CPL's financial statements 2013

CPL CONCORDIA’s

Financial Statements and consolidated 2013

Contents

CPL CONCORDIA corporate bodies pag. 6 pag. 10 pag. 13

Governance Control bodies CPL CONCORDIA organisation

report on operation pag. 18 pag. 26

Minutes of the ordinary Members’ Meeting Standardised management report to the CPL CONCORDIA financial statements and Consolidated financial statements

consolidated balance sheet 2013 pag. 84 Consolidated balance sheet 2013 pag. 90 Addendum pag. 137 Certification report

balance sheet 2013 pag. 142 Balance Sheet 2013 pag. 137 Certification report pag. 180 UNI EN ISO 9001:2008 Certification

CHAPTER 1

CPL CONCORDIA corporate bodies

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

Members' Meeting

All the cooperative members have the right to attend the Members’ Meeting (ordinary and extraordinary), as well as the financing and honorary members when foreseen by the resolution to convene the meeting. The Members’ Meeting is CPL’s highest governing body and, as foreseen by the cooperative’s bylaws, every year it carries out the following tasks: approval of the financial statements, election for the partial replacement of the members of the board of directors; furthermore it appoints the other corporate offices, adopts the bylaws and internal operational regulations, decides on the establishment of funds for the development of mutuality activities and on any matter submitted to the Board of Directors.

The Members’ Meeting may draft specific recommendations or ideas for the improvement of operations to be submitted to the Board of Directors. The activities of the Members’ Meeting are complemented by those of the Special Meeting of the Cooperative Shareholders, whose common representative may attend the Members' Meeting to verify the implementation of the development plans, thus safeguarding their interests.

Board of Directors

CPL is administered by the Board of Directors that represents the Members’ Meeting; an ordinary Members’ Meeting elects the Board of Directors and establishes its remunerations and responsibilities. The Board of Directors is made up of 13 members and every year it appoints the Chairman and Vice- Chairman from its

6

members; it also has the right to appoint one or more managing directors, establishing their powers.

To guarantee transparency and to share its activities with the cooperative world, two territorial representatives of Legacoop and Lega Nazionale delle Coperative have a permanent invitation to attend the meetings of the Board of Directors, without being entitled to vote; in this way CPL CONCORDIA has a direct interaction with the surrounding cooperative context. The Board of Directors has the right to perform any activities necessary to achieve the Cooperative’s purpose, including: execution of the resolutions of the Members’ Meeting, drafting of preliminary and final financial statements, preparation of annual and multi-year plans, deliberation on admission and revocation of Members, appointment of technical managers, area managers, sector managers, specialised division managers and service managers and definition of their powers and duties. As part of its functions, the Board of Directors annually the Cooperative’s Social Responsibility strategies and approves the social/sustainability reports; the adoption of the Organisation Model 231 and the presence of the Supervisory Body guarantee that there are no conflicts of interest at CPL. Assessment procedures and incentive based remuneration for the achievement of sustainability performances (social and environmental) are not currently foreseen for the members of the Board of Directors. The only assessment process adopted concerns the economic aspect and concerns the assessment of the variation between the performance achieved and the budget objectives.

All the members of the Board of Directors are employees of the cooperative.

CPL CONCORDIA corporate bodie s

Updated as of 21/06/2014

Daniele Spaggiari

Enrico Benetti

Arturo Caracciolo

Elena Galeotti

Mario Guarnieri

Valentina Monti

Fabio Bulgarelli

Alfredo Lupi

Emanuele Malavasi

Lorenzo Moscetta

Carlo Porta

Nicola Verrini

Roberto Casari

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

1

chap.

Members of the Board of Directors Name

Functions and tasks

Role

1. Roberto Casari

Chairman of the BoD - not executive Chairman

2. Mario Guarnieri

Vice-Chairman of the BoD - executive Controlling and Auditing Manager

3. Daniele Spaggiari

Managing Director - executive

Environment and Safety Service Manager & Building Sector Manager

4. Enrico Benetti

Director - executive

Project Manager

5. Arturo Caracciolo

Director - executive

Area Manager

6. Elena Galeotti

Director - executive

Legal

7. Valentina Monti

Director - executive

Cogeneration and biogas Service Coordinator - Triveneto Region

8. Fabio Bulgarelli

Director - executive

Project Manager

9. Alfredo Lupi

Director - executive

Area Manager

10. Emanuele Malavasi Director - executive

Contact Centre and Safety Systems Manager

11. Lorenzo Moscetta

Director - executive

Area Manager

12. Carlo Porta

Director - executive

Sector Manager

13. Nicola Verrini

Director - executive

Area Sales Manager

CPL CONCORDIA's financial statements and consolidated financial statements

7

8

CPL CONCORDIA corporate bodie s

1

chap.

Executive Committee The Executive Committee is the heart of CPL's management and is responsible for the cooperative's entire strategic and operational activity. Since 1 January 2013, the Committee has been extended to 8 members with a high level of technical and specialised expertise, which represent the cooperative's "technostructure"; the Committee carries out executive tasks in specific areas.

The extension of the Committee is the result of a generational turnover that has led to the gradual renewal

Roberto Casari

of CPL’s managers with the arrival of younger people; at the same time, this has met the need to introduce specific skills to tackle the increasing complexity of the market.

The members of the committee are assessed on an annual basis, however their incentive based remuneration is only linked to the economic performance and it is not expressly linked to the social and environmental performances achieved by the organisation.

Mario Guarnieri

Fabrizio Tondelli

Claudio Bonettini

Andrea Ambrogi

Pierluigi Capelli

Massimo Continati

Jenny Padula

Updated as of 21/06/2014

Members of the Executive Commitee 1. Roberto Casari

Chairman of the Board of Directors

2. Mario Guarnieri

Vice-Chairman of the Board of Directors

3. Fabrizio Tondelli

Executive General Manager - Industrial

4. Claudio Bonettini

Executive General Manager - Italy

5. Andrea Ambrogi

Sales Director - Italy

6. Pierluigi Capelli

Financial Director

7. Massimo Continati

Administration and IT Systems Director

8. Jenny Padula

Human Resources Director

All the members of the Executive Committee are independent, i.e. they are not financially involved in the or-

ganisation and do not have other potential benefits that may lead to conflicts of interest.

CPL CONCORDIA's financial statements and consolidated financial statements

9

Control bodies Board of Auditors

The Board of Auditors ensures the observance of the law, bylaws, principles of proper administration and in particular it controls the adequacy of the organisational, administrative and accounting structure of the company and its actual operation.

The Board of Auditors, by means of its Chairman, refers to the Members’ Meeting called for the approval of the financial statements, the criteria adopted in company management to achieve the statutory purposes.

The Board is made up of three statutory members and two alternate members appointed by the Members’ Meeting, which also appoints the Chairman of the Board of Auditors.

Members of the Board of Auditors Name Role Carlo Alberto Pelliciardi Chairman Domenico Livio Trombone Alternate Auditor Mauro Casari

Alternate Auditor Cristina Clò Alternate Auditor Luca Ori

Alternate Auditor Updated as of 21/06/2014

Supervisory Body

The Supervisory Body is foreseen by Law Decree no.

231 of 8/6/2001 (of which the Ethics Code is an integral part) and is responsible for supervising the effectiveness and assessing the adequacy of the organisation, management and control model.

10

The organisation, management and control model has been: applied to the whole business, by monitoring the risks of all cooperative areas; disseminated to all CPL CONCORDIA employees.

The CPL Supervisory Body: supervises the application of the model in relation to the different types of offences foreseen by the Decree; verifies the effectiveness of the model and its capacity to prevent the offences foreseen by the Decree from being committed; identifies and proposes to the competent bodies (Board of Directors and Board of Auditors) updates and changes to the Model, to take into account the regulatory changes and the changes in the company’s situation.

In 2013 no infringement occurred as regards corruption therefore no measures were adopted in this sense.

Members of the Supervisory Body Name Role Maurizio Rinaldi Chairman Anna Maria Pelliconi Member Luca Costa Member Updated as of 21/06/2014

CPL CONCORDIA corporate bodie s

Auditing firm

Auditing, which is the main control activity carried out on the Cooperative’s accounts, is performed by the appointed external auditing firms. Auditing is obligatory for the Cooperative because the latter issues shares for the general public (cooperative shares).

The aim of the activities of the Auditing Firm is to comply with the requirements of article 15 of Law 59 of 31 January 1992 (carried out by Hermes S.p.A.) and those of article 2409 ter of the Italian Civil Code and of article 14 of Legislative Decree no. 39 of 27/01/2010 (carried out by PricewaterhouseCoopers S.p.A).

Specifically the auditing firm carries out the following:

1

chap.

regularly checks proper bookkeeping and true and fair view of the affairs in the company accounts; verifies whether the financial statements of CPL CONCORDIA and the consolidated financial statements correspond to the accounting records and whether the accounting principles issued by the Italian Accounting Standards Body and by the International Accounting Standards for the consolidated financial statements (IA S-IFRS) are correctly and continuously applied; expresses a written opinion on CPL CONCORDIA ’s financial statements and on the consolidated financial statements.

The certification letter issued by the Auditing firm is a fundamental element to participate in tenders and to obtain loans and financing.

CPL CONCORDIA's financial statements and consolidated financial statements

11

12

CPL CONCORDIA corporate bodie s

1

chap.

CPL CONCORDIA Organisation updated as of 21/06/14

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

A7 A3 A1

A8

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

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

A5

A2

Territorial areas ABROAD E1 • Greece E2 • Romania E3 • Algeria E4 • Tunisia E5 • Poland E6 • SEA (South East Asia) and Middle East

A9

A6

A4

AS A6

A6

Specialised divisions S1 • Construction of Gas, Water, Electrical Power Grids S2 • Construction of Energy Systems and District Heating Networks S3 • Grid maintenance S4 • Heat management & Global Service S5 • Public Lighting S6 • Cogeneration S7 • Biogas S8 • After Sales Cogeneration S9 • Photovoltaic and Renewable Sources

CPL CONCORDIA's financial statements and consolidated financial statements

13

Corporate CPL CONCORDIA Soc. Coop.

Executive General Management Italy*

Quality

Area Managers Italy

Executive General Management Industrial*

Sales Management Italy*

Area Sales Managers Italy

Technical Service Estimates

Sector Managers Production Services

CPL ITALY

Board of Directors Vice Chairman*

Members and R.S.I.

Supervisory Body

Legal Affairs

Chairman*

Tenders Controlling and Auditing Safety and Environment Communication

Sales Management Industrial*

Management Board and IT Systems*

F & A*

HR Management*

Wages

Administration

Recruiting and training

IT System

CPL INDUSTRIAL

Parent Company Treasury Treasury planning

Credit Management Insurances, bank guarantees, leasing

Uplated as of 21/06/2014

* Members of the Executive Committee

chap.

CHAPTER 2 report on operation

CPL CONCORDIA's financial statements and consolidated financial statements

Minutes of the ordinary members’ meeting Minutes of inquorate members' meeting

On this day, Friday twentieth of June two thousand and fourteen, at 9:00 a.m., in the Sala Bruno Bighi of the registered office in Via A. Grandi no. 39, Concordia sulla Secchia, Italy, the Ordinary Members’ Meeting was held, following regular convocation notice published according to the corporate bylaws in the Official Gazette of the Italian Republic no. 65 of 03/06/2014, to discuss and decide on the following: AGENDA 1) Proposal of refund allocation, according to art. 62 of the bylaws; 2) Financial statements as of 31 December 2013: reports and decisions; 3) Partial renewal of the board of directors; 4) Appointment of the accounts auditor (art. 15 Law 59/1992); 5) Appointment of the auditing firm for the statutory audit of the financial statements (art. 14 Legislative Decree

Minutes of the ordinary members’ meeting 21st june 2014

On this day, Saturday twenty-first of June two thousand and fourteen, the Ordinary Members’ Meeting of the Company CPL CONCORDIA Soc. Coop., duly convened by notice published according to the corporate bylaws in the Official Gazette of the Italian Republic no. 65 of 03/06/2014, met on second call at 9:00 a.m. at the registered office in Via A. Grandi no. 39, Concordia sulla Secchia, Italy, to discuss and decide on the following: AGENDA 1) Proposal of refund allocation, according to art. 62 of the bylaws; 2) Financial statements as of 31 December 2013: reports and decisions; 3) Partial renewal of the Board of directors; 4) Appointment of the accounts auditor (art. 15 LAW 59/1992);

18

39/2010 and art. 2490-bis et sq. of the Italian Civil Code); 6) Any other business.

Roberto Casari, chairman of the board of directors was present at the registered office in Concordia sulla Secchia (MO), and he called upon Mr. Fabio Sereni – representative of the company’s legal office - to assist him in drafting these minutes.

The chairman, having acknowledged that no other member, apart from himself and Fabio Sereni, was present at the registered office, acknowledged that, according to articles 45 and 46 of the bylaws in force, the members’ meeting was not legally constituted.

He therefore postponed the meeting to be held on second call, convened with the same notice, on 21 June 2014 at 9:00 a.m.

The secretary (Fabio Sereni)

The chairman (Roberto Casari)

5) Appointment of the auditing firm for the statutory audit of the financial statements (art. 14 Legislative Decree 39/2010 and art. 2490-bis et sq. of the Italian Civil Code); 6) Any other business.

The meeting, following the proposal of the chairman of the meeting, appointed with favourable and unanimous vote of those present, the member Fabio Sereni as Secretary, who thanked and accepted. The chairman of the meeting, after informing the participants that: - on the date, cooperative members registered in the members’ register totalled 732; - on the date, the investor members registered in the members’ register totalled 72; having verified the identity and the legitimacy of the participants, communicated that there were no. 684 members present at the meeting, legitimated by their registration in the members’ register, including coo-

Report on oper ation

perative members and investor members, personally present or represented by means of proxy; the participants are listed in the annex sub A. In addition the following people were present at the meeting as guests: the vice minister of infrastructures and transport MP Riccardo Nencini, the Emilia Romagna regional councillor for production activities MP Luciano Vecchi, the Argentinean minister of energy of the province of Entre Rios Mr. Raul Arroyo, the chairman of Lega Coop Modena Mr. Lauro Lugli, the chairman of the National Associations of Labour and Production Cooperatives and chairman of CMB in Carpi Mr. Carlo Zini, the Mayor of Concordia sulla Secchia Mr. Prandini and the Mayor of San Possidonio Mr. Rudi Accorsi.

The chairman of the meeting declared the meeting duly formed and went on to deal with the matters on the agenda.

FIRST ITEM

The chairman of the meeting, Mr. Roberto Casari, welcomed the Members and thanked them for being present at the meeting; he then handed over to the Deputy chairman Mr. Mario Guarnieri who remembered Mr. Severo Barotto the historical deputy chairman and human resources director at CPL who passed away last February.

At this point, the chairman of the meeting gave the floor to the administration and information systems director to discuss the item on the agenda concerning the proposal for the allocation of the refund according to art. 62 of the bylaws. Massimo Continati, administration and information systems director, informed those present that in order to continue the process of capitalization of the cooperative, as well as to retain and reward the contribution of its members, the board of directors proposed, by virtue of the good results of the financial year, to allocate to each cooperative member, pursuant to art. 3 paragraph 2, letter b) of Law 142 of 3 April 2001 and subsequent amendments, by way of refund, an amount determined in relation to the quantity and quality of the work performed during the year 2012. The amount proposed by the board of directors to the meeting, to be divided between the members on the basis of the above criteria amounts to Euro 1,500,000; this amount is already posted under item B9 of the profit and loss account as part of personnel costs as supplement of remuneration paid to working members in 2012, 50% to be allocated to the free increase of the capital subscribed and paid and the remaining 50% to be allocated as supplement to the remuneration due to the cooperative members; both these allocations are foreseen by article 62 of the bylaws and pursuant to and by effect of art. 6, second paragraph of Decree Law no. 63/02, converted into Law No. 112/02.

For the purpose of the allocation of the refund, the amount was accurately verified in relation to the so-called "operating surplus"; the cooperative’s overall operating surplus, equal to Euro 3,516,685, multiplied, for the purpose of the refund, by the percentage of prevalence equal to 61.89%, means that the operating surplus from the members’ business was of Euro 2,176,308, which is

2

chap.

higher than the refund of Euro 1,500,000 posted under item "B9" of the profit and loss account.

After the presentation, Roberto Casari, chairman of the meeting submitted for approval the proposal for refund as presented by Mr. Massimo Continati, the administration and information systems director, and already included in the financial statements submitted for approval in section 2 below.

The members’ meeting after careful revision and counter-checking, unanimously

Decided

To divide between the members, on the basis of the above criteria, the amount of Euro 1,500,000; this amount is already posted under item B9 of the profit and loss account as part of personnel costs as supplement of remuneration paid to working members in 2013, 50% to be allocated to the free increase of the capital subscribed and paid and the remaining 50% to be allocated as supplement to the remuneration due to the cooperative members; both these allocations are foreseen by article 62 of the bylaws and pursuant to and by effect of art. 6, second paragraph of Decree Law no. 63/02, converted into Law No. 112/02.

SECOND ITEM

As regards this agenda item, the chairman of the meeting, Mr. Guarnieri took the floor and continued the meeting by showing a video to explain to all present the main activities carried out by CPL CONCORDIA and the Group and the economic and financial results achieved in 2013.

At the end of the video, the chairman of the meeting gave the floor to Mr. Massimo Continati, the administration and information systems director, for a detailed presentation of the financial statements. Mr. Continati illustrated the main figures of the financial statements as of 31/12/2013 (amounts expressed in Euro): BALANCE SHEET

EURO

Assets

539,626,999

Liabilities

395,580,840

Net worth (including the profit for the reporting year)

144,046,159

Memorandum account, pledges and risks

223,361,650

PROFIT AND LOSS ACCOUNT Reported according to the “value added” criteria

EURO

Value of production

335,769,534

Costs of production

(255,971,639)

Labour cost

(61,083,640)

Gross operating margin (GOM)

18,714,255

Depreciations and devaluations

(15,351,979)

Operating result Financial management Current result Income from holdings

3,362,276 (1,336,619) 2,025,657 6,206,073

Adjustments of financial assets

(3,112,666)

Refund to members

(1,500,000)

Extraordinary operations

PROFITS BEFORE TAX Taxes

3,018,004

6,637,068 (1,602,380)

PROFIT FOR REPORTING YEAR

5,034,688

CPL CONCORDIA's financial statements and consolidated financial statements

19

Following the brief presentation of the main figures of the Financial Statements, Mr. Continati illustrated the main figures of the consolidated financial statements of the CPL CONCORDIA Group as of 31/12/2013 (amounts expressed in Euro): BALANCE SHEET ASSETS

EURO

Receivables from members for payments still due

1,664,984

Fixed assets

219,324,202

Current assets

419,851,707

Accrued income and prepaid expenses

Total Assets

5,566,903

646,407,796 LIABILITIES

Group net worth

EURO 137,091,863

Minority capital and reserves Total net worth

23,290,295 160,382,158

Funds for risks and charges

12,630,703

SEVERANCE PAY Payables

5,118,017 463,102,698

Accrued expenses and deferred income

Total Liabilities

5,174,220

646,407,796

Memorandum accounts amount to Euro 238,721,089.

PROFIT AND LOSS ACCOUNT Reported according to the “value added” criteria Value of production

415,366,056

Costs of production

(304,829,280)

Labour cost

Gross operating margin (GOM) Depreciations and devaluations

(67,790,287)

42,746,489 (24,445,533)

Operating result

18,300,956

Financial management

(3,267,559)

Current result

15,033,397

Income from holdings

1,579,307

Adjustments of financial assets

(1,807,600)

Refund to members

(1,500,000)

Extraordinary operations

387,878

PROFITS BEFORE TAX

13,692,982

Taxes

(6,447,018)

PROFIT FOR REPORTING YEAR (PROFIT) LOSS FOR REPORTINGYEAR ATTRIBUTABLETO MINORITIES PROFIT (LOSS) ATTRIBUTABLE TO THE GROUP

7,245,965 (2,762,947) 4,483,018

At this point Mr. Continati, after the extensive presentation of the data contained in the video and the brief summary of the figures of the company and consolidated financial statements for the year ended 31.12.2013, underlined the representative items of the data submitted to the members’ meeting.

Mr. Continati underlined that such data must be contextualized to a very difficult macroeconomic situation, in which the cooperative and the whole group reacted positively producing good results also in 2013.

The decrease in gross operating margin of the parent company (which dropped from 8.14% in 2012 to 5.57% in 2013) compared to the last financial years can be attributed to three key factors: Crisis of international and national markets; ìSpending review; Transfer of certain activities from the cooperative

20

to the group; La crisi internazionale, che sul mercato nazionale è stata The international crisis, which has taken a heavy toll on the domestic market, has led to a decline in demand for products and services and the opportunities that have emerged in recent years offer lower profitability than in the past and require the immediate availability of liquidity.

Contracts with public bodies have long been a significant part of the cooperative’s order portfolio. The so-called spending review, that is the request for higher quality services at lower costs, implemented by public bodies has significantly reduced the operating margins.

Finally, from 2009 up to today, the cooperative has started a process to transfer certain activities from the parent company to companies part of the group with the aim of having better access to credit, to finance investments made in specific sectors such as gas distribution. On this matter, Mr. Continati, recalled the important operation concluded in 2013 with the establishment of the sub-holding EGN S.r.l., the company to which all the shares of the following companies were transferred: CPL distribuzione S.r.l., Ischia Gas S.r.l., Marigliano Gas S.r.l., Fontenergia S.r.l. e CPL Filiala Cluj Romania S.r.l. Following the transfer, the cooperative transferred a minority share of the company Egn S.r.l. to two important national investment funds. The aim of this operation was to differentiate the group’s financing sources by including institutional investors; the operation brought about Euro 20 million into the company’s funds. This process is continuing in 2014 with the creation of a single production centre for the marketing and sale of meters and correctors manufactured according to the principles of the AEEG Resolution 155/2008. This centre is the result of a joint venture between CPL CONCORDIA, Coopbilanciai in Campogalliano and Sacofgas S.p.a. The data to be analysed with greater attention is therefore that of the group's consolidated statement, rather than that of the cooperative, which however will always be the point of reference for the entire group.

In this respect, it must noted that the decrease in the parent company’s gross operating margin compared to previous years, was recovered in the consolidated statements, with a value of 10.29% compared to 11.56% in the previous financial year.

This decrease in the parent company’s gross operating margin was compensated by the income from equity investments largely composed of dividends received during the financial year from the management of subsidiaries and affiliated companies, which in 2013 amounted to Euro 6,206,073.

The parent company’s financial ratios, despite suffering the effects of the reduction of the gross operating margin, remained within values of absolute balance. The ratio between net financial position and net worth was 0.54, while the ratio between debt and gross operating margin was 4.02. Both of these ratios, often included in the covenants of the loans obtained by the Cooperative, were positive. The ratios of the consolidated statement

Report on oper ation

remained absolutely positive, with a ratio between net financial position and net worth of 0.98, well below the optimal ratio of 1.5, and a ratio between debt and gross operating margin of 3.02, well below the optimal ratio of 4.5. Mr. Continati concluded his speech underlining that, with the exception of the refund, the final figures were absolutely in line with the forecasts and interim financial statements; as a matter of fact, the ratios were even better, in particular as regards the consolidated statements. At this point, the chairman of the meeting gave the floor to the chairman of the board of directors, Roberto Casari, for his speech.

The chairman, Mr. Casari, thanked the members for being present and then underlined that CPL closed the financial year as of 31/12/2013 with a net profit of over Euro 5 million and a production value of Euro 335,769,534. Mr. Casari also pointed out that Italy is facing probably one of the worst crisis since World War II, with unemployment which has reached an unacceptable level of 13.6%, and the GDP has fallen -2.7%. Despite this, CPL and CPL Group closed the 2013 financial year with significant financial and economic values. The occupational trend is constantly growing: in 2009 the cooperative had 1124 employees and in 2013 it had 1350 employees of an average age of 39.

Roberto Casari, chairman of the meeting, reminded those present that the strength of the company lies in the search for new energy saving and efficiency solutions, which are then also marketed abroad. The company Meter Italia, born from the union of CPL CONCORDIA, Coop Bilanciai and Sacofgas 1927 SpA for the production of gas meters and correctors, has excellent development prospects considering the major orders already acquired, for jobs totalling over Euro 14 million: the orders are for the supply of 50,000 smart domestic meters and 30,000 smart industrial meters. The ESCO energy certification helped to confirm CPL in the tender of the ATER in Rome, a five-year order worth Euro 80 million; in the renewable sources sector, the company has developed Synfon, a high efficiency pyrogasification system that uses syngas from wood chips.

