Financial Statements at December 31, 2012, December 31, 2011 …€¦ · Chairman Domenico Catanese Directors Ernesto Zucca Raffaele Allocca The Board of Directors, appointed by the

Financial Statements for 2012, 2011 and 2010

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Financial Statements at December 31, 2012, December 31, 2011 and

December 31, 2010

as restated, on a voluntary basis, in

accordance with the International Financial

Reporting Standards adopted by the

European Union


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Index

GENERAL COMPANY INFORMATION........................................................................................... 4

CORPORATE GOVERNANCE SUMMARY ..................................................................................... 4

REPORT ON OPERATIONS ............................................................................................................... 5

1. Main activities .......................................................................................................................... 5

2. Sector background .................................................................................................................... 6

3. Key factors and significant events during the years 2012, 2011 and 2010 .............................. 6

4. Financial highlights .................................................................................................................. 8

4.1 Income statement at December 31, 2012, 2011 and 2010 ........................................... 8

4.2 Balance sheet and financial results at December 31, 2012, 2011 and 2010 .............. 10

5. Financial ratios ....................................................................................................................... 11

6. Investments............................................................................................................................. 12

7. Research & development........................................................................................................ 12

8. Human resources .................................................................................................................... 13

9. Transactions with subsidiaries, affiliated companies, parent companies and other related party

transactions ............................................................................................................................. 13

10. Risk factors ....................................................................................................................... ..... 13

10.1 Main risk factors........................................................................................................ 13

10.2 Information on financial risks ................................................................................... 14

11. Additional information ........................................................................................................... 14

11.1 Own shares ................................................................................................................ 14

11.2 Information relating to the environment.................................................................... 15

11.3 Environment and quality assurance ........................................................................... 15

11.4 Organizational model pursuant to Legislative decree 231/2001 ............................... 15

11.5 Privacy – information under Legislative decree 196/2003........................................ 15

11.6 Secondary offices ...................................................................................................... 15

12. Significant post balance sheet events ..................................................................................... 16

13. Business outlook..................................................................................................................... 16

14. General meeting resolutions ................................................................................................... 16

FINANCIAL STATEMENTS AT DECEMBER 31, 2012, 2011 AND 2010 .................................... 17

15. Statement of financial position ............................................................................................... 17

16. Statement of profit and loss .................................................................................................... 18

17. Statement of comprehensive income ...................................................................................... 18

18. Statement of cash flows .......................................................................................................... 19

19. Statement of changes in shareholders’ equity ........................................................................ 20

EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS ................................................. 21

20. General information................................................................................................................ 21

21. Summary of accounting policies and valuation methods ....................................................... 23

22. Notes to the statement of financial position ........................................................................... 30

23. Notes to the statement of profit and loss ................................................................................ 42

24. Net financial position ............................................................................................................. 46

25. Commitments and guarantees................................................................................................. 47

26. Contingent liabilities .............................................................................................................. 47


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27. Related party transactions....................................................................................................... 48

28. Other information ................................................................................................................... 50

28.1 Average number of employees by category .............................................................. 50

28.2 Emoluments of the directors and statutory auditors .................................................. 50

29. Information on financial risks ................................................................................................ 50

30. Significant post balance sheet events ..................................................................................... 53


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General Company information

Registered office: Via Giovanni da Udine n. 15 – 20156 MILAN

Tax Number: 13077470154

VAT Number: IT 13077470154

REA: MI – 1615799

The Company is subject to management and coordination by Prima Holding S.r.l.

Corporate governance summary

Board of Directors

Chairman Domenico Catanese

Directors Ernesto Zucca

Raffaele Allocca

The Board of Directors, appointed by the Shareholders’ Meeting held on April 22, 2014, will remain in charge

until the date of the General Meeting called to approve the Financial Statements as at December 31, 2014.

.

Board of Statutory Auditors

Chairman Mario Valenti

Statutory Auditors Riccardo Foglia Taverna

Elena Angela Valenti

Substitute Statutory Auditor Pierluigi Bottinelli Simone Pesce

The Board of Satutory Auditors, appointed by the Shareholders’ Meeting held on April 22, 2014, will remain in

office until the date of the General Meeting called to approve the Financial Statements as at December 31,

2016.

External auditors

Cristiano Agogliati


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Report on Operations

1. MAIN ACTIVITIES

The Company operates on the Italian domestic market, primarily with public sector entities. Its core business is

the energy industry, facility management and management of biomedical equipment.

The Company operates through its Energy, Biomedical and Facility Management Divisions.

The Energy Division offers the market advanced technological and energy solutions e.g. cogeneration and

trigeneration.

More specifically, the Company provides its clients with projects for the redevelopment of plant and the

optimization of energy consumption, through trigeneration and cogeneration. It is also looking at and studying

the development of solar power plants and systems. The Company is committed to increased use of renewable

energy sources.

The Biomedical Division handles the management and maintenance of the biomedical equipment of major

hospitals and healthcare corporations in Northern Italy, especially in Lombardy and Veneto Regions; it also has

some client healthcare facilities in Central Italy.

The Company offers integrated services to support and implement technical functions; it provides consultancy

on purchases of new technology; it identifies innovative instruments for strategic decisions; and draws up renewal

plans with feasibility studies and HTAs (Health Technology Assessments).

In response to changes in the market and demand, the Company has also set up a Facility Management Division

to offer such services to public sector entities and healthcare facilities. This releases clients from the need to

deploy human resources on non-core activities, enabling them to concentrate on their primary business activities.

The services provided range from equipment management to property management and include activities such

as gardening, cleaning, video surveillance, reception, caretaking and lighting management, as well as specialist

services for hospitals and healthcare facilities.

The Company’s approach to the market on which it operates is geared towards guaranteeing an optimal level of

efficiency when providing services to clients and identifying bespoke services for clients in order to satisfy their

specific needs, while keeping operating costs down.

The Company’s business is conducted largely at client premises with rapid response teams deployed at the

facilities managed, in order to act promptly as and when required.

The Company’s activities in the business segments described above are mainly performed on behalf of Public

Sector entities, under tenders and contracts requiring services of the highest quality. In 2011, business for public

sector clients represented around 95% of total business activities and around 92% in 2012 (89% in 2010).

The Company’s territorial presence in 2012 is: Lombardy, the Company’s historical region of origin, represented

52% of total revenue (53% in 2011 and 5 4 % in 2010), as followed by Triveneto with 34% (34% in 2011 and

3 4 % in 2010), Lazio with 9% (10% in 2011 and 10 % in 2010) and other regions with 5% (3% in 2011 and

2% in 2010).


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2. SECTOR BACKGROUND

Analysis of the Italian Facility Management market, both public and private, shows that it is currently in a phase of

maturation and consolidation after a period of strong increase. Comparison of the major players indicates that they are in

fierce competition as they seek to conquer increasingly broad market segments, offering qualified and more specialised

services.

Although the market has developed in a positive context which, in recent years, has witnessed a situation of qualitative and

quantitative growth, it can be said that the demand is not yet fully mature. In fact, even though the practice of outsourcing

non-core services has spread widely, the real logic of Facility Management has yet to establish itself.

One of the reasons for the difficulty of growth in demand is linked to the considerable fragmentation of the Italian

production sector which constitutes a barrier to market access.

Notwithstanding the obvious differences, sectors with a greater aptitude to the use of Facility Management are present both

in the private and public sectors. Regarding the first, the segments that assert themselves with greater certainty on the

market are related to large multinational industries and business poles. In terms of the public sector, however, health is the

sector that is asserting itself quantitatively and qualitatively with greatest significance in the Italian market.

It is therefore important to reflect on the tools/strategic levels that the construction sector will have to be put in place to

interact with the services market, including: technological innovation and the impact of this on projects, products and

processes; the growth of public and private partnerships and project financing; the new phase concerning energy saving

and environmental sustainability; the slowdown in the expansive real estate cycle; and growth of new models of

profitability based on leasing and management.

3. KEY FACTORS AND SIGNIFICANT EVENTS DURING THE YEARS 2012, 2011 AND

2010

On 1 January 2012, for accounting and tax purposes, a partial division took place in which part of the assets of the

“Prima Vera S.p.A.” company were assigned to the parent company, “Prima Holding S.r.l.”.

On 17 October 2011, the Extraordinary General Shareholders' Meeting (file no. 87026 - volume no. 11924 - Notary

Cafiero) approved a proposal for demerger, drawn up by the Administrative Body on 30 September 2011, which

provided for the allocation of part of the corporate assets of "Prima Vera S.p.A." to the parent company “Prima Holding

S.r.l.” The demerger was then concluded on 23 December 2011 (file no. 87204 - volume no. 12014 - Notary Cafiero).

On 2 May 2012, the MPP S.c.a.r.l. company was incorporated with Costruzioni Giuseppe Montagna S.r.l., Pulirapida

S.r.l. and Prima Vera S.p.A. as shareholders, and with the following shareholdings: 60% Costruzioni Giuseppe

Montagna S.r.l. – 20% Pulirapida S.r.l. – 20% Prima Vera S.p.A.. On 18 October 2012, the shares of Pulirapida S.r.l.

were transferred to Costruzioni Giuseppe Montagna S.r.l.; thus, at 31 December 2012, the shareholding structure was

as follows: 80% Costruzioni Giuseppe Montagna S.r.l. – 20% Prima Vera S.p.A.. The company is a non-profit

consortium, and constitutes the common organisation of partner companies for performing the activities entrusted to

them for implementing the works contracted by Tabacchi S.r.l. to members united in ATI, under the convention in

concession for redevelopment works on building "4" of the former Manifattura Tabacchi in Milan and subsequent

management of facility management services.

On 16 July 2012, the company signed the instrument of transfer of shares from the Certosa Servizi S.r.l. company,

equivalent to 20% of the share capital, to Teodoro Catanese.

On 25 September 2012, the Synchron Nuovo San Gerardo S.p.A. company was incorporated with Manutencoop

Facility Management S.p.A. (26,16%), Servizi Ospedalieri S.p.A. (0,04%), Eureca Consorzio Stabile (38,09%),

G.D.M. Costruzioni S.p.A. (0,10%), CEIF Società Cooperativa (4,08%), MACO S.p.A. (9,62%), Prima Vera S.p.A.


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(6,85%), CIR Food S.C. (10,85%) and Servizi Italia S.p.A. (4,21%) as shareholders. The company’s purpose is to enter

into, with Infrastrutture Lombarde S.p.A. and the San Gerardo Hospital in Monza, and subsequently implement the

"concession contract for construction and management, pursuant to Art. 144 of Legislative Decree No 163/2006,

related to enhancement, expansion and renovation of the San Gerardo Hospital in Monza".

On 27 December 2012, the General Meeting of Associates of Consorzio Stabile B.I.S. - Biomedical Integrated Services

in liquidation. The General Meeting approved the final liquidation balance sheet at 7 December 2012, and the plan of

apportionment and allocation of the net assets of the liquidation to shareholders.

On 16 February 2011, the company signed a purchase agreement for the acquisition of shares in Certosa Servizi S.r.l.,

for a nominal value of EUR 2,000, equal to 20% of the share capital. The agreement was drawn up by the notary Anna

Pellegrino and registered in Milan on 23 February 2011 under no. 7397 - series 1T.

Tabacchi S.r.l. was incorporated by the partners Giuseppe Montagna S.r.l., Pulirapida S.r.l. and Prima Vera S.p.A., with

the following shareholdings: 60% Giuseppe Montagna S.r.l. – 20% Pulirapida S.r.l. – 20% Prima Vera S.p.A.. The

purpose of the company is to design and implement works for the redevelopment of the "4" building, the former

Tabacchi factory in Milan, and the subsequent handling of the facility management services.

On 4 October 2011, a deed was signed for the transfer of a branch of Galileo Technologies S.r.l. (transferor) to Prima

Vera S.p.A. (transferee), to provide integrated services for the management of medical equipment, in accordance with

the Consip S.p.A. Convention, in the regions of Piedmont and Lombardy, with the exception of the City of Milan.

The transferor sold and transferred the branch to the transferee for its current value on the 4 October 2011.

The business has grown strongly in all segments over the three financial years thanks to the award of major

long-term contracts (revenue has grown from Euro 76.192 thousand in 2010 to Euro 85.128 thousand in 2011

and Euro 96.471 thousand in 2012).

The significant increase in revenues is mainly linked to the increase in performance of integrated services, due to the

acquisition, and/or full implementation during financial years 2011 and 2012, of new contracts with structures

operating primarily in the hospital sector.

The growth in turnover occurred primarily in the energy sector while other sectors remained fundamentally stable.

Also in 2011 and 2012, within the perspective of future strategy, the company was mainly concerned with investing in

the efficiency of thermal plants and in the study and implementation of cogeneration, trigeneration and district heating

plants.

The year 2010 was characterized by the consolidation of the Consip related contracts acquired between the end

of 2008 and the beginning of 2009. Moreover, in 2010, revenue increased further with contracts with 5 more

facilities in Triveneto Region and 1 in Emilia Romagna Region.

Corporate development has led to a strengthening of technical, administrative, financial and commercial structures and

improvement of procedures for management control and debt collection. During financial year 2013, the review and

updating of such procedures was fully implemented, even if significant efficiencies and benefits had already been

reported at the end of 2012; suffice it to mention the increase in net financial position compared with the previous

financial year (Euro 8.500 thousand of available NFP at the end of 2012).

Moreover, in 2012, this process of evolution was reflected by the recruitment within the corporate organisation of

Manager Mario Nevali, with a consequent increase in the managerial level of the company.


