31/12/2008

%

309.339.397

89,69%

321.695.920

96,88%

312.347.751

94,47%

243.437.301

87,54%

205.215.858

91,04%

0

0,00%

0

0,00%

0

0,00%

0

0,00%

0

0,00%

Variations of works in progress

11.395.089

3,30%

(8.918.554)

-2,69%

( 6.514.113)

-1,97%

7.472.352

2,69%

7.101.390

3,15%

Internally generated fixed assets

18.511.748

5,37%

15.005.426

4,52%

17.590.866

5,32%

20.127.269

7,24%

10.543.087

4,68%

5.641.979

1,64%

4.275.463

1,29%

7.195.762

2,18%

7.053.783

2,54%

2.557.229

1,13%

344.888.212

100,00%

332.058.254

100,00%

330.620.266

100,00%

278.090.704

100,00%

225.417.564

100,00%

( 135.065.081)

-39,16%

( 129.882.894)

-39,11%

( 137.132.994)

-41,48%

( 94.469.596)

-33,97%

( 68.603.208)

-30,43%

( 3.413.019)

-0,99%

3.781.351

1,14%

7.382.108

2,23%

( 656.326)

-0,24%

713.640

0,32%

( 101.939.902)

-29,56%

( 102.055.280)

-30,73%

( 110.507.263)

-33,42%

( 91.959.486)

-33,07%

( 76.946.495)

-34,14%

( 14.063.180)

-4,08%

( 14.877.283)

-4,48%

( 15.075.102)

-4,56%

( 13.949.275)

-5,02%

( 11.168.159)

-4,95%

Variation of the stock of semi-finished and finished products

Other income VALUE OF PRODUCTION Purchase costs Variation of the stock of raw materials Costs for services Costs for the employment of third-party assets Sundry operating expenses

( 3.972.042)

-1,15%

( 3.143.761)

-0,95%

( 3.311.792)

-1,00%

( 4.131.339)

-1,49%

( 2.872.710)

-1,27%

ADDED VALUE

86.434.989

25,06%

85.880.386

25,86%

71.975.223

21,77%

72.924.684

26,22%

66.540.633

29,52%

Personnel cost and relating charges

( 58.364.104)

-16,92%

( 57.434.590)

-17,30%

( 52.120.256)

-15,76%

( 47.893.690)

-17,22%

( 42.648.176)

-18,92%

MOL (GOM)

28.070.885

8,14%

28.445.795

8,57%

19.854.967

6,01%

25.030.994

9,00%

23.892.457

10,60%

Depreciation of tangible fixed assets

( 1.838.909)

-0,53%

( 1.746.646)

-0,53%

( 1.637.143)

-0,50%

( 1.800.681)

-0,65%

( 2.375.049)

-1,05%

Amortisation of intangible fixes assets

( 9.621.620)

-2,79%

( 7.807.505)

-2,35%

( 6.264.766)

-1,89%

( 4.714.592)

-1,70%

( 4.214.726)

-1,87%

Provisions and devaluation

( 4.834.916)

-1,40%

( 3.978.334)

-1,20%

( 3.131.953)

-0,95%

( 2.579.683)

-0,93%

( 1.117.812)

-0,50%

( 16.295.446)

-4,72%

( 13.532.485)

-4,08%

( 11.033.862)

-3,34%

( 9.094.957)

-3,27%

( 7.707.586)

-3,42%

OPERATING RESULT

11.775.439

3,41%

14.913.311

4,49%

8.821.105

2,67%

15.936.038

5,73%

16.184.870

7,18%

Interest and other financial charges

-1,61%

Amortisation/depreciation and provisions

( 4.370.509)

-1,27%

( 3.939.556)

-1,19%

( 1.634.095)

-0,49%

( 1.968.634)

-0,71%

( 3.637.127)

Other financial earnings

3.469.089

1,01%

1.468.044

0,44%

581.589

0,18%

735.115

0,26%

1.015.957

0,45%

TOTAL FINANCIAL ACTIVITY CURRENT RESULT

( 901.420)

-0,26%

( 2.471.512)

-0,74%

( 1.052.506)

-0,32%

( 1.233.520)

-0,44%

( 2.621.170)

-1,16%

10.874.019

3,15%

12.441.799

3,75%

7.768.599

2,35%

14.702.518

5,29%

13.563.700

6,02%

Earning from holdings Adjustments of financial assets

3.291.103

0,95%

3.402.439

1,02%

11.007.160

3,33%

178.829

0,06%

1.100.344

0,49%

( 1.956.593)

-0,57%

( 2.053.237)

-0,62%

( 1.858.950)

-0,56%

( 1.153.119)

-0,41%

( 2.658.698)

-1,18%

Rebate to members

( 1.700.000)

-0,49%

( 850.000)

-0,26%

( 1.700.000)

-0,51%

( 1.500.000)

-0,54%

( 1.200.000)

-0,53%

Special activities

( 1.169.752)

-0,34%

131.938

0,04%

126.852

0,04%

680.550

0,24%

11.902

0,01%

RESULT BEFORE TAX

9.338.777

2,71%

13.072.939

3,94%

15.343.662

4,64%

12.908.777

4,64%

10.817.248

4,80%

Tax on the income of the financial year

( 2.563.116)

-0,74%

( 4.165.545)

-1,25%

( 1.986.056)

-0,60%

( 4.311.305)

-1,55%

( 3.979.189)

-1,77%

NET RESULT

6.775.661

1,96%

8.907.393

2,68%

13.357.606

4,04%

8.597.472

3,09%

6.838.059

3,03%

The 2012 profit and loss account and the results must be analysed in the context of a macroeconomic situation of severe crisis, and recession, as already underlined. Despite this, however, the data and ratios resulting from the Profit and Loss account reclassified according to the value added method show a substantial consolidation of the values of production and a significant improvement in the economic indicators, such as the gross operating margin, which even though it did not reach the levels of the 2007-2009 period, which also contained the gas distribution assets related to a spin-off, stood at a gratifying 8.14%, almost unchanged compared to the 8.57 % of the last financial year.

A2. Analysis of assets and liabilities

Following the analysis of the profit and loss accounts, this section analyses the balance sheet, by comparing the previous four financial years, according to the item liquidity method.

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Report on operation chap.2

Balance Sheets reclassified according to the liquidity method ASSETS

ASSETS Short-term assets Cash and cash equivalents Financial assets which are not fixed assets Receivables from customers and other receivables Stock Receivables from members for payments still due Accrued income and prepayments Total short-term assets

31/12/2012

31/12/2011

(Values expressed in Euro)

31/12/2010

31/12/2009

31/12/2008

96.620.975 7.748.890 215.341.397 39.956.357 1.176.488 4.909.897 365.754.004

58.096.144 308.756 222.642.625 33.660.197 1.158.595 5.210.319 321.076.636

36.661.185 3.342.257 211.947.821 38.400.538 1.094.972 4.817.089 296.263.862

34.311.437 20.000 154.648.544 36.365.119 1.396.075 5.004.585 231.745.760

23.873.723 0 124.864.129 29.810.535 1.244.475 6.059.085 185.851.947

38.198.727 16.998.257 95.942.169

33.043.179 15.649.922 87.991.482 136.684.583

28.597.925 12.198.005 79.430.494 120.226.425

19.569.363 15.445.124 72.196.722 107.211.209

13.493.300 51.850.543 65.369.052 130.712.895

516.893.157

457.761.219

416.490.287

338.956.968

316.564.842

218.935.784

253.613.303

182.130.348

180.665.326

49.582.606 0 9.478.751 2.450.000 10.084.095 156.865.473 0 17.514.907 858.072 4.606.426 3.187.169 6.137.345 2.883.533

35.351.372 0 8.395.893 900.000 14.208.598 139.290.435 0 8.334.421 1.614.879 9.211.231 3.152.654 6.249.062 1.092.707 227.801.252

17.338.595 0 7.659.769 8.250.000 22.173.353 139.875.465 0 17.915.313 1.479.227 10.163.515 3.127.055 7.745.499 676.021 236.403.810

7.331.833 0 5.654.737 8.800.000 5.596.163 133.231.097 0 14.467.384 234.140 5.716.393 2.994.414 7.588.000 845.436 192.459.597

5.610.510 8.925.450 4.258.627 0 10.232.521 111.333.871 0 2.501.232 134.574 5.428.011 2.725.195 9.657.060 405.533 161.212.583

0 99.048.212 0 4.274.916 0 4.230.090 21.526 6.541.705

0 84.098.347 0 3.649.597 0 4.362.613 21.526 5.379.751 97.511.833

0 45.315.976 0 3.491.619 0 4.761.755 21.526 2.580.700 56.171.575

0 26.672.186 0 2.607.790 0 5.336.207 21.526 2.393.369 37.031.078

0 46.168.351 0 2.046.773 0 5.721.027 21.526 1.617.395 55.575.072

20.713.737 656.679 108.867.183 531.892 78.184 0 235.597 1.269.396 6.775.661

19.587.590 656.679 101.181.402 531.892 78.184 0 235.597 1.269.396 8.907.393 132.448.135

18.312.536 656.679 89.473.011 531.892 78.184 0 235.597 1.269.396 13.357.606 123.914.902

15.938.753 656.679 82.158.320 531.892 78.184 0 235.597 1.269.396 8.597.472 109.466.293

13.558.953 656.679 77.140.319 0 78.184 0 235.597 1.269.396 6.838.059 99.777.187

Total LIABILITIES

457.761.219

416.490.287

338.956.968

316.564.842

MEMORANDUM ACCOUNTS

218.935.784

253.613.303

182.130.348

180.665.326

Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets Total fixed assets

Total ASSETS MEMORANDUM ACCOUNTS LIABILITIES Short-term liabilities Payables due to banks Loan current instalment Payables due to other funders Financial payables due to subsidiary/associated companies Advances Payables due to suppliers Payables represented by negotiable instruments Payables due to subsidiary companies Payables due to associated companies Tax payables Payables due to social security institutions Other short-term payables Accrued liabilities and deferred income Total short-term liabilities

Medium-/long-term liabilities Debentures Payables due to banks Payables due to other funders Payables due to suppliers Payables represented by negotiable instruments Severance pay for employment termination Fund for retirement pensions and similar obligations Other funds Total medium-/long-term liabilities Net Equity Share capital Revaluation reserve Legal reserve Reserves for treasury shares held Statutory reserves Exchange rate fluctuation reserve Surplus from merger Capital contribution reserve, Law no. 784/80 Profit / loss of the financial year Total Net Equity

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35


The table above highlights the following: The total assets of the balance sheet increased by Euro 59 million, of which Euro 45 million concerned current assets and Euro 14 million the fixed assets. The increase in the current assets was partly due to the high amounts held in the current accounts on 31 December, in part used in the first months of 2013; the increase was also due to an increase in the inventory and in financial assets that did not constitute fixed assets. As regards the increase in the inventory, this was mainly due to an increase in the work underway mainly related to an increase of work with companies part of the group and with public administrations/local authorities that tend to delay the certification of the work progress reports, thus delaying invoicing. The balance sheet liabilities show an overall increase in the bank debt, mainly due to the new non-interest bearing lines of credit granted by Monte Paschi di Siena, the payment of taxes according to Legislative Decree 74/2012, Euro 30 million of which were used at the end of the year; please note however that the net debt (debts – liquidity) decreased by about Euro 7 million compared to the previous financial year. Please note also the increase in payables to suppliers mainly due to the extension of payment terms and suspension of the terms following the earthquake in May 2012. The process of capitalisation of the cooperative is progressing; in 2012 the net equity of the cooperative was almost Euro 139 million.

A3. Financial ratios

The financial ratios of the parent company for the financial year 2012 are shown in the table below:

CPL CONCORDIA Soc. Coop: Main financial ratios Company Data

ECONOMIC ANALYSIS

31/12/2012

31/12/2010

31/12/2009

31/12/2008

CALCULATION FORMULAS

R.O.E. (Return on Equity)

5,12%

7,21%

12,08%

8,52%

R.O.I. (Return on Investment)

2,28%

3,26%

2,12%

4,70%

MOL/Value of Production

8,14%

8,57%

6,01%

9,00%

10,60% MOL/VP x 100

Incidence of Extraordinary Earnings and Charges

40,27%

-51,43%

46,05%

57,75% 1- RN/RO x100

Incidence of Net Financial Charges on V.P.

0,74%

0,32%

0,44%

1,16% OFN/VP x 100

6,03

8,38

12,92

6,17 OFN/RO x 100

EBIT/ Net Financial Charges KEY:

13,06

7,36% R.O.E. = RN/CP x 100 5,11% R.O.I. = RO/CI x 100

= Net or final result RN = Equity Capital "Net equity - Result of the financial year" CP = Operating Result RO = Invested capital or Total Assets CI MOL (GOM)= Gross Operating Margin = Value of Production VP = Net Financial Charges OFN

FINANCIAL AND EQUITY ANALYSIS

Company Data 31/12/2012

31/12/2011

31/12/2010

31/12/2009

31/12/2008

Formule di calcolo

Liquidity ratio

1,39

1,41

1,25

1,20

Leverage

3,91

3,71

3,77

3,36

3,41 CI/CP

Net Financial Position/ Net Equity

0,48

0,57

0,38

0,14

0,44 (DBTO+DMLTO)/CP

Elasticity Ratio

2,42

2,35

2,46

2,16

EBITDA/DEBT

43,90

40,26

47,38

176,93

DEBT/EBITDA

2,28

2,48

2,11

0,57

KEY:

36

31/12/2011

1,15 AC/DBT

1,42 AC/IMMOB 58,15 MOL/DEBT x 100 1,72 DEBT/MOL

DEBT =

63.938.594

70.649.468

41.903.154

14.147.320

41.089.215

EBITDA =

28.070.885

28.445.795

19.854.967

25.030.994

23.892.457

AC = Short-term assets DBT = Short-term liabilities CI = Invested capital or Total Assets CP = Equity Capital "Net equity-Result of the financial year" DBTO = Short-term financial payables DMLTO = Medium-/long-term financial payables IMMOB = Fixed assets MOL (GOM)= Gross Operating Margin DEBT = Short-term financial payables + long-term financial payables net of cash and cash equivalents

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Report on operation chap.2

As mentioned in the comments to the profit and loss accounts, the economic ratios were certainly very positive. The gross operating margin was 8.14%, compared to 8.57% in the previous financial year and to 5.94% in the budget; the classic R.O.I. and R.O.E. were also positive; the ratio between the Ebit and the net financial charges was also very positive. The latter is one of the ratios more and more frequently included in the covenants of new loans, and the result must always be above 2. The ratio increased to 13.06 in 2012 while in the previous year it was 6.03. Among the ratios of a financial nature, it is worth mentioning the ratio between the debt and the EBITDA, which the main legal literature considers balanced when it is lower than three; in 2012 CPL’s ratio was 2.28, one again balanced, and lower than the previous financial year, in which it was 2.48. The ratio between third party assets and own assets was still good and stood at 0.48 compared to the limit ratio of one. The other financial indicators were also balanced, despite the increase in debt, which in 2012 was significantly compensated by an improvement in the results of the core business.

B The Group

Over the past few years, the CPL Concordia Group has developed an increasingly complex structure that includes more than 70 subsidiaries and associated companies. Many of these companies are special purpose vehicles (SPV), established to develop specific activities. With the exception of Ghirlandina Sport and its subsidiary Modena Calcio FC S.p.a. and of Immobiliare della Concordia, all the other companies operate in traditional sectors of the Cooperative. Many of the companies established in the last two years are involved in the construction and subsequent management of photovoltaic arrays. The structure as of 31 December 2012 is shown below.

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

37


Marigliano Gas S.r.l. (IT) 100%

100%

P.E.A. Progetto Energia Ambiente S.r.l. (IT)

Ischia Gas S.r.l. (IT)

100%

CoopGas S.r.l. (IT)

Energia Anonima FV 2 S.r.l. (IT)

100%

100%

10%

100%

Energia della Concordia S.p.A. (IT)

AlPower S.p.A. (AL)

40%

Marche Solar S.r.l. (IT) 100%

Centrale Sassinoro S.r.l. (IT)

Sic S.a.S. (IT)

Serio Energia S.r.l. (IT)

Immobiliare della Concordia S.r.l. (IT) 100%

Trinovolt S.r.l. (IT) 95%

20%

100%

Erre.Gas S.r.l. (IT) 100%

Vega Energie S.r.l. (IT)

Vignola Energia S.r.l. (IT)

70%

Grecanica Gas S.r.l. (IT)

99%

Nuoro Servizi S.r.l. in liquidazione (IT)

CPL Distribuzione S.r.l. (IT)

44%

CPL Energy India Private Ltd (IN)

100%

93%

(TUNISIA)

90%

98,70%

1%

Ghirlandina Sport S.r.l. (IT)

0,10%

Modena Football Club S.p.A. (IT)

CPL Concordia Filiala Cluj Romania S.r.l. (RO) CPWH Ltd (EN) 100%

Inversiones Energia y Ambiente S.A. (ARG)

Emprigas S.A. (ARG)

0,10%

key 50%

Redengas S.A. (ARG)

0,04%

0,30%

CPL Hellas A.B.E. & T.E. in liquidazione (GR)

TiPower S.a r.l.

75%

0,30%

5%

95%

100%

0,10%

65%

Progas Metano S.r.l. (IT)

50%

0,30%

50%

54%

100%

0,10%

Cristoforetti Servizi Energia S.r.l. (IT)

Torano Solar S.r.l. (IT)

100%

0,10%

96%

Parent Company Directly controlled companies

99%

Indirectly controlled companies Directly associated companies Indirectly associated companies

Biogengas S.r.l. (IT)

Tradenergy S.r.l. in liquidazione (IT) 100%

0,30%


Ichnusa Gas S.p.A. (IT) 45%

Fontenergia 4 S.r.l. (IT)

98%

Fontenergia 6 S.r.l. (IT)

98%

Pegognaga Servizi S.r.l. (IT)

50%

Fontenergia S.p.A. (IT)

49%

Sarda Reti Costruzioni S.r.l. (IT)

30%

Teclab S.r.l. (IT)

35%

Polargas S.r.l. (IT)

50%

Ies Solare S.r.l. (IT)

25%

Solarplant S.r.l. (IT)

24%

Ghirlandina Solare S.r.l. (IT)

34%

Fimetra S.r.l. (IT)

40%

Noci Solar 1 S.r.l. (IT)

49%

Noci Solar 2 S.r.l. (IT)

49%

Compagri S.p.A. in liquidazione (IT)

22,22%

Agrienergia S.p.A. (IT)

20,18%

Fontenergia 38 S.r.l. in liquidazione (IT)

34%

1,90%

1,90%

Fontenergia 7 S.r.l. (IT)

98%

0,83%

1,80%

Fontenergia 9 S.r.l. (IT)

Fontenergia 10 S.r.l. (IT)

Coimmgest S.p.A. (IT)

98%

X Datanet S.r.l. (IT)

50%

98%

1,70%

1%

45%

Fontenergia 11 S.r.l. (IT)

98%

Fontenergia 15 S.r.l. (IT)

98%

Fontenergia 19 S.r.l. (IT)

98%

Fontenergia 26 S.r.l. (IT)

98%

Fontenergia 27 S.r.l. (IT)

98%

Interenergia S.p.A. (IT)

100%

47%

Interenergia Uno S.r.l. (IT)

1%

100%

Interenergia Due S.r.l. (IT)

2%

100%

Interenergia Tre S.r.l. (IT)

1,90% 0,60%

100%

Interenergia Quattro S.r.l. (IT)

0,70%

Fontenergia 35 S.r.l. (IT)

98%

Fontenergia 37 S.r.l. (IT)

98%

1,60%

Fano Solar 1 S.r.l. (IT)

100%

Fano Solar 2 S.r.l. (IT)

100%

Notaresco Solar S.r.l. (IT)

100%

Sant’Omero Solar S.r.l. (IT)

100%

Energetski Servis d.o.o. (HR)

1%

Appointed on December 31, 2012

33,3%


Description and performance of the companies of the group B1. Subsidiary companies COOPGAS S.r.l. • This is the group’s natural gas sales company in accordance with Legislative Decree 164 /2000. In the financial year, the company served over 43,000 users, selling 76.2 million cubic meters of gas, of which 27.2 million cubic meters to the Group’s distribution networks. The profit from this activity of the company for the financial year 2012 amounted to Euro 1,467,870. The net equity reached Euro7.3 million against a book value of the holding of Euro2.5 million. ENERGIA DELLA CONCORDIA S.p.A. • this company, 100% of whose shares are held by Coopgas S.r.l., has two agreements for the construction, sale and management of plants that exploit biogas: one agreement is small and is with a farm in the area of Pavia and the other is an agreement of Euro 4 million concerning the Francavilla Fontana waste disposal site in Puglia. In the financial year 2012, the company acquired 100% of the shares of Solar Plus S.r.l, SPV that managed the photovoltaic plant in Altamura. During the year, Solar Plus was merged into Energia della Concordia, as per the deed of merger entered into on 23 November 2012 before Silvio Vezzi, Notary in Modena, who recorded it under file no. 122421 - folder 20258. The directors of the company, considering the difficulties encountered in the management of the plant for the production of biogas and electricity in Francavilla Fontana, during the year used the allocated provisions to cover losses of the biogas plant for Euro 260,000; at the same time, in 2011, it set aside another fund of Euro 250,000, of the same type. A series of actions to solve the problems of this plant are already underway, including the assignment of one of the two motors that took place at the end of 2012. In the financial year, the company also acquired 10% of shares in the company Centrale Sassinoro Srl and 95% of the limited partnership SIC di Santorelli Bruno. As regards the company Centrale di Sassinoro S.r.l., this is an SPV formed for the construction and subsequent management of a plant for the production of electrical energy generated exploiting the water of the river Sassinoro. In other words it is a hydroelectric plant, connected in the last days of 2012. As regards the company SIC S.a.S., it holds 20% of the shares of AIPower S.p.A and the resulting payables to members posted under the liabilities. As a result of this acquisition, the CPL Group directly or indirectly controls 74% of the Algerian company. The acquisition was made ​​to increase the importance of the group in the corporate governance of AI Power S.r.l. The results for the year of the two subsidiaries controlled by Energia della Concordia closed with a start-up loss of Euro 37,391 for Centrale Sassinoro S.r.l., and a loss of Euro 2,958 for Sic S.a.s. Energia della Concordia did not record any devaluation on its holdings, as Centrale Sassinoro S.r.l. is in the start-up phase, while Sic S.a.S., through the dividends of AIPower, will restore its equity and value in 2013. The Financial Statements of Energia della Concordia closed with a profit of Euro 1,043.

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Report on operation chap.2

CPL DISTRIBUZIONE S.r.l.• this company, which was established in 2008, has been distributing the Cpl Concordia Group's gas since 2009. The concessions managed by the company are: • Catchment area Calabria 30; • Catchment area Campania 30; Municipality of Campo Calabro; • Catchment area Campania 25; Municipality of Polistena; • Catchment area Calabria 20; Municipality of San Giorgio a Morgeto; • Catchment area Sicilia 12; Municipality of Cinquefrondi; • Catchment area Sicilia 17; Municipality of Rosarno; • Catchment area Sicilia 35. Municipality of Melicucco; In 2012, the company carried out the gas distribution activity, mainly for the companies of the Coopgas Group, but also for others. The amount of gas distributed in the financial year was 34,409,006 cubic meters, while 48,040 users were connected and received the service. The distribution activity for the reporting year generated profits amounting to Euro 2,590,238. The net equity of the company amounted to Euro 14,055,882 against a book value of the holding of Euro 10,000,000.

CPL ENERGY INDIA PRIVATE L.T.D. •

The company, of which 50% of the shares were acquired by CPL Distribuzione on 16 February 2011, is the vehicle through which the group CPL Concordia intends to develop its activities in the Indian market, which is experiencing considerable development. During the year, the company marketed mainly odorant and spare parts for reduction plants, but it hasn’t taken off yet. The company, which ends its financial year on 31 March each year according to the local regulations, prepared financial statements for the parent company as of 31 December 2012 that show a loss for the period of Euro 91,760.

IMMOBILIARE DELLA CONCORDIA S.r.l. • this company has been managing for years two activities relating to real estate; the first one concerns the construction and subsequent sale of properties and land in the Borgoverde area in the town of Carpi (MO), the second one concerns the management of the Hotel in the town of San Possidonio (MO). While the first activity is almost completed, since only one single housing unit remains to be sold, the second one represents the company’s current core business. The management of the hotel in 2012, was strongly affected by the earthquake that hit the area on the dramatic dates of 20 and 29 May. In fact, although there was no significant damage to the property, the Hotel remained closed from those sad days until the end of September. The restaurant part continued to work, staff was transferred within the cooperative and they provided meals to the personnel of Concordia’s headquarters; the hotel however was practically closed for four long months. After the work carried out to make the hotel safe, it reopened at the end of September but four months of income were lost. As regards damages, these were estimated at about Euro 250 thousand, and they are entirely covered by insurance. In this respect, the company has chosen to suspend such costs awaiting reimbursement, so as to have a close correlation between the special maintenance costs and the relevant insurance reimbursements. Despite these events, the loss recorded during the year 2012 was limited to Euro 50,779. The net equity of the company amounted to Euro 7,642,455 against a book value of the holding of Euro 9,013,721.

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CRISTOFORETTI SERVIZI ENERGIA S.r.l. • This company, which was established in April 1996 and operates in the heat management sector mainly in the Trentino-Alto Adige region of Italy, is a considerable strongpoint in the Group's strategic sector. Over the years, the company has expanded its territory by acquiring contracts in Veneto and Friuli Venezia Giulia, and since 2009 also in Lombardy. During the year the company took back the ownership of the networks of Vigo di Ton and Ferrara di Monte Baldo, and then rented them to the company Crisgas S.r.l. This operation was necessary to have the certainty of having cash inflows, which otherwise would not be guaranteed, amounting to the sales price settlement of the transfer of the business unit, made ​​in the previous year. The company produced profits for the year of Euro 705,327. The net equity of the company amounted to Euro 4,614,996 against a book value of the holding of Euro 1,452,208. ERRE.GAS S.r.l. • This company, which was established for the management of the distribution networks of Sapri and Camerota, transferred the concessions to third parties in 2011. In the financial year, the company only carried out credit recovery, awaiting the expiry of the free loan agreement for the storage facility with Cilento Reti Gas. In fact, as of today the storage facility and two plots of land are recorded in the company’s financial statements. The storage facility has been granted on free loan until the conversion of the concession from LPG to natural gas, which should take place in 2013. After the conversion, the storage facility will be dismantled and reused in other areas, while the land will be transferred. The financial statements show that the company closed with a loss of Euro 5,000. The directors of the parent company, considering that the company is in a state of pre-liquidation, have devaluated the holding adjusting it to the corresponding net equity value. MARIGLIANO GAS S.r.l. • This company, which was established in 2002, is a classic special purpose vehicle, of which the Cooperative is the sole shareholder, created for the construction and subsequent management of the gas concession of the town of Marigliano. During the financial year, the company expanded the gas distribution network of the town of Marigliano by distributing natural gas for the sales company Coopgas S.r.l. and other sales companies. There were 6,878 active customers as of 31 December 2011, and 3,595,052 cubic meters of gas were distributed. Profits for the year 2012 amounted to Euro 742,127, which is to be considered as extremely positive and in line with expectations. It should be noted also that in the financial year 2006 the company had entered into a financing agreement with the Banca Popolare dell’Emilia Romagna for Euro 5,000,000.00 with covenants that required payments by the shareholders as “Reserve for future share capital increase”. On the closing date of these financial statements, the parent company paid Euro 3.250 million entered by the company under net equity. As regards the financing granted by the Banca Popolare dell’Emilia Romagna, a lien was established on the company’s shares in favour of the bank, to guarantee the agreement for a maximum of Euro 5 million. The net equity of the company reached Euro 6.3 million against a book value of the holding of Euro 4.5 million.

NUORO SERVIZI S.r.l. in Liquidazione • At the end of 2006, the company transferred its business to the Consortium for Industrial Development of Central Sardinia. In the first months of 2007, with the planned dismissal of the 10 remaining workers, the company, which was in liquidation, was finally shut down. After a long series of initiatives involving both the Sardinia Region and the Ministry of Economic Development, in June 2012, the final price resulting from the sale of the business unit was paid as well as the 42

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amount related to the training of personnel transferred to ASI for the period from January to March 2007, for a total amount of Euro 4,287,160.80. The Liquidator also devalued, in the financial statements of the company, all outstanding receivables deemed uncollectible. At the same time, the company collected the necessary data to valuate the remaining payables due to INPS to be paid in the next few years for redundancies. During this activity, the Liquidator found a significant difference between the value set as payable by the company for redundancies in the financial year 2007 and data provided by INPS. As a result of the differences, positive and negative, which resulted from the valuation of receivables and payables in the process of liquidation, the company recorded a profit of Euro 343,900. The profits for the year have allowed the parent company to release part of the risk fund specially set aside to deal with the closure of the liquidation of the company, using Euro 306,807.