As regards international markets, the subsidiary CPL DG (CPL Distributed Generation Group, Inc.) was established in New York and the brand “NY Generator” was created with an American partner, to develop the offer and services of distributed energy generation, cogeneration and trigeneration, which are rapidly expanding in the North American market. The establishment of cogeneration plants in Poland and Thailand is also underway, in the second case the plant is in a Honda Automobile factory. In North Africa the "Oil & Gas and Power Service" sector which deals with the supply and maintenance of hydraulic gas turbines, is strengthening its presence, while the companies AIPower and TIPower

2

chap.

in Maghreb have entered into important contracts for technological gas supplies from wellheads to measurement and reduction systems.

As regards public lighting, following the acquisition of important tenders called by the cities of Ravenna, San Benedetto del Tronto and Massafra, today CPL can boast the management of public lighting systems in over 30 Italian cities with a total of 150,000 lighting points.

As regards the construction and management of gas networks, once the undersea pipeline of the island of Procida is completed, the land networks will be developed on the island and in the towns on the island of Ischia that are served by the other gas pipeline developed by CPL. Coopgas, the group’s main sales company, supplied 82 million cubic meters of gas in 2013 and about 2 GWh of electricity, and aims to extend the offer to include landline telephone and internet services under the brand COOPTEL. There are also prospects in the LNG - Liquid Natural Gas sector with the company Polargas, owner of the means of transport of liquid methane, which will contribute to lower production costs for energy-intensive companies and hospitals in areas not served by natural gas pipeline networks. A first energy production system running on LNG is already under construction in Sardinia to supply a major dairy industry.

At the end of the chairman’s speech, Mr. Pierluigi Capelli, financial director of CPL CONCORDIA, took the floor and confirmed that the trust granted by the credit system to CPL was confirmed by financing recently obtained from a pool of banks for Euro 37.5 million and factoring lines with a ceiling of over Euro 40 million to optimise the management of the current assets.

The floor was then taken by Raoul Arroyo, Argentinean minister for energy of the province of Entre Rios, Luciano Vecchi, Emilia Romagna regional councillor for production activities and the MP Riccardo Nencini, vice minister of infrastructures and transport.

At this point, Mr. Continati resumed, reading the report written pursuant to article 15 of law 59/92 on the Financial Statements as of 31. 12. 2013 by the company Hermes S. p. a. and reading, upon invitation of the chairman of the board of auditors, Mr. Carlo Alberto Pelliciardi, the report of the board of auditors on the financial statements as of 31. 12. 2013 written according to article 2429 paragraph 2 of the Italian Civil Code.

Upon conclusion of the speeches, the chairman of the meeting, Mr. Roberto Casari, on the basis of the results obtained and after having heard the reasoned opinion of the special meeting of the cooperative shareholders, proposed to the members’ meeting the approval of the implementation of the multi-year investment plan for the year 2013 and the allocation of the net profit for the year of Euro 5,034,688 = as follows: CPL CONCORDIA's financial statements and consolidated financial statements

21

per Euro 312,746.88 to cooperative shareholders (subscribers) by way of dividend (period 01/01/2013 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 51.64 (code IT00011295960) as of 31/12/2013, payable by 30 June 2014; per Euro 10,007.77 to cooperative shareholders (stock option) by way of dividend (period 01/01/2013 - 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 51.64 (code IT00011295960) as of 31.12.2013, payable by 30 June 2014; per Euro 140,000.00 to cooperative shareholders (subscribers) by way of dividend (period 01/01/2013 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 500.00 (code IT0003794788) as of 31/12/2013, payable by 30 June 2014; per Euro 138,600.00 to cooperative Shareholders (subscribers) by way of dividend (period 01/01/2013 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 500,00 (code IT0004431083) as of 31/12/2013, payable by 30 June 2014; per Euro 587,458.60 as dividend to cooperative members and investor members at the gross rate of 5.00% compared to the share capital actually paid, payable by 30 June 2014; per Euro 129,240.85 1.1% to the free capital increase (under Law 59/92) of the share capital actually paid, that can be capitalised; per Euro 151,040.64 3.00% to the mutuality funds for the promotion and development of cooperatives pursuant to art. 11 of Law 59 of 31/01/1992; per Euro 1,510,406.40 30% to the indivisible legal reserve fund, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/02/77; per Euro 2,055,186.86 to the ordinary reserve fund, indivisible between the members during the life of the cooperative and upon its dissolution, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/12/77.

The chairman of the meeting, Roberto Casari, put the following to the open vote by show of hands: a) the financial statements as of 31/12/2013 and the addendum which forms an integral part; b) the management report on the financial statements as of 31/12/2013, including the detailed description of the total amount of the refund, already posted in the profit and loss account, as well as the rules for allocation to cooperative members; c) Report of the board of auditors on the financial statements as of 31/12/2013; d) the allocation of the profit for the reporting year as proposed.

The above were approved with unanimous vote by show of hands, after having thoroughly revised and counter-checked all data.

THIRD ITEM

With regard to the third item on the agenda, the chairman informed the members present of the need to pro-

22

ceed to the partial renewal of the offices. In particular, he specified that for 5 directors the term of office expired with this meeting; taking into account the provisions of the electoral rules, as approved in the meeting held on 23 April 2010, the chairman proposed to have 13 (thirteen) members of the Board of directors, with the need therefore to appoint 5 new directors.

The chairman of the meeting, Mr. Roberto Casari then gave the floor to the coordinator of the electoral commission, Alessandra Grisanti, who thanked for the trust and thanked colleagues of the electoral commission, and then presented the work of the commission, explaining the method of voting for the members as provided by the bylaws and by the electoral rules just mentioned by the chairman. First of all, the coordinator of the electoral commission stated that of the directors to be elected in this election, 3 are of the headquarters section, while the remaining 2 directors to be elected are of the external offices section. The electoral coordinator then presented the self-nominations received for the renewal of the board of directors and the nominations of candidates independently assessed by the electoral commission); Ms. Grisanti then read out the complete list of candidates: For the Concordia area For external Emilia Romagna: offices: Enea Basaglia Enrico Benetti Daniele Diacci Diego Ganzerla Daniele Spaggiari Nicola Verrini

Arturo Caracciolo Guido Lancia Valentina Monti Guido Zardi

At this point the chairman of the meeting called on the participants at the meeting to vote the list of candidates proposed by the electoral commission.

The participants at the meeting approved the list of candidates with unanimous vote by show of hands, after having thoroughly revised and counter-checked the information.

Then, the coordinator of the electoral commission, after having heard the members, read out the list of candidates in order of decreasing preference expressed by the members entitled to vote: Enrico Benetti Daniele Spaggiari Valentina Monti (E) Arturo Caracciolo (E) Nicola Verrini

Enea Basaglia Guido Zardi (E) Diego Ganzerla Daniele Diacci Giulio Lancia (E)

The chairman put to the vote the list of candidates, as drafted by the electoral commission.

The participants at the meeting unanimously determined as thirteen the total number of members of the board of directors and approved the list of candidates for

Report on oper ation

the partial renewal of the board of directors.

The chairman of the meeting, therefore, declared the election of the following members as directors: Enrico Benetti Daniele Spaggiari Valentina Monti (E)

Nicola Verrini Arturo Caracciolo (E)

who were present at the meeting and declared to accept the office assigned to them.

The chairman pointed out that the board of directors of CPL CONCORDIA Soc. Coop., following a partial replacement following today’s meeting shall be as follows: Enrico Benetti Fabio Bulgarelli Arturo Caracciolo Roberto Casari Elena Galeotti Mario Guarnieri Alfredo Lupi

FOURTH ITEM

Nicola Verrini Daniele Spaggiari Carlo Porta Lorenzo Moscetta Valentina Monti Emanuele Malavasi

As regards this agenda item, the chairman of the board of auditors, Mr. Carlo Alberto Pelliciardi, took the floor, and described to the members the proposal of the board of auditors for the assignment of the statutory audit of the accounts of the company and consolidated financial statements for the years 2014, 2015 and 2016 pursuant to article 13 of Legislative Decree no. 39 of 27 January 2010.

The proposal was as follows: The approval of the financial statements as of 31 December 2013 marked the end of the previous three-year auditing term assigned to the auditing firm Pricewaterhousecoopers S.p.A.; the latter, having reached the maximum limit of two terms, cannot reapply for the next three-year period 2014 – 2016.

The meeting was convened not only to approve the financial statements at 31 December 2013, but also to appoint a company to carry out the statutory audit of the accounts for the financial years 2014, 2015 and 2016 and to approve the relevant remuneration, following the justified proposal of the board of auditors.

With particular reference to the assignment of the statutory audit of the accounts, on which the members were required to decide, the board of auditors underlined that article 13 of Legislative Decree n. 39/2010 foresees (in paragraphs 1 and 2): Art. 13 (Appointment, revocation and dismissal from appointments, termination of the contract) 1. Except as provided for in article 2328, second paragraph, number 11) of the Civil Code, the shareholders’ meeting, following a reasoned proposal of the supervisory body, assigns the task of the statutory audit and determines the amount payable to the statutory auditor or the statutory auditing company for the entire term of office and any criteria for the adjustment of the

2

chap.

said amount during the appointment.

2. The appointment has a term of three financial years and expires on the date of the shareholders' meeting called to approve the financial statements for the third year of office”.

Within this context the board of auditors communicated that it had examined the proposals from the following the firms willing to accept the appointment of statutory auditors: Hermes S.p.A. Deloitte & Touche S.p.A. Reconta Ernst & Young S.p.A. The board of directors carefully examined the proposal and requested the necessary additional information from the auditing firms.

Considering the results of the competition process and the technical-economic assessments to select the auditing firm to which to assign the new appointment, taking into account the comparative analysis of the offers received, in particular with reference to: a) competencies and specific auditing experience in the sector in questions; b) the suitability of the technical-professional structure in relation to the requirements related to the size and complexity of the company and of the CPL CONCORDIA Soc. Coop Group; c) the independence and autonomy of judgement with respect to the company and the CPL CONCORDIA Soc. Coop Group; d) the coherence of the remuneration required in relation to the time and levels of professionalism considered; and having ascertained that following the analysis of the results the best offer was the one presented by the auditing firm Hermes S.p.A., and having also noted that: the auditing firm Hermes S.p.A. is registered with the register of statutory auditors under no. 119641, with ministerial decree dated 03/11/2000 published in the Official Gazette no. 90 of 23.11.2000, and it has an agreement with Legacoop; the auditing plan described in the proposal is suitable and complete in relation to the size and complexity of the assignment; the aforementioned proposal contains the description of the nature of the appointment, with the activities to be carried out and the methods adopted in particular with reference to the financial years 2014, 2015 and 2016: (i) the audit of the company and consolidated financial statements and the expression, in a special report, of an opinion on the financial statements of the Company CPL Concordia Soc. Coop and on the consolidated financial statements of the CPL Concordia Group, pursuant to art. 14 of Legislative Decree 39/2010, including activities to verify the consistency of the management report with the company and consolidated financial statements as required by art. 14, paragraph 2, of Legislative

CPL CONCORDIA's financial statements and consolidated financial statements

23

Decree 39/2010; (ii) periodic checks to ensure proper bookkeeping and true and fair view of the affairs in the company accounts according to art. 14, paragraph 1, of legislative Decree 39/2010; the estimate of the hours proposed by the auditing firm Hermes S.p.A to carry out the audit of financial statements and other related auditing activities and the allocation between the professional levels employed is in line with the size and complexity of the assignment; the total annual fees required by the auditing firm Hermes S.p.A - amounting to Euro 10,000.00, plus expenses incurred to carry out the task, equal to 5% of the fees, plus VAT, as indicated in the above mentioned proposal - are such as to ensure the quality and reliability of the work, as well as the auditor's independence; the auditing firm Hermes S.p.A. meets the independence requirements foreseen by current regulations and, at present, according to the information available, there are no grounds for incompatibility; The board of auditors proposed to the ordinary members' meeting of the company CPL CONCORDIA Soc. Coop: 1. 1. to assign to the auditing firm Hermes S.p.A., for the financial years 2014, 2015 and 2016, the following task: (i) statutory audit of the company and consolidated financial statements of the company, including the process of verifying the consistency of the management report with the financial statements; (ii) checks to ensure proper bookkeeping and true and fair view of the affairs in the company accounts; 2. 2. to approve the remuneration of the auditing firm of Euro 10,000.00; The members’ meeting unanimously

Decided

to assign the statutory audit of accounts of the statutory company and consolidated financial statements of the cooperative pursuant to Article 14 of Legislative Decree 39/2010 and of Articles 2409 bis and subsequent of the Italian Civil Code, for the financial years ending 31 December 2014, 2015 and 2016, to the auditing firm Hermes S.p.A; to pay an annual fee of Euro 10,000, plus 5% for out-of-pocket expenses and plus VAT, granting, severally, to the chairman and deputy chairman the powers to implement this decision, including the power to define the terms, procedures and conditions of the appointment.

FIFTH ITEM

The chairman then gave the floor to Mr. Massimo Continati, the administration and information systems director who communicated that the approval of the

24

company and consolidated financial statements 2013 coincided with the expiry of the appointment of the auditing firm Hermes S. p. A., for the audit of the company and consolidated financial statements of CPL CONCORDIA Soc. Coop. for the years 2011-2012-2013 pursuant to and by effect of art. 15 of Law no. 59/1992 and subsequent amendments and related to the information notice provided for by Article 2513 of the Italian Civil Code.

The first term of office held by the auditing firm Hermes S.p.a. ended with the approval of the financial statements at 31 December 2013, and in accordance with what is provided for by Law 59 a second consecutive term can be assigned to the firm Hermes S.p.A. On this matter, Mr. Continati informed those present, also on the basis of agreements with the National Office of Legacoop, that he had examined the proposals from the following auditing firms willing to accept the appointment to audit the company and consolidated financial statements, pursuant to and by effect of art. 15 of Law no. 59/1992, for the period 2014-2016: Hermes S.p.A. Deloitte & Touche S.p.A. Reconta Ernst & Young S.p.A. Mr. Continati informed the members present that he had carefully examined the proposals and requested the necessary additional information from the auditing firms.

The proposed certification, according to Article 15 of Law 59/1992 of the statutory company and consolidated financial statements for the years 2014 to 2016, considered most suitable was that of the firm Hermes S.p.a.

The proposed fees amount to Euro 79,000.00 in total, of which Euro 71,100 for the audit of the company financial statements and Euro 7,900.00 for activities relating to the consolidated financial statements.

The proposal made by the administration manager and the board of directors to those present, was not only justified in economic terms, but it was also based on the criterion of continuity and knowledge of the cooperative, an extremely important factor to ensure an adequate auditing quality and to support the work of the administration office.

Finally, Mr. Continati also informed those present that in recent years the company Hermes S.p.a. has obtained important auditing assignments from the largest companies in the cooperative world.

After having concluded, the administration director, Mr. Continati, invited the members present to decide.

The members’ meeting unanimously

Decided

to assign to the auditing firm Hermes S.p.A. the statutory audit of the company and consolidated financial statements of the company CPL CONCORDIA Soc. Coop. for three years, 2014-2016, pursuant to and by effect of art. 15 of law no. 59/1992 and subsequent amendments and to grant, severally, to the chairman and de-

Report on oper ation

puty chairman the powers to implement this decision, including the power to define the terms, procedures and conditions of the appointment.

ANY OTHER BUSINESS

Although not included in the agenda, the chairman asked to discuss the following topic; no member objected, declaring that they were sufficiently informed.

The chairman of the meeting, Roberto Casari, took the floor and proposed an amendment to the regulation for loans from members that currently foresees the payment of interest accrued once a year on 31/12. The chairman pointed out to those present that with the decision taken on 30 April 2013, the members’ meeting approved the regulations for loans from members, which foresees in article 13 that "Interest is paid on the amounts deposited from the date of payment, if made in cash, up to the day of the withdrawal. For payments made by cheque interest is paid after 1 day for bank drafts and bank cheques from a local bank and after 3 days for bank cheques from non-local banks. Interest on loans from members are calculated as of 31 December of each year and the corresponding amount is be paid by crediting the loan account on the following 1 January. If by effect of such payment of interest, the loan exceeds the limit indicated in art. 3, the excess shall be considered non-interest bearing and returned to the member. In the event of termination of the loan during the year, the interest shall be calculated and paid on the day on which the loan is closed".

The chairman therefore proposed to calculate the interest retroactively starting from 2014, with a six-monthly term on 30/06 and 31/12, without prejudice to the payment of the corresponding amounts on the loan account unless the maximum limit is reached.

The members’ meeting after careful revision and counter-checking, unanimously

2

chap.

Decided

to approve the amendment to the regulation for loans from members approved by the members’ meeting held on 30 April 2013, and therefore to approve that the interest on loans from members shall be paid six-monthly on 30/06 and 31/12 of each year, with retroactive effect from 2014 and that the new text of art. 13) of the regulation is as follows: “Interest is paid on the amounts deposited from the date of payment, if made in cash, up to the day of the withdrawal. For payments made by cheque interest is paid after 1 day for bank drafts and bank cheques from a local bank and after 3 days for bank cheques from non-local banks. Interest on loans from members is paid six-monthly on 30 June and 31 December of each year and the corresponding amount shall be paid by crediting the loan account on the following 1 July and 1 January. If by effect of such payment of interest, the loan exceeds the limit indicated in art. 3, the excess shall be considered non-interest bearing and returned to the member. In the event of termination of the loan during the year, the interest shall be calculated and paid on the day on which the loan is closed".

*** Since all the items on the agenda had been discussed in full and no-one else requested to speak, the chairman of the meeting declared the meeting closed at the time of 3:20 p.m., following the immediate drafting, reading, and unanimous approval of these minutes.

Il Segretario (Fabio Sereni)

Il Presidente (Roberto Casari)

CPL CONCORDIA's financial statements and consolidated financial statements

25

Standardised management report to the CPL CONCORDIA financial statements and consolidated financial statements for the year ending 31/12/2013

Report prepared pursuant to article 2428 of the Italian Civil Code supplemented by article 1, paragraph 2 of Legislative Decree 32/2007 and article 40 of Legislative Decree no. 127 of 9 April 1991

Dear Members, the financial statements for the year ended 31 December 2013 submitted for your approval show a profit of Euro 5,034,688, before taxes for the year and of ordinary and extraordinary provisions; this result can be considered as very positive because it exceeded what had been foreseen and because it was obtained in a macroeconomic situation of deep crisis, in particular at national level.

The crisis was aggravated in this case by the earthquakes that hit our area on 20 and 29 May 2012, which have put a strain on the Cooperative, its people and the whole territory in which it operates. As regards this, it should be noted that the remaining costs incurred for the relocation generated by the earthquake in May 2012, totalling Euro 1,955,268, contributed to the determination of the operating result.

Production executed in the financial year amounted to Euro 335,769,534, a slight decrease on the previous year.

Total assets equalled Euro 539,626,999, net worth amounted to Euro 144,046,159, the funds for risks amounted to Euro 7,077,565, the severance pay for employment termination amounted to Euro 4,124,526 and the total payables, accrued expenses and deferred income amounted to Euro 384,378,749.

26

As always, the directors of the Cooperative performed, in accordance with art. 2 of Law 59/92, their duties with the desire of allowing the Cooperative to achieve the mutuality purposes provided for by law and the bylaws, with the aim of providing continuity of employment and achieving the best economic, social and professional conditions possible.

For these reasons, the Cooperative acted to maintain full employment of its members, rewarding their work performance with the best terms and conditions possible, taking into account the market conditions and those of the specific sector in which it operates. The company also worked to improve the professional and cultural qualifications of its members, investing to ensure the best conditions in the work environment and in training courses.

In order to continue the process of capitalisation of the Cooperative, as well as to retain and reward the contribution of its members, the board of directors proposed, by virtue of the good results for the financial year, to allocate to each cooperative member, pursuant to art. 3, paragraph 2, letter b) of Law 142 of 3 April 2001 and subsequent amendments, by way of refund, an amount determined in relation to the quantity and quality of the work performed during the financial year 2013. The amount proposed by the board of directors to the meeting,

Report on oper ation

2

chap.

to be divided between the members on the basis of the above criteria amounts to Euro 1,500,000; this amount is already posted under item B9 of the profit and loss account as part of personnel costs as supplement of remuneration paid to working members in 2013, 50% to be allocated to the free increase of the capital subscribed and paid and the remaining 50% to be allocated as supplement to the remuneration due to the cooperative members; both these allocations are foreseen by article 62 of the bylaws and pursuant to and by effect of art. 6, second paragraph of Decree Law no. 63/02, converted into Law No. 112/02.

The Cooperative in its role of parent company of a number of companies operating in the same business sector or in the integration and completion of the production chain of the construction and management of methane gas and LPG distribution networks, including the sale, construction and management of heating or cooling systems, district heating networks and the construction and management of photovoltaic plants, public lighting and high-efficiency cogeneration plants, has drawn up its consolidated financial statements as of 31 December 2013 pursuant to Legislative Decree no.

127 of 09/04/1991. The consolidated financial statements as of 31 December 2013 show a consolidated value of production of Euro 415.366.057, with a 1% increase with respect to the previous year.

The group’s results generated by this production show a pre-tax profit for the period of Euro 13.692.982 which, net of current, deferred and advanced taxes of Euro 6,447,018 and of minority profit (or group loss) of Euro 2,762,947, generated a net profit of Euro 4,483,017. Total assets equalled Euro 646,407,796, the group’s net worth amounted to Euro 137,091,863, minority net worth amounted to Euro 23,290,295, funds for risks amounted to Euro 12,630,703, severance pay for employment termination amounted to Euro 5,118,017 and total payables, accrued expenses and deferred income amounted to Euro 468,276,918.

CPL CONCORDIA's financial statements and consolidated financial statements

27

Personnel and corporate social values

1. Personnel

Our cooperative’s mission is to create real work, respecting individuals and their growth. Development, turnover and innovation have been possible thanks to the irreplaceable work of our men and women. Without the contribution of those who have worked within the Co-operative and its group, the results discussed herein would not have been possible. The human component of a company is the true added and intangible value.

The employees, with an average age of about 39 years, are the stakeholders that obtain from the Cooperative the largest portion of added value. The value allocated to the workforce is a tangible sign that the Cooperative remains true to its mission "to create real work" in the respective areas. The added value allocated to workers is divided into two cost categories for the company: direct and indirect remunerations.

Direct remunerations

Direct remunerations include all the components (financial or in kind) that contribute to measure the benefit (immediate or deferred) that the employees receive from their relationship with the company; direct remunerations include: direct pay (corresponding to the direct pay (corresponding to the "Wages and Salaries " item of statutory financial statements); severance pay for employment termination; other expenses for workers, including all those costs that the Cooperative incurs in favour of its personnel (insurance, canteens, travel, training courses, medical examinations and clothing).

The significant increase in personnel costs in the last five years, can be attributed to the new corporate structure which, together with the acquisition of important work orders, still creates the need for human resources. The cost of personnel is a fundamental and characteristic element for a production and work cooperative. This cost must be compensated by positive economic results arising from production.

In recent years, in a situation of clear macroeconomic recession, the CPL Group has gone against the trend,

28

also in terms of employment. In 2013 the level of employment, of the parent company and of the group, increased compared to the previous year. The relevant data is analysed in the tables below:

Average number of employees of the parent company NUMBER

2013

Top management Executives White collar Blue collar

TOTAL

2012 31 37 584 670

32 28 580 652

1,322

1,292

The table above shows the data concerning the average workforce of 2013 in comparison to 2012. The table shows an annual increase of 30 employees, to which the decrease of 8 employees in the previous year must be subtracted, in addition to the increase of 56 employees in 2011. In the last three difficult years of economic crisis, the Cooperative has increased its average workforce by 78 people. The situation at group level is shown in the table below:

Average number of employees of the Group NUMBER Top management Executives White collar Blue collar

TOTAL

2013

2012 38 44 746 802

37 33 693 765

1,630

1,528

The above table shows that in 2013 there was an average increase in employment of 102 employees, mainly in Italy, with the remainder working in our subsidiaries of the group E.G.N. S. r. l. in our subsidiary in Algiers, in our subsidiary Polargas S. r. l. and in Cristoforetti Servizi Energia srl. In the last financial year, the average employment increase was of 68 employees.

As regards labour contracts applied to the group, four national agreements are applied: Cooperative building agreement, cooperative metalworkers' agreement, gas fitters agreement and cooperative managers’ agreement.

