Davide Serra 2014-03-19 Italy Slide Pack [Eng] 31.03.14

Algebris Investments (UK) LLP is Authorised and Regulated by the Financial Services Authority

2014 Private & Confidential. Algebris Investments, 7 Clifford Street, London, W1S 2FT, United Kingdom.www.algebris.com

Italy: Problems, Consequences and Recommendations

Davide Serra

Algebris Investments (UK) LLP is Authorised and Regulated by the Financial Conduct Authority

2014 Private & Confidential. Algebris Investments, 7 Clifford Street, London, W1S 2FT, United Kingdom.

Agenda

A. Problems

B. Future consequences

C. Recommendations

2



0%

40%

80%

120%

160%

200%

240%

280%

320%

360%

400%

440%

480%

520%

560%

600%

640%

680%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%Debt/GDP Italy avg. Growth OECD avg. growth

A. The problem: High debt, low growth

GDP Growth % - 5 years rolling average vs. Debt / GDP %

Source: OECD, ISTAT

First Republic Second Republic

3

Deb

t/G

DP

Third

Republic

Debt/GDP now

at 130%+



Why does debt increase and growth decrease?

1. Chronic tax evasion

2. The tax evasion party

3. Overly complex tax system

4. High public expenditure vs. poor public services

5. High cost for public employees

6. High pension costs

Debt / GDP Growth

1. Low business competitiveness

2. Low market share in key sectors

3. High tax rates

4. Corruption

5. Low labour productivity

6. Low labour participation

7. High energy costs

8. Inefficient legal system

9. Low R&D investments

4



Why debt increases: 1. Tax evasion...

0.4

1

1.3

2.2

2.4

3.5

3.9

4

4.5

6.2

6.5

7.9

11.2

12.1

17.4

Norway (2005)

Netherlands (1995)

Australia (2001)

Canada (2008)

Denmark (2003)

Belgium (2002)

France (2008)

Ireland (1998)

Sweden (2005)

United States (2005)

Austria (2004)

United Kingdom (2009)

Spain (2000)

Mexico (2003)

Italy (2012)

Mario Monti, Aug 2012: Tax evasion produces a huge damage in the perception of our country abroad. I believe that Italy is in this difficult position especially because of this..

Source: Una nota sulle determinanti dell'economia sommersa, Confcommercio, May 2011

5

The shadow economy [% of GDP]

Shadow economy determinants:Public expenditures efficiency perception

Ease of paying taxesEfficacy and efficiency of the legal system

Average tax rate

Little tangible improvement has been made!



17.9%

19.0%

18.6%

19.3%

19.2%

20.0%

19.0%

19.2%

19.1%

19.7%

18.6%

18.5%

18.1%

17.8%

17.5%

17.2%

17.5%

17.5%

17.8%

17.3%17.4%

17.4%

17%

18%

18%

19%

19%

20%

20%

21%

1992 1995 1998 2001 2004 2007 2010 2013

...never challenged

Small improvements in 20 years

Source: Fiscalita ed economia sommersa, Confcommercio, Luglio 2013

6

The shadow economy [% of GDP]



117 117126

149 152

13 1314

14 13

102 94 79 5562

191 185189

193

195

0

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011 2012

Tax

Inco

me

(b

n)

Indirect Taxes Corporates&Other Self-employed Employees

Self-employed 32%Employees 68%

Self-employed should pay at least 45b more, 3% of GDP

423 409 412407

In 20 years this caused 60% of Debt / GDP

Source: ISTAT 2010Source: MEF

Total:

7

Total Tax Income

2%

3%

3%

4%

5%

5%

6%

7%

7%

8%

9%

10%

10%

10%

11%

12%

14%

15%

18%

19%

20%

22%

32%

36%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Romania

Lussemburgo

Lettonia

Estonia

Portogallo

Germania

Lituania

Regno Unito

Finlandia

Cipro

Danimarca

Irlanda

Bulgaria

Austria

Slovenia

Paesi Bassi

Ungheria

Svezia

Belgio

Repubblica Ceca

Polonia

Spagna

Italia

Grecia

Self-employed [% of total]