CPL HELLAS A.B.E. & T.E. • This company, established under Greek law, carried out its last production activities in the first few months of 2008. During 2012 the company was placed in receivership and its activity was reduced to recovering the remaining receivables, recovering tax related amounts and paying residual amounts due. The company entered a loss of Euro 33,123 in 2012 only due to overheads and the differential between contingent assets and liabilities. The directors of the Cooperative consequently devaluated the holding adjusting it to the corresponding portion of net equity. CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l. •This company, which deals with the distribution and sale of natural gas in thirty towns in the Transylvania region in Romania, now has nearly 15 million users, with more than 18 million cubic meters of gas sold. The company recorded an operating profit of Euro 334,925, despite the fact that the local government blocked the final sale price at the 2009 value, even though there had been a sharp increase in the cost of raw materials. In 2012 the rates were adjusted but with effect from 1 January 2013. This adjustment will give a further boost to the profitability of the company for the year 2013 and following years. The net equity of the company, despite the constant depreciation of the local currency is around Euro 8.9 million, compared to book value of the holding o fEuro 8.8 million. SERIO ENERGIA S.r.l. • the company was incorporated on 27 February 2003 for the management of the heating systems of the Bolognini Hospital of Seriate (BG). Despite the fact that the Cooperative only holds 40% of the shares in the company, it actually controls it in virtue of the activities it performs relative to the project that led to its establishment. The result for the period shows a profit of Euro 552,653. The net equity of the company reached Euro 1.8 million against a book value of the holding of Euro 0.4 million. ISCHIA GAS S.r.l. • the company was formed on 1 April 2005 by deed of Silvio Vezzi, Notary in Modena, with file no. 111359 folder no. 16678, for the construction and subsequent management of the natural gas distribution service in the territory of Ischia (NA). In the financial year the company focused on the connection of users. As of 31 December, 1,439 users were connected and 1,074,037 cubic metres of gas had been distributed. In the financial year 2012, the company received the adjustment amount for 2011 from the Adjustment fund of the Electricity Sector, and entered the amount of Euro 1,089,138 in the earnings of the profit and loss account. The company, in line with this payment, not having begun the process of depreciation of the sea pipeline, allocated in a Fund for risks and charges on future losses, the provisions for the losses that it will reasonably record when the depreciation process will start and the customer potential will not yet have been reached.

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As of 31 December 2012 the said fund amounted to Euro 1,290,000. The result, which was obviously affected by these factors, showed, however, a profit of Euro 763,013. As a consequence of this result, the net equity of the company reached a value of Euro 4,246,900, compared to the book value of the holding of Euro 3,700,000. For this reason, the Parent Company has released the fund of Euro 498,500 set aside in 2008, as the above risks have been transferred by the parent company to the company. It should be noted also that there is a financing agreement with the Banca Popolare dell’Emilia Romagna for Euro 6.000.000,00 with covenants that require payments by the shareholders into a net equity reserve called “Reserve for future share capital increase”, payments amounting to Euro 3,600,000 that the Cooperative made as ​​ of 31 December 2012. As regards the financing granted by the Banca Popolare dell’Emilia Romagna, a lien was established on the company’s shares in favour of the bank, to guarantee the agreement for a maximum of Euro 6 million.

PROGAS METANO S.r.l. • The company was incorporated on 23 April 2007 before Silvio Vezzi, Notary in Modena, who registered the deed under file no. 114585 and folder no. 17714; it is a project company formed for the gasification of the island of Procida. At the end of 2011 the ministerial decree for the provision of loans was approved, therefore the work for the construction of the grid started and continued throughout the year 2012. The result for the reporting year, which is determined solely by the administrative overheads incurred, amounted to a loss of Euro 27,199. AIPOWER S.p.A. • The company was established in Algiers on 7 April 2008 and approved on 12 April 2008, with the purpose of managing the core activities of the Cooperative on Algerian territory. The Cooperative directly holds 54 of the shares and indirectly through Sic S.a.s, as specified in the section dedicated to Energia della Concordia, a further 20%, 1% is held by another Italian partner and the remaining 25% is held by Algerian partners. In 2012, after the major acquisitions made at the end of 2011, the company developed a considerable work portfolio that allowed it to achieve a good economic result; in fact, the value of production was around Euro 4.5 million, with a profit of Euro 190,414.

VIGNOLA ENERGIA S.r.l. • The company was formed in 2009 and the Cooperative holds 99% of the shares, while the remaining 1% is held by the Consorzio Cooperative Costruzioni di Bologna; it was established for the management of a district heating system to be implemented in the town of Vignola (MO). After a few years of waiting, the construction of the plant started in 2012 and will presumably become operational in 2013. Therefore the profit and loss account mainly includes overheads. The loss for the reporting year, amounted to Euro 5,765. The investments made ​​as of 31.12.2012 amounted to Euro 1.2 million. GRECANICA GAS S.r.l. • The company, was incorporated on 6 April 2010 before Silvio Vezzi, Notary in Modena, who recorded the deed under file no. 119122, folder no. 19121; the Cooperative controls 95% and CPL Distribuzione the remaining 5%. The company was created for the construction of the gas distribution network and the management of the relevant catchment area Calabria 12. In 2012 the company continued the construction of gas distribution networks. The company entered a loss of Euro 15,242 generated solely by general business expenses. The investments for the network under construction as of 31 December 2012 amounted to Euro 7.4 million.

VEGA ENERGIE S.r.l. • The company, which was incorporated on 27 January 2011 before Silvio Vezzi, Notary in Modena, has the corporate purpose of executing the concession agreement for the design, construction and management of photovoltaic electricity 44

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generation systems, for the implementation of measures to improve the energy efficiency of the Science and Technology Park of Venice - Vega and the concession of the integrated service of management and procurement of electricity, thermal energy, cooling energy, natural gas and drinking water to users of the park. The company was established as a "project company" in conformity with, and for the legal purposes provided for by Article 156 of Legislative Decree No. 163 of 12 April 2006 and subsequent amendments and additions; therefore the corporate purpose is limited only to the activities foreseen and governed by the tender documents for the assignment of the work and relevant management issued by VEGA - Parco Scientifico-Tecnologico di Venezia S.c.a r.l, as the contracting authority, and by the offer submitted by the temporary business association made up of "CPL Concordia Società Cooperativa" and Nova Marghera Facility S.r.l. to participate in the aforesaid procedure, as well as by the contract and relative agreement signed with VEGA - Parco Scientifico-Tecnologico di Venezia S.c.a r.l. During the year the company regularly carried out its business developing a value of production of Euro 3.1 million with a net profit of Euro 42,271. It should be noted that the result for the year was strongly influenced by the difficulties encountered in the collection of amounts due, in view of which the directors of the company set up a fund for bad debts Euro 312,000, a sum considered adequate with respect to the client’s claims. In fact, considering the persisting delays in payments by the Parco Scientifico e Tecnologico S.c.a r.l., which is the company’s main customer, the Court of Venice, based on the information provided by Vega Energie, issued -on 22 February 2013- a court order for Euro 1.1 million. The Vega Parco Scientifico Tecnologico di Venezia S.c.a r.l. (VPST) served a counter summons to the court order, within the dead lines provided by the law, giving a number of reasons instrumental to the delays in their payments. The company's directors have therefore implemented a series of initiatives aimed at recovering the receivables that are certain of their collectability. The fund referred to above was created also considering the possibility of collecting the said receivables through an out of court settlement.

TIPOWER S.a r.l. • he Tunisian company, of which the Cooperative owns 90% of the shares, was incorporated on 16 May 2011 in Tunis with the aim of taking to Tunisia the know-how of the parent company, in particular as regards the engineering part. In other words, the company will have to replicate in Tunisia what has been done in Algeria with AIPower. In 2012, the company only carried out commercial activities, with the aim of analysing tenders and participating in them. The few costs incurred were all deferred to the next financial year, so the result is 0.

P.E.A. PROGETTO ENERGIA AMBIENTE S.r.l. • the company, whose shares were entirely acquired by CPL Concordia in May 2011, was founded as a design company, in fact it was acquired for the values ​​it contains in relation to the holdings held in the project companies of the catchment areas in Sardinia. In particular, the company holds a call option to repurchase shares in the companies Fontenergia 4 S.r.l. and Fontenergia 6 S.r.l., which are the companies of the Sardinia catchment area with the highest intrinsic value. In 2012, the company did not carry out any work. Therefore, the profit and loss account only contains general expenditure costs for the maintenance of the company that recorded a loss of Euro 8,279. As regards the future of the company, a wider group reorganisation project is being studied that will involve it directly, as it may become the Sub Holding of the gas distribution companies of the group Cpl Concordia.

GHIRLANDINA SPORT S.r.l. • The company was established in 2009 to mange the holding in the company Modena Football Club S.p.A. In the financial year 2012 some shareholders left Ghirlandina Sport, because they did not agree with the entry in the company CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

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of the group ACGF S.r.l. from Rome. On 20 September 2012 Ghirlandina Sport transferred 10 % of the shares of Modena Calcio and in January 2013 it transferred a further 54.155 %. In 2013, following the Special Shareholders’ Meeting on 31 January of Ghirlandina Sport, several shareholders left the company, so now 93% of the company Ghirlandina is owned by CPL, 6% by WAM Group and the remaining 1% by Mivebo S.r.l. The results of the company Modena Football Club S.p.A for the year ended 31 December 2012 showed a loss of Euro 3,425,589. As a result of this, the financial statements of Ghirlandina Sport, show a loss of Euro 2,890,020, while the company's net equity was negative by Euro 279,236. The share capital was then partly restored during the members’ meeting, and in part by payments made during the approval of the Financial Statements. On the basis of these results, the Cooperative adjusted the value of the holding of the subsidiary Ghirlandina Sport S.r.l. to the corresponding portion of its net equity, with an effect on its financial statements of Euro 2,325,994.

MODENA FOOTBALL CLUB S.p.A. • At the start of the financial year 61% of the company was controlled by CPL Group. In the financial year 2012 some shareholders left Ghirlandina Sport, the controlling company of Modena Football Club S.p.a., because they did not agree with the entry in the company of the group ACGF S.r.l. from Rome. On 20 September 2012 Ghirlandina Sport transferred 10 % of the shares of Modena Calcio and in January 2013 it transferred a further 54.155 %. In 2013, following the Special Shareholders’ Meeting on 31 January of Ghirlandina Sport, several shareholders left the company, so now 93% of the company Ghirlandina is owned by CPL, 6% by WAM Group and the remaining 1% by Mivebo S.r.l. Therefore today CPL indirectly controls Modena Football Club S.p.a. with 32.12% of the shares. The result of the 2012 financial year showed a loss of Euro 3,425,589, about 2 million higher than the previous year. This increase is related to the reduced income from the stadium and from the proceeds from the sale of television rights. In addition, no transfers were made that generated capital gains. The Cpl Group is evaluating the possibility of further reducing its shares in the company, now run by the majority shareholder A.C.G.F., which foresees management costs significantly lower than in the past.

INVERSIONES ENERGIA Y AMBIENTE S.A. • The Cooperative acquired 75% of the shares of Argentine Holding in January 2012. The company is in fact the sub Holding established under Argentine law that holds shares in companies operating in the distribution and sale of gas and, more specifically, 99 % of the company Emprigas S.A. and 96 % of the company Redengas S.A. The company, according to Argentine accounting principles, valuated the two holdings in its financial statements using the net equity method for the company Redengas, and the cost method for the company Emprigas. The financial statements of the company Redengas clearly reflect the fact that the tariff system had not been adjusted in Argentina. We believe, however, that with the next expected increase of the tariff system and with the recognition of the residual values ​​of Emprigas, the Argentine subconsolidated values will be profitable. This is the belief of our minority partner Tradegar S.A. that on 18 April 2013 acquired 25 % of the shares of the Argentine Sub Holding thus becoming an equal partner and the company’s controlling company in 2013. REDENGAS S.A. • The company, 96% of which is owned by the Argentinean Holding Inversiones Y Energia Ambiente S.A. and 0.06% by the associated company Emprigas S.A., manages the gas distribution grid of the city of Paranà in the province of Entre Rios, serving about 49,000 users. Over the last 10 years the Argentine government has blocked the gas sales prices, while inflation has increased by 20-25% per year. 46

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In light of this situation it is obvious that the results of the company are constantly at a loss. The company was also influenced by the costs related to past transactions which should have ceased their effects with the 2012 financial statements. The company closed its financial statements with a loss of Euro 253 thousand.

EMPRIGAS S.A. • The company, 99% of which is owned by the Argentinean Holding Inversiones Y Energia Ambiente S.A. and the remaining 1% by the associated company Redengas S.a., had the concession for the gas distribution grid of the city of San Francisco. At the end of the concession, it passed under the management of the council, which now manages it directly. The company has a legal dispute underway with the Council of San Francisco concerning the recognition of the residual value of the investments. To date, in fact, the Council is managing the concession without having awarded to Emprigas the residual value of the investments. CPWH UK LTD • the company, founded in London in December 2012, was created to promote the internationalization process of the Group and then became the holding company of those foreign initiatives on which the group worked in 2012. The projects include studies of the African markets and the creation of a joint venture with a British partner for the marketing of meters and gas volume correctors. At present, the company, of which 100% is owned by the Cooperative, has acquired 50% of the shares of the company Biogengas S.r.l., an Italian company whose corporate purpose is the construction of small-scale plants for the production of biogas from animal waste. The company incorporated under British law showed a loss for the reporting year of Euro 15.139 having posted in the financial year all the establishment and start-up costs, which cannot be capitalised according to English accounting standards.

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B2. Associated Companies FONTENERGIA S.p.A. • This company, which deals with the construction and management of gas distribution networks in the catchment area 22 or the catchment area of Ogliastra, 48% of which is today controlled by the financing members Cooperare S.p.A., 3% by Sofinco S.p.A., and 49% by the cooperative. In the agreements and shareholders’ agreements, CPL was assigned the technical and administrative management, while Sofinco and Cooperare S.p.A. are jointly responsible for controlling the company governance. With regard to the company’s core operations, the severe economic crisis that hit the island of Sardinia led to a significant drop in consumption despite an increase in users connected. The cost containment initiatives taken during the year 2012 have limited the losses to acceptable terms, which amounted to Euro 198,829. From a financial point of view, the company still suffers from the lack of payment of the contributions that were recorded at the time. In the first months of 2013 the accounting on the works was delivered to the Sardinia Region in accordance with the criteria laid down by Law no. 784/80 and in addition the company also supplied the accounting documentation showing the reconciliation of the investments made with the data of the financial statements and the work accounting. The documents submitted and our communication on 5 April 2013 show booked investments for Euro34.3 million in the catchment area 22 and another Euro1.8 million in the town of Pattada. Considering that 50% of the works carried out are subject to contributions and that as of today the Sardinia Region has only disbursed Euro 9.6 million, it is clear that the residue to be collected by the company is absolutely due.

ICHNUSA GAS S.p.A. • The company is the holding company that owns 98% of the shares of the project companies established for the management of the catchment areas acquired by the Cooperative for the construction and distribution of gas in the region of Sardinia. In fact, in 2009 and 2010 different special purpose companies were established to manage the construction and distribution of gas in various Sardinian catchment areas, whose tenders were conducted in accordance with the regional resolutions on the gasification of Sardinia. The Cooperative was awarded the announced concessions of 13 catchment areas, one of which, the catchment area 28, headed by the company Fontenergia 28 S.r.l., was transferred in April 2011 to the company Fiamma 2000 S.p.A. Most of the catchment areas were awarded to temporary business associations, of which the cooperative is a part, and it will be possible to establish project companies to take over the ownership of the concessions. Today the corporate structure of the Holding Ichnusa Gas S.p.A. is as follows:

• CPL CONCORDIA SOC. COOP • INTERMEDIA FINANCE S.P.A. • IMPRESA PELLEGRINI S.R.L. • SAF COSTRUZIONI S.R.L.

45% 25% 20% 10%

The main activity carried out by the company during the financial year 2012 concerned the procurement of financial resources necessary to support the investments of the entire project. The current macroeconomic situation has not allowed the company to obtain such financing. The governing body, in accordance with the Credit Institutions that analysed the project, is working on a syndicated loan with a more limited scope of investment which therefore does not include all 12 catchment areas acquired but only 6 and more specifi-

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cally the catchment areas 4, 6, 7, 9, 15 and 37. In addition, for all catchment areas we are working on cost containment, to obtain a better return on investments and a reduction in invested capital. The value of investments commented herein already show the desired reductions. The total investments of these catchment areas are around Euro 75 million, with contributions from the Sardinia Region, according to tender rules, for Euro 33 million, for a net investment of Euro 43 million. As regards the catchment areas that will remain outside the aforesaid loan, considering the economic situation which has changed totally from the moment of the calls to bid to today and the non-arrival of natural gas, it will be necessary to confront the Sardinia Region to understand whether there is the possibility to renegotiate the contribution amounts. The year 2013 will be decisive to close the syndicated loan on the 6 catchment areas mentioned above, and to shape the future of the other 6. In the financial year, the company posted a loss of Euro 115,350 and a net equity of Euro 3,346,060. The section below analyses the individual project companies, already established and operational, part of the so-called Ichnusa project, which is today 98% controlled by the holding.

FONTENERGIA 4 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 4 comprising the towns of Osilo, Porto Torres, Sennori, Sorso and Stintino, in Sardinia. The planned investment of this catchment area amount to Euro 15.5 million, of which Euro 7.5 million will be granted as public funding. During the financial year the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 10,847, while net equity amounted to Euro 1,195,835. FONTENERGIA 6 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 6 comprising the towns of Alghero and Olmedo, in Sardinia. The planned investments for this catchment area amount to Euro 10.6 million, of which Euro 5.1 million will be granted as public funding. During the financial year the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 5,169, while net equity amounted to Euro 1,857,542.. FONTENERGIA 7 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 7 comprising the towns of Ittiri, Cargeghe, Muros, Ossi, Tissi, Usini, Uri, Putifigari and Villenova Monteleone, with Ittiri as head town. The planned investments for this catchment area amount to Euro 14.9 million, of which Euro 5.2 million will be granted as public funding. The company ended the construction phase at the end of 2011 with the completion of the network of the town of Ittiri . In 2012 it began the management and sale of gas, and at the end of the year there were 849 users connected. Due to the limited number of users, depreciation was not calculated. As a result of this, the company showed a profit of Euro 53,093, while net equity amounted to Euro 705,996. FONTENERGIA 9 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 9 comprising the towns of Ozieri, Berchidda, Tula and Ittireddu, with Ozieri as head town. The planned investments for this catchment area amount to Euro 8.4 million, of which Euro 3.5 million will be granted as public funding. The construction of the gas distribution network ended in the financial year and the sale to users started, which as of 31 December resulted in 130 users connected. As for the catchment area 7, given the low number of connections, depreciation was not applied. The loss entered by the company amounted to Euro 47,489, while net equity amounted to Euro 367,445.

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FONTENERGIA 10 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 20 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 10 comprising the towns of Ala dei Sardi, Buddusò, Bitti, Onani, Orune, Osidda, Anela, Benetutti and Nule. The planned investments for this catchment area amount to Euro 10.9 million, of which Euro 3.5 million will be granted as public funding. During the financial year, the design activities continued but the construction of the network was not started. The company achieved a profit of Euro 5,386 due to the interests receivable from Ichnusa resulting from an interest-bearing loan granted, while net equity amounted to Euro 1,501,553. FONTENERGIA 11 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 11 comprising the towns of Posada, San Teodoro, Budoni, Lodè, Siniscola and Torpè, with Posada as head town. During the financial year the design activities continued but the construction of the network was not started. The planned investments for this catchment area amount to Euro 11.0 million, of which Euro 4.4 million will be granted as public funding. The loss entered by the company amounted to Euro 10,094, while net equity amounted to Euro 445,006.

FONTENERGIA 15 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 15 comprising the towns of Dorgali, Galtellì, Irgoli, Loculi, Onifai and Orosei, with Dorgali as head town. The construction phase started in the reporting year and will end in 2013. The planned investments for this catchment area amount to Euro11.5 million, of which Euro 4.3 million will be granted as public funding. The loss entered by the company amounted toEuro 20.158, while net equity amounted to Euro 282.123.

FONTENERGIA 19 S.r.l. • The company was formed for the design and construction of the gas distribution network of 19 Catchment area that includes the towns of Terralba, Marrubiu, Mogoro, Palmas Arborea, San Nicolò d’Arcidano, Santa Giusta and Uras. The planned investments for this catchment area amount to Euro 12.3 million, of which Euro 4.9 million will be granted as public funding. During the financial year the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 1,388, while net equity amounted to Euro 28,458. FONTENERGIA 26 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 26 comprising the towns of Barrali, Gesico, Goni, Guamaggiore, Pimentel, San Basilio, Selegas, Senorbì and Suelli. During the financial year the design activities continued but the construction of the network was not started. The planned investments for this catchment area amount toEuro12.5 million, of which Euro3.4 million will be granted as public funding. The loss entered by the company amounted to Euro10,538, while net equity amounted to Euro794,004.

FONTENERGIA 27 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 27 comprising the towns of Furtei, Guasila, Samassi, Samatzai, Sanluri, Segariu, Serramanna and Serrenti. During the financial year the deign activities continued but the construction of the network was not started. The planned investments for this catchment area amount to Euro 23.2 million, of which Euro 7.7 million will be granted as public funding. The loss entered by the company amounted to Euro 10,232, while net equity amounted to Euro 1,849,725.

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Report on operation chap.2

FONTENERGIA 35 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 20 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 35 comprising the towns of Giba, Masainas, Narcao, Perdaxius, Piscinas, Sant’Anna Arresi, Tratalias and Villaperuccio. The planned investments for this catchment area amount to Euro 10.4 million, of whichEuro 3.6 million will be granted as public funding. During the financial year the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 2.363, while net equity amounted to Euro 642.571.

FONTENERGIA 37 S.r.l. • The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the Catchment area 37 comprising the towns of Monastir, Nuraminis, San Sperate, Ussana and Sestu. During the financial year the design activities continued but the construction of the network was not started. The planned investments for this catchment area amount to Euro 13.9 million, of which Euro 6.2 million will be granted as public funding. The loss entered by the company amounted to Euro 10,010, while net equity amounted to Euro 7443,782.

PEGOGNAGA SERVIZI S.r.l. • The company was established in April 2005 to manage the cemetery services of the town of Pegognaga (MN). The Cooperative holds 50% of the shares, while the remaining 50% is held by the company Mazzola & Bignardi Servizi S.r.l. In the reporting year there was a decrease in income due to a temporary decrease in the number of renewals of niches. The result for the reporting year therefore shows a loss of Euro 22,355, while net equity amounts to Euro 209,300. TECLAB S.r.l. • The company, of which the Cooperative holds a 35% share was acquired on 22 April 2004, with deed recorded with the Register of Companies of La Spezia under prot. 4365. The company, which deals with the design and development of remote control software, was acquired as an ideal partner for our former Systems Division. The result for the reporting year shows a loss of Euro 24,729, while net equity amounts to Euro 226,741.

COIMMGEST S.p.A. • The company was established on 14 May 2007 before Silvio Vezzi, Notary in Modena, who registered the deed under file no. 114655 and folder no. 17735. The 55% majority share is held by Sofinco S.p.A., while the Cooperative holds the remaining 45%. The company was formed to manage real estate assets of the cooperative world and so far it has acquired the leasing agreements related to the properties of the historical headquarters in Concordia sulla Secchia and of the building in Via Grandi, 43-45, of the premises of the offices in Melegnano, Milan, Bologna, Fano and Padua. For each of these properties the company then entered into rental agreements with the Cooperative. The company has applied the international accounting standards to its financial statements, in particular the IAS 17 for the valuation of leasing agreements. It should be noted also that the Cooperative has an option agreement on the shares, for the purchase of the remaining 55 % owned by the majority shareholder, to be exercised by 31 December 2017. The activity of the reporting year was heavily affected by the earthquake that hit the provinces of Modena, Bologna, Ferrara and Mantua on 20 and 29 May 2012. The headquarters in Concordia sulla Secchia was strongly hit by the earthquake; the company manages as user the buildings of the historical headquarters, which include the units A, B, C, D and E, as well as the adjacent building referred to as "F" . Following the assessment of the total damage to the buildings mentioned above, it resulted that the headquarters of Concordia sulla Secchia managed by Coimmgest suffered a damage of Euro 6,967,509.36. Of this amount Euro 3,860,533.51 refer to properties to demolished and rebuilt, Euro 279,700 relate to demolition, while the remaining part pertains to repairs, seismic improvement and energy efficiency upgrade. A portion of the conventional reconstruction cost, equal to Euro 3,860,533.51, was charged to the parent company as it was attributable to buildings

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built on land owned by the leasing company; the other costs were charged to the company. The total amount of damage is shown in the table below:

Summary of damage resulting from mr. Pongiluppi's report REAL ESTATE

Amount attributable to CPL

Amount attributable to coimmgest

TOTAL

DAMAGE TO MAIN UNIT "A2"

290,945.91

1,051,036.00

1,341,981.91

DAMAGE TO MAIN UNIT "D"

0.00

1,881,150.01

1,881,150.01

DAMAGE TO MAIN UNIT "F"

637,401.58

0.00

637,401.58

TOTALE

928,347.49

2,932,186.01

3,860,533.50

Summary of demolition costs resulting from mr. Pongiluppi's report REAL ESTATE

Amount attributable to CPL

Amount attributable to coimmgest

TOTAL

DAMAGE TO MAIN UNIT "A2"

0.00

103,950.00

103,950.00

DAMAGE TO MAIN UNIT "D"

0.00

119,650.00

119,650.00

DAMAGE TO MAIN UNIT "F"

56,100.00

0.00

56,100.00

TOTALE

56,100.00

223,600.00

279,700.00

The table above shows that the company suffered damages amounting to Euro 2,932,186.01 and demolition costs amounting to Euro 223,600. In relation to the total value assessed by experts of Euro 2,932,186.01 of the overall damage, the residual amount as of 31.12.2012 of the property identified as unit "D" amounted to Euro 1,303,157.36, so instead of devaluating the value resulting from the damaged assessment report the amount of Euro 1,303,157 was devaluated. Therefore, in these Financial Statements the total amount of devaluation entered amounted to Euro 2,354,193, an amount determined by the devaluation of unit "D" for Euro1,303,157 and of unit "A2" for Euro 1,051,036. In light of the cost posted in terms of damage, the company has recorded under the extraordinary earnings the amount of Euro 3,400,000, which results from the Expert Assessment Report issued by Unipol, details of which are as follows:

• Claim 3997/2012/45447 of 20/05/2012 issued on 26/04/2013 amounting to Euro 277,300.00; •Claim 3997/2012/57483 of 29/05/2012 issued on 29/04/2013 amounting to Euro 2422,700.00; • Claim 3997/2012/69140 of 29/05/2012 issued on 29/04/2013 amounting to Euro 700,000.00. The repayment of these claims will be assigned to the companies following the issue of the authorisation to be decided by Italease and INGLEASE Spa; today, we received formal communication of the positive outcome. Finally, the company enjoyed the suspension and renegotiation of leasing agreements relating to the properties located in the area of the earthquake of Concordia sulla Secchia from 1 July to 31 December, and reduced rent was charged by the lessor for the CPL Concordia buildings. Despite the fact that the earthquake strongly affected the company, the result for the reporting year shows a loss of Euro 244,726, while net equity amounts to Euro 805,542.

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COMPAGRI S.p.A. in liquidazione • The company

of which the Cooperative holds 22.22% of the shares, is now in liquidation after having transferred the business unit related to the aerobic system to Agrienergia S.p.A. in 2010. All that remains to be managed are the payables and receivables of a financial nature that will be closed following the start-up of the management activity of Agrienergia. Consequently the result of the company only includes general expenses and financial charges; the result for the reporting year amounted to a loss of Euro 17,641

AGRIENERGIA S.p.A. • Since 2010 the management of the aerobic system and the construction and subsequent management of the new anaerobic plant have been carried out by Agrienergia S.p.A. The year 2012 was characterized by the continuation of the construction of the new anaerobic plant which it was hoped would begin by the middle of the previous financial year. Unfortunately, due to a series of countless bureaucratic problems in issuing permits and because of an endless series of technical problems, the construction phase has experienced considerable delays. The plant is scheduled to be completed in late summer 2013. The company closed its financial statements with breakeven results, covering its losses with part of the "Fund for risks and charges" assigned by Compagri S.p.A. to deal with the potential losses that were expected in the start-up period. X DATANET S.r.l. • Since 2011, the Cooperative owns 50 % of the shares of the company. The company deals with the development and maintenance of software, integrating with the Cooperative’s Information & Communications Technology sector. During 2012, the company developed and completed the optic archiving project and is working on other innovative projects. The company closed the financial year 2011 with a net profit of Euro 102,111, which is to be considered a very good result, while net equity amounted to Euro 465,196. SARDA RETI COSTRUZIONI S.r.l. • This company has been operating for several years in Sardinia in the LPG bottling sector and retail sale of LPG in Sardinia. The severe economic crisis that has hit our country has been even more critical for Sardinia. This crisis has generated a further slump in consumption, even of primary ones such as fuel for heating and cooking. In this difficult situation, the company entered a loss of Euro 361,210. Net equity, as a result of waivers of interest-free loans made in ​​ previous years, remains solid and amounts to Euro 1,193,679. The parent company, however, has devaluated the value of the holding by Euro 236,300. FONTENERGIA 38 S.r.l. in liquidazione • The company was incorporated on 19 December 2009 before the Gianmassimo Sechi, Notary of the district of Cagliari, who recorded the deed under file no. 72191 and folder no. 25183. The company was established for the management, maintenance and distribution of gas in the city of Cagliari. The company was incorporated as a "project company" in accordance with and for the purposes provided for in art. 156 of Legislative Decree no. 163 of 12 April 2006, but was not awarded the concession. The company was placed in liquidation, which will presumably be completed in 2013. IES SOLARE S.r.l. • the company, of which the Cooperative owns 25% of the shares, deals with the design, installation and maintenance of photovoltaic plants, mainly in Tuscany. The Cooperative made this acquisition in order to penetrate the alternative energy market in Tuscany, a region generally reluctant to turn to non-local operators. The company closed the 2012 financial year with a profit of Euro 170,553, while net equity amounted to Euro 776,671.

