CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS AS … · 2018-09-02 · Page 4 | Consolidated and separate financial statements as at 31/12/2016 Acumbamail S.L., a start-up founded

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS AS AT

31 DECEMBER 2016

Page1|Consolidatedandseparatefinancialstatementsasat31/12/2016

ContentsCorporatebodies..........................................................................................................................................................................2MailUpS.p.A.Leaderinthesendingofe-mailandtextmessages...............................................................................................3Summarydata...............................................................................................................................................................................5Summaryreport............................................................................................................................................................................7Reportonoperationsaccompanyingtheannualandconsolidatedfinancialstatementsasat31December2016..................11Groupconsolidatedfinancialstatementsasat31December2016...........................................................................................34Explanatorynotestotheconsolidatedfinancialstatementsasat31December2016..............................................................39IndependentAuditors’Reportontheconsolidatedfinancialstatementsasat31December2016..........................................80SeparatefinancialstatementsofMailUpasat31December2016............................................................................................83Explanatorynotestotheseparatefinancialstatementsasat31December2016....................................................................88ReportbytheBoardofAuditorstotheshareholders’meeting...............................................................................................130IndependentAuditors’Reportontheseparatefinancialstatementsasat31December2016..............................................136


CorporatebodiesBoardofDirectors(Expiryoftermsforapprovaloftheannualfinancialstatementsasat31December2016)Nameandsurname OfficeMatteoMonfredini ChairmanoftheBoDwithpowersLucaAzzali DeputyChairmanoftheBoDwithpowersDomenicoAlbertoMiscia DirectorwithpowersNazzarenoGorni DirectorwithpowersMatteoBettoni Directorwithpowers*ValerioDeMolli IndependentdirectorGianDomenicoSica Director*thedirectorresignedon28March2017,witheffectasfrom30March2017

BoardofStatutoryAuditors(Expiryoftermsforapprovaloftheannualfinancialstatementsasat31December2016)Nameandsurname OfficeMicheleManfredini ChairmanoftheBoardofAuditorsFabrizioFerrari RegularAuditorGiovanniRosaschino RegularAuditor

IndependentauditingcompanyBDOItaliaS.p.A.(Expiryoftermsforapprovaloftheannualfinancialstatementsasat31December2016)


MailUpS.p.A.Leaderinthesendingofe-mailandtextmessagesMailUp is a legal entityorganisedaccording to the lawof the ItalianRepublic,whichoperates in the sectorofmarketingtechnology on the cloud (newsletters/e-mails, text messages, social networks). It is a technological company that hasdeveloped a digital cloud computing platform chosen by SMEs and large enterprises to create, send and monitornewsletters, e-mails and text messages.MailUp is the leading solution in Italy in the ESP sector and has approximately10,500customersand900dealersspreadacrossmorethan50countries.Onaconsolidatedlevel,theGroupoperateswithmorethan16,000customersandretailers.Foundedin2002inCremona,MailUpisalsobasedinMilanandSanFrancisco.After the IPO in 2014on theAIMmarketoperatedby the Italian Stock Exchange, starting from the secondhalf of 2015,MailUpadded to theorganic growthanewbusiness line, consistingof theBEEeditor in its various versions (beefree.io),which already has thousands of customers worldwide and a growth path for external lines, acquiring established andemerging businesses in the same market segment or with complementary business: Acumbamail (Spanish market andLATAM),Globase(Nordicsmarket)andAgileTelecom(SMSwholesalemarket).MailUpGroupstructureBelowistheorganisationalstructureofthegroupasat31December2016:

MailUpInc.,established inSanFranciscobytheparentcompany inNovember2011, itoperateduntil31December2016,aimingtomarketandlocalisetheMailUp®platformintheUnitedStatesofAmericaand,moregenerally,ontheAmericancontinent. InDecember 2016, theparent company conferred the intangible assets relating to theproduct BEEPlugin andBEEPro.Thesubsidiarythereforeresolved,inserviceoftheconferralmadeduringFY2016,toincreaseitscapitalreservesinaccordancewithlocalregulations.Asfrom2017,MailUpIncwillberesponsiblefortheexclusivemarketingofthedifferentversionsoftheBEEeditor.Network Srl has historically handled all the technical services relative to theMailUp® platform for the parent company(softwaredevelopmentandmaintenance,help-desk,deliverabilityandabuse, IT infrastructure). Ina residualmanner, thecompanyalsodesigns,developsandretailsvideosurveillanceandintelligentvideoanalysissolutions.On27February2017,themergerbyacquisitiontookplaceofNetworkintoMailUp.Themergertookeffecton20March2017,thedateonwhichboth companieswere registeredwithCompaniesHouse,whilst the accounting and tax effects applied as from1 January2017, as envisaged by specific regulations. Themerger is justified by the need to simplify the company and productionstructureofMailUpandallowedforthesimplificationofadministrativeprocessesthankstotheeliminationofduplicationsandoverlapping.


AcumbamailS.L.,astart-upfoundedin2012withregisteredofficeinCiudadReal,Spain,hasdevelopedane-mailmarketingplatform that iswidespreadon theSpanish-speakingmarkets (SpainandLATAM)and features considerabledevelopmentpotential, with a freemium sales model targeting a lower profile customer base, which therefore complementsMailUp,which is instead increasingly taking a position on themedium/high bracket of themarket. The freemiummodel, in fact,envisagesaninitialleveloffreeuseoftheplatform,whichthereafterrequirespaymentwhereacertainthresholdofuseissurpassed,therebyfavouringcustomerswithlimitedvolumesandareducednumberofaddressees.MailUpNordicsA/Scontrols100%ofthecapitalofthecompanyGlobaseInternationalApS,aDanishcompanyoperatinginthee-mailmarketingsectorontheScandinavianmarkets(Denmark,Norway,Sweden,FinlandandIceland)withafocusonmedium/largecustomers.TheacquisitionoftheDanishcompaniesaimstopositiontheMailUp®platformontheNorthernEuropeanmarket,exploitingtherecognitionoftheGlobasetrademarkandthefavourablepositioningonamarketwithhighentrybarriersandahigh levelofspendingone-mailmarketing,bothbyofferingtheMailUp®platformtonewcustomersandbyprogressivelymigratingGlobaseplatformuserstoMailUp.AgileTelecomSpAwithregisteredofficeinCarpi(MO),isanoperatorauthorisedbytheMinistryofEconomicDevelopmentand Communication to offer a public communication service and is also registered with the Register of Operators inCommunication(ROC)heldbytheItalianAuthorityforTelecommunicationsGuarantees(AGCom).AgileTelecomhasbeenoperating since 1999 as an independent international operator specialised in SMS services, particularly on thewholesaleSMSmarket. Dozens of direct connectionswith carriers and operators across the globe allowAgile Telecom to optimisedeliveryofmessages in all countries, guaranteeing itsbusiness customers thebestpossible sendingquality at the lowestpossibleprice.


Summarydata

MaineventstakingplaceinFY2016SecondclosingoftheAgileTelecomacquisition:on09February2016,theacquisitionofthecontrollingshareof100%ofAgileTelecomS.p.A.wasdefinitivelycompleted,witheffectasfrom29December2015. Resolutionofthestockoptionplan:TheBoardofDirectorsofMailUpon29March2016approvedastockoptionplanandrelatedregulation,aimedatemployeesoftheCompanyand/oritssubsidiaries.ThePlanaimsto:(i)encouragetheresourcesmakingakeycontributiontothesuccessofthecompanyandthegrouptostaywiththegroup;and(ii)encouragetheloyaltyof the beneficiaries, developing their sense of belonging to the company and group. On 07 July 2016, the letters ofassignmentweresignedbytheaddresseesoftheSOP.Again,inJuly,thefirsttrancheofoptionsassignedwasexercised.In April,MailUp launched thenew commercial offer, further simplified. TheMailUp® platform is now available in threeeditions:WEB,forthosewhoprefertousetheplatforminafullyautonomousmode,buyingonlinewithacreditcard.PRO,for companies thatneedmore sophisticated featuresaswell asdedicated technical support. ENTERPRISE, formedium tolarge-sized companies that need a more articulated platform that is managed by multiple administrators and companydepartmentswithverysophisticatedneedsforcustomizationandintegration,aswellasadedicatedconsultancychannelonvarioustopics, fromthedesignofe-mailcampaignstothesettingofadhocconfigurationstomaximizetherateofe-maildelivery. With the Enterprise edition, MailUp is enhanced with new services and tailored consultancy to maximizeperformanceintermsofdeliveryrateandachievethebestsendingquality. On 29 April 2016, the Directorate General for Economic Development of the Lombardy Region (operating unit“Entrepreneurshipandaccesstocredit”)approvedthefundingof theproject“InnovativesystemforBigDataAnalytics”,presented by MailUp as leader of a consortium that involves a number of excellence companies adhering to theTechnologiesCentreofCremonaandtheCRITConsortium(CremonaInformationTechnology):MicrodataService,LineacomandPolitecnicodiMilano. The focusof theproject is thedevelopmentof a newBigDataAnalytics system for small andmedium-sizedcompanies.ItisaprojectwithamajorimpactonthefuturebusinessofMailUpinthemediumtolongterm,havingamarketpotential alsoat international level, inparticular in theEnglish-speakingworld,whereBigDataAnalyticstoolsareusedtodayonlyby largemultinationalplayersofthesector,duetothecomplexityofthetechnologiesandhighspecializationofresourcesthatneedtobeputinplace.MailUpwillreceiveuptoamaximumofEuro860,122non-repayablein24monthswithrespecttoatotalinvestmentofEuro2,045,648intheperiod.Thefundingwillcovercostsforpersonnel,training, tools and equipment and consultancy services needed for the realization of the investments, which will beimplementedoverthenext24months.BEEPlugin has been enhanced with new features requested by users. The BEEPlugin service is now considered a globalmarketleader,withaninternationalclientèleincludingmanySiliconValleycompanies.Thefirstfewmonthsofthisyearsawthelaunch,withaverylowentryfee,ofBEEPro,aversiondedicatedtoe-maildesignersanddigitalagencies,whichincludessomeadditional functionswith respect to the free version (freemium), alreadyproving tobeextremelypopularwith thecommunity of users.We are currently recording amonthly volume growth at particularly interesting rates. To this end,pleasenote that in fulfilmentof the resolutionpassedby theMailUpBoDon13December2016, andby theacceptanceresolved by the Board of the subsidiaryMailUp Inc on 20 December 2016,MailUp conferred the BEE editor owned anddeveloped by the parent company, to the American subsidiary, for a value of Euro 462,160. The subsidiary thereforeresolved, in service of the conferral, to increase its capital reserves in accordance with local regulations. As from 2017,MailUpIncwillberesponsiblefortheexclusivemarketingofthedifferentversionsoftheBEEeditor.InSeptember2016,MailUpjoinedtheAnti-PhishingWorkingGroup(APWG).Consistingoffinancialinstitutions,ISPs,ESPs,onlineretailersandsolutionproviders,APWGistheinternationalassociationdedicatedtofightingcybercrimeinthepublicandprivatesector,atentrepreneurial,governmental,legalanddiplomaticlevel.Withover3,200membersfromaroundtheworld,theAnti-PhishingWorkingGroupincludescompaniessuchasMicrosoft,Salesforce,FacebookandVISA.MailUpisthefirstItaliancompanytojointheproject,withtheaimofjoiningeffortsinthefightagainstphishingandcyberabuse,thanksto the sharingofdata,experienceand technology.Coined in1996, the term “phishing” refers to thekindofe-mail scamaimedatacquiringsensitiveinformationoftherecipient(personalandfinancialdataandaccesscodes)throughdeceptionand links to fake websites. According to phishing.org, phishing episodes have multiplied exponentially since 1996. Thepreventionofabuseisoneofthemostdifficultchallengesthatthedeliverability&complianceteamofMailUphastodealwith on a daily basis. Thanks to the partnershipwith APWG,MailUp can combine the results, expertise and tools of itsresearchwiththoseofothercompanies(ISPs,ESPs,vendors,securityfirms)interestedincombatingphishingandallcasesof


harmfuluseofmarketingtechnology.ForMailUpcustomers,thistranslatesintogreatersecurityinsendingcommunicationstoitscustomers:anincreasinglyimportantissuenotonlyinthefinancialsector,butalsoforthosethatmanagee-commercewebsites.TheParentCompany'smanagementhasembarkedonapathoforganizationalrethinkingoftheMailUpGroupstructureinordertopursuetheoptimizationofintercompanyprocesses.SuchanalysisfocusedinparticularontheroleofthesubsidiaryNetworkSrl,foryearsatechnologypartnerthathasexclusivemanagementofallfunctionsandtechnicalservicesrelatedtotheMailUp®platform.Intheseareas,Networkhasdevelopedconsolidatedexpertiseandprofessionalism.On27September2016,theBoardofDirectorsofMailUpapprovedtheplanforthemergerbyincorporationofNetworkSrlinMailUpS.p.A.Asitisafully-ownedcompany,underthefirstparagraphofArt.2505oftheItalianCivilCode,thedraftmergerwaspreparedinasimplifiedform.ThemergerisjustifiedbytheneedtosimplifythecompanyandproductionstructureofMailUpandalsoinvolvesthesimplificationofadministrativeprocessesandtheeliminationofduplicationsandoverlapping.DuringthesameBoardofDirectorsof27September2016,theCompanyalsoresolvedtoadopt,startingfromthecurrentconsolidated financial statements, the IAS/IFRS accounting standards for the preparation of the financial statements, asalready mentioned above. The transition to international accounting standards will also make communication towardsinternational stakeholders more effective and transparent. The internationalization process on which MailUp S.p.A. isfocused, imposesaconvergenceofcontentandmeansofexposureandassessmentof theeconomic,equityandfinancialpositiontowardsthoseofotherinternationalgroupsofcompanies.


Summaryreport

Consolidatedmanagerialincomestatementasat31December2016

Description 31/12/2016 % 31/12/2015 % Delta Delta%

E-mailrevenues 8,505,410 39.30% 6,911,710 73.08% 1,593,699 23%SMSrevenues 11,305,163 52.24% 2,198,108 23.24% 9,107,055 414%BEErevenues 150,160 0.69% 6,899 0.07% 143,261 2077%Professionalservicesrevenues 1,129,279 5.22% 101,133 1.07% 1,028,146

Otherrevenues 551,826 2.55% 239,637 2.53% 312,189 130%

Totalrevenues 21,641,838 100.00% 9,457,487 100.00% 12,184,351 129%

COGS 11,562,589 53.43% 3,800,717 40.19% 7,761,873 204%

Grossprofit 10,079,249 46.57% 5,656,770 59.81% 4,422,478 78%

S&Mcosts 3,101,731 14.33% 2,160,480 22.84% 941,252 44%R&Dcosts 548,433 2.53% 112,037 1.18% 436,396 390%-CapitalisedR&Dpayrollcost (1,254,487) -5.80% (1,541,677) -16.30% 287,190 -19%

-R&Dcosts 1,802,921 8.33% 1,653,714 17.49% 149,206 9%

Generalcosts 4,014,873 18.55% 2,709,808 28.65% 1,305,065 48%

Totalcosts 7,665,037 35.42% 4,982,325 52.68% 2,682,713 54%

EBITDA 2,414,211 11.16% 674,446 7.13% 1,739,766 258%

Amortisation,depreciationandprovisions 1,228,268 5.68% 815,659 8.62% 412,609 51%

EBIT 1,185,943 5.48% (141,214) -1.49% 1,327,157 -940%

Financialoperations (58,142) -0.27% 24,505 0.26% (82,647) -337%

EBT 1,127,801 5.21% (116,709) -1.23% 1,244,510 -1066%

Incometax 495,981 2.29% 87,576 0.93% 408,406 466%Prepaidtax (193,961) -0.90% (127,890) -1.35% (66,071) 52%Deferredtax 13,412 0.06% 24,097 0.25% (10,685) -44%

Periodprofit(loss) 812,367 3.75% (100,492) -1.06% 912,859 -908%

Groupprofit(loss) 780,483 (114,821)

Minorityinterestprofit(loss) 31,885 14,330


ConsolidatedbalancesheetwithdeterminationofNWCasat31December2016

Description 31/12/2016 31/12/2015 Delta Delta%

Intangiblefixedassets 3,835,490 3,186,211 649,279 20%Consolidationdifferences 10,308,159 10,308,159 - 0%Tangiblefixedassets 709,130 754,331 (45,201) -6%Financialfixedassets 171,653 136,348 35,305 26%Fixedassets 15,024,431 14,385,049 639,383 4%

Tradereceivables 3,396,264 2,866,722 529,542 18%Tradepayables (2,947,547) (2,320,262) (627,285) 27%Commercialworkingcapital 448,717 546,460 (97,743) -18%

Taxreceivablesandpayables 416,106 (323,722) 739,828 -229%Accrualsanddeferrals (5,120,696) (3,794,698) (1,325,999) 35%Otherreceivablesandpayables (3,679,200) (4,787,971) 1,108,771 -23%Networkingcapital (7,935,073) (8,359,931) 424,858 -5%

Provisionsforrisksandcharges (57,739) (117,739) 60,000 -51%Stafffunds (933,526) (698,650) (234,876) 34%Deferredtaxliabilities (31,287) (33,345) 2,058 -6%Netinvestedcapital 6,066,806 5,175,384 891,422 17%

Sharecapital 283,266 216,667 66,599 31%Reserves 5,896,510 6,068,373 (171,864) -3%Periodprofit(loss) 780,519 (114,821) 895,340 -780%Shareholders’equityofminorityinterests 59,959 29,010 30,949 107%Shareholders’equity 7,020,253 6,199,229 821,024 13%

Short-termpayables/(cash) (2,215,074) (2,594,679) 379,605 -15%Medium/long-termpayables 1,261,627 1,570,835 (309,208) -20%Netfinancialposition (953,447) (1,023,845) 70,398 -7%

Totalsources 6,066,806 5,175,384 891,422 17%


MailUpS.p.A.managerialincomestatementasat31December2016

Description 31/12/2016 % 31/12/2015 % delta delta%

E-mailrevenues 6,806,842 66.31% 6,213,970 70.02% 592,872 9.54%SMSrevenues 2,516,235 24.51% 2,170,530 24.46% 345,705 15.93%Professionalservicesrevenues 174,033 1.70% - 0.00% 174,033

Otherrevenues 767,446 7.48% 490,545 5.53% 276,901 56.45%

Totalrevenues 10,264,556 100.00% 8,875,044 100.00% 1,389,511 15.66%

COGS 3,856,512 37.57% 3,637,568 40.99% 218,944 6.02%

Grossprofit 6,408,044 62.43% 5,237,476 59.01% 1,170,567 22.35%

S&Mcosts 2,295,219 22.36% 2,083,126 23.47% 212,093 10.18%R&Dcosts 319,954 3.12% 63,276 0.71% 256,678 405.65%Generalcosts 2,514,935 24.50% 2,425,065 27.32% 89,870 3.71%

Totalcosts 5,130,108 49.98% 4,571,467 51.51% 558,641 12.22%

EBITDA 1,277,935 12.45% 666,010 7.50% 611,926 91.88%

Amortisation,depreciationandprovisions 1,239,246 12.07% 842,348 9.49% 396,898 47.12%

EBIT 38,690 0.38% (176,339) -1.99% 215,028 -121.94%

Financialoperations 1,153,865 11.24% 33,278 0.37% 1,120,587 3367.38%

EBT 1,192,554 11.62% (143,061) -1.61% 1,335,615 -933.60%

Incometax 8,955 0.09% 40,918 0.46% -31,963 -78.11%Prepaidtax (26,188) -0.26% (127,262) -1.43% 101,074 -79.42%Deferredtax (15,125) -0.15% 9,625 0.11% -24,750 -257.14%

Periodprofit(loss) 1,224,912 11.93% (66,342) -0.75% 1,291,254 -1946.35%


MailUpS.p.A.balancesheetwithdeterminationofNWCasat31December2016

Description 31/12/2016 31/12/2015 delta delta%

Intangiblefixedassets 3,660,657 3,361,555 299,102 8.90%Tangiblefixedassets 629,282 651,083 (21,801) -3.35%Financialfixedassets 11,416,878 10,894,241 522,637 4.80%Fixedassets 15,706,817 14,906,878 799,938 5.37%

Tradereceivables 1,156,163 1,083,040 73,123 6.75%Receivablesfromsubsidiaries 273,735 199,572 74,164 37.16%Receivablesfromassociatedcompanies 49,554 - 49,554

Tradepayables (691,622) (685,022) (6,600) 0.96%Amountsduetosubsidiaries (2,207,811) (2,064,399) (143,411) 6.95%Amountsduetoassociatedcompanies (4,921) - (4,921)

Commercialworkingcapital (1,424,901) (1,466,810) 41,908 -2.86%

Taxreceivablesandpayables 423,436 414,493 8,943 2.16%Accrualsanddeferrals (4,949,607) (3,610,430) (1,339,177) 37.09%Otherreceivablesandpayables (3,314,133) (4,372,923) 1,058,790 -24.21%Networkingcapital (9,265,205) (9,035,669) (229,536) 2.54%

Provisionsforrisksandcharges (60,489) (135,614) 75,125 -55.40%Provisionforseveranceindemnity(TFR) (387,921) (278,290) (109,632) 39.39%Netinvestedcapital 5,993,202 5,457,306 535,896 9.82%

Sharecapital 283,266 216,667 66,599 30.74%Legalreserve 60,000 40,000 20,000 50.00%Otherreserves 4,252,492 4,301,095 (48,603) -1.13%Profits/lossescarriedforward (178,029) - (178,029)

Periodprofit(loss) 1,224,912 (66,342) 1,291,254 -1946.35%Shareholders’equity 5,642,640 4,491,419 1,151,221 25.63%

Short-termpayables/(cash) (1,833,084) (542,448) (1,290,636) 237.93%Medium/long-termpayables 2,183,645 1,508,335 675,310 44.77%Netfinancialposition 350,561 965,887 (615,326) -63.71%

Totalsources 5,993,202 5,457,306 535,895 9.82%


Reportonoperationsaccompanyingtheannualandconsolidatedfinancialstatementsasat31December2016DearShareholders,The year endedon 31December 2016 records a positiveGroup result of Euro 812,367, ofwhich Euro 31,849pertain tominorities,afteramortisation,depreciationand impairmentappliedforatotalofEuro1,228,268andprovisionsmadeforcurrentanddeferredtaxintheamountofEuro315,433.TheseparatefinancialstatementsoftheparentcompanyMailUpS.p.A.(hereinafter“MailUp”)forthesameperiod,recordedapositiveresultofEuro1,224,912.Belowistheanalysisofthecompany’spositionandthetrendofoperationsrelativetotheyearjustended.1.IntroductionIn accordance with Art. 40 of Italian Legislative Decree no. 127/1991, amended by Art. 2, letter d) of Italian LegislativeDecreeno.32/2007,thisreportispresentedasasingledocumentforthepurposeoftheconsolidatedfinancialstatementsof theMailUpGroup (hereinafter the “MailUpGroup”or the“Group”)and theannual financial statementsof theparentcompany,MailUp,draftedinaccordancewithinternationalaccountingstandards(IAS/IFRS).Although not having met the requirements laid down by Art. 27 of Italian Legislative Decree no. 127/1991, theadministrativebodyofMailUpresolvedtodrafttheconsolidatedandannualfinancialstatementsoftheparentcompanyona voluntary basis, in accordance with international accounting standards (IAS/IFRS) insofar asMailUp (and the Group itheads)hasexercisedthefacultyenvisagedbyArts.2-3ofItalianLegislativeDecreeno.38/2005.ThisdocumentprovidesyouwithinformationontheconsolidatedpositionoftheGroupandonoperatingperformanceofboth the group and individually ofMailUp. This report, drawnupwith balances expressed in Euro, is presented so as toaccompany the consolidated financial statements for the purpose of providing income-related, equity, financial andoperatinginformationonthecompanyaccompanied,wherepossible,byhistoricelementsandforecastsvaluations.The consolidated financial statements for 2015 are also provided for comparison, reprocessed in application of theinternational accounting standards (IAS/IFRS). As an appendix to the explanatory notes to this year’s separate andconsolidatedfinancialstatements,adetailedtable isgivenshowingtheeffectsoftheadoptionoftheIAS/IFRSaccountingstandards(FTA-firsttimeadoption)ontheindividualandconsolidatedstatementoffinancialpositionasat1January2015andasat31December2015,asprescribedbyIFRS1.Asregardstheconsolidatedfinancialstatements,whichstrivetoensurestandardisedmeasurementcriteriaandhavebeenpreparedonthebasisoffullconsolidation,pleasenotethattheconsolidationscopeisasshownbelow:

Companyname Registeredoffice

Sharecapital %

MAILUPS.P.A. Milan 283,266 parentcompany

NETWORKS.R.L. Cremona(CR) 10,500 100%MAILUPINC. UnitedStatesof

America47,434* 100%

MAILUPNORDICSAS Denmark 67,255* 100%AGILETELECOMSPA Carpi(Mo) 500,000 100%ACUMBAMAILSL Spain 4,500 70%

The financial data includes, in this year for the first time, the results relative to Agile Telecom SpA andMailUp NordicsAS/GlobaseInternationalApS.(*figuresinUSdollarsandDanishKroneconvertedattheexchangerateof31December2016) 2.2016economicscenarioIn the lastquarterof2016, the Italianeconomydidbetter thanexpected, recordingagrowthoutlookof0.2%, takingthegrowth rate trends of the GDP to +1.1%. According to the preliminary estimate of the GDP disseminated by Istat on 14February2017,theItalianGDPfor2016grewby0.9%inrawtermsandby1%iftheeffectsofthecalendarareconsidered.


Thefigure,whichisslightlybetterthanexpected,fortheItalianGDPandwhichisassociatedwiththeimprovementseeninfamily spending power and the increase in investment, clasheswith themore positive data obtained by other Europeancountries, inparticulartheUnitedKingdom(+0.6%and+2.2%)andFrance(+0.4%and+1.1%).ThecurrentItalianrecoverytherefore remainsmediocre if compared with that of the othermain European countries and shows the existence of asystematicgapthatremains,despitethelatestgovernmentreforms.Intermsofoutlook,theItalianindicatorsoffaithshowdifferenttrends,whicharemainlynegativeapartfromthefaithofbusinesses,whichgainsgroundonallfrontsexceptfortradebusinesses.Instead, the data on the new openings of VAT numbers is very negative, having taken a dive in December by 38% andreducedby3.3%in2016withrespectto2015.Inmorerecentmonths,growthofcredittothenon-financialprivatesectorcontinued,withanincreasealsoseeninloanstobusinesses; growth does, however, remain modest. The quality of credit of Italian banks continues to benefit from theimprovementtotheoutlook,recordingafurtherreductionintheflowofnewimpairedloans.TheBankofItalybelievesthatriskstogrowthareheadingdownevenfurther.Themainfactorsofuncertaintycomefromtheworldcontext,aswellasfromfinancialconditions.Theriskthattheexpansionoftheglobaleconomy,withrespecttothat incorporated intoforecasts,maysuffertheonsetandspreadofprotectionistdrives,aswellaspossibleturbulence intheemergingeconomies,isparticularlyhigh.TheGroupMailUp is a legal entityorganisedaccording to the lawof the ItalianRepublic,whichoperates in the sectorofmarketingtechnology on the cloud (newsletters/e-mails, text messages, social networks). It is a technological company that hasdeveloped a digital cloud computing platform chosen by SMEs and large enterprises to create, send and monitornewsletters, e-mails and text messages.MailUp is the leading solution in Italy in the ESP sector and has approximately10,500customersand900dealersspreadacrossmorethan50countries.Onaconsolidatedlevel,theGroupoperateswithmorethan16,000customersandretailers.Foundedin2002inCremona,MailUpisalsobasedinMilanandSanFrancisco.After the IPO in 2014on theAIMmarketoperatedby the Italian Stock Exchange, starting from the secondhalf of 2015,MailUpadded to theorganic growthanewbusiness line, consistingof theBEEeditor in its various versions (beefree.io),which already has thousands of customers worldwide and a growth path for external lines, acquiring established andemerging businesses in the same market segment or with complementary business: Acumbamail (Spanish market andLATAM),Globase(Nordicsmarket)andAgileTelecom(SMSwholesalemarket).InaccordancewithArt.2428,wewouldpointoutthatbusinessoftheparentcompanyiscarriedoutintheregisteredofficeofMilan,atVialeRestelli1,andintheadministrativeofficeofCremona,atViaDeiComiziAgrari,10.DuringFY2016,fromalegalviewpoint,MailUpplayedtheroleofparentcompanyofthefollowingcompanies,whichcarryoutcomplementaryand/orfunctionalactivitiestothegroup’scorebusiness:

MailUpInc

NetworkSrl

AcumbamailSL

MailUpNordicsAS

AgileTelecomspa

On27February2017,themergerbyacquisitiontookplaceofNetworkSrlintoMailUp.ThemergerwilltakeeffectasfromthelastoftheentriesmadewithCompaniesHousedated20March2017,whilsttheaccountingandtaxeffectsappliedasfrom1January2017,incompliancewiththeprovisionsofspecificregulations.ThemergerisjustifiedbytheneedtosimplifythecompanyandproductionstructureofMailUpandallowed for thesimplificationofadministrativeprocesses thanks totheeliminationofduplicationsandoverlapping.

BelowistheGroup’sparticipationstructure.


MaineventsIn2016,theactivitiesoftheMailUpGroupwerecharacterisedbytheeventsindicatedbelow:SecondclosingoftheAgileTelecomacquisition:on09February2016,theacquisitionofthecontrollingshareof100%ofAgileTelecomS.p.A.wasdefinitivelycompleted,witheffectasfrom29December2015. Resolutionofthestockoptionplan:TheBoardofDirectorsofMailUpon29March2016approvedastockoptionplanandrelatedregulation,aimedatemployeesoftheCompanyand/oritssubsidiaries.ThePlanaimsto:(i)encouragetheresourcesmakingakeycontributiontothesuccessofthecompanyandthegrouptostaywiththegroup;and(ii)encouragetheloyaltyof the beneficiaries, developing their sense of belonging to the company and group. On 07 July 2016, the letters ofassignmentweresignedbytheaddresseesoftheSOP.Again,inJuly,thefirsttrancheofoptionsassignedwasexercised.In April,MailUp launched thenew commercial offer, further simplified. TheMailUp® platform is now available in threeeditions:WEB,forthosewhoprefertousetheplatforminafullyautonomousmode,buyingonlinewithacreditcard.PRO,for companies thatneedmore sophisticated featuresaswell asdedicated technical support. ENTERPRISE, formedium tolarge-sized companies that need a more articulated platform that is managed by multiple administrators and companydepartmentswithverysophisticatedneedsforcustomizationandintegration,aswellasadedicatedconsultancychannelonvarioustopics, fromthedesignofe-mailcampaignstothesettingofadhocconfigurationstomaximizetherateofe-maildelivery. With the Enterprise edition, MailUp is enhanced with new services and tailored consultancy to maximizeperformanceintermsofdeliveryrateandachievethebestsendingquality. On 29 April 2016, the Directorate General for Economic Development of the Lombardy Region (operating unit“Entrepreneurshipandaccesstocredit”)approvedthefundingof theproject“InnovativesystemforBigDataAnalytics”,presented byMailUp as leader of a consortium that involves several excellence companies adhering to the TechnologiesCentre of Cremona and the CRIT Consortium (Cremona Information Technology): Microdata Service, Lineacom andPolitecnicodiMilano.ThefocusoftheprojectisthedevelopmentofanewBigDataAnalyticssystemforsmallandmedium-sizedcompanies.ItisaprojectwithamajorimpactonthefuturebusinessofMailUpinthemediumtolongterm,havingamarketpotentialalsoat international level, inparticular in theEnglish-speakingworld,whereBigDataAnalytics toolsareused today only by large multinational players of the sector, due to the complexity of the technologies and highspecializationofresourcesthatneedtobeputinplace.MailUpwillreceiveuptoamaximumofEuro860,122non-repayablein24monthswithrespecttoatotalinvestmentofEuro2,045,648intheperiod.Thefundingwillcovercostsforpersonnel,training, tools and equipment and consultancy services needed for the realization of the investments, which will beimplementedoverthenext24months.BEEPlugin has been enhanced with new features requested by users. The BEEPlugin service is now considered a globalmarketleader,withaninternationalclientèleincludingmanySiliconValleycompanies.Thefirstfewmonthsofthisyearsaw


thelaunch,withaverylowentryfee,ofBEEPro,aversiondedicatedtoe-maildesignersanddigitalagencies,whichincludessomeadditional functionswith respect to the free version (freemium), alreadyproving tobeextremelypopularwith thecommunity of users.We are currently recording amonthly volume growth at particularly interesting rates. To this end,please note that in fulfilment of the resolution passed by theMailUp BoD on 13 December 2016, and by virtue of theacceptance resolved by the Board of the subsidiaryMailUp Inc on 20 December 2016,MailUp conferred the BEE editorowned and developed by the parent company, to the American subsidiary, for a value of Euro 462,160. The subsidiarythereforeresolved,inserviceoftheconferral,toincreaseitscapitalreservesinaccordancewithlocalregulations.Asfrom2017,MailUpIncwillberesponsiblefortheexclusivemarketingofthedifferentversionsoftheBEEeditor.InSeptember2016,MailUpjoinedtheAnti-PhishingWorkingGroup(APWG).Consistingoffinancialinstitutions,ISPs,ESPs,onlineretailersandsolutionproviders,APWGistheinternationalassociationdedicatedtofightingcybercrimeinthepublicandprivatesector,atentrepreneurial,governmental,legalanddiplomaticlevel.Withover3,200membersfromaroundtheworld,theAnti-PhishingWorkingGroupincludescompaniessuchasMicrosoft,Salesforce,FacebookandVISA.MailUpisthefirstItaliancompanytojointheproject,withtheaimofjoiningeffortsinthefightagainstphishingandcyberabuse,thanksto the sharingofdata,experienceand technology.Coined in1996, the term “phishing” refers to thekindofe-mail scamaimedatacquiringsensitiveinformationoftherecipient(personalandfinancialdataandaccesscodes)throughdeceptionand links to fake websites. According to phishing.org, phishing episodes have multiplied exponentially since 1996. Thepreventionofabuseisoneofthemostdifficultchallengesthatthedeliverability&complianceteamofMailUphastodealwith on a daily basis. Thanks to the partnershipwith APWG,MailUp can combine the results, expertise and tools of itsresearchwiththoseofothercompanies(ISPs,ESPs,vendors,securityfirms)interestedincombatingphishingandallcasesofharmfuluseofmarketingtechnology.ForMailUpcustomers,thistranslatesintogreatersecurityinsendingcommunicationstoitscustomers:anincreasinglyimportantissuenotonlyinthefinancialsector,butalsoforthosethatmanagee-commercewebsites.TheParentCompany'smanagementhasembarkedonapathoforganizationalrethinkingoftheMailUpGroupstructureinordertopursuetheoptimizationofintercompanyprocesses.SuchanalysisfocusedinparticularontheroleofthesubsidiaryNetworkSrl,foryearsatechnologypartnerthathasexclusivemanagementofallfunctionsandtechnicalservicesrelatedtotheMailUp®platform.Intheseareas,Networkhasdevelopedconsolidatedexpertiseandprofessionalism.On27September2016,theBoardofDirectorsofMailUpapprovedtheplanforthemergerbyincorporationofNetworkSrlinMailUpS.p.A.Asitisafully-ownedcompany,underthefirstparagraphofArt.2505oftheItalianCivilCode,thedraftmergerwaspreparedina simplified form. Themerger is justified by the need to simplify the company and production structure ofMailUp andinvolvesthesimplificationofadministrativeprocessesandtheeliminationofduplicationsandoverlapping.DuringthesameBoardofDirectorsof27September2016,theCompanyalsoresolvedtoadopt,startingfromthecurrentconsolidated financial statements, the IAS/IFRS accounting standards for the preparation of the financial statements, asalready mentioned above. The transition to international accounting standards will also make communication towardsinternational stakeholders more effective and transparent. The internationalization process on which MailUp S.p.A. isfocused, imposesaconvergenceofcontentandmeansofexposureandassessmentof theeconomic,equityandfinancialpositiontowardsthoseofotherinternationalgroupsofcompanies.BelowissomedataonthepricesandvolumesoftheMailUpsecurityduring2016.

Placingprice Euro2.50 29/07/2014Maximumannualprice Euro2.50 02/05/2016Minimumannualprice Euro1.6180 08/12/2016


Source:EnVentEquityResearch18/10/2016

PerformanceoftheMailUpsecurityin2016:pricesandvolumes-Source:www.borsaitaliana.itVolumestradedin2016recordedadailyaverageofaround2,083pieces(Source:EnVentEquityResearch18/10/2016)withamaximumof27,300piecesrecordedon11April2016.GrowthindemandandtrendsofthemarketsonwhichthecompanyoperatesThecloudcomputingmarket

Thecloudconsistsofasetofhardwareandsoftwareresourcesthatprovideservicesonrequest,throughtheinternet.Cloudservicescanbeclassifiedonthebasisofthemethodbywhichthecontentsmadeavailabletotheendusersareused;morespecifically,theoffercanbemadeinthreeways:

• IaaS(InfrastructureasaService):Thisconsistsofusingtheinfrastructuremadeavailablebyproviderstorunyourownapplicationinexchangeforpaymentthatisproportionaltotheuseoftheinfrastructure.Theenduserpaysfortheinstallationandmanagementoftheoperatingsystemandspecificapplications.


• PaaS(PlatformasaService):Inthiscase,theprovideralsosuppliestheoperatingsystem,middlewareandRuntimeenvironmentnecessarytoruntheapplication,hencetheenduserpaysforthedevelopment,implementationandmanagementofthespecificapplications.

• SaaS(SoftwareasaService):TheclientpaysthefeeforusenotonlyofthehardwareandsoftwarestructureasinPaaS,butalsoof the specific applicationsmadeavailableby theprovider. Theonly liabilityof theenduser is tomanagethenumberoflicencesrequiredaccordingtothenumberofusers.

AccordingtotheestimatesofGoldmanSachs,theexpensesforthecloudcomputingplatformsandinfrastructureswillgrowata rateof33% (CAGR)between2013and2018,despite the fact thatgrowthof theentire IT corporatemarketwill notexceed5%.By2018,59%ofcloudserviceswillbeSaaS,ascomparedwith41%in2013.

Worldexpenseforcloudcomputing

Source:Forbes24/01/2015

In2016,worldrevenuesgeneratedfromsubscriptionsintheSaaSsectorrespectedtheextremelypositiveforecastsofsectoranalysts,therebycominginataroundUS$106billionasaresultofthe21%growthon2015.

Source:SaaSsubscriptionrevenuesbycategoryworldwide–www.statista.com

41,0%44,6%

48,2%51,8%

55,4%59,0%

44%41%

38%34%

31%28%

15,0% 14,6% 14,2% 13,8% 13,4% 13,0%

2013 2014 2015E 2016E 2017E 2018E

Spesa mondiale per il Cloud Computing

SaaS (CAGR: 33%) IaaS (CAGR: 13%) PaaS (CAGR: 21%)

http://www.statista.com


GrowthexpectationsoftheworldmarketofSaaSareconfirmedasextremelypositive,forecastingreachingthefigureofUS$132.57billionin2020,withaCAGRof9.14%.

Dimensionoftheworldmarketofthepubliccloud(US$bln)

Source:Forbes24/01/2015

MailUpproductsaredevelopedandmarketedinSaaSmodeandcanbeclassifiedinthesegmentofdigitalmarketingknownprecisely as “digital marketing”. Today companies invest far more in internet marketing than in the more traditionalchannelsoftelevision,radioandnewspapers.

In the last update of the index that monitors the performance of software as a service companies listed on Nasdaq,BessemerVenturePartners, an international venture capital operator andprotagonist of 113 IPOs in the technology anddigital context (investor, amongst others, in successful businesses like Skype, LinkedIn, Gartner,Wix, Yelp and VerySign),envisagesaveragegrowth(2016on2015)ofturnoverofthemaincompaniesinthesegmentlistedonNasdaq-suchas,forexample, Shopify, Marketo, SalesForce, Wix and ZenDesk - of 26%, with an average valuation on analysts’ forecasts ofapproximately4.5xEV/Rev2016(EnterpriseValue/Revenues)and27xEV/EBITDA2016.

OnAIMUK,dotDigitalGroup,a leading company in the fieldof softwareasa serviceand focussedparticularlyone-mailmarketing,grewinlinewiththesegmentaverageonNasdaq(approximately29%growthofturnover)andisvaluedat5.3xEV/Rev2016andapproximatelyXEV/EBITDA2016.

Growthforecastsofthee-mailmarketingmarket

Thee-mailmarketingmarketdoesnotonlyregardthemarketingofSaaSplatformstoprovidetheservice,butratheramoreextensiverangeofproductswithahightechnologicalcontent,suchaslandingpages,graphicdesign,listbuilding,business

132,57

11,914,78

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

Dimensione del mercato mondiale del Cloud Pubblico (US $ Mld)

SaaS Paas IaaS


intelligence, integration systems, hosting and housing, CRM and other software applications that rely on and exploit thetechnologicalpotentialoftheplatforms.

AccordingtoastudybytheRadicatiGroup,anAmericanresearchcompanyspecialisedininformationtechnology,in2017,thetotaldailynumberofe-mailssentandreceivedwillreach269billion,withanaveragegrowthrateofaround4.4%inthenext4years,untilreaching319.6billionin2021.

Source:TheRadicatiGroupEmailStatisticsReport,2017-2021–ExecutiveSummary

In2017,thenumberofe-mailusersworldwidewillexceed3.7billion.Forecastsstandataround4.1billionusers in2021.Approximatelyhalftheworld'spopulationwillusee-mailasacommunicationtool.

Source:TheRadicatiGroupEmailStatisticsReport,2017-2021–ExecutiveSummary

It isalsoestimatedthat thetotalnumberofe-mailaccountsperuserwillgrowataratethat justexceedsthenumberofusers. More specifically, this trend will be seen in the consumer area, where different accounts are habitually used,according to the specificpurpose (e.g. shopping, friendsand family,banking,etc.).Over thenext four years, theaveragenumberwill rise from1.7 accounts per user to 1.86. Against the increasing use of instantmessaging (IM) services, chat,socialnetworkingandother formsofcommunication,e-mail continues toshowcontinuous, solidgrowth,alsodue to thefactthatothercommunicationmethodsrequireane-mailaddress,as inalle-commercetransactionswhereavalide-mailcontactaddressisrequired.