2. The Tax Evasion Party

412



3. Overly complex tax system

15 Payments

269 hours per year

720 potential tax reliefs to be checked

8 Payments

110 hours per year

few tax reliefs

Source: The World Bank, IFC Doing Business 2013

8

16

18

34

56

69

72

75

131

UK

Switzerland

Spain

Average OECD

US

Germany

Belgium

Italy

Ease of paying taxes (higher is worse)



4. High public expenditure vs. low public services

Source: Eurostat 2011

9

Public expenditure [% of GDP] Italy Public expenditure [% of GDP] Average DE, FR, ES, UK

7.5%

5.9%5.6%

4.1%

2.0%1.8%

Health Generalpublic

services

Education Economicaffairs

Publicorder and

safety

Defence

Average DE, FR, ES,UK

7.6%

8.3%

4.5%

3.8%

1.9%1.4%

Health Generalpublic

services

Education Economicaffairs

Publicorder and

safety

Defence

Italy



Population Public employees

Public employees vs. Labour force

Expenditure per employee000

Expenditure for public wages/GDP

65.3 millions 5,493,200 20.9%1 47.8 13.2%

81.8millions 4,434,000 10.5% 45.0 7.7%

63.3 millions 5,719,000 17.9% 33.8 10.8%

60.8 millions 3,417,000 13.3% 49.5 10.6%

46.2 millions 3,136,100 12.9% 39.4 11.1%

5. High cost for public employees...

In 2012 public expenses on

employees declined 1.2% for the first time in 12 years

Still FR/DE/ES on average spend

11% less than Italy for every employee,

while UK 26%

1 Official data updated as of 2011Source: Relazione 2012 sul costo del lavoro pubblico, Corte dei Conti, Eurostat

10



..and poor public services..

Source: Confcommercio

Institutions

Healthcare

Education

Infrastructures

From 2000 to

2010 little

improvement

11

0 1 2 3 4 5 6

Mexico

Italy

Slovakia

Greece

Slovenia

Spain

Cyprus

Portugal

Ireland

UK

Estonia

Norway

Canada

Belgium

Holland

Japan

Sweden

Denmark

Germany

Finland

End 2000 End 2010

Perception of public services (higher is better)



...waste 1.6% GDP each year

Average expenditure per public

employee in

UK, ES, DE, FR

41,200

Average expenditure per public

employee in ITA 48,400

If Italy lowered expenditure and

spent the same amount as the

average:

~25b savings,

~1.6% of GDP

Source: Relazione 2012 sul costo del lavoro pubblico, Corte dei Conti, Regione Lombardia, Provincia di Milano

Province of Milan:

13 executive councillors: average compensation 71,794/year

45 province councillors: average compensation 27,770/year

38 executives: average compensation 110,841/year

Lombardia Region:

81 regional councillors: average compensation 124,621/year

163 executives: average compensation91,149/year

50 directors: average compensation160k/year

12



6. High pension cost

Source: OECD Pensions Outlook 2012

13

Pensions expenditure [% of GDP]

4.6%

7.7%

10.1%

10.8%

14.6%

15.3%

United States

UnitedKingdom

Spain

Germany

France

Italy

2010

4.8%

8.2%

14.0%

13.0%

15.1%

15.7%

United States

UnitedKingdom

Spain

Germany

France

Italy

2050

Average UK, ES, DE, FR: 10.8% of GDP

Italy's costs would be 70bn (4.5% of GDP) lower if it spent like its neighbours!



Recap: Why does debt increase?

Tax evasion = 3-4% GDP

Public expenditure and

wages = 1.6% GDP

Pensions = 4.5% GDP

~10% of GDP wasted

annually

14



Second problem: Growth

1. Italy is not competitive...

Italy ranks 49th in the WEF 2013 Global Competitiveness

Index

Source: 2012 World Economic Forum

#49 Competitiveness

#9 GDP

#5 Debt

15

GCI 2012-2013

Country/Economy Rank Score

Switzerland 1 5.7

Singapore 2 5.6

Finland 3 5.5

Germany 4 5.5

United 5 5.5

Sweden 6 5.5

Hong 7 5.5

Netherlands 8 5.4

Japan 9 5.4

United 10 5.4

Norway 11 5.3

Taiwan 12 5.3

Qatar 13 5.2

Canada 14 5.2

Denmark 15 5.2

Italy 49 4.4



2. Low market share in key sectors: High Tech, Cheap

Manufacturing, Commodities

25.8%23.7%

21.3%18.1%

15.0% 13.8%

7.4% 6.4%

China France United Kingdom United States Germany Euro Area Italy Spain

Note: Products with high R&D; aerospace sector, computer, pharmaceuticals, scientific and electronic equipment Source: The World Bank 2012