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SOLARPLANT S.r.l. • The company, whose corporate structure is the same as Ies Solare S.r.l., is the classic special purpose company created to manage a 1 MW photovoltaic array site in Livorno that started production in 2011 . It should be noted that during the year 2012, the Cooperative sold 1% of its shares to one of the members of the company that exercised his pre-emptive right. The result recorded by the company as of 31 December 2012 showed a profit of Euro 243,252 and a net equity of Euro 739,342. NOCI SOLAR 1 S.r.l. • The company, which initially only had the Cooperative as shareholder, was created for the construction and subsequent management of the photovoltaic array called Noci 1, a plant with rated power of just under one megawatt located in the town of Noci (BA). On 15 December 2010, the Cooperative sold 51% of its shares in the company to the group WAMGROUP S.p.A., which now controls it. The array was completed and connected in the last days of December 2010 and production began in 2011. The result recorded by the company as of 31 December 2012 showed a profit of Euro 118,576 and a net equity of Euro 324,084.

NOCI SOLAR 2 S.r.l. • The company, which initially only had the Cooperative as shareholder, was created for the construction and subsequent management of the photovoltaic array called Noci 2, a plant with rated power of just under one megawatt located in the town of Noci (BA). On 15 December 2010, the Cooperative sold 51% of its shares in the company to the group WAMGROUP S.p.A., which now controls it. The array was completed and connected in the last days of December 2010 and production began in 2011. The result recorded by the company as of 31 December 2012 showed a profit of Euro 100,903 and a net equity of Euro 288,521.

GHIRLANDINA SOLARE S.r.l. • The company, founded in July 2010, was established for the construction and subsequent management of a photovoltaic system in the town of Modena in collaboration with Hera S.p.A., whose production began in 2011. The result recorded by the company as of 31 December 2012 showed a profit of Euro 76,284 and a net equity of Euro 173,660. ANDINA SERVICIOS TECNOLOGICOS SAC • The company was formed in May 2011 in Lima, Peru to operate in Peru with the aim of marketing technologies and systems part of the Cooperative’s System sector. The company is not yet active.

POLARGAS S.r.l. • The Cooperative acquired 50% of the shares of the company on 27 July 2011 before Carlo Bonanno, Notary in Saluzzo. The company was founded as a vehicle to develop the LNG (liquefied natural gas) technology at national level. The potential of the company lies in the joint venture between the two partners, CPL on the one hand and Vanzetti Engineering on the other. The company aims to build storage facilities and micro networks to shortly replace LPG, a more dangerous and much more expensive gas. During the year, the company operated exclusively in the motor vehicle sector while investments were mainly made in the civil sector. For the domestic market, LNG is not ruled by final legislation and the authorization process is long and complex. For these reasons, the company has experienced a sharp slowdown in its growth and development. The directors are working to obtain in the coming months the necessary authorisations to begin to develop the business. For the above mentioned reasons the company closed the 2012 financial year with a loss of Euro 106,610, while net equity amounted to Euro 796,996. ENERGETSKI SERVIS D.O.O. •

On 10 October 2012, the Cooperative acquired a 33% share in this company incorporated under Croatian law that has the corporate purpose of studying and designing systems to be generically used in the energy sector. The company's activity may help the Group to develop its business segments on the Croatian territory, together with the two equal partners Rotorm d.o.o. and Frigomotors d.o.o., two other young companies that are very active in this sector. During 2012, activities were not carried out, so the result for the reporting year showed a loss of Euro 1,399 corresponding to the few general expenses incurred during the year. Net equity amounted to Euro 38,486.

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FIMETRA S.r.l. •

this company, established on 14 December 2010, was born from the collaboration of the two partners CPL Concordia and Coopbilanciai di Campogalliano for the development of new prototypes of meters and correctors foreseen by the AEEG Resolution no. 155/2008 In 2011, the company acquired the production lines, equipment and software necessary for the development and marketing of the meters and correctors, provided for by the aforementioned resolution, which by 2016 must replace almost the entire national gas measurement system. Because of the extension by the Authority for Electricity and Gas of the deadline for the replacement of meters, the production was very low. Despite this, the company lease agreement in place with Coopbilanciai allowed the company to invoice 75% of the annual rent and therefore it achieved a breakeven result. The result for the reporting year shows a profit ofEuro 27,642, while net equity amounts to Euro 1,209,292.

Consolidated financial statements As mentioned in the introduction, over time the group’s consolidated financial statements have grown in terms of content and importance. The consolidated financial statements of the group CPL for the reporting year significantly reflect the economic and financial dynamics resulting from the development strategies planned in the last years by the Cooperative’s management team. The tables below show the profit and loss account and balance sheet of the consolidated financial statements and the related ratios, compared with the previous four financial years.

C1. Economic Analysis The section below includes the consolidated financial statements for the last five years reclassified according to the value added method.


Gruppo CPL CONCORDIA: Consolidated Profit and Loss Accounts reclassified according to Added Value method (Values expressed in Euro)

Group data Dec. 31, 2012 Income from sales and performances Variation of the stock of semi-finished and finished products

%

Dec. 31, 2011

%

Dec. 31, 2010

%

368,755,002

89,63%

356,374,962

91,80%

344,071,757

89,79%

( 3,518,102)

-0,86%

1,198,681

0,31%

2,087,663

0,54%

Dec. 31, 2009

%

273,434,698 85,90% 19,406

0,01%

Dec. 31, 2008

%

233,464,825 89,24% 576,641

0,22%

Variations of works in progress

7,054,266

1,71%

( 7,822,335)

-2,01%

( 3,461,488)

-0,90%

4,218,113

1,33%

2,641,285

1,01%

Internally generated fixed assets

30,129,651

7,32%

31,076,127

8,00%

31,224,727

8,15%

33,330,291

10,47%

22,465,251

8,59%

7,320,507

2,30%

2,460,153

0,94%

Other income VALUE OF PRODUCTION Purchase costs Variation of the stock of raw materials Costs for services Costs for the employment of third-party assets

9,014,017

2,19%

7,384,192

1,90%

9,252,613

2,41%

411,434,833

100,00%

388,211,626

100,00%

383,175,272

100,00%

318,323,015 100,00%

261,608,155 100,00%

( 159,118,083)

-38,67%

( 151,635,500)

-39,06%

( 156,041,443)

-40,72%

( 113,228,853) -35,57%

( 89,412,039) -34,18%

( 3,313,822)

-0,81%

3,470,420

( 117,075,013)

-28,46%

( 114,022,395)

-29,37%

( 124,648,765)

-32,53%

( 100,320,174) -31,52%

( 86,395,614) -33,02%

( 15,982,430)

-3,88%

( 16,569,551)

-4,27%

( 16,509,697)

-4,31%

( 13,043,466)

-4,10%

( 10,512,305)

0,89%

7,926,827

2,07%

( 876,791)

-0,28%

( 673,653)

-0,26%

-4,02%

Sundry operating expenses

( 5,444,675)

-1,32%

( 3,897,628)

-1,00%

( 4,328,331)

-1,13%

( 4,610,026)

-1,45%

( 3,214,075)

-1,23%

ADDED VALUE

110,500,810

26,86%

105,556,973

27,19%

89,573,864

23,38%

86,243,706

27,09%

71,400,469

27,29%

( 62,951,961)

-15,30%

( 60,876,944)

-15,68%

( 55,354,294)

-14,45%

47,548,849

11,56%

44,680,030

11,51%

34,219,569

Depreciation of tangible fixed assets

( 6,283,772)

-1,53%

( 6,354,029)

-1,64%

Amortisation of intangible fixes assets

( 11,195,468)

-2,72%

( 9,122,022)

-2,35%

Personnel cost and relating charges MOL (GOM)

( 50,757,875) -15,95%

8,93%

35,485,831

( 6,086,569)

-1,59%

( 7,235,051)

-1,89%

( 45,503,326) -17,39%

11,15%

25,897,143

9,90%

( 5,372,843)

-1,69%

( 4,538,904)

-1,74%

( 5,478,904)

-1,72%

( 4,798,687)

-1,83%

Provisions and devaluation

( 6,679,282)

-1,62%

( 5,357,977)

-1,38%

( 4,472,280)

-1,17%

( 3,231,300)

-1,02%

( 1,604,081)

-0,61%

Amortisation/depreciation and provisions

( 24,158,522)

-5,87%

( 20,834,027)

-5,37%

( 17,793,899)

-4,64%

( 14,083,047)

-4,42%

( 10,941,672)

-4,18%

OPERATING RESULT

23,390,326

5,69%

23,846,003

6,14%

16,425,670

4,29%

21,402,784

6,72%

14,955,472

5,72%

Interest and other financial charges

( 6,182,131)

-1,50%

( 5,810,819)

-1,50%

( 3,316,780)

-0,87%

( 3,544,259)

-1,11%

( 5,359,997)

-2,05%

3,128,862

0,76%

1,249,743

0,32%

508,963

0,13%

539,387

0,17%

555,815

( 3,053,269) 20,337,057

-0,74% 4,94%

( 4,561,076) 19,284,927

-1,17% 4,97%

( 2,807,817) 13,617,853

-0,73% 3,55%

( 3,004,872) 18,397,913

-0,94% 5,78%

( 4,804,182) 10,151,290

0,21% -1,84% 3,88% 0,02%

Other financial earnings

TOTAL FINANCIAL ACTIVITY CURRENT RESULT Earning from holdings

111,343

0,03%

730,410

0,19%

9,257,797

2,42%

59,546

0,02%

61,928

Adjustments of financial assets

( 3,621,668)

-0,88%

( 3,586,802)

-0,92%

( 4,751,321)

-1,24%

( 1,448,209)

-0,45%

583,754

0,22%

Rebate to members

( 1,700,000)

-0,41%

( 850,000)

-0,22%

( 1,700,000)

-0,44%

( 1,500,000)

-0,47%

( 1,200,000)

-0,46%

( 122,309)

-0,03%

625,279

0,16%

2,055,035

0,54%

709,155

0,22%

225,746

0,09%

Special activities RESULT BEFORE TAX

15,004,422

3,65%

16,203,814

4,17%

18,479,364

4,82%

16,218,405

5,09%

99,822,717

3,75%

Tax on the income of the financial year

( 6,286,904)

-1,53%

( 6,620,614)

-1,71%

( 3,669,471)

-0,96%

( 5,163,187)

-1,62%

( 4,280,480)

-1,64%

NET RESULT

8,717,518

2,12%

9,583,200

2,47%

14,809,893

3,87%

11,055,217

3,47%

5,542,237

2,12%

MINORITY (PROFIT) LOSS GROUP PROFIT (LOSS)

212,006

424,581

371,987

131,114

( 79,118)

8,929,524

10,007,781

15,181,880

11,186,331

5,463,119

Despite the difficult macroeconomic situation of our country, and not only that, the Cpl Concordia Group achieved very good results, especially in terms of Gross Operating Margin. The results of the Group and of the parent company were also affected by the terrible earthquakes on 20 and 29 May 2012. In fact in the extraordinary section the parent company posted costs for over Euro 3 million for damages and delocalisation charges. Without these events the net result would have been better than the previous financial year.

C2. Analysis of assets and liabilities The balance sheet is prepared with the method based on the item liquidity of the last five years.

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Consolidated Balance Sheets reclassified according to the liquidity method CONSOLIDATED BALANCE SHEETS

(Values expressed in Euro)

Group data Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

ASSETS Short-term assets Cash and cash equivalents Financial assets which are not fixed assets Receivables from customers and other receivables Stock Receivables from members for payments still due Accrued income and prepayments Totale attività a breve termine

102,238,585 4,410,384 244,205,359 40,582,975 1,502,018 5,635,426 398,574,747

61,526,074 311,089 248,239,162 42,035,468 1,392,714 5,741,781 359,246,289

39,934,258 3,342,341 235,533,153 45,354,244 1,106,117 5,336,495 330,606,607

44,382,965 20,084 176,503,149 36,997,411 1,865,121 5,781,392 265,550,122

25,450,671 84 148,416,906 32,925,820 1,307,851 6,328,906 214,430,237

Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets Total fixed assets

44,815,342 117,586,599 35,045,355 197,447,296

39,544,912 108,345,331 32,413,233 180,303,476

33,886,680 99,280,777 36,644,291 169,811,748

23,383,972 100,354,860 23,987,705 147,726,538

16,518,794 110,904,449 18,805,022 146,228,266

Total ASSETS

596,022,043

539,549,764

500,418,355

413,276,660

360,658,502

LIABILITIES Short-term liabilities Payables due to banks Payables due to members and other funders Advances Payables due to suppliers Payables represented by negotiable instruments Payables due to subsidiary companies Payables due to associated companies Tax payables Payables due to social security institutions Other short-term payables Accrued liabilities and deferred income Total short-term liabilities

68,641,007 10,951,740 8,833,013 179,609,666 0 1,399,769 868,497 6,056,901 3,671,899 8,038,352 4,827,804 292,898,648

56,091,940 11,238,163 15,134,966 155,248,773 0 0 1,625,305 10,824,634 4,660,054 9,248,628 1,936,936 266,009,399

38,670,512 11,219,383 22,879,506 154,141,960 0 4,517,880 2,479,227 19,449,532 4,606,420 10,172,417 768,200 268,905,034

24,222,993 9,972,513 5,978,711 145,301,471 0 2,215,200 419,162 11,417,379 4,450,611 12,665,648 955,321 217,599,010

23,111,934 8,626,554 10,542,116 122,129,652 0 0 134,574 7,273,227 4,166,163 11,375,041 477,122 187,836,383

Medium-/long-term liabilities Debentures Payables due to banks Payables due to members and other funders Advances Payables due to suppliers Payables represented by negotiable instruments Tax payables Other payables falling due after next financial year Severance pay for employment termination Fund for retirement pensions and similar obligations Tax fund Other funds Total medium-/long-term liabilities

0 131,055,272 11,578,863 0 4,341,977 0 139,690 641,568 4,906,855 21,526 448,446 10,936,339 164,070,535

0 114,009,597 12,058,863 0 3,649,597 0 0 287,381 4,905,251 21,526 379,373 8,065,754 143,377,341

0 83,941,505 12,538,863 0 3,491,619 0 0 559,973 5,247,411 21,526 307,161 4,834,046 110,942,104

0 68,520,018 0 0 2,607,790 0 0 593,432 5,796,182 21,526 234,609 3,932,389 81,705,947

0 60,046,242 0 0 2,053,233 0 0 208,297 6,132,307 21,526 233,177 2,307,990 71,002,772

Net Equity Share capital Revaluation reserve Legal reserve Statutory reserves Reserve for treasury shares held Capital contribution reserve, Law no. 784/80 Consolidation reserve Surplus from merger Exchange rate fluctuation reserve Profit / Loss brought forward Profit / loss of the financial year Total Group Net Equity

20,713,737 656,679 108,867,183 78,184 531,892 1,269,396 ( 2,023,987) 235,597 ( 2,028,048) 0 8,929,524 137,230,158

19,587,590 656,679 101,181,402 78,184 531,892 1,269,396 ( 2,883,518) 235,597 ( 1,604,118) 0 10,007,781 129,060,886

18,312,536 656,679 89,473,011 78,184 531,892 1,269,396 ( 4,368,775) 235,597 ( 1,470,245) 0 15,181,880 119,900,157

15,938,753 656,679 82,158,320 78,184 531,892 1,269,396 1,726,778 235,597 ( 1,416,124) 0 11,186,331 112,365,807

13,558,953 656,679 77,140,319 78,184 0 1,269,396 3,096,761 235,597 ( 874,376) 0 5,463,119 100,624,633

1,822,703

1,102,138

671,060

1,605,897

1,194,714

596,022,043

539,549,764

500,418,355

413,276,660

360,658,502

Minority Net Equity

Total LIABILITIES

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The elements that characterize the structure of the group’s Balance Sheet are the same as those that characterize the parent company’s financial statements. The main difference lies in the amount of consolidated tangible fixed assets which, compared to the amount entered in the parent company’s balance sheet, are significant due to the value of the gas distribution networks. In the consolidated Balance Sheet, this amount is offset by the higher debt of the group generated by the investments in the construction of the said networks. Considerations on the other items of the Consolidated Balance Sheet remain unchanged with respect to those on the parent company's balance sheet.

C3. Consolidated financial ratios The table below shows the ratios of the consolidated balance sheet for the last five years:

CPL CONCORDIA Group: Key financial indicators Group data

ECONOMIC ANALYSIS

31/12/2012

31/12/2010

31/12/2009

31/12/2008

R.O.E. (Return on Equity))

6,96%

8,41%

14,50%

11,06%

5,74%

R.O.I. (Return on Investment)

3,92%

4,42%

3,28%

5,18%

4,15%

MOL/Value of Production

11,56%

11,51%

8,93%

11,15%

9,90%

Incidence of Extraordinary Earnings and Charges

61,82%

58,03%

7,57%

47,73%

63,47%

Incidence of Net Financial Charges on V.P.

0,74%

1,17%

0,73%

0,94%

1,84%

7,66

5,23

5,85

7,12

3,11

Dec. 31, 2008

EBIT/ Net Financial Charges KEY :

FINANCIAL AND EQUITY ANALYSIS

31/12/2012

Calculation formulas

6,43% R.O.E. = RN/CP x 100 3,81% R.O.I. = RO/CI x 100 8,82% MOL/VP 60,01% 1- RN/RO 1,97% OFN/VP x 100 2,42 RO/OFN

RN = Net or final result CP = Equity Capital "Net equity-Result of the financial year" RO = Operating Result CI = Invested capital or Total Assets MOL = Gross Operating Margin VP = Value of Production OFN = Net Financial Charges

Group data

Budget

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Dec. 31, 2009

Liquidity ratio

1,36

1,35

1,23

1,22

1,14

Leverage

4,65

4,53

4,78

4,08

3,79

Net Financial Position/ Net Equity

0,94

1,11

1,02

0,58

0,70

Elasticity Ratio

2,02

1,99

1,95

1,80

1,47

EBITDA/DEBT

39,62

33,88

32,15

60,83

39,04

DEBT/EBITDA

2,52

2,95

3,11

1,64

2,56

DEBT = 119,998,721 131,872,488 106,436,005 EBITDA = 47,548,849 44,680,030 34,219,569

58,332,560

66,334,059 156,085,211

35,485,831

25,897,143

KEY :

58

Budget

31/12/2011

AC DBT CI CP DBTO DMLTO IMMOB MOL DEBT

Dec. 31, 2012

1,18 AC/DBT 4,23 CI/CP 1,24 (DBTO+DMLTO)/CP 1,64 AC/IMMOB 24,01 MOL/DEBT x 100 4,16 DEBT/MOL

37,475,454

= Short-term assets = Short-term liabilities = Invested capital or Total Assets = Equity Capital "Net equity-Result of the financial year" = Short-term financial payables = Medium-/long-term financial payables = Fixed assets = Gross Operating Margin = Short-term financial payables + long-term financial payables net of cash and cash equivalents

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

Calculation formulas


Report on operation chap.2


As with the CPL financial statements, also the ratios of the Group’s consolidated financial statements were positive with a good balance between the income and financial parts. The ratios of the consolidated financial statement all showed an improvement compared to the previous financial year. Without a doubt the suspension of the payments foreseen by Legislative Decree 47/2012 allowed the company to manage in the best way the payments to suppliers resulting in a positive impact on the Group’s debt. On the other hand it is important to remember the delay with which the public bodies pay their debts, sometimes over 200 days, which also has a significant impact on the debt. Please note finally that the Debt/Ebitda ratio was 2.52, better than the previous financial year and in line with the covenants usually required by credit institutes.

D Financial Situation Introduction The year 2012 was a difficult year due to the recession that continues to severely affect our country and the Eurozone economies. The continuation of such a deep global crisis, now in its fifth year, has led to a further deterioration in the profitability of firms, domestic demand is weak, families’ real income is decreasing and consumers’ confidence is at its lowest. Furthermore, the increase in unemployment, in particular as regards young people, has become a worrying social problem. A crisis that was initially of a financial nature continues to expand and affect the real economy, putting a strain on the stability of the Euro, banking industry and of the entire European financial system, and a climate of recession permeates Italy, where the main economic dynamics are supported by a few export-oriented sectors. Despite these problems, however, the past year has seen signs of progress on the political – institutional side, thanks to the adoption of strict and credible measures implemented to limit the Eurozone crisis and public debt in many countries. This started to have a positive affect in the summer and was reflected on financial markets which showed a good performance in the last part of 2012. This progress lets us hope that in 2013 we will see consolidated signs of improvement, although there are still many unknown factors and it is realistic to expect that the process to overcome the crisis, which has become structural, will inevitably be slow and gradual and will start showing results from 2014.

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Progress of the financial operations of CPL CONCORDIA in financial year 2012 The macroeconomic environment in recent years has negatively influenced the result of the financial operations of many companies. These negative effects are not present in the financial statements of CPL Concordia, which on the contrary, for the past five years has shown a continuous improvement, except a slight worsening in 2011. The reclassifications of the profit and loss accounts of the Parent Company highlight the following: the impact of the net financial operations related to the value of production was 1.16% in 2008, 0.44% in 2009, 0.32% in 2010, rising to 0.74% in 2011 before falling to 0.26% in 2012. The same ratio, analysing the consolidated financial statements of CPL Concordia Group was 1.84% in 2008, 0.94% in 2009, 0.73% in 2010, 1.17% in 2011 and 0.74% in 2012. Data that shows countercyclical trend in a time when the cost of money has increased a great deal compared to 2008. The substantial reduction at the end of 2009 and 2010 of the value of this ratio was due to the reduction in debt (which at the end of 2009 reached the minimum value and then increased in 2010 and 2011) and to the fall in interest rates in the markets in the last months of 2008, which remained so during the financial years 2009 and 2010. Similarly, the significant increase in the cost of money, characterising in particular the new credit lines with spreads much higher than those of the loans of the previous years, caused the rise in the cost of financial operations in 2011. This increase was limited in 2012 due to the suspension of the repayments of the capital amount of bank loans, following the disastrous events in the month of May. In fact, on 8 June 2012 a request for moratorium was sent, as an act of solidarity towards the Company following the earthquake, to all banks and financial institutions with which the Cooperative had medium to long term loans. The request included a suspension for a period of 12 months of the repayment of the capital amount of loan instalments; while we were waiting for the answers from the credit institutes Legislative Decree 74 of 08 June 2012, converted into Law no. 122 of 1 August 2012 was implemented with the suspension of the payments of the entire amount of the instalments (capital + interest) of any loan granted to companies affected by the Earthquake of 20 May 2012, until 30 November 2012. Subsequently, notwithstanding the provisions of law, the Cooperative entered into bilateral agreements with the credit institutes obtaining, from almost all of them, a suspension for the repayment of the capital amounts at least until June 2013, and paying the interests where required. All other conditions remained unchanged. Only one credit institute did not accept the bilateral suspension and only applied the legal provisions. Thanks to these bilateral agreements, it was possible to suspend repayments for loans up to 30 September 2013, for an amount of approximately Euro 30 million; these loans would otherwise have been replaced by new loans at higher market conditions. The same bilateral suspension of 12 months for the repayment of the capital amounts of bank loans was requested and applied also to other companies of the CPL Group: Ischia Gas S.r.l. for the syndicated loan with BPER as head bank; Marigliano Gas S.r.l. for the syndicated loan with BPER as head bank; CPL Distribuzione S.r.l. for the syndicated loan with UNICREDIT as head bank, for the UNICREDIT loan (former Banco di Sicilia), for the financial leasing with UNICREDIT LEASING and the loan from MPS; Serio Energia S.r.l. for the two loans with BPER; Immobiliare della Concordia S.r.l. for the loan from Banco Popolare; Fontenergia S.p.a. for the two loans with CARISBO, for the loan with BPER and the loan from Banco di Sardegna; Pegognaga Servizi S.r.l. for the loan with Banca di Sondrio. The acceptance of the request for extraordinary moratorium made by the Cooperative represented an important support from the Credit Institutes towards the entire CPL Concordia Group, whose headquarters in Concordia was badly affected by the

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earthquake. In November 2012, in accordance with Decree 74/2012, the Cooperative presented the application for an interest free bank loan for the payment of duties, taxes and contributions whose payment had been suspended until 30 November 2012, as well as for payments to be made in the period from 1 December 2012 to 30 June 2013. The fund for the granting of this loan was provided to the bank by the Loans and Deposits Bank (CDP). The funding was requested through the bank MPS for an amount of Euro 40.9 million. As of 14 December 2012 MPS had delivered a first part amounting to Euro 30,330,000, the second amount was paid on 1 February 2013, including an integration, for a total funding of Euro 43.9 million. Currently, following the Legislative Decree 43/2013, the possibility of financing the payment of taxes has been extended until 30 September 2013. After the said date, the total amount that has been actually used, must be repaid in three six-monthly instalments due on 31 December 2013, 30 June 2014 and 31 December 2014. The same funding was requested and obtained by other companies part of the Group: “Coopgas S.r.l.” and “Immobiliare della Concordia S.r.l.”. As regards "Coopgas Srl" the loan obtained from BPER, was valued as of 31 December 2012 for an amount of Euro 3.8 million, and as regards "Immobiliare della Concordia" the loan obtained from BPER, was valued as of 31 December 2012 for an amount ofEuro 0.294 million. The total debt of both loans will be confirmed, as well as the line of credit granted to the Parent Company on 30 September 2013 and reimbursed according to the same conditions (no. 3 six-monthly instalments, the first one due on 31 December 2013). At the end of the financial year, the net financial position of the Cooperative and of the entire Group was lower than that recorded at 31 December 2011. In particular, the net financial position of CPL was equal to Euro 63.94 million compared to Euro 70.65 million twelve months earlier, while the Group dropped to Euro 120.00 million compared to Euro 131.87 at 31 December 2011. One of the major repercussions induced by the current economic crisis is the constant search for financing by all the economic players. In this context, it becomes increasingly difficult for the Group to further improve its terms of payment with suppliers. Furthermore, Local Authorities are increasingly requesting contractors to be responsible for the investments required by a tender, which were previously sustained by the former. Regarding these requests, in return, a slight increase has been noted in the average length of the agreements. This is a logical consequence of the heavy cuts in government transfers, a result of the Eurozone crisis that has forced the state to reduce its debt, even by means of a significant reduction in public spending. Lastly, a progressive slowdown in collections from customers has been noted. All these elements have worsened slightly, despite the great attention that the Company has always placed on compliance with contract terms and conditions. As of 31 December 2012, the amount of receivables overdue to the Cooperative was worse compared to the figure at the end of 2011. It should be noted, however, that, despite the increase in the absolute value of the overdue amount compared to the end of 2011, the ratio of overdue receivables and value of production value (net of capitalizations) remained within percentages that are consistent with past figures. In fact, this ratio stood at 21.4 % at the end of 2012, at 18.5% at the end of 2011, at 15.41% at the end of 2010, at 16.05% at the end of 2009, at 12.18% at the end of 2008, at 16.63% at the end of 2007 and at 25.89% at the end of 2006. Furthermore, it should be noted that increasingly frequent requests are made to the Company from potential private customers concerning investments linked to long-term management contracts, which were traditionally sustained by the customers. Typical examples are improvements to be made to heating plants owned by third parties or the request to lease an asset (for example a cogenerator) instead of selling it. On the other hand, in return there is the possibility of executing agreements with a longer duration than the current one. The objective of the Cooperative and the Group, which is expressed in the three year industrial plan annually updated, is to continue to maintain the current rating and the main economic and financial ratios in absolute balance. In the financial year 2012, the Company obtained two new medium term lines of credit: the first one was entered into on 10 May 2013 with the "Cassa di Risparmio di Cento SpA" for Euro 1 million to support working capital, with a duration of 36 months; the second line of credit, amounting to Euro1.5 million, was granted by "Unipol Banca" on 10 July 2012, to support working capital, with a duration of 36 months. In 2012 CPL Concordia took on the loan granted by "MPS Capital Services" to"Compagri

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Report on operation chap.2

SpA"; this assumption was foreseen as partial payment of the purchase of shares of the company "Agrienergia SpA" according to deed dated 26 October 2010 of the Notary Umberto Tosi. The residual value of the financing of "MPS Capital Services" as of 31 December 2012 was Euro 0.326 million. In the financial year 2012, the Cooperative finalised three “without recourse” factoring operations (outright) respectively of Euro 7.7 million with "SACE FCT", Euro 2.0 million with "CREDEMFACTOR SP " and Euro 2.4 million with "UBIFACTOR SPA". These Factoring operations have made it possible to limit the use of working capital. In the financial year 2012, CPL Concordia also entered into an agreement with Banca IFIS for the activation of a "REVERSE FACTORING" service in favour of its suppliers. Thanks to this agreement, the suppliers that apply and are accepted by Banca IFIS, can access a financial line (of a total of Euro 20 million) for the immediate payment of up to 80% of the amount of the invoices issued to CPL Concordia, at better conditions than those normally applied by the credit market; upon expiry of the invoice subject of the operation, CPL pays the full amount to Banca IFIS that pays 20 % of the amount to the supplier. Reverse factoring facilitates the suppliers’ access to credit and consequently the correct management of outflows respecting the deadlines contractually established. The Group made the decision some time ago to procure all the resources necessary to support its needs in the medium/long term (with the exception of some for the purpose of covering cash imbalances). Further medium and long term credit lines are currently being defined, aimed at supporting the commitments contained in the three-year plan 2011-2013. The first months of the financial year 2013 were characterized by a worsening of the financial position of both the Cooperative and the Group. The amount of receivables overdue to the Cooperative showed and increase. It should be noted, however, that during the first quarter the Cooperative recorded an increase in turnover of around Euro 7.8 million (+7.5%) compared to the figure at the end of the first quarter 2012. By the end of the current financial year 2013, the net financial position (Euro 133.8 million consolidated) is expected to worsen in comparison with the situation recorded at the end of the financial year 2012. This is due not only to the reasons described above but also to the investments for various projects underway involving core business activities and to facilitate the penetration of foreign markets. However, this should result in a fairly limited impact on the main ratios of the financial statements, which should remain within values considered ​​ of absolute balance (the DEBT / EBITDA ratio expected as of 31 December 2013 should be around 3.12 in the consolidated financial statements). The liquidity the Cooperative benefited from during the whole financial year 2012 was placed in unrestricted bank deposits or loaned to the subsidiaries, in the case of temporary needs (the balance of intergroup loans increased by about Euro 4.6 million during the financial year), which were thus able to avoid taking on a loan (at least temporarily) from credit institutions at rates higher than those that CPL would receive if used. In this way, financial management was optimised at Group level and also the result of financial operations in the consolidated financial statements. Also in 2012 many activities that employed liquidity involved finance companies of the local cooperative system (in particular, Finpro Soc. Coop.) , as well as some credit institutes of reference.