By analysing only the parent company’s data and taking into account the average workforce on 31 December 2013, the breakdown is as follows:

Report on oper ation

2

chap.

* National Collective Labour Agreement Relating CCNL*

Coope- Project Con- EngineGas rative struction ering operators mana- agreeworkers workers ments gers

Operai Impiegati Dirigenti quadri collab.

Tirocinanti

158 54

495 532

8

29

Total

220

Appre- TOTALS ntices

2

653 589 31 37 10 2

2

1,322

3 31 10

1,056

3

31

10

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

2. Corporate social values

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

Personnel turnover in the last 2 years Cooperative members

31 Dec Employ- With- balance With- balance dec Employdec 2011 ments drawals 312012 ments drawals 312013

Blue collars White collars Top Managers

300 352 30

19 30 0

-13 -9 0

306 373 30

33 38 1

-18 -25 0

321 386 31

Total

682

49

-22

709

72

-43

738

The table shows that as of 31/12/2013 the cooperative members had grown to 738, with an increase of 29 members only in 2013 and of 56 members in two years, equal to an increase of 8.2%.

Thanks to the effects of the increasing loyalty of the members, the cost ratio of members and non-members, which is necessary to be considered a prevalent mutuality cooperative, was 61.89% compared to 38.11% of non-members, which includes the cost of self-employment professionals and collaborators. The amount of the loans from members in the last five years is shown below: Years 2013 Years 2012 Years 2011 Years 2010 Years 2009

Euro 10,862,360 Euro 9,380,143 Euro 8,150,246 Euro 7,057,188 Euro 5,654,737

These loans are paid-back on the basis of normal market rates, but never higher than those set down by the Ministry of Finance, increased by 2.5%; in 2013 they were paid at the gross annual rate of 5.125% (4.10 % net), with an increase of Euro 1,482,218.

An extremely important characteristic of a mutuality cooperative is that also "non-members" are involved; CPL reserves a portion of its income for initiatives of particular social value, expressing its "social citizenship".

The pursuit of the sense and motivation of social action occurs through a process in constant evolution, with the synthesis and integration of many elements that can be found both inside and outside the organization.

The Cooperative has distributed to the community part of the wealth it has generated; these contributions have been used to finance associations, non-profit cultural and sports associations, cultural sports and folklore events.

CPL CONCORDIA pays particular interest in the activities of the town’s authorities – as regards the organization of events - and of sports associations, especially regarding activities for young people.

Financial statements of the parent company

A1. Analisi Economica

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

CPL CONCORDIA's financial statements and consolidated financial statements

29

Profit and Loss Accounts reclassified according to Added Value method

Values expressed in Euros

FINAL DATA 31/12/2013 Income from sales and performances Variation of the stock of semifinished and finished products Variations of works in progress Internally generated fixed assets Other income VALUE OF PRODUCTION Purchase costs Variation of the stock of raw materials Costs for services Costs for the employment of third-party assets

%

31/12/2012

%

31/12/2011

%

31/12/2010

%

31/12/2009

%

304,471,044

90,68%

309,339,397

89,69%

321,695,920

96,88%

312,347,751

94,47%

243,437,301

87,54%

0

0,00%

0

0,00%

0

0,00%

0

0,00%

0

0,00% 2,69%

5,041,077

1,50%

11,395,089

3,30%

(8,918,554)

-2,69%

(6,514,113)

-1,97%

7,472,352

19,471,744

5,80%

18,511,748

5,37%

15,005,426

4,52%

17,590,866

5,32%

20,127,269

7,24%

6,785,669

2,02%

5,641,979

1,64%

4,275,463

1,29%

7,195,762

2,18%

7,053,783

2,54%

335,769,534

100,00%

344,888,212

100,00%

332,058,254

100,00%

330,620,266

100,00%

278,090,704

100,00%

-39,16% (129,882,894)

-39,11%

(137,132,994)

-41,48%

(94,469,596)

-33,97%

(132,449,375)

-39,45% (135,065,081)

412,791

0,12%

(3,413,019)

-0,99%

3,781,351

1,14%

7,382,108

2,23%

(656,326

-0,24%

(105,574,332)

-31,44%

(101,939,902)

-29,56%

(102,055,280)

-30,73%

(110,507,263)

-33,42%

(91,959,486)

-33,07%

(13,574,333)

-4,04%

(14,063,180)

-4,08%

(14,877,283)

-4,48%

(15,075,102)

-4,56%

(13,949,275)

-5,02%

Sundry operating expenses

(4,786,389)

-1,43%

(3,972,042)

-1,15%

(3,143,761)

-0,95%

(3,311,792)

-1,00%

(4,131,339)

-1,49%

ADDED VALUE

79,797,895

23,77%

86,434,989

25,06%

85,880,386

25,86%

71,975,223

21,77%

72,924,684

26,22%

(61,083,640)

-18,19%

(58,364,104)

-16,92%

(57,434,590)

-17,30%

(52,120,256)

-15,76%

(47,893,690)

-17,22%

18,714,255

5,57%

28,070,885

8,14%

28,445,795

8,57%

19,854,967

6,01%

25,030,994

9,00%

Depreciation of tangible fixed assets

(2,046,208)

-0,61%

(1,838,909)

-0,53%

(1,746,646)

-0,53%

(1,637,143)

-0,50%

(1,800,681)

-0,65%

Amortisation of intangible fixes assets

(9,271,615)

-2,76%

(9,621,620)

-2,79%

(7,807,505)

-2,35%

(6,264,766)

-1,89%

(4,714,592)

-1,70%

Provisions and devaluation

(4,034,156)

-1,20%

(4,834,916)

-1,40%

(3,978,334)

-1,20%

(3,131,953)

-0,95%

(2,579,683)

-0,93%

(15,351,979)

-4,57%

(16,295,446)

-4,72%

(13,532,485)

-4,08%

(11,033,862)

-3,34%

(9,094,957)

-3,27%

3,362,276

1,00%

11,775,439

3,41%

14,913,311

4,49%

8,821,105

2,67%

15,936,038

5,73%

(5,196,140)

-1,55%

(4,370,509)

-1,27%

(3,939,556)

-1,19%

(1,634,095)

-0,49%

(1,968,634)

-0,71%

3,859,521

1,15%

3,469,089

1,01%

1,468,044

0,44%

581,589

0,18%

735,115

0,26%

(1,336,619)

-0,40%

(901,420)

-0,26%

(2,471,512)

-0,74%

(1,052,506)

-0,32%

(1,233,520)

-0,44%

2,025,657

0,60%

10,874,019

3,15%

12,441,799

3,75%

7,768,599

2,35%

14,702,518

5,29%

Personnel cost and relating charges MOL (GOM)

Amortisation/depreciation and provisions OPERATING RESULT Interest and other financial charges Other financial earnings

TOTAL FINANCIAL ACTIVITY CURRENT RESULT Earning from holdings

6,206,073

1,85%

3,291,103

0,95%

3,402,439

1,02%

11,007,160

3,33%

178,829

0,06%

Adjustments of financial assets

(3,112,666

-0,93%

(1,956,593)

-0,57%

(2,053,237)

-0,62%

(1,858,950)

-0,56%

(1,153,119)

-0,41%

(1,500,000)

-0,45%

(1,700,000)

-0,49%

(850,000

-0,26%

(1,700,000)

-0,51%

(1,500,000)

-0,54%

3,018,004

0,90%

(1,169,752)

-0,34%

131,938

0,04%

126,852

0,04%

680,550

0,24%

Rebate to members Special activities RESULT BEFORE TAX Tax on the income of the financial year

NET RESULT

6,637,068

1,98%

9,338,777

2,71%

13,072,939

3,94%

15,343,662

4,64%

12,908,777

4,64%

(1,602,380)

-0,48%

(2,563,116)

-0,74%

(4,165,545)

-1,25%

(1,986,056)

-0,60%

(4,311,305)

-1,55%

5,034,688

1,50%

6,775,661

1,96%

8,907,393

2,68%

13,357,606

4,04%

8,597,472

3,09%

The economic ratios and the results must be analysed in the context of the long lasting economic crisis that is beginning to be heavily felt, also by the Cooperative, which as previously mentioned, was in any case able to maintain good results. It should be also added that in recent years the Cooperative has moved the gas distribution business almost completely within the single companies operating in that sector.

Please note in fact that in 2013, 90% of human resources dedicated to such activities were transferred to the companies in which these resources operate. In recent years the gas distribution business has always had a great impact on the gross operating margin; from 2013 this has been transferred to the subsidiaries to the detriment of the parent company.

30

The GOM, as can be seen later in the report, returned to the expected levels as regards the group consolidated statements, but the effects on the parent company are evident.

In contrast, the Cooperative is increasingly taking on the status of holding through the control of many companies which, having reached the state of maturity, contribute to the cooperative’s result through the payment of dividends.

All of the above having been stated, the parent company’s profitability showed a decrease, partly neutralised by the dividends paid by the subsidiaries and affiliated companies. The drop in the gross operating margin, from 8.14% in 2012 to 5.57% in 2013 was foreseen in the budget with a ratio of 5.51%.

Report on oper ation

A2. Analysis of assets and liabilities

2

chap.

this section analyses the balance sheet, by comparing the previous four financial years, according to the item liquidity method.

Following the analysis of the profit and loss accounts,

Balance Sheets reclassified according to the liquidity method

Values expressed in Euros FINAL DATA

31/12/2013 31/12/2012 ASSETS Short-term assets Cash and cash equivalents Financial assets which are not fixed assets Receivables from customers and other receivables Stock Receivables from members for payments still due Accrued income and prepayments Total short-term assets

31/12/2011

31/12/2010

31/12/2009

110,675,294 3,860,365

96,620,975 7,748,890

58,096,144 308,756

36,661,185 3,342,257

34,311,437 20,000

214,453,426

215,341,397

222,642,625

211,947,821

154,648,544

46,780,104 1,192,565 4,766,181 381,727,936

39,956,357 1,176,488 4,909,897 365,754,004

33,660,197 1,158,595 5,210,319 321,076,636

38,400,538 1,094,972 4,817,089 296,263,862

36,365,119 1,396,075 5,004,585 231,745,760

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

43,017,628 19,681,679 95,199,756 157,899,062

38,198,727 16,998,257 95,942,169 151,139,153

33,043,179 15,649,922 87,991,482 136,684,583

28,597,925 12,198,005 79,430,494 120,226,425

19,569,363 15,445,124 72,196,722 107,211,209

Total ASSETS

539,626,998

516,893,157

457,761,219

416,490,287

338,956,968

223,361,649 227,643,138 PASSIVO PATRIMONIALE

218,935,784

253,613,303

182,130,348

35,351,372 0 8,395,893 900,000 14,208,598 139,290,435 0 8,334,421 1,614,879 9,211,231 3,152,654 6,249,062 1,092,707 227,801,252

17,338,595 0 7,659,769 8,250,000 22,173,353 139,875,465 0 17,915,313 1,479,227 10,163,515 3,127,055 7,745,499 676,021 236,403,810

7,331,833 0 5,654,737 8,800,000 5,596,163 133,231,097 0 14,467,384 234,140 5,716,393 2,994,414 7,588,000 845,436 192,459,597

MEMORANDUM ACCOUNTS

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

65,023,132 0 11,907,645 15,335,000 11,202,499 152,784,740 0 11,315,604 1,423,103 5,687,980 3,613,670 6,072,464 2,011,798 286,377,633

49,582,606 0 9,478,751 2,450,000 10,084,095 156,865,473 0 17,514,907 858,072 4,606,426 3,187,169 6,137,345 2,883,533 263,648,378

Medium-/long-term liabilities Debentures Payables due to banks Payables due to other funders Payables due to suppliers Payables represented by negotiable instruments Severance pay for employment termination Fund for retirement pensions and similar obligations

0

0

0

0

0

93,699,607

99,048,212

84,098,347

45,315,976

26,672,186

0

0

0

0

0

4,301,508

4,274,916

3,649,597

3,491,619

2,607,790

0

0

0

0

0

4,124,526

4,230,090

4,362,613

4,761,755

5,336,207

21,526

21,526

21,526

21,526

21,526

7,056,039

6,541,705

5,379,751

2,580,700

2,393,369

109,203,206

114,116,449

97,511,833

56,171,575

37,031,078

22,426,530

20,713,737

19,587,590

18,312,536

15,938,753

656,679

656,679

656,679

656,679

656,679

113,813,193

108,867,183

101,181,402

89,473,011

82,158,320

531,892

531,892

531,892

531,892

531,892

78,184

78,184

78,184

78,184

78,184

0

0

0

0

0

235,597

235,597

235,597

235,597

235,597

Capital contribution reserve, Law n. 784/80

1,269,396

1,269,396

1,269,396

1,269,396

1,269,396

Profit / loss of the financial year

5,034,688

6,775,661

8,907,393

13,357,606

8,597,472

Total Net Equity

144,046,160

139,128,330

132,448,135

123,914,902

109,466,293

Total LIABILITIES

539,626,998

516,893,157

457,761,219

416,490,287

338,956,968

223,361,649

227,643,138

218,935,784

253,613,303

182,130,348

Other funds

Total medium-/long-term liabilities Net Equity Share capital Revaluation reserve Legal reserve Reserves for treasury shares held Statutory reserves Exchange rate fluctuation reserve Surplus from merger

MEMORANDUM ACCOUNTS

CPL CONCORDIA's financial statements and consolidated financial statements

31

32

Report on oper ation

The table above highlights the following: The total assets of the balance sheet increased by Euro 23 million, of which Euro 16 million concerned current assets and Euro 7 million the fixed assets. The increase in the current assets was partly due to the high amounts held in the current accounts on 31 December, in part used in the first months of 2013 and due to an increase in the stock. As regards the increase in stock, this was mainly due to an increase in the work underway mainly related to an increase of work with companies part of the group and with public administrations/local authorities that tend to delay the certification of the work progress reports, thus delaying invoicing.

The balance sheet liabilities show an overall increase in the bank debt, mainly due to the new non-interest bearing lines of credit granted by Monte Paschi di Siena, the

2

chap.

payment of taxes according to Decree Law 74/2012, Euro 35 million of which were used at the end of the year. An increase in the financial debts towards companies part of the group was also recorded due to the granting of financing, by the said companies to the parent company, following greater availability of funds during the financial year.

The process of capitalisation of the Cooperative is progressing; in 2013 the net worth of the Cooperative was over Euro 144 million.

A3. Financial ratios

Gli indici del bilancio di esercizio della Capogruppo che scaturiscono sono riepilogati nelle tabelle che seguono:

CPL CONCORDIA Soc. Coop: Main financial ratios Final Data

ECONOMIC ANALYSIS

31/12/2013

31/12/2012

31/12/2011

31/12/2010

31/12/2009

Calculation formulas

R.O.E. (Return on Equity)

3,62%

5,12%

7,21%

12,08%

8,52%

R.O.E. = RN/CP x 100

R.O.I. (Return on Investment)

0,62%

2,28%

3,26%

2,12%

4,70%

R.O.I. = RO/CI x 100

MOL/Value of Production

5,57%

8,14%

8,57%

6,01%

9,00%

MOL/VP x 100

Incidence of Net Financial Charges on V.P.

0,40%

0,26%

0,74%

0,32%

0,44%

OFN/VP x 100

2,52

13,06

6,03

8,38

12,92

OFN/RO x 100

EBIT/ Net Financial Charges

KEY:

FINANCIAL AND EQUITY ANALYSIS

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

Final Data 31/12/2013

31/12/2012

31/12/2011

31/12/2010

31/12/2009

Calculation formulas

Liquidity ratio

1,33

1,39

1,41

1,25

1,20

AC/DBT

Leverage

3,88

3,91

3,71

3,77

3,36

CI/CP

Net Financial Position/ Net Equity

0,54

0,48

0,57

0,38

0,14

(DBTO+DMLTO)/CP

Elasticity Ratio

2,42

2,42

2,35

2,46

2,16

AC/IMMOB

EBITDA/DEBT

24,86

43,90

40,26

47,38

176,93

DEBT/EBITDA

4,02

2,28

2,48

2,11

0,57

DEBT =

75,290,090

63,938,594

70,649,468

41,903,154

14,147,320

EBITDA =

18,714,255

28,070,885

28,445,795

19,854,967

25,030,994

KEY:

MOL/DEBT x 100 DEBT/MOL

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

As regards the ratios of an economic nature, it is worth mentioning the ratio between the debt and the gross operating margin (GOM of EBITDA), which the main legal literature considers balanced when it is lower than three; in 2013 CPL’s ratio was 4.02, higher than the previous financial year, in which it was 2.28. The increase in ratio was due to the increase in the overall debt and the

reduction in the GOM, for the reasons described above.

This ratio is balanced in the consolidated financial statements.

The ratio between third party assets and own assets was still good and stood at 0.54 compared to the limit ratio of one.

The other financial ratios were also balanced.

CPL CONCORDIA's financial statements and consolidated financial statements

33

51%

100%

100%

Polargas S.r.l.

(IT)

European Gas Network S.r.l. (IT)

100%

Torano Solar S.r.l.

(IT)

Marigliano Gas S.r.l.

(IT)

100%

Serio Energia S.r.l.

(IT)

40%

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

100%

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

0,10%

50% 100%

CoopGas S.r.l.

(IT)

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

Centrale Sassinoro S.r.l.

(IT)

Sic S.a.S. di Santorelli Bruno & Co. (IT)

100%

5%

95%

Ischia Gas S.r.l.

(IT)

100%

CPL Fuel S.r.l.

(IT)

Fontenergia S.r.l.

(IT)

100%

Erre.Gas S.r.l.

(IT)

100%

CPL CONCORDIA Filiala Cluj Romania S.r.l. (Ro)

100%

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

50%

CPL Distribuzione S.r.l. (IT)

100%

Vega Energie S.r.l.

(IT)

65%

0,10%

Vignola Energia S.r.l.

(IT)

99%

0,30%

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

44%

0,30%

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

100%

Ghirlandina Sport S.r.l.

(IT)

93%

0,10%

0,10%

0,30%

50% 54%

AIPower S.p.A. (DZ)

70%

Progas Metano S.r.l.

(IT)

95%

Grecanica Gas S.r.l.

(IT)

90%

TiPower S.a r.l.

(TN)

20%

CPL Energy India Private Ltd (IN)

5%

34,55% 90%

CPL Distributed Generation Group Inc. (US)

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

50%

Inversiones Energia y Ambiente S.A. (AR)

CPWH Ltd (GB)

100%

0,10%

GES Gas Energy Solution GmbH (DE)

75%

0,30%

0,50%

Rendegas S.A. (AR)

34

97,14%

Ecoenergy S.A. (AR)

36%

Joka CPL Polska Z.o.o.

(PL)

50%

L & G Drinks S.A. (AR)

67%

Trinovolt S.r.l.

(IT)

100%

Marche Solar S.r.l.

(IT)

100%

Report on oper ation

45%

1,90%

1,90%

Ichnusa Gas S.p.A. (IT)

2

chap.

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

30%

Pegognaga Servizi S.r.l. (IT)

50%

HERA S.p.A. (IT)

0,0233%

Fontenergia 4 S.r.l.

(IT)

98%

Biogengas S.r.l.

(IT)

50%

Ghirlandina Solare S.r.l. (IT)

34%

Sofinco S.p.A. (IT)

1,18%

Fontenergia 6 S.r.l.

(IT)

98%

Coimmgest S.r.l.

(IT)

45%

Fimetra S.r.l.

(IT)

40%

Nebrodi Gas Servies S.r.l. (IT)

0,50%

100% 0,83%

Fontenergia 7 S.r.l.

(IT)

98%

X Datanet S.r.l.

(IT)

1,80%

Fontenergia 9 S.r.l.

(IT)

98%

Interenergia S.p.A. (IT)

1,70%

Fontenergia 10 S.r.l.

(IT)

98%

Interenergia Uno S.p.A. (IT)

50%

Noci Solar 1 S.r.l.

(IT)

49%

48,9%

Noci Solar 2 S.r.l.

(IT)

49%

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

22,22%

Nebrodi Gas Vendita S.r.l. (IT)

Key 100%

Parent Company 1,00%

1,00%

2,00%

Fontenergia 11 S.r.l.

(IT)

98%

Fontenergia 15 S.r.l.

(IT)

98%

Fontenergia 19 S.r.l.

(IT)

98%

100%

100%

Interenergia Due S.p.A. (IT)

Agrienergia S.p.A. (IT)

20,41%

Interenergia Tre S.p.A. (IT)

Energetski Servis d.o.o. (HR)

33,33%

Interenergia Quattro S.p.A. (IT)

CTG S.A. (AR)

Directly controlled companies Indirectly controlled companies Indirectly associated companies Directly associated companies

45%

Other significant investments

Fontenergia 26 S.r.l.

(IT)

98%

0,70%

Fontenergia 27 S.r.l.

(IT)

98%

1,60%

Fontenergia 35 S.r.l.

(IT)

98%

1,00%

Fontenergia 37 S.r.l.

(IT)

98%

0,50%

Fontenergia 28 S.r.l.

(IT)

1,90%

100%

Uplated as of 31/12/2013

B. The Group

Over the past few years, the CPL CONCORDIA Group has developed an increasingly complex structure, which includes more than 70 subsidiaries and affiliated companies. Many of these companies are special purpose vehicles (SPV), established to develop specific activities. With the exception of Ghirlandina Sport and its subsidiary Modena Calcio FC S.p.a. and of Immobiliare della Concordia, all the other companies operate in traditional sectors of the Cooperative. The structure of the group as of 31 December 2013 is shown below.

CPL CONCORDIA's financial statements and consolidated financial statements

35

Description and performance of the companies of the group

B1. Subsidiary companies COOPGAS S.r.l. This is the group’s natural gas

sales company in accordance with Legislative Decree 164 /2000.

In the financial year the company served over 46,000 users, selling 82.8 million cubic meters of gas.

In the financial year the company also started purchasing and selling electricity. In the first days of 2014 it also acquired the know-how for telephone landlines.

The company's aim is to present itself, in 2014, on the national market and in particular as regards the domestic sector, as a provider of gas, electricity and telephony, in order to compete in the multi-utilities field.

The profit from company’s business for the financial year 2013 amounted to Euro 2,864,346.

The net worth of the company reached Euro 9 million against a book value of the holding of Euro 2.5 million.

ENERGIA DELLA CONCORDIA S.p.A.

This company, 100% of whose shares are held by Coopgas S.r.l., has two agreements for the construction, sale and management of plants that exploit biogas: one agreement is small and it is with a farm in the area of Pavia and the other is an agreement of Euro 4 million concerning the Francavilla Fontana waste disposal site in Puglia. In addition to these two systems the company also manages the photovoltaic plant in Altamura.

The company ended the financial year with a loss of Euro 183,961. This loss was generated due to the combined effect of two distinct factors; the first concerns the tax dispute with the Inland Revenue Office in Carpi resulting from the sale, in 2011, of 100% of the shares of the company Turi 8 S.r.l.; the Inland Revenue considered it as the sale of a business unit and consequently applied tax in proportion to the value of the system instead of a fixed amount. The company has objected, but it has posted Euro 108 thousand to the risk fund. The second factor is related to the situation of the waste disposal site in Francavilla Fontana which, due to negligence of the concession holder, Francavilla Environ-

36

ment, produces limited quantities of biogas, insufficient to operate the collection plant at full production; the result is a reduced production of electricity. The company is trying to solve this matter with the local authorities by granting the concession to a party that can take the necessary steps to make the site produce biogas, thus allowing the company to operate the plants at full production.

Hoping that the situation will be solved in the second half of 2014, the company has allocated Euro 200,000 to the risks and losses fund for the waste disposal site.

The company holds 95% of the company SIC S.a.s. di Santorelli Bruno & C. for a value of Euro 10,000. SIC has only one asset in the financial statements, consisting of 20% of the shares of AIPower S.p.A..

POLARGAS S.r.l.

The company was founded as a vehicle to develop the LNG (liquefied natural gas) technology at national level. The company aims to build storage facilities and micro networks to shortly replace LPG, a more dangerous and much more expensive gas.

During the year, the company operated exclusively in the automotive sector while investments were mainly made in the civil sector. For the domestic market, LNG is not ruled by final legislation and the authorization process is long and complex.

For these reasons, the company has experienced a sharp slowdown in its growth and development.

Despite the situation the group firmly believes in the development of LNG at national level and for this reason in December 2013 it purchased the 50% of the company owned by the group’s member Vanzetti, becoming sole shareholder. Due to the reduced business in 2013, the company closed with a loss of Euro 280,507. The loss was mainly caused by heavy fixed costs, both internal and external, not covered by the limited turnover.