Competitors’behaviour

TheESP(EmailServiceProvider)marketbringstogetherdozensofoperatorsbothinItalyandabroad,althoughonlyafewoperatorsarepurelytechnological(i.e.withanofferthatisonlylinkedtothesupplyofSoftware-as-a-Service):moreoften,thetechnologicalofferofcompetitorsisflankedbyawiderangeofcomplementaryservices(suchas,forexample,strategicconsultancy,graphicdesign,developmentofcontests,landingpages(i.e.thewebpagestowhichtheaddresseeisguidedto“conversion”,i.e.purchase),mediaplanning,listbuilding(i.e.marketingaimedatacquiringnewclientsorpotentialclients),operativeconsultancy,businessintelligence,systemintegration,hosting/housing,CRM,full-managedsendmanagement(i.e.whentheclientdoesnotindependentlyaccessthesendingplatform,butratherusestheconsultancyserviceofthesupplier,whichthendealswithallstagesofcreation,sendingandcampaignanalysis)and/orthesupplyofothersoftwareapplications.

Thisvarietyofoffermakes itdifficult topreciselyoutline thespecific sectorofESPs in termsofmarketdimension,sectoroperators,servicesoffered,etc.

However,thereisnodoubtthatMailUpS.p.A.isoneofItaly’smostimportantoperators(intermsofthevolumesofe-mailssentandnumberofcustomers)intheE-mailServiceProviderindustry.

On export markets, on a par with Italy, each country has various operators with the above-described articulated offercharacteristics,butfarmorerarely,purelytechnologicalplayers.Theselatteraremainlyconcentratedonthemoreevolvedmarkets,likeintheEnglish-speakingmarketsaswellasFrance,GermanyandPoland.


On Anglo-Saxon markets, competition numbers hundreds of operators, some of which are already listed or have beenrecentlyacquired.Someofthesehaveachievedacustomerbaseofdozensofthousandsofunitsand insomecasesevenmillionsofusers(onlypartlypaying).

MailUp is oneof the few solutionsworldwide to associate the typical functionsof ESP (E-mail ServiceProvider)with thepossibilityofsendingtransactione-mailsviatheSMTPRelayorAPI/WebServicechannel,plusthepossibilityofhavingtheplatforminwhitelabel(i.e.resalabletothirdpartybrand),multi-lingualandintegratedwiththeSMS/Social/Faxchannels.

TheSMSsectorcomesunderthescopeofCloudCommunicationtechnologies,whichworldwideseesthesemainoperators(seeIDCscheme).

This market is expected to grow with a CAGR of 127.5% in the period 2013-2018, according to the Worldwide CloudCommunicationsPlatforms2014-2018Forecast:TheResurgenceofVoiceandSMSofIDCandinparticularasregards“SMSmessages”,areexpectedtoreachavalueofUS$3.5billionin2018.

Social,politicalandunionclimateTheinternalsocialclimate,bothinMilanandintheofficeofCremona,aswellasattheofficesofsubsidiaries,ispositiveandfocusedonfullcollaboration.OperatingperformanceincompanysectorsIn2016,theMailUpGrouprecordedextremelypositiveresults.ConsolidatedtotalrevenueswentfromEuro9.4millionto21.6million,up129%followinggrowthbyexternallinesconsequenttotheacquisitionsofthesecondhalfof2015;forthefirsttimeintheperiodinquestion,infact,consolidationhasappliedtothenewscope,extendedtoincludesixcompanies,whichcameinadditiontotheorganicgrowthoftheMailUp®platform,ofmorethan10%inFY2016too.Movingontothemainlinesofbusiness,consolidatedrevenuesofthee-mailsegmentshowedatotalincreaseof23%,fromEuro6.9milliontoEuro 8.5million in 2016, whilst SMS sales grew in the same period by Euro 9.1million, to a large extent thanks to thecontributionmadebythesubsidiaryAgileTelecom.Thecontributionmadebythenewbusiness lineswaspositive,eveniflessnoticeableinabsolutevalue.Morespecifically,salesofthevariousversionsoftheBEEeditorhighlightedaninterestingmonthonmonthgrowthtrend.


EBITDAincreasedtoEuro2.4millionascomparedwiththeEuro0.67millionbookedthepreviousperiod,+258%equaltoEuro1.74millioninabsolutevalue,whilstnetprofitsfortheyearcameinatEuro812thousandascomparedwithalossofEuro100thousandatend2015.Thepre-taxresult(EBT)alsoincreasesbyEuro1.24million,cominginatEuro1.13million.2016resultsfortheparentcompanyMailUpareequallypositive.Totalvalueofproductionincreasedby15.66%toEuro1.39million,exceedingEuro10million.TheSMSsegmentislivelier,withayear-on-yearincreaseof15.93%andtotalrevenuesofEuro2.5million,with respect to the trendof e-mail,whosegrowth falls just shortof 10% for total revenuesof Euro6.8million.Thee-mailsectoriswithoutdoubtmoreconsolidatedand,bynature,guaranteesmoregradual,progressivegrowthover time,essentiallybeingannual charges subject toautomatic renewal save for termination, thechurn rateofwhich iseasilyoffsetbytheacquisitionofnewcustomersandup-sellingtoexistingcustomers,whoareextremelyloyalandsensitivetoqualityofservice.TheSMSmarket ismorevolatileandfocussedaboveallonpricing,subject,therefore,tomorerapidgrowthbutalsogreateruncertaintyandvariability.2016EBITDAhasbasicallydoubledonthesamefigureofthepreviousyear,Euro1.28millionascomparedwithEuro666thousand,withpercentagegrowthcominginasplus92%.EBTbenefitedfromdividendsdistributedbythesubsidiaryAgileTelecomrelativetoFY2015forEuro1.192million,recordinganincreaseofmorethanEuro1.3million.TheNetprofitfortheperiodcametoEuro1,224,912ascomparedwiththe-66,342ofthepreviousyear.Itshouldberecalledthat,byvirtueoftheadoptionofinternationalaccountingstandardsIAS/IFRSintheseconsolidatedandseparatefinancialstatements,asresolvedbytheparentcompanyBoDon27September2016,thecomparativefiguresforfinancesandequityfor2015givenbelowhavebeenrestatedaccordingtosaidinternationalstandardstoallowforgreaterhomogeneityofcomparisonandsignificanceinreadingthefiguresgiven.Forthissamereason,thechoicehasbeenmadenottopresentcomparisonswiththe2014datacalculatedaccordingtothenationalaccountingstandards(OIC).MaineconomicfiguresfortheMailUpGroupThetablebelowsummarisestheresultsconsolidated inthe last twoyears intermsof total revenues,EBITDAandpre-taxresult(EBT).

31/12/2016 31/12/2015Totalrevenues 21,641,838 9,457,487EBITDA 2,414,212 674,446Pre-taxresult(EBT) 1,127,801 (116,709)

Theconsolidatedreclassified incomestatementhasundergonethefollowingchangeswithrespecttothatofthepreviousyear(amountsarestatedineuros):

Description 31/12/2016 % 31/12/2015 % Delta Delta%

E-mailrevenues 8,505,410 39.30% 6,911,710 73.08% 1,593,699 23%SMSrevenues 11,305,163 52.24% 2,198,108 23.24% 9,107,055 414%BEErevenues 150,160 0.69% 6,899 0.07% 143,261 2077%Professionalservicesrevenues 1,129,279 5.22% 101,133 1.07% 1,028,146 Otherrevenues 551,826 2.55% 239,637 2.53% 312,189 130%

Totalrevenues 21,641,838 100.00% 9,457,487 100.00% 12,184,351 129%

COGS 11,562,589 53.43% 3,800,717 40.19% 7,761,873 204%


Grossprofit 10,079,249 46.57% 5,656,770 59.81% 4,422,478 78%

S&Mcosts 3,101,731 14.33% 2,160,480 22.84% 941,252 44%R&Dcosts 548,433 2.53% 112,037 1.18% 436,396 390%-CapitalisedR&Dpayrollcost (1,254,487) -5.80% (1,541,677) -16.30% 287,190 -19%-R&Dcosts 1,802,921 8.33% 1,653,714 17.49% 149,206 9%Generalcosts 4,014,873 18.55% 2,709,808 28.65% 1,305,065 48%

Totalcosts 7,665,037 35.42% 4,982,325 52.68% 2,682,713 54%

EBITDA 2,414,211 11.16% 674,446 7.13% 1,739,766 258%

Amortisation,depreciationandprovisions

1,228,268 5.68% 815,659 8.62% 412,609 51%

EBIT 1,185,943 5.48% (141,214) -1.49% 1,327,157 -940%

Financialoperations (58,142) -0.27% 24,505 0.26% (82,647) -337%

EBT 1,127,801 5.21% (116,709) -1.23% 1,244,510 -1066%

Incometax 495,981 2.29% 87,576 0.93% 408,406 466%Prepaidtax (193,961) -0.90% (127,890) -1.35% (66,071) 52%Deferredtax 13,412 0.06% 24,097 0.25% (10,685) -44%

Periodprofit(loss) 812,367 3.75% (100,492) -1.06% 912,859 -908%

Groupprofit(loss) 780,483 (114,821)

Minorityinterestprofit(loss) 31,885 14,330

ThefollowingtableshowingsomeGroupprofitabilityindexes,comparedwiththesameindexesrelatingtothefinancialstatementsofpreviousyears,providesabetterillustrationoftheincomesituation.

31/12/2016 31/12/2015NetROE(Netresult/Netcapital) 0.13 (0.02)GrossROE(EBT/Netcapital) 0.18 (0.02)ROI(EBITDA/Netcapital) 0.10 0.03ROS(EBITDA/Incomefromsales) 0.11 0.07

Consolidated income indexesall showa clear improvementon thepreviousyear, thereby further confirming thepositiveperformanceoftheyearjustended,asindeedstressedintheintroductiontothisparagraph.MainequityfiguresfortheMailUpGroupTheGroup’sreclassifiedbalancesheet,ascomparedwiththatof thepreviousyear, isas follows(figuresareexpressed ineuros):

Description 31/12/2016 31/12/2015 Delta Delta%

Intangiblefixedassets 3,835,490 3,186,211 649,279 20%Consolidationdifferences 10,308,159 10,308,159 - 0%


Tangiblefixedassets 709,130 754,331 (45,201) -6%Financialfixedassets 171,653 136,348 35,305 26%Fixedassets 15,024,431 14,385,049 639,383 4%

Tradereceivables 3,396,264 2,866,722 529,542 18%Tradepayables (2,947,547) (2,320,262) (627,285) 27%Commercialworkingcapital 448,717 546,460 (97,743) -18%

Taxreceivablesandpayables 416,106 (323,722) 739,828 -229%Accrualsanddeferrals (5,120,696) (3,794,698) (1,325,999) 35%Otherreceivablesandpayables (3,679,200) (4,787,971) 1,108,771 -23%Networkingcapital (7,935,073) (8,359,931) 424,858 -5%

Provisionsforrisksandcharges (57,739) (117,739) 60,000 -51%Stafffunds (933,526) (698,650) (234,876) 34%Deferredtaxliabilities (31,287) (33,345) 2,058 -6%Netinvestedcapital 6,066,806 5,175,384 891,422 17%

Sharecapital 283,266 216,667 66,599 31%Reserves 5,896,510 6,068,373 (171,864) -3%Periodprofit(loss) 780,519 (114,821) 895,340 -780%Shareholders’equityofminorityinterests 59,959 29,010 30,949 107%Shareholders’equity 7,020,253 6,199,229 821,024 13%

Short-termpayables/(cash) (2,215,074) (2,594,679) 379,605 -15%Medium/long-termpayables 1,261,627 1,570,835 (309,208) -20%Netfinancialposition (953,447) (1,023,845) 70,398 -7%

Totalsources 6,066,806 5,175,384 891,422 17%InordertoprovideabetterdescriptionoftheGroup’sequitysolidity,thetablebelowshowsafewbalancesheet indexesrelating to both (i) the method of financing medium/long-term commitments and (ii) the breakdown of the sources offinance,comparedwiththesamebalancesheetindicatorsforthepreviousyear.

31/12/2016 31/12/2015Primarystructuremargin(Ownfunds-Fixedassets) (8,897,379) (8,833,198)Primarystructureratio(Ownfunds/Fixedassets) 0.44 0.41Secondarystructuremargin((Ownfunds+Consolidatedliabilities)-Fixedassets) (5,528,681) (6,412,629)Secondarystructureratio((Ownfunds+Consolidatedliabilities)/Fixedassets) 0.65 0.57

Hedging of investments has improved slightly, affected by the considerable financial efforts connected with growth byexternal lines. The effect has been partially offset by the focussed recourse tomedium-term bank debt on the basis offavourablemarketeconomicconditionsandcreditratingextensivelyrecognisedtotheGroupbythebanks.


MainfinancialfiguresfortheMailUpGroupTheconsolidatednetfinancialpositionasof31December2016wasasfollows(ineuros):

NETFINANCIALPOSITION 31/12/2016 31/12/2015 DELTA %DELTA

Currentfinancialassets 4,461,219 3,265,717 1,195,502 37%Thirdparties - - - 0%Liquidfunds 4,461,219 3,265,717 1,195,502 37%

Currentfinancialliabilities 1,261,627 671,038 590,590 88%

Thirdparties 1,244,878 637,622 607,256 95%Otherlenders 16,750 33,416 (16,666) 0%

CURRENTFINANCIALPOSITION (3,199,592) (2,594,679) (604,912) 23%

Non-currentfinancialassets - - - 0%

Thirdparties - - - 0%Liquidfunds - - - 0%

Non-currentfinancialliabilities 2,246,145 1,570,835 675,310 43%

Thirdparties 2,246,145 1,570,835 675,310 43%Otherlenders - - - 0%

NON-CURRENTFINANCIALPOSITION 2,246,145 1,570,835 675,310 43%

NETFINANCIALPOSITION (953,447) (1,023,845) 70,398 -7%

Thefollowingtableshowingsomebalancesheetindicators,comparedwiththesameindicatorsrelatingtothepreviousyear,providesabetterillustrationoftheconsolidatedfinancialposition.

31/12/2016 31/12/2015Primaryliquidity(Immediateanddeferredliq./Currentliabilities)

0.61 0.49

Secondaryliquidity(Currentassets/Currentliabilities) 0.63 0.52Debt(Netdebt/Shareholders'equity) 2.46 2.39Fixedassethedgingrate(Owncapital+Consolidatedliabilities)/Fixedassets

0.63 0.60

The allocation is seen of part of the sources of finance deriving from the core business in support of acquisitions ofsubsidiaries,flankedinafocussedmannerbyrecoursetobankdebt.Asinthepast,theGroupdoesnotuseexternaldebttofinancethecorebusiness.MaineconomicfiguresforMailUpThetablebelowsummarisesthecompany’sresultsinthelasttwoyearsintermsoftotalrevenues,EBITDAandpre-taxresult(EBT).


31/12/2016 31/12/2015

Totalrevenues 10,264,556 8,875,044EBITDA 1,277,935 666,010Pre-taxresult(EBT) 1,192,554 (176,339)

Theseparatereclassifiedincomestatementhasundergonethefollowingchangeswithrespecttothatofthepreviousyear(amountsarestatedineuros):

Description 31/12/2016 % 31/12/2015 % delta delta%

E-mailrevenues 6,806,842 66.31% 6,213,970 70.02% 592,872 9.54%SMSrevenues 2,516,235 24.51% 2,170,530 24.46% 345,705 15.93%Professionalservicesrevenues 174,033 1.70% - 0.00% 174,033

Otherrevenues 767,446 7.48% 490,545 5.53% 276,901 56.45%

Totalrevenues 10,264,556 100.00% 8,875,044 100.00% 1,389,511 15.66%

COGS 3,856,512 37.57% 3,637,568 40.99% 218,944 6.02%

Grossprofit 6,408,044 62.43% 5,237,476 59.01% 1,170,567 22.35%

S&Mcosts 2,295,219 22.36% 2,083,126 23.47% 212,093 10.18%R&Dcosts 319,954 3.12% 63,276 0.71% 256,678 405.65%Generalcosts 2,514,935 24.50% 2,425,065 27.32% 89,870 3.71%

Totalcosts 5,130,108 49.98% 4,571,467 51.51% 558,641 12.22%

EBITDA 1,277,935 12.45% 666,010 7.50% 611,926 91.88%

Amortisation,depreciationandprovisions 1,239,246 12.07% 842,348 9.49% 396,898 47.12%

EBIT 38,690 0.38% (176,339) -1.99% 215,028 -121.94%

Financialoperations 1,153,865 11.24% 33,278 0.37% 1,120,587 3367.38%

EBT 1,192,554 11.62% (143,061) -1.61% 1,335,615 -933.60%

Incometax 8,955 0.09% 40,918 0.46% -31,963 -78.11%Prepaidtax (26,188) -0.26% (127,262) -1.43% 101,074 -79.42%Deferredtax (15,125) -0.15% 9,625 0.11% -24,750 -257.14%

Periodprofit(loss) 1,224,912 11.93% (66,342) -0.75% 1,291,254 -1946.35%Thefollowingtableshowingsomeprofitabilityindexes,comparedwiththesameindexesrelatingtothefinancialstatementsofthepreviousyear,providesabetterillustrationoftheincomesituation.

31/12/2016 31/12/2015NetROE(Netresult/Netcapital) 0.28 (0.01)GrossROE(EBT/Netcapital) 0.27 (0.03)


ROI(EBITDA/Netcapital) 0.06 0.04ROS(EBITDA/Incomefromsales) 0.13 0.08

Thecompany’sincomeindexesallshowaclearimprovementonthepreviousperiod,therebyfurtherconfirmingthepositiveperformanceoftheyearjustended,asindeedstressedintheintroductiontothisparagraph.MainequityfiguresforMailUpThe reclassified balance sheet of the company, as compared with that of the previous year, is as follows (figures areexpressedineuros):Description 31/12/2016 31/12/2015 delta delta%

Intangiblefixedassets 3,660,657 3,361,555 299,102 8.90%Tangiblefixedassets 629,282 651,083 (21,801) -3.35%Financialfixedassets 11,416,878 10,894,241 522,637 4.80%Fixedassets 15,706,817 14,906,878 799,938 5.37%

Tradereceivables 1,156,163 1,083,040 73,123 6.75%Receivablesfromsubsidiaries 273,735 199,572 74,164 37.16%Receivablesfromassociatedcompanies 49,554 - 49,554

Tradepayables (691,622) (685,022) (6,600) 0.96%Amountsduetosubsidiaries (2,207,811) (2,064,399) (143,411) 6.95%Amountsduetoassociatedcompanies (4,921) - (4,921)

Commercialworkingcapital (1,424,901) (1,466,810) 41,908 -2.86%

Taxreceivablesandpayables 423,436 414,493 8,943 2.16%Accrualsanddeferrals (4,949,607) (3,610,430) (1,339,177) 37.09%Otherreceivablesandpayables (3,314,133) (4,372,923) 1,058,790 -24.21%Networkingcapital (9,265,205) (9,035,669) (229,536) 2.54%

Provisionsforrisksandcharges (60,489) (135,614) 75,125 -55.40%Provisionforseveranceindemnity(TFR) (387,921) (278,290) (109,632) 39.39%Netinvestedcapital 5,993,202 5,457,306 535,896 9.82%

Sharecapital 283,266 216,667 66,599 30.74%Legalreserve 60,000 40,000 20,000 50.00%Otherreserves 4,252,492 4,301,095 (48,603) -1.13%Profits/lossescarriedforward (178,029) - (178,029)

Periodprofit(loss) 1,224,912 (66,342) 1,291,254 -1946.35%Shareholders’equity 5,642,640 4,491,419 1,151,221 25.63%

Short-termpayables/(cash) (1,833,084) (542,448) (1,290,636) 237.93%Medium/long-termpayables 2,183,645 1,508,335 675,310 44.77%Netfinancialposition 350,561 965,887 (615,326) -63.71%


Totalsources 5,993,202 5,457,306 535,895 9.82%Inordertoprovideabetterdescriptionofthecompany’sequitysolidity,thetablebelowshowsafewbalancesheetindexesrelating to both (i) the method of financing medium/long-term commitments and (ii) the breakdown of the sources offinance,comparedwiththesamebalancesheetindicatorsforthepreviousyears.

31/12/2016 31/12/2015Primarystructuremargin(Ownfunds-Fixedassets) (10,666,964) (10,889,953)Primarystructureratio(Ownfunds/Fixedassets) 0.35 0.29Secondarystructuremargin((Ownfunds+Consolidatedliabilities)-Fixedassets) (7,934,906) (8,967,715)Secondarystructureratio((Ownfunds+Consolidatedliabilities)/Fixedassets) 0.51 0.42

DataforMailUpalonebetterrevealstheimpactofacquisitionsontheBalanceSheetstructurethanthatoftheGroup.Equityinvestmentsinfactaccountfor69%offixedassetsandmorethan50%oftotalassets.ThegrowthpathforexternallineshasmadeakeycontributiontowardsachievingtheexcellenteconomicresultsbookedbytheparentcompanyandGroupthisyear.MainfinancialfiguresforMailUpThecompany’snetfinancialpositionasof31December2016wasasfollows(ineuros):


Currentfinancialassets 3,023,456 1,086,336 1,937,120 178%

Thirdparties - - - 0%Liquidfunds 3,023,456 1,086,336 1,937,120 178%



CURRENTFINANCIALPOSITION (1,833,084) (542,448) (1,290,636) 238%




Thirdparties 2,183,645 1,508,335 675,310 45%Otherlenders

(16,666) -50%


NETFINANCIALPOSITION 350,561 965,887 (615,326) -64%

Thefollowingtableshowingsomebalancesheetindicatorsofthecompany,comparedwiththesameindicatorsrelatingtopreviousyears,providesabetterillustrationofthefinancialsituation.

31/12/2016 31/12/2015Primaryliquidity(Immediateanddeferredliq./Currentliabilities) 0.33 0.20Secondaryliquidity(Currentassets/Currentliabilities) 0.42 0.25


Debt(Netdebt/Shareholders'equity) 2.81 2.98Fixedassethedgingrate(Owncapital+Consolidatedliabilities)/Fixedassets

0.45 0.43

Inadditiontothatalreadyrecalledpreviouslyontheconsolidatedfinancialindicators,andstressedagainhere,pleasenotethatthecompanyhasatlengthbenefitedfromtheliquiditygeneratedbyitscorebusiness.Morespecifically,thecollectionofannual fees inadvanceandtheconsequentdeferred incomeonthepartof futureaccountingcompetencymechanism,haverepresented,andindeedcontinuetorepresentthemainsourceoffinance,which,moreover,isinexpensiveandrisesproportionallyaccordingtothesystematicgrowthofturnoverseenovertime.Partoftheseresourceshavebeenallocated,togetherwiththosederivingfromfundingontheAIMmarketandthemedium-termbankdebtleverage,insupportofthestrategicgrowthprojectbyexternallinesandglobalisationthatthecompanyhaspursuedsinceitslisting.InformationpertainingtotheenvironmentandworkforceConsidering the social roleplayedby thebusiness,webelieve it appropriate toprovide the following informationon theenvironmentandstaff.WorkforceDuringtheyear,noincidentstookplacenoranyinjuriesatworkinvolvingstaffonthepayrollnorindeedwereanychargesrecordedwithregardstooccupationaldiseasesonemployeesorformeremployeesandmobbingcases.Asat31December2016, theGroup’sworkforcenumbers142employees,ofwhom2managers,7middlemanagers,132white-collarworkersand1labourer.Asat31December2015,theGroup’sworkforcenumbered132employees,ofwhom2managers,4middlemanagers,125white-collarworkersand1labourer.Atyearend,theMailUpworkforcetotalled58employees,ofwhom2middlemanagersand56white-collarworkers.TheGrouphasalwaysbeencommittedtosafeguardingrelationswithemployees;atpresent,therearenoemploymentlawdisputesinprogress.EnvironmentPleasenotethatthetypeofbusinesscarriedoutbythecompanydoesnotentailrisksnoranyonsetofsituationsthatmaydamagetheenvironment.InvestmentsDuringtheyear,consolidatedinvestmentsweremadeinthefollowingareas:

Fixedassets PeriodacquisitionsPlatformdevelopmentcosts 1,318,109DevelopmentofBEEsoftware 211,694ThirdpartysoftwareTrademarksITinfrastructure,electronicofficemachinesandofficefurniture

51,6569,668

254,174ofwhichinvestmentspertainingtotheparentcompanyalone,asfollows:

Fixedassets PeriodacquisitionsPlatformdevelopmentcosts 1,439,450ThirdpartysoftwareTrademarksITinfrastructuresandelectronicofficemachines

42,1569,668

243,440Giventhenatureofitsbusiness,theinvestmentsmadebyMailUparehistoricallyconcentratedonintangibleassetsand,inparticular,ontheincrementaldevelopmentoftheproprietarydigitalmarketingplatform,ofwhich,for2016,specificdetailsaregiven in thenextparagraph.Developmentprojects still inprogressat yearendare included,enteredunderPlatformdevelopmentcosts,amortisationofwhichwillstartuponcompletionoftherelatedproject.Researchanddevelopment


InaccordancewithArt.2428,paragraph2,number1,itisspecifiedthatduringtheyear,MailUpentereddevelopmentcostsin the amount of Euro 1,439,450. At year end, net of amortisation/depreciation, thesewere Euro 3,484,273. The parentcompany mainly pursues the incremental development of the MailUp® platform for the management and professionalsendingofnewsletters,e-mailsandtextmessages,accessibleover the internet inSaaS (Software-as-a-Service)mode.Thecostsincurredforthisdevelopmentwerecapitalisedbyvirtueofthefutureeconomicuse,certifyingthepotentialeconomicand financial recovery of the investment. Within the Group, the parent company alone carries out research anddevelopment. 2016 developments relative to BEE software for Euro 211,694 net of the inter-company margin, are alsoworthyofnotice,conferredtothesubsidiaryMailUpIncatend2016.Belowisasummaryofthemaindevelopmentactivitiescarriedout.New functionalitieswere included in theMailUp®platformaspartof the systematic incrementaldevelopment,updatingandinnovationprocess,whichhasalwaysbeenastrongpointoftheplatform.Developmentactivitieshavefocusedontheanalysis of usability of the platform and revision of the user interface, resulting in the release, in February 2017, of theversionMailUp9of theplatform,aswell ason thedevelopmentof innovativenewmodulesbasedon thephilosophyof“embeddable plugin”, that is, the creation of services thatmay be offered separately in the future, aswas the case forBEEPluginandBEEPro.Newfeatureswerealsodeveloped:

• “SimplifiedAutomation”thatallowscreatingautomationwithasimplified“draganddrop”interface.Thisfunctioncan be used for example to create “Welcome series”, i.e. a series of automated e-mails timed from the date ofregistration, happy birthday e-mail or automatic e-mail following the abandonment of a cart on an e-commercewebsite. This type of e-mail is referred to as “transactional” because it is not sent asmass e-mail but only after aspecificeventrelatedtoaspecificrecipientandisamongthemosteffectivee-mailmarketingmethodsasevidencedbythe2016E-mailMarketingObservatoryResearch.• “Landingpage” thatallowsusing the same“editor” tocreatee-mailsalso for thecreationof landingwebpages,useful not only following the sending of marketing e-mails, but also suitable for those who send SMS marketingcampaigns.Infact,itresolveswithsimplicitytheneedtohave“responsive”landingpages,i.e.suitabletobedisplayedeffectivelyevenonmobiledevices,adaptingthecontentandlayouttothetypeofdisplay.• New API (application programming interface) methods that allow more sophisticated integrations between theMailUp®platformandcustomerdigitalapplicationsandactivatethepositiveexternalitiesofthedigitalecosystem,withseveral companies and programmers that have decided to independently develop integrations between theMailUpservice and third-party applications/services. This led to the creation of Pymailup, a library in Python language thatsimplifiesintegrationwithPython,Prestashopsystems,oneofthemostpopulare-commerceplatforms,MSDynamicsCRM,DrupalSMSandotherssuchasthenewintegrationwithMagentothatwillbereleasedinopen-sourcemode.

As mentioned above, in FY 2016, development focussed mainly on the launch ofMailUp 9, the completely redesignedversionoftheplatform,enrichedwithnewfunctionsfortheautomationofe-mailandSMSmarketing.MailUp9 isoneofthemostimportantreleasesoftheplatform,theresultofamajorinterventionontheuserexperienceandcomeswithanall-newinterface,thankstothegraphicalredesignandreorganisationaccordingtofunctionalareas,withtheaimofofferingbusinesses aneven simpler,moreuser-friendlybrowsing. Research continuesonMarketingAutomation technology,withMailUp9introducingnewfunctionsforthecreationofworkflows:asfromtoday,userscannowcreateautomaticprocessestodelivermulti-channelcampaignsinatimely,customisedfashion.Intheareadedicatedtothecreationofe-mails,MailUp9thenintroducesCollaboration,aninnovativetoolbywhichtosharepre-launchstagesofthecampaign,allowingcolleaguesorcustomerstocollaborateonallaspectsofthemessage,throughtofinalapproval.Again, under the scope of research and development, a significant amount of the work carried out regarded thedevelopmentofthe“InnovativeBigDataAnalyticsSystem”,asdiscussedpreviouslyinthepartonthesignificanteventsoftheyear.


Transactionswithsubsidiaries,associates,parentsandotherrelatedcompaniesDuring the year, transactionswere implementedwith subsidiaries comingunder theGroup scopeandwithother relatedparties,aspartofthecompany’scorebusiness.Interventionsallaimedtopromotethedevelopmentinasynergiccontextthat enables positive integrations in the Group environment. No atypical or unusual operations were carried out withrespect tonormalbusinessmanagement.Operationsessentially regardtheexchangeofassets, theprovisionsofservices,the supply and use of financial means. Said relations come under the scope of ordinary business management and arestipulatedatarm'slength,orattheconditionsthatwouldhavebeenestablishedbetweenindependentparties.

CompanynameFixed

receivablesTrade

receivablesTrade

payablesOther

payables Dividends Sales Purchases

NetworkSrl

20,000

885,475

40,000

2,317,787

AgileTelecomSpA

100,721

496,901

814,372

1,192,140

90,355

735,301

GlobaseInternationalApS

2,491

2,891

MailupInc

142,301

150,523

11,063

236,601

123,950

Subsidiaries142,301

273,735

1,393,439

814,372

1,192,140

369,847

3,177,037

ConsorzioCRITScarl14,641

49,554

4,921

38,240

10,134

Associates14,641

49,554

4,921

-

-

38,240

10,134

GrafoVenturesdiGiandomenicoSica

-

9,818

40,931

ZoidbergSrl

3,778,324

Otherrelatedparties

-

-

9,818

3,778,324

-

-

40,931

Withregardstothetableabove,pleasenotethatotherpayablesduetoAgileTelecom(Euro814,372vstheoriginalEuro1,206,512)arerepresentedbytheresidualassumptionofdebtbythesellerwithregardstoAgile,whichtookplacewhenthecontrollingsharewasacquiredbytheparentcompany.TheamountpayabletoZoidbergofEuro3,778,324istheestimatedearnouttoberecognisedby30June2016tothesellerofAgileTelecom,underthepurchaseandsalecontractstipulatedbythepartieson29December2015.Aninterest-bearingloanisalsoinplace,disbursedin2016bytheparentcompanyMailUpNordics,inturna100%subsidiaryofMailUp,infavouroftheSwedishsubsidiaryGlobaseInternationalApS,forEuro203,693asat31December2016.Treasurystockandshares/holdingsinparentcompaniesMailUpowns42,420ownshares,foratotalofEuro112,466,purchasedpartlyin2015,forapriceofEuro57,502andfortheremainder,inFY2016,forthepriceofEuro54,964.Followingthecompletionofthefirstownsharepurchaseprogramme,on28April2016,theshareholders'meetingresolvedtoauthorisepurchasesanddisposalsofownsharesasfromthesamedateofthemeetingandfor18monthsofthatdate, inanamountthatcanbefreelydecidedbytheBoard,uptoamaximumnumberofsharesthatshallnotexceed10%ofthesharecapital.Thepurchasepriceofeachsharemustbenolessandnomore than 15% of the reference price recorded by the share during the stock market session of the day prior to eachindividual transaction. Due to the limited liquidity and reduced trade typical of the AIM market, which could havecompromisedand/orprevented theachievementof theobjectivesenvisagedof theownsharepurchaseprogramme, thecompanyavaileditselfofthefacultytopurchasedailyvolumesofupto50%oftheaveragedailyvolumeofsharestradedonthemarket,alwaysincompliancewithRegulation(EC)no.2273/2003of22December2003.


DisclosurerelativetorisksanduncertaintiespursuanttoArt.2428,subsection2,point6-bisoftheItalianCivilCodeThecompanyisexposedtovarioustypesofrisks.Thecompany’sstrategyaimstolimitexposuretotheserisksbymeansofsuitable, specific riskmanagementpolicies that envisage analyses,monitoring and control of the risks. The following is aseriesofquantitativeinformationonaimedatprovidingindicationsastothedimensionofcompanyriskexposure.RiskconnectedwiththegeneraleconomictrendTheeconomic-financialpositionofthecompaniesbelongingtotheGroup,isinfluencedbyallfactorscomprisingtheItalianandinternationalmacroeconomiccontext.Duringthereportingperiod,despitethemodestsignsofrecovery,situationsofuncertainty continue to persist in economic terms in general. This phase is following a long period of recession that hasresulted in a significantdeteriorationof theeconomy. In Italy, like inother EU countries,widespreadausteritymeasureshave been adopted,which have negatively influenced consumer trust, their buying power and spending capacity. In thisdifficultmacroeconomic situation, theMailUp Group has successfully grown and achieved important objectives, but thecrisisoftheEurozonecountriesandunforeseeableeffectsofitscontinuation,mayinanycasehavenegativeeffectsontheGroupbusiness.Marketrisks

Thesectors inwhichMailUpandtheGroupoperatesarecharacterisedbyrapidtechnologicaldevelopmentandsufferthecompetitivepressurederiving fromthedevelopmentof technology.TheGroupandcompany’ssuccessdepends,amongstother aspects, on the capacity to innovative and strengthen its technologies, in order to respond to the technologicalprogress in the sector in which it operates. The Group consequently finds itself having to cope with a more acutecompetitionbyvirtueoftheemergingtechnologiesandservicesthatmaybeintroducedorimplementedinthefuture.Thenewtechnologies, in fact,may limitor reducethecompany’sbusinessand/orencouragethedevelopmentandgrowthofnew operators. In particular, the SMS system may be surpassed by other network-based systems (such as Messenger,WhatsApp,WeChat, PushNotifications),with the consequence that the companymaynotbeable to successfully and/orquicklymanageanytransitiontotheuseoftheseplatforms.

If the solutions offered by the Group should be unable to satisfy the needs of clients and/or respond to technologicalprogress, thecompanywillneed tobeable to improve its technologicalplatformquicklyanddevelopand introducenewservices,newapplicationsandnewsolutionsontothemarketquicklyandatcompetitiveprices.TheGroup’s incapacitytoimprove,develop,introduceandsupplyservicesquicklythatareabletosatisfymarketdemands,includingintechnologicalterms,mayhaveanegativeimpactonoperatingresultsormaymaketheservicesofferedbytheGroupobsolete.Inordertomaintain itscompetitivenessonthemarket, theGroupwill thereforeneedto invest inresearchanddevelopment,withahighcapacitytoadjusttocontinuetorespondtotherapidtechnologicalchangesandconstantlydevelopthecharacteristicsofitsservicessoastorespondtothechangingmarketdemands.

If the Group should be unable to adjust promptly to the technological evolution and/or the introduction of a newtechnology,negativeeffectsmaybeseenontheconsolidatedeconomic,equityandfinancialposition.CreditriskThecreditriskistheexposuretopotential lossesderivingfromfailurebycounterpartiestofulfiltheobligationstheyhaveassumed.Creditmanagementisentrustedtothefinanceandadministrationdepartment,which,onthebasisofformalisedassessment and appointment procedures of commercial partners, seeks to minimise the risk. Following the economy’sdifficulties, stricterprocedureshavebeenadoptedtoquantifyandcontrolclient risk levels. Inorder to reduce theriskofinsolvency deriving from trade receivables, a series of measures has been introduced aiming to encourage the use ofelectronicpaymentsystems(creditcards,PayPal)bycustomers,forexamplestrengtheningandinnovatingthee-commercesalesystem.Thischoiceresultedintheconstantgrowthofcollectionsmadebyelectronicpaymentsystems,improvingthequalityoftradereceivablesandreducingtheimpactofthecostsofdebtcollection.ItmustbeconsideredthatthefinancialassetsoftheGrouphaveagoodcreditstanding.LiquidityriskThe liquidityriskconsistsof the impossibilityofrespectingpaymentcommitmentsduetodifficulties inobtainingfundsorliquidatingassetson themarket.Theconsequence isanegative impacton theeconomic results if theGroup is forced toincur additional costs to fulfil its commitments or, as an extreme consequence, a situation of insolvency that risks thecompanyasagoingconcern.Atpresent,also thanks to its listingon theAIMmarketand theexcellent relationswith the


bankingsystem,theMailUpGroupenjoysagoodlevelofliquidityandreduceddebt,aimedexclusivelyatgrowthbyexternallines,implementedthroughacquisitions,duringthesecondhalfof2015,ofsubsidiaries.Thisprocessenabledthedoublingupofvolumesofrevenueswithrespecttothepreviousyearandthebookingofexcellentresultsfor2016.Inordertooptimisethemanagementoffinancialresources,reducingtheliquidityrisk,theGrouphasadoptedprocessesforthe systematic monitoring of prospective liquidity conditions, in connection with the business planning process. TheforeseeablecashflowforFY2017includes,inadditiontothedynamicsofworkingcapitalandinvestments,alsotheeffectsof thematurity of current liabilities. TheGroup expects to copewith its financial needs through the flows deriving fromoperationsandcashonhand.Considering thepositive trendof salesvolumes,which isexpected tobemaintained in theforthcomingyears,itisexpectedthatinFY2017,financialresourcescanbegeneratedthat,togetherwithcurrentfunds,willbeabletoguaranteesuitablesupportfortheordinaryandextraordinaryinvestmentsplannedtoo.Itisconsideredthattheliquidityriskisnotsignificant.WithreferencetotherequirementslaiddownbyArt.2428,paragraph3,point6-bisoftheItalianCivilCodeinconnectionwiththecompany’suseoffinancialinstruments,itisspecifiedthatnocontractshavebeenstipulatedinrelationtofinancialinstruments.

InterestrateriskAt end 2015 and in the first half of 2016, the parent company obtained financial resources through banks to copewithextraordinaryoperationsofgrowthbyexternallines.Asat31December2016,consolidatedbankdebtisEuro3,491,022,ofwhichEuro1,244,878intheshort-term,ascomparedwithliquidfundsofEuro4,461,219.Theunderlyingloancontractsenvisagetermsandconditionsthatareinlinewithmarketpractice.Theloansareconnectedwiththeriskofinterestratechanges,astheyarenegotiatedatvariablerates.Itcannotbeexcludedthat growth of interest rates may result in an increase in costs connected with the financing of debt, with consequentnegativeeffectsonthecompany’seconomic-financialposition.

ExchangerateriskTherearetradereceivablesandpayablesheldinforeigncurrenciesbyMailUp,forlimitedamounts,mainlywithregardstotheAmericansubsidiaryMailUpInc.,aswellasmarginalamountsfortradepayables inforeigncurrencieswiththirdpartysuppliers. The companies relating to the subsidiaryMailUp Nordics, in particular, Globase International, operate on theDanishandNorthernEuropeanmarketandtheconsolidatedassetsandliabilitiesonthesefinancialstatementsareoriginallyheld inDanishKrone. TheDanishKrone/Euroexchange rate is extremely stable andhistorically oscillates onlyminimally.Exposure to risks connectedwith exchange rate fluctuation is therefore very limited.Under this scope,we alsonote thepresenceofafinancialreceivableheldinUSdollarsduetoMailUpInc., intheamountofEuro142,301asat31December2016,foraloandisbursedbytheparentcompanyinlieuofapreviousloanthathadbeenfullyrepaidduringtheyear,asperspecificcontractprovisions.ConversionexchangerateriskMailUpholdsanequityinvestmentinMailUpInc.withregisteredofficeinSanFrancisco,theUSA.Theequityinvestmentisbooked for a value of Euro 499,514 and is therefore subject to changes in the Euro/Dollar exchange rate, noted on theconsolidatedfinancialstatementsinthe“conversion”reserve.ItalsohasashareholdinginthesubsidiaryMailUpNordicsforatotalamountofEuro800,000subjecttotheDanishKrone/Euroexchangeraterisk.Itispointedout,asalreadymentionedabove, that the Danish Krone/Euro exchange rate is extremely stable and presents very low volatility risks. Although itmonitorsexposuretotheriskofconversionexchangerates,theGroupisonlyslightlysubjecttoit.Riskofrecovery/impairmentassetsThe risk of recovering the value of the assets held by the Group takes concrete form in connection with the economicperformanceofthecompaniesconsolidatedandthecapacitytoproducesufficientcashflowtoguaranteerecoveryoftheinvestmentvalue.Thisriskismonitoredbythemanagementthroughtheregularverificationofeconomicresults,includingunderthescopeofspecificvaluationprocedures,suchas,forexample,bycarryingoutimpairmenttestsatleastonceayear.SignificanteventsaftertheendoftheaccountingperiodThankstotheaccesstosixnewgeographicareas,includingcountriesandterritoriesoverseas,MailUphasachievedglobalcoverforitsSMSmessagingservice,enablingitscustomersinallsectorstosendSMSmessagestoallcountriesworldwide.Acapillarypresencein226networksthatguaranteestheMailUp®platformdeliveryoftextmessagesonanymobilecarrier.AchievingglobalcoveragecomesaspartoftheaimofstrengtheninganddevelopingtheSMSchannel,aMailUpassetthat


growsconstantly,asconfirmedbytheorganicgrowthandacquisitionofAgileTelecom.On27February2017,themergerbyacquisitiontookplaceofNetworkSrlintoMailUp,asmentionedpreviously.Therewasnooppositiontothemergerdecision.InaccordancewithArt.2504-bisoftheItalianCivilCode,themergerwilltakeeffectasfromthedateofthelastoftheentriesprescribedbyArt.2504oftheItalianCivilCode,whichtookplaceon20March2017.In compliance with the faculty admitted by Art. 2504-bis of the Italian Civil Code and paragraph 9 of Art. 172 of theConsolidatedIncomeTaxAct,theeffectsofthemerger,bothontheaccountsandtax,shallapplyasfrom1JanuaryoftheyearinwhichthelastentryismadewithCompaniesHouseofthemergerdeed,asenvisagedbyArt.2504oftheItalianCivilCode.On01February2017,MailUp9waslaunched,theall-newdesignversionoftheplatform,enrichedwithnewfunctionsforautomationande-mailandSMSmarketing.MailUp9isoneofthemostimportantreleasesoftheplatform,theresultofamajorinterventionontheuserexperience.MailUp9comeswithanall-newinterface,thankstothegraphicalredesignandreorganisation according to functional areas, with the aim of offering businesses an even simpler, more user-friendlybrowsing.MailUphasalsolaunchedthenewinstitutionalwebsitewww.mailupgroup.com,ameetingpointofthecorporatedimensionofMailUpandthecommunityof investors,analystsandmedia,thenewwebsiteofferscompletenews,financialdataandinvestorsdocuments releasedby theGroup.Thewebsite represents thecommunicationandmeeting spacebetween theparent company and its subsidiaries - Acumbamail, Globase, Agile Telecom and the BEE business unit, to describe thecorporateevolutionofMailUpS.p.A.,intherecentpastandindevelopmentstocome.OutlookTheGroupintendstocontinuetofurtherdevelopitsbusinessandservicesthroughaprofitablegrowthprocess,inordertosuccessfullygainstandingandreinforceitspositioninthereferencesector.Tothisend,inparticular,theaimistoproceedwiththefollowing:

• the incremental improvementoftheMailUp®platform, inparticularwiththe introductionofnewfunctionalitiesandthesimplificationofexistingones;morespecifically,theevolutionwillregardmobilemarketing,singlecustomerviewsupportedbybigdataandartificialintelligencesystems,customerjourneymanagementandtheintroductionofnew,innovativecommunicationchannels;

• investments in marketing & sales as necessary to increase the customer base, both in Italy and abroad, throughinternationalmarketingcampaignsandbusinessdevelopmentinselectcontexts;

• the incremental improvement of the Acumbamail platform,with the introduction of the new SMS channel and thelocalizationinothermarkets;

• the incremental improvement of the Agile Telecom platform, with the introduction of new SMS price calculationautomationsystemsofthevarioussuppliersandthestipulationofnewinterconnectionagreements;

• theprogressivemigrationofGlobasecustomerstotheMailUp®platform;• focussedbusinessdevelopmentaimed,amongstothers,atdevelopingnewcontactswithpartners (suppliersofSaaS

cloud systems, software and digital services) and retailers (such as, for example, hosting and telecommunicationsproviders),whichcanspeedupmarketpenetration;

• focussedinvestmentsonimprovingperformanceinordertoreducetherateofclientslostandimprovetheuseofitsservices,theon-boarding(i.e.serviceactivation)process,thefunctionsandintegrationswithexternalsystemsinordertoimprovetheclientconversionrate(intendedastheratioofpotentialclientsandclientsacquired);

• theintroductionofnewservices,whichshouldallowforanincreaseinclientspending,despitethefactthatitisalreadydriventoupgradetheservicefollowingtheincreaseinthelistofaddresseesandconsequentincreaseofsendingtime.ThesealsoincludestrengtheningtheSMSservices;

• investmentsaimingtodevelop integrationsbetweentheservicessuppliedandothere-commercesystems,CRMandCMS;

• acquisitionofsystems,softwareandtechnologiesunderthescopeofmarketingtechnologiesoncloud,whichenablearapidexpansionoftheserviceportfolioortheattackofmarketbracketsthathavethusfarnotbeenoverlytargeted;

• corporateacquisitionsinforeigncountriesinordertospeeduptheentryintonewmarkets.