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N Important events that occurred after the end of the financial year

In the months following the date of the financial statements no facts occurred that may in any way influence significantly the Group's performance. The events that occurred after the end of the financial year mainly concern acquisitions, incorporations and transfers of companies, described below. On 30 January 2013 the company "Joka – CPL Polska Sp. z o.o" was established in the city of Lodz in the Republic of Poland; the Cooperative holds a 50% share in the company and the remaining 50% is owned by the Polish partner "Joka Spolka z o.o" with headquarters in Warsaw . The company's purpose is the production, transmission, distribution and trading of electricity, gaseous fuels, hazardous and non hazardous waste and energy related activities in general. The share capital of the company amounts to Euro 400,000 PLN divided into 8,000 equal and indivisible shares amounting to PLN 50 per share; On 31 January 2013 the company "CPL Fuel S.r.l." was established with registered office in Piancogno (BS); the subsidiary Immobiliare della Concordia S.r.l. holds a 50% share and the remaining 50% is owned by the shareholder "IME S.r.l." with headquarters in Piancogno (BS). The company's purpose is the construction of fuel distribution system in the regions of Emilia Romagna and Veneto, and the sale of petroleum products and allied services. The share capital of the company amounts to Euro 10,000; On 9 April 2013 the holding company "CPL Concordia USA INC ." was established with headquarters in the state of Delaware in the United States of America; the Cooperative holds a 50% share in the company and the remaining 50% is owned by "G Three Partners Inc" of the Gristina family. The holding company owns 100% of the share capital of two operational companies, "New York Electric Maintenance & Data Corp.” and “CPL Metering Group Inc.” (companies incorporated in the state of New York). The company's business concerns the management contracts of large "buildings" (e.g. Empire State Building - historic skyscraper in New York as well as 40 other "buildings" in America) as regards the following sectors: plant engineering and maintenance, "metering", engineering and technical services, monitoring and invoicing of consumption and other energy-related sectors in general. The share capital of the Company consists of 1,000 shares without nominal value; On 18 April 2013, 25% of the company "Inversiones Energia Y Ambiente S.A." was sold to the shareholder Tredegar S.A , so the shares held passed from 75 % to 50%. In May 2013 the company “GES Gas Energy Solutions GmbH i.Gr.” was established in the Federal Republic of Germany; the Cooperative holds a 75% share in the company. The company's purpose is purely commercial aimed at the progressive entry in the country. The share capital of the company amounts to Euro 20,000.

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Allocation of the profits The Chairman of the Meeting, on the basis of the results obtained and after having heard the reasoned opinion of the Special Meeting of the Cooperative Shareholders, proposed to the Members’ Meeting the approval of the implementation of the multi-year investment plan for the year 2012 and the allocation of the net profit for the year of Euro 6,775,661 = as follows::

Euro 357.427,29 = agli Azionisti di Partecipazione Cooperativa (sottoscrittori) a titolo di dividendo (periodo 01/01/2012 – 31/12/2012) in misura del 8,00% lordo per azione del valore nominale di Euro 51,64 (cod. IT00011295960) al 31/12/2012, pagabile dal 3 luglio 2013;

Euro 357,427.29 = Cooperative Shareholders (subscribers) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00% per share with a nominal value of Euro 51.64 (code IT00011295960) as of 31/12/2012, payable from 3 July 2013;

Euro 11,435.16 = Cooperative Shareholders (Stock Option) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00% per share with a nominal value of Euro 51.64 (code IT00011295960) as of 31/12/2012, payable from 3 July 2013;

Euro 160,000.00 = Cooperative Shareholders (subscribers) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00% per share with a nominal value of Euro 500.00 (code IT0003794788) as of 31/12/2012, payable from 3 July 2013;

Euro 117,200.00 = Cooperative Shareholders (subscribers) by way of dividend (period 01/01/2012 - 31/12/2012) at a gross rate of 8.00% per share with a nominal value of Euro 500.00 (code IT0004431083) as of 31/12/2012, payable from 3 July 2013;

Euro 653,546.19 = as dividend to cooperative members and investor members at the gross rate of 6.00% compared to the capital actually paid, payable from 3 July 2013;

Euro 326,772.84 = 3.00% free capital increase (under Law no. 59/92) of the share capital actually paid, that can be capitalized; Euro 203,269.83 = 3.00% (three percent) Mutuality Funds for the Promotion and Development of cooperatives pursuant to art. 11 of Law no. 59 of 31/01/1992;

Euro 2,032,698.30 = 30% to the indivisible Legal Reserve Fund, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/12/77;

Euro 2,913,311.39 = to the Ordinary Reserve Fund indivisible between the members during the life of the Cooperative and upon its dissolution, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/12/77; Thank you for the confidence and trust you have placed in us. We invite you to approve the financial statements as of 31/12/2012 as they have been presented to you.. Concordia s/Secchia, lì 20/05/2013 Per il Consiglio di Amministrazione Il Presidente, Casari Roberto

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Financial statement

and consolidaTed

TWO THOUSAND

AND TWELVE CPL CONCORDIA

|CHAPTER |3


Consolidated Balance Sheet 2012


CONSOLIDATED BALANCE SHEET as of December 31, 2012

Statement of assets December 31, 2012

Amounts expressed in Euros A)

RECEIVABLES FROM MEMBERS FOR PAYMENTS STILL DUE

1,502,018

- Portion called in B)

December 31, 2011

Amounts expressed in Euros

1,502,018

1,392,714 1,392,714

FIXED ASSETS

I INTANGIBLE FIXED ASSETS: 1) Start up and expansion costs

192,784

301,932

2) Research, development, and advertising costs

111,722

58,601

3) Industrial patent rights and rights for the exploitation of intellectual properties

200,614

0

71,051

300,798

245,500

218,936

4) Concessions, licenses, trademarks, and similar rights 5) Goodwill 5b) Consolidation difference 6) Fixed assets in progress and payments on account 7) Other intangible fixed assets

Total

0

0

3,276,606

3,361,608

40,717,064

35,303,038

44,815,341

39,544,913

II TANGIBLE FIXED ASSETS 1) Land and buildings

11,329,942

11,111,325

2) Plants and machinery

81,455,740

73,152,965

3) Industrial and commercial equipment 4) Other tangible fixed assets 5) Fixed assets in progress and payments on account

Total

832,870

772,896

3,855,319

5,070,933

20,112,729

18,237,212

117,586,600

108,345,331

III FINANCIAL FIXED ASSETS: 1) Holdings in: a) Subsidiary companies b) Associated companies

0 9,970,685

c) Parent companies

0

0

d) Other companies

6,015,360

5,981,913

2) Receivables:

(within 12 months)

(within 12 months)

a) From subsidiary companies:

3,554,653

3,554,653

505,000

505,000

b) From associated companies:

9,166,542

10,385,792

5,650,242

6,869,492

0

0

0

0

924,500

6,307,486

768,518

6,127,394 15,983

c) From parent companies: d) From others: 3) Other securities

0

15,983

0

4) Treasury shares

0

289,184

0

Total Total Fixed Assets

68

0 5,672,077

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

32,240,535 194,642,476

0

29,470,467 177,360,711


Consolidated balance sheet 2012 chap.3

C)

CURRENT ASSETS

I STOCK: 1) Raw materials, ancillary and consumables

10,823,787

2) Products under processing and semi-finished products

13,964,886

1,589,406

2,129,399

19,140,486

12,597,281

4) Finished products and goods

6,522,137

10,103,874

5) Payments on account

2,507,159

3,240,028

40,582,975

42,035,468

3) Works in progress on order

Total II RECEIVABLES: 1) From customers: 2) From subsidiary companies: 3) From associated companies: 4) From parent companies: 4 bis) Tax receivables 4 ter) Taxes paid in advance 5) From others:

(entro 12 mesi) (entro 12 mesi) 2,576,048 207,356,218 2,497,984 212,711,918 0 2,076,654 0 6,301,070 0 9,585,612 0 8,014,334 0 0 0 0 98,852 11,504,029 0 7,468,439 0 7,793,945 0 6,047,240 129,920 8,693,722 444,782 10,638,927

Total

247,010,180

251,181,928

1) Holdings in subsidiary companies

527,744

306,811

2) Holdings in associated companies

3,878,362

0

4,195

4,195

III FINANCIAL ASSETS WHICH ARE NOT FIXED ASSETS:

3) Other holdings 4) Treasury shares

0

0

5) Other securities

84

84

4,410,385

311,090

102,188,388

61,288,993

0

207,154

Total IV CASH AND CASH EQUIVALENTS: 1) Bank and post office deposits 2) Cheques on hand 3) Cash and equivalents on hand

Total TOTAL CURRENT ASSETS D)

ACCRUED INCOME AND PREPAYMENTS:

TOTAL ASSETS

50,198

29,927

102,238,586 394,242,126

61,526,074 355,054,560

5,635,426

5,741,781

596,022,046

539,549,766

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Statement of liabilities December 31, 2012

Amounts expressed in Euros

December 31, 2011

Amounts expressed in Euros

A) NET EQUITY I SHARE CAPITAL II SHARE PREMIUM RESERVE III REVALUATION RESERVES IV LEGAL RESERVE V STATUTORY RESERVES VI RESERVE FOR TREASURY SHARES HELD

20,713,737

19,587,590

0

0

656,679

656,679

108,867,183

101,181,402

78,184

78,184

531,892

531,892

VII OTHER RESERVES: a) CAPITAL CONTRIBUTIONS, LAW NO. 784/80 b) CONSOLIDATION RESERVE c) SURPLUS FROM MERGER d) TRANSLATION DIFFERENCE RESERVE

1,269,396

1,269,396

(2,023,987)

(2,883,518)

235,597

235,597

(2,028,046)

(1,604,117)

VIII PROFITS (LOSSES) CARRIED FORWARD

0

0

IX PROFIT (LOSS) OF THE FINANCIAL YEAR

8,929,524

10,007,781

137,230,159

129,060,886

MINORITY CAPITAL AND RESERVES

2,034,709

1,526,719

MINORITY PROFITS (LOSSES)

(212,006)

(424,581)

MINORITY NET EQUITY

1,822,703

1,102,138

139,052,862

130,163,024

21,526

21,526

Total Group Net Equity

Total B) FUNDS FOR RISKS AND CHARGES: 1) For retirement pensions and similar obligations 2) For taxes 3) Others

Total C) SEVERANCE PAY FOR EMPLOYMENT TERMINATION

70

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448,446

379,373

10,936,339

8,065,754

11,406,311

8,466,653

4,906,855

4,905,251


Consolidated balance sheet 2012 chap.3

D) PAYABLES

(after 12 months)

(after 12 months)

1) Debentures

0

0

0

2) Convertible debentures:

0

0

0

0 0

3) Payables due to members for financing

0

9,384,405

0

8,224,246

4) Payables due to banks

131,055,272 199,696,279 114,009,597 170,101,537

5) Payables due to other funders

11,578,863

6) Advances 7) Payables due to suppliers

0

13,146,198

12,058,863

15,072,780

8,833,013

0

15,134,966

4,341,977 183,951,643

3,649,597 158,898,371

8) Payables represented by negotiable instruments

0

0

0

9) Payables due to subsidiary companies

0

1,399,769

0

0

10) Payables due to associated companies

0

868,497

0

1,625,305

0

0

0

0

139,690

6,196,591

0

10,824,634

11) Payables due to parent companies 12) Tax payables 13) Payables due to social security institutions 14) Other payables

0

0

3,671,899

0

4,660,054

641,568

8,679,920

287,381

9,536,009

Total E) ACCRUED LIABILITIES AND DEFERRED INCOME

TOTAL LIABILITIES

435,828,214

394,077,902

4,827,804

1,936,936

596,022,046

539,549,766

MEMORANDUM ACCOUNTS I) Garanzie prestate - Sureties - Collateral

197,157,911

194,150,478

1,324,400

2,494,000

Total

198,482,311

196,644,478

II) Other memorandum accounts - Bills subject to collection - Others

Total TOTAL MEMORANDUM ACCOUNTS

311,302

18,991

40,914,512

35,556,237

41,225,814

35,575,228

239,708,125

232,219,706

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Profit and loss account December 31, 2012

Amounts expressed in Euros

December 31, 2011

Amounts expressed in Euros

A) VALUE OF PRODUCTION 1) Income from sales and performances 2) Variation of the stock of products under processing, 3) Variations of works in progress on order 4) Increase in internally generated fixed assets 5) Other income and earnings - Others - Contributions on account of the financial year

8,629,224 384,792

Total

368,755,002

356,374,962

(3,518,102)

1,198,681

7,054,266 30,129,651

(7,822,335) 31,076,127

9,014,016

7,036,156 348,037

7,384,193

411,434,833

388,211,628

6) For raw materials, ancillaries, consumables and goods

159,118,083

151,635,500

7) For services

117,075,013

114,022,395

15,982,430

16,569,551

B) COSTS OF PRODUCTION:

8) For the employment of third-party assets 9) For the personnel: a) Wages and salaries

48,052,967

45,261,721

b) Social security contributions

13,668,876

13,564,818

2,930,118

2,900,405

c) Severance pay for termination of employment d) Retirement pensions and similar costs

0

64,651,961

0

61,726,944

10) Amortisation/Depreciation and devaluation a) Amortisation of intangible fixed assets

11,195,468

9,122,022

6,283,772

6,354,029

0

0

b) Depreciation of tangible fixed assets c) Other fixed asset devaluation d) Devaluation of receivables included among current assets and available cash funds 11) Variations of the stock of raw materials, ancillaries, consumables and goods

1,281,736

18,760,976

994,321

3,313,822

12) Provisions for risks

16,470,372 (3,470,420)

0

0

13) Other provisions

5,397,546

4,363,656

14) Sundry operating expenses

5,444,675

3,897,628

389,744,506

365,215,626

21,690,327

22,996,002

Total BALANCE BETWEEN VALUE AND COSTS OF PRODUCTION (A - B) C) FINANCIAL INCOME AND CHARGES: Earnings from holdings: - Related to subsidiary companies

0

354,798

- Related to associated companies

59,000

272,438

- Related to other companies

52,343

111,343

103,175

730,411

16) Other financial earnings a) from receivables recorded as fixed assets

72

- Related to subsidiary companies

0

0

- Related to associated companies

0

0

- Related to parent companies

0

- Related to other companies

0

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0

0


Consolidated balance sheet 2012 chap.3

b) From securities recorded as fixed assets

0

0

0

0

c) da titoli iscritti nell'attivo circolante which are not holdings

0

0

0

0

d) Other earnings - Related to subsidiary companies

80,815

6,605

- Related to associated companies

287,863

245,316

- Related to parent companies - Related to other companies

0 2,760,184

0 3,128,862

997,823

1,249,744

17) Interest and other financial charges - Related to subsidiary companies

0

0

- Related to associated companies

0

0

- Related to parent companies

0

- Related to other companies

6,128,192

0 6,128,192

5,826,635

53,941

(15,815)

5,826,635

17 bis) EXCHANGE RATE GAINS AND LOSSES Exchange rate gains and losses

53,941

Total (15 + 16 - 17 - 17 bis) D)

(2,941,928)

(15,815)

(3,830,665)

VALUE ADJUSTMENTS OF FINANCIAL ASSETS 18) Revaluation: a) of holdings

408,259

460,696

b) of financial fixed assets which are not holdings

0

0

c) of securities recorded as current assets which are not holdings

0

408,259

0

460,696

19) Devaluation: 4,029,927

4,017,498

b) of financial fixed assets which are not holdings

a) of holdings

0

30,000

c) of securities recorded as current assets which are not holdings

0

Total adjustments (18 - 19) E)

4,029,927

0

(3,621,668)

4,047,498

(3,586,802)

SPECIAL EARNINGS AND CHARGES: 20) Earnings: a) Capital gains on transfers, the revenues of which cannot be entered under item 5

0

b) Capital contributions

0

c) Other special earnings

3,458,602

488,557 0 3,458,602

180,182

668,739

21) Charges: a) Capital losses on transfers, the accounting effects of which cannot be entered under item 14 b) Taxes related to previous fiscal years c) Other special charges

Total special items ( 20 - 21 )

0

0

0 3,580,911

0 3,580,911

43,460

43,460

(122,309)

625,279

15,004,422

16,203,814

22) Current, deferred and advanced tax on the income of the financial year

(6,286,904)

(6,620,614)

26) PROFIT (LOSS) OF THE FINANCIAL YEAR MINORITY PROFIT (LOSS) GROUP PROFIT (LOSS)

8,717,518 212,006 8,929,524

9,583,200 424,581 10,007,781

PROFIT BEFORE TAX (A - B ± C ± D ± E)

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ADDENDUM

as of December 31, 2012

The consolidated financial statements as of 31 December 2012, of which this addendum forms an integral part, have been prepared on the basis of the accounting records of the consolidated companies, which are kept in compliance with the requirements of civil law. The figures commented are expressed in Euro. IThe assessment criteria adopted use the general principle of prudence and the going concern concept and comply with the provisions of art. 2426 of the Italian Civil Code and with the accounting standards prepared by the National Board of Certified Accountants and Auditors, as well as with the provisions of the documents of the Italian Accounting Authority (OIC), supplemented where lacking by the IFRS issued by the IASBs, and are coherent with those adopted in preparing the financial statement of the previous financial year. Please note also that: no exceptional situations occurred therefore it was not necessary to apply the exceptions provided for by article 2423, paragraph 4, of the Italian Civil Code. there are no assets or liabilities that fall under different items in the financial statements; the risks and losses for the reported year were taken into account even if they became known only after the end of the year. The Balance Sheet and the Profit and Loss Account have been prepared in accordance with the models referred to in Articles 2424 and 2425 of the Italian Civil Code as reformed by Legislative Decree No. 6/2003. For comparative purposes, the financial statement balances of the previous year have been reclassified (according to art. 2423 ter, fifth paragraph of the Italian Civil Code). In addition, the following documents are presented: financial statement, variations of the group net equity and reconciliation of holding company's net equity according to Italian civil code with consolidated net equity. The main business of the cooperative, economic relations with subsidiaries and associated companies, events after 31 December 2012 and the foreseeable evolution of the management outlook are highlighted in the Combined Management Report of the Parent Company and the Group.

Consolidation area

The consolidated financial statements include the financial statements of CPL CONCORDIA Soc. Coop. (Parent Company) and of its subsidiaries, in which the Parent Company owns directly or indirectly more than 50% of the capital; please note, in particular, that the companies in which the Parent Company holds 50% or lower percentages of holdings have been included in the consolidated financial statements using the full consolidation method in cases of actual control over the ordinary management of the investee companies, as in the case of the companies Serio Energia S.r.l and CPL Energy India Private Ltd. Please note also that from the financial year 2006, having lost the predominant influence over the company Cristoforetti Servizi Energia S.r.l., 50% of which is controlled by the parent company, Cristoforetti Servizi Energia S.r.l. has been consolidated using the proportional method. It should also be noted that as regards the companies Polargas S.r.l., XDATANET S.r.l. and Pegognaga Servizi S.r.l., with 50% of the shares owned by the Cooperative, as CPL CONCORDIA does not exercise a dominating influence, they have been considered affiliates. The remaining companies in which the Parent Company holds more than 20% of the shares or over which it exerts significant influence, according to art. 2359 of the Italian Civil Code, have been accounted for using the net equity method. The company Ichnusa Gas S.p.A. and its subsidiaries have been consolidated using the

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net equity method as the Group holds less than 50%. The companies included in the consolidation area as of 31 December 2012, compared with those included in the previous financial year, in addition to CPL CONCORDIA Soc. Coop. (Parent Company) are as follows: Year 2012 control % (direct and indirect)

Year 2011 control % (direct and indirect)

Coopgas S.r.l. - Concordia s/S (MO)

100

100

Cristoforetti Servizi Energia S.r.l. - Lavis (TN)

50

50

Energia della Concordia S.p.A. - Concordia s/S (MO)

100

100

Immobiliare della Concordia S.r.l. - Concordia s/S (MO)

100

100

Erre.Gas S.r.l. - Sapri (SA)

100

100

Marigliano Gas S.r.l. - Concordia s/S (MO)

100

100

Ischia Gas S.r.l. - Concordia s/S (MO)

100

100

Nuoro Servizi S.r.l. – Ottana (NU)

44

44

CPL HELLAS A.B.E. & T.E. - Atene – Grecia

100

100

CPL Concordia Filiala Cluj Romania S.r.l. - Cluj - Romania

100

100

AIPower S.p.A. - Algeri - Algeria

74

54

Serio Energia S.r.l. - Concordia s/S (MO)

40

40

CPL Distribuzione S.r.l. - Concordia s/S (MO)

100

100

Grecanica Gas S.r.l. - Concordia s/S (MO)

100

100

Ghirlandina Sport S.r.l. - Concordia s/S (MO)

93

61

Vignola Energia S.r.l. - Concordia s/S (MO)

99

99

Subsidiaries:

Progas Metano S.r.l. - Concordia s/S (MO)

70

70

CPL Energy India Private Ltd - New Delhi - India

50

50

Vega Energie S.r.l. - Concordia s/S (MO)

65

65

P.E.A. Progetto Energia Ambiente S.r.l. - Concordia s/S (MO)

100

100

TiPower S.a r.l. - Tunisi - Tunisia

90

90

Marche Solar S.r.l. - Concordia s/S (MO)

100

100

Solar Plus S.r.l. - Concordia s/S (MO)

0

100

CPWH Ltd - Londra - Inghilterra

100

0

SIC S.a.s. di Santorelli Bruno & C. - Acquasparta (TR)

95

0

Inversiones Energia Y Ambiente S.A. - Ciudad - Argentina

75

0

96,04

0

100

0

Redengas S.A. - Parana - Argentina Emprigas S.A. - San Francisco - Argentina

Variations in the consolidation area compared to the previous financial year:

Not included MARCHE SOLAR S.r.l. • The company, incorporated on 10 February 2011 before the Notary Silvio Vezzi of Modena, was born as vehicle company for the construction and subsequent management of the photovoltaic array of Cartoceto (PU). The array was connected in 2011 and has already obtained the incentive-based rates. In 2012, a preliminary agreement was signed to transfer 100% of the shares to the Danish company Nordik Solar; the transfer of which is subordinated to the acquisition of the control of the company by Leasint, the financing company. For this reason the holding has been included in the current assets.

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SOLAR PLUS S.r.l. • The company was acquired in financial year 2011 by Energia della Concordia S.p.A., as it was responsible for the management of the authorisations to build the photovoltaic plant in Altamura in Puglia. The plant was completed and started-up in 2012. In the financial year 2012, Energia della Concordia incorporated its subsidiary Solar Plus S.r.l. by deed of merger dated 23/11/2012 of the notary Silvio Vezzi of Modena, file no. 122421/20258 registered with the Chamber of Commerce on 11/12/2012.

New additions

INVERSIONES ENERGIA Y AMBIENTE S.A. • The Cooperative acquired 75% of the shares of Argentine Holding in January 2012. The company is in fact the sub Holding established under Argentine law that holds shares in companies operating in the distribution and sale of gas and, more specifically, 99 % of the company Emprigas S.A. and 96 % of the company Redengas S.A. The company, according to Argentine accounting principles, valuated the two holdings in its financial statements using the net equity method for the company Redengas, and the cost method for the company Emprigas. The financial statements of the company Redengas clearly reflect the fact that the tariff system had not been adjusted in Argentina. We believe, however, that with the next expected increase of the tariff system and with the recognition of the residual values ​​of Emprigas, the Argentine subconsolidated values will be profitable. This is the belief of our minority partner Tradegar S.A. that on 18 April 2013 acquired 25 % of the shares of the Argentine Sub Holding, thus becoming an equal partner and the company’s controlling company in 2013.

REDENGAS S.A. • The company, 96% of which is owned by the Argentinean Holding Inversiones Y Energia Ambiente S.A. and 0.06% by the associated company Emprigas S.A., manages the gas distribution grid of the city of Paranà in the province of Entre Rios, serving about 49,000 users. Over the last 10 years, the Argentine government has blocked the gas sales prices, while inflation has increased by 20-25% per year. In light of this situation it is obvious that the results of the company are constantly at a loss. The company was also influenced by the costs related to past transactions which should have ceased their effects with the 2012 financial statements. EMPRIGAS S.A. • the company, 99% of which is owned by the Argentinean Holding Inversiones Y Energia Ambiente S.A. and the remaining 1 % by the associated company Redengas S.A., had the concession for the gas distribution grid of the city of San Francisco. At the end of the concession, it passed under the management of the council, which now manages it directly. The company has a legal dispute underway with the Council of San Francisco concerning the recognition of the residual value of the investments. To date, in fact, the Council is managing the concession without having awarded to Emprigas the residual value of the investments. CPWH UK LTD • the company, founded in London in December 2012, according to the will of the Directors of the Parent Company, was created to promote the internationalisation process of the Group and then became the holding company of those foreign initiatives on which the group worked in 2012. The projects include studies of the African markets and the creation of a joint venture with a British partner for the marketing of meters and gas volume correctors. At present, the company, of which 100% is owned by the Cooperative, has acquired 50% of the shares of the company Biogengas S.r.l., an Italian company whose corporate purpose is the construction of small-scale plants for the production of biogas from animal waste to be marketed in Italy and abroad.

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SIC DI SANTORELLI BRUNO & C. S.a.s. • in 2012, Energia della Concordia S.p.A. acquired 95% of the shares of the company that holds 20% of the shares of AI Power S.r.l. and the resulting payables to members posted under the liabilities. As a result of this acquisition, the CPL Group directly or indirectly controls 74% of the Algerian company. The acquisition was made ​​to increase the importance of the group in the corporate governance of AI Power S.r.l.

Additional changes

GHIRLANDINA SPORT S.r.l. • The company was established in 2009 to mange the holding in the company Modena Football Club S.p.A. In the financial year 2012, some shareholders left Ghirlandina Sport, because they did not agree with the entry in the company of the group ACGF S.r.l. from Rome. On 20 September 2012, Ghirlandina Sport transferred 10 % of the shares of Modena Calcio and in January 2013 it transferred a further 54.155 %. In 2013, following the Special Shareholders’ Meeting on 31 January of Ghirlandina Sport, several shareholders left the company, so now 93% of the company Ghirlandina is owned by CPL, 6% by WAM Group and the remaining 1% by Mivebo S.r.l.

Associated companies

As regards the performance of individual associated companies and other companies, please see the Combined Management Report to the Statutory Consolidated Financial Statements of the CPL Concordia group.

Currency translation reserve

The criterion chosen to convert the financial statement items of foreign companies, expressed in currencies other than the reporting currency (Euro) of the CPL Group is the so-called "closing exchange rate method" applied as follows: assets and liabilities in the balance sheet have been translated at the exchange rate of 31 December 2012; costs and income of the Profit and Loss Account have been translated at the average exchange rate for the year 2012; the exchange difference arising from the translation of balance sheet and profit and loss account items, based on the exchange rates described above has been allocated to Net equity ("Translation difference reserve"); any exchange differences arising from the elimination of intergroup foreign debt/credit, have been allocated to the profit and loss account; the exchange difference arising from the translation of the initial net equity at the end of the year exchange rates has been allocated to "Translation difference reserve".

Financial statements used for the consolidation

The consolidated financial statements have been prepared on the basis of the financial statements approved by the shareholders’ meetings of each company, suitably adjusted to take into account the consolidation requirements and to standardise them with the group’s accounting principles. In the case of financial statements that had not been approved by the respective shareholders’ meetings at the time of preparation of the consolidated financial statements, the

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budgets approved by the respective Boards of Directors were consolidated. All subsidiaries and associated companies close their financial year as of 31 December, with the exception of the subsidiaries Polargas S.r.l. and CPL Energy India Private Ltd for which a balance sheet as of 31 December 2012 has been drawn up.