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4. FINANCIAL HIGHLIGHTS

4.1 Income Statement at December 31, 2012, 2011 and 2010

(Amounts in thousands of Euro) 2012 2011 2010 Change % Change Change % Change

2012 - 2011 2011 - 2010

Revenues 96.471 85.128 76.192 11.343 13,32% 8.936 11,73%

Other income 521 137 227 384 280,29% (90) (39,65)%

Total operating revenues 96.992 85.265 76.419 11.727 13,75% 8.846 11,58%

Purchases of raw and consumable

materials (21.997) (18.872) (19.394) (3.125) 16,56% 522 (2,69)%

Changes in inventories 85 108 121 (23) (21,30)% (13) (10,74)%

Costs for services (50.416) (44.169) (36.999) (6.247) 14,14% (7.170) 19,38%

Costs for use of assets owned by third

parties (1.202) (953) (672) (249) 26,13% (281) 41,82%

Personnel costs (9.542) (7.889) (6.467) (1.653) 20,95% (1.422) 21,99%

Other operating costs (668) (255) (220) (413) 161,96% (35) 15,91%

Amortisation, depreciation and

writedowns (4.131) (3.188) (1.729) (943) 29,58% (1.459) 84,38%

Provision for risks (101) (462) 361 (78,14)% (462)

Total operating costs (87.972) (75.680) (65.360) (12.292) 16,24% (10.320) 15,79%

Operating income 9.020 9.585 11.059 (565) (5,89)% (1.474) (13,33)%

Financial income 313 45 9 268 595,56% 36 400,00%

Dividends, gains and losses from sale

of investment (25) 113 0 (138) (122,12)% 113

Financial expenses (143) (135) (89) (8) 5,93% (46) 51,69%

Net financial income and expenses 145 23 (80) 122 530,43% 103 (128,75)%

Profit before taxation 9.165 9.608 10.979 (443) (4,61)% (1.371) (12,49)%

Income taxes (2.984) (3.320) (3.683) 336 (10,12)% 363 (9,86)%

Net Profit for the year 6.181 6.288 7.296 (107) (1,70)% (1.008) (13,82)%

Operating Revenues

Revenues rose from Euro 76.192 thousand in 2010 to Euro 85.128 thousand in 2011 and Euro 96.471 thousand in 2012

with year on year increases of 11,73% (2010-2011) and 13,32% (2011-2012).

The revenue trend is increased mainly thanks to the increase in performance of integrated services, due to the

acquisition, and/or full implementation during financial year 2012, of new contracts with structures operating primarily

in the hospital sector.

Breakdown of revenues by business division

The composition of 2012, 2011, 2010 revenues by division is detailed in the table reported below:

(Amounts in thousands of Euro) 2012 % on

revenues 2011

% on

revenues 2010

% on

revenues Change 2012-2011 Change 2011-2010

Energy 79.750 83% 72.234 85% 65.383 86% 7.516 10% 6.851 10%

Biomedical 16.721 17% 12.894 15% 10.809 14% 3.827 30% 2.085 19%

Total revenues 96.471 100% 85.128 100% 76.192 100% 11.343 13% 8.936 12%

The increase in revenues over the period 2010-2012 was driven by t h e Energy division – they increased by


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10% between 2010 and 2011 and by 10% between 2011 and 2012.

The Biomedical division also grew strongly over the three year period (+19% in 2011 compared to 2010 and +

30% in 2012 compared to 2011) and contributed an average 15% of total revenue thanks to the acquisition of

new clients and additional/supplementary contracts signed with hospitals already Consip affiliated for the Energy

services and which the Company acquired as clients during the three year period 2010-2012.

Operating costs

Purchases of raw and consumables materials increased by 16,56% in 2012 compared to 2011, following a 2,69%

decrease in 2011 compared to 2010. The increase in 2012 is directly linked to the revenue growth generated by the

acquisition of new contracts, mainly in the Energy segment.

Costs for services increased by 19,38% in 2011 compared to 2010 and by 14,14% in 2012 compared to 2011. The

increase over the three-year period was mainly due to higher costs incurred for energy conduction and systems

maintenance services, directly in relation to the acquisition of new contracts.

The caption Costs for use of assets owned by third parties essentially comprises the rental cost of the Company’s

head office premises in Milan and its local office premises in Rome.

The personal Costs increased by 20,95% in 2012 compared to 2011 – from Euro 7.889 thousand to Euro 9.542

thousand - and by 21,99% in 2011 compared to 2010- from Euro 6.467 thousand to Euro 7.889 thousand. This

increase is mainly due to an increase in the number of employees with operational roles within the corporate

structure in response to the significant increase in the volume of business and revenue over the three years which

made it necessary to strengthen the corporate structure and workforce accordingly.

Amortization, depreciation and writedowns increased over the period analysed, mainly as a result of capex

incurred as described in the subsequent “Investments” section.

The Provisions for risks are referred to the tax claim with the Italian Tax Office and to some disputes with

suppliers.

Operating income

The operating income decreased in the last three years due to the significant costs’ increase, instead of the gradual

increase in revenues, that is the result of the acquisition of new contracts in both the Energy segment and the

Biomedical segment.

Operating income amounted to Euro 9.020 thousand in 2012 (9% of revenue), Euro 9.585 thousand in 2011 (11%

of revenue) and Euro 11.059 thousand in 2010 (15% of revenue).

Net financial income and expenses

This caption includes interest income on current account deposits, interest on arrears invoiced to customers,

interest expenses on transactions for advances on sales invoices, six-monthly interest expenses on bonds of Euro

2 million, finance lease interest expenses and interest expenses calculated on the actuarial valuation of the

TFR/employee severance indemnity provision as performed in accordance with IAS19.

The caption Dividends, gains and losses from sale of investments for Euro 113 thousand in 2011 is referred to the

distribution of reserves by the subsidiary Utilità Progetti e Sviluppo S.r.l, the Euro amount of (25) thousand in 2012

is referred to capital losses from sale of participations.


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4.2 Balance sheet and Financial results at December 31, 2012, 2011 and 2010

The following table shows the Company’s equity and financial results as reclassified based on sources and uses

of funds.

(Amounts in thousands of Euro) 31/12/2012 31/12/2011 31/12/2010 Change % Change Change % Change

2012 - 2011 2011 - 2010 Non-current asset

Fixed asset and other non-current

asset 16.131 19.231 12.061 (3.100) (16,12)% 7.170 59,45%

Total non-current asset 16.131 19.231 12.061 (3.100) (16,12)% 7.170 59,45%

Net working capital Inventory 793 708 600 85 12,01% 108 18,00%

Trade receivables and other

commercial assets 68.975 61.055 63.471 7.920 12,97% (2.414) (3,80)%

Tax receivables 167 470 751 (303) (64,47)% (281) (37,42)%

Financial assets 378 (378) (100,00)% 378

Other receivables 1.223 513 413 710 138,40% 100 24,21%

Trade payables (62.581) (54.828) (52.147) (7.753) 14,14% (2.681) 5,14%

Tax payables (7.606) (5.735) (7.063) (1.871) 32,62% 1.328 (18,80)%

Other liabilities (2.397) (2.096) (1.610) (301) 14,36% (486) 30,19%

Total net working capital (1.426) 465 4.415 (1.891) (406,67)% (3.950) (89,47)%

Non-current liabilities Other non-current liabilities (1.374) (1.485) (788) 111 (7,47)% (697) 88,45%

Total non-current liabilities (1.374) (1.485) (788) 111 (7,47)% (697) 88,45%

TOTAL USES 13.331 18.211 15.688 (4.880) (26,80)% 2.523 16,09%

Total shareholders’ equity 21.831 21.465 15.492 366 1,71% 5.973 38,56%

Net financial position 8.500 3.254 (196) (5.246) (161,22)% (3.450) 1.760,20%

Net non-current assets decreased by Euro 3.100 thousand in 2012 and increased by Euro 7.170 thousand in 2011.

The increase in 2011 is mainly a result of capex incurred by the Company to upgrade technological system in

accordance with Energy Service contracts.

The decrease in 2012 is mainly connected to the allocation of part of the corporate assets of “Prima Vera S.p.A.” to

the parent company “Prima Holding” S.r.l.. The date on which the demerger became effective for accounting and tax

purposes has been set to coincide with 1 January 2012.

See the Investments section for more details.

Net working capital

Note that, at 31 December 2012, 2011 and 2010, Net working capital was primarily influenced by increases in

trade receivables and trade payables. The decrease of Net working capital is mainly tied to the increase in sales

which is led to higher demand for goods and services.

The increases in trade receivables and trade payables reflect both the growth of the business – resulting in a

significant increase in the volume of business – and sales/purchase invoicing trends together with related collections

and payments.

Trade receivables and other commercial assets recorded a decrease from Euro 63.471 thousand at December 31, 2010

to Euro 61.055 thousand at December 31, 2011 (3,80% decrease) and, then an increase, to Euro 68.975 thousand at

December 31, 2012 (12,97% increase). The decrease of trade receivables in 2011 is mainly due to the reduction in

collection times.

Trade payables increased from Euro 52.147 thousand at December 31, 2010 to Euro 54.828 thousand at December 31,

2011 (+ 5,14%) and to Euro 62.581 thousand at December 31, 2012 (+14,14% compared to December 31, 2011). The


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trade payables trend depends on the volume of business, the timing of invoicing and the timing of payment because,

in relation to certain contracts carried out as part of temporary business partnerships/joint ventures, receivables and

payables are often offset and the net balance settled. Meanwhile, sub-contract suppliers are paid when the Company

receives payment from its clients. The increase during the analysed period is mainly due to the growth in turnover,

which resulted in a greater need for goods and services.

Non-current liabilities

The caption Other non-current liabilities includes Liabilities for pensions and employee termination indemnity

(TFR), Provision for deferred taxes and Provisions for liabilities and charges for long terms.

Shareholders’ equity and capital transactions

See the Notes for details of movements on Shareholders’ equity.

Net financial position

The Net financial position showed net debt of Euro 196 thousand at December 31, 2010 but net cash of Euro 3.254

thousand at December 31, 2011 and net cash of Euro 8.500 thousand at December 31, 2012.

Amounts in thousands of Euro) 31/12/2012 31/12/2011 31/12/2010

Cash on hand 13 4 3 Banks 10.487 5.603 2.307 Cash equivalents

A. Total cash and cash equivalents 10.500 5.607 2.310 B . Current financial receivables and other financial assets

Finance lease payables

(181) (167)

C. Current financial debt

(181) (167)

D. Net current financial position (A+B +C) 10.500 5.426 2.143 Finance lease payables

(172) (339)

Bonds (2.000) (2.000) (2.000)

E. Non-current financial debt (2.000) (2.172) (2.339)

F. Net Financial position (D+E) 8.500 3.254 (196)

Further details about Net financial position trend are provided in Paragraph 24 Net financial position.

5. FINANCIAL RATIOS

The main financial ratios at December 31, 2012, 2011 and 2010 are shown below.

Profitability ratios

The main Profitability ratios at December 31,2012 , 2011 and 2010 are shown below.

Profitability ratios 2012 2011 2010

ROE 28,31% 29,29% 47,10% ROI 38,42% 41,20% 64,65% ROS 9,35% 11,26% 14,51%

ROE (Return on equity) provides a measure of the return on capital invested by the shareholders: it stood at 28,31%

for 2012, 29,29% for 2011 and 47,10% for 2010.


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ROI (Return on investments) provides a measure of the operating return on capital invested in the business: in 2012, it

stood at 38,42% against 41,20% in 2011 and 64,65% in 2010. The index reflects the profitability of operating

activities, irrespective of the sources of finance used.

ROS (Return on sales) provides a measure of the Company’s ability to convert its sales into operating income. It

stood at 9,35% in 2012 against 11,26% in 2011 and 14,51% in 2010. The ratio has improved steadily over the period

and reflects the profitability of the business in relation to its ability to generate a return on sales recorded.

Liquidity Ratios

Liquidity ratios 2012 2011 2010

Current ratio Current assets/Current liabilities 1,13 1,09 1,11 Cash ratio Cash/Current liabilities 0,14 0,09 0,04 Quick ratio (Cash+Receivables)/Current liabilities 1,09 1,06 1,08

The above ratios reflect the Company’s capacity to cover its current outflows with current inflows.

6. INVESTMENTS

During the three-year period, the Company invested in the following categories of Property, Plant and Equipment:

(Amounts in thousands of Euro) 2012 2011 2010

Goodwill 50

Software 80

Lands and building 4 365

Machinery and equipment 3 7

Industrial and commercial equipment 174 32 11

Other tangible assets 4.804 5.620 5.210

Fixed assets under construction and advances 27 4.427 250

Total investments 5.088 10.133 5.843

The capital expenditure incurred by the Company in 2011 and 2012 mainly regarded work on heating systems in

relation to long-term Energy Service contracts signed with clients.

In fact, the Company pursued a policy aimed at making these systems more efficient. This involves higher

initial costs but should see the initial investment recovered in time.

Additions to Property, Plant and Equipment in relation to such improvements totalled Euro 5.074 thousand in 2011 and

Euro 4.570 thousand in 2012.

7. RESEARCH & DEVELOPMENT

No Research & Development activities have been carried out by the Company in 2012, 2011 and 2010.


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8. HUMAN RESOURCES

During 2012, the Company had an average headcount of 188 employees (an increase of 24 employees compared to

2011). In 2011, it had an average of 164 employees (an increase of 11 employees over 2010) and in 2010 it had an

average of 153 employees.

Further details about breakdown of the average workforce over the three year period by category are provided in

Paragraph 28.1 Average number of the employees by category.

There is no ongoing litigation with regard to labour law or employment relations and, at present, there is no reason to

expect any such litigation to arise.

9. TRANSACTIONS WITH SUBSIDIARIES, AFFILIATED COMPANIES, PARENT

COMPANIES AND OTHER RELATED PARTY TRANSACTIONS

Information on transactions with related parties is reported in the Explanatory Notes.

All transactions between the Company and related parties fall within the scope of ordinary Company operations and are

regulated at market conditions, on an arm’s length basis.

Management & Coordination

The Company is subject to management and coordination by Prima Holding S.r.l. with registered offices in Milan (Via

Andrea Massena, 4).

Information on transactions with the parent company is provided in the Explanatory Notes.

10. RISK FACTORS

10.1 Main Risk factors

Risks linked to the economic environment

The continuing economic crisis in Italy offers few encouraging signs for future years and no reason to expect a

significant reversal of the current trend in the short term.

Risks related to competition

The market on which the Company operates is characterized by increasing competitiveness due to the business

combination processes underway between operators which already have significant organizations on the market and

which are capable of developing business models to provide services, while concentrating on minimizing prices for the

customer. In recent years, this has led to an increasingly competitive environment which will probably continue in the

future.