TheGroupdoes not,moreover, exclude the possibility of potentially increasing itsmarket share in themedium-term forexternallinesbyacquiringorcollaboratingonacommerciallevelwithothercompaniesoperatingonthereferencemarketorotherrelatedmarkets,assessingtherelevantvalueofsuchbothinstrategicandfinancialterms.

http://www.mailupgroup.com


OrganisationandmanagementmodelsofItalianLegislativeDecreeno.231/2001

In2015,MailUpadopteditsownorganisationandmanagementmodelcompliantwiththerequirementslaiddownbyItalianLegislativeDecree231/2001.Morespecifically,in2016,itimplementedtheabove,providingspecifictrainingtoits employees and implementing the related operating procedures. The newly-acquired companies have not yetadoptedtheIssuer’smodel.

PersonaldataprocessingIn compliance with Italian Legislative Decree no. 196 of 30/06/2003, in relation to the Personal Data Protection Code(“Consolidated Privacy Law”), the Group has, through formal communications, appointed the data controllers and datasupervisors.MailUphasalwayspaidparticularlycloseattentiontothecorrectapplicationofthePrivacyCode,evenoutsidenormallegislativeobligations,inviewofthestrategicimportance,foritsbusiness,oftheimpeccablemanagementofclientdatabasesincludedontheMailUp®platform.MailUpisinfactappointedbyclientsasExternalControllerfortheprocessingof personal data as required in order to send out commercial communications in the form of newsletters, e-mails, textmessagesandsocialmessages,throughtheplatform.Theinternalproceduresonthesemattersareconstantlyformalised,monitoredandupdated,asisspecifictrainingofemployees.TheGrouphasalsoforyearsbeenassistedbylegaladvisorsofprovencompetenceandexperience,onbothanationalandinternationallevel,onthespecificmattersofprivacyanddigitalmarketing. The prevention and fight against potential abuse by clients in this area is also closelymonitored, thanks to adedicatedtechnicaldepartmentandtheadoptionofparticularlystrict,protectivecontractualregulations. Allocationoftheyear’sresultWeproposetotheshareholders’meetingthattheMailUpperiodresultbeallocatedasfollows:

Periodresultasat31/12/2016 Euro 1,224,912totheextraordinaryreserve Euro 1,224,912

Wethankyouforyourconfidenceandwerequestthatyouapprovethefinancialstatementspresentedhere.

ChairmanoftheBoardofDirectorsMatteoMonfredini


Groupconsolidatedfinancialstatementsasat31December2016 BalanceSheetNotes 31/12/2016 31/12/2015

Non-currentassets Tangibleassets 1 709,130 754,331Intangibleassets 2 3,756,336 3,107,057Goodwill 3 10,387,313 10,387,312Equityinvestmentsinassociatesandjointventures 4 102,000 -Othernon-currentassets 5 69,653 136,348Prepaidtaxassets 6 785,139 647,377

Totalnon-currentassets 15,809,570 15,032,426 Currentassets Tradeandotherreceivables 7 3,396,264 2,866,722Othercurrentassets 8 1,742,954 729,462Liquidfundsandequivalent 9 4,461,219 3,265,717Totalcurrentassets 9,600,437 6,861,901 Totalassets 25,410,007 21,894,327 Balancesheet-Liabilities 31/12/2016 31/12/2015 GroupShareholders’Equity Sharecapital 10 283,266 216,667Reserves 11 5,896,510 6,068,373Periodresult 780,519 (114,822)Shareholders’equityofminorityinterests 12 59,959 29,010

Totalshareholders’equity 7,020,253 6,199,228 Non-currentliabilities Amountsduetobanksandotherlenders 13 2,246,145 1,570,836Othernon-currentliabilities - -Provisionsforrisksandcharges 14 57,739 117,739Stafffunds 15 933,526 698,650Deferredtaxliabilities 16 31,287 33,345

Totalnon-currentliabilities 3,268,697 2,420,569 Currentliabilities

Tradeandotherpayables 17 2,947,547 2,320,263Amountsduetobanksandotherlenders 18 1,261,627 671,038Othercurrentliabilities 19 10,911,883 10,283,230 Totalcurrentliabilities 15,121,057 13,274,530


Totalliabilities 25,410,007 21,894,327 IncomeStatementNotes 31/12/2016 31/12/2015 Revenues 20 21,114,120 9,309,629Otherincome 21 527,718 147,282

Totalrevenues

21,641,838 9,456,911

Costsforservices 22 (13,358,194) (5,623,677)Payrollcosts 23 (6,761,317) (4,531,071)Capitalisationofpayrollcostsfordevelopmentactivities 24 1,254,487 1,541,677Otheroperatingexpenses 25 (362,603) (169,395)

EBITDA

2,414,212 674,445

Amortisation,depreciationandimpairment

26 (1,228,268) (815,660)

EBIT

1,185,944 (141,214)

Financialexpense 27 (70,639) (16,392)Financialincome 28 12,496 40,898Portionofresultpertainingtoassociatesandjointventures - -Impairmentofnon-currentassets - -

Pre-taxprofit

1,127,801 (116,709)

Incometax

29 (315,433) 16,218

Netperiodresult

812,367 (100,491)ofwhichnetresultpertainingtominorities

31,489 14,330NetGroupresult

780,519 (114,821) Otheritemsofthestatementofcomprehensiveincome Profit/(loss)thatwillnotbesubsequentlyreclassifiedtotheperiodresult

Actuarialprofit(loss)netofthetaxeffect (49,924) (40,272)

Profit/(loss)thatwillbesubsequentlyreclassifiedtotheperiodresult

Profit/(loss)derivingfromtheconversionofthefinancialstatementsofconsolidatedcompaniescarriedincurrenciesotherthantheeuro

6,697 (16,501)

Comprehensiveperiodprofit/(loss) 769,140 (157,264)Periodprofittobeassignedto:

Shareholdersoftheparentcompany 737,292 (171,594)Minorityshareholders 31,849 14,330 Earningspershare:

basic 300.074 (0.017)


diluted 300.072 (0.017)

Consolidated statement of changes in equity

Figuresineuros 01/01/2015

Allocationof

MailUpresult

Sharecapitalincrease(*)

Changetoshare

premiumreserve(*)

Purchaseofownshares

ComprehensiveISresult

Stockoptionplan

Othertransactionslinkedto

thetransitiontoIAS

Periodresult

31/12/2015

Sharecapital 200,000

16,667

216,667

Sharepremiumreserve 2,751,664

1,983,333

(41,323)

4,693,674

Legalreserve 5,656 34,344

40,000

Extraordinaryreserve 125,866 168,361

294,226

Reservefortreasurystock -

(57,502)

(57,502)Reserveforexchangerategains -

-

Profit/(loss)carriedforward 47,638

1,707,347

1,754,985

Stockoptionreserve -

-

OCIreserve 19,423

(86,117)

(66,694)

FTAreserve (590,317)

(590,317)

Otherreserves (139,287)

139,287

-

Periodresult

-

(114,821) (114,821)

Shareholders’equity 2,420,642 202,704 16,667 1,983,333 (57,502) (86,117) - 1,805,311 (114,821) 6,170,218 (*)Asresolvedbytheordinaryshareholders'meetingon23December2015

Figuresineuros31/12/2015

Allocationof

MailUpresult

Sharecapitalincrease

(*)

Changetosharepremiu

mreserve

Purchaseofownshares

ComprehensiveISresult

Stockoptionplan

Othertransacti

onslinkedto

thetransitiontoIAS

Periodresult

31/12/2016


65,000

1,599

283,266


(85,953)

4,607,721


60,000

Extraordinaryreserve 294,226 66,397 (65,000)

295,624

Reservefortreasurystock (57,502)

(54,964)

(112,466)Reserveforexchangerategains - 25,289

25,289

Profit/(loss)carriedforward 1,754,985 (114,821)

(166,192)

1,473,972


243,316

243,316

OCIreserve (66,694)

(43,227)

3,293

(106,628)


(590,317)

Periodresult (114,821) 114,821

780,519 780,519

Shareholders’equity 6,170,218 111,686 - - (54,964) (43,227) 244,915 (248,852) 780,519 6,960,294(*)Asresolvedbytheordinaryshareholders'meetingon29March2016

Please note that “Other transactions linked to the transition to IAS” derive from the application of the internationalaccounting standards IAS/IFRS,which have affected themake-up of shareholders' equity, both for FY 2015 and the yearunderreview.Morespecifically, it regardstheallocationoftheFY2015profit,derivingfromtheapplicationofthe ItalianAccountingStandards (OIC)andthecostsconnectedwithsharecapital increasesreclassifiedunder itemsofshareholders'equityincompliancewithIAS/IFRSstandards.


Consolidated statement of cash flows

Description 31/12/2016 31/12/2015

Periodprofit(loss) 812,367 (100,491)

Incometax 495,981 87,576

Deferred/(prepaid)tax (180,548) (103,793)

Interestexpense/(interestincome) 48,165 (24,505)

Exchange(gains)/losses 9,978

1 Periodprofit(loss)beforeincometax,interest,dividendsandcapital

gains/lossesondisposals1,185,944 (141,214)

Valueadjustmentsfornon-monetaryelementsthathavenoequivalentiteminnetworkingcapital

ProvisionsforTFR 301,519 151,372

Otherprovisions - 63,799

Amortisationanddepreciationoffixedassets 1,206,869 815,660

Impairment Otheradjustmentsfornon-monetaryitems 578,3342 CashflowbeforechangesinNWC 2,694,331 1,467,950

Changestonetworkingcapital Decrease/(increase)intradereceivables (529,542) (1,472,957)

Increase/(decrease)intradepayables 627,285 1,547,203

Decrease/(increase)inaccruedincomeandprepaidexpenses 24,410 (99,369)

Increase/(decrease)inaccruedliabilitiesanddeferredincome 1,301,589 624,358

Otherchangesinnetworkingcapital (1,206,529) 5,391,843

3 CashflowafterchangesinNWC 2,911,544 7,459,029

Otheradjustments

Interestcollected/(paid) (29,016) 5,082

(Incometaxpaid) (981,375) (206,911)

(Useofprovisions) (70,334) (52,616)

4 Cashflowafterotheradjustments 1,830,818 7,204,582

A Cashflowfromoperations 1,830,818 7,204,582

Tangiblefixedassets (254,175) (307,723)

(Investments) (254,175) (307,723)

Divestmentrealisationprice Intangiblefixedassets (1,556,772) (9,027,725)

(Investments) (1,556,772) (9,027,725)

Divestmentrealisationprice

Financialfixedassets (35,305) (89,413)

(Investments) (35,305) (89,413)

Divestmentrealisationprice B Cashflowfrominvestments (1,846,251) (9,424,860)

Minorityinterestfunds 1,265,900 2,182,840

Increase(decrease)inshort-termpayablestobanks 2,806 11,924

Stipulationofloans 2,000,000 2,187,500

Repaymentofloans (736,906) (16,584)


Ownfunds (54,964) (40,835)

Sharecapitalincrease 16,667

Sale(purchase)oftreasuryshares (54,964) (57,502)

C Cashflowfromloans 1,210,936 2,142,005

Increase(decrease)inliquidfunds(A±B±C) 1,195,502 (78,273)

Liquidfundsasat01/01/2016 3,265,717 3,343,990

Liquidfundsasat31/12/2016 4,461,219 3,265,717

1,195,502 (78,273)


Explanatorynotestotheconsolidatedfinancialstatementsasat31December2016

GeneralinformationTheMailUpGroup(hereinafterthe“Group”or“MailUpGroup”)isanestablishedbusinessinthemarketingtechnologyonthecloudsector(newsletters/e-mails,textmessages,socialnetworks).ItleadsItalyintheESPsectorintermsofthenumberofe-mailssentandnumberofclients.TheparentcompanyMailUpS.p.A.(hereinafter“MailUp”)hasbeenlisted,sinceJuly2014,ontheBorsaItalianaAIMItaliamarket.

AccountingstandardsCriteriaforthepreparationoftheGroupconsolidatedfinancialstatementsInaccordancewithArt.4of ItalianLegislativeDecreeno.38of28February2005,which regulates theexerciseofoptionsenvisagedbyArt.5ofRegulation(EC)no.1606/2002oftheEuropeanParliamentandCouncilof19July2002relativetotheapplicationofinternationalaccountingstandards,theparentcompanyhasexercisedthefacultytovoluntarilyadopt,withinthe Group, the international financial reporting standards (hereinafter also referred to as the “IFRS”), issued by theInternationalAccountingStandardsBoard(the“IASB”)andapprovedbytheEuropeanCommissionforthepreparationofitsconsolidatedfinancialstatementsstartingfromtheyearended31December2016.Theterm“IFRS”isusedtorefertotheInternationalFinancialReportingStandards,therevisedinternationalaccountingstandards(“IAS”),allinterpretationsoftheInternational Financial Reporting Interpretations Committee (“IFRIC”), previously known as the Standing InterpretationsCommittee(“SIC”).Thedateof transition to the IFRS, asdefinedby IFRS1 “First timeadoptionof IFRS” is 01 January2015, and these2016financial statementspresentacomparativeyear (FY2015). In this regard,pleasenote that the IFRSaccountingstandardsappliedindraftingthefinancialstatementsclosedasat31December2016arethoseinforceonthatdateandarecompliantwiththoseadoptedforpreparingtheopeningbalancesheetasat01January2015,aswellasthefinancialstatementsasat31December2015,asrestatedinaccordancewiththeIFRSandreportedinthespecificAppendixattachedtotheseNotes,towhich reference ismade.ThisAppendixgives the reconciliationof theperiod resultand shareholders'equity resultingfromthefinancialstatementspreparedinaccordancewiththeaccountingstandardsusedduringthepreviousyears(ItalianAccounting Standards) and the period result and shareholders' equity according to the IFRS for the previous periodspresentedforcomparison,asrequiredbyIFRS1“FirsttimeadoptionofIFRS”andtherelatedexplanatorynotes.Forthepurposeofpreparingtheaccountingschedules,prevalenceisgiventotheeconomicsubstanceoftransactionsratherthantotheirlegalform.With reference to IAS 1, paragraphs 25 and 26, the directors confirm that, in view of the economic prospects, thecapitalisationandfinancialpositionofthecompany,thereisnouncertaintyasthefactthattheGroupcanoperateasagoingconcernandthat,consequently,inpreparingthefinancialstatementsasat31December2016,itshouldadoptaccountingstandardspreciselyundertheseterms.Theconsolidatedfinancialstatementsclosedasat31December2016havebeensubmittedforvoluntaryauditbyBDOItaliaS.p.A.,undertheappointmentconferreduponitfortheperiod2014-2016,astheGrouprespectsthecasesforexonerationfrom the obligation to draw up consolidated financial statements pursuant to Art. 27 of Italian Legislative Decree no.127/1991.Pleasenotethatdespite itholdscontrolling investments inNetworkSrl,MailUpInc.,AgileTelecomS.p.A.,AcumbamailSLand MailUp Nordics A/S, MailUp is not required to prepare consolidated financial statements. However, as the parentcompanyofsubsidiaries,strictly linkedintermsofthecreationofvaluewithintheGroupbusinessandinconnectionwiththeAIM issuers’ regulation,MailUpS.p.A.haschosenas fromFY2014 toalsoprepareconsolidatedannualaccounts, thisyearpreparedincompliancewiththeIAS/IFRS.ConsolidationstandardsappliedinpreparingtheconsolidatedfinancialstatementsTheconsolidatedfinancialstatementshavebeenpreparedconsolidatingthefinancialstatementsoftheparentcompanyonaline-by-linebasis,andthoseofallcompaniesinwhichthecompanydirectlyorindirectlyholdsthemajorityofvotingrightsasat31December2016.CompaniesaredefinedassubsidiarieswhentheParentcompanyhasthepower,directlyorindirectly,tomanagethemsoastoobtainbenefitsfromtheexerciseofsaidactivities.ThefinancialstatementsofsubsidiariesareconsolidatedasfromthedateonwhichtheGroupacquirescontrolofsuchanddeconsolidatedasfromthedateonwhichsaidcontroleases.


Acquisitionofsubsidiariesisbookedaccordingtothepurchasemethod(purchaseaccount).Thecostofacquisitioncorrespondstothecurrentvalueoftheassetsacquired,sharesissuedorliabilitiesassumedasatthedateofacquisition.The equity investment in the associate that is scarcely significant within the Group has been accounted for using thepurchasecostmethod.Inpreparingtheseconsolidatedfinancialstatements,theitemsoftheassetsandliabilities,aswellasincomeandexpensesofthebusinessesincludedintheconsolidationarea,havebeenstatedonaline-by-linebasis.Thefollowinghavethenbeeneliminated:• thebookvalueof the investmentsheldby theparentcompany in subsidiaries included in theconsolidationarea

andthecorrespondingportionsofthecompanies’equity;• intra-groupfinancialandtradereceivablesandpayables;• incomeandexpensesrelatingtotransactionsimplementedbetweenconsolidatedcompanies;• dividendsdistributedbetweengroupcompanies;• intra-groupguarantees;• thesurplusacquisitioncostwith respect to thecurrentvalueof thesharespertaining to thegroupof theequity

investments,isbookedamongsttheassetsasgoodwill.Anynegativegoodwillisbookedontheincomestatement;• portions of shareholders' equity and the period result pertaining to minority shareholders are highlighted

separately,respectivelyinaspecificitemoftheconsolidatedbalancesheetandincomestatement.Thetaxeffectsderivingfromtheconsolidationadjustmentsmadetothefinancialstatementsofthecompaniesconsolidatedarebooked,wherenecessary,totheprovisionfordeferredtaxorprepaidtaxassets.Fullsubsidiariesconsolidatedonaline-by-linebasisThe line-by-lineconsolidationconcerned the shareholdingsof thecompanies listedbelow, forwhich theparent companydirectlyholdscontrol:

Companyname Cityorforeigncountry

Sharecapital

Shareholders’

equity

Profit/Loss

%held Bookvalue

NETWORKSrl CREMONA(CR) 10,500 208,068 15,638 100 75,000MAILUPINC UNITED

STATESOFAMERICA

41,183*

459,113 932

100 499,514

ACUMBAMAILSL SPAIN 4,500 199,862 106,162 70 499,177MAILUPNORDICSA/S DENMARK 67,001* 1,027,890 (5,375) 100 800,000AGILETELECOMS.p.A. CARPI(MO) 500,000 1,481,934 881,934 100 9,278,325Total 11,152,016

(*historicexchangerateappliedasatthedateoffirstconsolidation)Network Srl has historically handled all the technical services relative to theMailUp® platform for the parent company(softwaredevelopmentandmaintenance,help-desk,deliverabilityandabuse, IT infrastructure). Ina residualmanner, thecompanyalsodesigns,developsandretailsvideosurveillanceandintelligentvideoanalysissolutions.On27February2017,themergerbyacquisitiontookplaceofNetworkintoMailUp.Themergertookeffecton20March2017,thedateonwhichboth companieswere registeredwithCompaniesHouse,whilst the accounting and tax effects applied as from1 January2017, as envisaged by specific regulations. Themerger is justified by the need to simplify the company and productionstructureofMailUpandallowedforthesimplificationofadministrativeprocessesthankstotheeliminationofduplicationsandoverlapping.MailUpInc.,established inSanFranciscobytheparentcompany inNovember2011, itoperateduntil31December2016,aimingtomarketandlocalisetheMailUp®platformintheUnitedStatesofAmericaand,moregenerally,ontheAmericancontinent. InDecember 2016, theparent company conferred the intangible assets relating to theproduct BEEPlugin andBEEPro.Thesubsidiarythereforeresolved,inserviceoftheconferralmadeduringFY2016,toincreaseitscapitalreservesinaccordancewithlocalregulations.Asfrom2017,MailUpIncwillberesponsiblefortheexclusivemarketingofthedifferentversionsoftheBEEeditor.


AcumbamailS.L.,astart-upfoundedin2012withregisteredofficeinCiudadReal,Spain,hasdevelopedane-mailmarketingplatform that iswidespreadon theSpanish-speakingmarkets (SpainandLATAM)and features considerabledevelopmentpotential, with a freemium sales model targeting a lower profile customer base, which therefore complementsMailUp,which is instead increasingly taking a position on themedium/high bracket of themarket. The freemiummodel, in fact,envisagesaninitialleveloffreeuseoftheplatform,whichthereafterrequirespaymentwhereacertainthresholdofuseissurpassed,therebyfavouringcustomerswithlimitedvolumesandareducednumberofaddressees.MailUpNordicsA/Scontrols100%ofthecapitalofthecompanyGlobaseInternationalApS,aDanishcompanyoperatinginthee-mailmarketingsectorontheScandinavianmarkets(Denmark,Norway,Sweden,FinlandandIceland)withafocusonmedium/largecustomers.TheacquisitionoftheDanishcompaniesaimstopositiontheMailUp®platformontheNorthernEuropeanmarket,exploitingtherecognitionoftheGlobasetrademarkandthefavourablepositioningonamarketwithhighentrybarriersandahigh levelofspendingone-mailmarketing,bothbyofferingtheMailUp®platformtonewcustomersandbyprogressivelymigratingGlobaseplatformuserstoMailUp.AgileTelecomSpAwithregisteredofficeinCarpi(MO),isanoperatorauthorisedbytheMinistryofEconomicDevelopmentand Communication to offer a public communication service and is also registered with the Register of Operators inCommunication(ROC)heldbytheItalianAuthorityforTelecommunicationsGuarantees(AGCom).AgileTelecomhasbeenoperating since 1999 as an independent international operator specialised in SMS services, particularly on thewholesaleSMSmarket. Dozens of direct connectionswith carriers and operators across the globe allowAgile Telecom to optimisedeliveryofmessages in all countries, guaranteeing itsbusiness customers thebestpossible sendingquality at the lowestpossibleprice.ThefinancialstatementsusedfortheconsolidationarethoseapprovedordefinitivelypreparedbytheBoardsofDirectorsoftheindividualcompaniesforapprovalbytherespectiveshareholders'meetings.TheconsolidatedfinancialstatementsrefertothesameclosingdateoftheParentCompany.CriteriaforconvertingfinancialstatementsnotpreparedineurosTheconversionofthefinancialstatementsofthesubsidiariesprepared inacurrencyotherthantheeuro,thecurrency inwhichtheconsolidatedfinancialstatementsareprepared,iscarriedoutusingthefollowingprocedures:* theassetsandliabilitieshavebeenconvertedatexchangeratescurrentasat31December2016;* theitemsoftheincomestatementhavebeenconvertedataverageexchangeratesforFY2016;* theemergingexchangedifferenceshavebeendebitedorcreditedtoaspecific reserveofconsolidatedequitynamed

“Reservefromconversiondifferences”;* theexchangedifferencesoriginatingfromtheconversionoftheitemsofequityareallocatedtoaspecificitemofequity

togetherwiththosederivingfromtheconversionofthe incomestatementataverageexchangerateswithrespecttotheyear-endexchangerate;

* wheresuchexists,goodwillandadjustmentstofairvalueconnectedwiththeacquisitionofaforeignentityaretreatedas assets and liabilities of the foreign entity and converted at the exchange rate in force on the date of firstconsolidation.

TablesofthefinancialstatementsThetablesofthefinancialstatementsusedhavethefollowingcharacteristics:a)ontheBalanceSheet-Statementoffinancialposition,theassetsandliabilitiesarestatedinincreasingorderofliquidity;anasset/liabilityisclassifiedascurrentwhenitmeetsoneofthefollowingcriteria:-itisexpectedtoberealised/extinguishedorexpectedtobesoldorusedinthenormaloperativecycle;-itismainlyheldfortrading;-itisexpectedtoberealised/extinguishedwithin12monthsofyearend.Ifnoneofthesethreeconditionsaremet,theassets/liabilitiesareclassifiedasnotcurrent;b)ontheIncomeStatement,thepositiveandnegativeitemsofincomearestatedaccordingtonature;c)Other comprehensive incomehighlights all changes toOther comprehensive profits (losses) occurring during the year,generatedby transactionsother than those implementedwith Shareholders and in accordancewith the specific IAS/IFRSaccountingstandards.TheCompanyhaschosentoshowsaidchangesinaseparatestatementwithrespecttotheIncomeStatement.ChangestoOthercomprehensiveprofits(losses)arestatednetoftherelatedtaxeffects,separatelyidentifying,


in accordance with IAS 1R in force as from 01 January 2013, the components intended to be reversed on the incomestatementinsubsequentyearsandthoseforwhichthereisnoprovisionforanyreversalontheincomestatement;d)theStatementofchangestoshareholders'equity,asrequiredby internationalaccountingstandards,providesseparateevidenceoftheperiodresultandallotherchangesnotcarriedontheIncomeStatement,but insteadallocateddirectlytoOther comprehensive profits (losses) on the basis of specific IAS/IFRS accounting standards and transactions withShareholdersintheircapacityasShareholders;e)theStatementofCashFlowsispreparedapplyingtheindirectmethod.MeasurementcriteriaTangibleassetsThesemainlyconsistof:

a) Plantsandmachineryb) Furnitureandfittingsc) Electronicofficemachines

Tangible assets are booked at the cost of purchase or production, including accessory expenses and net of the relateddepreciation.Routine maintenance costs are charged in full to the income statement. Costs for improvements, modernisation andtransformationsintendedtoincreasevaluearecarriedasassets.Depreciationstartswhentheassetsbecomeavailableforuse.Depreciationiscalculatedonastraight-linebasis,accordingtotheestimatedusefullifeoftherelatedassets,revisedfromtime to time if necessary, applying the following percentages,which have not changed from the previous year andwithapplicationofmonthlydepreciationaccordingtothemonthofpurchaseorcommissioningoftheasset:• Plantandmachinery:

o Genericandspecificplants:20%o Anti-break-insystems:30%

• Otherassets:o Furnitureandfittings:12%o Electronicofficemachines:20%o Signs:20%

Assets with a unit value of less than Euro 516.46, susceptible to autonomous use, are registered in full to the incomestatement.IntangibleassetsAnintangibleassetisbookedonlywhenitcanbeidentified,itissubjecttothecompany’scontrol,itisdestinedtogeneratefutureeconomicbenefitsandifitscostcanbedetermined.Intangible fixedassetsare initially recordedathistoricpurchase costor costof internalproductionand statednetof theamortisationchargedovertheyears,chargeddirectlytotheindividualitems.Ifimpairmentisnoted,theintangibleassetiswrittendownaccordingly,inlinewiththecriteriasetforthinthenextstandard“Impairmentofintangibleassetsandequityinvestments”.Amortisationratesarerevisedannuallyandaltered iftheestimateduseful lifediffersfromthatestimatedpreviously.Theestimateduseful life is fiveyearsfordevelopmentcosts; fiveyearsforthirdpartysoftware; fiveyearsfortrademarksandotherintangiblefixedassets.Developmentoftheplatform,thirdpartysoftwareandtrademarksareamortisedaccordingtotheirassumedpossibleuse,soastoensurethatthenetvalueatperiodendcorrespondstotheirresidualpossibleuse.Amortisation/depreciationstartswhenanassetbecomesavailable foruseand thecorrespondingdevelopmentproject completed.Platformdevelopment,recorded with the consent of the Board of Auditors, includes the development costs incurred internally to create andinnovatetheMailUp®platform.Costsarecapitalisedonlywhenthefollowingcanbeshown:

- theintentiontoimplementtheintangibleassetforuseorsale;- thecapacitytouseorselltheintangibleasset;


- thecapacitytoreliablyvaluethecostattributabletotheintangibleassetduringitsdevelopment;- theavailabilityoftechnical,financialorotherresources,suitabletocompletethedevelopmentanduseorsellthe

intangibleasset;- howtheintangibleassetwillgenerateprobablefutureeconomicbenefits.

Other fixed assets, registered with the consent of the Board of Auditors, relate to the costs of translating platformcomponentsincurredtomakeitusableontheexportmarkets.Fixedassetsunderconstructionandadvancesrelatetocosts incurredfordevelopmentprojectsontheMailUp®platform,whichasat31December2016hadnotbeencompletedand,therefore,couldnotbeused.EquityinvestmentsinassociatesThesearerecordedatpurchasecost,includingaccessoryexpenses,atthetimeofinitialbooking;thereafter,intheeventofevidence thatanequity investmentmayhave suffereda loss in value, theestimatedvalue that canbe recoveredon theequityinvestmentiscalculated.If impairmentisnoted,theequityinvestmentiswrittendownaccordingly,inlinewiththecriteriasetforthinthenextparagraph“Impairmentofintangibleassetsandequityinvestments”.Companies over which another company exerts significant influence, are considered as associates. Influence is assumedwhenintheordinaryshareholders'meetingatleastonefifthofvotescanbecastoronetenth,ifthecompanyhasshareslistedonthestockexchange.Othercurrentandnon-currentassets,tradereceivablesandotherreceivablesTradereceivables,othercurrentandnon-currentassetsandotherreceivablesareintendedasfinancialinstruments,mainlyrelative to receivables due from customers, not derivatives and not listed on an active market, from which fixed ordeterminablepaymentsareexpected.Tradereceivablesandotherreceivablesareclassifiedonthebalancesheetofcurrentassets, apart from those with a contractual due date that exceeds twelve months after the reporting date, which areclassifiedasnon-currentassets.These assets are valued at the time of first booking at fair value and, thereafter, at amortised cost, using the effectiveinterest rate, less impairment. An exception is made for receivables for which the brief duration makes discountinginsignificant.Impairmentof receivables isbookedon the incomestatementwhenobjectiveevidence is seen that theCompanywillbeunabletocollectthereceivableduefromthecounterpartyunderthetermsofthecontract.Thevalueofthereceivablesisstatednetoftherelatedimpairment.PrepaidtaxassetsPrepaidtaxassetsarebookedatnominalvalue.Theyarebookedwhentheircollectionisdeemedtobe“likely”.Seealsothecommentgivenunder“Incometax”.CashandliquidfundsLiquid funds include cash in hand, cheques andbank current accounts anddeposits that canbe reimbursedondemand,whicharereadilyconvertibleintocashandsubjecttoaninsignificantriskofachangeinvalue.Theyarebookedatnominalvalue.OwnsharesOwnsharesarebookedatpurchase cost, includingaccessoryexpensesof the sale andare stated reducing shareholders'equity.Thefinancialeffectsderivingfromanysubsequentsalesarenotedasshareholders'equity.Followingthecompletionof the firstownsharepurchaseprogramme,on28April2016, theshareholders'meetingresolvedtoauthorisepurchasesanddisposalsofownsharesasfromthesamedateofthemeetingandfor18monthsofthatdate, inanamountthatcanbefreely decided by the Board, up to a maximum number of shares that shall not exceed 10% of the share capital. Thepurchasepriceofeachsharemustbenolessandnomorethan15%ofthereferencepricerecordedbytheshareduringthestockmarketsessionofthedaypriortoeachindividualtransaction.AssetsheldforsaleAccordingto theprovisionsof IFRS5“Non-currentAssetsHeld forSaleandDiscontinuedOperations”,non-currentassetswhose book value will mainly be recovered through a sale rather than continuous use, if the requirements are met asenvisagedbythespecificstandard,areclassifiedasheldforsaleandvaluedatthelesserofbookvalueandfairvalue,netofthe costs of sale. As from the date on which said assets are classified as non-current assets held for sale, the related


amortisation is suspended.Liabilitiesconnectedwithsaidassetsareclassifiedunder“Liabilities relating toassetsheld forsale”,whilsttheeconomicresultrelatingtosaidassetsisnotedunder“Otherincome”.Non-currentfinancialliabilitiesFinancialliabilitiesareinitiallyrecordedatcost,correspondingtothefairvalueofthepricereceivednetofthetransactioncostsdirectlyattributabletothe loan.After initialbooking, loansaremeasuredusingtheamortisedcostcriterionandtheeffective interest ratemethod.Theamortisedcost is calculatedconsidering the issuecostsandanydiscountorpremiumenvisagedatthetimeofsettlement.EmployeebenefitsStaffprovisionsdisbursedatorfollowingterminationofthecontractofemploymentmainlyconsistofSeveranceIndemnity(“TFR”),whichisregulatedbyItalianlegislationunderArt.2120oftheItalianCivilCode.TFRisadefinedbenefitsplan,i.e.aformalisedprogrammeofpost-employmentbenefitsthatconstitutesafutureobligationandoneforwhichtheGroupwillbeartheactuarialandrelatedinvestmentrisks.AsrequiredbyIAS19R,theGroupusestheProjectedUnitCreditMethodtodeterminethecurrentvalueoftheobligationsandtherelatedsocialsecuritycostofthecurrentprovisions;thismethodofcalculation requires theuseofobjectiveactuarialhypotheses thatare compatiblewithdemographic (mortality rate, staffturnover rate) and financial (discounting rate, future increases in salary levels) variables. Actuarial gains and losses areimmediatelyrecognisedinfullonthestatementofcomprehensiveincomeincompliancewithIAS19R.Followingthesocialsecurityreform,asfrom1January2007,theTFRaccruedfollowingthecomingintoforceofsaidreform,is allocated to pension funds or treasury funds established by INPS for companieswithmore than 50 employees or, forcompanieswith fewerthan50employees,mayremain inthecompanyas forpreviousyears,oralternativelyallocatedtopensionfunds.Onthis,theallocationoftheaccruingportionsofTFRinpensionfundsorINPSmeansthataportionoftheTFRaccruingisclassifiedasadefinedcontributionsplan,insofarasthecompanyobligationconsistsexclusivelyofpayingthecontributions to the pension provision or INPS. The liability relative to previous TFR continues to constitute a definedbenefitsplan,tobeassessedaccordingtoactuarialhypotheses.Fromanaccountingviewpoint,throughtheactuarialvaluation,theinterestcostthatconstitutesthefigurativeexpensethatthe company would incur in asking the market for a loan in the amount of the TFR is carried under “Financialincome/expense”ontheincomestatement,andthecurrentservicecost,whichdefinestheamountofrightsaccruedduringthe year by the employees who have not transferred the portions accrued as from 01 January 2007 to complementarywelfare, under “payroll costs”. Actuarial gains and losses that reflect the effects deriving from changes to the actuarialhypothesesusedarebookeddirectlyasshareholders'equity,withoutbeingcarriedontheincomestatementandarestatedontheStatementofComprehensiveIncome.BenefitsincentiveplanforseniormanagementAdditionalbenefitsarerecognisedtothemanagementteamofMailUpS.p.A.throughcapitalsharingplans.Theseplansarebooked inaccordancewith theprovisionsof IFRS2 (Share-basedpayments).According to theprovisionsof IFRS2, theseplansareacomponentoftheremunerationofbeneficiaries;hence,forplanswhereremunerationtakestheformofcapitalinstruments,thecostisrepresentedbythefairvalueoftheseinstrumentsasatthedateofassignmentandiscarriedontheconsolidated incomestatementas “Payroll costs” throughout theperiod runningbetween thedateofassignmentandofaccrual,withacounter-entryintoanequityreservecalled“Stockoptionplanreserve”.Changesinfairvaluesubsequenttothedateofassignmenthavenoeffecton initialvaluation.At theendofeachyear, theestimatednumberof rights tobeaccruedthroughtomaturity, isupdated.Thechange inestimatereducesthe“Stockoptionplanreserve”,withacounter-entryunder“Payrollcosts”.ProvisionsforrisksandchargesProvisionsforrisksandcharges includeprovisionsderivingfromcurrentobligations(legalor implicit)derivingfromapastevent,inordertofulfilwhichitislikelythatresourceswillneedtobeused,theamountofwhichcanbereliablyestimated.Ifforecastuseofresourcesgoesbeyondtheyearafter,theobligationisregisteredatcurrentvalue,determinedthroughthediscountingofforecastfutureflows,discountedataratethatalsoconsidersthecostofmoneyandriskoftheliability.Instead, no provision is made against risks for which the onset of a liability is merely possible. In this event, a specificdisclosureisgiveninthespecificinformationsectiononcommitmentsandrisksandnoprovisionismade.TradepayablesPayablesarebookedatnominalvalue.When,consideringthepaymenttermsagreed,afinancialtransactionisimplemented,payablesaremeasuredatcurrentvalue,allocatingthediscountasafinancialexpenseaccordingtocompetence.Othercurrentliabilities


Theserefertovarioustypesoftransactionsandarebookedatnominalvalue.BookingofrevenuesRevenuesarebookedtotheextenttowhichitisprobablethattheeconomicbenefitsareachievedandtherelatedamountcanbereliablydetermined.Thefollowingspecificcriteriainthebookingofrevenuesmustberespectedbeforemakingtheallocationtotheincomestatement:Sales of goods - The revenue is recognised, in accordancewith that established by IAS 18,when all significant risks andbenefitsconnectedwiththeownershipoftheassetaretransferredtothebuyer.Provisionofservices -Revenuesarerecognisedat thetimeofeffectivedisbursementwithreferencetocompletionof theservicesuppliedandinrespectoftotalservicesstilltobeprovided.Interest-Thisisnotedaccordingtocompetence.CostsCostsandotheroperatingexpensesarenotedon the incomestatementwhentheyare incurredaccording toanaccrualsbasisandcorrelationwithrevenues,whentheydonotproducefutureeconomicbenefitsordonotmeettherequirementsforbookingasassetsonthestatementoffinancialposition.Financialexpensesarenotedaccordingtomaturity,onthebasisofthestartoftheterms,usingtheeffectiverate.ImpairmentofintangibleassetsandequityinvestmentsAt leastonceayear, themanagementverifies thenetbookvalueof intangibleassetsandgoodwill, soas todetermine ifthereisanyindicationthattheseassetsmayhavesufferedalossinvalue.Ifthereisanysuchevidence,thevaluethatcanberecoveredontheassetsisestimated.As the intangible assets, and in particular the main item, the costs for developing the MailUp® platform, are almostexclusively concentratedwith the parent company, the verification of their economic-financial recovery is carried out atleastonceayearintheseparatefinancialstatementsoftheparentcompany.ReferenceismadetotheexplanatorynotestotheseparatefinancialstatementsofMailUp,forfulldetails.Goodwillconnectedwithequityinvestmentsinsubsidiariesissubjecttoimpairmenttestingeachyear,evenwherethereareno indicators of loss in value or,more frequently, each time there is an indication that the assetmayhave lost value, ifnecessary.Therecoverablevalueofgoodwillisdefinedasthegreaterofitsfairvaluelessthecostsofsaleandvalueinuse,calculatedasthecurrentvalueoffuturecashflowthatisexpectedtostemfromanassetorcashgeneratingunit(CGU).Thecashflowforecastisbasedoncorporateplansandreasonable,documentedassumptionsregardingthefutureresultsoftheCGUandmacroeconomicconditions,alsoasregardsthediscountingrateusedinthediscountingprocess.Whenitisnotpossibletoestimatethevaluethatcanberecoveredonanindividualassets,thevaluethatcanberecoveredon the cash generating unit towhich the asset pertains, is estimated. In the event of goodwill on equity investments inassociates, referencewasmade to the discounted cash flows of the specific subsidiary, in accordancewith the forecastspreparedinthethree-yearbusinessplansapprovedbytherelatedadministrativebodies.Eachtimetherecoverablevalueofanasset(orcashgeneratingunit)islessthanthebookvalue,thelatterisreducedtotherecoverablevalueandthelossiscarriedontheincomestatement.Thereafter,ifalosspreviouslynotedonassetsotherthangoodwillshouldceasetoapplyorreduce,thebookvalueoftheasset(orcashgeneratingunit) is increaseduptothenewestimatedrecoverablevalue(whichshallnot,inanycase,exceedthenetcarryingamountoftheassethadnoimpairmentbeenapplied).TaxesPeriodtaxincludescurrentanddeferredtax.Incometaxisgenerallycarriedontheincomestatement,exceptwhenrelativetosituationsbookeddirectlyasequity.Currenttax istaxexpectedtobepaidontaxableperiodincomeandcalculatedincompliancewithcurrenttaxregulationsandconsideringtheexemptionsapplicableandanytaxcreditsdue.Deferredtaxiscalculatedusingtheliabilitymethodontemporarydifferencesbetweentheamountofassetsandliabilitiesonthefinancialstatementsandthecorrespondingtaxvalues.Deferredtaxiscalculatedaccordingtothetaxrateexpectedtobeinforceatthetimetheassetisrealisedortheliabilityisextinguished.Deferredtaxassetsareonlynotedifitislikelythatinfollowingyears,sufficienttaxableincomewillbegeneratedtorealisesaidassets.Deferredtaxassetsandliabilitiesareonlyoffsetwhenthereisalegalrighttocompensationandwhentheyrefertotaxduetothesametaxauthority.Income tax relative to previous years includes expenses and income noted during the year for income tax relative topreviousyears.