Consolidation method and criteria

The consolidation methods adopted, unchanged from the previous year, comply with laws relating to the consolidated financial statements (Legislative Decree No. 127 of 9 April 1991); they are also compliant with the practices and prevailing technical standards on this matter, according to the accounting standards prepared by the National Board of Certified Accountants and Auditors and, where lacking, by the International Accounting Standards Board (IASB). The assets and liabilities as well as the costs and incomes, in their entirety, have been taken from the financial statements of the companies included in the consolidation, after having been appropriately adjusted and reclassified on the basis of the above principles; furthermore, with reference to the financial statements of companies acquired in the financial year, the profit and loss accounts have been consolidated for the months following the acquisition; the Balance Sheet has been consolidated only in cases where the profit and loss account was not considered representative of the management of the group, believing, in fact, that this simplification better reflects the effective contribution to the Group by the company. The main consolidation methods are as follows: the book values of the holding in controlled companies, held directly or indirectly by the Parent Company, have been eliminated against the corresponding portion of the subsidiaries' net assets and by the acquisition of the assets and liabilities of the said companies regardless of the percentage of holdings held (so-called global integration method). In the first consolidation of a subsidiary, differences arising from the said eliminations have been allocated, if positive, to asset items constituting the highest cost values of ​​ the holding in the financial statements and the remainder under "Consolidation difference" and, if negative, under "Consolidation reserve". The amount recorded under the heading "Consolidation difference" has been depreciated over a maximum period of 10 years. The amounts entered under "Plants and machinery" (essentially attributable to the networks) have been depreciated over the estimated useful life. Any amounts of net equity and the results attributable to third party members have been entered, if significant, under the appropriate items in the balance sheet and profit and loss account. All operations of significant importance that took place between the group companies - in particular receivables/payables, costs/income – as well as unrealised profits have been eliminated. The consolidation operations have been performed as follows: if the consolidated companies adopted accounting principles that do not correspond with those of the parent company, the necessary adjustments have been made; elimination from the balance sheet and profit and loss account of he reciprocal payable and receivable items as well as costs and income in relation to operations that took place between companies included in the consolidation; write off, if the amount was significant, of profits arising from the transfer of raw materials and finished products between group companies, limited to stocks remaining at the end of the year, as well as of profits arising from the transfer of goods and rendering of services related to the construction of tangible and intangible assets;

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assets held under finance leases have been entered under the assets of the balance sheet at their normal market value or, if lower, at the current value of the instalments to be paid. Corresponding payables have been entered in the liabilities. The value entered as an asset is depreciated over its estimated useful life. Leasing payments have been apportioned between capital, thus reducing the debt, and interests recorded on an accrual basis in the profit and loss account; any dividends distributed and amounts to cover losses between consolidated companies have been eliminated from the profit and loss account and allocated to the reserve; the tax effects related to consolidation entries have been recognised only when realistically achievable in the future by the parent company, which is incorporated as a cooperative, taking into account the applicable tax regime; associated companies have been evaluated according to the net equity method.

Accounting principles applied

The most important accounting principles adopted to draw up the consolidated financial statements, agreed upon with the Board of Auditors in all cases provided by law, and which have remained unchanged from the previous financial year, are those adopted by the parent company. They are as follows:

A Intangible fixed assets

Intangible assets are recorded in the financial statements at cost of acquisition, plus any additional costs directly attributable or construction costs and depreciated in the following way, which is unchanged compared to the previous financial year: Multi-year charges

55 years charges for the acquisition of depreciation financing corresponding to the duration of the loans

Software

3 – 5 years

Goodwill

10 years

Work performed on third party assets

The shortest period between the duration of the agreement and the estimated useful life of the works.

Concessions

According to the length of the agreement or 3 years

Trademarks

3 – 5 years

Research and advertising expense

3 – 5 years

If on the date of the financial statements, the recovery value of the assets is lastingly lower than the cost, the assets are written down. If in the following months, the reasons for the write-down cease to exist, the original value is restored.

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B Tangible fixed assets

Tangible fixed assets are entered in the financial statements at the cost of acquisition or construction plus any directly attributable charges and recorded net of any depreciation funds and permanent capital contributions. If on the date of the financial statements, the recovery value of the assets is lastingly lower than the cost, the assets are written down. If in the following months, the reasons for the write-down cease to exist, the original value is restored. The costs of ordinary maintenance and repairs are entered in the profit and loss account in the period in which they are incurred. The costs of special maintenance and repair are capitalised and depreciated according to the depreciation rate of the asset to which they refer. Depreciation is calculated on a straight-line basis at rates considered to be representative of the useful life of the assets. % USED Land and buildings

3 - 5,5 - 6 - 2,5 - 12,5

Plants and machinery

2 - 4 - 5 - 8 - 10 - 12,5 - 15 - 20 - 30

Gas and Water Concessions

On the basis of the remaining useful economic life

LPG concessions transferred without charge

On the basis of the length of the concession

LPG concessions transferred upon payment

On the basis of the remaining useful economic life

Industrial and commercial equipment

10 - 20 - 25 - 40 - 15

Other assets

10 - 12 - 20 - 25

The depreciation rates used, for the assets included in the distribution systems, changed compared to the previous financial year in accordance with art. 24 of Legislative Decree no. 93/2011, which states in paragraph 8 that the new provider is essentially required to repay to the outgoing provider a value calculated according to the tariff adjustment method in force and on the basis of the value of the plants at the time of transfer of the ownership. The formulas to calculate the tariff adjustment are based on Table 3 in the annex to the Resolution of the AEEG ARG / gas no. 159/2008, as shown below:

Table 3- Conventional fixed asset depreciation periods Fixed asset categories

Years

Buildings - substations

40

Road pipelines and distribution networks

50

Main and secondary systems - Substation systems

20

Branch systems (connections)

40

Conventional metering units (meters)

20

Electronic metering units (with remote reading/remote management systems)

15

Other tangible and intangible fixed assets

7

All other assets are depreciated according to the statutory and tax rates, if the latter are representative of the useful lives of the assets to which they refer.

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C Leasing

As previously stated, the financially leased assets are entered in the assets of the balance sheet at their historical value of acquisition according to the agreement or, if lower, at the current value of the instalments to be paid. Corresponding payables are entered in the liabilities. The value entered as an asset is depreciated on the basis of its estimated useful life. Leasing payments are apportioned between capital, thus reducing the debt, and interests that are recorded on an accrual basis in the profit and loss account.

D Financial fixed assets

Holdings in companies are recorded according to the net equity method. The holdings in other companies are posted at the purchase or subscription price, plus the directly attributable charges. The book value is reduced, in the financial statements, to reflect the permanent loss of value of a subsidiary. To determine the latter, the negative variations of the net equity of each subsidiary are taken into account when they are considered to be permanent. The receivables included in the financial fixed assets are entered at the nominal value that corresponds to the probable realisable value. Shares are entered at purchase cost. If the value based on market trends is lower than the recorded value for an extended period of time, then it is written down to be aligned with the former. Accrued interest is recorded in the period to which it pertains. Any adjustments made on fixed assets are not maintained in the financial statement of the following years if the reasons for the adjustment cease to exist.

E Stock

The materials and goods in stock at the end of the financial year are recorded at the lower value between the purchase cost and the probable net realisable value based on market conditions. The cost of acquisition, including incidental costs directly attributable, is determined by the weighted average cost method. For stock with limited possibilities of use and longer storage time, adequate write-downs are made through the establishment of a special obsolescence fund that will result in a direct reduction of stock. Contract work in progress is valued by applying the percentage of completion criterion through the evaluation of the works carried out on the basis of contractual compensation. The effects related to possible future losses for the completion of the works are grouped in a special fund.

F Receivables from customers

Receivables from customers are entered in the financial statements at the presumed realisable value. The adjustment of the nominal value of receivables to their estimated realisable value is obtained by a direct reduction, though a special write-down fund calculated to cover bad debts, as well as general risks related to remaining receivables, including the risk of recovery costs.

G Receivables and payables in foreign currencies

Receivables and payables arising from transactions in a foreign currency are recorded at the exchange rate of the date on which the transaction occurs. At the date of closure of the financial statements the receivables and payables in forei-

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gn currencies, other than those in euro, and without clauses protecting against foreign exchange risks, are converted at the exchange rates of that date; the difference between the valuation of receivables and payables in foreign currency at the year-end exchange rate is recorded as a direct adjustment of the item to which it refers, and is offset in the profit and loss account. As regards medium and long-term receivables and payables in foreign currencies, any profits resulting from the conversion are allocated to a reserve, and they are unavailable until they are realised. With reference to currency payables safeguarded by a clause against the risk of exchange rate fluctuations beyond predetermined ranges of variation, the difference with respect to the exchange rate in the financial statements date is calculated and the amount not included in the covered range is allocated to the profit and loss account for the financial year.

H Financial assets which are not fixed assets

Financial assets which are not fixed assets represented by holdings in subsidiaries and associated companies are entered at the value considered to be representative of their realisable value.

I Capital contributions and subsidies for operating expenses

Capital contributions are entered on an accrual basis according to the approval of the concession by the competent body, which decides when there is no longer any encumbrance whatsoever to their final recognition. Up to the financial statements as of 31/12/1997, 50% of these were allocated to a special reserve and the remaining 50 % to the profit and loss account under item A5 "Other earnings and income", as allowed by the tax law and civil law in force at that time. Since the financial year 1998, they have been recorded by allocating the entire capital contribution to directly reduce the asset to which the contribution refers, as foreseen by art. 55, paragraph 3 of the Consolidated Tax Act amended by art. 21, paragraph 4, letter b, Law no. 449 of 27 December then received in Accounting Principle No. 12 ratified by the National Board of Certified Accountants and Auditors. Capital contributions are entered in the profit and loss account under "Other income" and at the same time they reduce the increases in internally generated fixed assets. Any contributions for operating expenses are entered under income items.

L Reserve for employee termination indemnities

The payables cover the existing liability in respect of the staff at the reporting date for all the consolidated Italian companies. The indemnity is calculated in accordance with the provisions of law and of the National Collective Labour Contract, on the basis of the salary actually received and seniority accrued at the reporting date. For foreign companies, provisions for pensions are allocated according to local regulations.

M Payables

Payables are entered at their nominal value considered representative of their to their settlement value.

N Cash funds - payables to banks and other funders They are entered at nominal value. Accrued interest is entered on an accrual basis.

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O Tax payables and prepaid, current and deferred taxes

Tax payables take into account the income tax calculated on the basis of taxable income attributable to each company of the group, net of advances paid and withholding taxes paid, of the taxes payable to the Inland Revenue Offices as withholding agents, and of the consumption tax on natural gas. Deferred and prepaid taxes are calculated on the total amount of all the temporary differences between the value of an asset or liability, including net equity items, according to statutory criteria and the amount attributed to that asset or liability for tax purposes, by applying the rate valid at the time when the temporary differences will be offset. Taxes paid in advance are recorded only if there is reasonable certainty that they will be recovered in the future, as required by Accounting Standard no. 25 of the National Council of Certified Accountants and Auditors relating to income taxes, issued in March 1999.

P Funds for risks and charges

They include the charges set aside for risks to cover losses or payables of a specific nature, whose existence is certain or probable, and whose amount or occurrence date are, nevertheless, impossible to establish accurately at the year end. The funds reflect the best possible estimate of the liabilities, based on the information available. Any risks for which the occurrence of a liability is simply a possibility have been outlined in the addendum.

Q Deferrals and accruals

These are recorded on an accrual basis and include earnings for the financial year collectable in future financial years, as well as costs incurred before the end of the financial year but payable in the following financial years. These items only include costs and earnings that pertain to two or more financial years, the amount of which varies according to time.

R Memorandum accounts

Memorandum accounts, at the bottom of the balance sheet, concern the Group’s direct and indirect commitments to third parties and unconsolidated subsidiaries and are recorded on the basis of the value that corresponds to the actual underlying commitment.

S Agreements that cover interest rate risks

The agreements to cover the interest rate risk are valued at cost. In the case of variable rate financing secured by IRS, interest is calculated at the rate fixed by the IRS and accounted for on an accruals basis. The fair value of the above mentioned IRS is entered in the memorandum accounts.

T Costs and Income

Costs and income are entered in the financial statement on an accrual basis in accordance with the principle of prudence. Transactions with subsidiaries and non-consolidated companies, with associated companies and with related parties are executed at arm’s lenght.

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Information on the content, classification and variations of the financial statement items

Assets

Receivables from members for payments still due The balance as of 31/12/2012 was Euro 1,502,000 and Euro 1,176,000 of that amount concerned the nominal value of shares not yet paid up by 237 cooperative members and 16 investor members; these share have already been fully called in. It is deemed that there is no risk of insolvency as regards these amounts. The remaining balance consists of the subscriptions to be paid by minority members, in the amount of Euro 159,000 to the subsidiary Inversiones Y Energia Ambiente S.A., Euro 44,000 to the subsidiary AI Power S.p.A and Euro 123,000 to the subsidiary Vega Energy S.r.l.

Intangible fixed assets

The variations of intangible fixed assets are shown in the following table:

Table of the financial movements in relation to intangible assets

(Values expressed in Euro/000)

Variations during the financial year Starting accounting Amortisation Devaluation Devaluation value Purchases Accounting fund variations Amortisation

Values relating to previous financial years Items

Cost

Decrease

And accounting value

Start-up and Expansion Costs

2,064

1,529

233

302

15

0

116

0

8

193

B I 1 Start-up and expansion costs

2,064

1,529

233

302

15

0

116

0

8

193

Research, development, and advertising costs

1,069

950

61

58

86

677

709

0

0

112

B I 2 Research, development, and advertising costs

1,069

950

61

58

86

677

709

0

0

112

Industrial patent rights

360

360

0

0

64

218

81

0

0

201

B I 3 Industrial patent rights

360

360

0

0

64

218

81

0

0

201

Concessions, licenses and trademarks

3,135

2,833

1

301

42

(178)

94

0

0

71

BI4

3,135

2,833

1

301

42

(178)

94

0

0

71

Goodwill

2,673

1,402

1,052

219

57

0

31

0

0

245

BI5

2,673

1,402

1,052

219

57

0

31

0

0

245

Consolidation difference

7,383

7,083

300

0

0

0

0

0

0

0

B I 5a Consolidation difference

7,383

7,083

300

0

0

0

0

0

0

0

Fixed assets in progress

3,585

0

223

3,362

1,645

(1,406)

0

0

325

3,276

B I 6 Fixed assets in progress

3,585

0

223

3,362

1,645

(1,406)

0

0

325

3,276

Other intangible fixed assets

87,720

51,398

1,019

35,303

14,864

2,122

10,164

439

969

40,717

B I 7 Other intangible fixed assets

87,720

51,398

1,019

35,303

14,864

2,122

10,164

439

969

40,717

B I INTANGIBLE FIXED ASSETS

107,989

65,555

2,889

39,545

16,773

1,433

11,195

439

1,302

44,815

Concessions, licenses, trademarks and sim. rights

Avviamento

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Intangible fixed assets increased by Euro 5,270,000 compared to the previous year, as shown in the table prepared for this purpose, which shows increases for new investments amounting to Euro 16,773,000, amortisation equal to Euro 11,195,000, devaluation equal to Euro 439,000 and disinvestments equal to Euro 1,302,000. The item BI 4 "Plant concessions, licenses and trademarks" includes costs incurred for obtaining additional licenses of the operating system SAP R/3, user licenses of the operating system NAVISION DYNAMICS and software licenses purchased to manage the outsourcing service to Public Utilities. "Goodwill" , which amounts to Euro 246,000 and was entered with the approval of the Board of Auditors, refers to 50% of the amount attributable for the acquisition of the business unit including a series of heat maintenance and management agreements paid by Cristoforetti Servizi Energia S.r.l. (50% consolidated with the proportional method) to the company Ecor, which operates in the northern area of Milan; goodwill also includes the amount for the purchase of the business unit DODOGAS that deals with all the contracts for the supply of gas to users of the town of Mignano Montelungo and of the corporate assets related to that activity. The voice BI 6 "Fixed assets in progress", consists of an amount of Euro 3,277,000 which is composed of Euro 583,000 for costs incurred for feasibility studies for the construction of magnetostrictive level probe systems, development of rev. 2 of the EDOR equipment, mechanical dispenser for odorisation system, chemical product tests, test chemicals, new electronic gas meters and relative data transmission infrastructure and volume correctors, Easydor "E" and "F" gas odorisation systems, uninterrupted power supply systems, new odorisation system called PIDA 2, evolution of the remote control system for meters called EFOR 3 and the new electronic system for F4 gas meters class G4; an amount of Euro 346,000, incurred for the development of several new software applications including the most significant one regarding the new version of the TDS (Total Data Service) control centre with ECENTRAL technology; Euro 397,000 for miscellaneous deferred charges, of which Euro 384,000 for costs incurred to obtain certifications for approval of odorant measurement and transfer units, for development of ESAC advanced communication protocol and to obtain certification and homologation of gas containers, valves and reducers, andEuro 14,000 for the preparation of district heating invoicing management systems and management systems for gas wholesalers; and an amount of Euro 1,589,000 for investments in third party assets referred to: improvements to one of the branches of the parent company in the town of Fano (PS), building of no. 2 cogeneration plants (owned by the customer) that upon completion will produce electricity, district heating plant in the "Annunziata" area in Giulianova (TE), co-generation plant at the Hospital of Tortona as part of the contract with the Health Authority of Alessandria, investments in public lighting systems of the towns of Pegognaga (MN), Zola Predosa (BO), Chieuti (FG) and San Mauro Pascoli (FC) and heat management systems for the Province of Verbania Cusio Ossola; Euro 362,000 for other investments in third party assets. The item BI 7 "Other Intangible Fixed Assets", which amounts to Euro 40,715,000, is mainly made up and more specifically for Euro 27,651,000 of investments in heat management and public lighting systems that at the end of the agreements shall remain property of the customers, and for Euro 1,293,000 for a call option to buy back shares. The remaining portion of the item is related to software and maintenance related to third party assets.. Composition, reasons for inclusion and amortisation criteria of the items: Start-up and expansion costs

Euro/000

Research, development and advertising costs Euro/000

193 112

The item "Research, development and advertising costs� is made up of feasibility studies for remote reading equipment for gas correctors, LPG volume correctors, odorant injection systems and remote control system for SMART CAMPUS. Start-up and expansion costs recorded in the financial statements with the consent of the Board of Auditors include preliminary feasibility and convenience studies related to the corporate business, headquarters relocation and expansion costs, business unit acquisition costs, corporate merger costs and costs for the establishment of certain subsidiaries. These costs, which are deemed applicable over a number of years, are amortised over a maximum of 5 years.

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Tangible fixed assets

The variations of tangible fixed assets are shown in the following table:

Table of the financial movements in relation to tangible assets Values relating to previous financial years ITEMS

Cost

Revalua- Depreciation tion fund

Transfer

Starting accounting value

(Values expressed in Euro/000)

Variazioni dell'esercizio Accounting DevaluaPurchases variations Depreciation tion

Transfer

End accounting value

Total revaluation

Land and buildings

15,705

0

4,593

1

11,111

443

0

203

0

21

11,330

0

B II 1 Land and buildings

15,705

0

4,593

1

11,111

443

0

203

0

21

11,330

0

154,925

0

35,005

46,767

73,153

12,332

2,443

3,154

0

3,318

81,456

0

154,925

0

35,005

46,767

73,153

12,332

2,443

3,154

0

3,318

81,456

0

Equipment

5,609

0

4,796

40

773

670

0

597

0

13

833

0

B II 3 Industrial and Commercial Equipment

5,609

0

4,796

40

773

670

0

597

0

13

833

0

Plants and Machinery B II 2 Plants and Machinery

Other assets

29,897

33

23,530

1,329

5,071

1,627

38

2,330

0

551

3,855

0

B II 4 Other assets

29,897

33

23,530

1,329

5,071

1,627

38

2,330

0

551

3,855

0

Gas network concessions and Real Estate

19,381

0

0

1,144

18,237

8,545

(3,914)

0

726

2,029

20,113

0

B II 5 Fixed assets in progress

19,381

0

0

1,144

18,237

8,545

(3,914)

0

726

2,029

20,113

0

225,517

33

67,924

49,281 108,345

23,617

(1,433)

6,284

726

5,932 117,587

0

B II TANGIBLE FIXED ASSETS

Item B. II 1 “Land and Buildings" which amounts to Euro11,330,000 increased by Euro 219,000 compared to the previous year, due to the investments made during ​​ the financial year in property owned by the group. Item B II 2 "Plant and machinery", which mainly includes the residual value of the Group’s gas distribution grids, amounts to Euro 81,456,000 with an increase of Euro 8,303,000 compared to the previous year, due to investments in owned plants and plants that were in construction and are now running. The transfers highlighted in the above table refer to the PV system located in the town of Cartoceto (PU), owned by the company Marche Solar S.r.l, which is no longer included in the consolidation area as specified in the relevant chapter. The item “Other tangible fixed assets”, which amounts to Euro 3,855,000, mainly includes the residual values to be depreciated of cars, vehicles and work vehicles. Fixed assets in progress, which amount to Euro 20,113,000, mainly include the amounts of the gas distribution grids of the Calabria 12 catchment area and of Procida Island, of the sea pipeline of Ischia and the expansion of the headquarters of the Parent Company. This item also includes the values, amounting toEuro 1,166,000 of the district heating system of the town of Vignola (MO).

Financial fixed assets

The consistency and variations of the holdings are shown in the table below:

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Table of the financial movements in relation to equity investments COMPANY NAME

(Values expressed in Euro/000)

% 2011

% 2012

Value as of Dec. 31, 2011

0,0%

0,0%

0

0

0

0

0

0

0

0

0

0

0

0

0

0 1,808

TOTAL SUBSIDIARIES

Increase

Decrease

Revaluation Devaluation

Other variations

Value as of Dec. 31, 2012

FONTENERGIA S.p.A. - Lanusei (NU)

49,0%

49,0%

1,839

0

0

0

(31)

0

ICHNUSA GAS S.p.A. - Bologna

45,0%

45,0%

437

0

0

0

(544)

107

0

PEGOGNAGA SERVIZI S.r.l.

50,0%

50,0%

116

0

0

0

(11)

0

105

TECLAB S.r.l. - La Spezia

35,0%

35,0%

70

0

0

9

0

0

79

COIMMGEST S.p.A. - Modena

45,0%

45,0%

253

0

0

109

0

0

362

COMPAGRI S.p.A. in liquidation - Bologna

22,22%

22,22%

0

0

0

0

0

0

0

AGRIENERGIA S.p.A. - Bologna

20,18%

20,18%

1,415

0

0

0

0

0

1,415 435

X DATANET S.r.l. - Mirandola (MO)

50,0%

50,0%

477

0

0

0

(42)

0

SARDA RETI COSTRUZIONI S.r.l. - Bolotana (NU)

30,0%

30,0%

117

0

(237)

0

0

120

0

FONTENERGIA 38 S.r.l. in liquidation - Cagliari

34,0%

34,0%

33

0

0

0

(2)

0

31

IES SOLARE S.r.l. - Livorno

25,0%

25,0%

149

3

0

42

0

0

194

INTERENERGIA S.p.A. - Bologna

47,0%

47,0%

3,878

0

(3.878)

0

0

0

0

NOCI SOLAR 1 S.r.l. - Concordia s/S (MO)

49,0%

49,0%

0

0

0

0

0

0

0

NOCI SOLAR 2 S.r.l. - Concordia s/S (MO)

49,0%

49,0%

0

0

0

0

0

0

0

GHIRLANDINA SOLARE S.r.l.

34,0%

34,0%

0

0

0

0

0

0

0

ANDINA SERVICIO TECNOLOGIES - Lima - PERU'

50,0%

50,0%

1

0

0

0

0

0

1

POLARGAS S.r.l. - Moretta (CN)

50,0%

50,0%

459

0

0

0

(60)

0

399

SOLARPLANT S.r.l. - Marina di Carrara (MS)

25,0%

25,0%

89

0

0

88

0

0

177

FIMETRA S.r.l. - Campogalliano (MO)

40,0%

40,0%

473

0

0

11

0

0

484

FONTENERGIA 4 S.r.l. - Cagliari

2,0%

2,0%

24

0

0

0

0

0

24

FONTENERGIA 6 S.r.l. - Cagliari

2,0%

2,0%

37

0

0

0

0

0

37

FONTENERGIA 7 S.r.l. - Cagliari

1,13%

1,13%

7

0

0

0

0

0

7

FONTENERGIA 9 S.r.l. - Cagliari

1,8%

1,8%

7

0

0

0

0

0

7

FONTENERGIA 10 S.r.l. - Cagliari

1,8%

1,8%

27

0

0

0

0

0

27

FONTENERGIA 11 S.r.l. - Cagliari

1,3%

1,3%

6

0

0

0

0

0

6

FONTENERGIA 15 S.r.l. - Cagliari

1,3%

1,3%

4

0

0

0

0

0

4

FONTENERGIA 19 S.r.l. - Concordia s/S (MO)

2,0%

2,0%

1

0

0

0

0

0

1

FONTENERGIA 26 S.r.l. - Cagliari

2,0%

2,0%

16

0

0

0

0

0

16

FONTENERGIA 27 S.r.l. - Cagliari

1,0%

1,0%

19

0

0

0

(1)

0

18

FONTENERGIA 35 S.r.l. - Cagliari

1,7%

1,7%

11

0

0

0

0

0

11

FONTENERGIA 37 S.r.l. - Cagliari

1,3%

1,3%

6

0

0

0

0

0

6

ENERGETSKI SERVIS D.o.o. - Spalato - CROAZIA

0,0%

33,3%

0

14

0

0

(1)

0

13

CENTRALE SASSINORO S.r.l. - Modena

0,0%

10,0%

0

130

0

0

(133)

3

0

BIOGENGAS S.r.l. - Truccazzano (MI)

0,0%

50,0%

0

5

0

0

0

0

5

TOTAL AFFILIATED COMPANIES

9,971

152

(4,115)

259

(825)

230

5,672

TOTAL SUBSIDIARIES AND AFFILIATED COMPANIES

9,971

152

(4,115)

259

(825)

230

5,672

BANCA POPOLARE DI VERONA BANCA POPOLARE DELL'EMILIA ROMAGNA - Modena ISTITUTO BANCARIO SAN PAOLO DI TORINO S.p.A. - Torino UNIPOL ASSICURAZIONI S.p.A. - Bologna

2

2

44

44

1

1

6

6

AZIONI SOC. GOLF CLUB MODENA

27

27

AZIONI AZIENDA LIBICO ITALIANA

9

9

19

19

500

500

AZIONI BANCA POPOLARE DI S.FELICE SUL PANARO AZIONI SOCIO SOVVENTORE COOPBILANCIAI Campogalliano (MO)

6

6

AZIONI BANCA MPS

AZIONI GESTURIST - Via Mazzini, 182 - Cesenatico (FC)

15

15

INTSEC S.p.A. - Siena

28

ICIE - ISTITUTO COPERATIVO PER L'INNOVAZIONE

21

ALIANTE - Modena F I N P R O - Modena C.C.C. - CONSORZIO COOP.VE COSTRUZIONI - Bologna

88

(25)

3 21

5 38 100

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39 100


Consolidated balance sheet 2012 chap.3

% 2011

COMPANY NAME

% 2012

Value as of Dec. 31, 2011

CCFR - Consorzio Coop.vo Ferrovie Reggiane - Reggio Emilia

24

C.E.R. - Cons. Emiliano-Romagnolo fra Coop. Prod. e Lav. - Bologna

36

C.N.A. - Modena COVECO Consorzio Veneto Cooperativo - Venezia

Increase

Decrease

Revaluation Devaluation

Other variations

Value as of Dec. 31, 2012

1

25 36

1

1

50

50

CONS.NAZ.COOP. CIRO MENOTTI - Bologna

25

25

CONSCOOP - Cons. Coop. Prod. e Lav. - Forli

103

103

C.N.S. - Consorzio Nazionale Servizi - Bologna

10

10

ISI SERVICE EMILIA ROMAGNA SOC. CONSORTILE - Bologna

54

54

SOCIETA' CONSORTILE IDROENNA

8

8

IMMOBILIARE LA MARCHESA - Mirandola (MO)

8

8

HERA S.p.A.

260

SOFINCO S.p.A. - Modena

949

28

977

3,500

72

3,572

INTERMEDIA FINANCE S.p.A.

260

SOCIETA CONSORTILE ALPI GAS

5

5

CONSORZIO CIPEA

4

4

CONSORZIO GLOBAL PROVINCIA DI RIMINI

6

6

ACQUADUEO S.r.l.

3

3

CONSORZIO M.O.L.E.

1

1

SOCIETA' CONSORTILE MICENES

2

2

MANUTENCOOP FACILITY MANAGEMENT S.p.A.

6

6

13

13

NOCSERVICE SOC. CONSORTILE

3

3

ATON PER IL PROGETTO

1

1

23

23

CONSORZIO LEGNAGO 2000

2

2

CONSORZIO ABN A&B NETWORK SOCIALE Soc. Coop a r.l.

0

5

INTERMEDIA BROKER S.p.A.

50

7

SEGLO SERVIZI GLOBALI S.c.a r.l.

11

IN.DA.CO

MULTIPROPRIETÀ S.r.l.