Risks connected to noncompliance or damages caused by subcontractors or suppliers

In carrying out its business, the Company uses the services of third parties, including sub-contractors to manage some

service contracts. In particular, the Biomedical Division uses sub-contractors to manage and maintain complex

biomedical equipment which requires highly specialist personnel. Therefore, the Company’s ability to fulfil its

obligations towards the client is also influenced by the ability of both the subcontractors and the suppliers to successfully

fulfil their contractual obligations. The subcontractor evaluation and selection system set up by the Company looks not

only at price but also technical capabilities.


Page 14

10.2 Information on financial risks

The Company constantly monitors the financial risks to which it is exposed, in order to detect any potentially

negative effects in advance and take the necessary action to mitigate them.

Capital management

The Company’s capital management objectives are geared towards guaranteeing its ability to continue to pursue

the best interests of the stakeholders while also maintaining an optimal capital structure.

Liquidity risk

The Company has adequate liquidity and equity-to-fixed-asset ratios to find the financial resources to support its

business development and investment projects.

The guidelines adopted by the Company are aimed at maintaining an adequate level of liquid assets and credit

lines.

Price risk

The price risks to which the Company is exposed mainly involve changes in the price of oil products and energy in

relation to heat management activities.

However, these changes are, for the most part, accommodated by the contractual terms and conditions agreed with

customers, as contracts generally provide for price adjustment.

Credit risk

Credit risk represents the Company’s exposure to potential losses arising from a counterparty’s failure to fulfil its

obligations. Credit risk is associated with the ordinary business of commercial transactions and is monitored by both

the operational and the administration functions on the basis of procedures and periodic reporting.

The Company’s portfolio mix, is made up mainly of contracts with the Public Administration, a situation that does not

involve any default issues but which requires constant contact with clients in order to minimize delays caused by the

red-tape and bureaucracy on the part of such clients.

There are no significant credit concentration risks to report, which are carefully monitored by the Company and the

senior management also plays an active role in particularly significant cases.

Foreign exchange risk and interest rate risk

The Company operates on the domestic market and, consequently, is not exposed to fluctuations in foreign exchange

rates.

The Company has no significant financial payables or receivables. Available liquidity has been deposited in current

accounts.

Taking into account the Company's financial position, the interest rate risk is not considered significant.

The Company does not use any financial instruments to hedge the risk of interest rate or foreign exchange rate

fluctuation.

11. ADDITIONAL INFORMATION

11.1 Own shares

The Company does not own any of its own shares either directly or indirectly. Over the years it did not purchase

or sell any of its own shares either directly or indirectly.


Page 15

11.2 Information relating to the environment

The Company operates with a focus on environmental issues. The Company has not been convicted for damage

to the environment nor has it been subject to fines or penalties for offences against the environment.

The Company does not pollute and has safeguards to prevent any environmental damage that may be caused by

errors or negligence on the part of users. In particular, it has the necessary safeguards to avoid accidental

spillage of fuel or waste.

11.3 Environment and Quality Assurance

The Company has acquired the following certifications:

− UNI EN ISO 9001: 2008 - Quality Management System;

− UNI EN ISO 14001: 2004 - Environment Management System;

− BS OHSAS 18001:2007 – Safety Management System;

− SA 8000:2008 – Social Accountability;

− UNI CEI 11352:2010 - Energy Service Companies;

− UNI CEI EN ISO 13485:2012 – Medical Device Quality Management System.

11.4 Organizational model pursuant to Legislative Decree 231/2001

Pursuant to Italian Legislative Decree 231/2001 – which came into force on June 8, 2001 - legal entities must

accept administrative responsibility for offences committed by Directors, officers or employees to the benefit or

advantage of the Company unless it is shown that, among other things, a Model of Organization, Management

and Control capable of preventing the commission of such offences has been adopted and duly implemented.

In 2008 Prima Vera approved the adoption of a Model of Organization, Management and Control, for the

prevention of offences, and established a Supervisory Body which met the requirements of autonomy,

independence and professionalism and was endowed with the powers of inspection and control of the Company’s

powers and functions as provided for by the Model itself. As an integral part of the Model, the Board of

Directors also approved the Code of Conduct.

On 15 July 2013, the Board of Directors of the Company has appointed the new members of the Supervisory Board and

approved the new "Organizational Model" which incorporated the contents of the review of the risk mapping, as well

as the legislative innovations introduced in recent months.

11.5 Privacy – Information under Legislative Decree 196/2003

In accordance with Annex B, point 26 of Legislative Decree No. 196/2003 on the protection of personal data, the

Directors acknowledge that the Company has complied with the measures for the protection of personal data, in light

of the provisions introduced by Legislative Decree No. 196/2003 in accordance with the terms and conditions

specified therein. In particular, they note that the Security Policy Document has been updated.

11.6 Secondary offices

The registered office of the company is located at Via G.Udine 15, Milan.

The Company also has the following premises:

- Rome, Via Del Circo Massimo,7

- Vicenza, Piazza del Castello 18


Page 16

12. SIGNIFICANT POST BALANCE SHEET EVENTS

Shortly before closure of the financial statement at 31.12.2012, the Company entered into major long-term contracts

that will ensure stability of turnover in the next three years, even in a critical national economic scenario.

No significant events occurred after the reporting period that can materially influence business operations of that

might impact the Company’s equity, financial position, result of operation and cash flow.

13. BUSINESS OUTLOOK

The main goal achieved in 2012 by Prima Vera was to position itself as one of the leading national players in the

services sector.

Through skills, structure, references and financial strength, the company is now able to compete nationally at all

contract levels.

In 2013, the focus will mainly be on development of its client portfolio, based on the multi-year contracts acquired.

Investments will continue in the sector of cogeneration and trigeneration, management of district heating activities,

and participation in "Project Financing" projects.

In August 2012, in fact, RTI led by Manutencoop Facility Management S.p.A., and of which Prima Vera S.p.A. is

part, was awarded the works contract for the design, renovation and management of facility management for the San

Gerardo Hospital in Monza. The project financing intervention includes overall works for about Euro 160 million and

the management concession for a period of about 30 years.

Furthermore, during January 2013, the company entered into a contract with Consip S.p.A. for "the award of an

integrated technological multi-service with energy supply for buildings used for domestic purposes" for Lot 2 -

Lombardy region. The total value of the order amounts to Euro 84 million.

In March 2013, the company decided to develop its activities in the public lighting sector, competing in the “Consip

Luce 3” tender.

14. GENERAL MEETING RESOLUTIONS

The Prima Vera S.p.A. statutory financial statements for the year ended December 31, 2010 report a net profit of Euro

7.387 thousand. The Shareholders’ General Meeting held on April 15, 2011 approved the allocation of the 2010 profit

to retained earnings. In addition, the Shareholders' Meeting held on November 24, 2011 approved the distribution of a

dividend of Euro 250 thousand.


6.007 thousand. The Shareholders’ General Meeting held on April 26, 2012 approved the allocation of the year-end

profit as follows: Euro 6.007 thousand to retained earnings. Moreover, the Shareholders’ General Meeting held on

January 23, 2012 approved the distribution of a dividend of Euro 500 thousand; the Shareholders’ General Meeting

held on August 22, 2012 approved the distribution of a dividend of Euro 200 thousand; the Shareholders’ General

Meeting held on October 4, 2012 approved the distribution of a dividend of Euro 200 thousand.


6.145 thousand. The Shareholders’ General Meeting held on April 23, 2013 approved the allocation of the year-end

profit as follows: Euro 250 thousand to dividends and Euro 5.895 thousand to retained earnings.

***************

Milan, May 15, 2014

Domenico Catanese

Chairman of the Board of Directors

Managing Director


Page 17

Financial statements at December 31, 2012, 2011 and 2010

15. STATEMENT OF FINANCIAL POSITION

(Amounts in thousands of Euro) Notes 31/12/2012 31/12/2011 31/12/2010

ASSETS

Tangible assets 1 15.199 18.723 11.525

Intangible assets 2 114 50

Investments available for sale 3 262 138 49

Tax receivables 4 175

Deferred tax assets 5 292 256 149

Financial assets 6 89 64 338

Other assets -

Total non-current assets 16.131 19.231 12.061

Inventory 7 793 708 600

Trade receivables and other commercial assets 8 68.975 61.055 63.471

Tax receivables 9 167 470 751

Financial assets 10 378

Cash and cash equivalents 11 10.500 5.607 2.310

Other receivables 12 1.223 513 413

Total current assets 81.658 68.731 67.545

Assets held for sale

Total assets 97.789 87.962 79.606

LIABILITIES AND SHAREHOLDERS' EQUITY

Share capital 500 500 500

Legal reserve 100 100 100

Other reserves 2.881 7.100 7.350

Actuarial valuation reserve (217) (110) (45)

Retained earnings (accumulated losses) 12.386 7.587 291

Profit (loss) for the year 6.181 6.288 7.296

Total shareholders' equity 13 21.831 21.465 15.492

Provisions for liabilities and charges of long terms 14 380 380

Liabilities for pensions and employee termination indemnity (TFR) 15 987 635 395

Provision for deferred taxes 16 7 470 393

Bonds 17 2.000 2.000 2.000

Finance lease payables 18 172 339

Total non-current liabilities 3.374 3.657 3.127

Provisions for liabilities and charges of short terms 173 82


181 167

Trade payables 19 62.581 54.828 52.147

Tax payables 20 7.606 5.735 7.063

Other financial liabilities

Other liabilities 21 2.224 2.014 1.610

Total current liabilities 72.584 62.840 60.987

Liabilities held for sale

Total equity and liabilities 97.789 87.962 79.606


Page 18

16. STATEMENT OF PROFIT AND LOSS

(Amounts in thousands of Euro) Notes 2012 2011 2010

Revenues 22 96.471 85.128 76.192 Other income 23 521 137 227

Total operating revenues 96.992 85.265 76.419

Purchases of raw and consumable materials 24 (21.997) (18.872) (19.394) Changes in inventories 25 85 108 121 Costs for services 26 (50.416) (44.169) (36.999) Costs for use of assets owned by third parties 27 (1.202) (953) (672) Personnel costs 28 (9.542) (7.889) (6.467) Other operating costs

(668) (255) (220)

Amortisation, depreciation and writedowns 29 (4.131) (3.188) (1.729) Provision for risks (101) (462)

Total operating costs (87.972) (75.680) (65.360)

Operating income 9.020 9.585 11.059

Financial income

313 45 9 Dividends, gains and losses from sale of investments

(25) 113

Financial expenses (143) (135) (89)

Net financial income and expenses 30 145 23 (80)

Profit before taxation 9.165 9.608 10.979

Income taxes 31 (2.984) (3.320) (3.683)

Net Profit from continuing activities 6.181 6.288 7.296

Profit/Loss from discontinued operations

Profit for year 6.181 6.288 7.296

17. STATEMENT OF COMPREHENSIVE INCOME

(Amounts in thousands of Euro) Notes 2012 2011 2010 Profit (loss) for the period 6.181 6.288 7.296

Other comprehensive income (items that will not be reclassified

subsequently to profit or loss)

Actuarial profit or loss 13 (148) (90) (43)

Income Taxes 13 41 25 12

Other component of profit or loss net of fiscal effect (items that will not be

reclassified subsequently to profit or loss) (107) (65) (31)

Other comprehensive income (items that will be reclassified subsequently

to profit or loss)

Fair value of available for sale financial assets

Other component of profit or loss net of fiscal effect (items that will be

reclassified subsequently to profit or loss)

Total comprehensive income 6.074 6.223 7.265


Page 19

18. STATEMENT OF CASH FLOWS

The statements of cash flows at December 31, 2012, 2011 and 2010 are set out below.


Cash and cash equivalents 5.607 2.310 7.181

Opening cash and cash equivalents A 5.607 2.310 7.181

Cash flow from operating activities: Profit (loss) for the year

6.181 6.288 7.296 Accrual of provision and charges

101 462

Amortisation / depreciation of intangible / tangible assets / Allowances

4.131 3.188 1.729

Increase (decrease) in TFR / Employee leaving indemnity provision

423 292 125 Income tax expense recognized in profit or loss

2.984 3.320 3.683

Finance income / (expenses) recognized in profit or loss

(145) (23) 80 Other changes

Cash flow from operating activities before changes in working capital B 13.675 13.527 12.913 Changes in operating assets and liabilities:

(Increase) decrease in inventory

(85) (108) (121)

(Increase) decrease in trade receivable and other receivables

(9.134) 2.013 (29.682) Increase (decrease) in trade payable and other payables

7.953 3.083 18.688

Increase (decrease) in tax payable

1.309 937 2.875 Utilization of provisions for risks

(10)

Payments for liabilities for pensions and employee termination indemnity

(71) (52) (24)

Interest paid

17 (133) (80) Income taxes paid (2.352) (5.334) (3.175)

Total changes in operating assets and liabilities C (2.373) 406 (11.519)

Total cash flow from operating activities D = B + C 11.302 13.933 1.394 Cash flow from investing activities

Net investment in tangible assets

(5.008) (10.083) (5.843)

Net investment in intangible assets

(80) (50) Net investment in financial assets

(50) 9

Net investments in available for sale

(124) (89) (23)

Interest received

163 45 12

Total cash flow from investing activities E (5.099) (10.168) (5.854) Cash flow from financing activities:

Increases in share capital and share premium reserve

Other changes in shareholders' equity - demerger effects

(410) (65)

Dividends paid

(900) (250) (250) Bonds

-

Shareholders loan

- Change in medium term finance lease payables

(167) (167)

Change in short term finance lease payables 14 6

Total cash flow from financing activities F (1.310) (468) (411)

Cash flow generated (absorbed) during the year G = D + E + F 4.893 3.297 (4.871)

Closing cash and cash equivalents A + G 10.500 5.607 2.310


Page 20

19. STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

The following table contains details of movements on shareholders’ equity in 2010, 2011 and 2012.