1,923 1,856

1,084

614

308 282 268 231

China US Japan Germany Italy Brazil France UK

Source: The Manufacturers Organization, 2012

16

Most important manufacturing countries [$ bn , current prices]

% High Tech exports in manufacturing sector 2011



28% 27% 28%29%

11%

17%

4%5%

Spain Italy UnitedKingdom

Germany France

..in early 2000s everybody studied law!

Until 2005 few students graduated in Science and Engineering vs. Law

Source: Eurostat

1998

26%

23%22%

31%

26%

6%

3% 4% 4%

8%

Spain Italy UnitedKingdom

Germany France

2010

Engineering and ScienceLaw

17



3. Too high tax rates

Tax pressure % of GDP

20.823.1

26.327.528.1

34.737.337.938.739.0

40.543.343.643.944.4

46.446.7

48.849.1

52.452.853.1

57.358.6

65.768.5

Luxembourg

Cyprus

Ireland

Denmark

Bulgaria

Slovenia

United Kingdom

Latvia

Spain

FinlandNetherlands

Portugal

Poland

Lithuania

RomaniaGreece

Germany

Slovak Republic

Czech Republic

Hungary

Sweden

Austria

Belgium

Estonia

France

Italy

Profits taxes

Labour taxes

Other taxes

Profit taxes and social contributions rates among the highest in the world

Italy allowed tax evasion to small corporations and squeezed the big

ones

Corporations dont grow and move elsewhere!

Source: The World Bank, IFC Doing Business 2012

18



2.4

2.5

2.5

2.9

3.7

4.2

4.4

4.5

4.5

4.9

5.1

5.4

5.6

5.7

Slovak Republic

Grecia

Italia

Portogallo

Spagna

Belgio

Francia

Giappone

Stati Uniti

Germania

Danimarca

Regno Unito

Norvegia

Svezia

4. Corruption

Source: World Economic Forum, Confcommercio 2013

19

Irregular payments and bribes index [1 = worst , 7 = best]

Only Greece and Slovak Republic

worse

Deep dive from 2000s score of 4.4

Only recently Montis government introduced measures to prevent and stop

corruption in the public administration



5. Low labour productivity...


Distance from main EU countries widened in the last year (+3%)

69.7

52.7

45.4 4542.4

39.5 39.3

32.2 32.1 31.3

20.316.9

20

Euro produced per hour in each countrys economy

Only Portugal, Spain and Greece worse than Italy

Northern Core countries way more productive

Average FR, DE, UK, ES = 39.6

Italy = 32.2 (-23% per hour)



...which doesnt legitimize recent wage increases

Last 10 years:

Wages +38%

Productivity +12%

Italy is losing competitiveness and market

share in manufacturing sector

Source: IMF, CSC, Global Insight

-4%

-1%

-1%

-1%

0%

0%

0%

0%

1%

8%

United States

Italy

Germany

France

Japan

South Korea

Russia

India

Brazil

China

21

Cumulated % change 2000-2011 in manufacturing Market Share 2007-2011 in manufacturing sector

Germany France Italy

Productivity +23% +23% +12%

Wages +22% +30% +38%

unit labour cost +1% -7% -26%



6. Low labour participation

=

77.1%

76.3%

74.1%

71.8%

71.0%

63.7%

Germany

UnitedKingdom

Spain

EU 27

France

Italy

71.7%

70.3%

67.9%

66.7%

65.6%

53.5%

Germany

UnitedKingdom

Spain

France

EU 27

Italy


22

% labour participation between 15 and 64 % woman labour participation between 15 and 64



7. High energy costs...

0.07

0.090.10 0.10

0.11 0.11

0.13

-43

-14

-12

-10

11

20

44

Italy

EU 27

United Kingdom

Belgium

Spain

Germany

France

Source: Enerdata 2012 Source: Eurostat 2012

23

Deficit production-consumption (TWh) Electricity prices for the Industry (/kWh)