5 (57)

0 11

SOC. CONSORTILE CAP 3-18

3

CONSORZIO ABI LAB TECNOLOGIA UTILE S.c.a r.l.

0

1

5,982

113

0

0

(82)

2

6.015

15,953

265

(4,15)

259

(907)

232

11,687

OTHER HOLDINGS HOLDINGS

3 1

The decrease related to the holding in the subsidiary Interenergia S.p.a. refers to its reclassification in the current assets, as a preliminary agreement was signed in the first months of 2013 for the transfer of all the shares to third parties.

Financial receivables from subsidiary companies The above mentioned item is made up as follows: COMPANY

NON-CURRENT RECEIVABLES

ENERGIA ANONIMA FV 2 S.R.L.

50,000

TRADENERGY S.R.L. IN LIQUIDAZIONE MARCHE SOLAR S.R.L. TORANO SOLAR S.R.L.

15,000 851,718 565,000

TRINOVOLT S.R.L.

2,072,935

TOTAL

3,554,653

Funding related to the companies Torano Solar and Trinovolt, which will be sold, are temporary and will end with the transfer of the shares of the company. The item Financial receivables from associated companies is made up as follows:

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COMPANY FONTENERGIA S.P.A.

NON-CURRENT RECEIVABLES 7,934,250

AGRIENERGIA S.P.A.

413,642

FIMETRA S.R.L.

200,000

GHIRLANDINA SOLARE S.R.L.

251,600

ICHNUSA GAS S.P.A.

438,000

NOCI SOLAR 1 S.R.L.

264,600

NOCI SOLAR 2 S.R.L.

308,700

POLAR GAS S.R.L.

325,000

CENTRALE SASSINORO S.R.L.

TOTAL

250,000

10,385,792

Of the financial receivables from Fontenergia S.p.A. Euro 1,219,000 refer to the residual amount of the interest-free loan of Euro 10,734,000, which was included in the previous financial years, and was decreased due to the collection of more than 9 million Euros of capital contributions received by the company in 2008; the residual amount refers to an interest-bearing loan to the company to meet the investments and expansion of the distribution grid of the catchment area of Ogliastra. This loan was granted at a rate of 4.75% for the year 2012, renewed from 01/01/2013 until 31/12/2013 with an interest rate reduced to 4.50% with the right to increase it up to a maximum of 5.50%. This loan is subordinated for Euro 4,000,000 with respect to the payables to "CARISBO". The financial loan related to Agrienergia S.p.A. amounting to Euro 414,000, refers to a non-interest bearing loan with maturity date on 31/12/2012, renewed from 01/01/2013 until 31/12/2013. The financial loan related to Fimetra S.r.l. amounting to Euro 200,000 refers to an interest bearing loan granted at a rate of 6% for the year 2012; the rate was also confirmed for the whole of 2013. This financing concerns the financial coverage of the multi-year investments planned by the company, The financial loan related to Ghirlandina Solare S.r.l. amounting to Euro 252,000, refers to an interest-free loan with maturity date on 31/12/2012, renewed for the year 2013. This loan is subordinated with respect to the payables to the “Banco Popolare”. The financial loan related to Ichnusa Gas S.p.A. amounting to Euro 438,000, refers to an interest bearing loan as of 10/09/2012 with maturity date on 31/12/2012, at a rate of 4.75% for the year 2012, renewed from 01/01/2013 until 31/12/2013 with an interest rate reduced to 4.50% with the right to increase it to a maximum of 5.50%. This loan was granted to provide subsidiaries with the necessary financial resources and for the repayment of bank loans. The financial loan related to Noci Solar 1 S.r.l. amounting to Euro 265,000, refers to an interest-free loan with maturity date on 31/12/2012, renewed for 2013. The financial loan related to Noci Solar 2 S.r.l. amounting to Euro 309,000, refers to an interest-free loan with maturity date on 31/12/2012, renewed for 2013. The financial loan related to Polar Gas S.r.l. amounting to Euro 325,000, refers to an interest bearing loan as of 05/03/2012 with maturity date on 31/12/2012, at a rate of 4.75% for the year 2012, renewed from 01/01/2013 until 31/12/2013 with an interest rate reduced to 4.50% with the right to increase it to a maximum of 5.50%. This loan was granted to provide the necessary financial resources for normal business. The financial loan related to Centrale Sassinoro S.r.l. amounting to Euro 250,000 refers to an interest free loan granted by Energia della Concordia S.r.l. The item non-current receivables from others includes:

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EURO/000

2012

CAUZIONI A GARANZIA

2011 883

731

SEGLO SERVIZI GLOBALI FINANZ.FRUTTIFERO ATTIVO

12

1

C.A.P. 3-18 S.C.A R.L. FINANZ.INFRUTTIFERO ATTIVO

16

0

0

13

CREDITO IMPOSTA L.40/97

16

26

DEPOSITI CAUZIONALI SU AFFITTI A LUNGO TERMINE

DEPOSITI CONTRATTUALI SU AFFITTI

5,380

5,356

TOTAL

6,307

6,127

The long-term amount of Euro 5,380,000, is composed of Euro 593,000 for the cautionary deposits on rents for the premises of the registered office and for the premises of the branches in Melegnano, Bologna, Padua and Fano and invoiced by the company Coimmgest S.p.A.,Euro 190,000 for cautionary deposits of various apartments and Euro 4,597,000 from advance instalments of the rent of gas distribution grids, part of the transfer operation of the said grids to the leasing companies. The item "Securities as guarantee" refers to cautionary deposits paid for gas, telephone and water utilities.

Treasury shares

As of 31/12/2012 the Group holds treasury shares in the Cooperative for an amount of Euro 289,000.

Stock

Final stock of raw materials, consumables and ancillaries, amounting to Euro 10,824,000, is made up of materials for the construction of gas and water distribution plants and heat plants, and of materials at construction sites as of 31/ 12. The item "Products under processing and semi-finished products" amounting to Euro 1,589,000 mainly includes the valuation of the supply and contract orders of the "Technological Systems Construction" sector. The estimated realisable value of those assets is not less than the value recorded at the date of the financial statements. The item, “Work in progress on order” includes the valuation of the multi-year orders according to the percentage of completion principle. The following table gives a detailed breakdown of the work in progress on order: EURO/000

2012

2011

Headquarters Area

1,341

Roma Tirreno Area

2

34

North West Area

5,710

3,007

Adriatic Area

2,124

1,842

Umbria Area

71

375

South Area North East Area

2,356

0

0

4,884

2,006

Tuscany Area

405

386

Bologna Area

535

1,350

Sardinia Area

3,233

974

“Intergroup services” sector Export Area

767

0

1,445

659

Work in progress devaluation fund

(1,377)

(392)

TOTAL

19,140

12,597

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The increase in this item, amounting to Euro 6.543, 000, is mainly related to an increase in Work in Progress with local authorities that tend to delay the certification of the work progress reports and consequently the relevant invoicing. The variations of the Work in progress devaluation fund are shown below: EURO/000

2012

2011

Fund at the start of the financial year

392

48

Amount used

(63)

(46)

Provisions

1,048

390

Final fund

1,377

392

The finished products and goods item includes the stock of odorant, and natural gas as regards the sales activity and the finished properties for sale. This item, amounting to Euro 6,522,000 decreased compared to the previous financial year by Euro 3,582,000. This reduction is mainly due to the reduced stock of natural gas for the distribution grids of the group’s catchment areas. The item "Payments on account", amounting to Euro 2,507,000, includes advances on work being performed by subcontractors, among which we highlight the suppliers JENBACHER S.r.l. for Euro 373,000, REMOSA for Euro 388,000, PEGASO for Euro 100,000, VIS GMBH – S.r.l. for Euro 60,000, HONEYWELL S.r.l. for Euro 98,000, PIAGGIO & FIGLI for Euro 64,000, ROBINTUR for Euro 34,000, BABCOCK WANSON ITALIANA S.p.A. for Euro 28,000, SICOMORO for Euro 24,000, VALVITALIA forEuro 26,000, OFF. RIPARAZ.DI VEZZANI & C. for Euro 15,000 GE.CO.SER for Euro 15,000 and MULTIMEIPLA S.r.l. for Euro 9,000. This item also includes advances towards suppliers of the Stable Organisation in Greece for Euro 100,000, Euro 786,000 in favour of the Cooperativa Bilanciai di Campogalliano (MO), Euro 4,000 in favour of the branch established in Poland in September 2012, Euro 69,000 to suppliers of feasibility studies and designs of urbanisation works in the area of Carpi (MO) and Euro 121,000 for works carried out at a sports facility in the town of San Possidonio (MO). Compared to the previous financial year there was an overall decrease of Euro 733,000

Receivables from customers This item is made up as follows: EURO/000 Third party customers

2012

2011

113,552

Gas sales customers

117,468

105

1,992

Public bodies

18,739

23,143

Cooperatives and consortiums

18.828

22.485

Customers with invoices to be issued

60,798

51,362

Bills receivable Withholdings for work and occupational safety guarantees Provisions for bad debt

Total

311

174

1621

1.513

(6,598)

(5,425)

207,356

212,712

The values of receivables decreased by Euro 5,356,000 compared to the previous year. This decrease widely compensates the increase of the item Works in progress. Te bad debt provisions are considered to be adequate with reference to the collectability of the receivables recorded in the consolidated financial statements. The variations of the Provisions for bad debt for the financial year are shown below: EURO/000

92

2012

2011

Balance at January 1, 2012

5,425

5,605

Amount used in reporting year

(225)

(1,165)

Provisions for reporting year

1,398

985

Balance at Dec. 31, 2012

6,598

5,425

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Consolidated balance sheet 2012 chap.3

With regard to the geographical composition of receivables and payables, please note that given the nature of the group’s activities, the receivables are mainly from local authorities and Italian customers in general; the payables to suppliers are to suppliers of raw materials and consumables and Italian subcontractors, except for receivables and payables present in permanent foreign organisations and foreign companies. A summary is shown below: EURO/000 ITALIA ALGERIA AUSTRIA ARGENTINA BELGIO CINA CROAZIA FRANCIA GERMANIA GRAN BRETAGNA GRECIA INDIA IRLANDA LUSSEMBURGO JUGOSLAVIA MALAYSIA MESSICO OLANDA POLONIA REPUBBLICA CECA REPUBBLICA DI SAN MARINO ROMANIA SLOVENIA SPAGNA SVIZZERA TUNISIA USA

TOTAL

RECEIVABLES 199,648 3,527 0 462 0 0 9 141 457 0 1,526 10 0 0 0 2 6 0 -196 0 29 1,436 -6 33 0 272 0

PAYABLES 180,997 -451 8 875 896 60 -1 18 151 15 85 43 -7 1 1 0 0 17 2 22 1 310 0 -1 138 4 0

207,356

183,184

Receivables from subsidiaries and associated companies

The breakdown is as follows:

Subsidiaries: Trinovolt S.r.l. Euro/000 Tradenergy S.r.l. in liquidazione Euro/000 Modena Football Club S.p.A. Euro/000 Marche Solar S.r.l. Euro/000 Torano Solar S.r.l. Euro/000 Energia Anonima FV2 S.r.l. Euro/000 Total Subsidiaries Euro/000

16 56 182 22 27 1,774 2,077

Associated companies: Fontenergia S.p.A. Euro/000 Sarda Reti Costruzioni S.r.l. Euro/000 Euro/000 Compagri S.p.A. Euro/000 Agrienergia S.p.A. Euro/000 Coimmgest S.p.A. Euro/000 Fano Solar 1 S.r.l. Fano Solar 2 S.r.l. Euro/000 Euro/000 Fontenergia 4 S.r.l. Euro/000 Fontenergia 6 S.r.l. Euro/000 Fontenergia 7 S.r.l. Euro/000 Fontenergia 9 S.r.l. Fontenergia 10 S.r.l. Euro/000 Euro/000 Fontenergia 11 S.r.l. Euro/000 Fontenergia 15 S.r.l. Fontenergia 19 S.r.l. Euro/000 Fontenergia 26 S.r.l. Euro/000 Fontenergia 27 S.r.l. Euro/000 Fontenergia 28 S.r.l. Euro/000 Fontenergia 35 S.r.l. Euro/000 Fontenergia 37 S.r.l. Euro/000 Fimetra S.r.l. Euro/000 Ghirlandina Solare S.r.l. Euro/000 X Datanet S.r.l. Euro/000 Ichnusa Gas S.p.A. Euro/000 Interenergia S.p.A. Euro/000 Interenergia Uno S.r.l. Euro/000 Euro/000 Interenergia Due S.r.l. Interenergia Tre S.r.l. Euro/000 Euro/000 Ies Solare S.r.l. Noci Solar 1 S.r.l. Euro/000 Noci Solar 2 S.r.l. Euro/000 Notaresco Solar 1 S.r.l. Euro/000 Sant’Omero Solar 1 S.r.l. Euro/000 Polargas S.r.l. Euro/000 Pegognaga Servizi S.r.l. Euro/000 Total Associated Companies Euro/000

105 242 2 665 172 4 4 336 760 1,805 1,617 344 102 946 442 413 299 56 462 176 6 18 7 308 35 25 13 82 25 20 19 30 15 12 19 9,586

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Receivables from the subsidiary Energia Anonima FV2 concern the construction of the photovoltaic plant it is responsible for. The trade receivables from the associated companies mainly regard the various Fontenergia companies and they concern the preliminary design phases carried out by the parent company; the more significant amounts concern the construction of gas distribution grids (catchment areas 7 and 9).

Tax receivables

The table below shows the breakdown of Tax receivables: EURO/000 Receivables from IRPEF (personal income tax) and withholding tax Receivables from Revenue Authority for IRAP (tax on productive activities) 2007/2011 – Decree Law no. 201/11 Receivables from Revenue Authority for IRES (corporate income tax) – IRAP (tax on productive activities) Receivables from Revenue Authority for R&D costs 20082009 VAT receivables from/payables to Italian tax authority VAT receivables from/payables to foreign tax authorities Receivables from/payables to tax authority for consumption tax

2012

TOTAL

2011 311

282

2,115

0

2,621

95

0

66

4,095 1.224

2,277 551

1,138

4,197

11,504

7,468

This item increased by Euro 4,036,000 following the effect of Group's VAT and due to the recovery of IRAP from IRES of the financial years 2007/2011 according to Legislative Decree 201 of 06/12/2011; the increase was also due to the IRAP and IRES of this reporting year, which were correctly reclassified under “Tax payables” in the last financial year. The “Receivables from Revenue Authority for IRAP (tax on productive activities) 2007/2011 –Decree Law no. 201/11”, concern the application for refund of IRAP foreseen by art. 2, paragraph 1 of Decree Law no. 201/2011 that states that IRAP can be deducted from income tax. This is the taxable portion of the costs for employees or similar, net of deductions pursuant to article 11, paragraph 1, letter a, of Decree Law no. 466/97.

Taxes paid in advance

Taxes paid in advance, amounting to Euro 7,794,000 are considered to be reasonably recoverable considering the relevant transfer to the next financial years, in view of tax amounts estimated to be at least of the same value as the recoverable amount. The receivables from the tax authority for prepaid taxes refer to the values ​​recorded in the financial statements of the individual companies and to the tax effect generated by the application of the international accounting principles on the accounting of leasing. The variations of prepaid taxes are shown below: EURO/000 Amount at the start of the financial year Decreases Increases

Final value

94

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2011 6,047 (113) 1,860

3,859 (8) 2,196

7,794

6,047


Consolidated balance sheet 2012 chap.3

From others

The table below shows the breakdown of the receivables from others: EURO/000

2012

2011

Receivables from receivership Nuova Warmflame

4

4

Receivables from INPS - INAIL - CIG

329

230

Receivables from ITALCOGIM Conca Casale

144

144

Global Rimini financing

150

150

4,737

4,513

Receivables from GSE (electrical services provider) for incentive rate

45

89

Advance payments to employees and other companies

48

77

0

4,308

1.580

0

0

432

45

55

5

0

Receivables from Gas/Electricity Authority Adjustment Fund

Receivables from ASI for the transfer of the Nuoro Servizi Business Unit Receivables from town catchment area Calabria 12 for work progress reports issued Receivables from CRISGAS for transfer of business unit Receivables from refineries for exemption from tax on diesel Purchase of future holding in BIOGENGAS S.r.l. Advance payment for purchase of EX SMALTIFLEX patent

680

0

Others

927

637

TOTAL

8,694

10,639

The balance amounting to Euro 8,694,000 decreased compared to the previous year by Euro 1,945,000 as a result of the conclusion of the process, which lasted almost five years, for the transfer of the business unit between the ASI Consortium and the company SIAP; this operation allowed Nuoro Servizi to collect the amount for the business unit, as well as other outstanding items between the company and the ASI Consortium.

Financial assets which are not fixed assets

This item totals Euro 4,410,000; of which Euro 30,000 concern the subsidiary TORANO SOLAR S.r.l., Euro 288,000 the subsidiary TRINOVOLTS.r.l., Euro 210,000 the subsidiary ENERGIA ANONIMA FV2 S.r.l., Euro 3,878,000 the associated company INTERENERGIA S.p.A. and Euro 2,000 the company FONTENERGIA 28 S.r.l.. In 2011, the company TRINOVOLT S.r.l. completed the construction of two photovoltaic arrays in the town of Binetto and on 31 August 2011 it connected it to the grid, with the incentive rate of the so-called “IV conto energia” (feed-in tariff). There is a preliminary agreement for the transfer of the shares, which is expected to be executed by the end of July 2013. The holding in Torano Solar S.r.l. is classified under this item; the company was created with the aim of transferring it as part of an initiative of solar rooftops. The company Energia Anonima FV2 S.r.l. completed the construction of a photovoltaic plant in the town of Triggiano (BA) during the financial year and connected it to the grid, enjoying the incentive rate of the so-called “IV conto energia” (feed-in tariff). There is a preliminary agreement for the transfer of the shares, which is expected to be executed by the end of next June. The company Interenergia S.p.A. (that owns 100% of the companies Interenergia Uno S.r.l., Interenergia Due S.r.l., Interenergia Tre S.r.l. and Interenergia Quattro S.r.l., the latter being 100% owner of the companies Fano Solar 1 S.r.l., Fano Solar 2 S.r.l., Notaresco Solar S.r.l. and Sant’Omero Solar S.r.l.) has entered into a preliminary agreement for the transfer of shares, which is expected to be executed by July 2013. The corporate purpose of the company FONTENERGIA 28 S.r.l. is the design and development of the distribution grid of the catchment area 28 in Sardinia that includes the towns of Armungia, Ballao, Dolianova, Donori, San Nicolò Gerrei, Sant’Andrea Frius, Silius, Soleminis and Villasalto. On 20 April 2011, the company transferred 69.5% of the shares to the company P.E.A. S.r.l., which in turn transferred 99.00% of the shares to the company Fiamma 2000 S.p.A. The remaining 0.50% will be transferred directly by the Parent Company CPL Concordia to Fiamma 2000 S.p.A. after the completion of testing of the gas grid of the catchment area.

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Cash and cash equivalents

Cash funds, amounting to Euro 102,239,000, increased by Euro 40,713,000 compared to the previous financial year.

Accrued income and prepayments The breakdown is as follows:

EURO/000 Prepayments on inquiries for loans and financing Prepayments on substitute taxes Prepayments on guarantee commissions Insurance prepayments Prepayments on advance rent of headquarters’ premises Prepayments on advance rent of premises of branches Prepayments on designs Accrued income on council payments Others

Total

2012

2011 31 617 537 58 1,851 1,880 0 0 661

34 835 255 75 1,851 1,880 59 20 733

5,635

5,742

The item "Prepayments on advance rent of headquarters’ premises" refers to the advanced payment of 20 monthly rent instalments for the building of the headquarters, paid to Coimmgest S.p.A., equal to Euro 1,671,000, and 6 quarterly instalments for the building next to the old headquarters equal to Euro 180,000; in both cases the instalments paid in advance will be allocated respectively to the last 20 monthly instalments for the old offices and to the last 6 quarterly instalments for the new building next to the headquarters. The item "Prepayments on advance rent of premises of branches" refers to the advanced payment of 20 monthly rent instalments for the branch offices of Melegnano and Bologna, 18 monthly instalments for the building in Bologna former headquarters of the Consorzio Cooperative Costruzioni and for the building in Fano, in addition to 7 quarterly advance payments for the building in Padua, in addition to the refund for the registration fee and cautionary deposit, paid to Coimmgest S.p.A. for a total of Euro 1,880,000; even in these cases the advance monthly instalments will be allocated to the last months foreseen by the agreement. The item Prepayments on designs refers to costs incurred for public and private tenders relating to contracts of considerable value which, in case of awarding of the contract, foresee that the design costs will be incorporated into the total. The costs deferred in this way will be transferred to the profit and loss account when the contract is definitely awarded, whether the contract is awarded to the Group or to third parties. During the financial year, no costs of this type were incurred and for this reason the amount of the item is equal to zero. The item "Others" includes prepayments on interests payable, advertising costs, rent and other minor costs whose economic effect pertains to the next financial year.

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Liabilities Share capital As of 31 December 2012 the share capital amounted to Euro 20,713,737 and was composed as follows: Euro 12.307.897 from the subscription of no. 709 cooperative members for a minimum share amount of not less than Euro 8,500; Euro 4,467,841 from the subscription for the original issuance of shares related to the Five-Year Plan 1998-2003 of no. 200,000 cooperative shares of the nominal value of Euro 51.64 each, 8,360 shares were subscribed by 49 cooperative members that exercised their legal right of option, no. 186,440 shares were subscribed by 286 members from the general public and no. 5,200 shares were subscribed by 31 employees. As of 31 December 2010 a total of no. 113,481 cooperative shares were redeemed for an amount of Euro 5,860,159. Euro 142,940 from the issue of no. 2,768 cooperative shares issued as Stock Option at the time of allocation of profits for the financial year 1999. Euro 2,000,000 from the subscription and payment of the relevant cooperative shares newly issued under the new five-year plan approved by the Board of Directors on 26/11/2004 and approved by the Members’ Meeting of 04 December 2004 for an overall amount of Euro 10,000,000, details of which are described in the Management Report; Euro 1,465,000 from the subscription and payment of the relevant cooperative shares newly issued under the new five-year plan 01/01/2009-31/12/2013 approved by the Members’ Meeting on 10 October 2008. The new issue, which amounted to Euro 10 million, concerned no. 20,000 shares of cooperative shares at Euro 500 each; Euro 330,059 for the subscription of no. 475 investor member shares of the nominal value of Euro 500 each, subscribed by 62 cooperative members with the requirements foreseen by the relevant regulation approved by the Ordinary Members’ Meeting of 22/12/2001, of which Euro 252,559 paid; As of 31/12/2012 there were 35 honorary members without any amount paid in as share capital, as provided in the bylaws.

Revaluation reserves

This reserve, amounting to Euro 656,679, was established pursuant to the rules on property revaluation in accordance with law no. 72/83.

Legal reserve

This is the indivisible ordinary reserve provided for by art. 12 of Law no. 904/77, the balance of which amounted to Euro 108,867,183 as of 31/12/2012. The amount of Euro 450,000 of this reserve was allocated for the financial coverage of the project 20133/13, as provided by Law no. 488/92. The amount of Euro 10,492 (in the ordinary legal reserve) refers to the share of profits that corresponds to the return of treasury shares held.

Reserve for treasury shares held

The amount allocated to this reserve is Euro 531,892. This is the reserve established on the basis of the members’ resolution of 20 June 2009 by which the Cooperative allocated part of the profits for the repurchase of no. 10,300 cooperative shares at a price of Euro 51.64 each. The allocation of the profits to this reserve was executed in conformity with the regulations approved by the Members’ Meeting on 27 November 1998, which regulates the civil law aspects of the shares to be issued and the implementation of the withdrawal right provided for by Article 3, exercised in conformity with the law and regulation; article 5 gives the directors of the cooperative the right to acquire treasury shares issued in favour of investor members and/or cooperative members, as foreseen by art . 57 of the bylaws. From a tax point of view, Article 460 of the 2005 Budget Law, and the Circular no. 34 of 15 July 2005 clarify that the share of taxed profits (30 % for work generating cooperatives) can be freely used in accordance with the destinations provided for by the Italian Civil Code.

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To this end, it should be noted that in the proposed allocation of the profits from the financial year 2008, the amounts allocated to dividends and to the establishment of the Reserve for the purchase of treasury shares did not exceed the limit of 30 % of the profits for the year, corresponding to the taxed portion.

Capital contributions law no. 784/80

These are capital contributions received in previous financial years and entered directly in net equity, in accordance with the rules in force at the time. The item amounts toEuro 1,269,396.

Consolidation reserve

This reserve includes the differences that emerge during the consolidation between the booked amount of the holding and the corresponding portion of net equity; the differences usually represent the amounts of future or expected profits. As of 31/12/2012 the reserve amounted to Euro (2.023.987).

Merger surplus

This is a reserve formed in previous years for the merger of Harmony Gas Ltd., for an amount of Euro 3,102,096, reduced in 2005 as it was used to cover losses for the financial year 2004, which amounted to Euro 2,866,499. The remaining balance therefore amounts to Euro 235,597.

Translation difference reserve

This item consists of the conversion into Euro of balance sheets and profit and loss account items of the foreign subsidiaries. Specifically these companies are the Romanian CPL Concordia Filiala Cluj Romania S.r.l., companies established in Maghreb, i.e. the Algerian company AIPower S.p.A. and the Tunisian company TIPower S.a r.l., the Indian company CPL ENERGY INDIA Ltd., the Argentinean companies part of the group headed by INVERSIONES ENERGIA Y AMBIENTE S.A. and the British company CPWH Ltd. This item, which as of 31 December 2012 was a negative Euro 2,028,046, suffered a further decrease due to the trend of local currencies against the Euro that has become considerably stronger. The variations of the Net Equity items are shown in the table below. The positive difference between the net equity of the parent company and the net equity in the consolidated financial statements is due to the higher value of the assets of each company with respect to the value of operations.

Minority net equity

This is the portion of consolidated net equity attributable to minority shareholders of consolidated subsidiaries. The variations are shown below:

Table of the financial movements in relation to third parties COMPANY AIPower S.p.A.

(Values expressed in Euro/000)

Exchange capital Balance as of Starting minority rate of companies Dec. 31, 2011 and reserves differences acquired in 2012

Shares Balance as Minority Minority acquired / profits of the of Dec. 31, profit transferred 2012 distribution by the Group financial year

187

0

0

0

(77)

51

161

Nuoro Servizi S.r.l.

(546)

0

0

0

67

193

(286)

Serio Energia S.r.l.

983

0

0

(241)

0

332

1,074

Progas Metano S.r.l.

56

0

0

0

0

(8)

48

Vignola Energia S.r.l.

5

0

0

0

0

0

5

333

0

0

0

0

16

349

Vega Energie S.r.l. TIPower S.a r.l.

18

0

0

0

0

0

18

CPL Energy India Private Ltd.

148

0

0

0

0

(45)

103

Ghirlandina Sport S.r.l.

(82)

0

0

0

630

(568)

(20)

0

528

0

0

0

(170)

358

1,102

528

0

(241)

620

(199)

1,810

Gruppo Inversiones Energia Y Ambiente S.A.

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

99


The increase is due, primarily, to the entry of the new companies of the Argentine group Inversiones Y Energia Ambiente S.A.