(Amounts in thousands of Euro) Share

Capital

Legal

Reserve

Other

Reserves

Reserve from

Actuarial

evaluation

Retained

earnings

Profit (loss )

for year

Total

Shareholders'

Equity

Balance at December 31, 2009 500 100 3.588 (14) 132 4.171 8.477

Allocation of prior year profit

4.012

159 (4.171)

Share capital increase

Coverage of losses

Share capital reduction

Dividends paid

(250)

(250)

Actuarial valuation

Other changes

Comprehensive profit (loss) (31) 7.296 7.265



Capital

Legal

Reserve

Other

Reserves

Reserve from

Actuarial

evaluation

Retained

earnings

Profit (loss )

for year

Total

Shareholders'

Equity



7.296 (7.296)


Coverage of losses


Dividends paid

(250)

(250)

Actuarial valuation

Other changes


Balance at December 31, 2011 500 100 7.100 (110) 7.587 6.288 21.465


Capital

Legal

Reserve

Other

Reserves

Reserve from

Actuarial

evaluation

Retained

earnings

Profit (loss )

for year

Total

Shareholders'

Equity



6.288 (6.288)


Coverage of losses


Dividends paid

(900)

(900)

Actuarial valuation

Other changes

(4.219)

(589)

(4.808)




Page 21

Explanatory Notes to the Financial Statements

20. GENERAL INFORMATION

PrimaVera S.p.A. has prepared, on a voluntary basis, financial information restated in accordance with IFRS. The sole

aim is to present the Company’s Statement of financial position, Statement of Profit and loss, Statement of

Comprehensive income, Statement of cash flows and Statement of changes in shareholders’ equity at December 31,

2012, 2011 and 2010 in accordance with the accounting principles and valuation methods required by International

Financial Reporting Standards effective as at January 1, 2014.

For this purpose, the effects of adopting the IFRS were initially determined with regard to the balance sheet at January

1, 2008. Moreover, the Company prepares these financial statements on a voluntary basis only and the accounting

policies and valuation methods used to prepare the statutory financial statements at December 31, 2012, December 31,

2011 and December 31, 2010 – prepared as required by law – are compliant with Italian legal requirements as

interpreted and supplemented, as necessary, by Italian Accounting Standards.

The Prima Vera S.p.A. financial statements have been restated in accordance with the International Financial Reporting

Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and adopted by the European

Union. The designation IFRS also includes all valid International Accounting Standards (“IAS”), as well as all

interpretations of the IFRS Interpretations Committee, formerly the Standing Interpretations Committee (“SIC”) and

then the International Financial Reporting Interpretations Committee (“IFRIC”).

The financial statements are prepared under the historical cost convention, modified as required for the measurement of

certain financial instruments, as well as on a going concern basis.

The Financial Statement 2010, reported in these documents, was amended compared to the one prepared in precedence

because the Company found a relevant error in the allocation of leasehold improvements carried out in 2010 among

fixed assets while they have to be better classified in P&L. For this reason the Financial Statement should have higher

expenses and lower fixed assets for Euro 473 thousand.

The effects of the amendment of the error in 2010 can be resumed as follows:


Page 22

STATEMENT OF FINANCIAL POSITION 2010 ADJUSTED

(Amounts in thousands of Euro) Financial Position

IAS 2010 Reclassification

Financial Position

IAS 2010 Adj

ASSETS

Tangible assets 11.998 (473) 11.525 Intangible assets 0

Available for sale investments 49 49

Deferred tax assets 0 149 149 Financial assets 338 338

Other assets 0

Total non-current assets 12.385 (324) 12.061

Inventory 600 600

Trade receivables and other commercial assets 63.471 63.471 Tax receivables 751 751

Financial assets 0 0

Cash and cash equivalents 2.310 2.310 Other receivables 413 413

Total current assets 67.545 0 67.545

Assets held for sale 0 0

Total assets 79.930 (324) 79.606

LIABILITIES AND SHAREHOLDERS' EQUITY

Share capital 500 500

Legal reserve 100 100 Other reserves 7.350 7.350

Actuarial valuation reserve (45) (45)

Retained earnings (accumulated losses) 291 291 Profit (loss) for the year 7.620 (324) 7.296

Total shareholders' equity 15.816 (324) 15.492

Liabilities for pensions and employee termination indemnity (TFR)

395 395

Provision for deferred taxes 393 393

Bonds 2.000 2.000 Finance lease payables 339 339

Total non-current liabilities 3.127 0 3.127

Finance lease payables 167 167 Trade payables 52.147 52.147

Tax payables 7.063 7.063

Other financial liabilities 0 0 Other liabilities 1.610 1.610

Total current liabilities 60.987 0 60.987

Liabilities held for sale 0 0

Total equity and liabilities 79.930 (324) 79.606


Page 23

STATEMENT OF PROFIT AND LOSS 2010 ADJUSTED

(Amounts in thousands of Euro) Profit and Loss 2010 Reclassification Profit and Loss 2010

adj

Revenues 76.192 76.192 Other income 227 227

Total operating revenues 76.419 0 76.419

Purchases of raw and consumable materials (19.394) (19.394) Changes in inventories 121 121

Costs for services (36.432) (567) (36.999) Costs for use of assets owned by third parties (672) (672)

Personnel costs (6.467) (6.467)

Other operating costs (220) (220) Amortisation, depreciation and writedowns (1.823) 94 (1.729)

Total operating costs (64.887) (473) (65.360)

Operating income 11.532 (473) 11.059

Financial income 9 9 Financial expenses (89) (89)

Net financial income and charges (80) 0 (80)

Profit before taxation 11.452 (473) 10.979

Income taxes (3.832) 149 (3.683)

Net Profit from continuing activities 7.620 (324) 7.296

Profit/Loss from discontinued operations 0

Profit for year 7.620 (324) 7.296

The financial statements at December 31, 2012, 2011 and 2010, as restated in accordance with IFRS, comprise the

Statement of financial position, Statement of Profit and loss, Statements of Comprehensive income, Statement of cash

flow, Statement of changes in shareholders’ equity and these Explanatory Notes.

The financial statement formats adopted are consistent with those indicated in IAS 1. In particular:

- the Statement of Financial Position has been prepared by classifying assets and liabilities into current and

non-current;

- the Statement of Profit and Loss has been prepared by classifying operating expenses by nature of expense,

since this form of presentation is considered more appropriate and representative of the Company’s specific

business;

- the Statement of Cash Flows has been prepared showing the financial flows using the “indirect method”, as

indicated by IAS 7.

The Financial statements are in thousands of Euro, unless otherwise indicated. The Euro is the Company’s

functional currency.

21. SUMMARY OF ACCOUNTING POLICIES AND VALUATION METHODS

General principles

As already stated, the Financial statements have been prepared based on IAS/IFRS international accounting standards in accordance with the historic cost principle. The accounting standards adopted are detailed further on.


Page 24

Tangible Assets

Tangible assets, net of accumulated depreciation and of any impairment losses, are recorded at acquisition cost,

including directly attributable expenses. Subsequent expenditures made for improvements and variations of tangible

assets are capitalized only if they increase the future economic benefits reliably measurable. Ordinary

maintenance or repair costs that did not significantly increase the production capacity or the useful life of the

assets are fully recognized in the Statement of profit and loss.

Depreciation, recorded in the Statement of profit and loss, is calculated by estimating the utilization and economic-

technical life of the assets based on its residual useful life. The depreciation rates indicated below are considered a

fair reflection of this method. They have not changed over the three-year period:

−

Buildings

3% − Plant and equipment 25 %; − Equipment 25%; − Furnishings 12%; − Vehicles 25%; − Office equipment 20%

Depreciation starts when the assets are ready for use.

The depreciation rates are reviewed yearly and revised if the current estimated useful life is different from that

estimated previously.

Leasehold improvements which satisfy the requirements provided by IAS are capitalized under the item to which

they refer and are depreciated over their estimated useful life or, if shorter, over the remaining period of the lease

agreement.

The caption Furnishings includes works of art which are not depreciated as their useful life cannot be estimated.

Moreover, their value is, generally, not destined to decrease over the years.

Other tangible assets include capex incurred by the Company in relation to contracts for the supply of services

to certain clients and requiring technological modifications to heating systems and work to make them compliant

with applicable legislation and regulations. These costs are capitalized and depreciated taking account of the

residual period of the contract in question as the related assets remain the property of the clients.

Intangible Assets

The intangible assets with a defined service life, net of accumulated depreciation and of any impairment losses, are

recorded at acquisition cost.

Depreciation is recorded starting by the moment in which the assets are available for the business’ use and it ends when

the assets are available for sale or removed.

The intangible assets include:

- Software

The Software, net of accumulated depreciation at constant rates for the period it is expected to be useful in the future,

is recorded at purchase cost.

- Goodwill

Goodwill represents, at the purchase date, the part of the cost exceeding the identifiable assets and liabilities’ fair value.

Goodwill is subject to annual impairment test or whenever there is an indicator of impairment. Any impairment losses

are recognized in the “Profit and Loss Statement” and are not subsequently reversed.


Page 25

Leased Assets

There are two types of leases: finance leases and operating leases.

Lease agreements are classified as finance leases when the terms of the agreement substantially transfer all of

the risks and benefits of ownership to the lessee.

Given this, as determined by IAS 17, a leasing contract is considered a finance lease when the following factors

are individually or jointly present:

- the lease transfers ownership of the asset to the lessee by the end of the lease term;

- the lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than fair

value at the date the option becomes exercisable such that, at the inception of the lease, it is reasonably

certain the option will be exercised;

- the lease term covers most of the economic life of the asset, even if title is not transferred;

- at the inception of the lease, the present value of minimum lease payments amounts substantially to the fair

value of the leased asset;

- the leased assets are of such a specialized nature such that only the lessee can use them without major

modifications being made.

All other leases are considered operating leases. Assets held under finance leases are recognized as tangible

assets at their fair value at the date of the contract signing or, if lower, at the present value of the minimum lease

payment. The corresponding liability towards the lessor is included in the Statement of Financial Position under

financial liability items.

Furthermore, gains realized on sale and leaseback transactions based on finance leases are deferred over either

the lease term or the remaining useful life of the asset, whichever is shorter.

Since there is no reasonable certainty as to the acquisition of the ownership of the asset at the end of lease

period, assets held under finance leases are depreciated over the shorter of the lease term and their useful lives.

Leases where the lessor substantially retains all the risks and rewards of ownership of the assets are recorded as

operating leases. Operating lease rentals are recognized in the Income Statement on a straight-line basis over the

lease term.

Financial assets

In accordance with the requirements of IAS 39 and 32, financial assets are classified under the following four

categories:

- Financial assets at fair value through profit and loss;

- Held-to-maturity (HTM) investments;

- Loans and receivables;

- Available-for-sale (AFS) financial assets.

Classification depends on the purpose for which assets are purchased and held. Management decides on their

initial classification at the time of their initial recognition in the accounts, subsequently checking this classification

at the end of each reporting period.

Financial assets are initially recognized at cost, which is equal to fair value plus contingent transaction costs.

Subsequent measurement depends on the type of instrument concerned.


Page 26

Non-current financial assets

Non-current financial assets include items such as guarantee deposits that the Company intends and is able to

hold until maturity. These assets do not fulfil the requirements for classification as cash equivalents. They are

recorded and removed from the Statement of Financial Position in accordance with the date of negotiation. The

assets are initially recognized at fair value and subsequently measured at amortized cost, net of impairment

losses.

Receivables and other receivable

Receivables are initially recorded at nominal value (representing the fair value of the transaction). They are then

stated at amortized cost, following deduction of the write-downs recorded in the Statement of Profit and loss

where there is objective evidence that the value of the receivables may be impaired.

These write-downs are determined by the difference between the book value of the receivables and the present

value of estimated future cash inflows, discounted at the effective interest rate. In particular, for current trade

receivables on which the time component has little effect, the valuation at amortized cost is equal to the nominal

value, net of impairment losses.

Investments available for sale

This category includes equity investments representing an interest of less than 20%. Investments classified as

“available-for-sale” are stated at fair value. Equity investments in companies that are not publicly traded and

whose fair value of which cannot be measured reliably, are valued at cost less impairment loss adjustments.

As required by IAS 39, changes in the value of these assets, measured at fair value, are recognized in a specific

equity reserve until the financial asset is disposed of or impaired, at which time income or losses are reversed to

the Income Statement. Losses that result from measurement at fair value are recognized directly in profit or loss

when there is objective evidence that the value of a financial asset has been impaired, even if the asset has not

been sold. The fair value is represented by the value for the securities listed on official markets.

Inventories

Inventories are recorded at the lower of cost and net realizable amount. Acquisition cost is calculated based on

the weighted average cost.

The net presumed realizable value of raw materials is represented by the presumed realizable value (replacement

cost).

Cash and cash equivalents

Cash and cash equivalents are recorded, depending on their nature, at nominal value (representing the fair value)

or amortized cost. They include cash on hand.

Impairment

Impairment of assets

At the close of each financial year, the Company assesses whether there are any indicators of impairment of assets. In

this case, or in the event an annual impairment test is required, the Company prepares an estimate of the recoverable

value. The recoverable value is the higher of the fair value of an asset or cash-generating unit net of sales costs and its

value in use is determined per individual asset, except when said asset does not generate cash flows that are fully

independent from those generated by other assets or groups of assets. If the carrying amount of an asset is higher than


Page 27

its recoverable value, said asset has been impaired and is subsequently written down to its recoverable value. In

calculating the value in use, the Company discounts estimated future cash flows at the current value by using a pre-tax

discount rate which reflects the market valuations on the time value of money and the specific risks of the asset.

Impairment losses of operating assets are recorded in the income statement under the category “Amortization,

depreciations and writedowns”.

When the impairment of an asset no longer exists or decreases, the carrying value of the asset is reinstated only up to

the new estimate of recoverable value. The reinstated value cannot exceed the value that would have been measured if

there had been no impairment. Reversal of an impairment loss is recognized in profit or loss.

Impairment of financial assets - Assets valued according to the amortized cost

At the end of each financial year, the Company assesses whether a financial asset or group of financial assets has

incurred any impairment loss. If objective evidence exists that a loan or receivable carried at amortized cost has

suffered an impairment loss, the amount of the loss is measured as the difference between the carrying amount of the

asset and the present value of estimated future cash flows (excluding future credit losses still not incurred) discounted at

the original effective interest rate of the financial asset (i.e. effective interest rate calculated at the initial recognition

date).