The evolution of the company is connected to the opening of the LNG market in line with the European market.

EUROPEAN GAS NETWORK S.r.l. - E.G.N. -

The company was established on 31 October 2013 through the contribution in kind of 100% of the shares of the CPL Group operating in the gas distribution service, in Italy and abroad. The company has a share capital of Euro 10 million and a share premium reserve of Euro 30,544 million.

Report on oper ation

The shares contributed to the company were: 1) CPL DISTRIBUZIONE S.R.L. 2) MARIGLIANO GAS S.R.L. 3) ISCHIA GAS S.R.L. 4) CPL CONCORDIA FILIALA CLUJ ROMANIA S.R.L. 5) FONTENERGIA S.R.L. The value of the assignment was established by means of a sworn appraisal carried out according to article 2465 of the Italian Civil Code by Mr. Gianluca Rossini and filed with the Court of Modena on 31 October 2013.

The expert appraisal was based on the evaluation by the company Audirevi S. p. A. The expert appraisal to determine the values of the companies involved in the contribution was prepared by examining the economic and financial plans of each company, adopting a general criterion of prudence. The participation of Fontenergia S.r.l. was assessed with great attention and prudence for a value of Euro 7 thousand due to the particular environmental situation of the Region of Sardinia, which in recent years has seen a slight but steady decline in consumption, and due to the uncertainty of receiving residual regional contributions, which at the time of evaluation were heavily reduced.

These appraisals were, however, in contrast with the decisions of the directors of the parent company, which in any case decided to buy a majority share in the company considering it strategic to place the shares of Fontenergia S.r.l. in the sub-holding E.G.N.; despite having to endure a heavy devaluation, its repurchase was considered functional to the success of the creation of this sub-holding company, which in the meantime had already been put on the market for the sale of a minority share.

Moreover, on the date on which the net worth of the companies were examined, Fontenergia S.r.l. had a net worth of Euro 6.7 million and, apart from the prudential assessments of the experts, the directors believe that with the judicial actions taken to recover the contributions due, not yet paid, and with the introduction of LNG instead of LPG in Sardinia, the profitability necessary to preserve the current net worth can be recovered.

In other words, for the directors the economic assessment of the effects on the statutory company and consolidated financial statements should be considered as part of a single greater and more complex operation, which has the sole purpose of creating a vehicle that contains the gas distribution assets; the assessment of the effects of individual contributions is in contrast with

2

chap.

the objective pursued. The evaluation of the single effects must be made only in tax terms.

The effects of the contribution operation are summarised below: Values expressed in Euros/000

% Holding Ownervalue ship

-A100% value

-BN.W. 31/12/12

-CFair Value

Delta (C-A)

10,000

100%

10,000

14,056

16,272

6,272

Marigliano Gas S.r.l.

4,450

100%

4,450

6,279

6,247

1,797

Ischia Gas S.r.l.

3,700

100%

3,700

4,247

5,921

2,221

CPL CONCORDIA Filiala Cluj Romania S.r.l.

8,805

100%

8,805

8,913

12,097

3,292

Fontenergia S.r.l.

3,070

100%

11,289

6,710

TOTAL

30,025

n.a.

38,244

40,204

business sector CPL Distribuzione S.r.l.

7 (11,282)

40,543

2,300

The table above shows the fair value of the operation, which resulted in a net worth of the company of Euro 40,543,000. Overall, the operation resulted in capital gain of the parent company of Euro 2,300,197, which was entirely written off in the consolidated financial statements.

The project of this sub-holding was born at the start of 2012, when the entire world of distribution seemed ready to face the new tenders by territory. It should be noted, in fact, that the concession awarding system, according to current legislation will not concern single municipalities but territories. The Ministry of Economic Development has divided the country into 177 territories that aggregate different towns and therefore different concessions. The participation in tenders by territory at national level requires the availability of human resources and in particular of financial resources to deal with possible acquisitions.

On the basis of this, CPL CONCORDIA decided to aggregate in a single sub-holding all those companies that it considered "mature" in their own business, and then to assign the 49% minority share to third parties to obtain the financial resources and the right partnership to participate in the calls for tenders.

Two important national infrastructure investment funds, Fondaco Sgr and Orizzonte Sgr, found this initiative interesting and on 29 November 2013, each acquired 24.5% of the shares, for a total of 49%, at the overall nominal value of Euro 19,866,560.

The company closed its financial statements allocating the dividends decided by the subsidiaries for Euro

CPL CONCORDIA's financial statements and consolidated financial statements

37

4,150,000 and closed with a profit of Euro 4,075,694.

CPL DISTRIBUZIONE S.r.l. This company, which was established in 2008, has been distributing the CPL CONCORDIA Group's gas since 2009.

The concessions managed by the company are: User area Calabria 20; User area Calabria 30; User area Campania 25; User area Campania 30; User area Sicilia 12; User area Sicilia 17; User area Sicilia 35; Municipality of Cittanova; Municipality of Campo Calabro; Municipality of Polistena; Municipality of San Giorgio a Morgeto; Municipality of Cinquefrondi; Municipality of Rosarno; Municipality of Melicucco.

In 2013, the company carried out the gas distribution activity, mainly for the companies of the Coopgas Group, but also for others.

The amount of gas distributed in the financial year was 34,633,236 cubic meters, while 48,997 users were connected and received the service. The distribution activity for the reporting year generated profits amounting to Euro 2,764,385. The net worth of the company amounted to Euro 14,520,268 against a book value of the holding of Euro 16,272,000, which corresponds to the amount contributed by CPL to E.G.N..

Romagna, a lien was established on the company’s shares in favour of the bank, to guarantee the agreement for a maximum of Euro 5 million.

ISCHIA GAS S.r.l. The company was formed on 1 April 2005 for the construction and subsequent management of the natural gas distribution service in the territory of Ischia (NA). In the financial year the company focused on the connection of users. As of 31 December, 1,793 users were connected and 1,883,796 cubic metres of gas had been distributed.

During the year the company recorded contingent assets from the payment by the Italian gas and electricity authority’s compensation fund of the CRT shares for the year 2012 of Euro 1,064,635.

The distribution activity for the reporting year, also integrated by the 2012 amounts, generated profits of Euro 1,576,853. The net worth of the company amounted to Euro 5,673,753 against a book value of the holding of Euro 5,921,000, which corresponds to the amount contributed by CPL to E.G.N. It should be noted also that there is a financing agreement with the Banca Popolare dell’Emilia Romagna for Euro 6.000.000,00 with covenants that require payments by the shareholders into a net worth reserve called “Reserve for future share capital increase”, payments amounting to Euro 3,600,000 that the Cooperative made as of 31 December 2012. As regards the financing granted by the Banca Popolare dell’Emilia Romagna, a lien was established on the company’s shares in favour of the bank, to guarantee the agreement for a maximum of Euro 6 million.

MARIGLIANO GAS S.r.l. The company, whi- CPL CONCORDIA FILIALA CLUJ ROch was established in 2002, is a classic special purpose MANIA S.r.l. The company, which deals with the vehicle, created for the construction and subsequent management of the gas concession of the town of Marigliano.

In 2013, the company carried out the gas distribution activity, mainly for the companies of the Coopgas Group. The amount of gas distributed in the financial year was 3,699,171 cubic meters, while 6,939 users were connected and received the service. The distribution activity for the reporting year generated profits amounting to Euro 464,341. The net worth of the company amounted to Euro 6,243,130 against a book value of the holding of Euro 6,247,000, which corresponds to the amount contributed by CPL to E.G.N. It should be noted also that in the financial year 2006 the company had entered into a financing agreement with the Banca Popolare dell’Emilia Romagna for Euro 5,000,000.00 with covenants that required payments by the shareholders as “Reserve for future share capital increase”. On the closing date of these financial statements, the parent company paid Euro 3.250 million entered by the company under net worth. As regards the financing granted by the Banca Popolare dell’Emilia

38

distribution and sale of natural gas in thirty towns in the Transylvania region in Romania, now has nearly 15,722 million users, with more than 26,225,169 million cubic meters of gas sold.

In 2013, the company benefited from the rate adjustment authorised by the local energy price control system; however it had to endure the negative judgment pronounced by the Administrative Court of Bucharest which sentenced the company to pay to the builders of the network of Apahida a type of rent for the networks of about Euro 357 thousand, registered under the company’s extraordinary facts. The distribution and sale activity for the reporting year generated profits amounting to Euro 622,522. The net worth of the company amounted to Euro 9,181,020 against a book value of the holding of Euro 12,097,000, which corresponds to the amount contributed by CPL to E.G.N..

FONTENERGIA S.r.l. The company, which de-

als with the construction and management of gas distribution networks in the user area 22 (or user area of

Report on oper ation

Ogliastra) in Sardinia. Until the previous financial year, 48% of the company shares were held by Cooperare e Sviluppo S.p.A., 3% by Sofinco S.p.A., and 49% by the Cooperative. Sofinco and Cooperare held their shares jointly in order to hold the majority of the shares.

In the financial year 2013 the Cooperative acquired the majority share of the companies Cooperare and Sofinco, becoming sole shareholder.

The purchase of 51% of the shares cost CPL Euro 8,218,835.08. The company was transformed from S.p.A. to S.r.l. during the financial year.

As previously mentioned this acquisition was necessary to complete the aggregation project, useful to optimally define the scope within which the E.G.N. distribution sub-holding was established.

The company showed a loss for the reporting year of Euro 87,163 mainly due to a slight drop in consumption and to the losses on credits, which equalled a posted amount of Euro 188,691. The net worth of the company amounted to 6,622,937 against a book value of the holding of Euro 7,000, which corresponds to the amount contributed by CPL to E.G.N. As previously mentioned, the strong discrepancy between the appraised value and the current net worth derives from the expert evaluations carried out on the recoverability of the remaining credits for capital contributions still to be collected, amounting to Euro 4.7 million and from the evaluations on the future profitability of the company in relation to the now certain waiver by the Region of Sardinia to the construction of the Galsi (the pipeline that would link Algeria to Sardinia), which would have brought natural gas to the region instead of LPG. On these two points, the directors of the parent company and of the company believe that the appraisals, despite being acceptable at this stage for the success of the E.G.N. project, are overly cautious and that over time they can be completely overturned.

In fact, in relation to the total collection of the contributions, the Regional Administrative Court of Sardinia has suspended the rejection sentence for the user area 22 and has cancelled the one for the user area 10. Regarding the income elements of the company, the group, also in relation to the authorisations and know-how held by the subsidiary Polargas, is determined to take LNG to Sardinia; as a result of the lower cost of raw material and the higher calorific power it would boost consumption, with obvious economic benefits for Fontenergia S.r.l.

For this reason, the directors of the company are convinced that the company’s net worth will be safeguarded and increased over time, and they consider the write-down carried out in the financial year as acceptable for the success of the aggregation operation, and positive for the future as it represents a potential reserve of profits in the consolidated financial statements.

PROGAS METANO S.r.l. The company is a

2

chap.

“project company” established on 23 April 2007 to introduce natural gas on the island of Procida.

In 2013 the company started the construction of the work necessary for the natural gas pipeline on the island. The investments made in the financial year 2013 were about Euro 2.2 million.

As this was a start up situation, the company closed the financial year with a loss of Euro 72,125, mainly due to general expenses incurred.

GRECANICA GAS S.r.l. The company was incorporated on 6 April 2010; the Cooperative controls 95% of the company and CPL Distribuzione S.r.l. the remaining 5%.

The company was created for the construction of the gas distribution network and the management of the relevant user area Calabria 12. In 2013 the company continued the construction of gas distribution networks and started supplying gas in two towns of the area by means of road transport.

The company closed with a loss of Euro 60,568 generated solely by general business expenses. The investments for the network under construction as of 31 December 2013 amounted to Euro 6.3 million, net of the contributions recorded.

TORANO SOLAR S.r.l. The company was established in 2010 as vehicle for the construction and management of a photovoltaic system in the town of Torano, however it never carried out this activity. The company therefore took part in a public tender for the award of land located in the municipality of Marmirolo (MN) adjacent to a large shopping centre, which has not yet built. The tender was for the construction on this land of a plant to produce electricity from wood chips.

To date the project has come to a standstill. In recent years, the company was included in the current assets as some entrepreneurs had shown an interest in acquiring 100% of the shares of the company. As the project is blocked, the company is no longer of interest, and the parent company intends to sell the land owned by the company to the subsidiary Immobiliare della Concordia S. r. l., which will solely manage the real estate.

The loss for the financial year 2013, only related to the general expenses of the company was Euro 19,283.

ERRE.GAS S.r.l.

The company, which was established for the management of the distribution networks of Sapri and Camerota, assigned the concessions to third parties at the end of 2011. In the financial year the company only carried out credit recovery, awaiting the expiry of the free loan agreement for the storage facility with Cilento Reti Gas. In fact, as of today the storage facility and two plots of land are recorded in the company’s financial statements. The storage facility has been granted on free loan until the conversion of the concession from LPG to natural gas. A prelimi-

CPL CONCORDIA's financial statements and consolidated financial statements

39

nary assignment agreement for the land was entered into during the reporting year, and the final deed for the transfer of the property should be entered into in 2014.

The company closed the reporting year with a net profit of Euro 28,076 determined by the financial income generated by the interest-bearing loan with the parent company. Net worth amounted to Euro 1,745,628, while the book value of the holding was of Euro 1,717,553.

IMMOBILIARE DELLA CONCORDIA S.r.l.

The company has been managing for years two activities relating to real estate; the first one concerns the construction and subsequent sale of properties and land in the Borgoverde area in the town of Carpi (MO), the second one concerns the management of the Hotel in the town of San Possidonio (MO). While the first activity was practically completed in 2013, the second one represents the company’s current core business.

The management of the hotel in 2013 was stable and guaranteed breakeven results.

In the first months of 2014, the company closed a dispute with the tax authorities which began in 2013, recording in the profit and loss account the effects of the dispute for an amount of Euro 44. 000.

The loss entered by the company at 31/12/2013 amounted to Euro 57,990, while net worth amounted to Euro 7,584,465, against a book value of the holding of Euro 9,013,721. The difference between the book value of the holding and the net worth is attributable to the future ability to generate income and maintain a significant market value of the property.

SERIO ENERGIA S.r.l. The company was in-

corporated on 27 February 2003 for the management of the heating systems of the Bolognini Hospital of Seriate (BG). Despite the fact that the Cooperative only holds 40% of the shares in the company, it actually controls it in virtue of the activities it performs relative to the project that led to its establishment.

The result for the period shows a profit of Euro 607,519.

The net worth of the company reached Euro 1.9 million against a book value of the holding of Euro 0.4 million, which represents 40% of the company’s share capital.

CRISTOFORETTI SERVIZI ENERGIA S.r.l.

The company, which was established in April 1996 and operates in the heat management sector mainly in the Trentino-Alto Adige region of Italy, is a considerable

40

strongpoint in the Group's strategic sector. Over the years, the company has expanded its territory by acquiring contracts in Veneto and Friuli Venezia Giulia, and since 2009 also in Lombardy. The company produced profits for 2013 of Euro 875,272. The net worth of the company amounted to Euro 5,490,268 against a book value of the holding of Euro 1,452,208.

VEGA ENERGIE S.r.l. The company, which was incorporated on 27 January 2011 has the corporate purpose of executing the concession agreement for the design, construction and management of photovoltaic electricity generation systems, for the implementation of measures to improve the energy efficiency of the Science and Technology Park of Venice - Vega and the concession of the integrated service of management and procurement of electricity, thermal energy, cooling energy, natural gas and drinking water to users of the park. The company was established as a "project company" in conformity with, and for the legal purposes provided for by Article 156 of Legislative Decree No. 163 of 12 April 2006 and subsequent amendments and additions; therefore the corporate purpose is limited only to the activities foreseen and governed by the tender documents for the assignment of the work and relevant management issued by VEGA - Parco Scientifico-Tecnologico di Venezia S.c.a.r.l, as the contracting authority, and by the offer submitted by the temporary business association made up of "CPL CONCORDIA Società Cooperativa" and “Nova Marghera Facility S.r.l.” to participate in the aforesaid procedure, as well as by the contract and relative agreement signed with VEGA Parco Scientifico-Tecnologico di Venezia S.c.a.r.l.

The company regularly supplied gas, electricity, thermal energy, cooling energy and water until August 2013. From September 2013 the company continued its activity only as regards the supply of electricity produced by the photovoltaic systems built and located on the buildings of the Vega Parco.

The interruption of the supply and other activities to improve energy efficiency was decided by company’s directors due to the unjustified and continuing delay in payments from the main customer Vega PST, despite the fact that the Court of Venice had issued a court order for payment in favour of the company, already on 28/1/2013. In 2013, the lawyers of Vega PST instrumentally tried to object to the ruling and initiated further proceedings, with the only purpose of taking time considering the illiquidity of the customer; the seriousness

Report on oper ation

of the situation became evident when the company discovered that on 29 July Vega PST presented to the Court of Venice the application for conditioned composition with creditors pursuant to Article 161 (6) of the Bankruptcy Law, and was granted the procedure with order of 5 August 2013. According to the regulations in force, Vega PST had 120 days of time from the date of admission to present the composition plan. The company was asked to provide the details of the receivables due from Vega PST as of 29 July.

The Court of Venice on 27/03/2014 provided for Vega PST to reach a composition with creditors with the assignment of some assets while the company continues to operate.

In the period following the supply of energy, the company focused on obtaining from the shareholders the support necessary to face its impellent financial requirements.

The majority shareholder, CPL CONCORDIA, formalised its availability to financially support the company at the relevant meeting of the board of directors and granted the company a non-interest bearing loan of Euro 900,000. This amount allowed the company to pay all amounts due to suppliers, except those to the shareholders, which are postponed and can only be paid after having received the amounts due from Vega PST. In this way, the directors of Vega Energie have safeguarded the company against actions from third parties.

As regards the receivables from Vega PST, included in the composition with creditors, the times and the recovery mode, it should be noted with satisfaction that the parties reached an agreement before the final presentation of the composition plan; the agreement was positively approved by the respective boards of directors.

This agreement foresees three solutions: 1st solution): the awarding by the procedure of the overall receivables amounting to Euro 2,342,752.98 (two million three hundred and forty-two thousand seven hundred and fifty-two/98) equal to 100% of the receivables in the financial statements of Vega Energie S.r.l. with payment in two instalments: 40% by June 2016 and the remaining 60% by June 2018.

Assignment from Vega Energie to Vega PST and corresponding purchase by Vega PST of all the energy produced by the photovoltaic system at the price of Euro/KWh 0.108 until the expiry of the different energy accounts. The photovoltaic system shall be owned by Vega Energie; 2nd solution): the awarding by the procedure of the

2

chap.

overall receivables amounting to Euro 2,342,752.98 (two million three hundred and forty-two thousand seven hundred and fifty-two/98) equal to 100% of the receivables in the financial statements of Vega Energie S.r.l. with payment in two instalments: 40% by June 2016 and the remaining 60% by June 2018.

Assignment from Vega Energie S.r.l. to Vega PST and relevant purchase by Vega PST of the photovoltaic system for Euro 1,880,000 (one million eight hundred and eighty thousand/00) to be paid immediately; 3rd solution): the awarding by the procedure of the overall receivables amounting to Euro 2,000,000.00 (two million /00) in favour of Vega Energie S.r.l. with payment in two instalments: 40% by June 2016 and the remaining 60% by June 2018.

Transfer from Vega Energie S.r.l. to Vega PST and relevant purchase by Vega PST of the photovoltaic system for Euro 2,350,000 (two million three hundred and fifty thousand/00) to be paid in three instalments; 10% immediately as confirmation deposit, 40% by June 2016 and the remaining 50% by June 2018. A 6% annual interest rate shall be applied on this payment term, calculated from the acceptance of the proposal until the final payment of the instalments.

In all three cases, the parties shall abandon any legal steps taken with compensation of legal costs and shall waive any and all claims, including damages, related to the agreement signed, any interest and any additional accessories, including the technical costs of any kind which may be incurred, not only for defence purposes.

Waiver by Vega PST and its successors/assignees to the payment of Euro 108,000 (one hundred and eight thousand/00) foreseen for the land leasehold granted to Vega Energie for the construction of the photovoltaic system.

The directors are aware of the fact that the Court of Venice has requested further details concerning the guarantees to be issued by Vega PST, which is willing to provide them. In other words there are no obstacles to the approval of the composition of creditors of Vega PST, which for the purposes herein reflects the agreements described above.

The documents served to the company include in fact the application for admission to the composition with creditors and the integration thereof, which state that the applicant asks the judge to authorise the termination of the contract with Vega Energie S.r.l., without the payment of compensation, justified by the same reasons given by Vega PST in the counter summons to the

CPL CONCORDIA's financial statements and consolidated financial statements

41

court order.

On 4 April 2014, the company received notification from the Court of Venice, Bankruptcy Section, of the request to appear on 8 May 2014 to discuss with the counterparts the termination of the existing agreements. The availability to terminate the agreement for the supply of gas, energy and water, which was actually suspended last August, without the request by Vega Energie of damage compensation, foreseen by the agreement, and compensation for loss of profit, are essential for the approval of the composition with creditors.

It is obvious that the company, having read and ascertained the contents of the three solutions included in the composition, which in any case proposes the payment of 100% of the amount, will be available to waive any claim for damages.

The company, for its part, has not entered in the financial statements any compensation amount and considers as positive the achievement of all the values entered in the financial statements, which seem to be confirmed by the current composition proposal, also in light of the additional provisions made in the present financial statements.

In fact, as regards the effects that the likely approval of the composition with creditors will have on the company, it should be noted that, also in relation to the provisions made in the appropriate funds in the current financial year and in previous years, these financial statements give a fair representation of the company's net worth, including any possible future losses.

As regards the commercial relations with the parent CPL CONCORDIA and the company Coopgas S.r.l., agreements have been signed for the deferral of payments connected with the amounts to be collected following the execution of the composition plan of Vega PST, with a 3% interest to be paid from 1 January 2014.

As regards the relationship with the other partner Nova Marghera Facility, on 1 April 2014, the company was notified of the court order Gen Reg. 1368/14 issued by the Court of Modena in favour of the shareholder, which ordered the company to pay the sum of Euro 389,645.27, with a request for temporary enforceability, not recognised by the Court.

The company's position as regards the court order by the minority shareholder is clear. The court order presents an obvious anomaly concerning the determination of the amount which foresees the deduction from the overall amount of the receivables of Euro 521,698.97, of the trade payables of Euro 9,553.70 (correct), and of the debt for the tenths of capital subscribed but not yet paid for Euro 122,500.00. This deduction is not acceptable because the main legal literature foresees that such sums must be paid in cash and not as compensation. Needless to say, as the shareholder is not able to pay such sums in cash, on the one hand, the company will act to exclude the defaulting member, and on the other it will object to the court order in question. The amounts ordered are not payable, due to the financing commitments undertaken towards the company, in

42

part because they are foreclosed by third parties and for claims for compensation made by the company. An objection against the proposed court order has therefore been filed.

In the unfortunate event that the company should be ordered to pay the amount mentioned in the court order, the shareholder CPL CONCORDIA, which has already approved a line of credit of 1,200,000 compared to what has been paid so far, amounting to Euro 930,000, in the board meeting on 28 April 2014, it decided to increase the credit line mentioned above to Euro 1,400,000 thereby ensuring the financial cover of the payment of the court order if the judgement concerning our objection is not positive.

Given this situation, the company devalued the photovoltaic system by over Euro 500 thousand after performing the so-called "impairment test" and maintained provisions carried out in the previous financial years, amounting to over Euro 357 thousand, in the provisions for bad debts. Due to the above and in relation to the broader situation described, the company's financial statements showed a loss of Euro 241,880 and net worth of Euro 756,479, against book value of the holding of Euro 455,000. The company directors believe that the provisions and devaluations implemented are more than adequate in order not to further reduce the net worth of the company.

VIGNOLA ENERGIA S.r.l. The company was formed in 2009 and the Cooperative holds 99% of the shares, while the remaining 1% is held by the Consorzio Cooperative Costruzioni di Bologna; it was established for the management of a district heating system to be implemented in the town of Vignola (MO). The construction of the plant started in 2012 and in 2013 the investment was completed and the production of electricity started in the last few months of the financial year 2013. The loss for the reporting year amounted to Euro 32,065, while net worth amounted to Euro 447,159, against a book value of the holding of Euro 495,000.

The difference between the value of the holding and the corresponding net worth value will be recovered by the profits deriving from future business.