Profit/(loss)pershareBasicProfit/(loss)per share is calculatedasa ratioof theeconomic result for theweightedaverageofordinary shares in issueduringtheyear,excludinganyownshares.DilutedDilutedprofit/(loss)pershareiscalculatedasaratiooftheeconomicresultfortheweightedaverageofordinarysharesinissueduringtheyear,excludinganyownshares.Inordertocalculatethedilutedearningspershare,theweightedaverageof shares in issue is altered, assuming the conversion of all potential shares with a diluting effect, whilst the Group'seconomicresultisadjustedtoconsidertheeffects,netoftax,oftheconversion.DiscretionaryvaluationsandsignificantaccountingestimatesThe preparation of the consolidated financial statements in compliance with the IFRS requires, from directors, theapplicationofaccountingstandardsandmethodsthat,insomecircumstances,arebasedonvaluationsandestimatesbasedon past experience and assumptions that are considered reasonable and realistic at the time, according to the relatedcircumstances. The application of these estimates and assumptions influences the amounts booked and the informationsupplied.Theendeffectiveresultsoftheitemsforwhichsaidestimatesandassumptionswereused,maydifferfromthatreportedonthefinancialstatements,whichnotetheeffectsoftheonsetoftheeventestimated,duetotheuncertaintythatcharacterisestheassumptionsandconditionsonwhichtheestimatesarebased.Belowisabrieflistofitemsrequiringagreaterdegreeofsubjectivityfromthedirectorsinpreparingtheestimatesandforwhichachange in theconditionsunderlyingtheassumptionsusedmayhaveasignificant impacton theGroup’s financialresults.ProvisionfordoubtfuldebtTheprovisionfordoubtfuldebtreflectsthebestestimateofthedirectorsastothelossesrelativetotheloansportfoliowithregards to customers. This forecast is based on the losses expected by directors, determined according to previousexperiencewithsimilarreceivables,currentandhistoricpastduepositions,carefulmonitoringofcreditqualityandforecastsregardingtheeconomicandmarketconditions.PrepaidtaxPrepaidtaxisbookedonthebasisofexpectationsoftaxableincomeinfutureyears,whichwillallowforitsrecovery.Theassessmentofforecasttaxableincomeforthepurposeofbookingprepaidtaxdependsonfactorsthatmayvaryovertimeanddeterminesignificanteffectsonthepotentialrecoveryofprepaidtaxreceivables.ProvisionsforrisksandchargesAgainstlegalandtaxrisks,provisionsaremadetorepresenttheriskofanegativeoutcome.Thevalueofprovisionsbookedrelative tosaid risks is thebestestimatedasat thedate,preparedby thedirectors.Thisestimateentails theadoptionofassumptions that depend on factors that may change over time and which may, therefore, have significant effects oncurrentestimatespreparedbydirectorsinordertopreparetheconsolidatedfinancialstatements.ConversionofamountsdenominatedinforeigncurrencyFunctionalcurrencyThe financial statementsareprepared inaccordancewith the currencyused in Italy. The functional currency is theeuro,whichisthecurrencyinwhichtheconsolidatedandseparatefinancialstatementsarepresented.TransactionsandaccountingentriesTransactionsperformedinforeigncurrenciesareinitiallybookedattheexchangerateasatthetransactiondate.As at the account closing date,monetary assets and liabilities held in foreign currency are reconverted according to theexchangerateinforceasatthatdate.Non-monetary itemsmeasuredathistoric cost in foreign currencyare convertedusing theexchange rate in forceon thedateofthetransaction.Non-monetaryitemsregisteredatfairvalueareconvertedusingtheexchangerateinforceasatthedateonwhichthevaluewasdetermined.


Accountingstandardsapplicableasfrom2016Below are the accounting standards, amendments and interpretations issued by the IASB applicable as from 31 January2016.IAS16-IAS38amendment-Clarificationsonacceptablemethodsofamortisation/depreciationByRegulationno.2015/2231issuedbytheEuropeanCommissionon02December2015,theamendmentstoIAS16andIAS38wereapprovedaimingtoclarifythatarevenue-basedamortisation/depreciationmethodisnotconsideredappropriateinsofar as it only reflects the flow of revenues generated by said activities and not, instead, the method by which theeconomicbenefitsincorporatedintotheassetareconsumed.Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.IFRS11amendment-BookingofinterestsinjointoperationsBy Regulation no. 2015/2173 issued by the European Commission on 24 November 2015, the amendment to IFRS 11“Booking of acquisitions of equity investments in joint operations” was approved, which establishes that an entity shalladoptthestandardssetoutinIFRS3torecordtheaccountingeffectsconsequenttotheacquisitionofaninterestinajointoperationthatconstitutesabusiness.Specifically,whenacquiringa jointoperation,the investormustmeasuretheassetsandliabilitiesacquiredattherelatedfairvalue,booktheexpensesconnectedwiththeacquisition,definethedeferredtaximpactsderivingfromthereallocationofthepricepaidonthevaluesacquiredand,finally,identifyanygoodwillasaresidualelementderivingfromtheexerciseofpurchasepriceallocationasdescribedabove.Theamendmentto IFRS11applies toboththeacquisitionofan initial interestandsubsequentacquisitions.However,anequityinvestmentheldpreviouslyisnotmeasuredatfairvaluewhentheacquisitionofasubsequentportionkeepsthejointcontrolunchanged (i.e. theadditionalacquisitiondoesnot result in controlover the subsidiary).Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.IAS16-IAS41amendment-Changestothestandardapplicabletoassetsrepresentedbyplantations(applicableasfrom01January2016)Theamendment,publishedinJune2014,aimstoalterthemethodbywhichtomeasureassetsrepresentedbyfruit-bearingplants,suchasvines,rubbertreesandoilpalms.Theamendmentenvisagestheapplicationofthesameaccountingmethodasexistingfortangiblefixedassets,therebyallowingforthebookingatcostasanalternativetothefairvaluemodelmethodpursuanttoIAS41,whichoriginallyappliedtoallbiologicalassets.Plantationsare,infact,comparablewithotherproductionplantsoractivities.Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.ThenewstandarddoesnotapplytotheGroup.IAS1amendment-ClarificationsonthedisclosureRegulationno.2015/2406 issuedbytheEuropeanCommissionon18December2015approvedtheamendmentsto IAS1given in the document “disclosure initiative”, essentially containing clarifications on the method by which financialstatementsdisclosuresshouldbepresented,drawingattentiontotheuseoftheconceptofmeaningandaggregation.Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.IFRS10-12-IAS28amendment-Investmentcompanies:exceptiontotheapplicationoftheconsolidationobligationTheamendment,whichwaspublishedinDecember2014,establishesthatinvestmentcompaniesthatmaycomeunderthescopeofthedefinitionestablishedbythestandard,shallbeexemptfromsubmittingconsolidatedfinancialstatementsandinsteadrequiredtovaluesubsidiariesusingthefairvaluemethodenvisagedbyIFRS9.ThenewstandarddoesnotapplytotheGroup.IAS19amendment-DefinedBenefitPlans:EmployeeContributionsRegulation no. 2015/29 issued by the European Commission on 17 December 2014 approved the amendment to IAS 19“DefinedBenefitPlans:EmployeeContributions”.Theamendmentcomesintoeffectstartingfromyearsstartingonorafter1February2015.Insomecountries,pensionplansrequireemployeesorthirdpartiestomakecontributionstothepensionplan and these contributions reduce the cost incurredby the employer. The change introduces a simplificationonwhichbasistheemployeecontributions(orthosepaidbythirdparties),whennotdependingonthenumberofyearsofservice,canbe recognisedasa reductionof thecostof labour in theperiod inwhich the related service isprovided, rather thanbeingattributedtotheentire“periodofwork”.ThebookingofvoluntarycontributionshasnotchangedwithrespecttothecurrentversionofIAS19(theyarerecognisedasreducingthecostoflabouratthetimepaymentismade).Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.


AnnualImprovementstoIFRSs2010-2012CycleRegulation no. 2015/28 issued by the European Commission on 17 December 2014 approved the document “AnnualImprovements to IFRSs 2010-2012 Cycle” containing amendments, which are mainly technical and editorial, to someinternationalfinancialreportingstandards.Thechangesspecifiedinsaiddocumenttakeeffectasfromyearsstartingonorafter1February2015.Thefollowingamendmentsareincludedinthe2010-2012improvementscycle:IFRS2“Share-basedpayments”:thedefinitionof“vestingcondition”hasbeenclarifiedanddefinitionsof“servicecondition”and“performancecondition”introduced;IFRS3“Businesscombinations”:thestandardhasbeenamendedtoclarifythattheobligationtopayapotentialpricecomesunderthedefinitionofafinancialinstrumentandmustbeclassifiedasafinancialliabilityoranitemofshareholders'equityonthebasisofindicationsgiveninIAS32.Ithasalsobeenclarifiedthatobligationstopayapotentialprice,differentfromthosecomingunderthescopeofthedefinitionofanequityinstrument,aremeasuredatfairvalueateachreportingdate,withchangesnotedontheincomestatement;IFRS 8 “Operating segments”: the change made requires a disclosure to be given on the assessments made in theaggregation of operating segments, describing the segments that have been aggregated and the economic indicatorsmeasuredtodeterminethattheaggregatedsegmentshavesimilareconomiccharacteristics;IAS16“Property,plantandmachinery”andIAS38“Intangibleassets”:bothstandardshavebeenamendedtoclarifythewayinwhichhistoric cost and theprovision for amortisation/depreciationof a fixed asset should bebooked,when an entityappliestherevaluedcostmodel;IAS24“Relatedpartydisclosure”:thechangemadeestablishestheinformationtobesuppliedwhenthereisathird-partyentitysupplyingservicesrelativetothemanagementofmanagerswithstrategicfunctionsintheentitydraftingthefinancialstatements.AnnualImprovementstoIFRSs2012-2014CycleRegulation no. 2015/2343 issued by the European Commission on 15 December 2015 approved the document “AnnualImprovements to IFRSs 2012-2014 Cycle” containing amendments, which are mainly technical and editorial, to someinternationalfinancialreportingstandards.Themainchangesareasfollows:IFRS5“Non-currentAssetsHeldforSaleandDiscontinuedOperations”:theamendmentclarifiesthatwhenanon-currentasset (or group held for disposal) is reclassified from “held for sale” to “held for distribution” or vice versa, thisreclassificationdoesnotconstituteachangetoaplanforsaleordistribution.IthasalsobeenclarifiedthatthestandardsofIFRS5onchangestoasalesplanapplytoanasset(orgroupheldfordisposal)thatceasesbeingheldfordistributionbutisnotreclassifiedas“heldforsale”;IFRS7“Servicecontracts”:ifanentitytransfersafinancialassettothirdpartiesandtheconditionsofIAS39arerespectedfor thederecognition fromtheaccountsof theasset, theamendment to IFRS7 supplies indicationsonwhat ismeantby“residualinvolvement”andaddsaspecificguidetohelpthecompanymanagementdetermineifthetermsofanagreementfortheprovisionofservicesthatregardtheassettransferreddoordonotgiverisetoaresidualinvolvement;IFRS 7 “Interim financial statements”: it clarifies that the disclosure required by the previous amendment to IFRS 7“Disclosure-Offsettingfinancialassetsandfinancialliabilities”neednotbesuppliedininterimfinancialstatements,unlessspecificallyrequiredbyIAS34;IAS19“Employeebenefits”:thestandardrequiresthediscountingrateusedtodiscountobligationsforbenefitssubsequentto termination of the contract of employment to be determinedwith reference to themarket performance of bonds ofprimarycompaniesandincountrieswherethereisno“deepmarket”forsaidsecurities,themarketreturnsofsecuritiesofpublicentitiesmustbeused.Thechangeintroducedwiththe2012-2014improvementscycleestablishesthatinassessingifthereisa“deepmarket”ofbondsofprimarycompanies,itisimportanttoconsiderthemarketonalevelofcurrencyandnotofindividualcountry;IAS34“Interimfinancialstatements”:itliststheinformationthatmustbegivenininterimfinancialstatements,unlessgivenelsewhere inthe interimfinancialstatements.Theamendmentclarifiesthemeaningof“disclosuregivenelsewhere intheinterimfinancialstatements”,explainingthatreferenceismadetootherdocumentsthatmustbemadeavailabletousers,togetherwiththeinterimfinancialstatements(e.g.theReportonoperations).Accountingstandards,amendmentsandinterpretationsapproved,butnotyetapplicable/notappliedearlybytheGroupIFRS9-Financialinstruments(applicableasfrom01January2018)Thenewdocumentrepresentsthefirstpartofaprocessinstages,whichaimstofullyreplaceIAS39.IFRS9introducesnewcriteriafortheclassificationandmeasurementoffinancialassetsandliabilitiesandforthederecognitionoffinancialassets.Morespecifically, thecriteria for therecognitionandmeasurementof financialassetsandtherelatedclassification inthefinancialreport,havebeenamended.Thenewprovisionsestablishamodelfortheclassificationandvaluationoffinancialassetsbasedexclusivelyonthefollowingcategories:assetsvaluedatamortisedcostandassetsvaluedatfairvalue.Thenew


provisionsalsoestablishthatequityinvestmentsotherthanthoseheldinsubsidiaries,jointoperationsorassociates,shallbemeasuredatfairvaluewiththeallocationoftheeffectstotheincomestatement.Ifsaidequityinvestmentsarenotheldfortrading, the changes in fair value can be noted in the statement of comprehensive income,maintaining only the effectsconnected with the distribution of dividends on the income statement. Upon disposing of the equity investment, theamountsnoted in thestatementofcomprehensive incomeshallnotbebooked to the incomestatement.On28October2010, the IASB supplemented the provisions of IFRS 9, including the criteria for the recognition and measurement offinancial liabilities. More specifically, the new provisions require that, if measuring a financial liability at fair value withallocationoftheeffectsontheincomestatement,thechangesinfairvalueconnectedwithchangestothecreditriskoftheissuer(the“owncreditrisk”)shallbenotedonthestatementofcomprehensiveincome;thisitemshallbeallocatedtotheincomestatementsoastoensurethesymmetricalrepresentationwithotheritemsconnectedwiththeliability,avoidinganyaccountingmismatch.Moreover,inNovember2013,anamendmentwaspublishedthatintroducedthreeimportantchanges.Themostimportantregards hedge accounting and introduces a new model that incorporates a series of improvements aimed at aligningaccountingtreatmentswiththemanagementofriskappliedbythecompany.Theothertwochangesregardtheperiodoffirst-timeapplicationofthestandard,offeringthepossibilityofimmediateadoptionandrecordingdirectlyonthestatementofcomprehensiveincomeoftheeffectsderivingfromthechangesintheissuercreditrisk(the“owncreditrisk”).TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IFRS15-RevenuefromContractswithCustomers(applicableasfrom01January2018)The new standard aims to improve the quality and standardisation in the recording of revenues and comparability offinancial statementsprepared inaccordancewith the IFRSand theAmericanaccountingstandards.According to thenewstandard,themodelforrecognisingrevenuescannolongerbebasedontheearningmethod,butrathermustusetheasset-liabilitymethod that draws attention to the time of transfer of control over the asset sold. TheGroup believes that theadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.Accountingstandards,amendmentsandinterpretationsnotyetapprovedIFRS16-Leasing(applicableasfrom01January2019,withthepossibilityofearlyapplication)On13January2016,theIASBpublishedthenewaccountingstandardIFRS16Leasing.ThenewstandardreplacesIAS17andprovides accounting representationmethods that aremore suitable in terms of reflecting the nature of the lease in thefinancialstatements.ThenewIFRS16appliesasfrom01January2019,butearlyapplicationispermittedforcompaniesalsoapplyingIFRS15-RevenuefromContractswithCustomers.TheGroupisstillfinalisingitsmeasurementoftheimpactofthenew standard on its equity and financial structure. According to the provisional analyses currently being finalised, thegreatestimpactwillregardcontractsinplacerelativeto:properties,carsandelectronicmachines.TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IAS12amendment-Incometax(applicableasfrom01January2017,withthepossibilityofearlyapplication)On19January2016,theIASBpublishedsomeamendmentstoIAS12.Theamendmentaimstoclarifyhowtobookdeferredtaxassetsrelativetodebtinstrumentsmeasuredatfairvalue.TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IAS7amendment-StatementofCashFlows(applicableasfrom01January2017)On29 January2016, the IASB issuedamendments to IAS7 “StatementofCashFlows”:Thechange requires the financialstatementstoprovide informationonthechangesto financial liabilitieswiththeaimof improvingthedisclosuregiventoinvestors to help them better understand the changes affecting these payables. This amendment, acting only on thepresentation,willhavenoimpactonthefinancialpositionandGroupprofitability.IFRS14-RegulatoryDeferralAccounts(applicableasfrom01January2016)ThenewstandardallowsonlythoseadoptingIFRSforthefirsttimetocontinuetobookamountsrelatingtorateregulationaccordingtothepreviousaccountingstandardsadopted.InordertoimprovethecomparabilitywithentitiesapplyingIFRSandthatdonotbooksaidamounts,thestandardrequirestheeffectofrateregulationtobepresentedseparatelyfromtheother items. The European Commission has decided not to start the approval process of this standard ad interim, andinsteadtoawaitthefinalstandard.Thenewstandarddoesnotapplytotheconsolidatedfinancialreport.IFRS10-IAS28amendment-Saleorcontributionofassetsbetweenaninvestoranditsassociateorjointventure(applicableasfrom01January2016)


Theamendment,whichwaspublishedinSeptember2014,aimstosolveaconflictbetweentheprovisionsofIFRS10andIAS28ifaninvestorsellsorcontributesabusinessorassociateorjointventure.Themainchangemadetotheamendmentisthe fact that thecapitalgainor lossconsequent to the lossof controlmustbe recorded in fullat the timeof thesaleorcontributionofthebusiness.Apartialcapitalgainorlosswillberecordedonlyintheeventofasaleorcontributioninvolvingindividualassetsonly.TheIASBhassuspendedpublicationandapprovalofsaidamendmenttoadatetobedefined.IFRS2amendmentClassificationandmeasurementofshare-basedpayments(issuedon29June2016)It includesclarificationsontheaccountingofstockoptionssubjecttovestingconditionsconnectedwithperformance.TheGroup believes that the adoption of the new standard will not have any significant impact on its financial position andprofitability.IFRS4amendment:ApplicationofIFRS9FinancialinstrumentstoIFRS4Insurancecontracts(issuedon12September2016)TheamendmentintroducesdifferentmethodsofbookingforinsurancecontractscomingunderthescopeofapplicationofIFRS4.Theamendmentdoesnotapplytotheconsolidatedfinancialreport.SpecificationsonIFRS15-RevenuefromContractswithCustomers(issuedon12April2016)TheIASBhasprovidedpracticalindicationsoncertainsubjectscoveredbyIFRS15(identificationofperformanceobligations,mainconsiderationsversusagentandlicensing).TheanalysisofthepotentialimpactofthisamendmentwillbeconsideredatthesametimeastheapplicationofIFRS15,describedabove.AnnualImprovementstoIFRSs2014-2016CycleThe document “Annual Improvements to IFRSs 2014-2016 Cycle”, not yet approved, containing amendments, which aremainlytechnicalandeditorial,tosomeinternationalfinancialreportingstandards.ThemainclarificationsregardIFRS1,IAS28andIFRS12.WebelievethattheseimprovementswillnotimpacttheGroup’sfinancialposition.IFRIC22interpretation-ForeignCurrencyTransactionsandAdvanceConsideration(issuedon08December2016)IFRIC 22 aims to clarify the booking of operations involving the receipt or payment of advances in foreign currency, inparticularwhenanentityrecordsanon-monetaryassetorliabilitybeforebookingtherelatedasset,revenueorcost.IFRIC22appliesasfrom01January2018;earlyapplicationispermitted.IAS40amendment-TransfersofInvestmentProperty(issuedon08December2016)Themainchanges introducedbytheamendment includethechange in intendedpurposeofan investmentpropertyonlybeingabletotakeplacewhenthereisevidenceofachangeinuse.RiskanalysisIngoingaboutitsbusiness,theCompanyisexposedtorisksanduncertainties,derivingfromexogenousfactorsconnectedwith the general macroeconomic context or the specific context to the operating segments in which it goes about itsbusiness,aswellastorisksderivingfromstrategicchoicesorinternaloperatingrisks.The identificationandmitigationofsuchriskshasbeencarriedoutsystematically,allowing for themonitoringandtimelyoverseeingoftherisklevelsdetected.Underthescopeofthebusinessrisks,themainrisksidentified,monitoredandmanagedbythecompanyareasfollows:-riskconnectedwiththegeneraleconomictrend;-market-relatedrisks;-risksconnectedwithfinancialoperationsRiskconnectedwiththegeneraleconomictrendTheeconomic-financialpositionofthecompaniesbelongingtotheGroup,isinfluencedbyallfactorscomprisingtheItalianandinternationalmacroeconomiccontext.Duringthereportingperiod,despitethemodestsignsofrecovery,situationsofuncertainty continue to persist in economic terms in general. This phase is following a long period of recession that hasresulted in a significantdeteriorationof theeconomy. In Italy, like inother EU countries,widespreadausteritymeasureshave been adopted,which have negatively influenced consumer trust, their buying power and spending capacity. In thisdifficultmacroeconomicsituation,theGrouphassuccessfullygrownandachievedimportantobjectives,butthecrisisoftheEurozonecountriesandunforeseeableeffectsof its continuation,may inany casehavenegativeeffectson the companybusiness.Marketrisks


Thesectors inwhichtheGroupoperatesarecharacterisedbyrapidtechnologicaldevelopmentandsufferthecompetitivepressure deriving from the development of technology. The company’s success depends, amongst other aspects, on thecapacity to innovative and strengthen its technologies, in order to respond to the technological progress in the sector inwhichitoperates.MailUpconsequentlyfindsitselfhavingtocopewithamoreacutecompetitionbyvirtueoftheemergingtechnologiesandservicesthatmaybeintroducedorimplementedinthefuture.Thenewtechnologies,infact,maylimitorreducetheGroup’sbusinessand/orencouragethedevelopmentandgrowthofnewoperators.Inparticular,theSMSsystemmaybesurpassedbyothernetwork-basedsystems(suchasMessenger,WhatsApp,WeChat,PushNotifications),withtheconsequence that the Groupmay not be able to successfully and/or quickly manage any transition to the use of thesetechnologicalsolutions.

If the solutions offered by the Group should be unable to satisfy the needs of clients and/or respond to technologicalprogress, theGroupwill need tobeable to improveanddevelopand introducenewservices,newapplicationsandnewsolutions onto the market quickly and at competitive prices. The incapacity to improve, develop, introduce and supplyservicesquicklythatareabletosatisfymarketdemands, including intechnological terms,mayhaveanegative impactonoperating results ormaymake the technology offeredobsolete. In order tomaintain its competitiveness on themarket,investmentswillthereforebeneededinresearchanddevelopment,withahighcapacitytoadjusttocontinuetorespondtotherapidtechnologicalchangesandconstantlydevelopthecharacteristicsof itsservicessoastorespondtothechangingmarketdemands.

If the Group should be unable to adjust promptly to the technological evolution and/or the introduction of a newtechnology,negativeeffectsmaybeseenonthecompany’seconomic,equityandfinancialposition.CreditriskThecreditriskistheexposuretopotential lossesderivingfromfailurebycounterpartiestofulfiltheobligationstheyhaveassumed.Creditmanagementisentrustedtothefinanceandadministrationdepartment,which,onthebasisofformalisedassessment and appointment procedures of commercial partners, seeks to minimise the risk. Following the economy’sdifficulties, stricterprocedureshavebeenadoptedtoquantifyandcontrolclient risk levels. Inorder to reduce theriskofinsolvency deriving from trade receivables, a series of measures has been introduced aiming to encourage the use ofelectronicpaymentsystems(creditcards,PayPal)bycustomers,forexamplestrengtheningandinnovatingthee-commercesalesystem.Thischoiceresultedintheconstantgrowthofcollectionsmadebyelectronicpaymentsystems,improvingthequalityoftradereceivablesandreducingtheimpactofthecostsofdebtcollection.ItmustbeconsideredthatthefinancialactivitiesoftheCompanyhaveagoodcreditstanding.LiquidityriskThe liquidityriskconsistsof the impossibilityofrespectingpaymentcommitmentsduetodifficulties inobtainingfundsorliquidatingassetson themarket.Theconsequence isanegative impacton theeconomic results if theGroup is forced toincur additional costs to fulfil its commitments or, as an extreme consequence, a situation of insolvency that risks thecompanyasagoingconcern.Atpresent,also thanks to its listingon theAIMmarketand theexcellent relationswith thebankingsystem,theMailUpGroupenjoysagoodlevelofliquidityandreduceddebt,aimedexclusivelyatgrowthbyexternallines, implemented through acquisitions, during the second half of 2015, of subsidiaries. This process enabled theconfirmationoftheorganicgrowthseenforseveralyearsnowandthebookingofexcellentresultsfor2016.Inordertooptimisethemanagementoffinancialresources,reducingtheliquidityrisk,theGrouphasadoptedprocessesforthe systematic monitoring of prospective liquidity conditions, in connection with the business planning process. TheforeseeablecashflowforFY2017includes,inadditiontothedynamicsofworkingcapitalandinvestments,alsotheeffectsof thematurityofcurrent liabilities.Themanagementexpects tocopewith its financialneeds through the flowsderivingfromoperationsandcashonhand.Consideringthepositivetrendofsalesvolumes,whichisexpectedtobemaintainedintheforthcomingyears, it isexpectedthatinFY2017,theGroupwillbeabletogeneratefinancialresourcesthat,togetherwithcurrentfunds,willbeabletoguaranteesuitablesupportfortheordinaryandextraordinaryinvestmentsplannedtoo.Itisconsideredthattheliquidityriskisnotsignificant.

InterestrateriskTheGroupandinparticularMailUphasobtainedfinancialresourcesthroughbankstocopewithextraordinaryoperations.Asat31December2016, theconsolidatednet financialposition is inanycasepositive formorethanEuro950thousand.Short-termamountsduetobanksandother lenderscomestoEuro1,262thousand,whilstthemedium-termdebt isEuro2,246thousand.Theunderlyingloancontractsenvisagetermsandconditionsthatareinlinewithmarketpractice.


Theloansareconnectedwiththeriskofinterestratechanges,astheyarenegotiatedatvariablerates.Itcannotbeexcludedthat growth of interest rates may result in an increase in costs connected with the financing of debt, with consequentnegativeeffectsontheconsolidatedeconomic-financialposition.Riskofrecovery/impairmentassetsTheriskofrecoveringthevalueofthegoodwillheldtakesconcreteforminconnectionwiththeeconomicperformanceandthecapacity toproduce sufficient cash flow toguarantee recoveryof the investmentvalue.This risk ismonitoredby themanagement through the regular verification of economic results, including under the scope of specific valuationprocedures,suchas,forexample,bycarryingoutimpairmenttestsatleastonceayear.DisclosureonthebookvalueoffinancialinstrumentsBelowisthedisclosureonthebookvalueofthefinancialinstrumentsforthefinancialyearendedon31December2016: 31December2016MailUpGroup (inunitsofeuros) Fairvalue

instrumentsmeasuredthroughprofitorloss(FVTPL)

Receivables,payablesandloans Fairvalue

Fairvaluehierarchy

Otherfinancialassets Othernon-currentfinancialassets 69,653 69,653 Level3Othercurrentfinancialassets 108,062 108,062 Level3Financialassetsnotheldasfixedassets 40,404 40,404 Level1Tradereceivables Tradereceivables 3,346,710 3,346,710 Level3Liquidfundsandequivalent Cashatbankandpostoffice 4,461,219 4,461,219 Level1 Non-currentfinancialliabilitiesandpayables Amountsduetobanks 2,246,145 2,246,145 Level1Currentliabilities Amountsduetobanksandotherlenders 1,261,627 1,261,627 Level1Tradepayables 2,942,626 2,942,626 Level3 PotentialliabilitiesIn addition to that indicated in the paragraph on Provisions for risks, no legal or tax disputes are currently underwayinvolvingtheGroupcompanies.


NOTESONTHEEQUITY,FINANCIALANDECONOMICSTATEMENTS

AssetsNon-currentassetsTangibleassets(1)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes709,130 754,331 (45,201)

Description 31/12/2016 31/12/2015 ChangesPlantsandmachinery 3,669 8,919 (5,250)Otherassets 705,461 745,412 (39,951)Total 709,130 754,331 (45,201)

“Otherassets”relatestothecostforthepurchaseofofficefurnitureandfittings,thepurchaseofelectronicofficemachines,miscellaneous equipment, signs and costs for the purchase of mobile telephones, booked net of periodamortisation/depreciationandconsolidationadjustments.Noimpairmentorwrite-backswereappliedthisyearorduringpreviousyears.Intangibleassets(2)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes3,756,336 3,107,057 649,279

Description 31/12/2016 31/12/2015 ChangesPlatformdevelopment 3,502,145 2,837,471 664,674Thirdpartysoftware 165,900 159,473 6,427Trademarks 22,566 20,644 1,922Other 65,725 89,469 (23,744)total 3,756,336 3,107,057 649,279

“Platform development” includes costs for the development of the MailUp® platform, net of relevantamortisation/depreciation,ofwhichdetailsaregivenbelowontheactivitiescarriedout;thissameitemalsoincludescostsforprojectstodeveloptheMailUp®platformcurrentlyinprogress,activitiesnotyetcompletedatyearendandwhichhavenot,therefore,beenamortised.ThecapitaliseddevelopmentsrelativetotheBEEsoftwareshouldalsobementioned.ThisassetwasthenconferredbytheparentcompanytothesubsidiaryMailUpInc,asfrom31December2016,atthevalueofEuro462,162.“Third party software” includes costs relative to software owned by third parties. “Trademarks” includes the expensesincurred for thedepositandprotectionof theMailUptrademark in Italyand inothercountriesconsideredasstrategic incommercialterms.“Other” fixedassets consistof the costs for translatingplatformcomponentsofmultiple-yearuse, incurred intoorder to


allow for its use on export markets (e.g. English, Spanish, Japanese, Bahasa) under the scope of the general strategicinternational growth project pursued by the Group. They also include, for residual amounts, improvements to leasedpropertiesownedbythirdparties.As regards the potential recovery of the value of intangible assets, please remember that the parent company directorstested them for impairment, on the basis of the latest economic-financial forecasts for future years (2017-2019) andverifyingthattherecoverablevalue,determinedbythediscountedcashflowsofMailUpexceedsthenetbookvalueoftheintangible fixed assets. The value of the intangible assets held by MailUp is by far the greatest of the total of theconsolidatedfinancialstatements,hencethetestofpotentialrecoverywaslimitedtotheparentcompanyonly.Referenceisthereforemadetothespecificparagraphoftheseparatefinancialstatementsfordetailsofimpairmenttesting.Belowisasummaryofthemaindevelopmentactivitiescarriedoutin2016.NewfunctionswereaddedtotheMailUp®platformin2016.Developmentactivitieshavefocusedontheanalysisofusabilityoftheplatformandrevisionoftheuserinterface,resultingintherelease,inFebruary2017,oftheversionMailUp9oftheplatform,aswellasonthedevelopmentofinnovativenewmodulesbasedonthephilosophyof“embeddableplugin”,thatis, the creationof services thatmaybeoffered separately in the future, aswas the case forBEEPlugin andBEEPro.Newfeatureswerealsodeveloped:

• “SimplifiedAutomation”thatallowscreatingautomationwithasimplified“draganddrop”interface.Thisfunctioncan be used for example to create “Welcome series”, i.e. a series of automated e-mails timed from the date ofregistration, happy birthday e-mail or automatic e-mail following the abandonment of a cart on an e-commercewebsite. This type of e-mail is referred to as “transactional” because it is not sent asmass e-mail but only after aspecificeventrelatedtoaspecificrecipientandisamongthemosteffectivee-mailmarketingmethodsasevidencedbythe2016E-mailMarketingObservatoryResearch;• “Landingpage” thatallowsusing the same“editor” tocreatee-mailsalso for thecreationof landingwebpages,useful not only following the sending of marketing e-mails, but also suitable for those who send SMS marketingcampaigns.Infact,itresolveswithsimplicitytheneedtohave“responsive”landingpages,i.e.suitabletobedisplayedeffectivelyevenonmobiledevices,adaptingthecontentandlayouttothetypeofdisplay;• New API (application programming interface) methods that allow more sophisticated integrations between theMailUp®platformandcustomerdigitalapplicationsandalsoactivatethepositiveexternalitiesofthedigitalecosystem,with several companies and programmers that have decided to independently develop integrations between theMailUpserviceandthird-partyapplications/services.ThisledtothecreationofPymailup,alibraryinPythonlanguagethat simplifies integration with Python, Prestashop systems, one of the most popular e-commerce platforms, MSDynamicsCRM,DrupalSMSandotherssuchasthenewintegrationwithMagentothatwillbereleasedinopen-sourcemode.

InFY2016,development focussedmainlyon the launchofMailUp9, thecompletely redesignedversionof theplatform,enriched with new functions for the automation of e-mail and SMS marketing. MailUp 9 is one of the most importantreleasesof theplatform, the result of amajor interventionon theuser experience and comeswith an all-new interface,thanks to thegraphical redesignand reorganisationaccording to functional areas,with theaimofofferingbusinessesaneven simpler, more user-friendly browsing. Research continues on Marketing Automation technology, with MailUp 9introducing new functions for the creation of work flows: as from today, users can now create automatic processes todelivermulti-channelcampaignsinatimely,customisedfashion.Intheareadedicatedtothecreationofe-mails,MailUp9thenintroducesCollaboration,aninnovativetoolbywhichtosharepre-launchstagesofthecampaign,allowingcolleaguesorcustomerstocollaborateonallaspectsofthemessage,throughtofinalapproval.Again under the scope of development, a significant amount of thework carried out regarded the “Innovative BigDataAnalytics System”project.The focusof theproject is thedevelopmentof anewBigDataAnalytics system for small andmedium-sizedcompanies.ItisaprojectwithamajorimpactonthefuturebusinessofMailUpinthemediumtolongterm,havingamarketpotential alsoat international level, inparticular in theEnglish-speakingworld,whereBigDataAnalyticstoolsareusedtodayonlyby largemultinationalplayersofthesector,duetothecomplexityofthetechnologiesandhighspecialization of resources that need to be put in place. On 29 April 2016, the Directorate General for EconomicDevelopmentoftheLombardyRegionapprovedthefundingoftheprojectpresentedbyMailUpasleaderofaconsortiumthatinvolvesanumberofexcellencecompaniesadheringtotheTechnologiesCentreofCremonaandtheCRITConsortium(Cremona Information Technology): Microdata Service, Lineacom and Politecnico di Milano. MailUp will receive up to amaximumofEuro860,122non-repayablein24monthswithrespecttoatotalinvestmentofEuro2,045,648intheperiod.


Thefundingwillcovercostsforpersonnel,training,toolsandequipmentandconsultancyservicesneededfortherealizationoftheinvestments,whichwillbeimplementedoverthenext24months.Goodwill(3)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes10,387,313 10,387,313 -

Goodwillderivingfromtheacquisitionofcompaniesisdetailedasfollows:

Description 31/12/2016MailUpInc 162,418AcumbamailSL 464,923MailUpNordicsA/S 485,636MailupNordics/Globase 460,137AgileTelecomS.p.A. 8,735,044Total 10,308,158

Goodwillisalsobookedrelativetothebusinesslinefaxator,managedbyAgileTelecom,forEuro79,155.ImpairmenttestingofgoodwillThe directors, as recalled in the section on the accounting standards adopted, verify the potential recovery of goodwillrecordedon the consolidated financial statements at least once a year, using specific assessments (impairment tests) oneachcashgeneratingunit(or“CGU”).Goodwilliscalculatedasthedifferenceinpurchasevalueoftheequityinsubsidiariesandshareholders’equityofthesubsidiaryatthetimeoffirstconsolidation.Inthespecificcase,theCGUsarerepresentedbythespecificsubsidiarytowhichgoodwill refers.Thepotential recoveryof the investment isdeterminedwithreferencetoforecastcashflow.Impairment testing was carried out considering the latest economic-financial forecasts for future years (2017-2019), asresultingfromthebudgetdataforFY2017andapplyingtheforecastsofdatacontainedthereinforFYsfrom2017to2018.Theseforecastspreparedfor impairmenttestinghavebeenapprovedbytheadministrativebodiesofthesubsidiariesandconsidertheeffectsenvisagedfortheapplicationofthereferenceIAS/IFRSaccountingstandards.Thepotentialrecoveryofthevalueofgoodwillrecordedischeckedthroughacomparisonofthebookvaluewiththerelatedvalue for recovery,determinedas the value inuse (recoverable amount). This recoverable amount is representedby thecurrent value of future cash flows of the subsidiaries, both for the specific flow period and in terms of the specificforecasting time frame,on thebasisof thedeterminationof the terminal value (or “TV”) inapplicationof theperpetuitymethod.In lightof theGroup’soperations and valuationpractice relative to similaroperations in Italy andabroad, referencewasmade to the following valuationmethods, commonly recognised by professional practice for operations of this type andcompaniesoperatinginthereferencesectors:

• Analyticalmethods(discountedcashflow),asmainmethod;• Marketmultiplesmethod,ascontrolmethod.

The discounted cash flow (DCF)method applied to the forecasts of the 2017-2019 Plan approved by the administrativebodiesof thesubsidiariesand terminalvalueof thebusinessestimatedat theendof thespecificperiodof the referencebusinessplan,wasbasedontheapplicationofaWACC(weightedaveragecostofcapital)discountingrate.Thecalculationoftheweightedaveragecostofcapitalisperformedonthebasisofthefollowingvariables:

§ Riskfreerate:Implicitrisk-freerateofreturndeterminedaccordingtothethree-yearaveragereturnoftheten-yearItalianBTP;

§ Riskpremium:returnexpectedbyinvestorsonaspecificmarketaccordingtothespecificcountryriskandaveragecostofdebt(spread);


§ Sector-specificbetathatmeasurestheexpectedvariabilityofreturnsupona1%variationinthemarketprices;§ Thecostofdebtisalsoconsiderednetofthespecifictaxrate;§ The final value of theWACC is weighted according to the company’s specific debt/equity ratio, to express the

weightofrecoursetoowncapitalandthirdpartyfinancialcapital.Inorder to further stress the resultsof the impairment test and verify that it holdsout even in theworsthypothesesofexpectedresults,thedirectorsappliedprudentsensitivityhypothesesthatsimulateareductioninEBITDA.Again,forreasonsofprudence,insomecases,theprospectivegrowthrateoftheterminalvaluehaszeroed.Thesensitivityandgrowthratehypotheses have beenmodulated according to the specific business of the subsidiaries: in the case of Acumbamail andMailUp Inc,as thebusiness is still in the initialor launchstages, sensitivitywas raised to15%of revenues, to reflect thegreateruncertaintysurroundingthebrilliantforecastsofthebusinessplan,justlike,againstthesignificantgrowthpotentialof the twocompanies,agrowthratehasbeenentered,albeitprudent,of1%, tobeapplied to the terminalvalue. In thepresenceofamoreconsolidated,maturebusiness,asinthecaseofAgileTelecom,thegrowthrateoftheterminalvaluehasbeen zeroed and sensitivity adjusted to 2016 turnover that was already considerable in absolute terms. For the Danishsubsidiaries MailUp Nordics/Globase, the three-year plan working hypothesis envisages the gradual replacement of theGlobaseplatformwithMailUp,aprocessthatshouldflankthemaintenanceofexistingcustomerswiththedisseminationofMailUpamongstnewcustomersinNorthernEurope,therebyallowingfortheachievementofinterestingdevelopmentratesinthemedium-term,ahypothesisthatisincludedinthetestsalbeitwithaprudent1%ingrowth.The multiple prospects of comparable listed companies are taken from the last Equity Research published by EnVentResearch and Analysis, dated 18October 2016,with reference to listed digital companies, likeMailUp, on the AIM Italymarket.More specifically, referencewasmade to theprospectiveaverage for2016,of themultiples relating to the salesrevenuesofasampleofreferencecompanies,EnterpriseValueEV/Salesand,bywayofafurthermethodofcomparison,theaverageofEV/EBITDAmultiples,thencalculatingtheaverageofthevaluesthusobtained.Following the assessments performed, confirmed by the positive outcome of the test performed with both methodsdescribedabove,noneedwasseentoapplyanyimpairmenttothebookvaluesandintangiblefixedassetsbooked.Equityinvestmentsinassociates(4)

Companyname Country 31/12/2015 RevaluationsWrite-downs Purchases 31/12/2016

CRITCremonainformationTechnology Italy 102,000 102,000Total 102,000 102,000

TheamountbookedamongsttheassetsofthebalancesheetreferstotheequityinvestmentofMailUpS.p.A.inConsorzioCRIT(CRemonaInformationTechnology).The purpose of the CRIT is to develop a technological pole in Cremona that enables synergies to be achieved betweenconsortiummembers,todevelopservicesofmutualinterest,bothmanagerialandoperativeinnature(co-working,start-upincubator, common training structures, canteen,meeting room). The consortium also developed a building complex, the“Digital innovation pole”, where Cremona-based ICT companies, starting from the consortiummembers themselves, canoperate at their best and construct a centre of excellence that can generate new businesses and transfer economicopportunities and better quality of life to the local world of businesses and communities, deriving from the use of newcommunicationand information technologies.MailUpwillbemoving itsoperativeheadquarters toCremona,at thePole,duringthefirsthalfof2017.Othernon-currentassets(5)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes


69,653 136,348 (66,695)

Description

31/12/2015 Increase Decrease Reclassifications 31/12/2016

Equityinvestmentsinothercompanies

2,000 (2,000) -

Receivablesfromassociatedcompanies

14,641 14,641

Otherreceivables 134,348 2,316 (2,422) (79,230) 55,012Total 136,348 2,316 (2,422) (66,589) 69,653

ThecolumnonreclassificationsrelatestotheamountreceivablefromtheCRITConsortium,whichbecameanassociatein2016,forEuro14,641,whilstfortheremainingamount,referenceismadetothereceivablesderivingfromtheTFMpolicy,reclassified amongst current assets insofar as itwill be liquidated at expiry of themandate of the parent company BoD,during approval of the annual financial statements. Equity investments in other companies have been reclassified in theinvestmentsaccounttowardsassociates.Receivablesallhaveamaturityinexcessof12months.“Receivablesduefromothers”relatetocautiondepositsduebeyondtheyear.Prepaidtaxassets(6)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes785,139 647,377 137,761

Prepaid tax assets refer to temporary differences recorded in the individual financial statements and consolidationdifferencesthatwillreverseoverthenextfewyears.Detailsinconnectionwitheachgroupcompanycanbesummarisedasfollows:

Description 31/12/2016

MailUpS.p.A. 494,723NetworkSrl 17,841MailUpInc 116,172AcumbamailSL 2,035MailUpNordicsA/S 82,051MailupNordics/Globase 21,522AgileTelecomS.p.A. 2,938Prepaidtaxforconsolidationdifferences 47,857Total 785,139

Currentassets


Tradeandotherreceivables(7)


Belowisthebreakdownofreceivablesbygeographicarea:

ReceivablesdividedbyGeographicArea

Tradeaccounts Associatedcompanies

Total

Italy 1,953,295 49,554 2,002,849EU 985,527 985,527Non-EU 407,888 407,888Total 3,346,710 49,554 3,396,264

Othercurrentassets(8)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes1,742,954 729,462 1,013,492

Description 31/12/2016 31/12/2015 ChangesInventories 4,847 22,505 (17,658)Taxreceivables 355,784 246,426 109,358Otherreceivables 1,077,272 131,581 945,691Financialassetsnotheldasfixedassets 40,404 39,893 511Accrualsanddeferrals 264,647 289,057 (24,410) 1,742,954 729,462 1,013,492

Liquidfunds(9)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes4,461,219 3,265,717 1,195,502

Description 31/12/2016 31/12/2015Cashatbankandpostoffice 4,460,497 3,264,705Cashandcashequivalents 722 1,012 4,461,219 3,265,717

Thebalancerepresentsliquidfundsandcashaswellasvaluablesheldontheclosingdateoftheyear.