Employee benefits

The provision for employee severance indemnities and the provisions for pensions are computed on an actuarial basis.

The amount of employee benefits that vested during the year is recognized in profit or loss as a labour cost. The

theoretical finance charge that the Company would incur if it were to borrow in the marketplace an amount equal to the

provision for employee severance indemnities is posted to financial income (expense). Actuarial gains and losses that

arise from changes in the actuarial assumptions used are recognized in comprehensive profit and loss, taking into

account the average working lives of the employees.

Specifically, in accordance with Budget Law No. 296 of December 27, 2006, only the liability for the vested employee

severance benefits that remained with the Company was valued for IAS 19 purposes, since the portion applicable to

future vesting benefits was paid to separate entities (supplemental pension funds or INPS funds). As a result of these

payments, the Company has no further obligations with regard to the work that employees will perform in the future

(so-called “defined-contribution plan”).


Finance lease payables, consisting of liabilities arising under finance lease agreements, are initially recognized at cost,

equal to the fair value of the amount received, less transaction costs. Subsequently they are measured at amortized cost,

determined using the effective interest rate.

Payables and other payables

Trade and other payables are recorded using the amortized cost method. Given the nature and due date of the payables,

this is normally the same as nominal value.

Bonds

Bonds are valued at amortized cost.

Provisions for risks and charges

These include liabilities deriving from current (legal or implicit) obligations, relating to a past event where performance

of the obligations is likely to lead to a deployment of resources whose amount can be reliably estimated. If the expected


Page 28

utilization of resources extends beyond a year, the liability is recorded at present value, determined by discounting

projected future cash flows at an interest rate that takes into account the cost of borrowing and the risk of the liability.

The provisions are reviewed whenever Financial Statements are prepared, and they are adjusted, as necessary, to reflect

the best current estimate. Any changes are reflected in the Income Statement for the period in which the change took

place.

Risks involving a possible liability are disclosed in the Notes, but no provision is made.

Recognition of revenues and income

Revenues are recorded to the extent in which it is likely that economic benefits can be achieved by the Company and

the associated amount can be reliably determined. Revenues are stated net of discounts, allowances and returns.

Revenues from the performance of services are recognized with reference to the state of completion of the service only

when the result of the service can be reliably estimated.

Recognition of costs and charges

Costs and charges are accounted for on an accrual basis when they concern goods and services purchased or consumed

during the year or when they have no identifiable future benefit.

Financial income and expenses

Financial income and expenses are accounted for on an accrual basis, calculated on the basis of the net value of the

related assets and liabilities using the effective interest rate.

Financial expenses are accounted for on an accrual basis in the Statement of profit and loss of the year in which they

occur.

Financial income is accounted for on the basis of the effective rate of return, determined on an accrual basis.

Income taxes

Current income taxes are recognized based on an estimate of taxable income, in accordance with the tax rates and laws

that have been enacted or substantively enacted at the end of the reporting period and taking into account any applicable

exemptions or available tax credits.

Income taxes are recorded in the Statement of Profit and loss, except for those relating to items which are directly

charged or credited to equity, in which case the tax effect is directly recognized in equity.

Deferred-tax assets and liabilities are computed on the temporary differences between the carrying amounts of assets

and liabilities and the corresponding tax bases, using the tax rates that are expected to be in effect when the temporary

differences are reversed. Deferred-tax assets are recognized only to the extent that their future recovery is probable. The

valuation of deferred-tax assets must be carried out taking into account future tax liabilities, as projected in Company

industrial plans. When gains and losses are recognized directly in equity, posted to the Reserve for other components of

comprehensive income, the corresponding deferred-tax assets or liabilities shall also be recognized in equity.

Current and deferred tax assets and liabilities are offset when there is a legally enforceable right to offset them, and they

are classified as receivables or payables in the Statement of Financial Position.

Taxes other than income taxes are included in operating costs.


Page 29

Use of estimates

The preparation of the Financial Statements and related notes, in conformity with IFRS, requires that management

make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of

contingent assets and liabilities at the date of the Financial Statements.

The estimates and assumptions used are based on experience and other factors that are considered as relevant. Actual

results could differ from those estimated. Estimates and assumptions are reviewed periodically, and the effects of any

changes are reflected immediately in the Income Statement for the year, if the review has effect only on this period, or

for future years, if the review affects both the present and future periods.

Furthermore, the preparation of the Financial Statements calls for the application of accounting principles and

methodologies that, in some cases, are based on difficult and subjective assumptions and valuations tied to historical

experience and to realistic and reasonable assumptions. The application of such forecasts and assumptions has an

impact on the amounts recorded in the Statement of Financial Position, in the Statement of profit and loss, in the

Statement of Cash Flows and in the Notes.

Below are detailed estimates of critical importance to the formulation of the Financial Statements, since they rely to a

significant degree on subjective judgments. Changes in the conditions underlying the judgments, assumptions and

estimates adopted might have a major impact on future results since there is the risk that adjustments to the book value

of assets and liabilities emerge in years following the Financial Statements.

The main financial statement items affected by such situations of uncertainty are:

- amortization and depreciation: tangible assets with a finite useful life are amortized and depreciated according to

the straight-line method applied over their estimated useful life;

- allowance for doubtful accounts – the allowance are determined by the difference between the book value of the

receivables and the present value of estimated future cash inflows and the valuation is revised on an ongoing basis;

- employee benefits – the cost of the services rendered by employees is determined using the best actuarial

valuations on the date of the estimate.


Page 30

22. NOTES TO THE STATEMENT OF FINANCIAL POSITION

NON CURRENT ASSETS

Note 1 – Tangible assets

The following tables contain details of Tangible assets at December 31, 2012, 2011 and 2010 and movements

thereon in the years:

(Amounts in thousands of Euro) 31/12/2009 Additions Disposals Reclassifications Depreciation & Writedowns 31/12/2010

Gross Value Lands and buildings 1.928 365 0

2.293

Machinery and equipment 15 7 0

22

Industrial and commercial

equipment 60 11 0

71

Other tangible assets 6.083 5.210 (66)

11.227

Fixed assets under construction 0 250 0 250

Total Gross Value 8.086 5.843 (66) 0 0 13.863

Accumulated Depreciation Lands and buildings (227) 0 0

(72) (299)

Machinery and equipment (7) 0 0

(4) (11)


equipment (19) 0 0

(16) (35)

Other tangible assets (735) 0 58

(1.316) (1.993)

Fixed assets under construction 0 0 0 0 0

Total Accumulated Depreciation (988) 0 58 0 (1.408) (2.338)

NBV Lands and buildings 1.701 365 0

(72) 1.994

Machinery and equipment 8 7 0

(4) 11


equipment 41 11 0

(16) 36

Other tangible assets 5.348 5.210 (8)

(1.316) 9.234

Fixed assets under construction 0 250 0 0 250

Total NBV 7.098 5.843 (8) 0 (1.408) 11.525


Gross Value Lands and buildings 2.293 4

2.297

Machinery and equipment 22

22


equipment 71 32

103

Other tangible assets 11.227 5.620 (367) (10)

16.470

Fixed assets under construction 250 4.427 10 4.687

Total Gross Value 13.863 10.083 (367) 0 0 23.579

Accumulated Depreciation Lands and buildings (299) 0 0

(68) (367)

Machinery and equipment (11) 0 0

(4) (15)


equipment (35) 0 0

(20) (55)

Other tangible assets (1.993) 0 0

(2.426) (4.419)

Fixed assets under construction 0 0 0

Total Accumulated Depreciation (2.338) 0 0 (2.518) (4.856)

NBV Lands and buildings 1.994 4 0 0 (68) 1.930

Machinery and equipment 11 0 0 0 (4) 7


equipment 36 32 0 0 (20) 48

Other tangible assets 9.234 5.620 (367) (10) (2.426) 12.051

Fixed assets under construction 250 4.427 0 10 0 4.687

Total NBV 11.525 10.083 (367) 0 (2.518) 18.723


Page 31


Gross Value Lands and buildings 2.297

(2.297)

0

Machinery and equipment 22 3

25


equipment 103 174

277

Other tangible assets 16.470 4.804 (1.187) 1.517

21.604

Fixed assets under construction 4.687 27 (1.796) (1.517) 1.401

Total Gross Value 23.579 5.008 (5.280) 0 0 23.307

Accumulated Depreciation Lands and buildings (367)

367

0

Machinery and equipment (15)

(4) (19)


equipment (55)

(42) (97)

Other tangible assets (4.419)

(3.573) (7.992)

Fixed assets under construction 0 0

Total Accumulated Depreciation (4.856) 0 367 0 (3.619) (8.108)

NBV Lands and buildings 1.930 0 (1.930) 0 0 0

Machinery and equipment 7 3 0 0 (4) 6


equipment 48 174 0 0 (42) 180

Other tangible assets 12.051 4.804 (1.187) 1.517 (3.573) 13.612

Fixed assets under construction 4.687 27 (1.796) (1.517) 0 1.401

Total NBV 18.723 5.008 (4.913) 0 (3.619) 15.199

The caption Land and buildings includes the building located in Milan, via Andrea Massena 4. The lease contract

was signed on November 24, 2005 for a period of 96 months. The building has been recognized in accordance with

the IAS 17 method. The effective Interest rate recalculated under IAS 17 is equal to 3,40%. 2010 and 2011

additions relate to leasehold improvements to the building. The 2012 decrease refers to the via Andrea Massena 4

building transfer to the parent company due to the partial spin-off effective as of January 1, 2012.

Other tangible assets relate to furnishings, vehicles, office equipment and capital expenditure relating to works

on heating systems in relation to long-term Energy Service contracts signed with clients.

The increase in Other tangible assets mainly relates to improvements for works on heating systems totalling

Euro 4.567 thousand in 2010, Euro 5.074 thousand in 2011 and Euro 4.570 thousand in 2012.

The caption Furnishings includes works of art which are not depreciated as their useful life cannot be estimated.

Moreover, their value is, generally, not destined to decrease over the years. The main additions of furnishing for the year

2010 amount to Euro 559 thousand, for the year 2011 amount to Euro 341 thousand and for the year 2012 to Euro 68

thousand.

Referring to Leasehold improvements, it has been necessary to rectify this amount and not to capitalize the one related to

the via Giovanni da Udine building in rent, because, according to IAS 38, those amounts could not have been capitalized.

Note 2 – Intangible assets The following tables contain details of Intangible assets at December 31, 2012 and 2011 and movements thereon in

the years:


Page 32

(Amounts in thousands of Euro) 31/12/2010 Additions Disposals Depreciation & Writedowns 31/12/2011

Gross Value Goodwill 50 50

Total Gross Value - 50 - - 50

Accumulated Depreciation Goodwill

Total Accumulated Depreciation - - - - -

NBV Goodwill 50 50

Total NBV - 50 - - 50

(Amounts in thousands of Euro) 31/12/2011 Additions Disposals Depreciation & Writedowns 31/12/2012

Gross Value Goodwill 50

50

Software 80 80

Total Gross Value 50 80 - - 130

Accumulated Depreciation Goodwill

Software (16) (16)

Total Accumulated Depreciation - - - (16) (16)

NBV Goodwill 50 50

Software 80 (16) 64

Total NBV 50 80 - (16) 114

Goodwill refers to the purchase of the “Galileo” business division in 2011 to provide integrated management services for electro-medical equipment as per the Consip S.p.A. convention in the Piedmont and Lombardy regions. Goodwill has been subject to annual impairment test, but no depreciation occurred. The increase of Software mainly refers to the purchase of accounting software (Visual Space) and management software (TEO). Specifically, TEO software is used to manage biomedical equipment technical-operating services for their entire life cycles: from inspection to acceptance to disposal.

Note 3 – Investments available for sale

This category includes equity investments representing an interest of less than 20%.

These investments are not publicly traded and, as their fair value cannot be measured reliably, are valued at cost

less impairment loss adjustments.

(Amounts in thousands of Euro) 31/12/2012 31/12/2011 31/12/2010

Investments available for sale 262 138 49

Total Investments available for sale 262 138 49

The main changes in the three years are detailed as in the following table:


Opening balance 138 49 26 - Increases 167 102 23 - Decreases (43) (13)

Total Available for sale investments 262 138 49

The increase in 2010 refers to:


Page 33

- the subscription of shares in Diecianni S.r.l. for the nominal amount of Euro 10 thousand;

- the subscription of shares in the Consortium B.I.S. biomedical for the amount of Euro 13 thousand.


- the subscription of shares in Certosa Servizi S.r.l. for the nominal amount of Euro 2 thousand;

- the subscription of shares in Tabacchi S.r.l. for the amount of Euro 100 thousand.


- the rejection, in share capital, of the shareholders’ loan to Certosa Servizi S.r.l. for the amount of Euro 25 thousand;

- the subscription of shares in MPP S.c.a.r.l. for a face value of Euro 2 thousand;

- the subscription of Synchron Nuovo San Gerardo S.p.A. shares for the amount of Euro 140 thousand.

Decreases in 2012 refer to the sale of shares in Certosa Servizi S.r.l. for the amount of Euro 27 thousand. Spin-off values

equal to Euro 16 thousand refer to the partial spin-off to parent company Prima Holding S.r.l., effective as of January 1,

2012, of the shares in Utilità Progetti e Sviluppo S.r.l. (Euro 6 thousand) and in Diecianni S.r.l. (Euro 10 thousand).

As of December 31, 2012 the Available for sale investments of the Company are breakdown in the following

table:

(Amounts in thousands of Euro)

Share capital

amount (in

Euro)

% held Equity Profit (loss) % Equity Cost

Italia Servizi Integrati S.p.A. (*) 1.000 10,00% 1.496 283 150 20

Consorzio BIS biomedical S.p.A. in liquidazione (***) 97 13,00% 80 (10)

MPP S.c.a.r.l. (**) 10 20,00% 0 n/a 2

Synchron N. S. Gerardo S.p.A. (****) 8.160 6,85% 8.145 (15) 558 140

Tabacchi S.r.l. (*) 500 20,00% 494 (6) 99 100

Total Investments available for sale 262

(*) data referring to 31/12/2011 (last Financial Statement approved)

(**) Company established in the year 2012

(***) Close-out Financial Statement referring to 7/12/2012

(****) Financial Statement at 31/12/2012 approved by the Board of Directors in 08/03/2013

The company holds the following investments:

- Euro 19,900 face value shares equal to 10% of Italia Servizi Integrati S.p.A. share capital, with registered offices in

Milan, no. 19 Via A. Canova – share capital Euro 1,000,000 fully paid-in – tax code and Milan business registry number

03459160960. The company operates in facility management and global services. The last approved financial statements

were closed on December 31, 2011 with shareholders’ equity posted at Euro 1,495,881 and net profits for 283,136.