Funds for risks and charges

The item "Provisions for retirement pensions and similar obligations" which amounts to Euro 22,000 is composed exclusively of the Parent Company’s employees’ pension funds and seniority. The "Fund for taxes, also deferred taxes" which amounts to Euro 448,000 includes Euro13,000 for the provision of payable deferred taxes performed by Immobiliare della Concordia S.r.l., Euro 2,000 for deferred taxes of the company CPL Energy India Ltd, and Euro 433,000 for deferred taxes by the company CPL Concordia Filiala Cluj Romania. The item B3 "Others", which amounts to Euro 10,936 is composed as follows: EURO/000

2012

2011

Fund for risks and charges Ischia Gas

1,290

Fund for risks and charges Compagri

121

121

0

103

Fund for risks and charges Nuoro Servizi in liquidation Fund for risks and charges Ghirlandina Sport Fund for future risks and charges Fund for resuming work in Algeria Fund for risks on transaction supplier “Rocca S.r.l.” Fund for cooperative studies and advertising Social fund for the group’s workers affected by the earthquake Fund for risks company Oltremare Fund for risks on rate adjustments, Liguria region Fund for risks on EMPALS contributions, Penne swimming pool Fund for risks, Greek branch Fund for risks, gas correctors service guarantee Funds for risks and charges, urbanisation Lotto Energy Group Fund for risks, for PV plant in Navicelli (PI) Fund for risks, guarantee for remote control system “Gelsia Reti” Fund for risks on resolution 79/2007 of the Regulatory Authority for Electricity and Gas

626

315

331

2,666

800

50

50

0

65

39

38

1

0

10

10

1,224

1,224

0

500

1,000

1.000

840

497

82

82

187

187

6

6

162

162

Fund for risks and charges on resolution 155/08

418

313

Fund for risks, Francavilla Fontana waste disposal site

250

260

Fund for risks, future value of plants in concession

134

0

Fund for risks, dismantling of LPG storage facilities

426

455

0

50

467

478

1,248

708

10,936

8,066

Fund for risks, sanctions regarding settlement of advance payment of VAT DEC. 2011 Fund for risks and charges, goodwill former SI.GAS Fund for risks to be valued by means of the net equity method, associated companies

TOTAL

The item Fund for risks and charges Ischia Gas, amounting to Euro 1,290,000 concerns the estimated future losses on the management of the Ischia catchment area. The Fund for risks “Compagri” concerns the amounts to be covered for the losses of the subsidiary Compagri S.p.A. The Fund for future risks and charges includes the provisions of the losses estimated for the next financial years as regards production work orders. The Fund for risks amounting to Euro 162,000, relates to the resolution no. 79/07 of 29 March 2007 of the Regulatory Authority for

100

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements


Consolidated balance sheet 2012 chap.3

Electricity and Gas, "Recalculation of the economic terms and conditions of supply for the period between 1 January 2005 and 31 March 2007 and criteria for updating the economic terms and conditions for the supply of natural gas", which imposes a retroactive variation of the prices charged to end users. The Fund for risks amounting to Euro 1,224,000 concerns the invoices for adjustments issued in relation to the rate adjustment for 2009 and 2010 for the work carried out according to the agreement “Liguria Region - Integrated Management of the Public Health Services of Liguria”. The Fund for risks for dismantling of LPG storage facilities refers to the provision relating to storage facilities that were not transferred as part of the transfer of the business unit Erre.Gas related to distribution grids; in fact the buyer purchased the grids foreseeing their conversion for the use of natural gas in view of the imminent connection to the SNAM distribution grid. The Fund for risks “Greek Branch” amounting to Euro 1,000,000 refers to the closure of disputes with customers and suppliers in Greece in relation to the gasification of the cities of Thessaloniki and Alexandroupolis. The variations of the Fund are as follows: EURO/000 Balance as of JANUARY 1, 2012

8,066

Use of Fund for future risks and charges

(93)

Use of Fund for former Si.Gas goodwill

(11)

Use of Fund losses on future job orders

(439)

Use of Fund Ischia gas losses

(626)

Use of Fund for risks, sanctions regarding settlement of advance payment of VAT DEC. 2011 Use of Fund for risks, Francavilla Fontana waste disposal site

(50) (260)

Use of Fund for risks, dismantling of LPG storage facilities

(29)

Use of Fund for risks on transaction F.lli Rocca

(65)

Use of Fund for risks, meters service guarantee

(496)

Use of Fund for risks on EMPALS, Penne swimming pool

(500)

Use of Fund for risks on future losses of Nuoro Servizi

(326)

Use of Fund for risks on future losses of Ghirlandina Sport

(329)

Other provisions

644

Fund for risks on resolution 155/08 of the Regulatory Authority for Electricity and Gas

104

Provisions for Francavilla Fontana waste disposal site

250

Provisions for sea pipeline, Ischia

1,290

Provisions for losses of the companies part of the Group

584

Provisions for corrector service guarantee

840

Provisions for the group’s workers hit by the earthquake

1

Provisions for risks, future value of plants in concession Provisions for the Fund for future risks and charges

Balance AS OF DEC. 31, 2012

134 2,247

10,936

Severance pay for employment termination

The variations of this item, which compared to the previous year remained virtually unchanged, are shown in the following table: EURO/000 Balance as of JANUARY 1, 2012 Adjustments to the Initial fund Provisions

4,906 0 2,982

Payments and transfer to complementary pension funds

Balance AS OF DEC. 31, 2012

(2,981)

4,907

The amount set aside for the current year is net of the amounts accrued and paid during the financial year for employees whose relationship terminated during the year.

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101


Payables due to members for financing This item is made up as follows: EURO/000

2012

2011

Loans from financing members

9,380

8,150

Loans Ghirlandina Sport S.r.l.

0

18

Loans SIC S.a.s.

4

0

Loans Nuoro Servizi

0

56

9,384

8,224

Total

The balance as of 31/12/2012 of loans from financing partners is constituted by payments of 500 members for a maximum of Euro 67,167 each. These loans, which are paid on the basis of normal market rates, but never higher than those set down by the Ministry of Finance, increased by 2.5%; for the year 2012 they were paid at the gross annual rate of 5.125% (4.10 % net) with an increase of Euro 1,230,000.

Payables due to banks

The exposure to banking institutes as of 31 December 2012 is shown below: EURO/000

2012 5,651

5,040

Banks, other technical forms

2,642

12,424

Loans/financing with banks Syndicated loans and special financing Tax financing following earthquake, Decree Law no. 74/2012

Total

Debt burden Ratio

115,776

97,065

41,200

55,573

34,427

0

199,696

170,102

Interest Cover Ratio

2008

0,66

2008

3,15

2009

0,52

2009

7,27

2010

0,90

2010

2011

1,02

2011

6,23

2012

0,87

2012

7,95

Optimal Value of this index: <1,5

2008

2,56

2009

1,64

2010

3,14

2011

2,95

2012

2,52

-2,55*

Optimal Value of this index: >2 * In 2010 the Interest Cover Ratio was negative because, in the balance of financial items (OFN) to the ratio's denominator, the income was greater than the financial charges.

Debt/Ebitda Ratio

Optimal Value of this index: <4,5

102

2011

Current accounts

CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements

The situation of loans and special financing of the group as of 31 December 2012 is shown in the table below:


Consolidated balance sheet 2012 chap.3

List of outstanding bank loans as of December 31, 2012 Financing institutions Min. Att. Prod. L. 46/82

Amount granted

Date of granting

Interest rate

154

09/05/2003

4,11%

CASSA DI RISP. DI PARMA & PIACENZA

3,000

10/04/2008

Euribor 3 months + 0,75%

UNICREDIT - 4,5 ML

4,500

27/12/2004

BPV - (ACCOLLO IDC)

2,500

26/05/2008

COOPFOND

3,000

BANCO POP. S.FELICE

4,000

(Values expressed in Euro/000)

BALANCE AS OF DEC. 31, 2012 Current

Non current

Total

Date of settlement

Share expiring after 5 years

0

0

0 30/11/2012

0

315

317

632 10/04/2014

0

Euribor 6 months + 0,50%

619

0

619 31/12/2013

0

Euribor 6 months + 0,50%

625

0

625 31/12/2013

0

19/12/2008

TUR + 0,375% (max 4,25%)

600

1,800

2,400 31/12/2016

0

24/12/2008

Euribor 3 months/365 + 1,50%

184

3,017

3,201 24/03/2021

1,437

CRFERRARA

3,815

10/03/2009

Average E3 months+E6 months + 1,40%

205

1,460

1,665 30/06/2015

0

MEDIOCREDITO

6,000

30/12/2009

Euribor 6 months/360 + SPREAD 1,75

1,200

2,400

3,600 31/12/2015

0

BNL

7,000

15/12/2009

PPREREDEMPTION Euribor 3 months or 6 months/365 + SPREAD 1,0 REDEMPTION Euribor 6 months/365 + SPREAD 1,60

2,000

3,000

5,000 15/06/2015

0

BANCA MPS

5,000

15/02/2010 12/08/2010

PREREDEMPTION Euribor 3 months or 6 months/365 + SPREAD 1,0

975

3,075

4,050 31/12/2016

0

10/06/2010

REDEMPTION Euribor 6 months/365 + SPREAD 1,60

375

563

938 30/04/2015

0

DEUTSCHE BANK 1,50 ML

1,500

CASSA DI RISPARMIO DI FERRARA

1,000

10/09/2010

Media E3 mesi+E6 mesi + 1,60%

50

666

716 09/03/2017

0

MEDIOCREDITO 4,00 ML

4,000

29/09/2010

Euribor 6 mesi/360+ SPREAD 1,65%

800

2,000

2,800 30/06/2016

0

CREDEM

5,000

12/07/2010

TASSO FISSO 3,10%

620

2.,577

3,197 12/07/2015

0

CARIGE - CASSA DI RISPARMIO DI GENOVA

5,000 12/10/2010 13/12/2010

Euribor 6 months/360 + 1,50%

975

3,074

4,049 31/12/2016

0

UNIPOL BANCA

5,000

Euribor 3 months/365 + 1,50%

994

2,573

3,567 30/06/2016

0

BANCA POPOLARE DI MILANO

24/11/2010 5,000 15/12/2010

Euribor 6 months/360 + 1,50%

1,199

3,801

5,000 31/12/2016

0

POOL BPV

51,500 16/02/2011 08/08/2011

Euribor 3 months/365 + 1,75%

10,300

41,200

51,500 16/11/2015

0

GE CAPITAL

5,000 17/05/2011 19/10/2011

Euribor 3 months/365 + 1,75%

2,000

3,000

5,000 16/05/2015

0

BPV - ACCOLLO ERREGAS

2,750

Euribor 6 months/360 + 1,40%

483

2,017

2,500 31/12/2017

0

0

14/10/2017 10,000 clausola revoca

0

BANCO DI BRESCIA

11/10/2010

31/12/2011

10,000

14/10/2011

Euribor 3 months/360 + 2,00%

CASSA DI RISPARMIO DI CENTO

1,000

16/05/2012

Euribor 6 months/360 + 4,25%

157

843

1,000 30/06/2016

0

UNIPOL BANCA

1,500

10/07/2012

Euribor 6 months/360 + 4,50%

238

1,146

1,384 31/03/2016

0 81

MPS - ACCOLLO COMPAGRI MPS - FIN. TRIBUTI SISMA D.L. 74/2012

407

Euribor 6 months/365 + 1,25%

10,000

27

299

326 05/02/2019

10,110

20,221

30,331 31/12/2014

0

Euribor 3 months + 1,25%

119

0

119 14/11/2013

0 106

30,331

14/12/2012

FREE

CASSA RURALE DI TRENTO I

1,300

14/11/2006

CASSA RURALE LAVIS V

1,200

19/06/2006

Euribor 3 months + 1,2%

133

688

820 18/06/2019

BANCA DI TRENTO E BOLZANO

600

28/12/2007

Euribor 3 months + 1,25%

68

0

68 31/12/2013

0

CASSA DI RISPARMIO BOLZANO

250

13/12/2012

Euribor 3 months + 4,65%

80

171

250 31/12/2015

0

500

04/08/2008

Euribor 3 months + 1,25%

53

40

92 04/08/2014

0

4,000

30/11/2009

Euribor 3 months + 1,25%

394

1,035

1,429 10/02/2016

0

CASSA RURALE TRENTO II MEDIOCREDITO BANCO DI BRESCIA (GRUPPO UBI)

750

21/10/2009

Euribor 3 months + 1,25%

107

0

107 21/10/2012

0

1,000

30/09/2010

Euribor 3 months + 2,00%

101

184

284 30/09/2015

0

BANCA POPOLARE DI VICENZA

500

01/07/2010

Euribor 3 months + 2,35%

51

92

143 30/09/2015

0

BANCA POPOLARE DELL'EMILIA ROMAGNA

338

15/11/2012

Euribor 3 months + 5,00%

107

222

329 15/11/2015

0

BANCA POP. EMILIA ROMAGNA

6,000

07/12/2006

Euribor 3 months + 1,2%

553

4,739

5,292 07/06/2019

1,421

BANCA POP. EMILIA ROMAGNA

5,000

07/12/2006

Euribor 3 months + 1,2%

469

3,125

3,594 07/12/2018

625

UNICREDIT ROMANIA S.A.

500

30/06/2006

Euribor 1 month + 2,6%

0

109

109 30/09/2014

0

UNICREDIT ROMANIA S.A.

1,200

30/09/2006

Euribor 1 month + 2,6%

0

299

299 30/09/2014

0

CREDITO VALTELLINESE

UNICREDIT ROMANIA S.A. INTESA POOL UNICREDIT BANCA

09/2011

Robor 1 month + 2,85%

0

982

982 04/12/2017

0

1,513

700

30/11/2009

Robor 3 months + 3,25%

0

1,096

1,096 31/10/2019

296

33,000

15/09/2005

Euribor 6 months/360 + 1%

2,828

10,372

13,200 30/09/2015

0

BANCO DI SICILIA

5,000

30/07/2004

Euribor 6 months/360 + 1,2%

526

1,842

2,368 30/06/2017

0

MONTE PASCHI SIENA

15/02/2010 5,000 11/08/2010

BPV - BSGSP BPV - ACCOLLO

420

Euribor 6 months/360 + 1,5%

975

3,075

4,050 31/12/2016

0

07/02/2005

Euribor 3 months + 1,25%

17

57

74 30/09/2017

0

65

08/2012

Euribor 3 months + 1,25%

4

61

65 30/09/2026

43

295

14/12/2012

FREE

98

196

294 31/12/2014

0

MUTUO CHIROGRAFARIO B.P.E.R

2,000

29/07/2004

Euribor 3 months/360 + 1,5%

180

445

625 29/08/2015

0

MUTUO CHIROGRAFARIO B.P.E.R

180

08/06/2010

Euribor 3 months/365 + 2,00%

21

93

114 08/06/2016

0

UNIPOL BANCA

30/06/2011 1,199 10/11/2011

Euribor 6 months/365 + 2,15%

0

1,199

1,199 02/05/2025

941

UNICREDIT SPA

2,000

29/06/2012

Euribor 6 months/360 + 3,65%

0

2,000

2,000 30/06/2022

1,059

BPER - FIN. TRIBUTI SISMA D.L. 74/2012

3,801

14/12/2012

FREE

3,801

0

3,801 31/12/2014

BPER - FIN. TRIBUTI SISMA D.L. 74/2012

55,734

131,169 186,903

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

0

6,009

103


During the financial year 2012, following the earthquake in May, the companies part of the group based in the area hit by the earthquake initially enjoyed a legal suspension of the payments of loan instalments in compliance with Decree Law no. 74/2012 and then a bilateral suspension was granted for at least 12 months from the date of the earthquake. Consequently, new non-interest bearing lines were granted for the payment of taxes in accordance with Decree Law no. 74/2012 by Monte Paschi di Siena and Banca Popolare Emilia Romagna, used at the end of the year respectively forEuro 30,331,000 and Euro 4,096,000. The item Loans/financing form banks, includes two loans that are not shown in the list of outstanding loans, with Banca Nazionale del Lavoro for Euro 3,000,000 and with Credito Emiliano for Euro 1,500,000. In the financial year, the Group obtained the following loans or financing: Loan of Euro 1 million from Cassa di Risparmio di Cento with maturity date on 30 June 2016, Euribor 6 months and 4.25% spread. Loan of Euro 1.5 million from Unipol Banca with maturity date on 31 March 2016, Euribor 6 months and 4.5% spread. Loan of Euro 250 million from Cassa di Risparmio di Bolzano with maturity date on 30 December 2015, Euribor 3 months and 4.65% spread. Loan of Euro 338 thousand from Banca Popolare dell’Emilia Romagna with maturity date on 15 November 2015, Euribor 3 months and 5% spread. Loan of Euro 2 million from Unicredit with maturity date on 30 June 2022, Euribor 6 months and 3.65% spread. Financial accounting covenants exist on the following bank loans: Banca Popolare di San Felice sul Panaro, BNL, CREDEM, POOL Banco San Geminiano San Prospero, GE CAPITAL and Banco di Brescia. All the covenants have been observed. Any other information about the financial position of the Group is provided in the Combined Management Report to the Financial Statements and Consolidated Financial Statements for the year 2012.

Payables due to other funders This item is made up as follows: EURO/000

2012

Financing from leasing companies Financing from factoring companies

Total

2011 13,048

14,827

98

246

13,146

15,073

The value decreased by Euro 1,628,000 compared to the previous year due to the payment of leasing fees pertaining to the reporting year related to the gas grid catchment area called Campania 30, and due to the sums received from customers for receivables transferred without recourse, to the factoring company "CREDEMFACTOR", and then paid to the same company.

Advances

The balance, amounting to Euro 8,833,000, down from the previous year by Euro 6,302,000 is mainly attributable to the reduction in advances to "business" customers and “cooperative and consortium” customers.

Payables due to suppliers

The item Payables due to suppliers is as follows: EURO/000 Suppliers Suppliers, for guarantees

Total

2012

2011

179,677

155,248

4,275

3,650

183,952

158,898

The balance increased by Euro 25,053,000 compared to the previous year, mainly due to the extension of payment terms related to the suspension of the terms following the earthquake in May 2012. The item “Suppliers, guarantee withholding account” represents the sub-contractors’ amounts to be redeemed at the end of the contract.

104

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Consolidated balance sheet 2012 chap.3

Payables due to subsidiaries

This item amounting to Euro 1,400,000 concerns the company Modena FC S.p.A.

Payables to associated companies

This item, amounting to Euro 869,000 is made up as follows:

Value expressed in Euro/000 Compagri S.p.A. Fontenergia S.p.A. Fontenergia 38 S.r.l. Sarda Reti Costruzioni S.r.l. Fontenergia 4 S.r.l. Fontenergia 6 S.r.l. Fontenergia 7 S.r.l. Fontenergia 9 S.r.l. Fontenergia 10 S.r.l. Fontenergia 11 S.r.l.

140 111 25 4 19 29 7 6 20 5

Fontenergia 15 S.r.l. Fontenergia 26 S.r.l. Fontenergia 27 S.r.l. Fontenergia 28 S.r.l. Fontenergia 35 S.r.l. Fontenergia 37 S.r.l. X Datanet S.r.l. Teclab S.r.l.

3 13 27 2 8 5 451 10

Total payables due to associated Companies

869

Tax payables

The breakdown is as follows: EURO/000

2012

Payables due for consumption tax

2011 71

62

Payables due for VAT with deferred collection

3,271

3,259

Personal income tax (IRPEF) to be paid

1,513

1,466

Corporate income tax (IRES) and regional tax on production (IRAP)

263

3,753

Foreign income taxes

509

51

89

80

Withholding taxes on loans from members Payables due for Decembers’ VAT

Total

481

2.154

6,197

10,825

The item, amounting toEuro 6,197,000, decreased by Euro 4,628,000 compared to the previous year. This decrease is mainly due to the Group’s VAT payables and to the amount of payables for direct taxes (IRES and IRAP) that in this financial year, being in credit, have been correctly reclassified under "Tax receivables" in the Balance Sheet.

Payables due to social security In more detail:

EURO/000 Social Security (INPS)

2011 2,220

National Insurance Institute for Industrial Accidents (INAIL) Executives' contributions Contributions for members’ Christmas bonus and supplementary pay Funds for operators of the Building sector and Chemists Complementary pensions Foreign social security institutions Social security charges for redundancy of personnel at Nuoro Servizi Others (including advance payments for accidents and illnesses)

Total

2012

2,204

1

1

11

30

709

615

71

151

348

335

97

27

222

1308

(7)

(11)

3,672

4,660

The decrease compared to the previous year, amounting to Euro 988,000, is due to the reduction of social security charges for redundancy of personnel at Nuoro Servizi.

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

105


Other payables In more detail:

EURO/000 Payables due to councils for collections on their behalf Payables due to employees Securities and deposits Payables due to members for interests on financing, reimbursement of shares and refund Payables due to third parties for acquisition of shares Payables for the acquisition of Camastra and Palma concessions Payables for future charges on areas with building permission Collections made on behalf of a temporary association of companies as representative head company Payables due to adjustments fund of energy sector Advance payment for transfer of company shares Others

2012

Total

2011 28 3,644 325

200 4,760 318

2,263

1,279

7 40 68

10 40 326

471

904

139 327 1,368

1,098 0 601

8,680

9,536

The payables due to councils concern the amounts collected on their behalf that are to be paid to them. The payables due to employees include the wages and salaries of December, the holidays accrued and not used and the additional monthly wage accrued as well as individual salary integrations and/or those foreseen by trade unions. The "Collections made on behalf of a temporary association of companies as representative head company" refer to collections made by the parent company as representative of a temporary association of companies at the end of December and paid to the companies on the first days of January 2013. The Payables due to adjustments fund of energy sector refer to the amounts that the Group received for the equalisation system implemented following Resolution 159/08 and that must be returned as provided for by the subsequent resolution 197/09.

Accrued liabilities and deferred income In more detail:

EURO/000

2012

2011

Accruals on interest payable

2,744

472

Others

2,084

1,465

Total

4,828

1,937

The amount of accruals on interest payable concerns, in addition to the interest on bank loans and other technical financing forms, leasing fees pertaining to the reporting year that will be charged in the future and income attributable to future years, for which invoices have already been issued. The increase in accruals on interest payable is due to the suspension of the repayment of loans granted by banks as a result of the provisions of Decree Law no. 74/2012 to assist businesses affected by the earthquake in May 2012. Various companies part of the group, having their registered office in Concordia sulla Secchia, have benefited from such suspension.

Memorandum accounts

The breakdown of commitments and risks outstanding as of 31 December 2012 entered under the memorandum accounts is as follows: EURO/000 Bills for discount subject to collection that have been presented Guarantees issued to third parties and companies part of the group Liens and mortgages Leasing fees for motor vehicles, equipment and property Guarantees issued by third parties Guarantee deposits for agreements Letters of credit for imports, foreign documents Derivatives – MTM IRS – Coverage agreements

TOTAL

106

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

2012

2011

311 160,965 1,324 5,016 12,493 59,365 0 234

19 156,569 2,494 5,540 4,209 61,282 1,878 229

239,708

232,220


Consolidated balance sheet 2012 chap.3

The item “Bills for discount subject to collection that have been presented and that were not payable as of 31 December” includes the value of the bank orders issued by the Group to customers and discounted at banks, but that were not payable as of 31/12/2012. The item also includes the value of the bills of exchange issued in favour of the Group by customers, discounted at banks but that were not payable as of 31/12/2012. The item “Guarantees issued to third parties and companies part of the group” includes the value of the guarantees as of 31/12/2012 provided by the Group in favour of banks for the issue of bank and insurance credit lines/loans. The item also includes the counter-security of the regular payment of residual rent on grid leases entered into by the subsidiary CPL Distribuzione, for a total of Euro 23,000,000. The item "Liens and Mortgages" includes the value of the lien on holdings granted as guarantee for syndicated loans (head bank: BPER) granted to Marigliano Gas S.r.l. (value of lien on holdings Euro 1,194,000) and Ischia Gas (value of lien on holdings Euro 100,000). The item "Leasing fees for motor vehicles, equipment and property" includes the residual debt of the leasing fees existing as of 31/12/2012 for leasing agreement for the purchase of financially leased vehicles and instrumental goods. The item "Guarantees issued by third parties" includes the value of the guarantees given by Banks/Insurance companies to the Parent Company in the interest of third parties to guarantee contractual obligations mainly made up of subcontracting agreements. The item "Guarantees deposits for agreements" includes the value of the guarantees provided by Insurance companies in favour of third parties in the interest of the Group for participation in tenders and for the issue of guarantees for contractual obligations, the value of the guarantees provided by foreign banks in favour of third parties in the interest of companies part of the group, the value of the co-obligations as of 31/12/2012 for the issue of insurance policies regarding the Temporary Association of Companies to participate in tenders or to guarantee contractual obligations. Derivatives – MTM IRS: this item includes the Mark to Market value of the two interest rate coverage IRS agreements entered into on 28/10/2010 with Intesa San Paolo S.p.A. and an interest rate coverage IRS agreement entered into on 04/04/2011 with Banco San Geminiano e San Prospero. The contracts make it possible to eliminate the interest rate risk on three loans outstanding as of 31/12/2012, with a remaining debt ofEuro2,400,000 and Euro2,000,000 granted by Medio Credito Italiano S.p.A. and Euro 4,500,000 equal to 50% of the amount of the Head Bank (Banco San Geminiano e San Prospero - Gruppo Banco Popolare) of the syndicated loan totalling Euro 51,500,000. The notional amount of derivatives is equal to the remaining debt of the above mentioned loans. Following the earthquake that hit the headquarters of the parent company on 29 May 2012, the legal suspension of the payment of instalments due was initially applied on all types of loans until 30 November 2012 (pursuant to Decree Law no. 74/2012); a bilateral suspension was subsequently requested and applied for the payment of the capital share of the loans, for 12 months (from the date of the earthquake). The loans subject to bilateral suspension include those with interest rate coverage agreements (IRS). Therefore, from 29 May 2012 there was a difference between the residual value of the loan agreements (Medio Credito Italiano e Banco Popolare), which remained unchanged, and the notional value of the interest rate coverage agreements, which was reduced as provided by the initial amortisation plan. A brief summary of the IRS coverage agreements is shown below:

AGREEMENT DATE

EXPIRY DATE

EXPIRY DATE

28/10/2010 28/10/2010 04/04/2011

30/06/2015 30/06/2014 16/02/2015

30/06/2015 30/06/2014 16/02/2015

MARK TO MARKET* (Euro) -47,235.00 -48,662.00 -137,685.50

*Il Mark to Market is the current market value of each agreement calculated as of 31/12/2012, whose positive sign (+) or negative (-) refers to the position of the Parent Company CPL CONCORDIA Soc. Coop.

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Profit and loss account A Value of production The breakdown is as follows:

EURO/000 Income from sales and services Income from production work orders Sale and distribution of gas Fuel sales Electricity sales Sale of green certificates Sale of materials Income from consultancy and services Connection contributions Income from equalisation of rate system Sale of immovable property Income from hotel and restaurant services Rents and leases

Total Variation of the stock of products under processing, semi-finished and finished goods Variation of works in progress on order Increase in internally generated fixed assets Other income Contingent assets Miscellaneous accrued earnings Capital gain on transfer of assets Reimbursements for insurance claims Rents and leases Other earnings Subsidies for operating expenses Capital contributions

Total TOTAL

The value of production of the Group for the financial year 2012 increased by Euro 23,223,000 compared to the previous year. The details and the analysis of this item are described in the Management Report to the Financial Statements and Consolidated Financial Statements. As regards the determination by geographical area of the income from sales and services, the breakdown is shown below:

2012

2011

268,090 36,391 5 5,300 128 42,591 6,489 389 8,254 364 754 0

273,886 27,350 0 3,750 177 36,217 7,664 449 5,440 315 792 335

368,755

356,375

(3,518)

1,199

7,054 30,130

(7,822) 31,076

4,813 2,508 114 168 351 245 414 401

2,965 1,760 115 854 319 1,023 348 0

9,014 411,435

7,384 388,212

Value expressed in Euro/000 Algeria 12,332 Argentina 2,713 Francia 208 Grecia 6 India 178 Messico 6 Polonia 28 Romania 7,067 Spagna 79 Tunisia 333 Italia 388,585 Total 411,435

The item "Increase in internally generated fixed assets" amounting to Euro 30,130,000 consists of work performed with in-house personnel for the construction or expansion of intangible assets, mainly made up of heat management systems owned by third parties, and tangible assets, consisting of the construction of gas distribution systems. Subsidies for operating expenses mainly include the amounts paid by the electrical services provider (GSE) as part of the energy produced by photovoltaic and cogeneration plants transferred to the provider. Other incomes also include contingent assets from different sources, including transactions with suppliers and customers, or from the evaluation of payables made ​​in previous financial years that were higher than the amounts​​ actually incurred.

108

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Consolidated balance sheet 2012 chap.3

The item "Other earnings" includes the charge of costs incurred on behalf of third parties. The item Capital gain on transfer of assets includes the effects of the transfer of equipment and other assets of low value. La voce “Proventi attivi diversi” accoglie il riaddebito di costi sostenuti per conto di terzi soggetti. La voce "Plusvalenze alienazioni cespiti", accoglie gli effetti di cessione di attrezzature ed altri beni di modico valore.

Value of production 330.620 332.058 344.888 278.091 225.418

2008

2009 2010

2011

2012

CPL CONCORDIA Soc. Coop CPL CONCORDIA Group

383.175 388.212 411.435 318.323 261.608

2008

2009 2010

2011

2012

Data expressed in Euro/000

B6. Purchases

This item, amounting to Euro 159,118,000, increased by Euro 7,483,000 over the previous year mainly due to the increase of the value of production despite a reduction in purchasing costs of raw materials, ancillaries and consumables due to the significant reduction in the purchase of photovoltaic panels; on the other hand there was an increase in the cost of gas consumption as regards heat management agreements and of the costs for the purchase of fuel and lubricants. It should be noted that there was a significant reduction in the costs related to the "Surface Rights for Photovoltaic Systems intended for sale”.

B7. Services

The item, amounting to Euro 117,075,000, increased by Euro 3,053,000 over the previous year, equal to 2.68%, mainly due to the increase in the value of production even if there was a decrease in contracts for technical and administrative consultancy and in advertising costs; there was an increase in costs related to third-party services and subcontracting, maintenance costs, insurance costs and ancillary personnel costs, for example, the cost of restaurants, accommodation, canteen and in general travel costs of employees.

B8. For the employment of third-party assets

The item, amounting to Euro 15,982,000, decreased by Euro 587,000 compared to the previous year mainly due to the reduced use of rented vehicles.