Description 31/12/2016 31/12/2015 ChangesTradereceivables 3,346,710 2,866,722 479,988Associatedcompanies 49,554 - 49,554 3,396,264 2,866,722 529,542


LiabilitiesGroupShareholders’EquitySharecapital(10)


The share capitalof theparent companyMailUpS.p.A. is entirelypaid in and is representedas at31December2016by11,330,627ordinaryshareswithnoparvalue,whoseaccountingparitycomestoEuro0.025each.Thesharecapitalchangedfollowingthe:- execution during the meeting of the Board of Directors held on 29 March 2016, of the delegation conferred by theextraordinary shareholders'meetingheldon23December2015, to increase the share capital freeof charge. The capitalincreasetookplacewitheffectasfrom11April2016,foranominalfigureofEuro65,000,bymeansoftheissueof2,600,000free shares,with the same characteristics as those in issue, assigned to shareholders in theamountof 3new sharesperevery10sharesinissue.Thecapitalincreasewasmadebymeansofallocationtocapitalofacorrespondingamountoftheextraordinaryreserve;- execution during the meeting of the Board of Directors held on 29 March 2016 of the delegation conferred by theextraordinary shareholders' meeting held on 23 December 2015, to increase the share capital in a divisible manner, inexchangeforpayment,withexclusionofoptionrights,totheserviceoftheStockOptionPlan, intendedforemployeesofMailUpandsubsidiaries.Subscriptionon06 July2016of63,960ordinary sharesat theunit issuepriceofEuro0.025andsubsequentpaymentoftherelatedcapitalintheamountofEuro1,599.Allsharesissuedareordinary.Therearenodebentureloansinplace.Reserves(11)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes5,896,510 6,068,373 (171,864)

Description 31/12/2015 Increases Decreases 31/12/2016Sharepremiumreserve 4,963,674 85,953 4,607,721Stockoptionreserve 243,316 243,316Legalreserve 40,000 20,000 60,000Extraordinaryoroptionalreserve 294,226 66,398 65,000 295,624Reserveforexchangerategains 25,289 25,289FTAreserve (590,317) (590,317)OCIreserve (56,773) 33,423 (90,196)Negativereservefortreasurystock (57,502) 54,964 (112,466)Translationreserve (9,921) 6,511 (16,432)Roundingoff 1 (1)Profit/(loss)carriedforward 1,754,986 281,014 1,473,972Total 6,068,373 174,152 346,015 5,896,510

TheFTAreservewasgeneratedduringthetransitiontotheIFRSoftheindividualandconsolidatedfinancialstatements:TheOCI reserve represents theeffectsderiving from the remeasuringof thedefinedbenefitsplan,as represented in thestatementofcomprehensiveincome.Thestockoptionsreserveoriginatesfromtheincentiveplantothebenefitofseniormanagement.


Amongstotheraspects,themainaimoftheIncentivePlanistohelpstrengthentheinvolvementofthepeopleholdingkeypositionsinthepursuitoftheCompanyandGroup’soperativeobjectives.Thenegativereservefortreasurystockcorrespondstothepurchasepriceofownsharesintheparentcompanyheldasat31December2016.Thetranslationreserveexpressestheneteffectoftheconversionintheconsolidatedfinancialstatementsofthefinancialstatementsofforeignsubsidiariesheldincurrenciesotherthantheeuro(MailUpIncandMailupNordics/Globase).PeriodresultThe net period result is positive and comes to Euro 812,367with respect to a loss of 100,491 as at 31December 2015,includingtheminorityshareofEuro31,489.OthercomprehensiveincomeThe section of the accounting schedules includes the Statement of Comprehensive Income, which highlights the othercomponentsofthecomprehensiveeconomicresults,netofthetaxeffect.Shareholders’equityofminorityinterests(12)

Description 31/12/2016 31/12/2015 ChangesMinorityinterestsincapitalandreserves 28,110 14,680 13,430Thirdpartyincome 31,849 14,330 17,519Shareholders’equityofminorityinterests 59,959 29,010 30,949

Non-currentliabilitiesAmountsduetobanksandotherlenders(13)

Description 31/12/2016 31/12/2015 ChangesAmountsduetobanks 2,246,145 1,570,836 675,309 2,246,145 1,570,836 675,309

“Amountsduetobanks”canbebrokenupasfollowsamongsttheGroupcompanies: Please note that the Group debt as at 31 December 2016 is expressed entirely at variable rates and is represented byunsecuredloans. Provisionsforrisksandcharges(15)


Description 31/12/2016 31/12/2015 ChangesMailUpS.p.A. 2,183,645 1,508,336 675,309AgileTelecomS.p.A. 62,500 62,500 -Total 2,246,145 1,570,836 675,309


Description 31/12/2015 Increases Decreases Reclassifications 31/12/2016Provisionforlegaldisputes 57,739 57,739Provisionforpensions 60,000 (60,000) 0 117,739 (60,000) 57,739

Aprovisionhasbeenestablishedforcurrentlegaldisputes.TheparentcompanycurrentlyhasalawsuitunderwaywiththeFinancial Administration in connectionwith the companies’ income tax, regional production tax and value added tax for2004.Theoffice has issued a noticeof assessmenton thebasis of theuseof the results of the sector studies’ calculation; thereconstruction of revenues prepared by the Authority entailed greater tax, totalling Euro 58,468 and sanctions for Euro49,344,alreadypaidinfull.Thepetitionproposedbythecompanyhasbeenrejectedonafirstandsecondinstanceandthecompanyhassubmittedanappealincassation.Thecompany’slawyersbelievethattheyarelikelytobesuccessfulinthelastinstanceofproceedings.Anamounthasbeenallocatedonthefinancialstatementsconsideringthereduction,bythetaxcourts,oftheofficeclaims.Inthepetitionssubmitted,ithas,amongstotheraspects,beenshownthattherecalculationofthesectorstudywithamoreevolvedstudy,bringsaboutamorefavourableresultforthecompany.Therefore,aprovisionforriskshasbeenallocated,inaccordancewithArt.2423-bisoftheItalianCivilCodeandaccountingstandardOIC19,foranamountequaltothegreatertaxderivingfromtheapplicationofsaidstudy.The provision for pensions, established by the parent companywith reference to the indemnities due to directors uponterminationoftheirappointment,hasbeenreclassifiedtoothercurrentliabilitiesinsofarasitwillbeliquidatedatexpiryofthemandateofthecurrentparentcompanyBoD,duringapprovaloftheannualfinancialstatements.Stafffunds(16)


Thechangeisasfollows.

Description 31/12/2015 Increases Decreases Actuarialgains/losses

31/12/2016

Stafffunds 698,650 243,111 (73,924) 65,689 933,526 698,650 243,111 (73,924) 65,689 933,526

Theincreasesrelatetoyearprovisions.Thedecreasesrelatetoyearuses.Deferredtaxliabilities(17)

Description 31/12/2015 Increases Decreases 31/12/2016Deferredtaxprovision 33,345 28,537 30,595 31,287 33,345 28,537 30,595 31,287

Thedeferredtaxprovisionrelatesto:

- contributionsoncapitalaccount,taxationofwhichhasbeendeferredtofutureyears;- consolidationdifferencesderivingfromtheelisionofinfra-groupamortisation/depreciation.


CurrentliabilitiesTradeandotherpayables(18)

Description 31/12/2016 31/12/2015 ChangesTradepayables 2,942,626 2,320,263 622,363Amountsduetoassociates 4,921 4,921 2,947,547 2,320,263 627,284

Tradepayablesarestatednetofcommercialdiscounts.Belowisabreakdownoftradepayablesaccordingtogeographicarea

ReceivablesdividedbyGeographicArea

Tradeaccounts Associatedcompanies

Total

Italy 2,282,830 4,921 2,287,751EU 491,965 491,965Non-EU 167,831 167,831 Total 2,942,626 4,921 2,947,547

Amountsduetobanksandotherlenders(19)

Balanceasat31/12/2016 Balanceasat31/12/2015 Changes1,261,627 671,038 590,590

Description 31/12/2016 31/12/2015 ChangesAmountsduetobanks 1,244,877 637,622 607,256Amountsduetootherprovidersoffinance

16,750 33,416 (16,666)

1,261,627 671,038 590,590Amountsduetobanksrelatestotheresidualshort-termportionsofunsecuredvariable-rateloansstipulatedbytheparentcompanywithBancoPopolareandCreditoValtellineseandbythesubsidiaryAgileTelecomwithDeutscheBank.“Amountsduetootherprovidersoffinance”relatestotheresidualamountofabeneficial-rateloanobtainedbytheParentCompany MailUp and disbursed by Finlombarda, following participation in the tender “Development of innovation ofLombardybusinessesinthetertiarysector”aimedatpresentinganddevelopingprojectsseekingtoinnovatetheLombardyproductionsystem.Othercurrentliabilities(20)


Belowisthebreakdownofcurrentliabilities:


Taxpayablesmainlyrefertowithholdingsappliedtoincomefromemploymentandautonomousworktobepaidduringthefollowingyear,andthebalance,fordirecttaxdueandVAT.AmountpayabletosocialsecurityinstitutionsmainlyrelatetovarioustypesofsocialchargestobepaidduringthefollowingyearwithreferencetotheremunerationofthemonthofDecember,thethirteenthmonth’ssalaryandholidayaccruedandnottaken.AmountsduetoemployeesrefertoremunerationforthemonthofDecemberliquidatedinJanuary,holidayaccruedandnottakenandstaffpremiums.The amount due to Zoidberg S.r.l. relates to the acquisition of the company Agile Telecom on 29 December 2015. Thecontractofpurchaseandsaleenvisagespaymenttotheseller,by30June2017,ofavariableprice(earnout)accordingtothe average EBITDA of the company acquired in the last two years, which has been estimated there. The agreementenvisages,at thediscretionofMailUp,paymentofup to75%of theamount in shares inMailUp, tobe released throughsharecapitalincrease.TheamountsdueforTFM(directors’severanceindemnities)allocatedbytheparentcompanyrefertotheindemnitiesduetodirectorsatconclusionoftheirappointment,asdetailedabove.Deferredincome:approximately75%oftherevenuesofMailUpcomefromrecurringcharges.MailUpcollectstherecurringchargesderivingfromthee-mailservice,but,onanaccrualsbasis,onlypartofthechargesisusedtoformtheyear’sincome,whilstthepartoffuturecompetenceisusedasabasisforthefollowingyear’sincome.IncomestatementRevenues(21)


Description 31/12/2016 31/12/2015 ChangesRevenuesfromsalesofmail 8,505,410 6,911,710 1,593,700RevenuesfromsalesofSMS 11,305,163 2,198,108 9,107,055RevenuesfromsalesofBEE 150,160 6,899 143,261Revenuesfromsalesofprofessionalservices

1,129,279 101,133 1,028,146

Other 24,108 91,779 (67,671)Total 21,114,120 9,309,629 11,804,491

Theincreaseinturnoverwithrespecttothepreviousyearismainlyduetotheeconomicconsolidationoftherevenuesof

Description 31/12/2016Advances 7,128Taxpayables 515,357Amountpayabletosocialsecurityinstitutions 209,459Amountsduetodirectorsforemoluments 50,715Amountsduetoemployeesforsalaries,holidays,permitsandadditionalmonths’salaries

844,979

AmountsduetoZoidbergs.r.l. 3,778,324AmountsdueforTFM(directors’severanceindemnities) 100,000Accruedliabilities 8,601Deferredincome 5,376,742Sundry 20,578Total 10,911,883


subsidiaries acquired in 2015 and, in particular, Agile Telecom, consolidated only in terms of equity in the previousconsolidated financial statements. The significant increase in revenues by external lines comes in addition to theorganicgrowthofturnoverinanycasealsoexceeding2016at12%.Otherincome(22)


Theitemincludes:-operatinggrants,Euro55,108;-rentalincomefromleasedproperties,Euro38,236;-contributionsrelativetotaxcreditforresearchanddevelopment,Euro111,504;-contributiondisbursedbytheRegionofLombardyaspartofthe“competitivenessagreements”tender,Euro240,654;-contingentassets,Euro69,704;-otherresidualrevenues,Euro12,512.Costsforservices(23)


Theitemincludes:-costsrelativetothepurchaseofSMS,Euro7,462,027;-costsrelativetodirectors’emolumentsandseveranceindemnityuponterminationofoffice,Euro1,138,606;-costsforconsultancy,Euro1,084,021;-costsfortheuseofthirdpartyassets,Euro825,674-ITinfrastructureandotherindustrialserviceexpenses,Euro591,503;-marketingandadvertisingservicesexpenses,Euro468,170;-softwarelicences,Euro284,218;-housingandhostingservicesexpenses,Euro242,719;-expensesfortakingpartineventandtradefairs,Euro147,765;-bankexpenses,Euro141,960;-expensesfortransfers,Euro116,397;-costsrelatingtotheAIMItalymarket,Euro88,594;-costsforutilitiesandofficefacilities,Euro154,551;-telephonecosts,Euro71,379;-insurance,Euro68,233;-reimbursementofexpensesandmileage,Euro62,849;-costsforstaffsearchesandtraining,Euro58,947;-costsforhardwarematerialthatcannotbecapitalised,Euro57,844;-internetconnectioncosts,Euro56,355;-costsformergersandacquisitions,Euro49,666;-emolumentstotheBoardofAuditors,Euro38,943;-employeebenefits,Euro34,444;-financialcommunicationcosts,Euro24,630;-miscellaneousadministrativeservicesexpenses,Euro22,487;-entertainmentexpenses,Euro19,377;-maintenanceofownorthirdpartyproperty,Euro12,102;-Supervisorybodyfees,Euro7,500;-otherresidualcosts,Euro27,233.


Payrollcosts(24)This item includes all expenses for employees, including performance promotions, category promotions, cost of livingbonuses,costsforunpaidholidaysandallocationsrequiredbylawandcollectiveemploymentcontracts.Thecostforemployeesisshowninthetablebelow:

Description 31/12/2016 31/12/2015 ChangesWagesandsalaries 5,130,080 3,499,479 1,630,601Stockoptions 243,347 243,347Welfareandsocialsecurity 1,086,371 876,649 209,722Employeeseveranceindemnities 301,519 154,943 146,576 6,761,317 4,531,071 2,230,246

Thetablebelowshowsthegroupworkforce,brokendownaccordingtogeographicarea:

Levelofclassification

Totalnumber % Italy UnitedStatesofAmerica

Spain Denmark

Labourers 1 1% 1 Officeworkers 132 93% 111 1 7 13Middlemanagers 7 5% 6 1Managers 2 1% 1 1Total 142 100% 118 2 7 15

Capitalisationofpayrollcostsfordevelopmentactivities(25)


Thesearethecostsofstaffinvolvedindevelopmentactivitiescapitalisedin2016,theyearinwhichsaidcostswereincurred.Theexpensesspanseveralyearsandtherelatedbenefitsarealsoseeninseveralyears.Thecapitalisationofthecostsofstaffinvolvedindevelopmentissubjecttotherequirementsalreadyspecifiedamongstthemeasurementcriteria.Foran in-depthanalysisof thedevelopmentprojects,please refer to the informationgivenon theparagraphonintangibleassets.Otheroperatingexpenses(26)


Costsforservices 31/12/2016 31/12/2015 ChangesChangeininventoriesoffinishedproductsandgoods 17,658 16,253 1,405Sundryoperatingexpenses 344,945 153,142 191,803Total 362,603 169,395 193,208


Thebalancebookedforsundryoperatingexpensesisdetailedbelow:-lossesonreceivables,Euro188,092;-contingentliabilities,Euro66,795;-miscellaneoustaxandduties(registration,waste,signs,governmentconcessionrate,etc.),Euro48,930;-associationfees,Euro21,142;-subscriptionstobooksandmagazines,Euro4,174;-othermiscellaneousexpenses,Euro15,812.Amortisation,depreciationandimpairment(27)Thedetailsareshownbelow:

Provisionsandimpairment 31/12/2016 31/12/2015 ChangesAmortisationofintangiblefixedassets 907,493 540,383 367,110Depreciationoftangiblefixedassets 299,376 269,909 29,467Provisionsfordoubtfuldebt 21,399 5,368 16,031Totalamortisation,depreciationandprovisions

1,228,268 815,660 412,608

Financialexpense(28)

Balance as at 31/12/2016 Balance as at 31/12/2015 Changes (70,639) (16,392) (54,247)

The amount consists of interest expense on bank loans and exchange losses. It also includes the interest cost deriving from the actuarial valuation according to IAS 19R. Financialincome(29)

Balance as at 31/12/2016 Balance as at 31/12/2015 Changes 12,496 40,898 (28,402)

The amount consists of interest income on bank current accounts, income on Agile Telecom securities and exchange gains. Periodincometax(30)

Balance as at 31/12/2016 Balance as at 31/12/2015 Changes (315,433) 16,218 (331,651)

Currentandprepaidtax 31/12/2016 31/12/2015 Changes


Currenttax (495,982) (87,576) (408,406)Deferred(prepaid)tax 180,549 103,793 76,755Total (315,433) 16,218 (331,651)

TheGroupcompanieshavesetupyeartaxesonthebasisoftheapplicationofcurrenttaxregulationsinforceintherelevantcountry.Theyear’staxesaremadeupofcurrenttax,deferredtaxandprepaidtax,relatingtopositiveandnegativeitemsofincome respectively subject to imposition or deductions in years other than those during which they are booked.Prepaid/deferred tax connectedwith the consolidation entries deriving from the elisions of intra-groupmargins and therelatedeffectontheconsolidationamortisation/depreciationshares,havealsobeencalculated.RelatedpartytransactionsTransactionsimplementedbytheGroupwithrelatedparties,identifiedaccordingtothecriteriadefinedbyIAS24-Relatedpartydisclosure-arecarriedoutatarm'slength.BelowaretheequityandeconomicbalancesrelativetoGrouptransactionswithrelatedparties for theyearendedon31December2016-

Companyname Fixedreceivables

Tradereceivables

Tradepayables

Otherpayables

Dividends Sales Purchases

ConsorzioCRITScarl 14,641

49,554

4,921

38,240

10,134

Associates14,641

49,554

4,921

- -

38,240

10,134

GrafoVenturesdiGiandomenicoSica

-

9,818

40,931

ZoidbergSrl

3,778,324

Otherrelatedparties-

-

9,818

3,778,324 -

-

40,931

The most significant amount relates to the extraordinary purchase of the controlling stake in Agile Telecom. Thiscorrespondstotheestimatedvariablefeetobepaid,inaccordancewiththecontractofpurchaseandsale,toZoidbergasseller,forEuro3,278thousand,andforEuro500thousandbywayofdepositinguaranteeofcontractualobligations,bysaidsameseller.TheadditionalamountsrelatetocommercialtransactionsandloanstotheassociateconsortiumCRIT,forEuro14,641.PotentialassetsandliabilitiesThecompanyhasnopotentialassetsandliabilitiesasat31December2016.FeestodirectorsandauditorsDirectors’feescametoEuro1,098,606,whilstthefeestotheBoardsofAuditors,wherepresent,cametoEuro38,943.FeetotheindependentauditingfirmPleasenotethat-inaccordancewithletter16-bisofArt.2427oftheItalianCivilCode-thetotalamountoffeesduetotheindependentauditingfirmincludedinthe2016financialstatementswasEuro73,950,includingcostsandexpenses.DisclosureregardingcoordinationandmanagementactivitiesInaccordancewithArt.2497-bisof the ItalianCivilCode,wewouldspecifythatthecompany isnotsubjecttothirdparty


coordinationandmanagement.SubsequenteventsThankstotheaccesstosixnewgeographicareas,includingcountriesandterritoriesoverseas,MailUphasachievedglobalcoverforitsSMSmessagingservice,enablingitscustomersinallsectorstosendSMSmessagestoallcountriesworldwide.Acapillarypresencein226networksthatguaranteestheMailUp®platformdeliveryoftextmessagesonanymobilecarrier.AchievingglobalcoveragecomesaspartoftheaimofstrengtheninganddevelopingtheSMSchannel,aMailUpassetthatgrowsconstantly,asconfirmedbytheorganicgrowthandacquisitionofAgileTelecom.On27February2017,themergerbyacquisitiontookplaceofNetworkSrlintoMailUp,asmentionedpreviously.Therewasnooppositiontothemergerdecision.InaccordancewithArt.2504-bisoftheItalianCivilCode,themergerwilltakeeffectasfromthedateofthelastoftheentriesprescribedbyArt.2504oftheItalianCivilCode,whichtookplaceon20March2017.In compliance with the faculty admitted by Art. 2504-bis of the Italian Civil Code and paragraph 9 of Art. 172 of theConsolidatedIncomeTaxAct,theeffectsofthemerger,bothontheaccountsandtax,shallapplyasfrom1JanuaryoftheyearinwhichthelastentryismadewithCompaniesHouseofthemergerdeed,asenvisagedbyArt.2504oftheItalianCivilCode.On01February2017,MailUp9waslaunched,theall-newdesignversionoftheplatform,enrichedwithnewfunctionsforautomationande-mailandSMSmarketing.MailUp9isoneofthemostimportantreleasesoftheplatform,theresultofamajorinterventionontheuserexperience.MailUp9comeswithanall-newinterface,thankstothegraphicalredesignandreorganisation according to functional areas, with the aim of offering businesses an even simpler, more user-friendlybrowsing.MailUphasalsolaunchedthenewinstitutionalwebsitewww.mailupgroup.com,ameetingpointofthecorporatedimensionofMailUpandthecommunityof investors,analystsandmedia,thenewwebsiteofferscompletenews,financialdataandinvestorsdocuments releasedby theGroup.Thewebsite represents thecommunicationandmeeting spacebetween theparent company and its subsidiaries - Acumbamail, Globase, Agile Telecom and the BEE business unit, to describe thecorporateevolutionofMailUpS.p.A.,intherecentpastandindevelopmentstocome.NetfinancialpositionBelow is a breakdown of the consolidated net financial position that ensues from a comparison of liquid funds as at 31December 2016with financial debt contractedwith regards to banks and other institutional lenders, in the specific caseFinlombarda,fortheresidualportionofaspecial-rateloan.





CURRENTFINANCIALPOSITION (3,199,592) (2,594,679) (604,912) 23%


Thirdparties - - - 0%

http://www.mailupgroup.com


Liquidfunds - - - 0%

Non-currentfinancialliabilities 2,246,145 1,570,835 675,310 43%Thirdparties 2,246,145 1,570,835 675,310 43%Otherlenders - - - 0%


NETFINANCIALPOSITION (953,447) (1,023,845) 70,398 -7%

Referenceismadetothesectionon“Othercurrentliabilities”above,andtorelatedpartytransactions,formoreinformationonotherpayablesnotincludedintheNFPandinparticularthenon-costlydebtduetothesellerofthecontrollingstakeinAgileTelecom,ZoidbergSrl,correspondingtotheestimatedvariablefeetobepaidinaccordancewiththecontractofsaleforEuro3,278thousandandforEuro500thousandbywayofdepositasguaranteeofcontractualobligationslyingwiththeseller.Wewouldremindyouthatbywayoffinancialreceivablenotshowninthetablebelow,wealsohavethereceivablederivingfromtheTFMpolicy,whichwillbeliquidateduponexpiryoftheappointmentofthecurrentparentcompanyBoardofDirectors,forEuro108thousand,which,however,isoffsetbytherespectivepayableduetothedirectorsforTFM,equaltoEuro100thousand.Milan,28March2017TheChairmanoftheBoardofDirectorsMatteoMonfredini


Appendix1EffectsoftheadoptionoftheIAS/IFRSaccountingstandardsontheConsolidatedStatementoffinancialpositionasat1January2015

GeneralstandardInaccordancewithArt.4ofItalianLegislativeDecreeno.38of28February2005,whichregulatestheexerciseofoptionsenvisagedbyArt.5ofRegulation(EC)no.1606/2002oftheEuropeanParliamentandCouncilof19July2002relativetothe application of international accounting standards, the directors of MailUp S.p.A. have exercised the faculty tovoluntarilyadopttheinternationalfinancialreportingstandards(hereinafteralsoreferredtoasthe“IFRS”),issuedbytheInternationalAccountingStandardsBoard(the“IASB”)andapprovedbytheEuropeanCommissionforthepreparationofitsconsolidatedfinancialstatementsstartingfromtheyearended31December2016.Theterm“IFRS”isusedtorefertotheInternationalFinancialReportingStandards,therevisedinternationalaccountingstandards(“IAS”),allinterpretationsof the International Financial Reporting Interpretations Committee (“IFRIC”), previously known as the StandingInterpretationsCommittee(“SIC”).ThisfacultyhasalsobeenadoptedfortheConsolidatedfinancialstatementsoftheMailUpGrouppreparedonavoluntarybasis, inaccordancewithArt.19,PartOneoftheAIMItalyIssuers'Regulation,astherequirementsarenotmetas laiddownbyItalianLegislativeDecreeno.127/1991.ThedateoftransitiontotheIFRS,asdefinedbyIFRS1“FirsttimeadoptionofIFRS”,is01January2015,andthese2016consolidated financial statements present a comparative year (FY 2015). The Group's financial statements as at 31December2016arethereforethe firstconsolidatedfinancialstatementsprepared incompliancewiththe internationalaccounting standards approved by the European Commission. In this regard, please note that the IFRS accountingstandardsappliedindraftingtheConsolidatedfinancialstatementsclosedasat31December2016arethoseinforceonthatdateandarecompliantwiththoseadoptedforpreparingtheopeningConsolidatedStatementoffinancialpositionasat01January2015,aswellasthefinancialstatementsasat31December2015,asrestatedinaccordancewiththeIFRS.ThisAppendixoffersareconciliationoftheConsolidatedShareholders'equitydeterminedinaccordancewiththeItalianAccounting Standards and the Consolidated Shareholders' equity determined in accordance with the IFRS as at thetransitiondateof01January2015,aswellasareconciliationoftheperiodresultandConsolidatedshareholders'equityatyearenddeterminedaccordingtotheItalianAccountingStandardsandtheperiodresultandconsolidatedshareholders'equityatyearend,determinedaccordingtotheIFRSforFY2015presentedforcomparisoninthesefinancialstatements.AdescriptionisalsogivenoftheimportantadjustmentsmadetotheConsolidatedStatementoffinancialpositionandtheConsolidatedincomestatementtogetherwiththerelatedexplanatorynotes,asrequiredbyIFRS1FirsttimeadoptionofIFRS.ReconciliationtablesrequiredbyIFRS1IFRS1identifiesthetransitionproceduretobeadoptedwhentheInternationalaccountingstandardsareadoptedforthefirst time. The first financial statementsof anentitydrafted in accordancewith the IFRSare those inwhich theentityclearlydeclares,withoutreservation,completecompliancewiththeIFRS.EffectsoftheadoptionoftheIAS/IFRSaccountingstandardsontheConsolidatedStatementoffinancialpositionasat1January2015Below is a summary statement of the Consolidated Statement of financial position as at the date of transition to theinternationalaccountingstandardsasestablishedbyaccountingstandardIFRS1,reclassifiedconsideringthenatureanddegreeofliquidityoftheasset,theintendedpurposeandduedateoftheliability.


Tobetterunderstandtheeffects,themostsignificantchangesareanalysedforeachlineofthefinancialstatements.

MAILUPGROUPCONSOLIDATEDBALANCESHEETasat01January2015

(figuresinEurothousands) NotesItalian

AccountingStandards(*)

FTAadjustments/reclassifications

IAS/IFRSaccountingstandards

ASSETS Non-currentassets Tangibleassets 716 716Intangibleassets (1) 2,404 (618) 1,786Goodwill - -Equityinvestmentsinassociatesandjointventures Othernon-currentassets 47 47Deferredtaxassets (2) 59 326 385Totalnon-currentassets 3,226 (291) 2,934 Currentassets Tradeandotherreceivables 1,394 - 1,394Othercurrentassets (3) 791 (277) 514Liquidfundsandequivalent 3,344 - 3,344Totalcurrentassets 5,529 (277) 5,252 TOTALASSETS 8,755 (569) 8,186

(*)AdjustedtotheclassificationsenvisagedbytheIAS/IFRStablesofthefinancialstatements


MAILUPGROUPCONSOLIDATEDBALANCESHEETasat01January2015





SHAREHOLDERS’EQUITYANDLIABILITIES Shareholders’equity GroupShareholders’Equity Sharecapital 200 200Reserves (4) 2,995 (843) 2,152Periodresult 68 68Shareholders’equityofminorityinterests

Totalshareholders’equity 3,264 (843) 2,421 Non-currentliabilities Amountsduetobanksandotherlenders Othernon-currentliabilities Provisionsforrisksandcharges 78 - 78Stafffunds (5) 425 16 441Deferredtaxliabilities 10 - 10Totalnon-currentliabilities 512 16 528 Currentliabilities Tradeandotherpayables 773 - 773Amountsduetobanksandotherlenders 79 - 79Othercurrentliabilities (6) 4,126 259 4,385Totalcurrentliabilities 4,979 259 5,237 TOTALLIABILITIES 8,755 (569) 8,186


1. Otherintangiblefixedassets(IAS38)

Sometypesofmulti-yearcosts,mainlycostsincurredduringthestart-upphase,costsrelativetotheIPOandothercostsspanningseveralyears,arenotcapitalisedforthepurposeofIAS/IFRS;thenetbookvaluesasatthetransitiondatehavethereforebeenreversedwithacounter-entryintheFTAreserve.

2. Prepaidtaxassetsanddeferredtaxliabilities(IAS12)TheadjustmentrelatestothebookingoftaxeffectsoftheadjustmentsnecessarytomakethemovefromthefinancialstatementsdraftedonthebasisoftheItalianAccountingStandardstothosedraftedonthebasisoftheIFRS.

3. Othercurrentassets-Revenuerecognition(IAS18)The adjustment relates to the different booking of costs connectedwithmarketing and provision fees linked to revenuerecognition.Fortheiteminquestion,areductionindeferredassetswasnotedintheamountofEuro277thousand.

4. Otherreservesandresultscarriedforward(IFRS1-IAS39)Theitemmainlyreducesfollowingthebookingofthe“FTAreserve”established,netofthetaxeffect,foratotalnegativevalue of Euro 611 thousand, as a counter-entry of adjustments made as at the date of transition to internationalaccounting standards (01 January 2015), stated in thesenotes and as detailed in the reconciliation tablebelowof theConsolidatedshareholders'equityasat1 January2015.For the remainingEuro231 thousand, thedifference isdue tocostsconnectedwiththeIPOontheAIMItalymarket,directlyreducingthesharepremiumreserve,asestablishedbyIAS


39.

5. Provisionforseveranceindemnityandotherbenefits(IAS19R)The provision for severance indemnity and other employee benefits has been recalculated according to the actuarialmethodsenvisagedbyIFRS19R.Theapplicationofthesemethodsgeneratedanegativeeffect(followingtheincreaseintheliabilitybooked)ofEuro18thousand.

6. Othercurrentliabilities–Revenuerecognition(IAS18)The adjustment relates to the different booking of revenues relating to SMS. For the item in question, a reduction indeferredincomewasnotedintheamountofEuro259thousand.

ReconciliationtableofConsolidatedshareholders'equityasat1January2015BelowisthereconciliationofConsolidatedshareholders'equityasat01January2015,draftedaccordingtothe ItalianAccounting Standards and that as at the same date drafted in accordance with the IFRS, complete with specificexplanatorynotes.TheamountsarestatedinEurothousandsandadjustmentsaregroupedaccordingtotype.

(figuresinEurothousands) Asat01January2015

ConsolidatedShareholders'equityaccordingtotheItalianAccountingStandards 3,264

IAS38-Reversalofcapitalisationofstart-upcosts (4)IAS38-Reversalofcapitalisationofresearchcosts (123)IAS38-Reversalofcapitalisationoflistingcostsandothermulti-yearexpenses (317)IAS18-RevenueRecognition (386)IAS19R-Discountingofprovisionforseveranceindemnity(TFR)andotherpensionbenefits (12)

Consolidatedshareholders'equityaccordingtoIAS/IFRS(netofthetaxeffectaccordingtoIAS12)

2,421

ForadescriptionofthemainitemsofthecomprehensivereductioninConsolidatedshareholders'equity,pleaserefertotheinformationgivenintheparagraphsabovecommentingontheindividualitemsofcounter-entriesoftheFTAreserve.


Reconciliationof theConsolidated Statementof financial positionand theConsolidated income statement as at 31December2015Below is the summary tableof theConsolidatedStatementof financialpositionasat31December2015, as resultingfromtheadjustmentsmadeasatthedateoftransitionandthosemadeontheperiodConsolidatedincomestatement.TheadjustmentoftheConsolidatedstatementoffinancialpositionasat31December2015accordingtotheIFRSimpliesthe same structural logics and use of the accounting standards adopted for the opening Consolidated Statement offinancialposition.Tobetterunderstandtheeffects,themostsignificantchangesareanalysedforeachlineofthefinancialstatements.

MAILUPGROUPCONSOLIDATEDBALANCESHEETasat31December2015



FTAadjustments/reclassification

s


ASSETS Non-currentassets Tangibleassets 754 754Intangibleassets (1) 4,039 (932) 3,107Goodwill (2) 7,025 3,362 10,387Equityinvestmentsinassociatesandjointventures Othernon-currentassets 136 136Deferredtaxassets (3) 225 423 647Totalnon-currentassets 12,179 2,853 15,032 Currentassets Tradeandotherreceivables 2,867 2,867Othercurrentassets (4) 1,030 (300) 729Liquidfundsandequivalent 3,266 3,266Totalcurrentassets 7,162 (300) 6,862 TOTALASSETS 19,342 2,553 21,894



MAILUPGROUPCONSOLIDATEDBALANCESHEETasat31December2015





SHAREHOLDERS’EQUITYANDLIABILITIES Shareholders’equity GroupShareholders’Equity Sharecapital 217 217Reserves (5) 7,034 (966) 6,068Periodresult (12) (102) (115)Shareholders’equityofminorityinterests

29

29

Totalshareholders’equity 7,267 (1,068) 6,199 Non-currentliabilities Amountsduetobanksandotherlenders 1,571 1,571Othernon-currentliabilities Provisionsforrisksandcharges 118 118Stafffunds (6) 670 28 699Deferredtaxliabilities 33 33Totalnon-currentliabilities 2,392 28 2,421 Currentliabilities Tradeandotherpayables 2,320 2,320Amountsduetobanksandotherlenders 671 671Othercurrentliabilities (7) 6,691 3,593 10,284Totalcurrentliabilities 9,682 3,593 13,275 TOTALLIABILITIES 19,342 2,553 21,894


MAILUPGROUPCONSOLIDATEDINCOMESTATEMENTasat31December2015





Revenues (8) 9,366 (57) 9,310

Otherincome 147 147Costsforservices (9) (5,233) (391) (5,624)Payrollcosts (6) (4,573) 42 (4,530)Capitalisationofpayrollcostsfordevelopmentactivities 1,541 1,541Otheroperatingexpenses (169) (169)EBITDA 1,079 (405) 674Amortisation,depreciationandimpairment (10) (1,061) 245 (816)EBIT 18 (160) (141)Financialincome/(expense) (6) 33 (9) 25Pre-taxprofit 51 (169) (117)Incometax (11) (49) 67 16Netperiodresult 2 (102) (100)ofwhichnetresultpertainingtominorities 14 14NetGroupresult (12) (102) (114)

Otheritemsofthestatementofcomprehensiveincome

Profit/(loss)thatwillnotbesubsequentlyreclassifiedtotheperiodresult

Actuarialprofit(loss)netofthetaxeffect (40)

Profit/(loss)thatwillbesubsequentlyreclassifiedtotheperiodresult Profit/(loss)derivingfromtheconversionofthefinancialstatementsofconsolidatedcompaniescarriedincurrenciesotherthantheeuro

(17)

Comprehensiveperiodprofit/(loss) (157)

Periodprofitattributableto:

Shareholdersoftheparentcompany

(114)

Minorityshareholders

14

Earnings:

pershare

(0.001)

pershare(diluted) (12)

(0.001)


1. Otherintangiblefixedassets(IAS38)Sometypesofmulti-yearcosts,mainlycostsincurredduringthestart-upphase,costsrelativetotheIPOandothercostsspanningseveralyears,arenotcapitalisedforthepurposeofIAS/IFRS;thenetbookvaluesasatthetransitiondatehavethereforebeenreversedwithacounter-entryrespectivelyinthesharepremiumreserveandintheFTAreserve.

2. Goodwillandbusinesscombination(IFRS3–IAS36)


In application of accounting standard IAS 36, goodwill booked is no longer systematically amortised in theConsolidatedincomestatementbutratherismeasuredat leastonceayear, inordertoidentifyanylossofvalue(impairmenttesting).

Moreover,theGrouphasretroactivelybookedtheestimatedearnoutenvisagedinthepurchasecontractfor100%ofAgileTelecomS.p.A.stipulatedon29December2015.

3. Prepaidtaxassetsanddeferredtaxliabilities(IAS12)The adjustment relates to the booking of tax effects of the adjustments necessary tomake themove from thefinancialstatementsdraftedonthebasisoftheItalianAccountingStandardstothosedraftedonthebasisoftheIFRS.

4. Othercurrentassets-Revenuerecognition(IAS18)The adjustment relates to the different booking of costs connected with marketing and provision fees linked torevenuerecognition.Fortheiteminquestion,areductioninprepaidexpenseswasnoted.

5. Otherreservesandresultscarriedforward(IFRS1–IFRS2–IFRS10–IAS39)Theiteminquestionincludesanadjustmentrelativetothecombinedeffectof:

- reductionrelatingtothebookingofthe“FTAreserve”,whichincludestheeffect,netofthetaxeffect,oftheadjustmentsmadeduringthefirstconversiontotheIFRS(01January2015),unchangedwithrespecttothatdate(equaltoEuro611thousand);

- increaserelativetotheeffectsofadjustmentsrelativetotheadoptionofIFRSofcompetenceofFY2015,whichhaveimpacted,accordingtotherespectivereferencestandards,directlytheGroup'sshareholders'equity-inparticularwithreferenceto:

• bookingofcostsconnectedwiththereversetakeoverofAgileTelecominDecember2015,usedtodirectlyreducethesharepremiumreserveinaccordancewiththeprovisionsofIAS39;

• bookingofchangestotheStatementofComprehensiveIncome,recordedintheOICreserve;

• applicationofIAS32,whichconsiderstheoperationsperformedonownsharesaschangestoshareholders'equityinthetotalamountofEuro57thousand;

• bookingoftheimpactsontheIncomestatement,forwhichreferenceismadetotherelatednotes.

6. Provisionforseveranceindemnityandotherbenefits(IAS19R)The provision for severance indemnity and other employee benefits has been recalculated according to theactuarialmethods envisagedby IFRS 19R.More specifically, actuarial gains and losses havebeen enteredunderother itemsof thestatementofcomprehensive income, theservicecosthasbeenenteredunder“payroll costs”and the interest cost has been entered as “financial expense”. The application of these methods generated anegativeeffect(followingtheincreaseintheliabilitybooked)ofEuro28thousand.

7. Othercurrentliabilities(IAS18–IFRS3)Theadjustmentisdetailedbelow:

• positive change for Euro 314 thousand relative to deferred income following the different booking ofrevenuesrelatingtoSMS;

• positivechangeforEuro3,278thousandrelativetotheearn-outtobepaidunderthescopeofthecontractofpurchaseofAgileTelecomS.p.A.

8. Revenues(IAS18)TheadjustmentrelatestothedifferentbookingofrevenuesrelatingtoSMS.For2015,theeconomiceffectwasEuro56thousand.

9. Costsforservices(IAS38)Sometypesofmulti-yearcosts,mainlycostsincurredduringthestart-upphase,costsrelativetotheIPOandothercostsspanningseveralyears,arenotcapitalisedforthepurposeofIAS/IFRS;theincreasesin2015havetherefore


beenreclassifiedascostsforservices.

10. Amortisation/depreciation(IAS38)Theadjustment,forthetotalamountofEuro245thousand,isshownbelow:

• Euro185thousandrelative to thereversalofamortisation/depreciationonassets thatcanno longerbecapitalisedunderIAS38;

• Euro60thousandrelativetothereversalofamortisationofgoodwill.Goodwillisanassetthat,undertheIFRS,hasanundefinedusefullife.Theseassetsarethereforenotamortised,differentlytothatenvisagedbytheprovisionsandItalianAccountingStandards,butratherimpairmenttested(IAS36).

11. Periodtax(IAS12)Theitemisimpacted(totalreductioninexpenseforEuro67thousand)bythedeferredtaxeffect(whereapplicableandfortheportionrelativetotheimpactsrecordedontheincomestatement),determinedinconnectionwiththeadjustmentsmadeanddescribedabove.

12. Dilutedearningspershare(IAS33R)According to IAS33R, in calculatingearningsper share, theeffectsof the StockOptionPlan resolvedon07 July2016havebeencalculatedretroactively.

ReconciliationtableofConsolidatedshareholders'equityasat31December2015BelowisthereconciliationofConsolidatedshareholders'equityasat31December2015,draftedaccordingtotheItalian Accounting Standards and that as at the same date drafted in accordancewith the IFRS, completewithspecificexplanatorynotes.TheamountsarestatedinEurothousandsandadjustmentsaregroupedaccordingtotype.