- Euro 13,000 face value shares equal to 13% of Consorzio Stabile B.I.S. Biomedical Int. Services in liquidation

share capital, with registered offices at no. 83 Via Donat Cattin – Arezzo. The consortium was established to participate

in tenders for the integrated clinical engineering and biomedical and scientific equipment sector. On January 27, 2012,

the Extraordinary Shareholders’ Assembly dissolved and placed the consortium in liquidation, nominating the liquidator.

The Assembly of Consortium members held on December 27, 2012 approved the final liquidation financial statements as

of December 7, 2012 and the distribution plan for liquidation shareholders’ equity. Euro 9,998 were distributed to Prima

Vera S.p.A., liquidated during the month of March 2013, and assigned Euro 414 to be liquidated following the collection

of VAT receivables and withholding taxes.

- Euro 100,000 face value shares equal to 20% of Tabacchi S.r.l. share capital, with registered offices in Milan, no. 1

Via F. De Sanctis – share capital 500,000 fully paid-in – VAT number 07498250963. The first approved financial

statements were closed on December 31, 2011 with shareholders’ equity posted at Euro 493,710 and operating losses for

Euro 6,290. The company operates to design and requalify former Manifattura Tabacchi building "4" in Milan and

subsequent facility management services.

- Euro 2,000 face value shares equal to 20% of MPP S.c.a.r.l. share capital, established on May 2, 2012, with

registered offices in Milan, no. 1 Via F. De Sanctis - share capital Euro 10,000 fully paid-in - tax code and Milan

business registry number 07853290968. The company has a non-profit partnership nature and is the shared organisation


Page 34

of member companies to complete assigned activities for work contracted by Tabacchi S.r.l. to the temporary

partnership, due to the work grant concession for the requalification of former Manifattura Tabacchi building "4" in

Milan and subsequent facility management services.

- Euro 139,740 face value shared equal to 6.85% of Synchron Nuovo San Gerardo S.p.A. share capital,

established on September 25, 2012, with registered offices in Zola Predosa (Bologna), no. 4 Via U. Poli - share capital

Euro 8,160,000 paid-in for Euro 2,040,000. The company's mission is the execution of "construction and management

concession contracts, as per Legislative Decree 163/2006 art. 144, regarding the reinforcement, expansion and

renovations of the San Gerardo hospital in Monza” with Infrastrutture Lombarde S.p.A. and the San Gerardo Hospital

of Monza. The first financial statements, approved by the Board of Directors on March 8, 2013, closed on December

31, 2012 with net shareholders’ equity for Euro 8,145,091 and year’s losses for Euro 14,909.

Note 4 – Tax receivables

On 2012 tax includes receivables for Euro 175 thousand for the IRES reimbursement claim for failed IRAP deduction on

personnel costs for the years 2007 – 2011.

Note 5 – Deferred Tax assets

The caption Deferred Tax assets refers to the fiscal effect (IRES + IRAP) calculated on the Leasehold improvements

costs reclassification on the via Giovanni da Udine building in rent for Euro 149 thousand in 2010, Euro 124 thousand in

2011 and for Euro 130 thousand in 2012.

For 2011 the prepaid tax credits, amounting to EUR 132 thousand, mainly refers to the allocations made to other

provision accounts.

For 2012 the prepaid tax, equal to Euro 162 thousand, mainly refers to allocations to contingency reserves.

Note 6 – Financial Assets

This line item includes non-current non-interest bearing financial loans to other companies classified as investments

available for sale.

These totalled Euro 338 thousand at December 31, 2010, Euro 64 thousand at December 31, 2011 and Euro 89 thousand

at December 31, 2012 and may be broken down as follows:


Utilità Progetti e Sviluppo S.r.l. 170

Diecianni S.r.l. 143

Certosa Servizi S.r.l. 35

Tabacchi S.r.l. 50

Other loan 10 10 10

Total Financial loans 60 45 323

Security deposits 29 19 15

Other Financial assets 29 19 15

Total Financial assets 89 64 338

The financial assets at December 31, 2012 includes receivables for an amount equal to Euro 50 thousand concerning the

pro-quota non-interest bearing shareholders' loan granted, during the month of February 2012, by Prima Vera S.p.A. to

Tabacchi S.r.l., as set by the subsidiary shareholders' assembly resolution on November 11, 2011. This loan expires with

the unsecured loan granted by the Bank of Legnano S.p.A. to the project company and thus in 15 years.

The financial assets at December 31, 2011 includes receivables relating to an interest-free loan granted to the affiliated


Page 35

company Certosa Servizi S.r.l. for an amount of EUR 35 thousand.

The financial assets at December 31, 2010 refers to interest-free financing granted to the subsidiary Utilità Progetti e Sviluppo S.r..l., amounting to Euro 170 thousand. Also, in 2010, the Company granted an interest-free loan totaling Euro 143 thousand to associated company Diecianni S.r.l.; the loan was made in several installments.

CURRENT ASSETS

Note 7 – Inventory

The table that follows shows the amount of inventory at December 31, 2012, 2011 and 2010:


Fuel and oil for heating 793 708 600

Total Inventory 793 708 600

The valuation method is described in Summary of Accounting Policies and Valuation Methods.

Closing inventories relate to petroleum-based products, fuel and oil for heating, used by the Company for its

activities.

The increase in this caption over the three years is due to the expansion of the Company’s business activities

resulting in a greater need for stored petroleum products.

Note 8 – Trade receivables and other commercial assets

Trade accounts receivable relate to services provided by the Company. At December 31, 2012, 2011 and 2010,

they were analysed as follows:


Trade accounts receivables 68.956 61.047 63.462 Trade accounts receivables from related parties 19 8 9

Total Trade receivables 68.975 61.055 63.471

Total receivables were adjusted for the provision for doubtful receivables in order to bring nominal value in line with

estimated recoverable value. During the financial years analysed, the provision for doubtful receivables changed as

follows:


Opening balance 1.100 789 468

- (Utilizations) (1.100)

- Accruals 347 311 321

Total Trade receivables 347 1.100 789

The full use of the reserve posted at December 31, 2011 for Euro 1.100 thousand refers to a transaction signed with

customer Milanosport S.p.A. on December 20, 2012.

The company invoiced customers for default interest totalling Euro 303 thousand during the year 2012 and collected

Euro 153 thousand. Reserves for Euro 150 thousand were allocated for the uncollected part to directly adjust

receivables.


Page 36

Note 9 – Tax receivables

Tax receivables at December 31, 2012, 2011 and 2010 are broken down as follows.


IRES receivables 165 354 IRAP receivables 39 VAT receivables 2 10 751 Other Tax receivables 67

Total Tax receivables 167 470 751

Note 10 – Financial Assets

The amount for the year 2011 refers to the loan granted to Diecianni S.r.l. for Euro 378 thousand and result of partial spin-off to the parent company Prima Holding S.r.l., effective as of January 1, 2012.

Note 11 – Cash and cash equivalents

Cash and cash equivalents may be analysed as follows.


Bank and post office accounts 10.487 5.603 2.307 Cash and cash equivalents on hand 13 4 3

Total Cash and cash equivalents 10.500 5.607 2.310

The balance includes bank and post office accounts and cash on hands at the end of the three years.

Note 12 – Other receivables

The following table shows a breakdown of Other receivables at December 31, 2012, 2011 and 2010:


Paid in advance to suppliers 180 76 49 Directors and employees expense reserve 137 39

Advances to employees

73

Suspended costs 413

Receivables due from suppliers 346 346

Suppliers doubtful debt (346) (346)

Other receivables 23 19

Deferred costs 437 376 194 Other advances 33 3 97

Total Other receivables 1.223 513 413

This caption mainly includes advances paid to suppliers and deferred costs relating to subsequent reporting periods.

For 2012 the balance includes suspended costs for Euro 413 thousand. The item refers to reversed consortium charges

(20% share), for the year 2012, communicated by MPP S.c.a.r.l., which were fully suspended since the job has yet to

produce earnings in the year 2012. The caption also includes Euro 346 thousand for receivables due by a supplier, fully

written down during the previous year due to insolvency risks.


Page 37

Note 13 – Shareholders’ equity

Shareholders’ equity was analysed as follows at December 31, 2012, 2011 and 2010:


Share capital 500 500 500 Legal reserve 100 100 100 Other reserves 2.881 7.100 7.350 Reserve from actuarial valuation (217) (110) (45) Retained earnings (accumulated losses) 12.386 7.587 291 Profit (loss) for the year 6.181 6.288 7.296

Total shareholders' equity 21.831 21.465 15.492

Movements on Shareholders’ equity are shown in the table included in Paragraph 19.

Share Capital

At December 31, 2012, 2011 and 2010 the share capital is wholly subscribed and paid. It amounts to Euro 500

thousand and consists of number 500.000 ordinary shares with a nominal value of Euro 1.

Legal reserve

At December 31, 2012, 2011 and 2010 the Legal reserve amounts to Euro 100 thousand.

Other reserve

This item may be analysed as follows:


First Time Adoption (FTA) reserve 20 172 172 Extraordinary reserve 2.861 6.928 7.178

Total shareholders' equity 2.881 7.100 7.350

The First Time IFRS Adoption Reserve of Euro 172 thousand was created on January 1, 2008 upon the first

time adoption of IFRS. The other side of the entry regarded the adjustments made to the Italian GAAP account

balances as a result of IFRS adoption (as required by IFRS 1) and relates to the application of IAS 17 Leasing

for Euro 152 thousand and the application of IAS 19 Employee benefits for Euro 20 thousand.

In 2012 the Euro 152 thousand referring to application of IAS 17 Leasing decreased due to the partial spin -off to

parent company Prima Holding S.r.l.

Movements on the extraordinary reserve in 2011 refer to the Shareholders' Meeting of 24 November 2011 that

approved the distribution of the amount of EUR 250,000, withdrawing it from the extraordinary reserve, taken from

profits from previous years. The distribution was carried out on 21 December 2011.

Movements on the extraordinary reserve in 2012 refer to the repeatedly mentioned partial spin-off to parent company

Prima Holding S.r.l. for Euro 4.067.

Actuarial valuation reserve

The actuarial valuation reserve reflects actuarial gains/losses arising from the valuation of the TFR/employee

termination indemnity at December 31, 2012, 2011 and 2010.


Page 38

(Amounts in thousands of Euro) Gross Reserve Deferred taxes Net Reserve

Reserve at December 31, 2009 (19) 5 (14)

Changes in 2010 (43) 12 (31)


Changes in 2011 (90) 25 (65)


Changes in 2012 (148) 41 (107)


Retained earnings/(accumulated losses)

Retained Earnings / (Accumulated Losses) include the effect on shareholders’ equity of the application of

IAS/IFRS from 2008 to 2012 (difference between statutory result –Italian Gaap and the result under IAS/IFRS).

The table below gives a breakdown of equity and shows the possible uses and amounts available for distribution

for each component.

(Amounts in thousands of Euro) Amount Utilization option Distributable portion

Share Capital 500 Legal Reserve 100 B

First Time Adoption (FTA) reserve 20

Extraordinary reserve 2.861 A, B, C 2.861

Actuarial valuation reserve (217)

Retained earnings (accumulated losses) 12.386 A, B, C 12.386

Utilization Option

A: for capital increase

B: to cover losses

C: for distribution to shareholders

NON CURRENT LIABILITIES

Note 14 – Provisions for liabilities and charges

Provisions for liabilities and charges may be analysed as follows:

Description Provisions for risks and charges of long terms

Provisions for risks and charges of short terms

Balance at 31/12/2010

Provision for the year 2011 380 82

Balance at 31/12/2011 380 82

Releases

(3) Reclassification to other payables

(7)

Provision for the year 2012

101

Balance at 31/12/2012 380 173

Reserves concern some disputes with suppliers (Euro 173 thousand in 2012 and Euro 82 thousand in 2011) and the tax

claim with the Tax Office (Euro 380 thousand in both 2012 and 2011).


Page 39

Note 15 – Liabilities for pension obligations and employees’ leaving indemnity

This item includes all liabilities for pension plans and other employee benefits following termination of the employment

relationship or payable when certain requirements are met. It consists of accruals relating to the Company’s employee

severance indemnity (TFR). A valuation in accordance with the criteria of IAS 19 was performed only for the liability

corresponding to the provision for employee severance indemnities that is still held at the Company.

Liabilities for pensions and employee severance indemnity totalled Euro 987 thousand at December 31, 2012 (Euro 635

thousand at December 31, 2011 and Euro 395 thousand at December 31, 2010).

There has been a significant increase over the three-year period due to the headcount increase.

Changes in the period are reported below:


Opening balance 635 395 238 Service cost 248 173 125 Interest cost 27 19 13 Utilised (71) (52) (24) Actuarial gains / (losses) 148 90 43 Business combination/transfers cont. Galileo branch 10

Closing balance 987 635 395

Under IAS 19, the Employee severance indemnity has been considered as a “Defined benefit plan”, determined

on the basis of actuarial calculations performed by an external consultant in accordance with international

accounting standards.

The Company uses a duly certified professional to determine the actuarial amounts.

Benefit obligations are estimated using the Projected Unit Credit method. Under this method each participant’s

benefits under the plan are attributed to years of service, taking into consideration future salary increases and the

plan’s benefit allocation formula. Thus, the estimated total pension to which each participant is expected to

become entitled at retirement is broken down into units, each associated with a year of past or future credited

service.