+37% price Vs EU 27 average

Sticky prices, highly dependent from long term agreement

with foreign suppliers more than from demand/supply



...due to less efficent production

74.9%

49.7%

27.5%22.8% 20.4%

16.3%

3.5%0.0%

In 2011 a second referendum abolished any attempt to build nuclear power plants

From 2007 production from renewable sources has almost doubled under poorly designed public subsidies

Source: Enerdata 2012, Terna 2010

24

Nuclear power production [% on the gross production] Renewable energy production [% on the gross production]

32.8%31.4%

17.1%

13.7%12.4%

4.5% 3.9% 3.6%

Cost of electricity up ~11% in two years Firms spend ~10-15% more on electricity than in the other EU countries; in a cost cutting economy many decides to move abroad (ie. Alcoa)



8. Ineffective legal system

26

28

28

29

30

30

32

32

34

35

36

38

39

40

41

43

Belgium

Australia

UK

France

Germany

Sweden

Portugal

United States

Norway

Denmark

Canada

Mexico

Greece

Spain

Italy

Cyprus


3.5

3.6

4

4.1

4.3

4.8

4.8

4.9

5.5

5.6

5.6

5.7

5.8

5.8

5.9

6

6.1

Slovakia

Italy

Slovenia

Greece

Mexico

Portugal

Denmark

Spain

Sweden

Canada

France

US

Japan

Norway

Germany

UK

Australia

25

Legal System Efficiency Index Average number of days before sentence is pronounced

ITALY

1210 Days

DE, UK, ES, FR

530 Days vs.

Number of court iterations needed to observe a contract

Will the legislative decree on liberalization (January 2012) enhance the situation with the introduction of companies

courthouses?



...also bankruptcy procedures take years


0.4

0.6

0.8

0.9

0.9

0.9

1

1

1.2

1.5

1.5

1.8

1.8

1.9

2

2

4

Ireland

Japan

Canada

Belgium

Finland

Norway

Denmark

UK

Germany

Spain

US

Italy

Mexico

France

Greece

Portogallo

Slovacchia

26

Duration of a bankruptcy process [years]

~2 years to go bankrupt

Montis executive modified the bankruptcy law in the effort to reveal a potential insolvency in advance and ease a creditor

debtor agreement:

Introduction of the Concordato preventivo

Higher protection to the economic activity

Intervention to ease banks financing in a debt

restructuring process



9. Little R&D investments

2.88%

2.24%

1.77%

1.33%

1.25%

Germany

France

UK

Spain

Italy


% Enterprises % Government

45% 42%

45% 32%

54% 37%

64% 30%

Source: OECD 2010/2011

27

R&D expenditure % GDP

45% 49%



B. Future consequences:

High debt + low growth = no new births

-2.71

-0.87

1.52

2.94

3.87

Germany Italy France UnitedKingdom

Spain

0

1,000

2,000

3,000

4,000

5,000

6,000

-6

-4

-2

0

2

4

6

8

10

12

1960 1970 1980 1990 2000 2010

Debt (bn) Natural Growth Rate

Source: CIA World Factbook 2012 Est., ISTAT 2011

28

Natural growth rate [rates per 1000pp] Historical data: Natural growth rate (per 1000pp)



No jobs for young people Youth Unemployment Sky-rocketing

12%

8%11%

14% 16%20%

9%

20%18%

23%

8% 8%

16%

21%23%

25%

30%

35%

53%55%

Germany Japan US UK EU 27 France Ireland Italy Spain Greece

2007 2012


29

Youth unemployment % (19-25 years old)

In 5 years almost doubled

2013 Estimate: 41.6%



Unfair system for present and future generations

Source: OECD Pensions Outlook 2012

0

10

20

30

40

50

60

70

80

1949 1958 1971 1983 1989 1993 1999 2002 2010 2020 2030 2040 2050

First Republic Second Republic

1983: Retirement at 55

2050: Retirement at 70

30

Pensionable age progression (men)



...firms will leave the country...