B9. Costs for personnel

This item includes all charges incurred on an ongoing basis for employees. The amount transferred to the profit and loss account for the financial year 2012 amounted to Euro 64,652,000 with an increase of Euro 2,925,000, mainly as a result of the increase in units engaged in the production process. The increase was also due to the effects of variable remuneration linked to company results and to the supplementary amount agreed with the trade unions. The average number of employees in the group during the financial year, divided by categories, is as follows: Number Top management Executives White collar Blue collar

Total

2012

2011 37 33 693 765

35 27 638 760

1,528

1,460

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Employment data for the CPL Group 2008

1.150

2009

1.289

2010

1.416

2011

1.511

2012

1.540 Number of employees as of Dec. 31, 2012

B13. Other provisions

This item, amounting to Euro 5,398,000 is made up as follows: Provisions for losses on future job orders Euro/000 Provisions for losses on work orders not valued Euro/000 according to the percentage of completion Provisions for risks on gas correctors installation guarantee Euro/000 Euro/000 Prov. risks on work orders for future guarantees Euro/000 Prov. risks on Algeria work orders for future guarantees Prov. future losses of Francavilla Fontana waste disposal site Euro/000 Euro/000 Provisions sea pipeline, Ischia Provisions for risks from value variations of concession plants Euro/000 Prov. for risks for the payment of employees +contributions of Nuoro Ser. Euro/000 Euro/000 Provisions for meter replacements TOTAL Euro/000

1,047 604 840 1,643 12 250 664 134 100 104 5,398

These provisions refer to: Euro 1,047,000 to cover the risks associated with future losses on production orders; Euro 604,000 to cover the risks associated with future losses on production orders not valued according to the principle of percentage of completion; Euro 840,000 for the guarantee fund for assistance on natural gas correctors installed during the financial year, that will be under guarantee in the years 2013, 2014 and 2015; Euro 1,643,000 of direct prudential provisions on work orders for assistance under guarantee in subsequent years, costs that will be almost entirely incurred in the next financial year; Euro 12,000 for risks for work carried out under guarantee on the works in Algeria; Euro 250,000 to cover future operating losses that are expected to be generated by the management of the plant at the Francavilla Fontana waste disposal site; Euro 664,000 for provisions of costs related to the sea pipeline of the island of Ischia, which is not yet depreciated as the number of users connected has not yet exceeded 10% of all potential users of the entire island. This fund will be used at the beginning of the depreciation of the pipeline until the end of the concession, i.e. up to 31/12/2023; Euro 134,000 to cover the risk arising from the difference detected by an assessment required by us to determine the residual value of the equipment in concession; Euro 100,000 for any additional charges for the payment of employees and INPS of Nuoro Servizi. Euro 94,000 for a tax dispute of CPL CONCORDIA FILIALA CLUJ ROMANIA concerning the technological consumption of natural gas; Euro 104,000 for the replacement of traditional meters that must be completed by 31/12/2016.

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Consolidated balance sheet 2012 chap.3

B14. Sundry operating expenses

This item, amounting to Euro 5,445,000, increased by Euro 1,547,000 mainly as a result of transactions with losses entered under the contingent liabilities.

C15. Earnings from holdings

This item, amounting to Euro 111,000 is made up as follows: Dividend from Ghirlandina Solare S.r.l. Euro/000 Dividend from X Datanet S.r.l. Euro/000 Total from associated companies Euro/000

34 25 59

Dividend from Azioni Hera shares Euro/000 Euro/000 Dividend from azioni Sofinco shares Euro/000 Dividend from azioni C.C.F.S. shares Dividend from azioni Finpro shares Euro/000 Total from other companies Euro/000

21 28 1 2 52

C16. Other financial earnings The breakdown is as follows:

EURO/000 From subsidiaries From associated companies From other companies

2012

Total

2011 81 288 2,760

7 245 998

3,129

1,250

Financial earnings from other companies mainly consist of interests on arrears from customers for late payments and accrued interest on current accounts.

C17. Interest and other financial charges The breakdown is as follows:

EURO/000 Interest on loans and financing Interest on current accounts Interest on funding from members Interest on hot money, eurolire and bills subject to collection Interest on advance payment of invoices Interest on leasing contracts Charges for SWAP coverage Other interests

Total

2012

2011 4,114 432 444 72 341 348 132 245

4,254 80 399 67 394 424 80 129

6,128

5,827

This item, amounting to Euro 6,128,000, increased by Euro 302,000 compared to the previous year, mainly due to higher interest on current accounts. The financial management of the group is better analysed in the Combined Management Report to the Financial Statements and Consolidated Financial Statements.

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C17.bis. Exchange rate gains and losses

The item, amounting to Euro 54,000, consists in payable differences produced by the valuation of items in currencies other than Euros at the exchange rate on 31 December 2012 compared with the exchange at which the receivable or payable object of the valuation was actually produced. The items considered relate to receivables and payables in foreign currencies accounted for as follows: Euro 24,000 by CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l., Euro 12,000 by CPL ENERGY INDIA PRIVATE Ltd. and Euro 8,000 by AIPOWER S.p.A. The main portion, amounting to Euro 50,000 refers to the same items resulting from the Stable Organisations in Romania, Argentina and Algeria, as well as payables and receivables outstanding as of 31 December, with Algerian customers and suppliers.

D18 a) Revaluation of holdings The item, Amounting to Euro 408,000, is composed of values resulting from the valuation of the associated companies, carried out with the net equity method, the details of which are as follows:

Coimmgest S.p.A. Euro/000 Teclab S.r.l. Euro/000 Ies Solare S.r.l. Euro/000 Noci Solar 1 S.r.l. Euro/000 Noci Solar 2 S.r.l. Euro/000 Fimetra S.r.l. Euro/000 Solar Plant S.r.l. Euro/000 Total of Revaluation of holdings Euro/000

110 9 43 78 69 11 88 408

D19 a) Devaluation and losses of holdings This item, amounting to Euro 4,030,000 is made up as follows:

Safin-Sarda Reti Costruzioni Euro/000 236 Euro/000 2,881 Modena Football Club S.p.A. Fontenergia S.p.A. Euro/000 31 Euro/000 11 Pegognaga Servizi S.r.l. Euro/000 41 X Datanet S.r.l. Gruppo Ichnusa Euro/000 544 Euro/000 2 Fontenergie Bacini Sardegna Ghirlandina Solare S.r.l. Euro/000 2 Polargas S.r.l. Euro/000 61 Fontenergia 38 S.r.l. Euro/000 1 Energetski Servis D.o.o. Euro/000 1 Centrale Sassinoro S.r.l. Euro/000 133 Biogengas S.r.l. Euro/000 1 Origina S.p.A. Euro/000 25 Intermedia Broker Euro/000 57 Winding up of inactive companies Euro/000 3 Total Devaluation and losses of holdings Euro/000 4,030

112

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Consolidated balance sheet 2012 chap.3

E Special earnings and charges

This item, amounting to Euro -122,000 is made up as follows: Gains from eliminations Euro/000 42 Use of risk funds Euro/000 30 Use of fund for risks, legal dispute Redengas Euro/000 260 Variation of redundancy payables Nuoro Servizi Euro/000 964 Application for refund IRAP 2007-11 Decree Law no. 201/2011 Euro/000 2,115 Refund IRAP 185/2008 Euro/000 7 Special earnings earthquake May 2012 Euro/000 4 Special charges earthquake May 2012 Euro/000 (3,245) Devaluation intangible fixed assets Emprigas Euro/000 (328) Others from previous financial years Euro/000 30 Total of extraordinary income and charges Euro/000 (122)

Income tax for reporting year: current,

deferred, and advanced This item includes:

Current corporate income tax -IRES Euro/000 Current regional tax on production -IRAP Euro/000 Euro/000 PREPAID TAX FOREIGN INCOME TAXES Euro/000 Total taxes Euro/000

4,954 2,959 (1,667) 41 6,287

Receivables and payables with a residual duration of

more than five years

The balance of payables with a residual duration greater than five years equals Euro 6,009,000 and is composed exclusively of bank loans included in item D3 of the liabilities. There were no receivables with duration of more than 5 years as of 31 December 2012.

Remuneration of directors, auditors and external auditors

The remuneration of the auditors and directors for the performance of their duties also at other companies included in the consolidation amounted to Euro 385,000 for the financial year 2012, of whichEuro 235,000 for the board of auditors and Euro 150,000 for the directors. The remuneration paid to the various external auditing companies in the financial year amounted to Euro 215,000, of which Euro 108,000 for the legal auditing of the accounts in accordance with art. 14 of Legislative Decree 39/2010, Euro 72,000 for the certification according to Law no. 59/92 of the Statutory Financial Statements as of 31/12/2012, Euro 29,000 for the audit of the separate annual accounts pursuant to art. 21 paragraph 21.2 of the integrated text approved by the Authority for Electricity and Gas with Resolution no. 11 of 18/1/2007 and subsequent modifications and integrations and Euro 6,000 for miscellaneous expenses.

Supplementary tables

The following supplementary tables are included to provide further information on the Groupâ&#x20AC;&#x2122;s consolidated financial position: financial statement

variations of group net equity reconciliation of holding company's net equity according to Italian civil code with consolidated net equity. CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements

113


Financial statement for the year ending as of Dec. 31, 2012 SOURCES

2012 8,929

2011 10,008

Adjustments of items which did not determine variations of net working capital Amortisation of intangible fixed assets Depreciation of tangible fixed assets Devaluation of holdings Accrued fund for retirement pensions Provisions to risk fund for future losses Release of funds

11,195 6,284 907 2,982 6,163 (3,224)

9,122 6,354 2,053 3,607 4,291 (987)

Net Working Capital generated from operating activities

33,236

34,448

Payments of contributions to share capital Net value of transferred intangible fixed assets Net value of transferred tangible fixed assets Decreases of holdings Decrease of long-term receivables from customers Increase of long-term payables to banks Increase of other long-term payables Increase of long-term payables to suppliers

1,236 1,741 6,658 4,115 138 17,046 494 692

1,499 1,140 4,599 5,673 (1,332) 30,068 (272) 158

TOTAL SOURCES

65,356

75,981

USES Acquisition of technical fixed assets Increase of intangible fixed assets Distributed dividends Provisions to mutual benefits fund Repayments of contributions to share capital Variation of translation reserve Variation of consolidation reserve Variation of minority reserve Retirement pensions paid or transferred during the year Increase of long-term receivables Decrease of other long-term financing Acquisition of holdings Revaluation of holdings

22,184 18,206 686 267 378 424 241 (721) 2,980 7,035 480 497 259

20,017 15,920 1,133 401 339 134 339 (431) 3,949 (4,748) 480 6,608 303

TOTAL USES

52,916

44,444

INCREASE OF NET WORKING CAPITAL

12,440

31,537

Variation of net working capital components CURRENT ASSETS Receivables from members for payments still due Stock Receivables Cash and cash equivalents Financial assets Accrued income and prepayments

109 (1,452) (4,034) 40,713 4,099 (106)

287 (3,318) 12,706 21,592 (3,031) 405

INCREASE OF CURRENT ASSETS

39,329

28,641

CURRENT LIABILITIES Payables to members for funding Payables to banks Payables to other funders Payments on account Payables to suppliers Payables to subsidiaries Payables to associated companies Other payables Accrued liabilities and deferred income

1,160 12,549 (1,446) (6,302) 24,361 1,400 (757) (6,966) 2,890

1,167 17,421 (1,148) (7,745) 1,107 (4,518) (854) (9,495) 1,169

INCREASE OF CURRENT LIABILITIES

26,889

(2,896)

INCREASE OF NET WORKING CAPITAL

12,440

31,537

Profit of the financial year

114

(Values expressed in Euro/000)

CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements


Consolidated balance sheet 2012 chap.3

Variations of Group net equity Share Capital Balance as of 01/01/2012 Allocation of 2011 profit: Allocation of holding company dividends Allocation to mutual benefits fund Payment of contributions to share capital Repayment of contributions to share capital Variation of translation reserve Variation of consolidation reserve for acquisition of holdings and other consolidation variations Consolidated profit (loss) of the financial year

Balance as of Dec. 31, 2012

19,588

(Values expressed in Euro/000)

Reserve for Revaluation StatuOwn Shares tory Reserve Held Reserve 101,181 657 78 532 7.686 Legal Reserve

Surplus from merger 236

Capital contributions

Conversion reserve

1,269

(1,604)

Profit/loss Consoof the finan- TOTAL lidation cial year reserve (2,884) 10,008 129,061 860 (7,686) 860

1,504

(686)

(686)

(267)

(267)

(268)

1,236

(378)

(378) (424)

20,714 108,867

657

78

532

236

1,269

(2,028)

Reconciliation of holding company's net equity according to Italian civil code with consolidated net equity Holding company's net equity and result Consolidated subsidiaries' net equity and result Effect of financial leasing operations Cancellation of dividends distributed by subsidiaries Cancellation of intragroup profits on fixed assets' transfers Tax effect on margins achieved by transferring fixed assets Evaluation adjustment of holdings in subsidiaries to net equity method Book value of consolidated holdings Other consolidation adjustments I.E.A. sub-consolidation effect

Net equity and result of the financial year from consolidated financial statement Minority net equity and result

Group net equity and result of the financial year

(424)

(2,024)

(1,101)

(1,101)

8,929

8,929

8,929

137,230

(Values expressed in Euro/000)

Net Equity as of Dec. 31, 2012 139,128 59,786 (473) 160 (5,930) 1.598 (6,937) (49,658) 1,366 13

Result of the financial year as of Dec. 31, 2012 6,776 3,557 395 (3,180) 20 27 (419) 1,628 (76) (10)

139,053

8,718

(1,823)

212

137,230

8,930

These consolidated Financial Statements, provide a truthful and correct portrayal of the groupâ&#x20AC;&#x2122;s net worth and financial situation, in addition to the economic result of the reporting year, and tallies with the results of the accounting records. Concordia sulla Secchia, May 20, 2013

On behalf of the Board of Directors The Chairman, Casari Roberto

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CERTIFICATION REPORT

Auditing Standard n° 001 issued by Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili and recommended by Consob. In ourr opinion, the report on operations is consistent with the consolidated financial statements of CPL Concordia Soc. Coop. as of 31 December 2012. Verona, 6 June 2013 PricewaterhouseCoopers SpA Signed by Alexander Mayr (Partner)

AUDITORS’ REPORT IN ACCORDANCE WITH ARTICLE 14 OF LEGISLATIVE DECREE This report has been translated into the English language from the original, which N° was39 issued in JANUARY 2010 OF 27 Italian, solely for the convenience of international readers.

To the shareholders of CPL Concordia Soc. Coop.

1

We have audited the consolidated financial statements of CPL Concordia Soc.Coop. as of 31 December 2012.. The directors of CPL Concordia Soc. Coop. are responsible for the preparation of these financial statements in compliance with the laws governing the criteria for their preparation. Our ur responsibility is to express an opinion on these consolidated financial statements based on our audit.

2

We conducted our audit in accordance with the auditing standards issued by the Italian Accounting Profession (Consiglio Nazionale dei Dottori Commercialisti Commercialisti e degli Esperti Contabili) and recommended by Consob,, the Italian Commission for listed Companies and the Stock Exchange. Those standards require that we plan and perform the audit to obtain the necessary assurance about whether the consolidated financial financial statements are free of material misstatement and, taken as a whole, are presented fairly. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the the accounting principles used and significant estimates made by the directors. We believe that our audit provides a reasonable basis for our opinion. For the opinion on the consolidated financial statements of the prior period, which are presented for comparative purposes as required by law, reference is made to our report dated 8 June 2012.

3

In our opinion, the consolidated financial statements of CPL Concordia Soc.Coop. as of 31 December 2 of 22012 comply with the laws governing the criteria for their preparation; accordingly, they have been prepared clearly and give a true and fair view of the financial position and result of operations of the Group.

4

The directors of CPL Concordia Soc.Coop. are responsible for the preparation of a report on operations in compliance with the applicable laws. laws Our responsibility is to express an opinion on the consistency of the report on operations with the consolidated financial statements, as required by law. For this purpose, we have performed the procedures required under Italian

PricewaterhouseCoopers SpA Sede legale e amministrativa: Milano 20149 Via Monte Rosa 91 Tel. 0277851 Fax 027785240 Cap. Soc. Euro 6.812.000,00 i.v., C .F. e P.IVA e Reg. Imp. Milano 12979880155 Iscritta al n° 119644 del Registro dei Revisori Legali - Altri Uffici: Ancona 60131 Via Sandro Totti 1 Tel. 0712132311 - Bari 70124 Via Don Luigi Guanella 17 Tel. 0805640211 - Bologna Zola Predosa 40069 Via Tevere 18 Tel. 0516186211 - Brescia 25123 Via Borgo Pietro Wuhrer 23 Tel. 0303697501 - Catania 95129 Corso Italia 302 Tel. 0957532311 - Firenze 50121 Viale Gramsci 15 Tel. 0552482811 - Genova 16121 Piazza Dante 7 Tel. 01029041 - Napoli 80121 Piazza dei Martiri 58 Tel. 08136181 - Padova 35138 Via Vicenza 4 Tel. 049873481 - Palermo 90141 Via Marchese Ugo 60 Tel. 091349737 - Parma 43100 Viale Tanara 20/A Tel. 0521 0521275911 - Roma 00154 Largo Fochetti 29 Tel. 06570251 - Torino 10122 Corso Palestro 10 Tel. 011556771 - Trento 38122 Via Grazioli 73 Tel. 0461237004 - Treviso 31100 Viale Felissent 90 Tel. 0422696911 - Trieste 34125 Via Cesare Battisti 18 Tel. 04034807811 - Udine 33100 Via Poscolle 43 Tel. 043225789 - Verona 37135 Via Francia 21/C Tel.0458263001

www.pwc.com/it

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Consolidated balance sheet 2012 chap.3


Financial statement

and consolidaTed

TWO THOUSAND

AND TWELVE CPL CONCORDIA

|CHAPTER |4


Balance sheet 2012


BALANCE SHEET

as of December 31, 2012

Statement of assets December 31, 2012

Amounts expressed in Euros A)

RECEIVABLES FROM MEMBERS FOR PAYMENTS STILL DUE

1,176,488

- Portion called in B)

December 31, 2011

Amounts expressed in Euros

1,176,488

1,158,595 1,158,595

FIXED ASSETS

I INTANGIBLE FIXED ASSETS 1) Start up and expansion costs 2) Research, development, and advertising costs 3) Industrial patent rights and rights for the exploitation of intellectual properties 4) Concessions, licenses, trademarks, and similar rights 5) Goodwill 6) Fixed assets in progress and payments on account

4,829

3,956

86,191

33,250

0

0

63,455

107,895

0

0

2,916,262

2,606,294

35,127,990

30,291,784

38,198,727

33,043,179

1) Land and buildings

3,403,798

3,235,343

2) Plants and machinery

6,546,771

4,940,938

7) Other intangible fixed assets

Total II TANGIBLE FIXED ASSETS

3) Industrial and commercial equipment 4) Other tangible fixed assets 5) Fixed assets in progress and payments on account

725,171

682,284

2,445,197

2,922,760

3,877,320

3,868,597

16,998,257

15,649,922

a) Subsidiary companies

48,810,526

38,920,494

b) Associated companies

8,339,583

15,768,469

Total III IMMOBILIZZAZIONI FINANZIARIE 1) Holdings in:

c) Parent companies

0

0

d) Other companies

5,959,318

5,926,191

2) Receivables:

(within 12 months)

19,239,653

19,239,653

17,576,000

17,576,000

b) From associated companies

8,916,542

10,135,792

5,650,242

6,869,492

c) From parent companies d) From others 3) Other securities 4) Own shares

Total Total FIXED ASSETS

120

(within 12 months)

a) From subsidiary companies

CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements

0

0

0

0

763,871

1,547,075

659,065

1,417,862

0

0

289,184

0

94,321,131

86,478,508

149,518,115

135,171,609


Balance sheet 2012 chap.4

C)

CURRENT ASSETS

I STOCK: 1) Raw materials, ancillary and consumables

9,683,333

2) Products under processing and semi-finished products

1,605,189

1,905,206

25,483,234

14,772,328

3) Works in progress on order

12,911,777

4) Finished products and goods

1,052,505

1,237,080

5) Payments on account

2,132,095

2,833,806

39,956,356

33,660,197

Total II RECEIVABLES 1) From customers 2) From subsidiary companies 3) From associated companies 4) From parent companies 4 bis) Tax receivables 4 ter) Taxes paid in advance 5) From others

(after 12 months)

(within 12 months)

179,792,277 15,235,644 9,585,612 0 7,755,038 3,018,405 1,575,459

1,512,974 186,317,809 0 25,817,334 0 8,014,334 0 0 0 1,076,044 0 2,181,950 0 748,127

216,962,435

224,155,598

1) Holdings in subsidiary companies

537,743

306,811

2) Holdings in associated companies

7,209,202

0

1,945

1,945

4) Own shares

0

0

5) Other securities

0

0

7,748,890

308,756

96,604,400

57,877,310

0

202,654

Total III FINANCIAL ASSETS WHICH ARE NOT FIXED ASSETS

3) Other holdings

Total IV CASH AND CASH EQUIVALENTS 1) Bank and post office deposits 2) Cheques on hand 3) Cash and equivalents on hand

Total TOTAL CURRENT ASSETS D)

ACCRUED INCOME AND PREPAYMENTS

TOTAL ASSETS

16,575

16,180

96,620,975 361,288,656

58,096,144 316,220,695

4,909,897

5,210,319

516,893,156

457,761,218

CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements

121


Statement of liabilities December 31, 2012

Amounts expressed in Euros

December 31, 2011

Amounts expressed in Euros

A) NET EQUITY I SHARE CAPITAL II SHARE PREMIUM RESERVE III REVALUATION RESERVES IV LEGAL RESERVE V STATUTORY RESERVES VI RESERVE FOR TREASURY SHARES HELD

20,713,737

19,587,590

0

0

656,679

656,679

108,867,183

101,181,402

78,184

78,184

531,892

531,892

235,597

235,597

VII OTHER RESERVES: SURPLUS FROM MERGER EXCHANGE RATE FLUCTUATION RESERVE CAPITAL CONTRIBUTIONS, LAW NO. 784/80

0

0

1,269,396

1,269,396

VIII PROFITS (LOSSES) CARRIED FORWARD

0

0

IX PROFIT (LOSS) OF THE FINANCIAL YEAR

6,775,661

8,907,393

139,128,329

132,448,133

21,526

21,526

Total B) FUNDS FOR RISKS AND CHARGES 1) For retirement pensions and similar obligations 2) For taxes 3) Others

Totale C) SEVERANCE PAY FOR EMPLOYMENT TERMINATION

122

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

0

0

6,541,705

5,379,751

6,563,231

5,401,277

4,230,090

4,362,613


Balance sheet 2012 chap.4

D) PAYABLES

(after 12 months)

(after 12 months)

1) Debentures

0

0

0

2) Convertible debentures

0

0

0

0

3) Payables due to members for financing

0

9,380,143

0

8,150,246

4) Payables due to banks

99,048,212 148,630,818

0

84,098,347 119,449,719

5) Payables due to other funders

0

98,608

0

245,647

6) Advances

0

10,084,096

0

14,208,598

7) Payables due to suppliers

4,274,916 161,140,389

3,649,597 142,940,031

8) Payables represented by negotiable instruments

0

0

0

9) Payables due to subsidiary companies

0

19,964,907

0

9,234,421

10) Payables due to associated companies

0

858,072

0

1,614,879

11) Payables due to parent companies

0

0

0

0

12) Tax payables

0

4,606,426

0

9,211,231

13) Payables due to social security institutions

0

3,187,169

0

3,152,654

14) Other payables

0

6,137,345

0

Total E) ACCRUED LIABILITIES AND DEFERRED INCOME

TOTAL LIABILITIES

0

6,249,062

364,087,973

314,456,488

2,883,533

1,092,707

516,893,156

457,761,218

MEMORANDUM ACCOUNTS I) Guarantees granted - Sureties - Collateral

185,092,924

180,866,556

1,324,400

2,494,000

Total

186,417,324

183,360,556

II) Other memorandum accounts - Bills subject to collection - Others

Total TOTAL MEMORANDUM ACCOUNTS

311,302

18,991

40,914,512

35,556,237

41,225,814

35,575,228

227,643,138

218,935,784

CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements

123


Profit and loss account December 31, 2012

Amounts expressed in Euros

December 31, 2011

Amounts expressed in Euros

A) VALUE OF PRODUCTION 1) Income from sales and performances 2) Variation of the stock of products under processing, semi-finished and finished products 3) Variations of works in progress on order 4) Increase in internally generated fixed assets 5) Other income and earnings - Others - Contributions on account of the financial year

5,544,845 97,134

Total

309,339,397

321,695,920

0

0

11,395,089 18,511,748

(8,918,554) 15,005,426

5,641,979

4,215,957 59,506

4,275,463

344,888,213

332,058,255

6) For raw materials, ancillaries, consumables and goods

135,065,081

129,882,894

7) For services

101,939,902

102,055,280

14,063,180

14,877,283

B) COSTS OF PRODUCTION

8) For the employment of third-party assets 9) For the personnel: a) Wages and salaries

44,628,836

42,751,765

b) Social security contributions

12,668,901

12,784,147

2,766,367

2,748,679

c) Severance pay for termination of employment d) Retirement pensions and similar costs

0

e) other costs

0

0 60,064,104

0

58,284,591

10) Amortisation/Depreciation and devaluation: a) Amortisation of intangible fixed assets

9,621,620

7,807,505

b) Depreciation of tangible fixed assets

1,838,909

1,746,646

0

0

c) Other fixed asset devaluation d) Devaluation of receivables included among current assets and available cash funds 11) Variations of the stock of raw materials, ancillaries, consumables and goods

700,624

12,161,153

700,000

3,413,018

12) Provisions for risks 13) Other provisions 14) Sundry operating expenses

Total BALANCE BETWEEN VALUE AND COSTS OF PRODUCTION (A - B)

10,254,151 (3,781,351)

0

0

4,134,292

3,278,334

3,972,042

3,143,762

334,812,772

317,994,944

10,075,441

14,063,311

C) FINANCIAL INCOME AND CHARGES 15) Earnings from holdings: - Related to subsidiary companies

3,180,000

- Related to associated companies

59,000

- Related to other companies

52,102

3,070,000 230,000 3,291,102

102,439

3,402,439

16) Other financial earnings: a) from receivables recorded as fixed assets:

124

- Related to subsidiary companies

0

0

- Related to associated companies

0

0

- Related to parent companies

0

- Related to other companies

0

CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements

0 0

0

0


Balance sheet 2012 chap.4

b) From securities recorded as fixed assets which are not holdings c) From securities recorded as current assets which are not holdings

0

0

0

0

0

0

0

0

d) Other earnings: - Related to subsidiary companies

599,801

345,052

- Related to associated companies

287,863

245,316

- Related to parent companies - Related to other companies

0 2,581,424

0 3,469,088

877,676

1,468,044

17) Interest and other financial charges - Related to subsidiary companies

129,173

186,001

- Related to associated companies

0

12,500

- Related to parent companies

0

- Related to other companies

4,190,599

0 4,319,772

3,743,710

50,738

(2,655)

3,942,211

17 bis) EXCHANGE RATE GAINS AND LOSSES - Exchange rate gains and losses

50,738

Total ( 15 + 16 - 17 - 17 bis ) D)

2,389,680

(2,655)

930,927

VALUE ADJUSTMENTS OF FINANCIAL ASSETS 18) Revaluation: a) of holdings

752,537

0

b) of financial fixed assets which are not holdings

0

0

c) of securities recorded as current assets which are not holdings

0

752,537

0

0

19) Devaluation: 2,709,129

2,023,237

b) of financial fixed assets which are not holdings

a) of holdings

0

30,000

c) of securities recorded as current assets which are not holdings

0

Total adjustments (18 - 19) E)

2,709,129

0

(1,956,592)

2,053,237

(2,053,237)

SPECIAL EARNINGS AND CHARGES 20) Earnings: a) Capital gains on transfers, the revenues of which cannot be entered under item 5 b) Capital contributions c) Other special earnings

0

0

0 2,075,048

0 2,075,048

148,046

148,046

21) Charges: a) Capital losses on transfers, the accounting effects of which cannot be entered under item 14 b) Taxes related to previous fiscal years c) Other special charges

Total special items (20 - 21)

0

0

0 3,244,800

16,108 3,244,800

0

16,108

(1,169,752)

131,938

9,338,777

13,072,939

22) Tax on the income of the financial year 22 a) Current tax 22 b) Advanced/(deferred) tax

(2,563,116) (3,399,571) 836,455

(4,165,546) (4,997,964) 832,418

26) PROFIT (LOSS) OF THE FINANCIAL YEAR

6,775,661

8,907,393

PROFIT BEFORE TAX ( A - B ± C ± D ± E )

CPL CONCORDIA | CPL CONCORDIA’s financial statements and consolidated financial statements

125


CERTIFICATION REPORT

126

CPL CONCORDIA | CPL CONCORDIAâ&#x20AC;&#x2122;s financial statements and consolidated financial statements


Balance sheet 2012 chap.4

UNI EN ISO 9001:2008

Certification

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127


Financial

statement

and consolidaTed

TWO THOUSAND

AND TWELVE

CPL CONCORDIA the annual report was prepared under the responsibility of: Massimo Continati Administration and Information Systems Manager Pierluigi Capelli Financial Manager Paolo Cavicchioli Administrative Management Assistant Massimo Greco Head of Accounting of CPL Samuele Righi Administrative Manager of the Group Companies Division Marco Dal Dosso Management Oversight Office Virna Iodice Press Office Sts italiana Graphics and Layout Nuovagrafica s.c. Printing Print run completed October 25, 2013


FINANCIAL STATEMENT AND CONSOLIDADED TWO THOUSAND AND TWELVE CPL CONCORDIA Soc. Coop. Via A. Grandi 39 - 41033 Concordia s/S. (MO) Italy - tel. +39.0535.616.111 - fax +39.0535.616.300 - info@cpl.it www.cpl.it

Financial statement

and consolidaTed

TWO THOUSAND

AND TWELVE CPL CONCORDIA


CPL FINANCIAL STATEMENT 2012