More specifically, the following assumptions were adopted:

Valuation date December, 31, 2012 December, 31, 2011 December, 31, 2010

Discount rate 2,85% 4,35% 5.15%

Salary increases 3,00% 3,00% 3.00%

Inflation (RPI) 2,00% 2,00% 2.00%

The discount rate was set by reference to a discount yield curve of Euro Corporate Bonds rated AA. In detail,

the discount rate was determined as the flat rate that leads to the same present value obtained by applying at

each term the whole discount yield curve to the expected cash flows generated by the actuarial valuation.

The following demographic assumptions were used in valuing the liabilities and benefits under the plan:

• Mortality rate: RG48 table

• Disability: Social Security Rates (INPS tables by age and sex)

• Withdrawal 5% p.a. flat up to retirement, including an allowance for advance payments

• Retirement age: 65 male, 60 female


Page 40

Note 16 – Provision for deferred taxes

The balances of Euro 7 thousand at December 31, 2012, Euro 470 thousand at December 31, 2011 and Euro 393

thousand at December 31, 2010 include the deferred tax liability accrued at the date of the transition to the IFRS

(Euro 177 thousand) .

The following table shows a breakdown of this provision by type of underlying temporary difference.


Deferred tax liabilities

Differences in the valuation of building (IAS 16)

63 33

- First time adoption

- with effect on Profit and loss

63 33

Adoption of standard on finance leases (IAS 17)

378 329


170 170

- with effect on Profit and loss

208 159

Adoption of standard on employee benefits (IAS 19) (1) 27 31

- First time adoption 7 7 7

- with effect on Profit and loss 75 62 41

- with effect on Other comprehensive income (83) (42) (17)

Adoption of standard on intangible assets (IAS 38) 8 2


- with effect on Profit and loss 8 2

Total Provision for deferred taxes 7 470 393

Note 17 – Bonds


Bonds 2.000 2.000 2.000

Total Bonds 2.000 2.000 2.000

The liability for bonds represents the total capital amount of the bonds issued. The repayment terms included in

the bond rules provide for a bullet repayment on June 30, 2013.

The bond issue was approved by the Shareholders’ General Meeting on May 14, 2008. Some 2.000.000 bonds,

not convertible into shares, were issued in 2008. Each bond has a nominal value of Euro 1 and is for a period of

five years (1 July 2008 to 30 June 2013). The bonds were subscribed in full by the Chairman – and indirect

shareholder – of the Company.

The bond rules provide for interest payable at the official European Central Bank Rate plus two-thirds; the

applicable rate is as at January 1 and July 1 each year.

Note 18 – Finance Lease payables

The following table shows the financial liabilities, current and non-current portion, relating to finance lease.


Finance lease payables - current

181 167 Finance lease payables - non current 172 339

Total Finance lease payables - 353 506


Page 41

These entries refer to the finance lease of the representative premises (via Massena). Further details are given in Note 1

Tangible assets.

CURRENT LIABILITIES

Note 19 – Trade payables

Trade accounts payable were analysed as follows at December 31, 2012, 2011 and 2010:


Due to suppliers 62.464 54.595 52.051 Due to related parties 117 233 96

Total Trade Payables 62.581 54.828 52.147

The significant increase in the caption is due mainly to the increase in turnover resulting in a greater need for

goods and services.

Moreover, the terms of payment of some suppliers are managed depending on how long it takes to collect trade

receivables.

Further details of regarding related parties are provided in Note 27 Related party transactions.

Note 20 – Tax payables

Tax payables were analysed as follows at December 31, 2012, 2011 and 2010:


Corporate income tax IRES 1.364 Regional income tax IRAP 11 261 VAT payables 7.074 5.308 5.170 Other tax debts 521 427 268

Total Tax payables 7.606 5.735 7.063

The Corporate income tax/IRES and Regional income tax/IRAP payables represent the Company’s income tax

liabilities net of payments on account made during each reporting period.

The VAT payable regards deferred VAT on services rendered to Public Sector clients and VAT Tax payable. Other tax payables includes payables for amounts withheld from the bond, employee income tax/IRPEF payable

and amounts payable for deductions at source from external consultants.

Note 21 – Other liabilities

A breakdown of these liabilities is as follows:


Payable to social security institutions 674 559 314 Payable to employees for salaries and expenses 463 365 316 Payable to Directors 24 84 32 Amounts due to employee for holiday to pay 589 518 470 Accrual for insurance costs 29 23 17 Deferred income 334 398 369 Other payables 111 67 92

Total Other liabilities 2.224 2.014 1.610


Page 42

Other liabilities mainly includes payables to social security institutions, payables to employees for salaries and

expenses, amounts due to employees for paid leave and deferred income in the form of contract revenue deferred in

order to match it with the related contract costs.

23. NOTES TO THE STATEMENT OF PROFIT AND LOSS

Note 22 – Revenues

The Company’s revenues are generated by the following services:


Performance of integrated services for maintenance 78.390 71.376 64.953 Provision of services maintenance biomedical 16.721 12.894 10.809 Revenues from the sale of Electric power 1.319 813 430 Revenues from the sale of petroleum 41 45

Total 96.471 85.128 76.192

Revenues increased from Euro 76.192 thousand in 2010 to Euro 85.128 thousand in 2011 and Euro 96.471 thousand in

2012 with year on year increases of 12% (2010-2011 ) and 13% (2011-2012).The increase is largely thanks to the

growth of the business in the Energy segment, as described in the Report on Operations which contains further

information.

Note 23 – Other income

This caption, amounting to Euro 521 thousand in 2012, Euro 137 thousand in 2011 e Euro 227 thousand in 2010 relates

to other revenue associated with the business.

Note 24 – Purchases of raw and consumable materials



Purchases of raw and consumable materials 21.997 18.872 19.394

Total Purchases of raw and consumable materials 21.997 18.872 19.394

Purchases of raw and consumable materials mainly regard purchases of fuel used by heating systems in order to

provide the energy service to clients’ buildings.

The increase in 2012 (17%) and the decrease in 2011 (3%) is mainly because of the trend of market prices for these

raw materials.

Note 25 – Change in inventories

This item relates to the change in fuel inventories, as indicated in Note 4.


Opening stock 708 600 479 Year-end stock 793 708 600

Total Change in inventories 85 108 121


Page 43

Note 26 – Costs for services

A breakdown of the components of the Costs for services at December 31, 2010, 2009 and 2008, is as follows:


Maintenance 45.459 40.296 33.614 Other consultancies 1.326 661 501 Acquisition/Pre-contract costs 182 422 408 Administrative, tax and legal consultancies 721 524 284 Advertising 205 365 260 Travel expenses 409 209 167 Insurance costs 65 93 74 Statutory auditors' fees 44 44 42 Transport and storage 47 37 28 Laboratory utilities 37 26 18 Other service costs 1.921 1.492 1.603

Total 50.416 44.169 36.999

Costs for services increased by 14% in 2012 compared to 2011 and by 19% in 2011 compared to 2010. The increase

in these costs over the three-year period was mainly due to higher costs for energy conduction and systems

maintenance services, directly as a result of the acquisition of new contracts.

The increase in Other consultancies was mainly due to costs for assistance and consultancy services provided by

parent company Prima Holding in relation to dealings with Public Sector clients.

Further information on dealings with related parties is provided in Paragraph 27 Related party transactions.

Other service costs mainly comprise entertainment costs, telephone costs and other payroll related costs.

Entertainment costs increased over the three-year period due to the growth of the business with higher costs

incurred in relation to PR activities, commercial meetings and trade fairs.

Note 27 – Costs for Use of assets owned by third party



Rental of premises 277 234 193 Other rentals 925 719 479

Total Costs for use of assets owned by third parties 1.202 953 672

The cost of the use of assets owned by third party consists of the rental cost of the premises used by the

Company related mainly in respect of its registered office in Milan and the premises located in Rome.

The premises are made available mainly by the related company, Oriente S.r.l. Further information on dealings

with related parties is provided in Paragraph 27 Related party transactions.

The caption also includes other rentals, mainly for vehicles.


Page 44

Note 28 – Personnel costs

A breakdown of personnel costs at December 31,2012, 2011 and 2010, is as follows:


Wages and salaries 6.753 5.500 4.453 Social contributions 2.081 1.695 1.312 TFR - employee leaving indemnity 248 173 125 Other pension fund paid 115 74 54 Directors fees 325 435 505 Other personnel costs 20 12 18

Total personnel costs 9.542 7.889 6.467

Personnel costs include all costs incurred by the Company for the remuneration of its employees.

Personnel costs almost trebled in 2012 compared to 2010. The increase was mainly due to the greater number of

employees with operational roles within the Company structure following the large increase in revenues over the

three-year period.

The workforce over the three year period may be broken down by employee category as follows:


Executives 6 5 4 White collar 96 89 58 Blue collar 70 60 58 Others 33 34 33

Total 205 188 153

Note 29 – Amortization, depreciation and writedowns



Amortization of intangible assets 16 Depreciation of tangible assets 3.619 2.518 1.408 Writedowns 496 670 321

Total Amortisation, depreciation and writedowns 4.131 3.188 1.729

Amortization, depreciation and writedowns increased over the three-year period analysed mainly as a result of

capex incurred.


Page 45

Note 30 – Financial income and expenses

A breakdown of Financial income and expenses at December 31, 2012, 2011 and 2010, is as follows:


Interest from participations

113

Bank interest earned 10 26 8 Other financial income 303 19 1

Total Financial income 313 158 9

Dividends, gains and losses from sale of investments (25)

Finance lease interest charges

(11) (21) Interest costs (IAS 19) (27) (19) (13) Bond interest (29) (37) (33) Bank interest (76) (67) (21) Other financial expenses (11) (1) (1)

Total Financial expenses (168) (135) (89)

Total net financial income (expenses) 145 23 (80)

This item includes interest income on current account deposits, interest expenses in relation to advances on sales

invoices, six-monthly interest expenses on the bonds of Euro 2 million, financial expenses relating to finance

leases and interest costs calculated on the actuarial valuation of the TFR/employee severance indemnity in

accordance with IAS19. The 2012 increase in interest incomes refers to Euro 303 thousand relating to interest on arrears invoiced to customers. The caption Dividends, gains and losses from sale of investments refers to capital losses from sales of holdings. The 2011 caption Interest from participations refers to the distribution of reserves by subsidiary Utilità Progetti e Sviluppo S.r.l..

Note 31 –Income taxes

The income tax expense amount to Euro 2.984 thousand in 2012, Euro 3.320 thousand in 2010 and Euro 3.683 thousand in 2010 and is shown in the following table:


IRES (2.555) (2.750) (3.110) IRAP (618) (579) (618)

Total current taxes (3.173) (3.329) (3.728)

Deferred taxes 189 9 45

Total deferred taxes 189 9 45

Total (2.984) (3.320) (3.683)

In relative terms the tax rate Reconciliation of theoretical and effective corporation tax charge (IRES) is shown in

the following table:


Page 46


Profit before taxation 9.165 9.608 10.979 Theoretical income tax (IRES) 2.520 27,50% 2.642 27,50% 3.019 27,50%

Permanent differences for costs on vehicles 41 0,45% 24 0,25% 39 0,36%

Other permanent differences 134 1,46% 41 0,43% 29 0,26%

Temporary differences 24 0,26% 236 2,46% (2) (0,02)%

ACE (89) (0,97)% (58) (0,60)%

IRAP (10% + personnel costs) (62) (0,68)% (24) (0,25)% (15) (0,14)%

Total for current income tax (IRES) 48 0,52% 219 2,28% 51 0,46%

Income Tax IAS reclassification (172) (3)

Italian Deferred Tax (30) (132)

Total IRES in the statement of profit and loss 2.366 25,82% 2.726 28,37% 3.070 27,96%


EB IT 9.020

9.585

11.059 Personnel costs 9.542

7.889

6.467

Taxable base for IRAP 18.562 17.474 17.526 Theoretical income tax (IRAP) 724 3,90% 681 3,90% 684 3,90%

Deductions ex art.11 D.Lgs.446 (148) (0,80)% (110) (0,63)% (84) (0,48)% Other deductions for employees costs

1 0,01% 1 0,01%

Other permanent differences 42 0,23% 22 0,13% 12 0,07% Temporary differences

Total for current income tax (IRAP) (106) (0,57)% (87) (0,50)% (71) (0,41)%

Total IRAP in the statement of profit and loss 618 3,33% 594 3,40% 613 3,50%

24. NET FINANCIAL POSITION

The Net financial position is as follows:


Cash on hand 13 4 3 Banks 10.487 5.603 2.307 Cash equivalents

A. Total cash and cash equivalents 10.500 5.607 2.310 B . Current financial receivables and other financial assets


(181) (167) C. Current financial debt (181) (167)

D. Net current financial position (A+B +C) 10.500 5.426 2.143 Finance lease payables

(172) (339)

Bonds (2.000) (2.000) (2.000)

E. Non-current financial debt (2.000) (2.172) (2.339)

F. Net Financial position (D+E) 8.500 3.254 (196)

The net financial position includes cash and cash equivalents, current financial payables and non-current financial

payables. Financial payables include finance lease payables arising upon accounting for the finance lease on the

head office property in accordance with IAS 17; they also include bonds of Euro 2,000 thousand subscribed by

the major shareholder.

The changes in the Net financial position over the three-year period 2012-2010 have been driven by the Company’s

operating activities and, in particular, to sales and purchase invoicing trends and related collections and payments.


Page 47

25. COMMITMENTS AND GUARANTEES

A breakdown of commitments and guarantees is as follows:


Guarantees issued in favour of third parties 20.422 14.161 5.770 Guarantees issued by third parties in favour of the Company 441

Total Commitments and Guarantees 20.863 14.161 5.770

The caption reflects the guarantees issued by some banks and insurance to guarantee contractual

obligations held by the Company towards third parties with which it operates.

26. CONTINGENT LIABILITIES

The Company is not involved in any civil or administrative proceedings or other legal disputes, except as disclosed

below.

The following are the main on-going tax litigations related to the company.

In 2010, the Inland Revenue (L’Agenzia delle Entrate) carried out a general audit of the company in relation to the 2007

tax year, which was concluded with a report on findings dated 28/06/2010, which has resulted in charges being brought

about for non-deductible expenses for IRES and IRAP purposes totalling EUR 777,768.