P.E.A. PROGETTO ENERGIA AMBIENTE S.r.l.

The company, whose shares were entirely acquired

by CPL CONCORDIA in May 2011, was founded as a design company, in fact it was acquired for the values it contains in relation to the holdings held in the project companies of the user areas in Sardinia. In particular, the company holds a call option to repurchase shares in the companies Fontenergia 4 S.r.l. and Fontenergia 6 S.r.l., which are the companies of the Sardinia user area with the highest intrinsic value. In 2013, the company did not carry out any work. Therefore, the profit and loss account only contains general expenditure costs for the maintenance of the company that recorded a loss of Euro 6,445.

Report on oper ation

NUORO SERVIZI S.r.l. in receivership

At the end of 2006, the company assigned its business to the Consortium for Industrial Development of Central Sardinia. In the first months of 2007, with the planned dismissal of the 10 remaining workers, the company, which was in liquidation, was finally shut down. After a long series of initiatives involving both the Sardinia Region and the Ministry of Economic Development, in June 2012 the final price resulting from the sale of the business unit was paid as well as the amount related to the training of personnel transferred to ASI for the period from January to March 2007, for a total amount of Euro 4,287,160.80. The Liquidator also devalued, in the financial statements of the company, all outstanding receivables deemed uncollectible. During the reporting year the activity carried out was the management of previous pending matters. The loss for the reporting year, of Euro 121,576 reflects past events not recorded in previous financial statements. In 2014 the company will close the receivership with the allocation of residual assets and liabilities to its shareholders.

GHIRLANDINA SPORT S.r.l.

The company was established in 2009 to manage the holding in the company Modena Football Club S.p.A. Currently 93% of the company Ghirlandina is owned by CPL CONCORDIA, 6% by WAMGROUP S.p.A. and the remaining 1% by Mivebo S.r.l.

In June of 2013 the directors of the Cooperative decided to authorise the company's sole director to assign the shares of Modena F.C. S.p.A., which in the meantime had dropped to 34.545%. The assignment was made on 9 May 2014 at a price of Euro 41,454, equal to the nominal value. The company financial statements take into account of this operation; devaluation was carried out to align the value of the holding to the assignment value. As a result, the company showed a loss of Euro 415,505, while net worth amounted to Euro 111, 829.

The Cooperative acted in a consistent manner and recorded a devaluation of Euro 385,040, conforming to the corresponding net worth value.

AIPOWER S.p.A. The company was establi-

shed in Algiers on 7 April 2008 and approved on 12 April 2008, with the purpose of managing the core activities of the Cooperative on Algerian territory. The Cooperative directly holds 54% of the shares and indirectly through Sic S.a.s, as specified in the section dedicated

2

chap.

to Energia della Concordia, a further 20%, 1% is held by another Italian partner and the remaining 25% is held

by Algerian partners.

In 2013, after the major acquisitions made at the end of 2011, the company developed a considerable work portfolio that allowed it to achieve a good economic result; in fact, the value of production was around Euro 7 million, with a profit of Euro 337,377.

TIPOWER S.a r.l. The Tunisian company, of whi-

ch the Cooperative owns 90% of the shares, was incorporated on 16 May 2011 in Tunis with the aim of taking to Tunisia the know-how of the parent company, in particular as regards the engineering part. In other words, the company will have to replicate in Tunisia what has been done in Algeria with AIPower S.p.A. In 2013, the company only carried out commercial activities, with the aim of analysing tenders and participating in them.

The few costs incurred were all deferred to the next financial year, so the result was 0.

The first agreements were acquired in the first months of 2014.

CPL CONCORDIA USA INC. The company was incorporated in New York on 9 April 2013 pursuant to a joint venture between the Cooperative which owns 50% of the shares and the American company G3Power which holds the other 50%. The company's purpose is the management, electrical maintenance and service invoicing of the buildings. The company has a share capital of $1,375,000 and in turn it entirely controls two other companies, New York Electric and CPL EMS, also based in New York. Of the share capital of $1,375,000, $1,300,000 were paid by the shareholder CPL CONCORDIA. In order to complete the cooperative’s business offer in America, especially in the renewable energy field, the said companies established, on 24 July 2013, a new company called CPL Distributed Generation Group Inc., CPL DI. GI. for short. The American shareholder assigned 10% of its 50% share to a natural person active in that market to motivate him to develop the new brand.

The combined management continued with some problems throughout 2013, but at the beginning of 2014 the relationship between the shareholders became unsustainable.

In 2013 the Cooperative financed the company for $750,000. By common consent it was decided to close any relationship between the shareholders by entering CPL CONCORDIA's financial statements and consolidated financial statements

43

into a Separation and Stock Exchange Agreement, which was signed on 19 February 2014, which will be discussed later in the events that occurred after the end of the reporting year.

The separation agreement, in brief, governed the exchange of shares between the shareholders, whereby CPL acquired a 50% share of the CPL DI.GI., reaching a 90% controlling share and assigned its 50% of CPL CONCORDIA Usa Inc. to G3Power, and the parties may lay no other claims. In other words, CPL CONCORDIA valued the shares of CPL DI.GI. $2,075,000, corresponding to Euro 1.6 million.

The directors of the Cooperative in view of the current portfolio of CPL DI. GI., of its profit for the period and the lack of predictability about the future development of the company decided to devalue the full amount of Euro 1.6 million.

CPL DISTRIBUTED GENERATION GROUP INC. – CPL DI.GI. As described in the previous

section, 90% of the company is now owned by the Cooperative and 10% by Mr. Tom Smith; the vicissitudes of the Cooperative in this first year of activity in the United States have also been described in the previous section.

The company ended the first months of business with a loss of Euro 554,973. This loss was mainly due to the cost of management fees charged by G3power, which amounted to Euro 460 thousand in 2013, but which will not be repeated in 2014.

Due to the devaluation carried out and previously described, the value of the holding was equal to 0.

The financial year 2014 will be important for the launch of the brand in the American market; trusting in the Cooperative’s great experience in the sector, gratifying results are expected in the next financial years.

INVERSIONES ENERGIA Y AMBIENTE S.A. – in breve IEA S.A. After the ac-

quisition of 755 of the shares in 2012, in 2013 25% of the shares were assigned to Tradegar S.A., with a capital gain of Euro 125 thousand. Therefore from the financial year 2013, 50% of the Argentinean holding is controlled by the Cooperative and 50% by the company Tredegar S. A. As both companies hold the same number of shares, starting from the reporting year the company was consolidated with the proportional method.

The Argentinean holding holds 97.14% of the shares of Redengas S.A., described in the next section, 36% of the company Ecoenergy S.A. and 67% of the shares of L & G Drinks S.A. During the reporting year, the company assigned the controlling interest in Emprigas S.A.; the latter was historically controlled by IEA, but due to the loss of the concession for the distribution service of the City of San Francisco it was deprived of its assets and then assigned to a party that will deal with the recovery of the remaining assets contained in the

44

company’s balance sheet, leaving the group unharmed.

The assignment amounted to 400 thousand pesos, and a capital loss was recorded in the financial statements of the company of 429,712 pesos. The result of Redengas was positive, but for convenience, the company did not adjust the value of the holding to the net worth of the subsidiary.

In the reporting year the Argentinean holding established the company Ecoenergy S.A., which will manage a production line of photovoltaic panels for the domestic market. The activity will start in 2014. In the reporting year the holding also acquired a 67% share of L & G Drinks S.A., a company that in turn will become the sub-holding for the construction and maintenance of the gas distribution networks in the Region of Entre Rios. The financial statement of the holding IEA S.A. s showed a loss of about Euro 29 thousand.

The sub-consolidated financial statements of the Argentinean companies, drafted for internal purposes, showed a profit of Euro 58,486.

REDENGAS S.A. The company, 97.14% of which is owned by the Argentinean Holding Inversiones Y Energia Ambiente S.A. manages the gas distribution grid of the city of Paranà in the province of Entre Rios, serving about 49,000 users. Over the last 10 years, the Argentine government has blocked the gas sales prices, while inflation has increased by 20-25% per year. Following to the downsizing of personnel and the constant monitoring of overheads, in addition to the assignment of certain assets, the year 2013 closed with a net profit of 1,357,922 pesos, corresponding to Euro 186,595.

CPWH UK LTD The company, founded in London

in December 2012, was created to promote the internationalization process of the Group and then became the holding company of those foreign initiatives on which the group worked in 2012. The projects include studies of the African markets and the creation of a joint venture with a British partner for the marketing of meters and gas volume correctors. At present, the company, 100% of which is owned by the Cooperative, has signed a preliminary purchase agreement with CPL Distribuzione S.r.l. for 50% of the shares of CPL ENERGY INDIA PRIVATE LTD, CEIPL for short, paying in advance the entire price of Euro 228,000.

The acquisition was finalised in March 2014.

The company incorporated under British law showed a loss for the reporting year of Euro 6,885 represented by general running costs.

CPL ENERGY INDIA PRIVATE L.T.D. The

company, 50% of the shares of which were acquired by CPL Distribuzione S.r.l. on 16 February 2011, which were assigned to CPWH UK LTD on 31 March 2014 is the vehicle through which the group CPL CONCORDIA intends to develop its activities in the Indian market, which is experiencing considerable development. During the reporting

Report on oper ation

year, the company marketed mainly odorant and spare parts for reduction plants, but it hasn’t taken off yet. The company, which ends its financial year on 31 March each year according to the local regulations, prepared financial statements for the parent company as of 31 December 2013 that show a loss for the period of Euro 184,065. The tenders for the assignment of the construction and management of the distribution networks of certain large cities will take place in 2014. The group is assessing the tenders and preparing the offers. The tenders will be awarded in 2014 and the group will then evaluate the opportunities, also of development.

GES GAS ENERGY SOLUTIONS GMBH

The company was incorporated under German law in 2013 as instrument for the development and marketing of the CPL group product price list in the European market. The Cooperative holds 75% of the shares, while the remaining 25% are held in part by natural persons and by the company “Tormene Ag”, which operates in the same sector.

The financial year 2013 was characterised by a startup period in which all the market penetration strategies were prepared. The first orders arrived at the end of the reporting year, while general expenses, mainly attributable to employees were accounted for starting from the incorporation and therefore were not covered by the low income produced.

For this reasons the company showed a loss in 2013 of Euro 137,996.

JOKA CPL POLSKA Z.o.o. The company was incorporated under Polish law in 2013, and the Cooperative holds a 50% share. The aim is to technically support the tenders acquired by CPL’s Polish branch and to act as local instrument for the acquisition of new tenders in the renewable energy field and more in general in the energy saving sector. The remaining 50% is held by a local partner that has the objective of developing the CPL brand in the local market. In 2013 the company achieved only a small part of what was expected and for this reason the reporting year showed a loss of Euro 39,397.

CPL HELLAS A.B.E. & T.E.

in receivership The company, established under Greek law, carried out its last production activities in the first few months of 2008. During 2012 the company was placed in receivership and its activity was reduced to recovering the remaining receivables, recovering tax related amounts

2

chap.

and paying residual amounts due. The company entered a loss of Euro 34,591 in 2012 only due to overheads and the differential between contingent assets and liabilities. The directors of the Cooperative consequently devaluated the holding adjusting it to the corresponding portion of net worth.

B2. Affiliated Companies ICHNUSA GAS S.p.A. The company is the holding company that owns 98% of the shares of the project companies established for the management of the user areas acquired by the Cooperative for the construction and distribution of gas in the region of Sardinia.

In fact, in 2009 and 2010 different special purpose companies were established to manage the construction and distribution of gas in various Sardinian user areas, whose tenders were conducted in accordance with the regional resolutions on the distribution of gas in Sardinia.

The Cooperative was awarded the announced concessions of 13 user areas, one of which, the user area 28, headed by the company Fontenergia 28 S.r.l., was assigned in April 2011 to the company Fiamma 2000 S.p.A. Most of the user areas were awarded to temporary business associations, of which the Cooperative is a part, and it will be possible to establish project companies to take over the ownership of the concessions.

In 2013, the financial partner Intermedia S. p. A. assigned its shares to another financial partner, Sofinco S. p. A. In 2013, the operational shareholders SAF Costruzioni S. r. l. opened the procedure of composition with creditors.

Today the corporate structure of the Holding Ichnusa Gas S.p.A. is as follows: • CPL CONCORDIA SOC. COOP. • SOFINCO S.p.A. • IMPRESA PELLEGRINI S.R.L. • SAF COSTRUZIONI S.R.L. composition with creditors

45% 25% 20% 10%

The main activity carried out by the company during the financial year 2013 concerned the procurement of financial resources necessary to support the investments of the entire project. The current macroeconomic situation has not allowed the company to obtain such financing. The governing body, in accordance with the credit institutions that analysed the project, is working on a syndicated loan with a more limited scope of in-

CPL CONCORDIA's financial statements and consolidated financial statements

45

vestment which therefore does not include all 12 user areas acquired but only 6 and more specifically the user areas 4, 6, 7, 9, 15 and 37. Alongside meetings with the credit institutions the company also worked with the Region of Sardinia to gain access to the Jessica Funds, i.e. funding with preferential interest rates made available by the EU for investment in new works in the energy sector, which can be accessed by the user areas 4 and 6.

The value of investments commented include the reductions of the investment values and the eligibility to funding of the project in part with equity, in part with ordinary funding, in part with regional contributions and in part with funding at preferential interest rates. The total investments of these user areas are around Euro 76.1 million, with contributions from the Sardinia Region according to tender for Euro 31.4 million, for a net investment of Euro 44.7 million. The total amount to be financed, VAT and other uses included, amounts to Euro 58.2 million. As regards the user areas that will remain outside the aforesaid scope of investment, considering the economic situation, which has changed totally from the moment of the calls to bid to today, and the non-arrival of natural gas, a first approach with the Sardinia Region has already been made to change the amount of the investments and the contractual terms of the concessions. The Cooperative’s position is to await new developments hoping that the Region will be willing to review its programmes as well as its contribution in terms of additional resources.

In the financial year, the company posted a loss of Euro 35,494 and a net worth of Euro 3,310,567. The section below analyses the individual project companies, already established and operational, part of the so-called Ichnusa project, of which the holding currently controls 98%.

FONTENERGIA 4 S.r.l. The company was in-

corporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 4 comprising the towns of Osilo, Porto Torres, Sennori, Sorso and Stintino, in Sardinia. The planned investments for this user area amount to Euro 15.6 million, of which Euro 7.2 million will be granted as public funding. During the financial year the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 8,621, while net worth amounted to Euro 1,187,214.

FONTENERGIA 6 S.r.l. The company was in-

corporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 6 comprising the towns of Alghero and Olmedo, in Sardinia. The planned investments for this user area amount to Euro 11.2 million, of which Euro 5.1 million will

46

be granted as public funding. During the financial year the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 5,161, while net worth amounted to Euro 1,852,381.

FONTENERGIA 7 S.r.l.The company was in-

corporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 7 comprising the towns of Ittiri, Cargeghe, Muros, Ossi, Tissi, Usini, Uri, Putifigari and Villenova Monteleone, with Ittiri as head town. The planned investments for this user area amount to Euro 14.9 million, of which Euro 5.2 million will be granted as public funding. The company ended the construction phase at the end of 2011 with the completion of the network of the town of Ittiri. In 2012 it began the management and sale of gas which continued in 2013. The limited number of users and relevant consumption, and the start of the depreciation of the networks resulted in a loss of Euro 323,609, while net worth amounted to Euro 382,387.

FONTENERGIA 9 S.r.l. The company was in-

corporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 9 comprising the towns of Ozieri, Berchidda, Tula and Ittireddu, with Ozieri as head town. The planned investments for this user area amount to Euro 8.6 million, of which Euro 3.5 million will be granted as public funding. The company completed the main network at the end of 2012 and in 2013 it began the distribution and sale of gas. Due to the limited number of users connected compared to the potential users, depreciation was not calculated. As a result of this, the company showed a loss of Euro 36,385, while net worth amounted to Euro 331.060.

FONTENERGIA 10 S.r.l. The company was incorporated on 20 April 2012 as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 10 comprising the towns of Ala dei Sardi, Buddusò, Bitti, Onani, Orune, Osidda, Anela, Benetutti and Nule. The planned investments for this user area amount to Euro 10.9 million, of which Euro 3.5 million will be granted as public funding. During the financial year, the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 1,139, while net worth amounted to Euro 1,500,414.

Report on oper ation

FONTENERGIA 11 S.r.l. The company was in-

corporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 11 comprising the towns of Posada, San Teodoro, Budoni, Lodè, Siniscola and Torpè, with Posada as head town. During the financial year the design activities continued but the construction of the network was not started. The planned investments for this user area amount to Euro 11.0 million, of which Euro 4.4 million will be granted as public funding. The loss entered by the company amounted to Euro 7,913, while net worth amounted to Euro 437,093.

FONTENERGIA 15 S.r.l.

The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no.

163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 15 comprising the towns of Dorgali, Galtellì, Irgoli, Loculi, Onifai and Orosei, with Dorgali as head town. The construction phase started in the reporting year and will end in 2014, if the more general funding of Ichnusa will be completed. The planned investments for this user area amount to Euro 11.7 million, of which Euro 4.3 million will be granted as public funding.

The loss entered by the company amounted to Euro 20,021, while net worth amounted to Euro 262,102.

FONTENERGIA 19 S.r.l. The company was formed for the design and construction of the gas distribution network of user area 19 that includes the towns of Terralba, Marrubiu, Mogoro, Palmas Arborea, San Nicolò d’Arcidano, Santa Giusta and Uras.

The planned investments for this user area amount to Euro 12.3 million, of which Euro 4.9 million will be granted as public funding. During the financial year the design activities continued but the construction of the network was not started. The company closed the reporting year with a slight profit of Euro 358, given by the difference between the administrative costs and the financial income generated by the interest bearing loan with the parent company.

FONTENERGIA 26 S.r.l. The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no.

163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 26 comprising the towns of Barrali, Gesico, Goni, Guamaggiore, Pimentel, San Basilio, Selegas, Senorbì and Suelli. During the financial year, the design activities continued but the construction of the network was not started. The planned investments for this user area amount to Euro 12.5 million, of which Euro 3.4 million will be granted as public funding. The loss ente-

2

chap.

red by the company amounted to Euro 8,581, while net worth amounted to Euro 785,423.

FONTENERGIA 27 S.r.l. The company was incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no.

163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 27 comprising the towns of Furtei, Guasila, Samassi, Samatzai, Sanluri, Segariu, Serramanna and Serrenti. During the financial year, the design activities continued but the construction of the network was not started. The planned investments for this user area amount to Euro 23.2 million, of which Euro 7.7 million will be granted as public funding. The loss entered by the company amounted to Euro 7,489, while net worth amounted to Euro 1,842,236.

FONTENERGIA 35 S.r.l. The company was

incorporated on 20 April 2011 as a "project company" according to and for the purposes of art. 156 of Legislative Decree no. 163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 35 comprising the towns of Giba, Masainas, Narcao, Perdaxius, Piscinas, Sant’Anna Arresi, Tratalias and Villaperuccio.

The planned investments for this user area amount to Euro 10.4 million, of which Euro 3.6 million will be granted as public funding. During the financial year, the design activities continued but the construction of the network was not started. The loss entered by the company amounted to Euro 11,522, while net worth amounted to Euro 631,049.

FONTENERGIA 37 S.r.l. The company was

incorporated as a "project company" according to and for the purposes of art. 156 of Legislative Decree no.

163 of 12 April 2006, and more specifically for the design and construction of the gas distribution network of the user area 37 comprising the towns of Monastir, Nuraminis, San Sperate, Ussana and Sestu. During the financial year, the design activities continued but the construction of the network was not started. The planned investments for this user area amount to Euro 14.1 million, of which Euro 6.2 million will be granted as public funding. The loss entered by the company amounted to Euro 9,982, while net worth amounted to Euro 435,799.

PEGOGNAGA SERVIZI S.r.l. The company was established in April 2005 to manage the cemetery services of the town of Pegognaga (MN). The Cooperative holds 50% of the shares, while the remaining 50% is held by the company Mazzola & Bignardi Servizi S.r.l. In the reporting year there was a decrease in revenue due to a temporary decrease in the number of renewals of niches. The operating result for the year showed a profit of Euro 22,471, while net worth amounted to Euro 231,772.

CPL CONCORDIA's financial statements and consolidated financial statements

47

COIMMGEST S.p.A. The company was establi-

shed on 14 May 2007 before Silvio Vezzi, Notary in Modena, who registered the deed under file no. 114655 and folder no. 17735. The 55% majority share is held by Sofinco S.p.A., while the Cooperative holds the remaining 45%. The company was formed to manage real estate assets of the Cooperative world and so far it has acquired the leasing agreements related to the properties of the historical headquarters in Concordia sulla Secchia and of the building in Via Grandi, 43-45, of the premises of the offices in Melegnano, Milan, Bologna, Fano and Padua. For each of these properties, the company then entered into rental agreements with the Cooperative.

The company has applied the international accounting standards to its financial statements, in particular the IAS 17, i.e. the financial method, for the valuation of leasing agreements as allowed by the ruling of the Court of Cassation no. 8292 of 26.05.2003.

It should be noted also that the Cooperative has an option agreement on the shares, for the purchase of the remaining 55 % owned by the majority shareholder, to be exercised by 31 December 2017.

After the earthquake that struck the properties in the area of Concordia sulla Secchia in May 2012, during 2013 the company signed with the owners of the buildings, the leasing companies Banca Italease and ING Lease Italia S.p.A., an agreement for the transfer of the Jus Aedificandi, i.e. the means by which the company acquired the right to restore the properties under leasing, and at the same time signed the agreement to ensure the ownership of the insurance reimbursements and access to grants awarded by the Emilia Romagna region for reconstruction. As regards the property located in Via Grandi 43/45, in the town of Concordia sulla Secchia, the early redemption option was executed, therefore the building was recorded as property owned by the company. As part of a wider project of relocation of the property affected by the earthquake in May 2012, the company acquired a plot of land from CPL located in the town of San Possidonio and adjacent to the historical headquarters of the Cooperative. On this land the Cooperative will build, under tender contract, a warehouse. The payment of this property will be made following the receipt of the contributions from the Emilia Romagna Region, for reconstruction through relocation. During the reporting year the company received insurance reimbursements released by Unipol SpA for Euro 2.4 million, which it used in part to pay the subcontractors and designers.

The operating result for the year was in any case affected by the earthquake, not in terms of current management but as regards the transfer to the profit and loss account of deferred taxes, which the company had recorded last year because it had considered the contributions recorded on an accrual basis as non-deductible, as there was no clear Ministerial decision on this matter.

The amount of deferred, advanced and current taxes amounted to Euro 754,049, which added to the result

48

before taxes resulted in a profit for the reporting year of Euro 1,039,146.

COMPAGRI S.p.A. in receivership The company

of which the Cooperative holds 22.22% of the shares, is now in receivership after having transferred the business unit related to the aerobic system to Agrienergia S.p.A. in 2010. All that remains to be managed are the payables and receivables of a financial nature that will be closed following the start-up of the management activity of Agrienergia. Consequently the result of the company only includes general expenses and financial charges; the result for the reporting year amounted to a loss of Euro 12,116.

AGRIENERGIA S.p.A. Since 2010 the mana-

gement of the aerobic system and the construction and subsequent management of the new anaerobic plant have been carried out by Agrienergia S.p.A. The year 2013 was marked by the completion of the construction activities of the two plants and the subsequent start of production; as a result the incentive rate expected was also obtained. Some additional work remains to be done but the plants are operational, although not at full production.

The plants managed by the company are considered unique at national level and can be defined as prototypes. The obstacles encountered in the implementation of the systems, in addition to the constant requests for modifications by control bodies, such as the Province and Arpa, increased the cost of investment to Euro 11.8 million, forcing the company to increase the share capital in different stages, and in 2013 it was increased to Euro 9 million. The company’s revenue in 2013 was much lower compared to the budget due to the delay in the connection of the plants to the network.

As a result of this, the company posted a loss of Euro 448,084 after having used the residual "Provisions for future charges and losses" of Euro 54,578. Net worth amounted to Euro 9,163,107, after a contribution for future share capital increase of Euro 600,000, made by the sole shareholder CPL CONCORDIA.

X DATANET S.r.l. Since 2011, the Cooperative

owns 50 % of the shares of the company. The company deals with the development and maintenance of software, integrating with the Cooperative’s Information & Communications Technology sector. The company closed the financial year 2013 with a profit of Euro 69,738, while net worth amounted to Euro 534,934.