High spreads on funding affect directly firms competitiveness

Scenario 1: Increase in cost of funding for 3 years

+250bps

42% interest expense increase33% less profitNet income margin drops from 2.2% to 1.5%

Source: Mediobanca Research (MBRES), Algebris Investments (UK) LLP Deindustrialization of Italian

firms

31

bn 2012 2012Scenario

+250 Delta %

Net Revenues 646 100.0% 100.0% 0%

Gross profit 125 19.4% 19.4% 0%

EBITDA 58 9.0% 9.0% 0%

EBIT 30 4.6% 4.6% 0%

Interest expenditures (20) (3.1%) (4.4%) 42%

Interest proceeds 24 3.8% 3.8% 0%

Earnings before taxes 34 5.3% 4.0% (25%)

Net income 15 2.2% 1.5% (33%)

Debt / EBITDA 5.5x

Interest expense/ Financial Debt 6.0%Additional Spread 2.5%

Interest expense/ Financial Debt 8.5%



...Italian families will lose wealth...

32

2,713 2,713 2,713

5,9264,868

4,130

2010A Scenario 1 Scenario 2

Real Estate Net cash

Scenario 1

+100 bps

spread

Scenario 2

200 bps

spread

2010A

7,581 6,8438,639

-12% -21%

mm 2010A Scenario 1 Scenario 2

Cash and marketable

securities 3,600 3,600 3,600

Debt -887 -887 -887

+ Real Estate 5,926 4,868 4,130

%Growth -17.9% -30.3%

Net Wealth 8,639 7,581 6,843

%Growth -12.2% -20.8%

Source: Equita Sim, Algebris Investments (UK) LLP



New Government, New Era?

...Prime Minister Renzi has committed to 1 key reform per month..

Target: 15th place in the Doing Business index by 2018

Is this a precondition for a Third Republic?

33



C. Recommendations

1. Reform fiscal system

Simple and digital tax system

Remove cash

Incentivise corporations

2. Reduce public expenditure

3. Invest only where there is a real prospect of success

4. Reform legal system

34



1. Simple and digital tax system

Simple tax regulations

Unification of minor taxes and referral to a single Tax Authority

Efficient online systems

Optimization of tax reliefs

Switzerland UK SpainOECD High

IncomeUS Germany Belgium Italy

Payments (number per year) 19 8 8 12 8 9 11 15

Time (hours per year) 63 110 167 176 175 207 156 269

Profit tax (%) 8.9 22.2 1.2 15.5 27.6 18.9 5.4 22.9

Labor tax and contributions (%) 17.7 10.2 36.8 22.8 10 21.9 50.8 43.4

Other taxes (%) 3.6 3.1 0.7 1.7 9.1 5.9 1.5 2.0

Total tax rate (% profit) 30.2 35.5 38.7 40.0 46.7 46.8 57.7 68.3

Source: World Bank 2012

35

A radical reform is needed... ...to enhance the actual highly fragmented system

Three different VAT rates (21%, 10% and 4%) applied upon the type of

good/service

The housing tax IMU, introduced in 2013 and already subject to strong

opposition from the centre-right party

IRPEF, IRAP, INPS among the most important taxes



1. Cash removal = an efficient way to fight tax evasion

Source: Visa, A.T. Kearney 2013

36



In 4 years Shadow Economy

vs. GDP improved 5%

For Italy a similar outcome

could add 20b tax income,

1.5% of GDP

Debit cards may be used

instead of credit cards

1. The case of South Korea

8

10

12

14

16

18

20

22

1990 1993 1996 1999 2002 2005 2008

Tax system reform 98-99

Deduction of credit card expenditures from tax bill

Credit card receipts participate to a national lottery game

Source: Myongji University, Algebris Investments (UK) LLP

63.6

493.8

1998 2010

57% of total

consumption

37

Korea: The Shadow Economy % of GDP

Credit card payments in South Korea (tr KRW)



Lower taxation on corporations and employees (2% of GDP) and raise taxation on financial income

1. Stimulate investments in corporations: reduce

the tax pressure...