On 30/07/2010 the company prepared a statement of defence pursuant to art. 12, paragraph 7 of the Taxpayers’ Charter

contesting the findings contained in the report on findings.

The Inland Revenue subsequently issued the following notices of assessment, all following on from the findings made

during the previous check and the questionnaires subsequently sent to the company:

i. On 12.11.2010, a notice of assessment for IRES, IRAP and VAT purposes for the 2005 tax year, with a request for

higher taxes totalling around EUR 111,000, plus penalties and interest;

ii. On 03.03.2011, a notice of assessment for IRES, IRAP and VAT purposes for the 2006 tax year, with a request

for higher taxes totalling around EUR 140,000, plus penalties and interest; The company appealed these

assessments with separate actions at the Milan Provincial Tax Commission, which, having held the two

proceedings, fully accepted the company's appeals, annulling the aforementioned notices. The Inland Revenue

appealed against the judgment of the Tax Commission, demanding the reform of the contested judgement and

confirmation of the contested tax assessment notices. The company entered an appearance in these proceedings and

requested the dismissal of the appeal proposed by the Office; the oral hearing has not been held to date;

iii. On 29.8.2011 the Company was issued a notice of assessment for IRES, IRAP and VAT purposes for the year

2007, bearing a claim for payment totalling around EUR 690,000, including taxes, penalties and interest, of which

EUR 310,000 related to real estate leasing. This assessment has been challenged before the Milan Provincial Tax

Commission; the oral hearing for the appeal has no been held to date;

iv. On 22.3.2012 and 26.3.2012 the Company was issued a notice of assessment for IRES, IRAP and VAT purposes

for the years 2008 and 2009, bearing a claim for payment totalling approximately EUR 270,000 (for the 2008) and

EUR 300,000 (for 2009), all related to real estate leasing. These assessments have been challenged before the Milan

Provincial Tax Commission; the oral hearing for the appeal has no been held to date;

v. On 04.02.2013, the company received notice of assessment no. T9D031C04176/2011 regarding the partial

annulment of the assessment of the 2007 tax year issued on 29.8.2011, for the part relating to the recovery of the

real estate leasing. In particular, the Office acknowledged that the company had actually already increased part of

the fees for IRES purposes (approximately EUR 42,000 for "the so-called land quota") and also part of interest

expenses (EUR 18,000) for IRAP purposes.

vi. On 08.03.2013 the company received communication from the Tax Commission that the appeal relating to the tax

assessment for IRES, IRAP and VAT purposes for the years 2005 and 2006, will be processed on 20.05.2013.

The governing body of the company consider it plausible that if the Milan Region Tax Commission upheld the judgment

of the Court of First Instance regarding the lack of foundation for the findings the on the non-deductibility of the real


Page 48

estate leasing in relation to the years 2005 and 2006, also same claims for the years 2007, 2008 and 2009 may be

censured in their respective rulings. The governing body has, therefore, deemed the provisions for liabilities recorded in

the financial statements at 31 December 2012 to be adequate.

27. RELATED PARTY TRANSACTIONS

Related party transactions mainly take place between Prima Vera S.p.A., its parent company Prima Holding

S.r.l. and the Chairman and indirect sole shareholder of the Company, Domenico Catanese. The Company also

enters into transactions with Oriente S.r.l. and Antonio Catanese, both of which are related parties as they are

related to the major shareholder.

These transactions take place during the Company’s normal business activities and are settled on an arm’s length

basis at normal market terms and conditions, taking account of the characteristics of the goods and services

involved.

The following tables shows the effect on the Company’s 2012, 2011 and 2010 Statement of profit and loss and in

the Statement of financial position of dealings with related parties, as identified in accordance with IAS 24:

December 31, 2010 Amounts in

thousand of Euro

Operating

revenue

Costs for

services

Costs for use

of assets

Financial

expenses

Trade

receivables

Trade

payables Bond

Domenico Catanese

33

2.000

Oriente S.r.l.

182

96

Antonio Catanese

2

1

Teodoro Catanese

8

Prima Holding S.r.l. 165

Total 165 184 33 9 96 2.000


thousand of Euro

Operating

revenue

Costs for

services

Costs for use of

assets

Financial

expenses

Trade

receivables

Trade

payables Bond

Domenico Catanese

37

2.000

Oriente S.r.l.

213

16

Antonio Catanese

2

Teodoro Catanese

8

Prima Holding S.r.l. 345 217

Total 345 215 37 8 233 2.000


thousand of Euro

Operating

revenue

Costs for

services

Costs for use of

assets

Financial

expenses

Trade

receivables

Trade

payables Bond

Domenico Catanese

29

2.000

Oriente S.r.l.

222

117

Antonio Catanese

Teodoro Catanese

8

Prima Holding S.r.l. 360 11

Total 360 222 29 19 117 2.000

Costs for services of Euro 360 thousand at December 31, 2012 relate to the consulting agreement with parent company

Prima Holding S.r.l. This contract relates to the consulting and assistance services provided by parent company Prima

Holding S.r.l. with regard to internal and external relations and the establishment and maintenance of relations with

public sector entities, mainly in relation to participation in competitive tendering processes and the acquisition of


Page 49

contracts for services.

Costs for the use of assets owned by third parties totalled Euro 222 thousand at December 31, 2012, Euro 213

thousand at December 31, 2011 and Euro 182 thousand at December 31, 2010. These costs included rental costs

under contracts entered into with Oriente S.r.l., a company related to the major shareholder, for the rental of the

Company’s head office and administrative headquarters in Via Polidoro da Caravaggio until 30 June 2010 and, then,

in via Giovanni da Udine from 1 July 2010.

Costs for the use of assets owned by third parties also include Euro 2 thousand – in each year analysed – of rental

costs for the local offices in Rome which are rented from Antonio Catanese, a related party of the major shareholder

Domenico Catanese.

Financial expenses of Euro 29 thousand at December 31, 2012, Euro 37 thousand at December 31, 2011 and Euro 33

thousand at December 31, 2010 consist of interest expenses accruing on the bonds of Euro 2 million subscribed by

major shareholder Domenico Catanese.

The Company is subject to management and coordination by Prima Holding S.r.l. which owns 100% of its share

capital. In this regard, it is noted that, as indicated above, a service contract is in place to support the Company in

developing the business.

The following table shows a summary of the key financial data of Prima Holding S.r.l. for the years ended

December 31, 2012, 2011 and 2010.


BALANCE SHEET ASSETS

A) Receivables from stockholders' for unpaid capital

B) Tangible and intangible assets 4.838 102 105 C) Current assets 476 555 288 D) Prepaid expenses and accrued income 74 2 -

Total Assets 5.388 659 393

LIABILITIES

A) Stockholders' equity: Share capital 100 100 100 Reserve 4.406 65 31 Retained earnings

Profit /(loss) 825 374 233 B) Provisions for risks and charges

C) Staff leaving indemnity/T.F.R. provision

D) Payables 52 120 29

E) Accrued expenses and deferred income 5

Total Liabilities and stockholders' equity 5.388 659 393


PROFIT AND LOSS

A) Value of production 371 345 165

B) Cost of production (671) (143) (176)

C) Financial income and expenses 1.096 250 250 D) Impairment losses on financial assets

E) Extraordinary income and charges

1

Income taxes for the year 29 (79) (6)

Profit (loss) for the year 825 374 233


Page 50

28. OTHER INFORMATION

28.1 Average number of employees by category

The average number of employees, by category, has varied as follows in 2012, 2011, 2010:

2012 2011 2010

Executives 6 4 4 White collar 92 68 58 Blue collar 63 58 58 Others 27 34 33

Total 188 164 153

28.2 Emoluments of the Directors and Statutory Auditors

The table below shows the total remuneration of the Directors and of the Board of Statutory Auditors

for the performance of related functions.


Directors 325 435 505

Statutory Auditors 44 44 42 Total 369 479 547

The fees paid to the Independent auditors for audit services provided in 2012 amounts to Euro 36 thousand.

29. INFORMATION ON FINANCIAL RISKS

The Company constantly monitors the financial risks to which it is exposed, in order to detect the potentially

negative effects in advance and take the necessary action to mitigate them. The following section provides

qualitative and quantitative disclosures on the effect that these risks may have upon the Company.

Capital management

The Company’s capital management objectives are geared towards guaranteeing its ability to continue to pursue

the best interests of the stakeholders while also maintaining an optimal capital structure.

Liquidity risk

The liquidity risk is the risk that Prima Vera S.p.A. may not have access to sufficient financial resources to meet

its financial and commercial obligations in accordance with agreed terms and maturities.

The Company has adequate liquidity and equity-to-fixed-asset ratios to find the financial resources to support its

business development and investment projects.

The guidelines adopted by the Company are aimed at maintaining an adequate level of liquid assets and credit

lines.


Page 51

The Company does not have any bank borrowing. Rather it is funded through equity and bonds which have been

wholly subscribed by the major shareholder.

Price risk

The price risks to which the Company is exposed mainly involve changes in the price of oil products and energy

in relation to heat management activities.

However, these changes are, for the most part, accommodated by the contractual terms and conditions agreed

with customers, as contracts generally provide for price adjustment.

Credit risk

Credit risk represents the Company’s exposure to potential losses arising from a counterparty’s failure to fulfil

its obligations. Credit risk is associated with the ordinary business of commercial transactions and is monitored

by both the operational and the administration functions on the basis of procedures and periodic reporting.

The Company’s portfolio mix, is made up mainly of contracts with the Public Administration, a situation that

does not involve any default issues but which requires constant contact with clients in order to minimize delays

caused by the red-tape and bureaucracy on the part of such clients.

There are no significant credit concentration risks to report, which are carefully monitored by the Company and

the senior management also plays an active role in particularly significant cases.

The Company’s customers are mainly made up of public administration and health care facilities.

Trade receivables disclosed below include amounts origination from public administration that are past due at

the end of the reporting period for which the Company has not recognized an allowance for doubtful debts

because the amounts are considered recoverable due to the credit standing of the counterparties.

Age of receivables varied as follows in 2012, 2011 and 2010:


not due 27% 18.460 22% 13.466 64% 40.961 0-120 20% 13.716 21% 13.339 10% 6.579

121-365 14% 9.920 13% 7.807 22% 14.324 over 365 39% 27.376 44% 27.543 4% 2.396

Total Trade receivables 100% 69.472 100% 62.155 100% 64.260

Foreign exchange risk and interest rate risk

The Company operates on the domestic market and, consequently, is not exposed to fluctuations in foreign

exchange rates.

The Company has no significant financial payables or receivables. Available liquidity has been deposited in

current accounts.

Taking into account the company's financial position, the interest rate risk is not considered significant.

The Company does not use any financial instruments to hedge the risk of interest rate or foreign exchange rate

fluctuation.

Classes of financial instruments

In order to provide full disclosure as required by IFRS 7, the following table show a break-down of the types of


Page 52

financial instruments recorded in the Financial Statements, with an indication of the measurement criteria applied

and, in the case of financial instruments measured at their fair value, of the recognition (profit or loss or equity).

When applicable, the last two columns of the table lists the fair value of the financial instrument and the amount

recognized in the relevant reserve.

The table below details the amounts at December 31, 2012. Please note that the same Classes of financial

instruments were included in 2011 and 2010 Financial Statements.

(Amounts in thousands of Euro) Measurement criteria for financial instruments Financial

instruments at fair

value through

Financial

instruments

at amortized

cost

Carrying

value at

31.12.2012

Fair value at

31.12.2012

Profit or loss Equity

Class of financial instruments

(1) (2) (3)

Assets Cash and cash equivalents 10.500 10.500 10.500

Investments available for sale 262 262 n.d

Financial assets 89 89 89

Trade receivables 68.975 68.975 68.975

Liabilities Trade payables 62.581 62.581 62.581

Bonds 2.000 2.000 2.000(*)

(1) Financial assets and liabilities measured at fair value with changes recognized in profit or loss

(1) Financial assets and liabilities measured at fair value with gain or loss recognized in equity

(3) Loans & receivables and financial liabilities measured at amortized cost

(*) The carrying amount approximate the fair value

The following tables include the net financial income and expenses, at December 31, 2012, at December 31,

2011, at December 31, 2010 relating to financial assets and liabilities broken down into the categories provided

for by IAS 39, showing for each item the type of expenses and income.

December 31, 2010

(Amounts in thousands of

Euro)

From

interests

From

changes in

Fair value

From Write -

down at fair

value

From

equity

reserve

From other

income

/(expenses)

Net profit

/(loss)

Assets

Cash and cash equivalents (13)

(13) Financial assets

Trade receivables 1

1 Liabilities

Trade payables (1)

(1)

Finance lease payables (21)

(21) Bonds (33) (33)

Total categories IAS 39 (67) 0 0 0 0 (67)


Page 53

December 31, 2011


Euro)

From

interests

From

changes in

Fair value

From Write -

down at fair

value

From

equity

reserve

From other

income

/(expenses)

Net profit

/(loss)

Assets


(42)

Financial assets

0 Trade receivables 19

19

Liabilities

0 Trade payables (1)

(1)

Finance lease payables (11)

(11) Bonds (37) (37)

Total categories IAS 39 (72) 0 0 0 0 (72)

December 31, 2012


Euro)

From

interests

From

changes in

Fair value

From Write -

down at fair

value

From

equity

reserve

From other

income

/(expenses)

Net profit

/(loss)

Assets


(66)

Financial assets

0 Trade receivables 303

303

Liabilities

0 Trade payables (11)

(11)


0 Bonds (29) (29)

Total categories IAS 39 197 0 0 0 0 197

30. SIGNIFICANT POST BALANCE SHEET EVENTS

No significant events occurred after the reporting period that can materially influence business operation or that

might impact the Company’s equity, financial position, results of operations and cash flow.

Milan, May 1 5 , 2014

Domenico Catanese

Chairman of the Board of Directors

Managing Director

Documents

Financial Statements at December 31, 2012, December 31, 2011 …€¦ · Chairman Domenico Catanese Directors Ernesto Zucca Raffaele Allocca The Board of Directors, appointed by the