Asat31December2015

(figuresinEurothousands)

Netresult OCI Shareholders’equity

ItalianAccountingStandards-Consolidatedfinancialstatements 2 7,238

IAS38-Reversalofcapitalisationofstart-upcosts 1 (3)IAS38-Reversalofcapitalisationofresearchcosts 34 (89)IAS38-Reversalofcapitalisationoflistingcostsandothermulti-yearexpenses (220)

(578)

IAS38-Reversalofamortisationofconsolidationdifference 60 60

IAS18-RevenueRecognition (15) (402)IFRS10-Consolidationdifference-NetworkSrl 23

IAS19R-Discountingofprovisionforseveranceindemnity(TFR)andotherpensionbenefits 38

(40)

(23)

IAS32-Classificationoftreasuryshares (58) IAS/IFRSaccountingstandards(netofthetaxeffectaccordingtoIAS12)-Consolidatedfinancialstatements

(100) (40) 6,170

ForadescriptionofthemainitemsofthecomprehensivereductioninConsolidatedshareholders'equity,pleaserefertotheinformationgivenintheparagraphsabovecommentingontheindividualitems.Milan,28March2017


TheChairmanoftheBoDMatteoMonfredini


IndependentAuditors’Reportontheconsolidatedfinancialstatementsasat31December2016




SeparatefinancialstatementsofMailUpasat31December2016

BalanceSheetNotes 31/12/2016 31/12/2015

Non-currentassets Tangibleassets 1 629,282 651,083Intangibleassets 2 3,660,657 3,361,555Equityinvestmentsinsubsidiaries 3 11,152,016 10,689,854Equityinvestmentsinassociatesandjointventures 4 102,000 -Othernon-currentassets 5 162,862 204,387Prepaidtaxassets 6 494,723 474,494

Totalnon-currentassets 16,201,539 15,381,372 Currentassets Tradeandotherreceivables 7 1,156,163 1,083,040Receivablesfromsubsidiaries 8 273,735 199,572Receivablesfromassociates 8 49,554 -Othercurrentassets 9 1,347,776 550,432Liquidfundsandequivalent 10 3,023,456 1,086,336Totalcurrentassets 5,850,654 2,919,381 Totalassets 22,052,223 18,300,753 Balancesheet-Liabilities 31/12/2016 31/12/2015 Shareholders’equity Sharecapital 11 283,266 216,667Reserves 12 4,134,463 4,341,095Periodresult 1,224,912 (66,342)

Totalshareholders’equity 5,642,640 4,491,419 Non-currentliabilities Amountsduetobanksandotherlenders 13 2,183,645 1,508,335Othernon-currentliabilities - -Provisionsforrisksandcharges 14 57,739 117,739Stafffunds 15 387,921 278,290Deferredtaxliabilities 16 2,750 17,875

Totalnon-currentliabilities 2,632,055 1,922,238 Currentliabilities

Tradeandotherpayables 17 691,622 685,022Payablestosubsidiaries 18 2,207,811 2,064,399Payablestoassociates 18 4,921 -


Amountsduetobanksandotherlenders 19 1,190,373 543,889Othercurrentliabilities 20 9,682,803 8,593,786 Totalcurrentliabilities 13,777,528 11,887,097Totalliabilities 22,052,223 18,300,753

IncomeStatementNotes 31/12/2016 31/12/2015 Revenues 21 9,703,633 8,608,331Otherincome 22 560,923 266,713

Totalrevenues

10,264,556 8,875,044

Costsforservices 23 (6,240,207) (5,909,369)Payrollcosts 24 (2,606,077) (2,163,760)Otheroperatingexpenses 25 (140,336) (135,906)

EBITDA

1,277,935 666,010

Amortisation,depreciationandimpairment

26 (1,239,246) (842,348)

EBIT

38,689 (176,339)

Financialexpense 27 (49,743) (11,248)Incomefromsubsidiaries 28 1,192,140 -Financialincome 29 11,468 44,526Portionofresultpertainingtoassociatesandjointventures - -Impairmentofnon-currentassets - -

Pre-taxprofit

1,192,554 (143,061)

Incometax

30 32,358 76,719

Netperiodresult

1,224,912 (66,342) Otheritemsofthestatementofcomprehensiveincome Profit/(loss)thatwillnotbesubsequentlyreclassifiedtotheperiodresult

Actuarialprofit(loss)netofthetaxeffect (28,377) (21,238)

Profit/(loss)thatwillbesubsequentlyreclassifiedtotheperiodresult

Comprehensiveperiodprofit/(loss) 1,196,535 (87,580) Earningspershare:

basic 310.120 (0.009)diluted 310.117 (0.009)


Separate statement of changes in equity

Figuresineuros 01/01/2015

Allocationofresult


(*)

Changetoshare

premiumreserve(*)

Purchaseofownshares

OCIreserve

Subscriptionofstockoptions

Othertransactionslinkedtothe

transitiontoIAS

Periodresult

31/12/2015


16,667

216,667


1,983,333

(41,323)

4,693,674


40,000

Extraordinaryreserve 125,866 168,361

294,226

Reservefortreasurystock -

(57,502)

(57,502)Reserveforexchangerategains

-

-

Profit/(loss)carriedforward -

-


-

OCIreserve

(21,238)

(21,238)


(608,066)

Periodresult 202,704 (202,704)

(66,342) (66,342)

Shareholders’equity 2,677,825 - 16,667 1,983,333 (57,502) (21,238) (66,342) 4,491,419(*)Asresolvedbytheordinaryshareholders'meetingon23December2015

Figuresineuros 31/12/2015 Allocationofresult


(*)

Purchaseofownshares

OCIreserve

Subscriptionofstockoptions

Othertransactionslinkedto

thetransitiontoIAS

Periodresult

31/12/2016


65,000

1,599

283,266


(85,953)

4,607,721

Legalreserve 40,000

20,000

60,000

Extraordinaryreserve 294,226

(65,000)

66,397

295,624

Reservefortreasurystock (57,502)

(54,964)

(112,466)

Reserveforexchangerategains -

25,289

25,289

Profit/(loss)carriedforward - (66,342)

(111,686)

(178,028)


94,005

94,005

OCIreserve (21,238)

(28,377)

(49,615)


(608,066)

Periodresult (66,342) 66,342

1,224,912 1,224,912

Shareholders’equity 4,491,419 - - (54,964) (28,377) 95,604 (85,953) 1,224,912 5,642,641(*)Asresolvedbytheordinaryshareholders'meetingon29March2016

Pleasenotethat“Othertransactions linkedtothetransitiontoIAS”derivefromtheapplicationofthe internationalaccounting standards IAS/IFRS,whichhaveaffected themake-upof shareholders'equity,both forFY2015and theyearunderreview.Morespecifically, itregardstheallocationoftheFY2015profit,derivingfromtheapplicationoftheItalianAccountingStandards(OIC)andthecostsconnectedwithsharecapitalincreasesreclassifiedunderitemsofshareholders'equityincompliancewithIAS/IFRSstandards.


Separate statement of cash flows

Description 31/12/2016 31/12/2015 Periodprofit(loss) 1,224,912 (66,342) Incometax 8,955 40,918 Deferred/(prepaid)tax (41,313) (117,637) Interestexpense/(interestincome) 30,066 (232) Exchange(gains)/losses 8,209 (33,046) (Dividends) (1,192,140)

(Capitalgains)/capitallossesderivingfromthedisposalofassets

1 Periodprofit(loss)beforeincometax,interest,dividendsandcapital

gains/lossesondisposals 38,689 (176,339)

Valueadjustmentsfornon-monetaryelementsthathavenoequivalentiteminnetworkingcapital

ProvisionsforTFR 122,225 76,864 Otherprovisions 49,625 Amortisationanddepreciationoffixedassets 1,233,546 837,412 Impairment

Otheradjustmentsfornon-monetaryitems

(1,294,991)

2 CashflowbeforechangesinNWC 1,394,460 (507,429) Changestonetworkingcapital Decrease/(increase)intradereceivables (196,840) 111,700 Increase/(decrease)intradepayables 154,931 1,358,441 Decrease/(increase)inaccruedincomeandprepaidexpenses 77,580 (70,179) Increase/(decrease)inaccruedliabilitiesanddeferredincome 1,261,597 409,779 Decrease/(increase)intaxreceivables 68,687 95,436 Increase/(decrease)intaxpayables (28,830) 76,551 Decrease/(increase)inotherreceivables (909,243) (47,019) Increase/(decrease)inotherpayables (209,547) 4,156,338 Otherchangesinnetworkingcapital 3 CashflowafterchangesinNWC 1,612,795 5,583,619 Otheradjustments Interestcollected/(paid) (23,833) 5,082 (Incometaxpaid) (24,550) (168,916) (Capitalgains)/capitallossesderivingfromthedisposalofassets

Dividendscollected 1,192,140

(Useofprovisions) (52,778) (31,171)4 Cashflowafterotheradjustments 2,703,774 5,388,613 A Cashflowfromoperations 2,703,774 5,388,613 Tangiblefixedassets (243,440) (238,193) (Investments) (243,440) (238,193) Divestmentrealisationprice Intangiblefixedassets (1,729,569) (1,994,365) (Investments) (1,729,569) (1,994,365) Divestmentrealisationprice Financialfixedassets (60,475) (4,515) (Investments) (60,475) (4,515) Divestmentrealisationprice Acquisitionordisposalofsubsidiaries (7,299,177)


B Cashflowfrominvestments (2,033,484) (9,536,249)

Minorityinterestfunds 1,321,794 1,993,191

Increase(decrease)inshort-termpayablestobanks (3,800) 9,775 Stipulationofloans 2,000,000 2,000,000 Repaymentofloans (674,406) (16,584) Ownfunds (54,964) (40,835) Capitalincreasebypayment 16,667 Sale(purchase)oftreasuryshares (54,964) (57,502) Changetosharepremiumreserve

C Cashflowfromloans 1,266,830 1,952,356

Increase(decrease)inliquidfunds(A±B±C) 1,937,120 (2,195,280)

Liquidfundsasat01/01/2016 1,086,336 3,281,617 Liquidfundsasat31/12/2016 3,023,456 1,086,336

1,937,120 (2,195,280)


Explanatorynotestotheseparatefinancialstatementsasat31December2016

Generalinformation

BusinessMailUp S.p.A. (hereinafter “MailUp”) is a legal entity organised according to the lawof the Italian Republic,whichoperatesinthesectorofmarketingtechnologyonthecloud(newsletters/e-mails,textmessages,socialnetworks).Itis a technological company that has developed a digital cloud computing platform chosen by SMEs and largeenterprisestocreate,sendandmonitornewsletters,e-mailsandtextmessages.MailUpistheleadingsolutioninItalyin theESP sector andhas approximately 10,500 customers and900dealers spreadacrossmore than50 countries.Founded in 2002 in Cremona,MailUp has its registered office inMilan. After the IPO in 2014 on the AIMmarketoperated by the Italian Stock Exchange,MailUp added to the organic growth, as from the second half of 2015, agrowthpath forexternal lines,acquiringestablishedandemergingbusinesses in thesamemarket segmentorwithcomplementary business: Acumbamail (Spanish market and LATAM), Globase (Nordics market) and Agile Telecom(SMSwholesalemarket).

AccountingstandardsCriteriaforthepreparationoftheseparatefinancialstatementsIn accordancewith Art. 4 of Italian Legislative Decree no. 38 of 28 February 2005,which regulates the exercise ofoptionsenvisagedbyArt.5ofRegulation(EC)no.1606/2002oftheEuropeanParliamentandCouncilof19July2002relativetotheapplicationofinternationalaccountingstandards,thecompanyhasexercisedthefacultytovoluntarilyadopt the international financial reporting standards (hereinafter also referred to as the “IFRS”), issued by theInternationalAccountingStandardsBoard(the“IASB”)andapprovedbytheEuropeanCommissionforthepreparationofitsfinancialstatementsstartingfromtheyearended31December2016.The term “IFRS” is used to refer to the International Financial Reporting Standards, the revised internationalaccounting standards (“IAS”), all interpretations of the International Financial Reporting Interpretations Committee(“IFRIC”),previouslyknownastheStandingInterpretationsCommittee(“SIC”).ThedateoftransitiontotheIFRS,asdefinedbyIFRS1“FirsttimeadoptionofIFRS”is01January2015,andthese2016financial statements present a comparative year (FY 2015). In this regard, please note that the IFRS accountingstandardsappliedindraftingthefinancialstatementsclosedasat31December2016arethoseinforceonthatdateandarecompliantwiththoseadoptedforpreparingtheopeningbalancesheetasat01January2015,aswellasthefinancial statements as at 31December2015, as restated in accordancewith the IFRSand reported in the specificAppendixattachedtotheseNotes, towhichreference ismade.ThisAppendixgivesthereconciliationoftheperiodresultandshareholders'equity resulting fromthe financial statementsprepared inaccordancewith theaccountingstandards used during the previous years (Italian Accounting Standards) and the period result and shareholders'equity according to the IFRS for the previous periods presented for comparison, as required by IFRS 1 “First timeadoptionofIFRS”andtherelatedexplanatorynotes.Forthepurposeofpreparingtheaccountingschedules,prevalenceisgiventotheeconomicsubstanceoftransactionsratherthantotheirlegalform.With reference to IAS1, paragraphs25 and26, thedirectors confirm that, in viewof theeconomicprospects, thecapitalisationandfinancialpositionofthecompany,thereisnouncertaintyasthefactthattheCompanycanoperateasagoingconcernandthat,consequently, inpreparingthefinancialstatementsasat31December2016, itshouldadoptaccountingstandardspreciselyundertheseterms.The financial statements for theyearendedon31December2016havebeensubject tostatutoryauditingbyBDOItaliaS.p.A.,undertheappointmentmadeuponitfortheperiod2014-2016.Please note that despite it holds controlling investments in Network Srl, MailUp Inc., Agile Telecom S.p.A.,Acumbamail SL and MailUp Nordics A/S, MailUp is not required to prepare consolidated financial statements.However, as the parent company of subsidiaries, strictly linked in terms of the creation of valuewithin theGroupbusiness and in connection with the AIM issuers’ regulation, it has chosen as from FY 2014 to also prepareconsolidatedannualaccounts,thisyearpreparedincompliancewiththeIAS/IFRS.


TablesofthefinancialstatementsThetablesofthefinancialstatementsusedhavethefollowingcharacteristics:a)on theBalanceSheet - Statementof financialposition, theassetsand liabilitiesare stated in increasingorderofliquidity;anasset/liabilityisclassifiedascurrentwhenitmeetsoneofthefollowingcriteria:-itisexpectedtoberealised/extinguishedorexpectedtobesoldorusedinthenormaloperativecycle;-itismainlyheldfortrading;-itisexpectedtoberealised/extinguishedwithin12monthsofyearend.Ifnoneofthesethreeconditionsaremet,theassets/liabilitiesareclassifiedasnotcurrent;b)ontheIncomeStatement,thepositiveandnegativeitemsofincomearestatedaccordingtonature;c)Other comprehensive incomehighlightsall changes toOther comprehensiveprofits (losses)occurringduring theyear,generatedbytransactionsotherthanthoseimplementedwithShareholdersandinaccordancewiththespecificIAS/IFRSaccountingstandards.TheCompanyhaschosentoshowsaidchangesinaseparatestatementwithrespecttotheIncomeStatement.ChangestoOthercomprehensiveprofits(losses)arestatednetoftherelatedtaxeffects,separately identifying, inaccordancewith IAS1R in forceas from01January2013, thecomponents intendedtobereversedontheincomestatementinsubsequentyearsandthoseforwhichthereisnoprovisionforanyreversalontheincomestatement;d) the Statement of changes to shareholders' equity, as required by international accounting standards, providesseparate evidence of the period result and all other changes not carried on the Income Statement, but insteadallocateddirectlytoOthercomprehensiveprofits(losses)onthebasisofspecific IAS/IFRSaccountingstandardsandtransactionswithShareholdersintheircapacityasShareholders;e)theStatementofCashFlowsispreparedapplyingtheindirectmethod.MeasurementcriteriaTangibleassetsThesemainlyconsistof:

d) Plantsandmachinerye) Furnitureandfittingsf) Electronicofficemachines

Tangibleassetsarebookedatthecostofpurchaseorproduction,includingaccessoryexpensesandnetoftherelateddepreciation.Routinemaintenancecostsarechargedinfulltotheincomestatement.Costsforimprovements,modernisationandtransformationsintendedtoincreasevaluearecarriedasassets.Depreciationstartswhentheassetsbecomeavailableforuse.Depreciationiscalculatedonastraight-linebasis,accordingtotheestimatedusefullifeoftherelatedassets,revisedfromtimetotimeifnecessary,applyingthefollowingpercentages,whichhavenotchangedfromthepreviousyearandwithapplicationofmonthlydepreciationaccordingtothemonthofpurchaseorcommissioningoftheasset:• Plantandmachinery:

o Genericandspecificplants:20%o Anti-break-insystems:30%

• Otherassets:o Furnitureandfittings:12%o Electronicofficemachines:20%o Signs:20%

AssetswithaunitvalueoflessthanEuro516.46,susceptibletoautonomoususe,areregisteredinfulltotheincomestatement.IntangibleassetsAn intangibleasset isbookedonlywhen itcanbe identified, it issubject tothecompany’scontrol, it isdestinedtogeneratefutureeconomicbenefitsandifitscostcanbedetermined.Intangiblefixedassetsareinitiallyrecordedathistoricpurchasecostorcostofinternalproductionandstatednetoftheamortisationchargedovertheyears,chargeddirectlytotheindividualitems.


If impairmentisnoted,theintangibleassetiswrittendownaccordingly,inlinewiththecriteriasetforthinthenextstandard“Impairmentofintangibleassets”.Amortisationratesarerevisedannuallyandalterediftheestimatedusefullifediffersfromthatestimatedpreviously.The estimated useful life is five years for development costs; five years for third party software; five years fortrademarksandotherintangiblefixedassets.Developmentoftheplatform,thirdpartysoftwareandtrademarksareamortisedaccordingtotheirassumedpossibleuse, so as to ensure that the net value at period end corresponds to their residual possible use.Amortisation/depreciation starts when an asset becomes available for use and the corresponding developmentproject completed. Platform development, recorded with the consent of the Board of Auditors, includes thedevelopmentcostsincurredinternallytocreateandinnovatetheMailUp®platform.Costsarecapitalisedonlywhenthefollowingcanbeshown:

- theintentiontoimplementtheintangibleassetforuseorsale;- thecapacitytouseorselltheintangibleasset;- thecapacitytoreliablyvaluethecostattributabletotheintangibleassetduringitsdevelopment;- theavailabilityof technical, financialorother resources, suitable tocomplete thedevelopmentanduseor

selltheintangibleasset;- howtheintangibleassetwillgenerateprobablefutureeconomicbenefits.

Other fixedassets, registeredwith theconsentof theBoardofAuditors, relate to thecostsof translatingplatformcomponentsincurredtomakeitusableontheexportmarkets.FixedassetsunderconstructionrelatetocostsincurredfordevelopmentprojectsontheMailUp®platform,whichasat31December2016hadnotbeencompletedand,therefore,couldnotbeused.EquityinvestmentsSubsidiariesarecompaniesinwhichtheCompanysimultaneouslyholdsthefollowingthreeelements:(a)poweroverthe business; (b) exposure, or rights, to variable returns deriving from the involvementwith it; (c) capacity to usepowertoinfluencetheamountofsaidvariablereturns.All equity investments are recorded at purchase cost, including accessory expenses, at the time of initial booking;thereafter,intheeventofevidencethatanequityinvestmentmayhavesufferedalossinvalue,theestimatedvaluethatcanberecoveredontheequityinvestmentiscalculated.Ifimpairmentisnoted,theequityinvestmentiswrittendown accordingly, in line with the criteria set forth in the next paragraph “Impairment of tangible and intangibleassetsandequityinvestments”.Companies over which another company exerts significant influence, are considered as associates. Influence isassumed when in the ordinary shareholders' meeting; at least one fifth of votes can be cast or one tenth, if thecompanyhasshareslistedonthestockexchange.Othercurrentandnon-currentassets,tradereceivablesandotherreceivablesTradereceivables,othercurrentandnon-currentassetsandotherreceivablesareintendedasfinancialinstruments,mainly relative to receivables due from customers, not derivatives andnot listed on an activemarket, fromwhichfixedordeterminablepaymentsareexpected.Tradereceivablesandotherreceivablesareclassifiedonthebalancesheetofcurrentassets,apartfromthosewithacontractualduedatethatexceedstwelvemonthsafterthereportingdate,whichareclassifiedasnon-currentassets.Theseassetsarevaluedatthetimeoffirstbookingatfairvalueand,thereafter,atamortisedcost,usingtheeffectiveinterest rate, less impairment.Anexception ismade for receivables forwhichthebriefdurationmakesdiscountinginsignificant.ImpairmentofreceivablesisbookedontheincomestatementwhenobjectiveevidenceisseenthattheCompanywillbeunabletocollectthereceivableduefromthecounterpartyunderthetermsofthecontract.Thevalueofthereceivablesisstatednetoftherelatedimpairment.PrepaidtaxassetsPrepaidtaxassetsarebookedatnominalvalue.Theyarebookedwhentheircollectionisdeemedtobe“likely”.Seealsothecommentgivenunder“Incometax”.CashandliquidfundsLiquid funds include cash in hand, cheques and bank current accounts and deposits that can be reimbursed on


demand,which are readily convertible into cash and subject to an insignificant risk of a change in value. They arebookedatnominalvalue.OwnsharesOwn shares are booked at purchase cost, including accessory expenses of the sale and are stated reducingshareholders' equity. The financial effects deriving from any subsequent sales are noted as shareholders' equity.Following thecompletionof the firstownsharepurchaseprogramme,on28April2016, theshareholders'meetingresolvedtoauthorisepurchasesanddisposalsofownsharesasfromthesamedateofthemeetingandfor18monthsofthatdate, inanamountthatcanbefreelydecidedbytheBoard,uptoamaximumnumberofsharesthatshallnotexceed 10%of the share capital. The purchase price of each sharemust be no less and nomore than 15%of thereferencepricerecordedbytheshareduringthestockmarketsessionofthedaypriortoeachindividualtransaction.AssetsheldforsaleAccording to theprovisionsof IFRS5 “Non-currentAssetsHeld for SaleandDiscontinuedOperations”,non-currentassetswhosebookvaluewillmainlyberecoveredthroughasaleratherthancontinuoususe,iftherequirementsaremetasenvisagedbythespecificstandard,areclassifiedasheldforsaleandvaluedatthelesserofbookvalueandfairvalue,netofthecostsofsale.Asfromthedateonwhichsaidassetsareclassifiedasnon-currentassetsheldforsale,therelatedamortisationissuspended.Liabilitiesconnectedwithsaidassetsareclassifiedunder“Liabilitiesrelatingtoassetsheldforsale”,whilsttheeconomicresultrelatingtosaidassetsisnotedunder“Otherincome”.Non-currentfinancialliabilitiesFinancial liabilities are initially recorded at cost, corresponding to the fair value of the price received net of thetransactioncostsdirectlyattributabletotheloan.Afterinitialbooking,loansaremeasuredusingtheamortisedcostcriterionandtheeffectiveinterestratemethod.Theamortisedcostiscalculatedconsideringtheissuecostsandanydiscountorpremiumenvisagedatthetimeofsettlement.EmployeebenefitsStaff provisions disbursed at or following termination of the contract of employmentmainly consist of SeveranceIndemnity(“TFR”),which isregulatedby Italian legislationunderArt.2120oftheItalianCivilCode.TFR isadefinedbenefitsplan,i.e.aformalisedprogrammeofpost-employmentbenefitsthatconstitutesafutureobligationandoneforwhich theGroupwill bear the actuarial and related investment risks. As required by IAS 19R,MailUp uses theProjectedUnitCreditMethodtodeterminethecurrentvalueoftheobligationsandtherelatedsocialsecuritycostofthe current provisions; this method of calculation requires the use of objective actuarial hypotheses that arecompatiblewithdemographic(mortalityrate,staffturnoverrate)andfinancial(discountingrate,futureincreasesinsalary levels) variables. Actuarial gains and losses are immediately recognised in full on the statement ofcomprehensiveincomeincompliancewithIAS19R.Followingthesocialsecurityreform,asfrom1January2007,theTFRaccruedfollowingthecomingintoforceofsaidreform, is allocated to pension funds or treasury funds established by INPS for companies with more than 50employeesor, for companieswith fewer than50employees,may remain in the companyas forpreviousyears,oralternativelyallocated topension funds.On this, theallocationof theaccruingportionsofTFR inpension fundsorINPSmeans thataportionof theTFRaccruing is classifiedasadefinedcontributionsplan, insofaras thecompanyobligation consists exclusively of paying the contributions to the pension provision or INPS. The liability relative topreviousTFRcontinuestoconstituteadefinedbenefitsplan,tobeassessedaccordingtoactuarialhypotheses.From an accounting viewpoint, through the actuarial valuation, the interest cost that constitutes the figurativeexpense that the companywould incur in asking themarket for a loan in the amount of the TFR is carried under“Financial income/expense” on the income statement, and the current service cost, which defines the amount ofrightsaccruedduringtheyearbytheemployeeswhohavenottransferredtheportionsaccruedasfrom01January2007tocomplementarywelfare,under“payrollcosts”.Actuarialgainsandlossesthatreflecttheeffectsderivingfromchanges to theactuarialhypothesesusedarebookeddirectlyasshareholders'equity,withoutbeingcarriedon theincomestatementandarestatedontheStatementofComprehensiveIncome.BenefitsincentiveplanforseniormanagementAdditionalbenefitsarerecognisedtothemanagementteamofMailUpthroughcapitalsharingplans.Theseplansarebooked inaccordancewith theprovisionsof IFRS2 (Share-basedpayments).According to theprovisionsof IFRS2,theseplansarea componentof the remunerationofbeneficiaries;hence, forplanswhere remuneration takes theformofcapitalinstruments,thecostisrepresentedbythefairvalueoftheseinstrumentsasatthedateofassignmentand iscarriedontheconsolidated incomestatementas“Payrollcosts”throughouttheperiodrunningbetweenthedate of assignment and of accrual,with a counter-entry into an equity reserve called “Stock option plan reserve”.


Changesinfairvaluesubsequenttothedateofassignmenthavenoeffectoninitialvaluation.Attheendofeachyear,theestimatednumberof rights tobeaccruedthroughtomaturity, isupdated.Thechange inestimatereduces the“Stockoptionplanreserve”,withacounter-entryunder“Payrollcosts”.ProvisionsforrisksandchargesProvisionsforrisksandchargesincludeprovisionsderivingfromcurrentobligations(legalorimplicit)derivingfromapastevent,inordertofulfilwhich,itislikelythatresourceswillneedtobeused,theamountofwhichcanbereliablyestimated.If forecast use of resources goes beyond the year after, the obligation is registered at current value, determinedthroughthediscountingofforecastfutureflows,discountedataratethatalsoconsidersthecostofmoneyandriskoftheliability.Instead,noprovisionismadeagainstrisksforwhichtheonsetofaliabilityismerelypossible.Inthisevent,aspecificdisclosureisgiveninthespecificinformationsectiononcommitmentsandrisksandnoprovisionismade.TradepayablesPayables are booked at nominal value. When, considering the payment terms agreed, a financial transaction isimplemented, payables aremeasured at current value, allocating the discount as a financial expense according tocompetence.OthercurrentliabilitiesTheserefertovarioustypesoftransactionsandarebookedatnominalvalue.BookingofrevenuesRevenuesarebookedtotheextenttowhich it isprobablethattheeconomicbenefitsareachievedandtherelatedamount can be reliably determined. The following specific criteria in the booking of revenues must be respectedbeforemakingtheallocationtotheincomestatement:Salesofgoods-Therevenueisrecognised,inaccordancewiththatestablishedbyIAS18,whenallsignificantrisksandbenefitsconnectedwiththeownershipoftheassetaretransferredtothebuyer.Provisionofservices-Revenuesarerecognisedatthetimeofeffectivedisbursementwithreferencetocompletionoftheservicesuppliedandinrespectoftotalservicesstilltobeprovided.Interest-Thisisnotedaccordingtocompetence.CostsCosts and other operating expenses are noted on the income statement when they are incurred according to anaccrualsbasisandcorrelationwithrevenues,whentheydonotproducefutureeconomicbenefitsordonotmeettherequirementsforbookingasassetsonthestatementoffinancialposition.Financialexpensesarenotedaccordingtomaturity,onthebasisofthestartoftheterms,usingtheeffectiverate.ImpairmentofintangibleassetsAtleastonceayear,thecompanyverifiesthenetbookvalueoftangibleandintangibleassets,soastodetermineifthereisanyindicationthattheseassetsmayhavesufferedalossinvalue.Ifthereisanysuchevidence,thevaluethatcanberecoveredontheassetsisestimated.Intangibleassetsaresubjecttoimpairmenttestingeachyear,evenwheretherearenoindicatorsoflossinvalueor,morefrequently,eachtimethereisanindicationthattheassetmayhavelostvalue,ifnecessary.Therecoverablevalueofatangibleorintangibleassetisdefinedasthegreaterofitsfairvaluelessthecostsofsaleandvalue inuse,calculatedasthecurrentvalueof futurecashflowthat isexpectedtostemfromanassetorcashgeneratingunit(CGU).Thecashflowforecastisbasedoncorporateplansandreasonable,documentedassumptionsregardingthefutureresultsofthecompanyandmacroeconomicconditions,alsoasregardsthediscountingrateusedinthediscountingprocess.Whenitisnotpossibletoestimatethevaluethatcanberecoveredonanindividualasset,thecompanyestimatesthevaluethatcanberecoveredonthecashgeneratingunittowhichtheassetpertains.Morespecifically,withreferencetoMailUp, a single CGU has been identified as coincidingwith the legal entity,whose assets include tangible andintangibleassetsasatthetestingdate.Eachtimetherecoverablevalueofanasset(orcashgeneratingunit)islessthanthebookvalue,thelatterisreducedto the recoverable valueand the loss is carriedon the income statement. Thereafter, if a losspreviouslynotedonassetsotherthangoodwill shouldceasetoapplyorreduce, thebookvalueof theasset (orcashgeneratingunit) isincreaseduptothenewestimatedrecoverablevalue(whichshallnot,inanycase,exceedthenetcarryingamountoftheassethadnoimpairmentbeenapplied).


DividendsIncome fordividends is recordedwhen the right to collectionmatures,whichnormally coincideswith themeetingresolutiontodistributethedividends.ThedividendsresolvedarerecognisedasamountsduetoShareholdersatthetimethedistributionisresolved.TaxesPeriodtaxincludescurrentanddeferredtax.Incometaxisgenerallycarriedontheincomestatement,exceptwhenrelativetosituationsbookeddirectlyasequity.Current tax is tax expected to be paid on taxable period income and calculated in compliance with current taxregulationsandconsideringtheexemptionsapplicableandanytaxcreditsdue.Deferred tax is calculated using the liabilitymethod on temporary differences between the amount of assets andliabilitiesonthefinancialstatementsandthecorrespondingtaxvalues.Deferredtaxiscalculatedaccordingtothetaxrateexpectedtobeinforceatthetimetheassetisrealisedortheliabilityisextinguished.Deferredtaxassetsareonlynotedifitislikelythatinfollowingyears,sufficienttaxableincomewillbegeneratedtorealisesaidassets.Deferredtaxassetsandliabilitiesareonlyoffsetwhenthereisalegalrighttocompensationandwhentheyrefertotaxduetothesametaxauthority.Incometaxrelativetopreviousyearsincludesexpensesandincomenotedduringtheyearforincometaxrelativetopreviousyears.Profit/(loss)pershareBasicProfit/(loss)pershare iscalculatedasaratioof theeconomicresult for theweightedaverageofordinaryshares inissueduringtheyear,excludinganyownshares.DilutedDiluted profit/(loss) per share is calculated as a ratio of the economic result for theweighted average of ordinaryshares in issueduring theyear,excludinganyownshares. Inorder to calculate thedilutedearningsper share, theweightedaverageofshares in issueisaltered,assumingtheconversionofallpotentialshareswithadilutingeffect,whilsttheeconomicresultisadjustedtoconsidertheeffects,netoftax,oftheconversion.DiscretionaryvaluationsandsignificantaccountingestimatesThe preparation of the consolidated financial statements in compliancewith the IFRS requires, fromdirectors, theapplicationofaccountingstandardsandmethodsthat,insomecircumstances,arebasedonvaluationsandestimatesbasedonpastexperienceandassumptionsthatareconsideredreasonableandrealisticatthetime,accordingtotherelatedcircumstances.Theapplicationof theseestimatesandassumptions influences theamountsbookedandtheinformationsupplied.Theendeffectiveresultsoftheitemsforwhichsaidestimatesandassumptionswereused,maydifferfromthatreportedonthefinancialstatements,whichnotetheeffectsoftheonsetoftheeventestimated,duetotheuncertaintythatcharacterisestheassumptionsandconditionsonwhichtheestimatesarebased.Belowisabrief listof itemsrequiringagreaterdegreeofsubjectivity fromthedirectors inpreparingtheestimatesand for which a change in the conditions underlying the assumptions usedmay have a significant impact on thefinancialresults.ProvisionfordoubtfuldebtThe provision for doubtful debt reflects the best estimate of the directors as to the losses relative to the loansportfolio with regards to customers. This forecast is based on the losses expected by the Company, determinedaccordingtopreviousexperiencewithsimilarreceivables,currentandhistoricpastduepositions,carefulmonitoringofcreditqualityandforecastsregardingtheeconomicandmarketconditions.PrepaidtaxPrepaidtaxisbookedonthebasisofexpectationsoftaxableincomeinfutureyears,whichwillallowforitsrecovery.Theassessmentofforecasttaxableincomeforthepurposeofbookingprepaidtaxdependsonfactorsthatmayvaryovertimeanddeterminesignificanteffectsonthepotentialrecoveryofprepaidtaxreceivables.ProvisionsforrisksandchargesAgainstlegalandtaxrisks,provisionsaremadetorepresenttheriskofanegativeoutcome.Thevalueofprovisionsbookedrelativetosaidrisksisthebestestimatedasatthedate,preparedbythedirectors.Thisestimateentailsthe


adoption of assumptions that depend on factors that may change over time and which may, therefore, havesignificanteffectsoncurrentestimatespreparedbydirectorsinordertopreparetheCompany’sfinancialstatements.ConversionofamountsdenominatedinforeigncurrencyFunctionalcurrencyTheCompanypreparesthefinancialstatementsinaccordancewiththecurrencyusedinItaly.Thefunctionalcurrencyofthecompanyistheeuro,whichisthecurrencyinwhichtheseparatefinancialstatementsarepresented.TransactionsandaccountingentriesTransactionsperformedinforeigncurrenciesareinitiallybookedattheexchangerateasatthetransactiondate.Asattheaccountclosingdate,monetaryassetsandliabilitiesheld inforeigncurrencyarereconvertedaccordingtotheexchangerateinforceasatthatdate.Non-monetaryitemsmeasuredathistoriccostinforeigncurrencyareconvertedusingtheexchangerateinforceonthedateofthetransaction.Non-monetary itemsregisteredatfairvalueareconvertedusingtheexchangerate inforceasatthedateonwhichthevaluewasdetermined.Accountingstandardsapplicableasfrom2016

Below are the accounting standards, amendments and interpretations issued by the IASB applicable as from 31January2016.IAS16-IAS38amendment-Clarificationsonacceptablemethodsofamortisation/depreciationByRegulationno.2015/2231issuedbytheEuropeanCommissionon02December2015,theamendmentstoIAS16andIAS38wereapprovedaimingtoclarifythatarevenue-basedamortisation/depreciationmethodisnotconsideredappropriateinsofarasitonlyreflectstheflowofrevenuesgeneratedbysaidactivitiesandnot,instead,themethodbywhich the economic benefits incorporated into the asset are consumed. This amendment had no impact on thefinancialpositionandconsolidatedprofitability.IFRS11amendment-BookingofinterestsinjointoperationsByRegulationno.2015/2173issuedbytheEuropeanCommissionon24November2015,theamendmenttoIFRS11“Booking of acquisitions of equity investments in joint operations”was approved,which establishes that an entityshall adopt the standards set out in IFRS 3 to record the accounting effects consequent to the acquisition of aninterest in a joint operation that constitutes a business. Specifically,whenacquiring a joint operation, the investormust measure the assets and liabilities acquired at the related fair value, book the expenses connected with theacquisition,define thedeferred tax impactsderiving fromthe reallocationof thepricepaidon thevaluesacquiredand, finally, identify any goodwill as a residual element deriving from the exercise of purchase price allocation asdescribedabove.TheamendmenttoIFRS11appliestoboththeacquisitionofaninitialinterestandsubsequentacquisitions.However,anequityinvestmentheldpreviouslyisnotmeasuredatfairvaluewhentheacquisitionofasubsequentportionkeepsthe joint control unchanged (i.e. the additional acquisition does not result in control over the subsidiary). Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.IAS16- IAS41amendment-Changestothestandardapplicabletoassetsrepresentedbyplantations(applicableasfrom01January2016)Theamendment,publishedinJune2014,aimstoalterthemethodbywhichtomeasureassetsrepresentedbyfruit-bearing plants, such as vines, rubber trees and oil palms. The amendment envisages the application of the sameaccountingmethodasexistingfortangiblefixedassets,therebyallowingforthebookingatcostasanalternativetothe fair valuemodelmethodpursuant to IAS41,whichoriginallyapplied toallbiologicalassets.Plantationsare, infact,comparablewithotherproductionplantsoractivities.Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.ThenewstandarddoesnotapplytotheGroup.IAS1amendment-ClarificationsonthedisclosureRegulationno.2015/2406issuedbytheEuropeanCommissionon18December2015approvedtheamendmentstoIAS 1 given in the document “disclosure initiative”, essentially containing clarifications on the method by which


financial statementsdisclosures shouldbepresented, drawing attention to theuseof the conceptofmeaning andaggregation.Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.IFRS10-12-IAS28amendment-Investmentcompanies:exceptiontotheapplicationoftheconsolidationobligationThe amendment, which was published in December 2014, establishes that investment companies that may comeunderthescopeofthedefinitionestablishedbythestandard,shallbeexemptfromsubmittingconsolidatedfinancialstatements and instead required to value subsidiaries using the fair value method envisaged by IFRS 9. The newstandarddoesnotapplytotheGroup.IAS19amendment-DefinedBenefitPlans:EmployeeContributionsRegulationno.2015/29issuedbytheEuropeanCommissionon17December2014approvedtheamendmenttoIAS19“DefinedBenefitPlans:EmployeeContributions”.Theamendmentcomesintoeffectstartingfromyearsstartingonorafter1February2015.Insomecountries,pensionplansrequireemployeesorthirdpartiestomakecontributionstothe pension plan and these contributions reduce the cost incurred by the employer. The change introduces asimplificationonwhichbasistheemployeecontributions(orthosepaidbythirdparties),whennotdependingonthenumberofyearsofservice,canberecognisedasareductionofthecostoflabourintheperiodinwhichtherelatedserviceisprovided,ratherthanbeingattributedtotheentire“periodofwork”.ThebookingofvoluntarycontributionshasnotchangedwithrespecttothecurrentversionofIAS19(theyarerecognisedasreducingthecostoflabouratthetimepaymentismade).Thisamendmenthadnoimpactonthefinancialpositionandconsolidatedprofitability.AnnualImprovementstoIFRSs2010-2012CycleRegulationno.2015/28issuedbytheEuropeanCommissionon17December2014approvedthedocument“AnnualImprovementstoIFRSs2010-2012Cycle”containingamendments,whicharemainlytechnicalandeditorial,tosomeinternationalfinancialreportingstandards.Thechangesspecifiedinsaiddocumenttakeeffectasfromyearsstartingonorafter1February2015.Thefollowingamendmentsareincludedinthe2010-2012improvementscycle:IFRS 2 “Share-based payments”: the definition of “vesting condition” has been clarified and definitions of “servicecondition”and“performancecondition”introduced;IFRS3“Businesscombinations”:thestandardhasbeenamendedtoclarifythattheobligationtopayapotentialpricecomes under the definition of a financial instrument and must be classified as a financial liability or an item ofshareholders' equity on the basis of indications given in IAS 32. It has also been clarified that obligations to pay apotentialprice,differentfromthosecomingunderthescopeofthedefinitionofanequityinstrument,aremeasuredatfairvalueateachreportingdate,withchangesnotedontheincomestatement;IFRS 8 “Operating segments”: the changemade requires a disclosure to be given on the assessmentsmade in theaggregationofoperatingsegments,describingthesegmentsthathavebeenaggregatedandtheeconomicindicatorsmeasuredtodeterminethattheaggregatedsegmentshavesimilareconomiccharacteristics;IAS16“Property,plantandmachinery”andIAS38“Intangibleassets”:bothstandardshavebeenamendedtoclarifytheway inwhich historic cost and the provision for amortisation/depreciation of a fixed asset should be booked,whenanentityappliestherevaluedcostmodel;IAS24“Relatedpartydisclosure”:thechangemadeestablishestheinformationtobesuppliedwhenthereisathird-partyentitysupplyingservicesrelativetothemanagementofmanagerswithstrategicfunctionsintheentitydraftingthefinancialstatements.AnnualImprovementstoIFRSs2012-2014CycleRegulation no. 2015/2343 issued by the European Commission on 15 December 2015 approved the document“AnnualImprovementstoIFRSs2012-2014Cycle”containingamendments,whicharemainlytechnicalandeditorial,tosomeinternationalfinancialreportingstandards.Themainchangesareasfollows:IFRS5 “Non-currentAssetsHeld for SaleandDiscontinuedOperations”: theamendment clarifies thatwhenanon-currentasset(orgroupheldfordisposal)isreclassifiedfrom“heldforsale”to“heldfordistribution”orviceversa,thisreclassification does not constitute a change to a plan for sale or distribution. It has also been clarified that thestandardsofIFRS5onchangestoasalesplanapplytoanasset(orgroupheldfordisposal)thatceasesbeingheldfordistributionbutisnotreclassifiedas“heldforsale”;IFRS 7 “Service contracts”: if an entity transfers a financial asset to third parties and the conditions of IAS 39 arerespectedforthederecognitionfromtheaccountsoftheasset,theamendmenttoIFRS7suppliesindicationsonwhatismeant by “residual involvement” and adds a specific guide to help the companymanagement determine if theterms of an agreement for the provision of services that regard the asset transferred do or do not give rise to aresidualinvolvement;