12.5%

20%

=

50-60%Corporations

Financial assets

50%Employees

Government securities

Recommendation

-1% GDP 16bn

~+1% GDP 10bn

~

-1% GDP 16bn

The missing 10-15bn will be retrieved from the reduction of both tax evasion and public expenditure

-

+

-Tax Rate

30%

40%

40-50%

Optimal

Source: Algebris Investments (UK) LLP

38



2. Reduce public expenditure

Widespread Spending Review Disposal of government assets

Real Estate

Holdings in listed companies

Capitalization of concessions

70-80bn

40bn

30bn

Debt

Interest expenditure

Growth

Radical rationalization of public expenditure

Reduction of managers and executives in public companies

Increase of public employees productivity

Waste

Services

Source: Algebris Investments (UK) LLP , Cassa Depositi e Prestiti

39



2. A concrete example..

Source: Regione Lombardia, Algebris Investments (UK) LLP

40

President and

councillors

Province of Milan

13 people

70k each

Board of the

province

47 people

22k each

Executives

48 people

110k each

..6.7 millions only for their

wages..

..And 108 politicians and

executives..

Headquartered in San Babila

Centre of Milan

Real estate here is valued

20k/m

..and there is a huge waste of

resources due to poor

energy efficiency of old

buildings..



1. Focus on Education and Research to revive manufacturing sector and retrieve competitiveness

3. Invest only where there is a real prospect of success

Energy

Transportation

Defence

Agro industrial

Telecommunications

Source: EUROSTAT, IMF, Confindustria, Algebris Investments (UK) LLP

Machinery and equipment

Metallurgy

Automotive

Chemicals

Electronic devices

Pharmaceuticals

Made in Italy

No lawyers and politicians

2. Focus on exports

Scientists and Engineers

41



4. Reform legal system

Source: Algebris Investments (UK) LLP

42

Fairness

Timing

Simplicity

Organizational restructuring

Reorganisation of law offices following best

European and national practices (i.e. Torino)

Digitalisation of the whole law system

Geographical redistribution of law offices

Improve business competitiveness

Focus on post-sentence execution to

preserve companies rights

Strengthen credit recovery mechanism

making it possible to collect credits from

people (or ad hoc companies) close to the

person/company directly involved in the

sentence

Introduce severe anti-corruption laws



Disclaimer

This document is issued by Algebris Investments (UK) LLP. It is for private circulation only. The information contained in this document is strictly confidential and is only for the use of theperson to whom it is sent. The information contained herein may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of AlgebrisInvestments (UK) LLP.

Algebris Investments (UK) LLP is Authorised and Regulated in the UK by the Financial Services Authority. The information and opinions contained in this document are for backgroundpurposes only, do not purport to be full or complete and do not constitute investment advice. Algebris Investments (UK) LLP is not hereby arranging or agreeing to arrange any transaction inany investment whatsoever or otherwise undertaking any activity requiring authorisation under the Financial Services and Markets Act 2000.

This document does not constitute or form part of any offer to issue or sell, or any solicitation of an offer to subscribe or purchase, any investment nor shall it or the fact of its distributionform the basis of, or be relied on in connection with, any contract therefore.

No reliance may be placed for any purpose on the information and opinions contained in this document or their accuracy or completeness. No representation, warranty or undertaking,express or implied, is given as to the accuracy or completeness of the information or opinions contained in this document by any of Algebris Investments (UK) LLP, its members, employees oraffiliates and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions.

This document is being communicated by Algebris Investments (UK) LLP only to persons to whom it may lawfully be issued under The Financial Services and Markets Act 2000 (FinancialPromotion) Order 2001 including persons who are authorised under the Financial Services and Markets Act 2000 of the United Kingdom (the Act), certain persons having professionalexperience in matters relating to investments, high net worth companies, high net worth unincorporated associations and partnerships, trustees of high value trusts and persons who qualifyas certified sophisticated investors. This document is exempt from the prohibition in Section 21 of the Act on the communication by persons not authorised under the Act of invitations orinducements to engage in investment activity on the ground that it is being issued only to such types of person.

The distribution of this document may be restricted in certain jurisdictions. The above information is for general guidance only, and it is the responsibility of any person or persons inpossession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction.

Past performance is not necessarily a guide to future performance. The strategy employed may result in the NAV exhibiting a high level of volatility and so is suitable for professionalinvestors only.

Algebris Investments (UK) LLP, 7 Clifford Street, London W1S 2FT, UK. Company registration no.:OC319392.

43

Documents

Davide Serra 2014-03-19 Italy Slide Pack [Eng] 31.03.14