NOCI SOLAR 1 S.r.l. The company, which ini-

tially only had the Cooperative as shareholder, was created for the construction and subsequent management of the photovoltaic array called Noci 1, a plant with rated power of just under one megawatt located

Report on oper ation

in the town of Noci (BA). On 15 December 2010, the Cooperative sold 51% of its shares in the company to the group WAMGROUP S.p.A., which now controls it. The array was completed and connected in the last days of December 2010 and production began in 2011. The operating result recorded as of 31 December 2013 showed a profit of Euro 115,277, while net worth amounted to Euro 439,361.

NOCI SOLAR 2 S.r.l.

The company, which initially only had the Cooperative as shareholder, was created for the construction and subsequent management of the photovoltaic array called Noci 2, a plant with rated power of just under one megawatt located in the town of Noci (BA). On 15 December 2010, the Cooperative sold 51% of its shares in the company to the group WAMGROUP S.p.A., which now controls it. The array was completed and connected in the last days of December 2010 and production began in 2011. The result recorded as of 31 December 2013 showed a profit of Euro 104,692, while net worth amounted to Euro 393,213.

GHIRLANDINA SOLARE S.r.l.

The company, founded in July 2010, was established for the construction and subsequent management of a photovoltaic system in the town of Modena in collaboration with Hera S.p.A., whose production began in 2011. The result recorded by the company as of 31 December 2013 showed a profit of Euro 59,864 and a net worth of Euro 173,524.

ENERGETSKI SERVIS D.O.O. On 10 Octo-

ber 2012, the Cooperative acquired a 33% share in this company incorporated under Croatian law that has the corporate purpose of studying and designing systems to be generically used in the energy sector. The company actually may help the group to develop its business segments on the Croatian territory, together with the two equal partners “Rotorm d.o.o.” and “Frigomotors d.o.o.”, two other young companies that are very active in this sector.

During 2013, activities were not carried out, so the result for the reporting year showed a loss of Euro 3,246 corresponding to the few general expenses incurred during the year. Net worth amounted to Euro 34,731.

2

chap.

In fact the lease agreement with Coopbilanciai allowed the company to achieve a good economic and financial balance. The result for the reporting year showed a profit of Euro 33,033, while net worth amounted to Euro 1,242,326.

CENTRALE SASSINORO S.r.l. The com-

pany, of which the group holds 10%, was established for the construction and subsequent management of a hydroelectric plant in Sassinoro in the province of Benevento. The plant connected to the grid at the end of the previous year, recorded its first year of business in 2013 with a profit of Euro 39,657, while net worth amounted to Euro 49,075. Investments recorded for the development of the power plant amounted to Euro 3,6 million.

BIOGENGAS S.r.l. The company, established in

November 2012, closed its first year of operation with a loss of Euro 165,797 and a negative net worth of Euro 156,529.

It should be noted that the corporate purpose is the design and marketing of systems for the collection of biogas from animal manure aimed at the production of electricity, mainly for farms.

The Cooperative owns 50% of the shares of the company, but it is actually controlled by the shareholders (natural persons) that also own Brevetti Cremonesi, the company that developed the patent for the use of biogas from animal manure.

In 2013 only 4 plants were requested and completed which represented the company’s turnover, which obviously was not sufficient to cover the general expenses.

CPL FUEL S.r.l The company was established in 2013 for the construction and management of an LNG distribution plant in Este (PD); the group, through Immobiliare della Concordia S.r.l., holds 50% of the shares.

In 2013 the design of the plant was the sole activity carried out. The work will be completed in 2014 and the management of the plant will commence. The general expenses incurred for the reporting year were included in the financial statements which showed a loss of Euro 6,821.

FIMETRA S.r.l. The company, established on 14 December 2010, was born from the collaboration of the two partners CPL CONCORDIA and Coopbilanciai di Campogalliano for the development of new prototypes of meters and correctors foreseen by the AEEG Resolution no. 155/2008. Over the past two years, the company has developed the know-how to develop electronic meters and it has acquired production lines; in 2013 the company was leased to Coopbilanciai.

CPL CONCORDIA's financial statements and consolidated financial statements

49

C Consolidated financial statements

As mentioned in the introduction, over time the group’s consolidated financial statements have grown in terms of content and importance. The consolidated financial statements of the group CPL for the reporting year significantly reflect the economic and financial dynamics resulting from the development strategies planned in the last years by the Cooperative’s management team.

The tables below show the profit and loss account and

balance sheet of the consolidated financial statements and the related ratios, compared with the previous four financial years.

C1. Economic analysis

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

Consolidated Profit and Loss Accounts reclassified according to Added Value method 31/12/2013

%

31/12/2012

%

FINAL DATA 31/12/2011 %

%

368,755,002

89,63%

Variation of the stock of semi-finished and finished products

(1,879,580)

-0,45%

(3,518,102)

-0,86%

1,198,681

0,31%

2,087,663

0,54%

19,406

0,01%

(695,732)

-0,17%

7,054,266

1,71%

(7,822,335)

-2,01%

(3,461,488)

-0,90%

4,218,113

1,33%

36,437,425

8,77%

30,129,651

7,32%

31,076,127

8,00%

31,224,727

8,15%

33,330,291

10,47%

9,970,838

2,40%

9,014,017

2,19%

7,384,192

1,90%

9,252,613

2,41%

7,320,507

2,30%

415,366,056

100,00%

411,434,833

100,00%

388,211,626

100,00%

383,175,272

100,00%

318,323,015

100,00%

-38,67% (151,635,500)

-39,06%

(156,041,443)

-40,72% (113,228,853)

-35,57%

0,89%

7,926,827

VALUE OF PRODUCTION Purchase costs

(161,949,358)

Variation of the stock of raw materials

3,109,583

-38,99% (159,118,083) 0,75%

(3,313,822)

3,470,420

-29,37% (124,648,765)

85,90%

(876,791)

-0,28%

-32,53% (100,320,174)

-31,52%

(122,988,666)

Costs for the employment of third-party assets

(16,134,633)

-3,88%

(15,982,430)

-3,88%

(16,569,551)

-4,27%

(16,509,697

-4,31%

(13,043,466)

-4,10%

(6,866,207

-1,65%

(5,444,675)

-1,32%

(3,897,628)

-1,00%

(4,328,331)

-1,13%

(4,610,026)

-1,45%

ADDED VALUE

110,536,776

26,61%

110,500,810

26,86%

105,556,973

27,19%

89,573,864

23,38%

86,243,706

27,09%

Personnel cost and relating charges

(67,790,287)

-16,32%

(62,951,961)

-15,30%

(60,876,944)

-15,68%

(55,354,294)

-14,45%

(50,757,875)

-15,95%

42,746,489

10,29%

47,548,849

11,56%

44,680,030

11,51%

34,219,569

8,93%

35,485,831

11,15%

MOL (GOM)

-28,46% (114,022,395)

2,07%

273,434,698

Costs for services

Sundry operating expenses

-29,61% (117,075,013)

-0,81%

89,79%

%

89,45%

Internally generated fixed assets

344,071,757

31/12/2009

371,533,106

Other income

91,80%

31/12/2010

Income from sales and performances

Variations of works in progress

356,374,962

Values expressed in Euros

Depreciation of tangible fixed assets

(7,113,394)

-1,71%

(6,283,772)

-1,53%

(6,354,029)

-1,64%

(6,086,569

-1,59%

(5,372,843)

-1,69%

Amortisation of intangible fixes assets

(11,115,062)

-2,68%

(11,195,468)

-2,72%

(9,122,022)

-2,35%

(7,235,051)

-1,89%

(5,478,904)

-1,72%

Provisions and devaluation

(6,217,077)

-1,50%

(6,679,282)

-1,62%

(5,357,977)

-1,38%

(4,472,280)

-1,17%

(3,231,300

-1,02%

Amortisation/depreciation and provisions

(24,445,533)

-5,89%

(24,158,522)

-5,87%

(20,834,027)

-5,37%

(17,793,899)

-4,64%

(14,083,047)

-4,42%

OPERATING RESULT

18,300,956

4,41%

23,390,326

5,69%

23,846,003

6,14%

16,425,670

4,29%

21,402,784

6,72%

Interest and other financial charges

(6,337,286)

-1,53%

(6,182,131)

-1,50%

(5,810,819)

-1,50%

(3,316,780)

-0,87%

(3,544,259)

-1,11%

3,069,726

0,74%

3,128,862

0,76%

1,249,743

0,32%

508,963

0,13%

539,387

(3,267,559) 15,033,397

-0,79% 3,62%

(3,053,269) 20,337,057

-0,74% 4,94%

(4,561,076) 19,284,927

-1,17% 4,97%

(2,807,817) 13,617,853

-0,73% 3,55%

(3,004,872) 18,397,913

0,17% -0,94% 5,78%

Other financial earnings

TOTAL FINANCIAL ACTIVITY CURRENT RESULT

1,579,307

0,38%

111,343

0,03%

730,410

0,19%

9,257,797

2,42%

59,546

0,02%

Adjustments of financial assets

Earning from holdings

(1,807,600)

-0,44%

(3,621,668)

-0,88%

(3,586,802)

-0,92%

(4,751,321)

-1,24%

(1,448,209)

-0,45%

Rebate to members

(1,500,000)

-0,36%

(1,700,000)

-0,41%

(850,000)

-0,22%

(1,700,000)

-0,44%

(1,500,000)

-0,47%

387,878

0,09%

(122,309)

-0,03%

625,279

0,16%

2,055,035

0,54%

709,155

0,22%

Special activities RESULT BEFORE TAX

13,692,983

3,30%

15,004,422

3,65%

16,203,814

4,17%

18,479,364

4,82%

16,218,405

5,09%

Tax on the income of the financial year

(6,447,018)

-1,55%

(6,286,904)

-1,53%

(6,620,614)

-1,71%

(3,669,471)

-0,96%

(5,163,187)

-1,62%

7,245,965

1,74%

8,717,518

2,12%

9,583,200

2,47%

14,809,893

3,87%

11,055,217

3,47%

NET RESULT MINORITY (PROFIT) LOSS GROUP PROFIT (LOSS)

(2,762,947)

212,006

424,581

371,987

131,114

3,09%

4,483,018

8,929,524

10,007,781

15,181,880

11,186,331

3,09%

Despite the difficult macroeconomic situation of our country, and not only that, the CPL CONCORDIA Group achieved satisfying results in 2013, in line with expectations. The drop in profitability of the parent company was largely recovered through the profitability achieved by the companies operating in the energy and heat management sector, in the trading and selling of gas and energy and in gas distribution. As regards these two areas, which represent the most significant portion of the business

50

carried out by the companies included in the consolidation, besides the parent company, the most significant items are analysed below.

C2. Analysis of Assets

and Liabilities

The balance sheet is prepared with the method based on the item liquidity of the last five years.

Report on oper ation

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

Values expressed in Euros

GROUP DATA Dec. 31, 2010

Dec. 31, 2012 Dec. 31, 2011 ASSETS

Dec. 31, 2009

Dec. 31, 2008

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

118,870,700 1,819,481 251,214,201 43,795,884 1,664,984 5,566,903 422,932,153

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

61,526,074 311,089 248,239,162 42,035,468 1,392,714 5,741.781 359,246,289

39,934,258 3,342,341 235,533,153 45,354,244 1,106,117 5.336,495 330,606,607

44,382,965 20,084 176,503,149 36,997,411 1,865,121 5,781,392 265,550.122

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

50,413,146 141,553,245 31,509,251 646,407,794

44,815,342 117,586,599 35,045,355 596,022,043

39,544.912 108,345,331 32,413,233 539,549,764

33,886,680 99,280,777 36,644,291 500,418,355

23,383,972 100,354.860 23,987,705 413,276,660

646,407,794

596,022,043

539,549,764

500,418,355

413,276,660

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

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

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

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

Totale ASSETS

2

chap.

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

86,365,682 12,185,662 9,547,848 176,420,969 0 0 1,673,163 9,368,612 4,170,842 8,230,347 5,174,220 313,137,344

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

Total medium-/long-term liabilities

0

0

0

0

0

138,033,341

131,055,272

114,009,597

83,941,505

68,520,018

11,578,863

11,578,863

12,058,863

12,538,863

0

0

0

0

0

0

4,832,811

4,341,977

3,649,597

3,491,619

2,607,790 0

0

0

0

0

96,199

139,690

0

0

0

598,359

641,568

287,381

559,973

593,432

5,118,017

4,906,855

4,905,251

5,247,411

5,796,182

21,526

21,526

21,526

21,526

21,526

528,965

448,446

379,373

307,161

234,609

12,080,212

10,936,339

8,065,754

4,834,046

3,932,389

172,888,290

164,070,535

143,377,341

110,942,104

81,705,947

22,426,530

20,713,737

19,587,590

18.312,536

15,938,753

656,679

656,679

656,679

656,679

656,679

113,813,193

108,867,183

101,181,402

89,473,011

82,158,320

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

78,184

78,184

78,184

78,184

78,184

531,892

531,892

531,892

531,892

531,892

1,269,396

1,269,396

1,269,396

1,269,396

1,269,396

(4,999,668)

(2,023,987)

(2,883,518)

(4,368,775)

1,726,778

235,597

235,597

235,597

235,597

235,597

(1,402,958)

(2,028,048)

(1,604,118)

(1,470,245)

(1,416,124)

0

0

0

0

0

4,483,018

8,929,524

10,007,781

15,181,880

11,186,331

Total Group Net Equity Minority Net Equity

137,091,864 23,290,295

137,230,158 1,822,703

129,060,886 1,102,138

119,900,157 671,060

112,365,807 1,605,897

Total LIABILITIES

646,407,794

596,022,043

539,549,764

500,418,355

413,276,660

Profit / loss of the financial year

CPL CONCORDIA's financial statements and consolidated financial statements

51

52

Report on oper ation

The elements that characterise the structure of the group’s balance sheet are the same as those that characterise the parent company’s financial statements.

The main difference lies in the amount of consolidated tangible fixed assets which, compared to the amount entered in the parent company’s financial statements, are significant due to the value of the gas distribution networks. In the consolidated balance sheet this amount is offset by the higher debt of the group gene-

2

chap.

rated by the investments in the construction of the said networks. Considerations on the other items of the consolidated balance sheet remain unchanged with respect to those on the parent company's financial statements.

C3. Consolidated financial ratios

The table below shows the ratios of the consolidated balance sheet for the last five years:

CPL CONCORDIA Group: Main financial ratios Consuntivi

ECONOMIC ANALYSIS

Preventivo

Formule di calcolo

31/12/2013

31/12/2012

31/12/2011

31/12/2010

31/12/2009

31/12/2013

R.O.E. (Return on Equity)

3,38%

6,96%

8,41%

14,50%

11,06%

4,56%

R.O.E. = RN/CP x 100

R.O.I. (Return on Investment)

2,83%

3,92%

4,42%

3,28%

5,18%

3,82%

R.O.I. = RO/CI x 100

10,29%

11,56%

11,51%

8,93%

11,15%

9,08%

MOL/VP x 100

0,79%

0,74%

1,17%

0,73%

0,94%

1,35%

OFN/VP x 100

5,60

7,66

5,23

5,85

7,12

3,67

OFN/RO x 100

MOL/Value of Production Incidence of Net Financial Charges on V.P. EBIT/ Net Financial Charges

KEY:

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

Consuntivi

FINANCIAL AND EQUITY ANALYSIS

Preventivo

Formule di calcolo

31/12/2013

31/12/2012

31/12/2011

31/12/2010

31/12/2009

31/12/2013

Liquidity ratio

1,35

1,36

1,35

1,23

1,22

1,26

AC/DBT

Leverage

4,87

4,65

4,53

4,78

4,08

4,66

CI/CP

Net Financial Position/ Net Equity

0,98

0,94

1,11

1,02

0,58

1,21

(DBTO+DMLTO)/CP

Elasticity Ratio

1,89

2,02

1,99

1,95

1,80

1,73

AC/IMMOB

EBITDA/DEBT

33,06

39,62

33,88

32,15

60,83

26,94

DEBT/EBITDA

3,02

2,52

2,95

3,11

1,64

3,71

DEBT = 129,303,272 EBITDA =

KEY:

42,746,489

119,998,721 131,872,488 106,436,005 47,548,849

44,680,030

34,219,569

MOL/DEBT x 100 DEBT/MOL

58,332,560 133,785,644 35,485,831

42,834,844

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

As with the parent company’s financial statements, also the ratios of the group’s consolidated financial statements were positive with a good balance between the income and financial parts.

The Debt/Ebitda ratio was 3.02, absolutely in line with the covenants usually required by credit institutes and far above the expected ratio.

CPL CONCORDIA's financial statements and consolidated financial statements

53

D. Financial Situation INTRODUCTION

Despite a slight economic recovery and improvement in the recession that has severely affected our country and the Eurozone economies, the year 2013 was a difficult year. The effects of six years of deep global crisis have in any case caused a reduction in domestic demand, affecting the profitability of most Italian companies, with the exception of those that work with international markets. The families’ real income was low also in 2013 and unemployment, in particular as regards young people, has become a worrying economic and social problem.

Despite this initial recovery, the effects of the crisis, which was initially of a financial nature, continue to influence the real economy; the monetary policies implemented in 2013 to curb inflation and generate price stability, are the basis for a significant recovery project which, however, requires and needs new financial input, in particular from the banking system.

Progress of the financial operations of CPL CONCORDIA in financial year 2013

The macroeconomic environment in recent years has negatively influenced the result of the financial operations of many companies. These negative effects are not present in the financial statements of CPL CONCORDIA, which on the contrary, for the past five financial years has recorded a limited effect on the financial operations, except for a slight worsening in 2011.

The reclassifications of the profit and loss accounts of the parent company highlight the following: the impact of the net financial operations related to the value of production was 0.44% in 2009, 0.32% in 2010, 0.74% in 2011, 0.26% in 2012 and 0.40% in 2013.

The same ratio, analysing the consolidated financial statements of CPL CONCORDIA Group was 0.94% in 2009, 0.73% in 2010, 1.17% in 2011 and 0.74% in 2012 and 0.78% in 2013. Data that shows countercyclical trend in a time when the cost of money increased in the last financial years (especially due to the spread applied by the banking system).

The reduction in debt (which at the end of 2009 had reached the minimum value) and the drop in the rates of

54

reference (Euribor) recorded in the markets from the last few months of 2008 onwards, contributed to the reduction in value of this ratio, recorded since/in the financial years 2009 and 2010. From the financial year 2009 onwards, however, there was a significant increase in the cost of money due to the increase in the spread applied by lenders.

Following the earthquake in May 2012 that hit the headquarters in Concordia, as early as June 2012 a request for moratorium was sent by the Cooperative, as an act of solidarity towards the company, to all banks and financial institutions with which the Cooperative had medium to long term loans. The request included a suspension for a period of 12 months of the repayment of the capital amount of loan instalments.

Legislative Decree 74 of 8 June 2012, (converted into Law no. 122 of 1 August 2012) then imposed by law a part of the requests that the company had already asked its lenders to apply voluntarily. The Decree in fact implemented the suspension of the payments of all instalments until 30 November 2012.

Subsequently, the Cooperative entered into bilateral agreements with the lenders and obtained a suspension for the repayment of the capital amounts, for almost all cases, until June 2013, for a value of about Euro 30 million which was made possible also thanks to the provisions of Decree Law n. 74; in this way it received important support to deal with the major damage caused by the earthquake. In the absence of such extensions, the company would have had to resort to the market, entering into new loan agreements at higher market conditions.

The same bilateral suspension for the repayment of the capital amounts until 30 June 2013 was also obtained by other companies of the group, in particular Ischia Gas S. r. l., Marigliano Gas S. r. l., CPL Distribuzione S. r. l., Serio Energia S. r. l., Immobiliare della Concordia S. r. l. and Pegognaga Servizi S. r. l.

In November 2012, in accordance with Decree 174/2012, the Cooperative presented the application for an interest free bank loan for the payment of duties, taxes and contributions for the payments due and for those suspended until 30 November 2012, as well as for payments to be made in the period from 1 December 2012 to 30 June 2013; for the said second period, the amounts communicated in November 2012 were estimated.

The fund for the granting of this loan was provided to the bank by the Loans and Deposits Bank (CDP), supported by the State guarantee (so-called 2012 Earthquake

Report on oper ation

moratorium ceiling – Phase 1). The funding was requested through the bank MPS and as of 30 June 2013 the residual debt of the loan was Euro 30.74 million.

In 2013, according to Decree Law 43/2013, the companies affected by the Earthquake 2012 were granted the possibility to open a new line of interest free financing (with use of "CDP" funding and assisted by a State guarantee) to finance the payment of taxes due from 1 July 2013 to 15 November 2013 (so-called 2012 Earthquake moratorium ceiling – Phase 2). On 13 November 2013, the Cooperative obtained a payment from MPS, from this line of financing of Euro 4.53 million.

In total the debt at 30 November 2013 of the residual amount of the two interest free lines granted to the Cooperative, pursuant to Decree Law 174/2012 and Decree Law 43/2013, amounted to Euro 35.28 million.

The same interest-free loans were requested and obtained by other companies belonging to the CPL Group, more specifically: "Coopgas S.r.l." (according to Decree Law 174/2012 and according to Decree Law 43/2013) and “Immobiliare della Concordia S. r. l.” (according to Decree Law 174/2012). With regard to the financing line according to Decree Law 174/2012, the company "Coopgas S.r.l.", from November 2012 to 30 June 2013, through BPER obtained a loan with a residual value of Euro 12.83 million; the company “Immobiliare della Concordia S. r. l.” obtained, again through BPER a similar loan valued at 30 June 2013 for a residual amount of Euro 0.241 million. With reference to the line according to Decree Law 43/2013 the company "Coopgas S.r.l." requested and obtained through BPER, a new loan on 13 November 2013 totalling Euro 1.14 million.

For all the companies that benefited from the financing lines for the payment of taxes, granted under Decree Law 174/2012 and Decree law 43/2013, the repayment plan initially envisaged by the loan agreement, according to the agreement signed between the bank and the "CDP", envisaged: a repayment in three six-monthly instalments, starting on 31 December 2013 and with final expiry on 31 December 2014, for loans granted in “phase 1" (Decree Law 174/2012 ); a refund in four six-monthly instalments with starting on 30 June 2014 and with final expiry on 31 December 2015, for loans granted in “phase 2” (Decree Law 43/2013). However, as a result of the two extensions granted, respectively,

by Decree Law 150/2013 (which suspended the instalment due 31 December 2013 and granted a one-year extension of the final expiry date originally planned) and

by Law 50 of 28 March 2014 (two-year extension of the

2

chap.

final expiry date originally planned with consequent rescheduling of the repayment plan), the repayment of the two lines to date is amended as follows: “phase 1” repayment in six six-monthly instalments of equal constant capital amount, the first due on 30 June 2014, and the last one on 31 December 2016; “phase 1” repayment in eight six-monthly instalments of equal constant capital amount, the first due on 30 June 2014, and the last one on 31 December 2017.

With reference to the new sources of bank financing in the year 2013, the company obtained six new medium term lines, as follows: 60 month loan agreement entered into on 29 March 2013 with "Banca Intesa" for an amount of Euro 5.00 million; 36 month loan signed on 28 June 2013 with "Deutsche Bank" for Euro 2 million; 42 month "bullett" loan entered into on 30 June 2013 with "Unipol Banca" for Euro 0.49 million; 60 month loan (BEI funding) signed on 31 July 2013 with "BNL" for Euro 10.0 million; 72 month loan signed on 2 August 2013, with “Cassa Depositi e Prestiti Spa" for Euro 15 million; 60 month loan signed on 28 October 2013, with "Veneto Banca Spa" for Euro 1.5 million.

For CPL Group companies, the following new bank loans were granted: “Progas Metano S. r. l.” 144 month loan for Euro 2.5 million with "Banca della Campania; “Fontenergia S. r. l.” (former Fontenergia S.p.A.) 36 month loan for Euro 1.00 million with "Unipol Banca"; “Cristoforetti Servizi Energia S.r.l.” 60 month loan for Euro 1.5 million with the "Banca Popolare Alto Adige” and a 60 month loan for Euro 2 million with "Mediocredito Trentino Alto Adige”. As evidence of CPL Group’s will to diversify its sources of funding to cover the requirements arising from investments, at the end of November 2013, the Company completed a major operation with the assignment of 49% of the shares of the company "European Gas Network S.r.l."(sub-holding company which owns all the shares of the of CPL Group's distribution companies) to two investment funds: Fund PPP Italia (Fondaco SGR S.p.A.) and Fondo Sistema infrastrutture (Orizzonte SGR S.p.A.). From this operation the group obtained important liquidity, amounting to Euro 20 million.