IFRS7 “Interim financial statements”: it clarifies that thedisclosure requiredby thepreviousamendment to IFRS7“Disclosure-Offsettingfinancialassetsandfinancial liabilities”neednotbesuppliedininterimfinancialstatements,unlessspecificallyrequiredbyIAS34;IAS 19 “Employee benefits”: the standard requires the discounting rate used to discount obligations for benefitssubsequent to termination of the contract of employment to be determined with reference to the marketperformanceofbondsofprimarycompaniesandincountrieswherethereisno“deepmarket”forsaidsecurities,themarketreturnsofsecuritiesofpublicentitiesmustbeused.Thechangeintroducedwiththe2012-2014improvementscycle establishes that in assessing if there is a “deep market” of bonds of primary companies, it is important toconsiderthemarketonalevelofcurrencyandnotofindividualcountry;IAS34“Interimfinancialstatements”:itliststheinformationthatmustbegivenininterimfinancialstatements,unlessgiven elsewhere in the interim financial statements. The amendment clarifies the meaning of “disclosure givenelsewhere in the interimfinancial statements”,explaining that reference ismadetootherdocuments thatmustbemadeavailabletousers,togetherwiththeinterimfinancialstatements(e.g.theReportonoperations).Accountingstandards,amendmentsandinterpretationsapproved,butnotyetapplicable/notappliedearlybytheGroupIFRS9-Financialinstruments(applicableasfrom01January2018)Thenewdocumentrepresentsthefirstpartofaprocessinstages,whichaimstofullyreplaceIAS39.IFRS9introducesnew criteria for the classification andmeasurement of financial assets and liabilities and for the derecognition offinancialassets.Morespecifically,thecriteriafortherecognitionandmeasurementoffinancialassetsandtherelatedclassificationinthefinancialreport,havebeenamended.Thenewprovisionsestablishamodelfortheclassificationandvaluationof financial assetsbasedexclusivelyon the following categories: assets valuedatamortisedcostandassets valued at fair value. The new provisions also establish that equity investments other than those held insubsidiaries, jointoperationsorassociates, shallbemeasuredat fair valuewith theallocationof theeffects to theincomestatement. Ifsaidequity investmentsarenotheldfortrading,thechanges infairvaluecanbenoted inthestatementofcomprehensiveincome,maintainingonlytheeffectsconnectedwiththedistributionofdividendsontheincomestatement.Upondisposingoftheequityinvestment,theamountsnotedinthestatementofcomprehensiveincomeshallnotbebookedtotheincomestatement.On28October2010,theIASBsupplementedtheprovisionsofIFRS9, including thecriteria for the recognitionandmeasurementof financial liabilities.Morespecifically, thenewprovisions require that, if measuring a financial liability at fair value with allocation of the effects on the incomestatement,thechangesinfairvalueconnectedwithchangestothecreditriskoftheissuer(the“owncreditrisk”)shallbenotedonthestatementofcomprehensive income;this itemshallbeallocatedtotheincomestatementsoastoensure the symmetrical representation with other items connected with the liability, avoiding any accountingmismatch.Moreover, in November 2013, an amendment was published that introduced three important changes. Themostimportantregardshedgeaccountingandintroducesanewmodelthatincorporatesaseriesofimprovementsaimedataligningaccountingtreatmentswiththemanagementofriskappliedbythecompany.Theothertwochangesregardthe period of first-time application of the standard, offering the possibility of immediate adoption and recordingdirectlyonthestatementofcomprehensiveincomeoftheeffectsderivingfromthechangesintheissuercreditrisk(the“owncreditrisk”).TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IFRS15-RevenuefromContractswithCustomers(applicableasfrom01January2018)ThenewstandardaimstoimprovethequalityandstandardisationintherecordingofrevenuesandcomparabilityoffinancialstatementspreparedinaccordancewiththeIFRSandtheAmericanaccountingstandards.Accordingtothenewstandard, themodel forrecognisingrevenuescanno longerbebasedontheearningmethod,butrathermustusetheasset-liabilitymethodthatdrawsattentiontothetimeoftransferofcontrolovertheassetsold.TheGroupbelieves that the adoption of the new standard will not have any significant impact on its financial position andprofitability.Accountingstandards,amendmentsandinterpretationsnotyetapprovedIFRS16-Leasing(applicableasfrom01January2019,withthepossibilityofearlyapplication)On13January2016,theIASBpublishedthenewaccountingstandardIFRS16Leasing.ThenewstandardreplacesIAS17andprovidesaccounting representationmethods thataremoresuitable in termsof reflecting thenatureof theleaseinthefinancialstatements.ThenewIFRS16appliesasfrom01January2019,butearlyapplicationispermitted


for companies also applying IFRS 15 - Revenue from Contracts with Customers. The Group is still finalising itsmeasurementof the impactof thenewstandardon itsequityand financial structure.According to theprovisionalanalysescurrentlybeing finalised, thegreatest impactwill regardcontracts inplace relative toproperties, carsandelectronicmachines.TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IAS12amendment-Incometax(applicableasfrom01January2017,withthepossibilityofearlyapplication)On19January2016, the IASBpublishedsomeamendmentsto IAS12.Theamendmentaimstoclarifyhowtobookdeferredtaxassetsrelativetodebtinstrumentsmeasuredatfairvalue.TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IAS7amendment-StatementofCashFlows(applicableasfrom01January2017)On 29 January 2016, the IASB issued amendments to IAS 7 “Statement of Cash Flows”: The change requires thefinancial statements to provide information on the changes to financial liabilities with the aim of improving thedisclosuregiventoinvestorstohelpthembetterunderstandthechangesaffectingthesepayables.Thisamendment,actingonlyonthepresentation,willhavenoimpactonthefinancialpositionandGroupprofitability.IFRS14-RegulatoryDeferralAccounts(applicableasfrom01January2016)The new standard allows only those adopting IFRS for the first time to continue to book amounts relating to rateregulation according to the previous accounting standards adopted. In order to improve the comparability withentitiesapplying IFRSand thatdonotbooksaidamounts, thestandard requires theeffectof rate regulation tobepresentedseparatelyfromtheotheritems.TheEuropeanCommissionhasdecidednottostarttheapprovalprocessof this standard ad interim, and instead to await the final standard. The new standard does not apply to theconsolidatedfinancialreport.IFRS 10 - IAS 28 amendment - Sale or contributionof assets betweenan investor and its associate or joint venture(applicableasfrom01January2016)Theamendment,whichwaspublishedinSeptember2014,aimstosolveaconflictbetweentheprovisionsofIFRS10andIAS28 ifan investorsellsorcontributesabusinessorassociateor jointventure.Themainchangemadetotheamendmentisthefactthatthecapitalgainorlossconsequenttothelossofcontrolmustberecordedinfullatthetimeofthesaleorcontributionofthebusiness.Apartialcapitalgainorlosswillberecordedonlyintheeventofasaleorcontributioninvolvingindividualassetsonly.TheIASBhassuspendedpublicationandapprovalofsaidamendmenttoadatetobedefined.IFRS2amendment-Classificationandmeasurementofshare-basedpayments(issuedon29June2016)Itincludesclarificationsontheaccountingofstockoptionssubjecttovestingconditionsconnectedwithperformance.TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IFRS4amendment-ApplicationofIFRS9FinancialinstrumentstoIFRS4Insurancecontracts(issuedon12September2016)The amendment introduces different methods of booking for insurance contracts coming under the scope ofapplicationofIFRS4.Theamendmentdoesnotapplytotheconsolidatedfinancialreport.SpecificationsonIFRS15-RevenuefromContractswithCustomers(issuedon12April2016)The IASB has provided practical indications on certain subjects covered by IFRS 15 (identification of performanceobligations,mainconsiderationsversusagentandlicensing).TheanalysisofthepotentialimpactofthisamendmentwillbeconsideredatthesametimeastheapplicationofIFRS15,describedabove.AnnualImprovementstoIFRSs2014-2016CycleThedocument“Annual Improvementsto IFRSs2014-2016Cycle”,notyetapproved,containingamendments,whicharemainlytechnicalandeditorial,tosomeinternationalfinancialreportingstandards.ThemainclarificationsregardIFRS1,IAS28andIFRS12.WebelievethattheseimprovementswillnotimpacttheGroup’sfinancialposition.IFRIC22interpretation-ForeignCurrencyTransactionsandAdvanceConsideration(issuedon08December2016)


IFRIC22aimstoclarifythebookingofoperationsinvolvingthereceiptorpaymentofadvancesinforeigncurrency,inparticularwhenanentityrecordsanon-monetaryassetorliabilitybeforebookingtherelatedasset,revenueorcost.IFRIC22appliesasfrom01January2018;earlyapplicationispermitted.IAS40amendment-TransfersofInvestmentProperty(issuedon08December2016)Themainchangesintroducedbytheamendmentincludethechangeinintendedpurposeofaninvestmentpropertyonlybeingabletotakeplacewhenthereisevidenceofachangeinuse.RiskanalysisIn going about its business, the Company is exposed to risks and uncertainties, deriving from exogenous factorsconnectedwiththegeneralmacroeconomiccontextorthespecificcontexttotheoperatingsegmentsinwhichitgoesaboutitsbusiness,aswellastorisksderivingfromstrategicchoicesorinternaloperatingrisks.The identificationandmitigationof such riskshasbeen carriedout systematically, allowing for themonitoringandtimelyoverseeingoftherisklevelsdetected.Under the scope of the business risks, themain risks identified, monitored andmanaged by the company are asfollows:-riskconnectedwiththegeneraleconomictrend;-market-relatedrisks;-risksconnectedwithfinancialoperations.RiskconnectedwiththegeneraleconomictrendTheeconomic-financialpositionofthecompaniesandothersubsidiariesbelongingtotheGroup,is influencedbyallfactors comprising the Italian and international macroeconomic context. During the reporting period, despite themodest signs of recovery, situations of uncertainty continue to persist in economic terms in general. This phase isfollowing a longperiodof recession thathas resulted in a significantdeteriorationof theeconomy. In Italy, like inotherEUcountries,widespreadausteritymeasureshavebeenadopted,whichhavenegatively influencedconsumertrust, their buying power and spending capacity. In this difficultmacroeconomic situation,MailUp has successfullygrownandachieved importantobjectives, but the crisis of theEurozone countries andunforeseeableeffectsof itscontinuation,mayinanycasehavenegativeeffectsonthecompanybusiness.Marketrisks

The sectors in which MailUp operates are characterised by rapid technological development and suffer thecompetitivepressurederivingfromthedevelopmentoftechnology.Thecompany’ssuccessdepends,amongstotheraspects, on the capacity to innovative and strengthen its technologies, in order to respond to the technologicalprogress in the sector in which it operates. MailUp consequently finds itself having to cope with a more acutecompetition by virtue of the emerging technologies and services that may be introduced or implemented in thefuture.Thenewtechnologies,infact,maylimitorreducethecompany’sbusinessand/orencouragethedevelopmentandgrowthofnewoperators.Inparticular,theSMSsystemmaybesurpassedbyothernetwork-basedsystems(suchasMessenger,WhatsApp,WeChat,PushNotifications),withtheconsequencethatthecompanymaynotbeabletosuccessfullyand/orquicklymanageanytransitiontotheuseoftheseplatforms.

If the solutions offered by the company should be unable to satisfy the needs of clients and/or respond totechnologicalprogress, thecompanywillneedtobeableto improve its technologicalplatformquicklyanddevelopand introducenewservices,newapplicationsandnewsolutionsontothemarketquicklyandatcompetitiveprices.Thecompany’s incapacityto improve,develop, introduceandsupplyservicesquicklythatareabletosatisfymarketdemands, including in technological terms, may have a negative impact on operating results or may make thecompany’stechnologicalplatformobsolete.Inordertomaintainitscompetitivenessonthemarket,thecompanywillthereforeneedto invest inresearchanddevelopment,withahighcapacitytoadjusttocontinuetorespondtotherapidtechnologicalchangesandconstantlydevelopthecharacteristicsofitsservicessoastorespondtothechangingmarketdemands.

Ifthecompanyshouldbeunabletoadjustpromptlytothetechnologicalevolutionand/ortheintroductionofanewtechnology,negativeeffectsmaybeseenonthecompany’seconomic,equityandfinancialposition.


CreditriskThecreditriskistheexposuretopotentiallossesderivingfromfailurebycounterpartiestofulfiltheobligationstheyhaveassumed.Creditmanagementisentrustedtothefinanceandadministrationdepartment,which,onthebasisofformalisedassessmentandappointmentproceduresofcommercialpartners,seekstominimisetherisk.Followingtheeconomy’s difficulties, stricter procedures havebeen adopted to quantify and control client risk levels. In order toreduce the risk of insolvency deriving from trade receivables, a series ofmeasures has been introduced aiming toencouragetheuseofelectronicpaymentsystems(creditcards,PayPal)bycustomers,forexamplestrengtheningandinnovatingthee-commercesalesystem.Thischoiceresultedintheconstantgrowthofcollectionsmadebyelectronicpaymentsystems,improvingthequalityoftradereceivablesandreducingtheimpactofthecostsofdebtcollection.ItmustbeconsideredthatthefinancialactivitiesoftheCompanyhaveagoodcreditstanding.LiquidityriskTheliquidityriskconsistsoftheimpossibilityofrespectingpaymentcommitmentsduetodifficultiesinobtainingfundsorliquidatingassetsonthemarket.Theconsequenceisanegativeimpactontheeconomicresultsifthecompanyisforcedtoincuradditionalcoststofulfilitscommitmentsor,asanextremeconsequence,asituationofinsolvencythatrisks the company as a going concern. At present, also thanks to its listing on the AIMmarket and the excellentrelationswith the banking system,MailUp enjoys a good level of liquidity and reduced debt, aimed exclusively atgrowth by external lines, implemented through acquisitions, during the second half of 2015, of subsidiaries. Thisprocess enabled the confirmation of the organic growth seen for several years now and the booking of excellentresultsfor2016.Inordertooptimisethemanagementoffinancialresources,reducingtheliquidityrisk,MailUphasadoptedprocessesfor the systematicmonitoringofprospective liquidity conditions, in connectionwith thebusinessplanningprocess.TheforeseeablecashflowforFY2017includes,inadditiontothedynamicsofworkingcapitalandinvestments,alsothe effects of thematurity of current liabilities. The company expects to copewith its financial needs through theflowsderivingfromoperationsandcashonhand.Consideringthepositivetrendofsalesvolumes,whichisexpectedto bemaintained in the forthcoming years, it is expected that in FY 2017, the company will be able to generatefinancialresourcesthat,togetherwithcurrentfunds,willbeabletoguaranteesuitablesupportfortheordinaryandextraordinaryinvestmentsplannedtoo.Itisconsideredthattheliquidityriskisnotsignificant.

InterestrateriskThe company has obtained financial resources through banks to cope with extraordinary operations. As at 31December 2016, the consolidated net financial position, net of amounts held on account, comes to Euro 350,561.Morespecifically,short-termamountsduetobankscomestoEuro1,190,373,whilstthemedium-termdebt isEuro2,183,645.Theunderlyingloancontractsenvisagetermsandconditionsthatareinlinewithmarketpractice.Theloansareconnectedwiththeriskofinterestratechanges,astheyarenegotiatedatvariablerates.Itcannotbeexcludedthatgrowthof interestratesmayresult inan increase incostsconnectedwiththefinancingofdebt,withconsequentnegativeeffectsonthecompany’seconomic-financialposition.ConversionexchangerateriskMailUp holds an equity investment in MailUp Inc. with registered office in San Francisco, the USA. The equityinvestmentisbookedforavalueofEuro499,514andisthereforesubjecttochangesintheEuro/Dollarexchangerate.ThecompanyalsohasashareholdinginthesubsidiaryMailUpNordicsforatotalamountofEuro800,000subjecttotheDanishKrone/Euroexchange rate risk. It ispointedout that theDanishKrone/Euroexchange rate isextremelystableandpresentsverylowvolatilityrisks.Althoughitmonitorsexposuretotheriskofconversionexchangerates,MailUpisonlyslightlysubjecttoit.Riskofrecovery/impairmentassetsThe risk of recovering the value of the assets held by the Company takes concrete form in connection with theeconomic performance and the capacity to produce sufficient cash flow to guarantee recovery of the investmentvalue.This risk ismonitoredby themanagement throughtheregularverificationofeconomicresults, includingunder thescopeofspecificvaluationprocedures,suchas,forexample,bycarryingoutimpairmenttestsatleastonceayear.Disclosureonthebookvalueoffinancialinstruments


Belowisthedisclosureonthebookvalueofthefinancial instrumentsforthefinancialyearendedon31December2016: 31December2016MailUpS.p.A.(inunitsofeuros) Receivables,

payablesandloans

Fairvalue Fairvaluehierarchy

Otherfinancialassets Othernon-currentfinancialassets 162,862 162,862 Level3Othercurrentfinancialassets 108,062 108,062 Level3Tradereceivables Tradereceivables 1,156,163 1,156,163 Level3Liquidfundsandequivalent Cashatbankandpostoffice 3,023,456 3,023,456 Level1 Non-currentfinancialliabilitiesandpayables

Amountsduetobanks 2,183,645 2,183,645 Level1Currentliabilities Amountsduetobanksandotherlenders

1,190,373 1,190,373 Level1

Tradepayables 691,622 691,622 Level3 PotentialliabilitiesInadditiontothatindicatedintheparagraphonProvisionsforrisks,nolegalortaxdisputesarecurrentlyunderwayinvolvingtheCompany.


NOTESONTHEEQUITY,FINANCIALANDECONOMICSTATEMENTSAssets

Non-currentassetsTangibleassets(1)


Plantsandmachinery

Description Amount Historic cost 60,526 Previous years’ depreciation/amortisation (59,460) Balance as at 31/12/2015 1,066 Period acquisitions Period disposals Period amortisation/depreciation (984) Balance as at 31/12/2016 82

Otherassets

Description Amount Historic cost 1,623,470 Previous years’ depreciation/amortisation (973,453) Balance as at 31/12/2015 650,017 Period acquisitions 243,440 Period disposals 0 Period amortisation/depreciation (264,257) Balance as at 31/12/2016 629,200

“Othertangibleassets”include:

- expensesforthepurchaseofofficefurnitureandfurnishingsforEuro74,685,netofperioddepreciation;- expensesforthepurchaseofelectronicofficemachineryforEuro547,715,netofperioddepreciation;- expensesforthepurchaseandinstallationofsigns,forEuro5,375,netofperioddepreciation;- expensesforthepurchaseofmobiletelephonesforEuro1,425,netofperioddepreciation.

Intangibleassets(2)

Balance as at 31/12/2016 Balance as at 31/12/2015 Changes 3,660,657 3,361,555 299,102

Descriptionofcosts

Value31/12/2015

Periodincreases Perioddecreases

Periodamortisation/depreciatio

n

Value31/12/2016

Platformdevelopment

3,185,715 1,676,911 (462,162) (916,192) 3,484,272


Thirdpartysoftware 92,844 42,156 (29,630) 105,370Trademarks 20,644 9,668 (7,745) 22,567Other 62,352 833 (14,737) 48,448

3,361,555 1,729,568 (462,162) (968,304) 3,660,657 “Platform development” includes costs for the development of the MailUp® platform for Euro 3,484,273, net ofrelevantamortisation/depreciation,ofwhichdetailsaregivenbelow;thissameitemalsoincludescostsforprojectstodevelop theMailUp® platform currently in progress, activities not yet completed at year end andwhich have not,therefore, been amortised. Period decreases highlights the value of the intangible asset BEE editor, developed byMailUpS.p.A.andsoldbymeansofconferraltotheAmericansubsidiaryMailUpIncon31December2016.“Thirdpartysoftware”includescostsrelativetosoftwareownedbythirdpartiesandpurchasedbythecompany.“Other”fixedassetsconsistofthecostsfortranslatingplatformcomponentsofmultiple-yearuse,incurredintoorderto allow for its use on export markets (e.g. English, Spanish, Japanese, Bahasa) under the scope of the generalstrategicinternationalgrowthprojectpursuedbytheGroup.ImpairmenttestingofintangibleassetsAs recalled in the section on the accounting standards adopted, the company verifies the potential recovery ofintangiblefixedassetsbookedonceayearthroughspecificassessments(impairmenttests)oneachcashgeneratingunit(or“CGU”),inthespecificcaserepresentedbythelegalentityMailUpS.p.A.,whichhasbookedsaidvaluesinitsaccounts.Thepotentialrecoveryoftheinvestmentisdeterminedwithreferencetoforecastcashflow.Impairmenttestingwascarriedoutconsideringthelatesteconomic-financialforecastsforfutureyears(2017-2019),asresultingfromthebudgetdataforFY2017andapplyingtheforecastsofdatacontainedthereinforFYsfrom2017to 2018. These forecasts prepared for impairment testing have been approved by the administrative body of thecompanyandconsidertheeffectsenvisagedfortheapplicationofthereferenceIAS/IFRSaccountingstandards.Thepotentialrecoveryofthevalueofthefixedassetsbookedrecordedischeckedthroughacomparisonofthenetbookvaluewiththerelatedvalueforrecovery,determinedasthevalueinuse(recoverableamount).Thisrecoverableamountisrepresentedbythecurrentvalueoffuturecashflow,bothforthespecificflowperiodandintermsofthespecificforecastingtimeframe,onthebasisofthedeterminationoftheterminalvalue(or“TV”)inapplicationoftheperpetuitymethod.Considering the companies’ operations and valuation practice relative to similar operations in Italy and abroad,referencewasmadetothefollowingvaluationmethods,commonlyrecognisedbyprofessionalpracticeforoperationsofthistypeandcompaniesoperatinginthereferencesectors:

• Analyticalmethods(discountedcashflow),asmainmethod;• Marketmultiplesmethod,ascontrolmethod.

Thediscountedcashflow(DCF)methodappliedtotheforecastsofthe2017-2019Planapprovedbytheadministrativebodyandterminalvalueof thebusinessestimatedat theendof thespecificperiodof thereferencebusinessplan,wasbasedontheapplicationofaWACC(weightedaveragecostofcapital)discountingrate.Thecalculationoftheweightedaveragecostofcapitalisperformedonthebasisofthefollowingvariables:

§ Riskfreerate:Implicitrisk-freerateofreturndeterminedaccordingtothethree-yearaveragereturnoftheten-yearItalianBTP;

§ Riskpremium: returnexpectedby investorsona specificmarketaccording to thespecificcountry riskandaveragecostofdebt(spread);

§ Sector-specific beta that measures the expected variability of returns upon a 1% variation in the marketprices;

§ Thecostofdebtisalsoconsiderednetofthespecifictaxrate;§ ThefinalvalueoftheWACCisweightedaccordingtothecompany’sspecificdebt/equityratio,toexpressthe

weightofrecoursetoowncapitalandthirdpartyfinancialcapital.Inordertofurtherstresstheresultsoftheimpairmenttestandverifythatitholdsoutevenintheworsthypothesesofexpectedresults,themanagersappliedprudentsensitivityhypothesesthatsimulateareductioninEBITDA.Again,for reasons of prudence, the prospective growth rate of the terminal value has been zeroed in view of the nowconsolidatednatureofthehistoricbusinessofMailUp,particularlyonanationallevel.ThemultipleprospectsofcomparablelistedcompaniesaretakenfromthelastEquityResearchpublishedbyEnVentResearchandAnalysis, dated18October2016,with reference to listeddigital companies, likeMailUp,on theAIMItalymarket.Morespecifically,referencewasmadetotheprospectiveaveragefor2016,ofthemultiplesrelatingto


thesalesrevenuesofasampleofreferencecompanies,EnterpriseValueEV/Salesand,bywayofafurthermethodofcomparison,theaverageofEV/EBITDAmultiples,thencalculatingtheaverageofthevaluesthusobtained.Followingtheassessmentsperformed,confirmedbythepositiveoutcomeofthetestperformedwithbothmethodsdescribedabove,noneedwasseentoapplyanyimpairmenttothebookvaluesandintangiblefixedassetsbooked.Developmentcosts“Platformdevelopment” includes the costs relating to the incrementaldevelopment,updateand innovationof theSaaS(SoftwareasaService)MailUp®platformownedbythecompany,whichhasalwaysbeenastrategicfactorinthebusiness success. The same item includes costs for projects to develop the MailUp® platform, currently underdevelopment; these had not been completed at year end and have therefore not been amortised. The costs arereasonably linked to benefits that extend over several years, and are amortised in relation to their residualpossibilitiesofuse,giventheeconomicandfinancialpotentialrecoveryoftheinvestment.ThecapitaliseddevelopmentsrelativetotheBEEsoftwarein2016shouldalsobementioned,forEuro238,294.ThisassetwasthenconferredtothesubsidiaryMailUpInc,asfrom31December2016,atthevalueofEuro462,162,asmentioned.Belowisasummaryofthemaindevelopmentactivitiescarriedoutin2016.NewfunctionswereaddedtotheMailUp®platformin2016.Developmentactivitieshavefocusedontheanalysisofusabilityoftheplatformandrevisionoftheuserinterface,resultingintherelease,inFebruary2017,oftheMailUp9version of the platform, as well as on the development of innovative new modules based on the philosophy of“embeddableplugin”,thatis,thecreationofservicesthatmaybeofferedseparatelyinthefuture,aswasthecaseforBEEPluginandBEEPro.Newfeatureswerealsodeveloped:

• “Simplified Automation” that allows creating automationwith a simplified “drag and drop” interface. Thisfunctioncanbeusedforexampletocreate“Welcomeseries”,i.e.aseriesofautomatede-mailstimedfromthedateof registration,happybirthdaye-mail or automatic e-mail following theabandonmentof a cartonane-commercewebsite.Thistypeofe-mailisreferredtoas“transactional”becauseitisnotsentasmasse-mailbutonly after a specific event related to a specific recipient and is among the most effective e-mail marketingmethodsasevidencedbythe2016E-mailMarketingObservatoryResearch;• “Landing page” that allows using the same “editor” to create e-mails also for the creation of landingwebpages, useful not only following the sending ofmarketing e-mails, but also suitable for thosewho send SMSmarketingcampaigns.Infact,itresolveswithsimplicitytheneedtohave“responsive”landingpages,i.e.suitabletobedisplayedeffectivelyevenonmobiledevices,adaptingthecontentandlayouttothetypeofdisplay;• NewAPI (applicationprogramming interface)methods thatallowmoresophisticated integrationsbetweentheMailUp®platformandcustomerdigitalapplicationsandalsoactivatethepositiveexternalitiesofthedigitalecosystem,withseveralcompaniesandprogrammersthathavedecidedtoindependentlydevelopintegrationsbetweentheMailUpserviceandthird-partyapplications/services.ThisledtothecreationofPymailup,alibraryin Python language that simplifies integration with Python, Prestashop systems, one of the most popular e-commerceplatforms,MSDynamicsCRM,DrupalSMSandotherssuchasthenewintegrationwithMagentothatwillbereleasedinopen-sourcemode.

In FY 2016, development focussed mainly on the launch ofMailUp 9, the completely redesigned version of theplatform,enrichedwithnewfunctionsfortheautomationofe-mailandSMSmarketing.MailUp9isoneofthemostimportantreleasesoftheplatform,theresultofamajorinterventionontheuserexperienceandcomeswithanall-new interface, thanks to the graphical redesign and reorganisation according to functional areas, with the aim ofoffering businesses an even simpler, more user-friendly browsing. Research continues on Marketing Automationtechnology,withMailUp9 introducingnew functions for thecreationofwork flows:as fromtoday,users cannowcreateautomaticprocessestodelivermulti-channelcampaignsinatimely,customisedfashion.Intheareadedicatedtothecreationofe-mails,MailUp9then introducesCollaboration,an innovativetoolbywhichtosharepre-launchstagesofthecampaign,allowingcolleaguesorcustomerstocollaborateonallaspectsofthemessage,throughtofinalapproval.Again,under thescopeofdevelopment,a significantamountof theworkcarriedout regarded the“InnovativeBigDataAnalyticsSystem”project.Thefocusoftheproject isthedevelopmentofanewBigDataAnalyticssystemforsmall and medium-sized companies. It is a project with a major impact on the future business of MailUp in the


mediumtolongterm,havingamarketpotentialalsoatinternationallevel,inparticularintheEnglish-speakingworld,whereBigDataAnalyticstoolsareusedtodayonlybylargemultinationalplayersofthesector,duetothecomplexityofthetechnologiesandhighspecializationofresourcesthatneedtobeputinplace.On29April2016,theDirectorateGeneralforEconomicDevelopmentoftheLombardyRegionapprovedthefundingoftheprojectpresentedbyMailUpas leader of a consortium that involves a numberof excellence companies adhering to the Technologies CentreofCremonaandtheCRITConsortium(CremonaInformationTechnology):MicrodataService,LineacomandPolitecnicodiMilano.MailUpwillreceiveuptoamaximumofEuro860,122non-repayablein24monthswithrespecttoatotalinvestmentofEuro2,045,648intheperiod.Thefundingwillcovercostsforpersonnel,training,toolsandequipmentandconsultancyservicesneededfortherealizationoftheinvestments,whichwillbeimplementedoverthenext24months.Equityinvestmentsinsubsidiaries(3)

Balance as at 31/12/2016 Balance as at 31/12/2015 Changes 11,152,016 10,689,854 462,162

Description 31/12/2015 Increase Decrease 31/12/2016Subsidiarycompanies

10,689,854 462,162 11,152,016

10,689,854 462,162 11,152,016TheincreaseinequityinvestmentsrelatestotheconferraloftheBEEeditortothesubsidiaryMailUpInc,asalreadymentioned.Thesubsidiaryhasinfactresolved,inserviceoftheconferralmadeduringFY2016,toincreaseitscapitalreservesinaccordancewithlocalregulations.Thefollowinginformationissuppliedonthecontrollingequityinvestmentshelddirectly.Subsidiarycompanies

Companyname Cityorforeigncountry

Sharecapital

Shareholders’equity

Profit/Loss

%held Bookvalue

NETWORKS.R.L. CREMONA(CR) 10,500 208,068 15,638 100 75,000MAILUPINC UNITED

STATESOFAMERICA

41,183*

459,113 932

100 499,514

ACUMBAMAILSL SPAIN 4,500 199,862 106,162 70 499,177MAILUPNORDICSA/S DENMARK 67,001* 1,027,890 (5,375) 100 800,000AGILETELECOMS.P.A. CARPI(MO) 500,000 1,481,934 881,934 100 9,278,325Total 11,152,016

(*historicexchangerateappliedasatthedateoffirstconsolidation)NetworkSrlhashistoricallyhandledallthetechnicalservicesrelativetotheMailUp®platformfortheparentcompany(softwaredevelopmentandmaintenance,help-desk,deliverabilityandabuse,ITinfrastructure).Inaresidualmanner,the company also designs, develops and retails video surveillance and intelligent video analysis solutions. On 27February2017, themergerbyacquisition tookplaceofNetwork intoMailUp.Themerger tookeffecton20March2017, the date on which both companies were registered with Companies House, whilst the accounting and taxeffectsappliedas from1 January2017,asenvisagedby specific regulations.Themerger is justifiedby theneed tosimplify the company and production structure of MailUp and allowed for the simplification of administrativeprocessesthankstotheeliminationofduplicationsandoverlapping.MailUpInc.,established inSanFranciscobytheparentcompany inNovember2011, itoperateduntil31December2016,aimingtomarketandlocalisetheMailUp®platformintheUnitedStatesofAmericaand,moregenerally,ontheAmericancontinent. InDecember2016,theparentcompanyconferredthe intangibleassetsrelatingtotheproductBEEPluginandBEEPro.Thesubsidiarythereforeresolved,inserviceoftheconferralmadeduringFY2016,toincrease


itscapitalreservesinaccordancewithlocalregulations.Asfrom2017,MailUpIncwillberesponsiblefortheexclusivemarketingofthedifferentversionsoftheBEEeditor.Acumbamail S.L., a start-up founded in 2012with registeredoffice inCiudadReal, Spain, hasdevelopedane-mailmarketingplatformthatiswidespreadontheSpanish-speakingmarkets(SpainandLATAM)andfeaturesconsiderabledevelopment potential, with a freemium sales model targeting a lower profile customer base, which thereforecomplementsMailUp,whichisinsteadincreasinglytakingapositiononthemedium/highbracketofthemarket.Thefreemiummodel, in fact, envisages an initial level of free use of the platform,which thereafter requires paymentwhere a certain threshold of use is surpassed, thereby favouring customers with limited volumes and a reducednumberofaddressees.MailUp Nordics A/S controls 100% of the capital of the company Globase International ApS, a Danish companyoperating in the e-mail marketing sector on the Scandinavian markets (Denmark, Norway, Sweden, Finland andIceland) with a focus on medium/large customers. The acquisition of the Danish companies aims to position theMailUp® platformon theNorthern Europeanmarket, exploiting the recognition of theGlobase trademark and thefavourablepositioningonamarketwithhighentrybarriersandahighlevelofspendingone-mailmarketing,bothbyofferingtheMailUp®platformtonewcustomersandbyprogressivelymigratingGlobaseplatformuserstoMailUp.Agile Telecom SpA with registered office in Carpi (MO), is an operator authorised by the Ministry of EconomicDevelopmentandCommunicationtoofferapubliccommunicationserviceandisalsoregisteredwiththeRegisterofOperatorsinCommunication(ROC)heldbytheItalianAuthorityforTelecommunicationsGuarantees(AGCom).AgileTelecom has been operating since 1999 as an independent international operator specialised in SMS services,particularlyonthewholesaleSMSmarket.DozensofdirectconnectionswithcarriersandoperatorsacrosstheglobeallowAgileTelecomtooptimisedeliveryofmessages inall countries,guaranteeing itsbusinesscustomers thebestpossiblesendingqualityatthelowestpossibleprice.

Equityinvestmentsrecognisedasnon-currentassetsrepresentalong-termandstrategicinvestmentforthecompany.Theinvestmentsreportedatpurchasecosthavenotbeenwritten-downforlastinglossesofvalue.Nocasesof“valuerestoration”occurred.Tothisend,pleasenotethatintheconsolidatedfinancialstatementsoftheparentcompanyMailUp, the goodwill entered relative to the controlling equity investments detailed above has been impairmenttested by the management, confirming the potential economic-financial recovery of the investment. Reference ismadetotheexplanatorynotestotheconsolidatedfinancialstatements,forfulldetails.The investment in the foreign companyMailUp Inc. has a booked cost that exceeds the corresponding portion ofequity. After the initial start-up phase, in FY 2015 and 2016, the company achieved positive results, with a goodincrease in turnover. The directors do not believe the loss of equity to be permanent; the positive signs seen,reinforcedby theexcellentprospectsof themarketingofBEE (PluginandProversion), shouldbeconfirmed in thenearfuture.The booked value of the equity investments acquired in 2015 (Acumbamail, MailUp Nordics/Globase and AgileTelecom)alsoexceedthecorrespondingportionofequity.Duringtheacquisition, thedirectorsconsideredthat thecompanieshad goodprospects tomakeprofit andbelieve that they represent strategic investments for the groupinsofaras theywillallowfor importantsynergieswith thebusinessof theparentcompany.Thedirectors thereforeconfirmthevaluesassignedandthefiguresbooked,excludinganyimpairment,asseenfromtheprovisionalresultsofthethree-yearbusinessplans(2017-2019)preparedbytheadministrativebodiesofthesubsidiariesandimpairmenttestedinthegroupconsolidatedfinancialstatements.Equityinvestmentsinassociatesandjointventures(4)Associatedcompanies

Description 31/12/2015 Increase Decrease 31/12/2016Associatedcompanies

102,000 102,000

102,000 102,000


Companyname Cityorforeign

countrySharecapital

Shareholders’equity

Profit/(Loss)

%held Bookvalue

CRIT-CRemonaInformationTechnology

CREMONA(CR) 310,000 351,114 41,114 33% 102,000

ThecompanypurchasedsharesforEuro2thousandintheconsortiumCRITCRemonaInformationTechnologyuponincorporation. It then increased its investment in the associated companyby Euro100 thousand as a result of thetransformationtoconsortiumwithlimitedliabilityon16March2016andthesubsequentstrengtheningofthecapitalby the shareholderson30March to relaunch the growthprojectof the consortium. Thepurposeof theCRIT is todevelop a technological pole in Cremona that enables synergies to be achieved between consortiummembers, todevelop services of mutual interest, both managerial and operative in nature (co-working, start-up incubator,commontrainingstructures,canteen,meetingroom).Theconsortiumalsodevelopedabuildingcomplex,the“Digitalinnovation pole”, where Cremona-based ICT companies, starting from the consortium members themselves, canoperateattheirbestandconstructacentreofexcellencethatcangeneratenewbusinessesandtransfereconomicopportunitiesandbetterqualityoflifetothelocalworldofbusinessesandcommunities,derivingfromtheuseofnewcommunicationand informationtechnologies.MailUpwillbemoving itsoperativeheadquarterstoCremona,atthePole,duringthefirsthalfof2017.Othernon-currentassets(5)


Description

31/12/2015 Increase Decrease Reclassifications 31/12/2016

Equityinvestmentsinothercompanies

2,000 (2,000) 0

Receivablesfromsubsidiaries

114,816 97,265 (69,779) 142,302

Receivablesfromassociatedcompanies

14,641 14,641

Otherreceivables 87,571 (2,422) (79,230) 5,919 204,387 97,265 (72,201) (66,589) 162,862ThecolumnonreclassificationsrelatestothereceivableofEuro14,641duefromtheCRITConsortium,whichbecamea related company following the above-described recapitalisation, and Euro 66,589 the reclassification as othercurrentliabilitiesofthereceivablederivingfromtheTFMpolicy,whichwillbecollectedbytheendofnextyear.The receivable due from subsidiaries regardsMailUp Inc. and is in connectionwith an interest-bearing loan.Morespecifically,MailUpInchasrepaidpartofaloantheexpiredbycontractasat31December2016forEuro69,779andreceiveda furtherdisbursement fromtheparentcompany forEuro97,264, toapply to thecredit facilityalready inplaceanddueon31December2018.“Receivablesduefromothers”relatetocautiondepositsduebeyondtheyear.Receivablesallhaveamaturityinexcessof12months.Prepaidtaxassets(6)



Prepaid tax assets refer to tax losses that can be carried forward, to future amortisation of intangible fixed assetsreclassifiedinapplicationoftheIAScriteriaduringFTAandtherecalculationoftheTFRprovisionmadeinaccordancewiththeactuariallogicsrequiredbyIAS19.

CurrentassetsTradeandotherreceivables(7)


The amount relates to trade receivables and includes receivables for invoices to be issued, in the amount of Euro20,199.Theadjustmentofthenominalloanvaluetofairvaluehasbeenobtainedbymeansofaspecificprovisionfordoubtfuldebt,thathasbeenaffectedasfollowsduringtheyear:

Description

Balanceasat31/12/2015 4,937Perioduse 4,937Periodprovision 5,700Balanceasat31/12/2016 5,700

KeyaccountsIn accordance with the provisions of IFRS 8, please note that for the years ended on 31 December 2016 and 31December2015,therearenocustomersgeneratingrevenuesthatexceed10%oftotalrevenues.Receivablesfromsubsidiariesandassociates(8)

Description 31/12/2016 31/12/2015 ChangesSubsidiaries 273,735 199,572 74,163Associatedcompanies 49,554 49,554 323,289 199,572 123,717

ReceivablesduefromsubsidiariesandassociatesderivefromnormalcommercialoperationsimplementedduringFY2016.Belowisthebreakdownofreceivablesbygeographicarea:

Receivables divided by

Geographic Area

Trade accounts Subsidiaries Associated companies

Total

Italy 1,054,740 120,722 49,554 1,225,016 EU 93,348 2,491 95,838


Non-EU 8,075 150,523 158,598 Total 1,156,163 273,735 49,554 1,479,452

Othercurrentassets(9)


Theitemisasfollows:

Description 31/12/2016 31/12/2015 ChangesTaxreceivables 187,238 221,558 (34,320)Otherreceivables 979,450 70,207 909,243Accrualsanddeferrals 181,088 258,667 (77,579) 1,347,776 550,432 797,343

Taxreceivablesasat31December2016,areasfollows:

Description AmountReceivablesfromthetaxauthorityforwithholdingsapplied 31,509ReceivableforthepetitionforrepaymentofIRESpursuanttoDecreeLaw201/2011

1,270

Taxreceivablesrelativetotaxlitigation 120,092ReceivablesforIRAPtax 34,367Total 187,238

Receivablesduefromthirdpartiesasof31December2016compriseasfollows:

Description AmountContributionsoncompetitivenessAgreementsTenderLombardyRegion

860,122

ReceivableduefromTFMpolicy 108,062E-commercecautiondeposits 941Supplierdeposits 5,714Sundry 4,611Total 979,450

Accruedincomeanddeferredexpensesasat31December2016areasfollows:

Description AmountAccruedincome 170,161Deferredexpenses 10,927Total 181,088

Theserecord the incomeandexpenseswithanearlierorpostponedaccrualcomparedwith theactualcashand/or


documentmanifestation, theydonot take intoaccount thedataofpaymentorcollectionof therelated incomeorexpenses,commontodueormoreperiodsanddivisiblebasedontime.Asat31December2016,therewerenoaccrualsordeferralswitharesidualdurationofmorethanfiveyears.Thebreakdownofaccruedincomeisasfollows:-costsformarketingservicesEuro27,379-miscellaneousconsultancyEuro26,196-softwarelicencesEuro17,131-costsforthecertificationofe-maildeliverabilityandantispamservicesEuro16,352-insuranceEuro16,162-costsfortakingpartintradefairsandeventsEuro13,524-annualfeeofspecialistCFOSimSpAEuro8,507-costsforhousingandhostingservicesEuro7,094-hirechargesEuro6,539-maintenancecostsEuro6,824-stafftrainingandidentificationcostsEuro4,515-costsforbusinessinformationservicesEuro4,268-financialcommunicationcostsEuro3,490-associationfeescostsEuro3,461-leasingcostsEuro2,765-bankexpensesEuro2,339-otherresidualcostsEuro3,615Accruedincome,ofEuro10,927,relatestoincomeforservicespaidascharges,pertainingto2016,butinvoicedandcollectedinthenextyear.Liquidfunds(10)


Description 31/12/2016 31/12/2015

Cashatbankandpostoffice 3,023,336 1,086,296Cashandcashequivalents 120 40 3,023,457 1,086,336

Thebalancerepresentsliquidfundsandcashaswellasvaluablesheldontheclosingdateoftheyear.Liabilities

Shareholders’equitySharecapital(11)


Thesharecapitalchangedfollowingthe:-executionduringthemeetingoftheBoardofDirectorsheldon29March2016,ofthedelegationconferredbytheextraordinary shareholders'meeting held on 23 December 2015, to increase the share capital free of charge. Thecapital increase tookplacewitheffectas from11April2016, foranominal figureofEuro65,000,bymeansof theissueof2,600,000freeshares,withthesamecharacteristicsasthoseinissue,assignedtoshareholdersintheamountof3newsharesperevery10 shares in issue.Thecapital increasewasmadebymeansofallocation tocapitalofa


correspondingamountoftheextraordinaryreserve.-executionduringthemeetingoftheBoardofDirectorsheldon29March2016ofthedelegationconferredbytheextraordinaryshareholders'meetingheldon23December2015,toincreasethesharecapitalinadivisiblemanner,inexchangeforpayment,withexclusionofoptionrights,totheserviceoftheStockOptionPlan,intendedforemployeesofMailUpandsubsidiaries.Subscriptionon06July2016of63,960ordinarysharesattheunitissuepriceofEuro0.025andsubsequentpaymentoftherelatedcapitalintheamountofEuro1,599.Thesharecapitalcomprises11,330,627shareswithnoparvalue,whoseaccountingparitycomestoEuro0.025each.Allsharesissuedareordinary.Therearenodebentureloansinplace.Reserves(12)


Description 31/12/2015 Increases Decreases 31/12/2016Sharepremiumreserve 4,693,674 85,953 4,607,721Stockoptionreserve 94,005 94,005Legalreserve 40,000 20,000 60,000Extraordinaryoroptionalreserve 294,226 66,398 65,000 295,624Reserveforexchangerategains 25,289 25,289FTAreserve (608,066) (608,066)OCIreserve (21,238) 28,377 (49,615)Negativereservefortreasurystock (57,502) 54,964 (112,466)Lossescarriedforward 178,029 (178,029)Total 4,341,095 205,692 412,323 4,134,463In compliancewith the provisions of Arts. 2357 and 2424 of the Italian Civil Code, the Reserve for own shares inportfoliohasbeenenteredundertheliabilities,undergroupequity,bywayofcounter-entry inanamountequaltotheownsharesheldasat31December2016.Theownsharereserveisrestrictedandshallbemaintaineduntilthesharesaresold.LossescarriedforwardThe item relates to the accumulated amount as at 31 December 2015 of profits and losses deriving from theapplication of the IAS accounting standards during FTA, net of the related tax effect, as specified above in theparagraphontheadoptionoftheIAS/IFRSaccountingstandardsonthe2015BalanceSheet.The shareholders’ equity accounts arebrokendownas followsaccording to their origin, possibleuse, distributablenatureandusemadeinlastthethreeyears.