At the end of the financial year, the net financial position of the Cooperative and of the entire group was higher than that recorded as of 31 December 2012.

In particular, the net financial position of CPL was equal to Euro 75.29 million compared to Euro 63.94 million twelve months earlier, while the Group dropped to Euro 129.30 million compared to Euro 120.00 as of 31 December 2012.

CPL CONCORDIA's financial statements and consolidated financial statements

55

In any case, the key ratios, calculated on the basis of the consolidated financial statements, were within values of absolute balance: Debt/EBITDA equalled 3.03x and Debt/Equity ratio equalled 0.98x.

One of the major repercussions induced by the current economic crisis is the constant search for financing by all the economic players. In this context, it becomes increasingly difficult for the group to further improve its terms of payment with suppliers. Furthermore local authorities are increasingly requesting contractors to be responsible for the investments required by a tender, which were previously sustained by the former. As a result of these requests, the average length of the agreements has slightly increased. This is a logical consequence of the heavy cuts in government transfers, a result of the Eurozone crisis that has forced the state to reduce its debt, even by means of a significant reduction in public spending.

To manage part of the payables, in 2012, CPL CONCORDIA Soc. Coop. entered into an agreement with "Banca IFIS S.p.A." for the activation of a reverse factoring service in favour of its suppliers.

Furthermore, it should be noted that increasingly frequent requests are made to the company from potential private customers concerning investments linked to long-term management contracts, which were traditionally sustained by the customers. Typical examples are improvements to be made to heating plants owned by third parties or the request to lease an asset (for example a cogenerator) instead of selling it. On the other hand, in return there is the possibility of executing agreements with a longer duration than the current one.

As of 31 December 2013, the amount of overdue loans held by the Cooperative appeared improved compared to the amount at the end of 2012, thanks to the great attention that the group has always placed on the control and management of the entire credit cycle.

It should be noted that the ratio of overdue loans and the value of production (net of capitalisation) has improved. In fact, this ratio stood at 17.04% at the end of 2013, while it was 21.4% at the end of 2012, 18.5% at the end of 2011, 15.41% at the end of 2010 and 16.05% at the end of 2009.

With reference to the management of receivables during the year 2013 certain non-recourse factoring operations were implemented by the Cooperative that helped to curb the use of working capital.

The liquidity the Cooperative benefited from during the whole financial year 2013 was placed in unrestricted

56

bank deposits or loaned to the subsidiaries, in the case of temporary need, which were thus able to avoid taking out a loan (at least temporarily) from credit institutions at rates higher than those that CPL would receive if used. In this way, financial management was optimised at group level, limiting the effect of the financial operations, as can be seen in the consolidated financial statements.

In 2013 many activities that employed liquidity involved finance companies of the local cooperative system (in particular, Finpro Soc. Coop.), as well as some credit institutes of reference.

The Group made the decision some time ago to procure all the resources necessary to support its needs in the medium/long term (with the exception of some for the purpose of covering temporary cash imbalances); in April 2014 the Cooperative obtained a new 60 month loan for Euro 37.5 million from a pool of banks, headed by "ICCREA Banca Impresa S.p.A."; this last loan, in the same way as the main ones signed in 2013, aims to support the commitments deriving from its core business and those contained in the three-year plan 2013-2015.

Between the end of 2013 and the first months of the current year 2014, the group obtained from the financial system, ceilings for the disinvestment "without recourse" of receivables from customers for an amount of over Euro 40 million. These lines of credit can be used, if necessary, to limit the use of working capital.

An increase in the net financial position is expected at the end of the current year 2014, compared with the one reported at the end of 2013; the increase will derive, mainly, from investments relating to various ongoing projects, traditional activities in the domestic market and those resulting from strategies to penetrate foreign markets.

Despite the increase in the financial position, the main ratios of the financial statements, should remain within values considered of absolute balance (the DEBT / EBITDA ratio expected as of 31 December 2014 should be just slightly higher than the one calculated on the basis of the 2013 financial statements).

The Cooperative and the group’s objective, which is expressed in the three year industrial plan 2013-2015, is to continue to maintain the current rating and the main economic and financial ratios in absolute balance.

Report on oper ation

Foreseeable evolution of the management

The three-year strategic development plan of the Cooperative and the entire CPL CONCORDIA Group currently in force was approved in February 2013, which is highlighted in the report accompanying the financial statement of the last financial year. The three-year plan covers the 2013-2015 period. The criterion adopted to draft the three-year plan is based on three key factors: the development of the group’s products; successful internationalisation; maintaining the excellent rating standards necessary to access credit.

As described in the previous sections, if on the one hand the results of the financial statements, of the parent company and the entire group, confirm the soundness of the overall financial situation and the good financial ratios, on the other, from a strictly economic point of view the results generated by the product marketing activities and the internationalisation process are certainly insufficient.

All this must be considered in a macroeconomic context of significant stagnation of both domestic and international markets, making future planning very difficult.

For these reasons the three-year plan has not been updated and focus has been placed on an internal reorganization process, needed to prepare the group for new challenges.

The internal reorganisation process focuses on three key factors: a) rationalisation of the internationalisation process; b) improvement of the efficiency of the production system with the aim of reducing costs; c) reorganisation of the organisational structure.

This type of process was already implemented by the Cooperative in 2005. The results produced in these years by that reorganisation are evident, and described at the beginning of this report.

The year 2014 will be a crucial year for the Cooperative to change, reorganise itself and be ready to start again, with the advantage of having a sound financial position.

From a strictly strategic point of view, 2013 was characterised by the concentration of the gas distribution

2

chap.

companies into a single sub-holding (E.G.N. S. r. l.) , with the subsequent assignment of 49% of the shares of the latter to two investment funds, as detailed in the section of this report dedicated to the subsidiaries.

In 2014, the Cooperative will tackle another project of great strategic impact, which concerns the concentration in a single legal entity of all the following activities: study, design, construction, marketing and sale of gas meters and correctors for both the domestic market, according to AEEG resolution no. 155/08, and international market.

The operation will involve two other companies in addition to the Cooperative: Coopbilanciai Soc. Coop and Sacofgas 1927 S. p. A. The market, after years of waiting, is mature and the aggregation process is in progress. In other words, the group is ready to get the expected results and seize the market opportunities.

In the early months of 2014 the group acquired a 40% share in TEA Acque S.p.A. This acquisition was strongly wanted to enter with determination into a market with very few players. The national water system will require significant investments in the next few years and the group will certainly be present.

Between the end of 2013 and the beginning of 2014, the group, through its subsidiary Coopgas S.r.l., acquired the know-how to be a leader in both the electricity and telephony market.

Within the next few months, Coopgas S.r.l. will be able to present itself to its customers offering the whole package of gas supply, electricity and telephony for both civil and industrial customers at very competitive conditions offered by a provider that can cover the provinces in which it operates with its various offices around the country, in addition to the user areas in which the group is also distributor.

If the national economic situation has shown signs of recession for years, our group has, as always, been characterised by a consolidated dynamic attitude. The group’s numerous initiatives in the various areas supported by a more modern and efficient organizational structure, are the group’s precious resources to meet the challenges of the near future.

CPL CONCORDIA's financial statements and consolidated financial statements

57

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

In the months following the date of the financial statements no facts occurred that may in any way influence significantly the group's performance.

The events that occurred after the end of the financial year mainly concern acquisitions, incorporations and assignments of companies, described below.

On 14 January 2014, the company Acque della Concordia S.r.l. with registered office in San Giorgio di Mantua (MN) was established, of which the Cooperative holds a share of 70%; the remaining 30% is owned by the partner S.T.A. S. r. l. – Società Trattamento Acque with headquarters in San Giorgio di Mantua (MN). It's a project company set up to acquire a holding in TEA Acque S.r.l. which currently amounts to 40% of the share capital; the company carries out operational tasks related to the performance of the integrated water service in the homogeneous area 2 of the Ambito Territoriale Ottimale (ATO) – territory with integrated services - in the province of Mantua. The share capital of the company amounts to Euro 10,000; On 19 February 2014 the so-called "Separation and Stock Exchange Agreement" was signed between the Cooperative, the American partners G Three Partners LLC of the Gristina family and the partner Thomas Smith; with the above agreement the companies CPL CONCORDIA Usa Inc. together with its subsidiaries New York Electric & Maintenance Data Corp. and CPL Metering Group Inc. were exchanged with the company CPL Distributed Generation Group Inc.; before the agreement, the Cooperative held 50% of CPL CONCORDIA Usa Inc. and 50% of CPL Distributed Generation Group Inc.; with the signing of the agreement, the Cooperative now owns 90% of CPL Distributed Generation Group Inc. and has no share in CPL CONCORDIA USA Inc.; In data 24 marzo 2014 è stato acquisito il 50% della società Tecnoservizi S.r.l. con sede a Novi di Modena (MO); il restante 50% è di proprietà è suddiviso in parti uguali fra i due soci privati Malagola Elisa e Martinelli Paolo entrambi di Novi di Modena (MO). La società ha per oggetto la fabbricazione di elaboratori, sistemi ed altre apparecchiature per l’informatica. Il capitale sociale della società ammonta ad Euro 10.000;

58

On 24 March 2014, 50% of the company Tecnoservizi Srl with headquarters in Novi di Modena (MO) was acquired; the remaining 50% is divided equally between the two private shareholders Malagola Elisa and Martinelli Paolo, both from Novi di Modena (MO). The company's purpose is the manufacture of computers, systems and other information processing equipment. The share capital of the company amounts to Euro 10,000; On 28 March 2014, a further 20% of the affiliated company Fimetra S.r.l. was acquired from the other shareholder CoopBilanciai Soc.Coop. with headquarters in Campogalliano (MO); the shares now held amount to 60% of the share capital of the company therefore it passes from being an affiliated company in 2013 to being a subsidiary in 2014; On 31 March 2014, 50% of the share of CPL Energy India Private Ltd was transferred from the company CPL Distribuzione S. r. l to the UK subsidiary Cpwh Ltd; On 24 April 2014, the holding (equal to 30% of the share capital) of the company “Sarda Reti Costruzioni S. r. l.” was entirely assigned to “So. di. gas – S. o. i. s. S. p. A.” with headquarters in Sestu (CA); On 9 May 2014, the entire holding (equal to 34.545% of the share capital) of the company "Modena Football Club S.p.A.", 93% of which was held by the subsidiary "Ghirlandina Sport S.r.l.", was assigned to the company "World Promotion Company S.A." with headquarters in Luxembourg which already held 64.155% of the share capital of Modena the football club.

Report on oper ation

Allocation of the profits

The board of directors, on the basis of the results obtained and after having heard the reasoned opinion of the special meeting of the Cooperative shareholders, proposed to the members’ meeting the approval of the implementation of the multi-year investment plan for the year 2013 and the allocation of the net profit for the year of Euro 5,034,688 = as follows:

Euro312,746.88 =to Cooperative Shareholders (sub-

scribers) by way of dividend (period 01/01/2013 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 51,64 (code IT00011295960) as of 31/12/2013, payable by 30 June 2014; Euro10,007.77 = to Cooperative shareholders (stock option) by way of dividend (period 01/01/2013 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 51.64 (code IT00011295960) as of 31.12.2013, payable by 30 June 2014; Euro140,000.00 = to Cooperative shareholders (subscribers) by way of dividend (period 01/01/2013 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 500.00 (code IT0003794788) as of 31/12/2013, payable by 30 June 2014; Euro138,600.00 = to Cooperative shareholders (subscribers) by way of dividend (period 01/01/2013 31/12/2013) at a gross rate of 7.00% per share with a nominal value of Euro 500,00 (code IT0004431083) as of 31/12/2013, payable by 30 June 2014;

Thank you for the confidence and trust you have placed in us. We invite you to approve the financial statements as of 31/12/2013 as they have been presented to you.

2

chap.

Euro 587,458.60 = as dividend to Cooperative mem-

bers and investor members at the gross rate of 5.00% compared to the share capital actually paid, payable by 30 June 2014; Euro 129,240.85 = 1.1% to the free capital increase (under Law 59/92) of the share capital actually paid, that can be capitalised; Euro 151,040.64 = 3.00% to the mutuality funds for the promotion and development of cooperatives pursuant to art. 11 of Law 59 of 31/01/1992; Euro 1,510,406.40 = 30% to the indivisible legal reserve fund, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/02/77; Euro 2,055,186.86 = to the ordinary reserve fund, indivisible between the members during the life of the Cooperative and upon its dissolution, as provided for in the bylaws and in accordance with the provisions of art. 12 of Law no. 904 of 16/12/77;

Concordia s/Secchia, lĂŹ 19/05/2014 Chairman of the board of directors Roberto Casari

CPL CONCORDIA's financial statements and consolidated financial statements

59

CHAPTER 3

consolidated balance sheet 2013

Consolidated Balance Sheet 2013 as of December 31, 2013

Statement of

assets December 31, 2013 Amounts expressed in Euros

A)

RECEIVABLES FROM MEMBERS FOR PAYMENTS STILL DUE Portion called in

B)

December 31, 2012 Amounts expressed in Euros

1,664,984 1,664,984

1,502,018 1,502,018

FIXED ASSETS

I INTANGIBLE FIXED ASSETS 1) Start up and expansion costs

339,612

192,784

2) Research, development, and advertising costs

110,209

111,722

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

92,349

200,614

4) Concessions, licenses, trademarks, and similar rights

38,540

71,051

214,750

245,500

5) Goodwill 5b) Consolidation difference 6) Fixed assets in progress and payments on account 7) Other intangible fixed assets

Total

0

0

3,743,285

3,276,606

45,874,400

40,717,064

50,413,145

44,815,341

II ITANGIBLE FIXED ASSETS 1)Land and buildings

11,366,046

11,329,942

2) Plants and machinery

107,447,659

81,455,740

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

Total

841,783

832,870

4,912,406

3,855,319

16,985,351

20,112,729

141,553,245

117,586,600

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

0

0

b) Associated companies

4,642,559

5,672,077

c) Parent companies

0

0

d) Other companies

5,612,972

6,015,360

2) Receivables:

(entro 12 mesi)

2,924,653

2,924,653

3,554,653

3,554,653

b) From associated companies:

7,368,720

7,368,720

9,166,542

10,385,792

c) From parent companies:

0

0

0

0

d) From others:

1,388,807

6,775,171

924,500

6,307,486

3) Other securities

0

21,498

0

15,983

4) Treasury shares

0

12,239

0

289,184

Total Total fixed assets

62

(entro 12 mesi)

a) From subsidiary companies:

27,357,812 219,324,202

32,240,535 194,642,476

consolidated ba lance sheet

C)

2013

3

chap.

CURRENT ASSETS

I STOCK 1) Raw materials, ancillary and consumables

3,574,651

2) Products under processing and semi-finished products

1,238,939

1,589,406

28,696,118

19,140,486

4) Finished products and goods

6,133,730

6,522,137

5) Payments on account

4,152,445

2,507,159

43,795,883

40,582,975

3) Works in progress on order

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

Total

(oltre 12 mesi) 3,907,180 0 87,591 0 43,570 0 113,098

208,010,943 32,435 13,278,402 0 6,524,225 8,788,911 18,730,725

255,365,641

10,823,787

(oltre 12 mesi) 2,576,048 0 0 0 98,852 0 129,920

207,356,218 2,076,654 9,585,612 0 11,504,029 7,793,945 8,693,722

247,010,180

III FINANCIAL ASSETS WHICH ARE NOT FIXED ASSETS 1) Holdings in subsidiary companies

287,500

527,744

2) Holdings in associated companies

1,527,703

3,878,362

3) Other holdings

4,195

4,195

4) Treasury shares

0

0

5) Other securities

84

84

1,819,482

4,410,385

118,814,263

102,188,388

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

Total TOTAL CURRENT ASSETS D) ACCRUED INCOME AND PREPAYMENTS

TOTAL ASSETS

0

0

56,438

50,198

118,870,701 419,851,707

102,238,586 394,242,126

5,566,903

5,635,426

646,407,796

596,022,046

CPL CONCORDIA's financial statements and consolidated financial statements

63

Statement of

liabilities December 31, 2013 Amounts expressed in Euros

December 31, 2012 Amounts expressed in Euros

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

22,426,530

20,713,737

0

0

656,679

656,679

113,813,193

108,867,183

78,184

78,184

531,892

531,892

VII OTHER RESERVES: a) CAPITAL CONTRIBUTIONS, LAW NO, 784/80 b) CONSOLIDATION RESERVE c) SURPLUS FROM MERGER d) TRANSLATION DIFFERENCE RESERVE VIII PROFITS (LOSSES) CARRIED FORWARD IX PROFIT (LOSS) OF THE FINANCIAL YEAR

Total Group Net Equity MINORITY CAPITAL AND RESERVES MINORITY PROFITS (LOSSES) MINORITY NET EQUITY

Total

1,269,396

1,269,396

(4,999,668)

(2,023,987)

235,597

235,597

(1,402,957)

(2,028,046)

0

0

4,483,017

8,929,524

137,091,863

137,230,159

20,527,348

2,034,709

2,762,947

(212,006)

23,290,295

1,822.703

160,382,158

139,052,862

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

Total C) SEVERANCE PAY FOR EMPLOYMENT TERMINATION

64

21,526

21,526

528,965

448,446

12,080.212

10,936,339

12,630,703

11,406,311

5,118,017

4,906,855

consolidated ba lance sheet

D) PAYABLES

(after 12 months) 0

0

0

2) Convertible debentures

0

0

0

0

3) Payables due to members for financing

0

10,914,245

0

9,384,405

138,033,341

224,399,023

131,055,272

199,696,279

11,578,863

12,850,280

11,578,863

13,146,198

0

9,547,848

0

8,833,013

4,832,811

181,253,780

4,341,977

183,951,643

8) Payables represented by negotiable instruments

0

0

0

0

9) Payables due to subsidiary companies:

0

0

0

1,399,769

10) Payables due to associated companies

0

1,673,163

0

868,497

11) Payables due to parent companies:

0

0

0

0

96,199

9,464,811

139,690

6,196,591

0

4,170,842

0

3,671,899

8,828,706

641,568

5) Payables due to other funders 6) Advances 7) Payables due to suppliers

12) Tax payables 13) Payables due to social security institutions 14) Other payables:

598,359

Total E) ACCRUED LIABILITIES AND DEFERRED INCOME

TOTAL LIABILITIES

3

chap.

(after 12 months)

1) Debentures

4) Payables due to banks

2013

0

8,679,920

463,102,698

435,828,214

5,174,220

4,827,804

646,407,796

596,022,046

MEMORANDUM ACCOUNTS I) Guarantees granted - Sureties - Collateral

209,475,528

197,157,911

30,400

Total

1,324,400

209,505,928

198,482,311

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

Total TOTAL MEMORANDUM ACCOUNTS

38,027

311,302

29,177,134

40,914,512

29,215,161

41,225,814

238,721,089

239,708,125

CPL CONCORDIA's financial statements and consolidated financial statements

65

profit and loss account December 31, 2013 Amounts expressed in Euros

December 31, 2012 Amounts expressed in Euros

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

9,509,527 461,311

Total

371,533,106

368,755,002

(1,879,580)

(3,518,102)

(695,732) 36,437,425

7.054,266 30,129,651

9,970,838

8,629,224 384,792

9,014,016

415,366,057

411,434,833

6) For raw materials, ancillaries, consumables and goods

161,949,358

159,118,083

7) For services

122,988,666

117,075,013

16,134,633

15,982,430

B) COSTS OF PRODUCTION

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

51,313,675

48,052,967

b) Social security contributions

14,929,519

13,668,876

3,047,092

2,930,118

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

0

e) Other cost

0

0 69,290,286

0

64,651,961

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

11,115,062

11,195,468

7,113,394

6,283,772

511,797

0

1,729,957

20,470,210

1,281,736

(3,109,583)

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

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

18,760,976 3,313,822

0

0

3,975,324

5,397,546

6,866,207

5,444,675

398,565,101

389,744,506

16,800,956

21,690.327

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

678,397

0

- Related to associated companies

868,013

59,000

- Related to other companies

32,897

1,579,307

52,343

111,343

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

66

- Related to subsidiary companies

0

0

- Related to associated companies

0

0

- Related to parent companies

0

- Related to other companies

0

0 0

0

0

consolidated ba lance sheet

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

0

0

0

0

2013

3

chap.

d) Other earnings: - Related to subsidiary companies

0

80,815

- Related to associated companies

206,259

287,863

- Related to parent companies - Related to other companies

0 2,863,467

0 3,069,726

2,760,184

3,128,862

6,264,153

6,264,153

6,128,192

6,128,192

73,132

73,132

53,941

53,941

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

0

- Related to associated companies

0

- Related to parent companies - Related to other companies

0

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

Total (15 + 16 - 17 - 17 bis)

(1,688,252)

(2,941,928)

D) VALUE ADJUSTMENTS OF FINANCIAL ASSETS 18) Revaluation: a) of holdings b) of financial fixed assets which are not holdings c) of securities recorded as current assets which are not holdings

2,066,227

408,259

0

0

0

2,066,227

0

408,259

19) Devaluation: a) of holdings b) of financial fixed assets which are not holdings c) of securities recorded as current assets which are not holdings

3,873,827

4,029,927

0

0

0

Total adjustments (18 - 19) E)

3,873,827

0

(1,807,600)

4,029,927

(3,621,668)

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

0

0

0 3,053,195

0 3,053,195

3,458,602

3,458,602

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

Total special items (20 - 21)

0

0

0 2,665,317

0 2,665,317

3,580,911

3,580,911

387.878

(122,309)

13,692,982

15,004,422

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

(6,447,018)

(6,286,904)

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

7,245.964 (2,762,947) 4,483,017

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

PROFIT BEFORE TAX (A - B ± C ± D ± E)

CPL CONCORDIA's financial statements and consolidated financial statements

67

Addendum as of December 31, 2013

The consolidated financial statements as of 31 December 2013, of which this addendum forms an integral part, have been prepared on the basis of the accounting records of the consolidated companies, which are kept in compliance with the requirements of Italian civil law.

The figures commented are expressed in Euros.

The assessment criteria adopted use the general principle of prudence and the going concern concept and comply with the provisions of Art. 2426 of the Italian Civil Code and with the accounting standards prepared by the National Board of Certified Accountants and Auditors, as well as with the provisions of the documents of the Italian Accounting Authority (OIC), supplemented where lacking by the IFRS issued by the IASBs, and are coherent with those adopted in preparing the financial statements of the previous financial year.

Please note also that: no exceptional situations occurred therefore it was not necessary to apply the exceptions provided for by article 2423, paragraph 4, of the Italian Civil Code. there are no assets or liabilities that fall under different items in the financial statements; the risks and losses for the reported year were taken into account even if they became known only after the end of the year.

The balance sheet and the profit and loss account have been prepared according to the layouts envisaged in Articles 2424 and 2425 of the Italian Civil Code, and likewise the reformed provisions of Italian Legislative Decree n. 6/2003. In order to compare the balances in the financial statements, the balances from the previous financial year have been reclassified in compliance with Art. 2423-ter, paragraph 5, of the Italian Civil Code).

Documents introduced this year include the cash flow statement, the schedule of changes in consolidated net worth, and the statement of reconciliation between the net worth of the parent company and the consolidated net worth. The cooperative’s main business, its economic relations with subsidiaries and affiliates, events after 31 December 2013, and the foreseeable evolution

68

of the management outlook are all highlighted in the Combined Management Report of the Parent company and the group.

Consolidation area

The consolidated financial statements include the financial statements of CPL CONCORDIA Soc. Coop (parent company) and its subsidiaries, in which the parent company holds, either directly or indirectly, stakes amounting to over 50% of the capital. It should be noted that the companies in which stakes of 50% or lower are held have been consolidated with the full consolidation method in the cases where there is actual control over the daily management thereof, as with Serio Energia S.r.l. and CPL Energy India Private Ltd. Finally, it should also be noted that, as of 2006, when the parent company lost its controlling influence over the company Cristoforetti Servizi Energia S.r.l. (the parent company now holds a 50% stake), Cristoforetti Servizi Energia S.r.l. was consolidated using the proportional method, as were the following other companies: Inversiones Energia y Ambiente S.A. and Joka CPL Polska Z.o.o.. It should also be noted that, as CPL CONCORDIA does not have a controlling influence in XDATANET S.r.l.