Nature/Description Amount Possibleuse(*)

Availableamount

Sharepremiumreserve 4,607,721 A,B,C,D 4,607,721Stockoptionreserve 94,005 B Legalreserve 60,000 A,B Extraordinaryreserve 295,624 A,B,C,D 295,624Reserveforexchangerategains 25,289 FTAreserve (608,066) OCIreserve (49,615) Negativereservefortreasurystock (112,466) Lossescarriedforward (178,029) Total 4,903,345Restrictedportion Residualdistributableportion 4,903,345


(*)A:capitalincrease;B:losscoverage;C:shareholderdistribution;D:otherstatutoryrestrictions.ReservesincorporatedintothesharecapitalThe share capital includes Euro 219,293 consisting of previous years’ profits, formerly the extraordinary reserve,followingtheresolutionstoincreasethesharecapitalpassedon03July2014and29March2016.

Non-currentliabilitiesAmountsduetobanksandotherlenders(13)

Description 31/12/2016 31/12/2015 ChangesAmountsduetobanks 2,183,645 1,508,335 675,310 2,183,645 1,508,335 675,310

Amounts due to banks relates to the residual medium/long-term portion of unsecured loans taken out by thecompanywithBancoPopolareandCreditoValtellinese.Provisionsforrisksandcharges(14)


Description 31/12/2015 Increases DecreasesReclassifications 31/12/2016Provisionforlegaldisputes 57,739 57,739Provisionforpensions(TFM) 60,000 (60,000) 0 117,739 (60,000) 57,739Aprovisionhasbeenestablishedforcurrentlegaldisputes.ThecompanycurrentlyhasalawsuitunderwaywiththeFinancialAdministrationinconnectionwiththecompanies’incometax,regionalproductiontaxandvalueaddedtaxfor2004.Theofficehasissuedanoticeofassessmentonthebasisoftheuseoftheresultsofthesectorstudies’calculation;thereconstruction of revenues prepared by theAuthority entailed greater tax, totalling Euro 58,468 and sanctions forEuro49,344,alreadypaidinfull.The petition proposed by the company has been rejected on a first and second instance and the company hassubmitted an appeal in cassation. The company’s lawyers believe that they are likely to be successful in the lastinstanceofproceedings.Anamounthasbeenallocatedonthefinancialstatementsconsideringthereduction,bythetax courts, of the office claims. In the petitions submitted, it has, amongst other aspects, been shown that therecalculationofthesectorstudywithamoreevolvedstudy,bringsaboutamorefavourableresultforthecompany.Therefore,aprovision for riskshasbeenallocated, inaccordancewithArt.2423-bisof the ItalianCivilCode, foranamountequaltothegreatertaxderivingfromtheapplicationofsaidstudy.Theprovisionforpensions,withreferencetotheindemnitiesduetodirectorsuponterminationoftheirappointment(TFM),hasbeenreclassifiedtoothercurrentliabilitiesinsofarasitwillbeliquidatedbyend2017,uponexpiryofthemandateofthecurrentBoardofDirectors.


Stafffunds(15)


Thechangeisasfollows.

Description 31/12/2015 Increases Decreases Actuarial(losses)/gains

31/12/2016

Staffprovision(TFR) 278,290 125,767 (53,473) 37,337 387,921 278,290 125,767 (53,473) 37,337 387,921

Theincreasesrelatetoyearprovisionsmadeforemployeeseveranceindemnity.Thedecreasesrelatetoyearuses.Themainactuarialassumptionsare:

DemographichypothesesAsregardsthedemographichypotheses,theISTAT2011mortalitytableswereusedandtheINPSdisability/invaliditytables.As regards the probability of leaving work for reasons other than death, the turnover probabilities noted by thecompanies assessed over a time frame of observation deemed to be representative,were used;more specifically,annualfrequenciesof10%wereconsidered.

Economic-financialhypothesesThese regard the theoretical lines of remuneration, the technical interest rate, the inflation rate and the valueadjustmentratesofsalariesandTFR.Thetechnicalassessmentswerecarriedoutonthebasisofthehypothesesdescribedbelow:

Annualtechnicaldiscountingrate

20142.00%

20152.00%

20161.30%

Annualinflationrate 1.50% 1.50% 1.50%

Annualcomprehensiveremunerationincreaserate

2.50% 2.50% 2.50%

As regards the choice of the discounting rate, the index for the Eurozone Iboxx Corporate AA has been taken asbenchmark,withdurationinlinewiththeaveragefinancialdurationofthegroupvalued(10+years).

Deferredtaxliabilities(16)

Description 31/12/2015 Increases Decreases 31/12/2016Deferredtaxprovision 17,875 15,125 2,750 17,875 15,125 2,750


Thedeferredtaxprovisionrelatestocontributionsoncapitalaccount,taxationofwhichhasbeendeferredtofutureyears.

CurrentliabilitiesTradeandotherpayables(17)

Description 31/12/2016 31/12/2015 ChangeTradepayables 691,622 685,022 6,600

“Tradepayables”arestatednetofcommercialdiscounts.Theitemalsoincludespayables:

- forinvoicestobereceivedfromItalysuppliers,Euro242,585;- payablesforinvoicestobereceivedfromEUsuppliers,Euro12,390;- payablesforinvoicestobereceivedfromnon-EUsuppliers,Euro13,464.

Payablestosubsidiariesandassociates(18)


Amountsduetosubsidiariesaredetailedbelow:

- amountsduetoNetworkSrlforEuro885,475;- amountsduetoMailUpInc.forEuro11,063;- amountsduetoAgileTelecomS.p.A.forEuro1,311,273.

Amountsduetoassociatesaredetailedbelow:-amountsduetotheCRITconsortiumforEuro4,921.Payablesexpressedinaforeigncurrencyhavebeenadjustedtotheyear-endspotexchangerate.Amountsduetobanksandotherlenders(19)


Description 31/12/2016 31/12/2015 ChangesSubsidiarycompanies 2,207,811 2,064,399 143,411Associatedcompanies 4,921 4,921Total 2,212,732 2,064,339 148,332


Description 31/12/2016 31/12/2015 ChangesAmountsduetobanks 1,173,623 510,473 663,150Amountsduetootherprovidersoffinance

16,750 33,416 (16,666)

1,190,373 543,889 646,484Amountsduetobanksrelatestotheloanstipulatedbythecompanyduringtheyear.“Amountsduetoother lenders”relatestotheresidualamountofabeneficial-rateloanobtainedfromFinlombardafollowingparticipationinthetender“DevelopmentofinnovationofLombardybusinessesinthetertiarysector”aimedatpresentinganddevelopingprojectsseekingtoinnovatetheLombardyproductionsystem.Othercurrentliabilities(20)


Taxpayables

Othercurrentliabilities:

Description 31/12/2016 31/12/2015 ChangesAdvances 6,437 21,622 (15,185)Amountpayabletosocialsecurityinstitutions 100,081 88,529 11,552Amountsduetodirectorsforemoluments 40,598 39,677 921Amountsduetoemployeesforsalariesandwagespayable 143,474 120,142 23,332Amountsduetoemployeesforholidays,permitsandadditionalmonths’salaries

209,414 182,220 27,194

AmountsduetoZoidbergs.r.l. 3,778,324 4,078,324 (300,000)AmountsdueforTFM 100,000 0 100,000Accruedliabilities 8,589 4,058 4,531Deferredincome 5,122,106 3,865,039 1,257,067Sundry 15,335 1,145 14,190Total 9,524,358 8,400,756 1,123,602TheamountduetoZoidbergS.r.l.relatestotheacquisitionofthecompanyAgileTelecomon29December2015.Thecontract of purchase and sale envisages payment to the seller, by 30 June 2017, of a variable price (earn out)accordingtotheaverageEBITDAofthecompanyacquiredinthelasttwoyears,whichhasbeenestimatedthere.Theagreementenvisages,at thediscretionofMailUp,paymentofup to75%of theamount in shares inMailUp, tobereleasedthroughsharecapitalincrease.

Description 31/12/2016 31/12/2015 ChangesVATpayable 49,387 63,125 (13,738)PayableforTobinTax - 12,000 (12,000)Amountpayabletothetaxauthorityforwithholdingsappliedatsource

103,261 117,905 (14,644)

PayablesforIRES 5,796 - 5,796Total 158,444 193,030 (34,586)


Deferredincome:approximately75%oftherevenuesofMailUpcomefromrecurringannualcharges.MailUpcollectstherecurringchargesderivingfromthee-mailservice,but,onanaccrualsbasis,onlypartof thecharges isusedtoform the year’s income, whilst the part not pertaining to it, i.e. the Deferred income, is used as a basis for thefollowingyear’sincome.ThepayableforTFMhasbeenreclassifiedtoothercurrentinsofarasitwillbeliquidateduponexpiryofthemandateofthecurrentBoardofDirectors,duringapprovalofthesefinancialstatements.CommitmentsandguaranteesAsat31December2016,therearenocommitmentsandguaranteesgivenbyMailUptothirdparties.IncomestatementRevenues(21)


IncomefromsalesandservicescomestoEuro9.7million(Euro8.6millionasat31December2015),recordinganincreaseofEuro1.1million(+12.72%)onthecorrespondingfigureforFY2015.RevenuesbyproducttypeBelowaredetailsofrevenuesaccordingtoproducttype.

Description 31/12/2016 31/12/2015 ChangesRevenuesformailfees 6,806,842 6,213,970 592,872RevenuesforSMS 2,516,235 2,170,530 345,705Professionalservicesrevenues 174,033 - 174,033Inter-companyplatformusefee 206,523 223,831 (17,308) 9,703,633 8,608,331 1,095,302

Otherincome(22)


Theitemincludes:-contributionsrelativetotaxcreditforresearchanddevelopment,Euro111,504;-contributiondisbursedbytheRegionofLombardyaspartofthe“competitivenessagreements”tender,“innovativeBigDataAnalyticssystem”,asdetailedabove,Euro240,654;-RevenuestoGroupcompaniesforadministrative,legalandtechnicalactivities,Euro155,772;-Rentalincomefromleasedproperties,Euro35,415;-Customerexpensereimbursements,Euro3,618;-Contingentassets,Euro12,870;-Otherresidualrevenues,Euro1,090.Costsforservices(23)


Thesereferto:


Description 31/12/2016SMSpurchases 1,682,755AssetsofavaluelessthanEuro516,46 23,464Hostingservicepurchases 10,122Stationerycosts 2,254Miscellaneouspurchasesofmaterials 1,084Technicalconsultancy(IT,quality,compliance,helpdesk) 978,962Directors’fees 938,364Industrialservicesrelatingtotheplatform(housing,licencecharges,compliance) 547,304

Marketingandadvertisingexpenses 346,325Otherthirdpartyconsultancy 303,779Legalexpenses 162,618Tradefairandeventsparticipationcosts 142,109Administrativeconsultancy 107,571Bankserviceexpenses 96,554CostsrelatingtotheAIMItaliamarket 88,594Travelandbusinesstrips 75,537Mergers&acquisitionscosts 49,666Insurance 39,678Translationservicecosts 30,528Cleaningserviceexpenses 28,954Telephonecosts 27,429Condominiumexpenses 25,671Stafftrainingcosts 24,679Financialdisclosures 24,630Kilometrereimbursement 22,963Itemisedreimbursements 18,651Entertainmentexpenses 18,471BoardofAuditorsfees 17,943Internetconnectionexpenses 15,169Electricityandwater 15,033Administrativeservices 14,451Giftstoemployees 11,578Staffsearchandselectioncosts 10,560Maintenanceofownproperty 8,842SupervisoryBoardfees 7,500Agicomcontribution 2,544Staffmedicalexpenses 2,180Supplyoffoodanddrink 2,141Maintenanceofthirdpartyassets 2,038Transportexpenses 993Postalchargesandpostage 617Rentalandlease 205,704Leasecharges 25,390Hire 78,808Total 6,240,207

Payrollcosts(24)


Thisitemincludesallexpensesforemployees,includingperformancepromotions,categorypromotions,costoflivingbonuses,costs forunpaidholidaysandallocationsrequiredby lawandcollectiveemploymentcontracts.This figureincludes the service cost deriving from the actuarial valuation according to IAS 19R, as well as the cost for stockoptionsissuedinaccordancewithIFRS2.Thecostforemployeesisshowninthetablebelow:

Description 31/12/2016 31/12/2015 ChangesWagesandsalaries 1,877,236 1,637,269 239,967Stockoptions 94,005 94,005Welfareandsocialsecurity 512,611 449,628 62,983Employeeseveranceindemnities 122,225 76,864 45,361 2,606,077 2,163,761 442,316Averageno.ofemployeesIn2016,theaveragenumberofemployeesofMailUpcameto52,ofwhom2middlemanagersand50white-collarworkers.Otheroperatingexpenses(25)


Otheroperatingexpensesareshownbelow:

Description AmountGovernmentconcessiontaxes 1,727Registrationtax 1,319Stampduty 2,216Wastetax 5,668Taxonsigns 1,976Associationfee 7,647Lossesonreceivables 53,457Contingentliabilities 60,064Subscriptionstomagazinesandnewspapers 923ChamberofCommercefees 851Annualfeesfortheauthenticationofcorporatebooks 310Donations 619Stampduty 677Othertaxandduties 800Othermiscellaneousexpenses 2,082Total 140,336

Amortisation,depreciationandimpairment(26)“Amortisation,depreciationandimpairment”comestoEuro1,239thousandfortheyearendedon31December2016(Euro842thousandfortheyearendedon31December2015).Belowaredetails:


Provisionsandimpairment 31/12/2016 31/12/2015Amortisationofintangiblefixedassets 968,305 580,044Depreciationoftangiblefixedassets 265,241 257,367Provisionsfordoubtfuldebt 5,700 4,937Totalamortisation,depreciationandprovisions

1,239,246 842,348

Financialexpense(27)

Balance as at 31/12/2016 Balance as at 31/12/2015 Changes (49,744) (11,248) (38,496)

Description 31/12/2016 31/12/2015 Changes Interest and other financial expenses (33,649) (6,694) (26,955) Exchange losses (16,095) (4,554) (11,540) (49,744) (11,248) (38,496)

ItalsoincludestheinterestcostderivingfromtheactuarialvaluationaccordingtoIAS19R. Incomefromsubsidiaries(28)

Description 31/12/2016 31/12/2015 Changes Dividends 1,192,140 1,192,140 1,192,140 1,192,140

Dividendsarethoseresolvedbytheshareholders'meetingofAgileTelecomspaon28April2016.Financialincome(29)


Description 31/12/2016 31/12/2015 Changes From accounts receivable included in fixed assets

2,105 3,639 (1,534)

Proceeds other than the above 1,478 3,287 (1,809) Exchange gains 7,885 37,600 (29,715) 11,468 44,526 (33,058)

IncomeotherthantheabovereferstobankinterestincomeforEuro1,478;“Fromreceivableincludedinfixedassets”indicatesinterestforloanstosubsidiariesintheamountofEuro2,105.Periodincometax(30)

Balance as at 31/12/2016 Balance as at 31/12/2015 Changes


(32,358) (76,719) 44,361

Taxes Balance as at 31/12/2016

Balance as at 31/12/2015

Changes Current tax: 8,955 40,918 (31,963) IRES IRAP 8,955 40,918 (31,963) Substitute tax Deferred (prepaid) tax (41,313) (117,637) 76,324 IRES (41,313) (117,637) 76,324 IRAP (32,358) (76,719) 44,361

The companyhas set up year taxes on thebasis of the applicationof current tax regulations. The year’s taxes aremadeupofcurrenttax,deferredtaxandprepaidtax,relatingtopositiveandnegativeitemsof incomerespectivelysubjectto impositionordeductions inyearsotherthanthoseduringwhichtheyarebooked.Thestatementsbelowacknowledge the reconciliation of the theoretical expense resulting from the financial statements and the taxexpense.Reconciliationbetweenthetaxliabilityasperthefinancialstatementsandthetheoreticaltaxliability(IRES)

Description Value TaxesPre-taxresult 1,192,554 Theoreticaltaxliability(%) 27.5 327,952Timingdifferencestaxableinsubsequentyears (262,892) (72,295)

Timingdifferencesdeductibleinsubsequentyears 47,083 12,948Reversaloftimingdifferencesfrompreviousyears 55,000 15,125Differenceswhichdonotreverseinsubsequentyears (1,823,357) (501,423) Taxableamount (791,612) 0Currentperiodincometax 0Deferredtaxnetofusesoftaxaccruedinpreviousyears (41,313) NetperiodIREStax (41,313)

DeterminationofthetaxbaseforIRAP

Description Value TaxesDifferencebetweenvalueandcostofproduction,grossofCDLandimpairment

2,650,466

CostsnotsignificantforIRAPpurposes 1,273,920 IncomenotsignificantforIRAPpurposes (1,275,509) 2,648,877 Theoreticaltaxliability(%) 3.9 103,306 Deductionsforemployedstaff (2,419,262) (94,351)TaxbaseforIRAP 229,615 CurrentIRAPfortheyear 8,955

Earningspershare(31)Basic earnings per share are calculated by dividing the net period income attributable to ordinary companyshareholders by theweighted average number of ordinary shares, excluding own shares, in issue during 2016 andtotalling9,967,844.Belowistheincomeandinformationonsharesusedtocalculatethebasicearningspershare.


Description 31/12/2016Netprofitattributabletoshareholders 1,196,535Openingnumberofordinaryshares 8,647,480-sharecapitalincrease Closingnumberofordinaryshares 11,288,207Weightednumberofsharesinissue 9,967,844Basicearningspershare 0.120Dilutedearningspersharewerecalculatedasfollows:Description 31/12/2016Netprofitattributabletoshareholders 1,196,535Openingnumberofordinaryshares 8,647,480-sharecapitalincrease Closingnumberofordinaryshares 11,288,207Weightednumberofsharesinissue(includingstockoptions) 10,234,307Basicearningspershare 0.117DisclosureonrelatedpartytransactionsDuringtheyear,thecompanyperformedcommercialandfinancialtransactionswithrelatedcompanies.Thetransactionswereimplementedaspartofnormalbusiness,regulatedattheconditionscontractedbytheparties,inlinewithordinarymarketpracticeandaresummarisedbelow:

CompanynameFixed

receivablesTrade

receivablesTrade

payablesOther

payables Dividends Sales PurchasesNetworkSrl 20,000 885,475 40,000 2,317,787

AgileTelecomSpA 100,721 496,901 814,372 1,192,140 90,355 735,301

GlobaseInternationalApS 2,491 2,891

MailupInc 142,301 150,523 11,063 236,601 123,950

Subsidiaries 142,301 273,735 1,393,439 814,372 1,192,140 369,847 3,177,037

ConsorzioCRITScarl 14,641 49,554 4,921 38,240 10,134

Associates 14,641 49,554 4,921 - - 38,240 10,134GrafoVenturesdiGiandomenicoSica

- 9,818 40,931

ZoidbergSrl 3,778,324

Otherrelatedparties - - 9,818 3,778,324 - - 40,931InformationonthefeesduetotheBoardofDirectors,BoardofAuditorsandIndependentAuditingFirmInaccordancewith the law,pleasenote thetotal feesduetodirectors, theboardofauditorsandthe independentauditingfirm:

Title 31/12/2016 31/12/2015Directors 938,364 772,175Boardofauditors 17,943 16,305Independentauditingcompany 43,650 17,200

Netfinancialposition


Belowisabreakdownofthecompany’snetfinancialpositionthatensuesfromacomparisonofliquidfundsasat31December2016with financialdebtcontractedwith regards tobanksandother institutional lenders, in thespecificcaseFinlombarda,fortheresidualportionofaspecial-rateloan.Reference ismade to the section on “Other current liabilities” above formore information on other payables notincludedintheNFPandinparticularthenon-costlydebtduetothesellerofthecontrollingstakeinAgileTelecom,ZoidbergSrl,correspondingtotheestimatedvariablefeetobepaidinaccordancewiththecontractofsaleforEuro3,278thousandandforEuro500thousandbywayofdepositasguaranteeofcontractualobligations lyingwiththeseller.Wewouldremindyouthatbywayoffinancialreceivablenotshowninthetablebelow,wealsohavetheloandisbursedtotheAmericansubsidiaryMailUpInc,detailedamongstnon-currentassets(Euro142thousand)andthereceivablederivingfromtheTFMpolicy,whichwillbeliquidateduponexpiryoftheappointmentofthecurrentBoardofDirectors,forEuro108thousand,which,however,isoffsetbytherespectivepayableduetothedirectorsforTFM,equaltoEuro100thousand.





CURRENTFINANCIALPOSITION (1,833,084) (542,448) (1,290,636) 238%




Thirdparties 2,183,645 1,508,335 675,310 45%Otherlenders

(16,666) -50%


NETFINANCIALPOSITION 350,561 965,887 (615,326) -64%

RequirementsenvisagedbyArt.25,paragraph2,letterHofDecreeLaw179/2012For thepurposeof identifying innovativeSMEsandtheir registrationwith thespecificspecial sectionofCompaniesHouse,Art.25,paragraph2, letterhofDecreeLaw179/2012,convertedwithamendmentswithLawno.221/2012establishesthatatleasttwoofthefollowingrequirementsmustbemet:

1) researchanddevelopmentcostsshallbeequaltoorgreaterthanthreepercentofthelargerofcostandtotalvalueofproductionoftheinnovativeSME.

2) useofemployeesor collaborators,byany title, inapercentageequal toorgreater than two thirdsof the

totalworkforce,ofstaffwithadegree.

3) owner or depositary or licensee of at least one industrial property right relative to an industrial,biotechnologicalinvention,topographyofaproductwithsemi-conductorsornewplantvarietyorownerofrights relating to an original processing program registeredwith the Special public register for processingprograms,aslongassaidrightsrelatedirectlytothecompanyobjectandbusiness.

AsregardsresearchanddevelopmentcostsincurredbytheinnovativeSME,asrequiredbyArt.4ofItalianDecreeLaw


no.3of24January2015regardingresearch,developmentand innovationcosts, it isspecifiedthatduringtheyear,thecompanyincurredcostsexceeding3%ofthegreatervalueofcostandtotalvalueofproduction,asenvisagedbythepointontherequirementslistedabove.The maintenance of the requirement under point 2 is also confirmed, also in terms of compliance with Art. 25,paragraph15ofDecreeLaw179/2012.Belowaredetailsoftheresearchanddevelopmentprojects:Project 31/12/2016

DEVELOPMENTOFMAILUP9.0PROJECT

407,280

MAILUPBIGDATAANALYTICSPROJECT

170,056

DEVELOPMENTOFMAILUP8.9.4PROJECT

146,993


141,853

MAILUPINFRASTRUCTUREDEVELOPMENT

113,389


111,994DEVELOPMENTOFMAILUPEMAILSENDINGENGINEPROJECT 81,675ADMINTERFACEPROJECT 65,168DEVELOPMENTOFMAILUPCOLLABORATIONPROJECT 51,511DEVELOPMENTOFSMSPROJECT 41,157DEVELOPMENTOFMAILUPCONSOLEINTEGRATIONS 34,865DEVELOPMENTOFACCOUNTPROVISIONPROJECT 21,322DEVELOPMENTOFFACEBOOKAPPPROJECT 21,300DEVELOPMENTOFMAILUP8.9.1PROJECT 14,354MAILUPCLOUDPLATFORMDEVELOPMENT 11,200

INVESTMENTSINR&D

1,434,118

Valueofproduction 10,264,556

%incidence 14%

These financial statements, comprising the balance sheet, income statement, statement of changes in equity,statementofcashflowsandexplanatorynotes, includingappendix1,provideatrueandfairviewoftheequityandfinancial situation as well as the economic result for the year and are consistent with the underlying accountingrecords.Milan,28March2017TheChairmanoftheBoardofDirectorsMatteoMonfredini


Appendix1EffectsoftheadoptionoftheIAS/IFRSaccountingstandardsontheIndividualStatementoffinancialpositionasat1January2015

GeneralstandardInaccordancewithArt.4ofItalianLegislativeDecreeno.38of28February2005,whichregulatestheexerciseofoptionsenvisagedbyArt.5ofRegulation (EC)no.1606/2002of theEuropeanParliamentandCouncilof19 July2002 relative to theapplicationof internationalaccounting standards,MailUpS.p.A.hasexercised the faculty tovoluntarilyadopttheinternationalfinancialreportingstandards(hereinafteralsoreferredtoasthe“IFRS”),issuedbytheInternationalAccountingStandardsBoard(the“IASB”)andapprovedbytheEuropeanCommissionforthepreparation of its consolidated financial statements starting from the year ended 31 December 2016. The term“IFRS” is used to refer to the International Financial Reporting Standards, the revised international accountingstandards (“IAS”),all interpretationsof the InternationalFinancialReporting InterpretationsCommittee (“IFRIC”),previouslyknownastheStandingInterpretationsCommittee(“SIC”).ThedateoftransitiontotheIFRS,asdefinedbyIFRS1“FirsttimeadoptionofIFRS”is01January2015,andthese2016financialstatementspresentacomparativeyear(FY2015).Thefinancialstatementsasat31December2016are therefore the first financial statements prepared in compliancewith the international accounting standardsapprovedbytheEuropeanCommission. In this regard,pleasenotethat the IFRSaccountingstandardsapplied indraftingthefinancialstatementsclosedasat31December2016arethoseinforceonthatdateandarecompliantwiththoseadoptedforpreparingtheopeningStatementoffinancialpositionasat01January2015,aswellasthefinancialstatementsasat31December2015,asrestatedinaccordancewiththeIFRS.This Appendix offers a reconciliation of the Shareholders' equity determined in accordance with the ItalianAccounting Standards and the Shareholders' equity determined in accordancewith the IFRS as at the transitiondate of 01 January 2015, as well as a reconciliation of the period result and shareholders' equity at year enddetermined according to the Italian Accounting Standards and the period result and consolidated shareholders'equity at year end, determined according to the IFRS for FY 2015 presented for comparison, in these financialstatements.Adescription isalsogivenofthe importantadjustmentsmadetotheStatementof financialpositionandtheincomestatementtogetherwiththerelatedexplanatorynotes,asrequiredbyIFRS1FirsttimeadoptionofIFRS.Effectsof theadoptionof the IAS/IFRSaccountingstandardson theStatementof financialpositionrelative totheseparatefinancialstatementsofMailUpasat1January2015BelowisasummaryoftheStatementoffinancialpositionrelativetotheseparatefinancialstatementsofMailUpS.p.A.asatthedateoftransitiontotheinternationalaccountingstandardsasestablishedbyaccountingstandardIFRS1,reclassifiedconsideringthenatureanddegreeofliquidityoftheasset,theintendedpurposeandduedateoftheliability.To better understand the effects, the most significant changes are analysed for each line of the financialstatements.

SEPARATEBALANCESHEETMAILUPS.P.A.asat01January2015





ASSETS


Non-currentassets Tangibleassets 670 670Intangibleassets (1) 2,567 (620) 1,947Equityinvestmentsinsubsidiariesandassociates 114 114Othernon-currentassets 198 198Deferredtaxassets (2) - 325 325Totalnon-currentassets 3,550 (295) 3,254 Currentassets Tradeandotherreceivables 1,313 1,313ReceivablesfromGroupcompanies 81 81Othercurrentassets (3) 710 (277) 433Liquidfundsandequivalent 3,282 3,282Totalcurrentassets 5,386 (277) 5,109 TOTALASSETS 8,936 (573) 8,363

(*) AdjustedtotheclassificationsenvisagedbytheIAS/IFRStablesofthefinancialstatements

SEPARATEBALANCESHEETMAILUPS.P.A.asat01January2015





SHAREHOLDERS’EQUITYANDLIABILITIES Shareholders’equity Sharecapital 200 200Reserves (4) 3,115 (840) 2,275Periodresult 203 203Totalshareholders’equity 3,518 (840) 2,678 Non-currentliabilities Amountsduetobanksandotherlenders Othernon-currentliabilities Provisionsforrisksandcharges 78 78Stafffunds (5) 201 9 209Deferredtaxliabilities 8 8Totalnon-currentliabilities 287 9 295 Currentliabilities Tradeandotherpayables 778 613PayablestoGroupcompanies 613 778Amountsduetobanksandotherlenders 79 79Othercurrentliabilities (6) 3,661 259 3,920Totalcurrentliabilities 5,131 259 5,390 TOTALLIABILITIES 8,936 (573) 8,363


1. Otherintangiblefixedassets(IAS38)

Sometypesofmulti-yearcosts,mainlycostsincurredduringthestart-upphase,costsrelativetotheIPOandothercostsspanningseveralyears,arenotcapitalisedforthepurposeofIAS/IFRS;thenetbookvaluesasatthetransitiondatehavethereforebeenreversedwithacounter-entryrespectivelyinthesharepremiumreserveandintheFTAreserve.

2. Prepaidtaxassetsanddeferredtaxliabilities(IAS12)The adjustment relates to the booking of tax effects of the adjustments necessary tomake themove from thefinancialstatementsdraftedonthebasisoftheItalianAccountingStandardstothosedraftedonthebasisofthe


IFRS.

3. Othercurrentassets-Revenuerecognition(IAS18)The adjustment relates to the different booking of costs connected with marketing and provision fees linked torevenuerecognition.For the item inquestion,a reduction indeferredassetswasnoted in theamountofEuro277thousand.

4. Otherreservesandresultscarriedforward(IFRS1-IAS39)The itemmainlyreducesfollowingthebookingofthe“FTAreserve”established,netofthetaxeffect, foratotalnegative value of Euro 609 thousand, as a counter-entry of adjustments made as at the date of transition tointernational accounting standards (01 January2015), stated in thesenotes andasdetailed in the reconciliationtablebelowoftheshareholders'equityasat1January2015.FortheremainingEuro231thousand,thedifferenceisduetocostsconnectedwiththe IPOontheAIMItalymarket,directlyreducingthesharepremiumreserve,asestablishedbyIAS39.

5. Provisionforseveranceindemnityandotherbenefits(IAS19R)The provision for severance indemnity and other employee benefits has been recalculated according to theactuarialmethodsenvisagedbyIFRS19R.Theapplicationofthesemethodsgeneratedanegativeeffect(followingtheincreaseintheliabilitybooked)ofEuro9thousand.

6. Othercurrentliabilities–Revenuerecognition(IAS18)TheadjustmentrelatestothedifferentbookingofrevenuesrelatingtoSMS.Fortheiteminquestion,areductionindeferredincomewasnotedintheamountofEuro259thousand.

Reconciliationtableofshareholders'equityofMailUpS.p.A.asat1January2015Belowisthereconciliationofshareholders'equityofMailUpS.p.A.asat01January2015,draftedaccordingtotheItalian Accounting Standards and that as at the same date drafted in accordancewith the IFRS, completewithspecificexplanatorynotes.TheamountsarestatedinEurothousandsandadjustmentsaregroupedaccordingtotype.

(figuresinEurothousands) Asat01January

2015 Shareholders'equityofMailUpS.p.A.accordingtotheItalianAccountingStandards 3,518

IAS38-Reversalofcapitalisationofstart-upcosts (4)IAS38-Reversalofcapitalisationofresearchcosts (126)IAS38-Reversalofcapitalisationoflistingcostsandothermulti-yearexpenses (317)IAS18-RevenueRecognition (386)IAS19R-Discountingofprovisionforseveranceindemnity(TFR)andotherpensionbenefits (7)

Shareholders'equityofMailUpS.p.A.accordingtoIAS/IFRS(netofthetaxeffectaccordingtoIAS12)

2,678

Foradescriptionof themain itemsof thecomprehensive reduction in shareholders'equity,please refer to theinformation given in the paragraphs above commenting on the individual items of counter-entries of the FTAreserve.

ReconciliationoftheStatementoffinancialpositionofMailUpS.p.A.andtheincomestatementofMailUpS.p.A.asat31December2015


Below is the summary tableof the Statementof financial positionofMailUp S.p.A. as at 31December2015, asresultingfromtheadjustmentsmadeasatthedateoftransitionandthosemadeontheperiodincomestatement.Theadjustmentof theStatementof financialpositionasat31December2015according to the IFRS implies thesamestructurallogicsanduseoftheaccountingstandardsadoptedfortheopeningStatementoffinancialposition.To better understand the effects, the most significant changes are analysed for each line of the financialstatements.

SEPARATEBALANCESHEETMAILUPS.P.A.asat31December2015



FTAadjustments/reclassification

s


ASSETS Non-currentassets Tangibleassets 651 651Intangibleassets (1) 4,295 (934) 3,362Equityinvestmentsinsubsidiariesandassociates (2) 7,412 3,278 10,690Othernon-currentassets 204 204Deferredtaxassets (3) 57 418 474Totalnon-currentassets 12,619 2,762 15,381 Currentassets Tradeandotherreceivables 1,083 1,083ReceivablesfromGroupcompanies 200 200Othercurrentassets (4) 851 (300) 550Liquidfundsandequivalent 1,086 1,086Totalcurrentassets 3,220 (300) 2,919 TOTALASSETS 15,839 2,462 18,301

(*)AdjustedtotheclassificationsenvisagedbytheIAS/IFRStablesofthefinancialstatements SEPARATEBALANCESHEETMAILUPS.P.A.asat31December2015



FTAadjustments/reclassificatio

ns


SHAREHOLDERS’EQUITYANDLIABILITIES Shareholders’equity Sharecapital 217 217Reserves (5) 5,301 (960) 4,341Periodresult (5) 112 (178) (66)Totalshareholders’equity 5,629 (1,138) 4,491Non-currentliabilities Amountsduetobanksandotherlenders 1,508 1,508Othernon-currentliabilities Provisionsforrisksandcharges 118 118Stafffunds (6) 271 7 278Deferredtaxliabilities 18 18Totalnon-currentliabilities 1,915 7 1,922 Currentliabilities Tradeandotherpayables 685 685


PayablestoGroupcompanies 2,064 2,064Amountsduetobanksandotherlenders 544 544Othercurrentliabilities (7) 5,002 3,593 8,594Totalcurrentliabilities 8,295 3,593 11,887 TOTALLIABILITIES 15,839 2,462 18,301


SEPARATEINCOMESTATEMENTMAILUPS.P.A.asat31December2015





Revenues (8) 8,810 (56) 8,608Otherincome 121 267Costsforservices (9) (5,519) (391) (5,909)Payrollcosts (6) 2,181) 17 (2,163)Otheroperatingexpenses (136) (136)EBITDA 1,095 (429) 667Amortisation,depreciationandimpairment (10) (1,027) 185 (842)EBIT 68 (244) (175)Financialincome/(expense) (6) 37 (4) 33Pre-taxprofit 105 (249) (142)Incometax (11) 6 70 76Netperiodresult 112 (178) (66) Otheritemsofthestatementofcomprehensiveincome

Profit/(loss)thatwillnotbesubsequentlyreclassifiedtotheperiodresult

Actuarialprofit(loss)netofthetaxeffect (21) Profit/(loss)thatwillbesubsequentlyreclassifiedtotheperiodresult

Profit/(loss)derivingfromtheconversionofthefinancialstatementsofconsolidatedcompaniescarriedincurrenciesotherthantheeuro

Comprehensiveperiodprofit/(loss) (87)

Earnings: Pershare

(0.000)

Pershare(diluted) (12) (0.000)


1. Otherintangiblefixedassets(IAS38)Sometypesofmulti-yearcosts,mainlycostsincurredduringthestart-upphase,costsrelativetotheIPOandothercostsspanningseveralyears,arenotcapitalisedforthepurposeofIAS/IFRS;thenetbookvaluesasatthetransitiondatehavethereforebeenreversedwithacounter-entryintheFTAreserve.

2. Businesscombination(IFRS3–IAS36)TheCompanyhasretroactivelybookedtheestimatedearnoutenvisagedinthepurchasecontractfor100%ofAgile


TelecomS.p.A.stipulatedon29December2015.Thesefigureshavebeenimpairmenttested,revealingnolossofvalue.

3. Prepaidtaxassetsanddeferredtaxliabilities(IAS12)The adjustment relates to the booking of tax effects of the adjustments necessary tomake themove from thefinancialstatementsdraftedonthebasisoftheItalianAccountingStandardstothosedraftedonthebasisoftheIFRS.

4. Othercurrentassets-Revenuerecognition(IAS18)The adjustment relates to the different booking of costs connected with marketing and provision fees linked torevenuerecognition.Fortheiteminquestion,areductioninprepaidexpenseswasnoted.

5. Otherreservesandresultscarriedforward(IFRS1–IFRS2–IFRS10–IAS39)Theiteminquestionincludesanadjustmentrelativetothecombinedeffectof:

- reductionrelatingtothebookingofthe“FTAreserve”,whichincludestheeffect,netofthetaxeffect,oftheadjustmentsmadeduringthefirstconversiontotheIFRS(01January2015),unchangedwithrespecttothatdate(equaltoEuro609thousand);

- increaserelativetotheeffectsofadjustmentsrelativetotheadoptionofIFRSofcompetenceofFY2015,whichhaveimpacted,accordingtotherespectivereferencestandards,directlytheshareholders'equity,inparticularwithreferenceto:

• bookingofcostsconnectedwiththereversetakeoverofAgileTelecominDecember2015,usedtodirectlyreducethesharepremiumreserveinaccordancewiththeprovisionsofIAS39;

• bookingofchangestotheStatementofcomprehensiveincome,recordedintheOICreserve;

• applicationofIAS32,whichconsiderstheoperationsperformedonownsharesaschangestoshareholders'equityinthetotalamountofEuro57thousand;

• bookingoftheimpactsontheIncomestatement,forwhichreferenceismadetotherelatednotes.

6. Provisionforseveranceindemnityandotherbenefits(IAS19R)The provision for severance indemnity and other employee benefits has been recalculated according to theactuarialmethods envisagedby IFRS 19R.More specifically, actuarial gains and losses havebeen enteredunderother itemsof theStatementofcomprehensive income, theservicecosthasbeenenteredunder“payrollcosts”and the interest cost has been entered as “financial expense”. The application of these methods generated anegativeeffect(followingtheincreaseintheliabilitybooked)ofEuro7thousand.

7. Othercurrentliabilities(IAS18–IFRS3)Theadjustmentisdetailedbelow:

• Positive change for Euro 314 thousand relative to deferred income following the different booking ofrevenuesrelatingtoSMS;

• PositivechangeforEuro3,278thousandrelativetotheearn-outtobepaidunderthescopeofthecontractofpurchaseofAgileTelecomS.p.A.

8. Revenues(IAS18)TheadjustmentrelatestothedifferentbookingofrevenuesrelatingtoSMS.For2015,theeconomiceffectwasEuro56thousand.

9. Costsforservices(IAS38)Sometypesofmulti-yearcosts,mainlycostsincurredduringthestart-upphase,costsrelativetotheIPOandothercostsspanningseveralyears,arenotcapitalisedforthepurposeofIAS/IFRS;theincreasesin2015havethereforebeenreclassifiedascostsforservices.


10. Amortisation/depreciation(IAS38)TheadjustmentofEuro185thousandrelativetothereversalofamortisation/depreciationonassetsthatcannolongerbecapitalisedunderIAS38.

11. Periodtax(IAS12)Theitemisimpacted(totalreductioninexpenseforEuro70thousand)bythedeferredtaxeffect(whereapplicableandfortheportionrelativetotheimpactsrecordedontheincomestatement),determinedinconnectionwiththeadjustmentsmadeanddescribedabove.

12. Dilutedearningspershare(IAS33R)According to IAS33R, in calculatingearningsper share, theeffectsof the StockOptionPlan resolvedon07 July2016havebeencalculatedretroactively.

Reconciliationtableofshareholders'equityofMailUpS.p.A.asat31December2015

Belowisthereconciliationofshareholders'equityofMailUpS.p.A.asat31December2015,draftedaccordingtotheItalianAccountingStandardsandthatasatthesamedatedraftedinaccordancewiththeIFRS,completewithspecificexplanatorynotes.TheamountsarestatedinEurothousandsandadjustmentsaregroupedaccordingtotype. Asat31December2015

(figuresinEurothousands) Netresult OCI Shareholders’equity

ItalianAccountingStandards-SeparatefinancialstatementsofMailUpS.p.A. 112

5,629 IAS38-Reversalofcapitalisationofstart-upcosts 1 (3)IAS38-Reversalofcapitalisationofresearchcosts 34 (92)IAS38-Reversalofcapitalisationoflistingcostsandothermulti-yearexpenses (220) (578)IAS18-RevenueRecognition (15) (402)IAS19R-Discountingofprovisionforseveranceindemnity(TFR)andotherpensionbenefits

22 (21) (5)

IAS32-Classificationoftreasuryshares (58)

IAS/IFRSaccountingstandards(netofthetaxeffectaccordingtoIAS12)-SeparatefinancialstatementsofMailUpS.p.A.

(66) (21) 4,491

Foradescriptionofthemainitemsofthecomprehensivereductioninshareholders'equity,pleaserefertotheinformationgivenintheparagraphsabovecommentingontheindividualitems.Milan,28March2017TheChairmanoftheBoDMatteoMonfredini


ReportbytheBoardofAuditorstotheshareholders’meeting







IndependentAuditors’Reportontheseparatefinancialstatementsasat31December2016



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CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS AS … · 2018-09-02 · Page 4 | Consolidated and separate financial statements as at 31/12/2016 Acumbamail S.L., a start-up founded