Pegognaga Servizi S.r.l., CPL Fuel, and Biogengas S.r.l. (in all of which the parent company holds 50% stakes), the aforesaid companies have been considered affiliates. The remaining companies in which the parent company holds more than 20% of the shares or over which it exerts significant influence (as envisaged by Art. 2359 of the Italian Civil Code) have been accounted for using the net worth method.

The company Ichnusa Gas S.p.A. and its subsidiaries have been consolidated using the net worth method as the group holds less than 50% stakes in these companies. The companies included in the consolidation area as of 31 December 2013, compared with those included in the previous financial year, in addition to CPL CONCORDIA Soc. Coop. (parent company) are as follows:

consolidated ba lance sheet

Subsidiaries AIPower S.p.A. - Algeri - Algeria Coopgas S.r.l. - Concordia s/S (MO) CPL CONCORDIA Filiala Cluj Romania S.r.l.

Cluj – Romania CPL Distribuzione S.r.l. - Concordia s/S (MO) CPL Energy India Private Ltd – New Delhi - India CPL HELLAS A.B.E. & T.E. - Atene - Grecia CPWH Ltd – Londra – Inghilterra Cristoforetti Servizi Energia S.r.l. - Lavis (TN) Energia della Concordia S.p.A. Concordia s/S (MO) Erre.Gas S.r.l. - Concordia s/S (MO) Ghirlandina Sport S.r.l. - Concordia s/S (MO) Grecanica Gas S.r.l. - Concordia s/S (MO) Immobiliare della Concordia S.r.l.

Concordia s/S (MO) Inversiones Energia y Ambiente S.A. Mendoza - Argentina Ischia Gas S.r.l. - Concordia s/S (MO) Marigliano Gas S.r.l. - Concordia s/S (MO) Nuoro Servizi in Liquidazione S.r.l. - Ottana (NU) P.E.A. Progetto Energia Ambiente S.r.l.

Concordia s/S (MO) Progas Metano S.r.l. - Concordia s/S (MO) Redengas S.A. - Parana - Argentina Serio Energia S.r.l. - Concordia s/S (MO) SIC S.a.s. di Santorelli Bruno & C. Acquasparta (TR) TiPower S.a r.l. - Tunisi - Tunisia Vega Energie S.r.l. - Concordia s/S (MO) Vignola Energia S.r.l. - Concordia s/S (MO) Emprigas S.A. - San Francisco - Argentina CPL Distributed Generation Group Inc. New York - USA European Gas Network S.r.l.

Concordia s/S (MO) Fontenergia S.r.l.

GES Gas Energy Solutions GmBH Kassel - Germania Joka CPL Polska Sp. Z.o.o - Lodz - Polonia Polargas S.r.l. - Concordia s/S (MO) Torano Solar S.r.l. - Concordia s/S (MO)

Year 2013 control % (direct and indirect)

Year 2012 control % (direct and indirect)

73 100

73 100

51

100

51 25,50 100 100 50

100 50 100 100 50

100

100

100 93 97,55

100 93 100

100

100

50

75

51 51 44

100 100 44

100

100

70 48,57 40

70 96,04 40

95

95

90 65 99 0

90 65 99 100

90

0

51

0

51

49

75

0

50 100 100

0 49 100

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

2013

3

chap.

Not included EMPRIGAS S.A. The company, 99% of which is

owned by the Argentinian Holding Inversiones Y Energia Ambiente S.A. and the remaining 1% by the affiliate Redengas S.A., held the concession for the gas distribution grid for the city of San Francisco. At the end of the concession, it changed hands and now the city's council manages it directly. During the year, the Argentinian holding assigned all the shares in its possession.

New additions CPL DISTRIBUTED GENERATION GROUP INC. - CPL DI.GI. -

This company was established on 24 July 2013 in order to provide a full range of business activities on American soil, completing those already offered by the parent company, above all in the field of renewable energy; today the company is controlled 90% by the parent company and 10% by Mr Tom Smith, an individual who has been working in the market for years with the aim of developing the new brand.

EUROPEAN GAS NETWORK S.r.l. E.G.N. - This company was established on 31 October 2013 through the contribution in kind of 100% of the shares in all the CPL group gas distribution companies operating in both Italy and abroad. The company’s share capital amounts to Euro 10,000,000 and the share premium reserve amounts to Euro 30,544,000.

The equity investments contributed with this operation concerned the following companies: 1) CPL DISTRIBUZIONE S.R.L. 2) MARIGLIANO GAS S.R.L. 3) ISCHIA GAS S.R.L. 4) CPL CONCORDIA FILIALA CLUJ ROMANIA S.R.L. 5) FONTENERGIA S.R.L. The value of the equity concerned by the contribution was established by a sworn expert’s assessment

CPL CONCORDIA's financial statements and consolidated financial statements

69

report drafted in accordance with Article 2465 of the Italian Civil Code by Gianluca Rossini and filed with the Court of Modena on 31 October 2013.

The assessment report cites the assessment work carried by the company Audirevi S.p.A..

The plan for this sub-holding company originated in early 2012, when the entire distribution world seemed ready to take on the new area-linked tender system, according to which (following new legislation) concessions will now be assigned not individually but by geographic area. The AEEG (Italian regulatory authority for electricity and gas) has divided the country into 177 areas which group together six different towns/cities and therefore several concessions at once. For the entire national system, taking part in these ‘area tenders’ involves the mobilisation of both human and - most of all - financial resources in preparation for the potential concessions.

On the basis of these conditions, CPL CONCORDIA has decided to group all those companies it deemed ready together within a single sub-holding and then sell the 49% minority stake in this holding to third parties in order to obtain the necessary financial resources and the right partnership to participate in area tenders. This initiative attracted two major national infrastructure investment funds, namely Fondaco Sgr and Orizzonte Sgr which, on 29 November 2013, each acquired 24.5% of the shares, making a total of 49% amounting to an overall nominal value Euro 19,867,000.

FONTENERGIA S.r.l.

This company builds and manages gas distribution networks in Sardinia’s User Area 22 (i.e. the Ogliastra user area). Until last year, 48% of the company's shares were held by Cooperare e Sviluppo S.p.A., 3% by Sofinco S.p.A., and the remaining 49% were held by the parent company. Cooperare and Sofinco held their shares jointly in order to establish a majority share in the company.

During the year, the parent company acquired the aforesaid majority share in the company from Cooperare and Sofinco, becoming the sole shareholder.

CPL purchased the 51% share packet at an acquisition price of Euro 8,219,000.

This acquisition was needed to complete the merger plan devised in order to mark out a clear boundary within which to establish the distribution sub-holding EGN.

GES GAS ENERGY SOLUTIONS GMBH

This company, established under German law in 2013, was intended as means of developing and marketing the CPL group product range within the European market. The parent company owns 75% of the shares, while the remaining 25% are held by natural persons and by "Tormene Ag", a company which operates in the same industry as the parent company.

JOKA CPL POLSKA Z.o.o. This company, in which the parent company holds a 50% stake, was 70

established under Polish law in 2013 with the main aim of providing technical support for the contracts acquired by CPL’s Polish branch and acting as a local facility for the acquisition of new contracts in the field of renewable energy and energy saving in general. The remaining 50% are owned by a local partner whose core business is the development of the CPL brand within the local market.

POLARGAS S.r.l. This company was establi-

shed as a means of developing technology related to LNG (i.e. "Liquefied Natural Gas") throughout Poland. Its activities include the construction of storage facilities and micro-networks, which will soon replace those employed for the more dangerous and much more costly LPG. During the year, the company operated solely in the automotive industry and investments were aimed primarily at non-business users. For the domestic market, LNG remains largely unregulated and a long and complex authorisation process is required. As a result, the company has experienced severely sluggish growth and development. Nevertheless, the group has confidence in the development of LNG within the country, which is why it acquired the 50% stake held by the other shareholder, Vanzetti, in December 2013, thereby becoming the company’s sole shareholder.

TORANO SOLAR S.r.l.

This company was established in 2010 as part of a plan to build and manage a photovoltaic plant located in the town of Torano, although it never actually carried out the activities for which it was set up. It then went on to take part in an open call for tender to purchase a plot of land located in the town of Marmirolo (MN), next to a large – as yet unbuilt - shopping centre. The tender specifications envisaged that the land be used for the construction of a plant to produce electricity from wood chips. However, the project has come to a complete standstill. In recent financial statements, the company had been allocated to current assets since a group of business owners had offered to buy up 100% of the company’s shares. As the project was not going anywhere, the company has lost its appeal, and now the parent company plans to sell off the land held by the company to a subsidiary Immobiliare della Concordia S.r.l., which is a firm of estate agents and will handle the property solely in terms of the aforesaid sale.

Additional changes INVERSIONES ENERGIA Y AMBIENTE S.A. - also abbreviated to IEA S.A.

After acquiring 75% of the shares in this company in January 2012, in 2013, we sold on 25% to Tradegar SA. Therefore, in 2013 the Argentinian holding was 50% owned by the parent company and 50% owned by Tredegar SA. Since it is under joint control, as of the start

consolidated ba lance sheet

of the reporting year, the company has been consolidated using the proportional method.

Affiliated companies

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

Currency translation reserve

The criterion chosen to convert the financial statement items of foreign companies, expressed in currencies other than the reporting currency (Euros) of the CPL group is the so-called "closing exchange rate method", which is applied as follows: assets and liabilities in the balance sheet have been translated at the exchange rate as on 31 December 2013; costs and income of the Profit and Loss Account have been translated at the average exchange rate for the year 2013; the exchange difference arising from the translation of balance sheet and profit and loss account items, based on the exchange rates described above, has been allocated to net worth ("Translation difference reserve"), any exchange differences arising from the elimination of intergroup foreign debt/credit, have been allocated to the profit and loss account; the exchange difference arising from the translation of the initial net worth at the end of the year exchange rates has been allocated to "Translation difference reserve".

Financial statements used for the consolidation

The consolidated financial statements have been prepared on the basis of the financial statements approved by the shareholders’ meetings of each company, suitably adjusted to take into account the consolidation requirements and to standardise them with the group’s accounting principles. In the case of financial statements that had not been approved by the respective shareholders’ meetings at the time of preparation of the consolidated financial statements, the budgets approved by the respective Boards of Directors were consolidated. All subsidiaries and affiliates close their financial year on 31 December, with the exception of the subsidiary CPL Energy India Private Ltd and the affiliate Modena Football Club S.p.A., for which a special balance sheet as of 31 December 2013 has been drawn up.

Consolidation method and criteria

The consolidation methods adopted, remain unchanged from the previous year and comply with legal provisions relating to consolidated financial statements

2013

3

chap.

(Italian Legislative Decree n. 127 dated 9 April 1991).

These methods, furthermore, comply with the practices and prevailing technical standards on this matter, as envisaged by the accounting standards prepared by the National Board of Certified Accountants and Auditors and, where lacking, by the International Accounting Standards Board (IASB). Once properly adjusted and reclassified based on the aforesaid standards, the financial statements prepared by the companies included in the consolidation area are used for reporting all the assets, liabilities, costs and revenues. Furthermore, with reference to the financial statements prepared by the companies acquired during the year, the profit and loss account and the balance sheet have been consolidated for the months following the acquisition, and solely the balance sheet has been consolidated when the profit and loss account is not considered representative of the group's management activities, since it is felt that this simplification better reflects the company’s actual contribution to the group.

The main consolidation methods are as follows: the book values of the holding in controlled companies, held directly or indirectly by the parent company, have been eliminated against the corresponding portion of the subsidiaries' net assets and by the acquisition of the assets and liabilities of the said companies, regardless of the percentage of holdings held (the so-called global integration method). In the first consolidation of a subsidiary, differences arising from the said eliminations have been allocated, if positive, to asset items constituting the highest cost values ​​of the holding in the financial statements and the remainder under "Consolidation difference" and, if negative, under "Consolidation reserve".

The amount recorded under the heading "Consolidation difference" has been depreciated over a maximum period of 10 years. The amounts entered under "Plants and machinery" (essentially attributable to the networks) have been depreciated over the estimated useful life.

Any amounts of net worth and the results attributable to third party members have been entered, if significant, under the appropriate items in the balance sheet and profit and loss account. All operations of significant importance that took place between the group companies - in particular receivables/payables, costs/income - as well as unrealised profits have been eliminated.

The consolidation operations have been performed as follows: if the consolidated companies had adopted accounting principles that do not correspond with those of the parent company, the necessary adjustments have been made. elimination from the balance sheet and profit and loss account of he reciprocal payable and receivable items as well as costs and income in relation to operations that took place between companies included in the consolidation; write off (if the amount was significant) of profits arising from the transfer of raw materials and fini-

CPL CONCORDIA's financial statements and consolidated financial statements

71

shed products between group companies, limited to stocks remaining at the end of the year, as well as of profits arising from the transfer of goods and rendering of services related to the construction of tangible and intangible assets; assets held under finance leases have been entered under the assets of the balance sheet at their normal market value or, if lower, at the current value of the instalments to be paid. Corresponding payables are entered in the liabilities. The value entered as an asset is depreciated over its estimated useful life. Leasing payments have been apportioned between capital, thus reducing the debt, and interests recorded on an accrual basis in the profit and loss account; any dividends distributed and amounts to cover losses between consolidated companies have been eliminated from the profit and loss account and allocated to the reserve; the tax effects relating to consolidation entries have been recognized only when realistically achievable in the future for the parent company, which is incorporated as a cooperative, taking into account the applicable tax regime le società collegate vengono valutate con il metodo del patrimonio netto.

Accounting principles applied

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

A. Intangible fixed assets

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

Tangible fixed assets are entered in the financial statements at the cost of acquisition or construction plus any directly attributable charges and recorded net of any depreciation funds and permanent capital contributions.

If, on the date of the financial statements, the recovery value of the assets is lastingly lower than the cost, the assets are written down. If, in the following months, the reasons for the write-down cease to exist, the original value is restored. The costs of ordinary maintenance and repairs are entered in the profit and loss account in the period in which they are incurred.

The costs of special maintenance and repair are capitalized and depreciated according to the depreciation rate of the asset to which they refer. Depreciation is calculated on a straight-line basis at rates considered to be representative of the useful life of the assets. % used Land and buildings

2 – 2.5 – 3 – 5,5 – 6– 10 – 12,5

Plants and machinery

2 – 4 – 5 – 6.67 – 8 – 10 – 12.5 – 15 – 20 – 30

Gas and Water Concessions

On the basis of the remaining useful economic life

LPG concessions transferred without charge

On the basis of the length of the concession

LPG concessions transferred upon payment

On the basis of the remaining useful economic life

Industrial and commercial equipment

10 – 20 – 25 – 40 – 15

Other assets

10 – 12 – 20 – 25

The depreciation rates used, for the assets included in the distribution systems, have been valued in accordance with Art. 24 of Legislative Decree n. 93/2011, which states in paragraph 8 that the new provider is essentially required to repay to the outgoing provider a value calculated according to the tariff adjustment method in force and on the basis of the size of the facilities at the time they changed hands.

The formulas to calculate the tariff adjustment are based on Table 3 of the annex to the AEEG ARG/Gas Resolution n. 159/2008, as shown below:

Multi-year charges

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

Software

3 - 5 years

Goodwill

10 years

Fixed asset categories

Work performed on third party assets

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

Buildings - substations

Table 3 - Conventional fixed asset depreciation periods Years 40

Road pipelines and distribution networks

50

Main and secondary systems - Substation systems

20

Concessions

According to the length of the agreement or 3 years

Branch systems (connections)

40

Trademarks

3 - 5 years

Conventional metering units (meters)

20

3 - 5 years

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

15

Other tangible and intangible fixed assets

7

Research and advertising expense

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

72

B. Tangible fixed assets

consolidated ba lance sheet

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

C. Finance Leasing

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

D. Financial fixed assets

Holdings in companies are recorded according to the net worth method.

The holdings in other companies are posted at the purchase or subscription price, plus the directly attributable charges.

The book value is reduced, in the financial statements, to reflect the permanent loss of value of a subsidiary.

To determine the latter, the negative variations of the net worth of each subsidiary are taken into account when they are considered to be permanent.

The receivables included in the financial fixed assets are entered at the nominal value that corresponds to the probable realisable value.

Shares are entered at purchase cost. If the value based on market trends is lower than the recorded value for an extended period of time, then it is written down to be aligned with the former. Accrued interest is recorded in the period to which it pertains.

Any adjustments made on fixed assets are not maintained in the financial statement of the following years if the reasons for the adjustment cease to exist.

E. Stock

The materials and goods in stock at the end of the financial year are recorded at the lower value between the purchase cost and the probable net realisable value based on market conditions. The cost of acquisition, including incidental costs directly attributable, is determined by the weighted average cost method. For stock with limited possibilities of use and longer storage time, adequate write-downs are made through the establish-

2013

3

chap.

ment of a special obsolescence fund that will result in a direct reduction of stock. Contract work in progress is valued by applying the percentage of completion criterion by valuing the works carried out on the basis of contractual compensation. The effects related to possible future losses for the completion of the works are grouped together in a special fund.

F. Receivables from customers

Receivables from customers are entered in the financial statements at the presumed realisable value.

The adjustment of the nominal value of receivables to their estimated realisable value is obtained by a direct reduction, though a special write-down fund calculated to cover bad debts, as well as general risks related to remaining receivables, including the risk of recovery costs.

G. Receivables and payables in foreign currencies

Receivables and payables arising from transactions in a foreign currency are recorded at the exchange rate of the date on which the transaction occurs.

At the date of the financial statements, receivables and payables in foreign currencies other than the Euro and not backed by clauses safeguarding against foreign exchange are translated at the exchange rates in force on that date; the difference arising from the valuing of receivables and payables in foreign currencies at the year end is recorded as a direct adjustment of the post to which it refers and then offset in the profit or loss.

As regards medium and long-term receivables and payables in foreign currencies, any profits resulting from the conversion are allocated to a reserve, and they are unavailable until they are realised.

With reference to currency payables safeguarded by a clause against the risk of exchange rate fluctuations beyond predetermined ranges of variation, the difference compared to the exchange rate in the financial statements date is calculated and the amount not included in the covered range is allocated to the profit and loss account for the financial year.

H. Non-fixed financial assets

Non-fixed financial assets represented by holdings in subsidiaries and affiliates are entered at the value considered to be representative of their realisable value.

CPL CONCORDIA's financial statements and consolidated financial statements

73

I. Capital contributions and

subsidies for operating expenses

Capital contributions are entered on an accrual basis according to the approval of the concession by the competent body, which decides when there is no longer any encumbrance whatsoever to their final recognition.

Up to the financial statements as of 31/12/1997, 50% of these were allocated to a special reserve and the remaining 50 % to the profit and loss account under item A5 "Other earnings and income", as allowed by the tax law and civil law in force at that time. Since the financial year 1998, they have been recorded by allocating the entire capital contribution to directly reduce the asset to which the contribution refers, as foreseen by Art. 55, paragraph 3 of the Consolidated Tax Act amended

by Art. 21, paragraph 4, letter b, Law n. 449 of 27 December then received in Accounting Principle n. 12 ratified by the National Board of Certified Accountants and Auditors. Capital contributions are entered in the profit and loss account under "Other income" and at the same time they reduce the increases in internally generated fixed assets. Any contributions for operating expenses are entered under income items.

L. Employee severance pay

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

M. Payables

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

N. Cash funds – payables to banks

and other funders

These are entered at nominal value. Accrued interest is entered on an accrual basis.

O. Tax payables and prepaid, current and deferred taxes

Tax payables take into account the income tax calculated on the basis of taxable income attributable to each company of the group, net of advances paid and withholding taxes paid, of the taxes payable to the Inland Revenue Offices as withholding agents, and of the consumption tax on natural gas.

Deferred and prepaid taxes are calculated on the total amount of all the temporary differences between the value of an asset or liability, including net worth items, according to statutory criteria and the amount

74

attributed to that asset or liability for tax purposes, by applying the rate valid at the time when the temporary differences will be offset. Taxes paid in advance are recorded only if there is reasonable certainty that they will be recovered in the future, as required by Accounting Standard n. 25 of the National Council of Certified Accountants and Auditors relating to income taxes, issued in March 1999.

P. Funds for risks and charges

They include the charges set aside for risks to cover losses or payables of a specific nature, whose existence is certain or probable, and whose amount or occurrence date are, nevertheless, impossible to establish accurately at the year end.

The funds reflect the best possible estimate of the liabilities, based on the information available.

Any risks for which the occurrence of a liability is simply a possibility have been outlined in the addendum.

Q. Deferrals and accruals

These are recorded on an accrual basis and include earnings for the financial year and collectable in future financial years, as well as costs incurred before the end of the financial year but payable in the following financial years.

These items only include costs and earnings that pertain to two or more financial years, the amount of which varies over time.

R. Memorandum accounts

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

S. Agreements that cover interest

rate risks

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

T. Costs and Income

Costs and income are entered in the financial statement on an accrual basis in accordance with the principle of prudence. Transactions with subsidiaries and non-consolidated companies, with affiliates and with related parties are performed at normal market conditions.

consolidated ba lance sheet

2013

3

chap.

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

Assets

Receivables from members for payments still due

The balance as of 31/12/2013 was Euro 1,665,000 and Euro 1,193,000 of that amount concerned the nominal value of shares not yet paid up by 237 cooperative members; these share have already been fully called in. It is deemed that there is no risk of insolvency as regards these amounts. The remaining balance consists of the subscriptions to be paid by minority members,

amounting to Euro 345,000 payable to the subsidiary Inversiones Y Energia Ambiente S.A., Euro 5,000 due to the subsidiary AI Power S.p.A and Euro 123,000 payable to the subsidiary Vega Energy S.r.l.

Intangible fixed assets

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

Variations Of Intangible Fixed Assets

Values expressed in Euro/000 YEAR 2013

Values relating to previous financial years Items

Starting accounting Amortisation Devaluation value Purchases fund

Cost

Variations during the financial year Accounting variations

Amortisa- Devaluation tion

End accounting value

Decrease

Start-up and Expansion Costs

2,071

1,645

233

193

280

0

131

0

2

340

B I 1 Start-up and expansion costs

2,071

1,645

233

193

280

0

131

0

2

340

Research, development, and advertising costs

1,832

1,659

61

112

54

25

81

0

0

110

B I 2 Research, development, and advertising cost

1,832

1,659

61

112

54

25

81

0

0

110

Industrial patent rights

642

441

0

201

0

0

109

0

0

92

B I 3 Industrial patent rights

642

441

0

201

0

0

109

0

0

92

Concessions for plants, licenses and trademarks

2,999

2,927

1

71

30

0

62

0

0

39

B I 4 Concessions, licenses, trademarks and sim, rights

2,999

2,927

1

71

30

0

62

0

0

39

Goodwill

2,730

1,433

1,052

245

1,833

0

30

0

1,833

215

B I 5 Goodwill

2,730

1,433

1,052

245

1,833

0

30

0

1,833

215

Consolidation difference

7,383

7.083

300

0

0

0

0

0

0

0

B I 5a Consolidation difference

7,383

7,083

300

0

0

0

0

0

0

0

Fixed assets in progress

3,499

0

223

3,276

2,105

(1,638)

0

0

0

3,743

B I 6 Fixed assets in progress

3,499

0

223

3,276

2,105

(1,638)

0

0

0

3,743

Other intangible fixed assets

103,737

61,562

1,458

40,717

14,286

1,613

10,702

0

40

45,874

B I 7 Other intangible fixed assets

103,737

61,562

1,458

40,717

14,286

1,613

10,702

0

40

45,874

BI

124,893

76,750

3,328

44,815

18,588

0

11,115

0

1,875

50,413

INTANGIBLE FIXED ASSETS

CPL CONCORDIA's financial statements and consolidated financial statements

75

Intangible fixed assets increased by Euro 5,598,000 compared to the previous year, as shown in the table prepared for this purpose, which shows increases for new investments amounting to Euro 18,558,000, amortization amounting to Euro 11,115,000, and disinvestments amounting to Euro 1,875,000. "Goodwill ", which amounts to Euro 215,000 and was entered with the approval of the board of auditors, refers to 50% of the amount attributable for the acquisition of the business unit comprising a series of heat maintenance and management agreements paid by Cristoforetti Servizi Energia S.r.l. (50% consolidated with the proportional method) to the company Ecor, which operates in the northern area of Milan and also to the acquisition of the business unit DODGAS, which concerns the set of gas supply agreements entered into with users in the town of Mignano Montelungo and the corporate assets relating to this business; Item BI 6 "Work in progress", which amounts to Euro 3,743,000, includes the sum of Euro 1,101,000 for costs incurred for feasibility studies; Euro 676,000 for costs incurred for the development of several new software programs; for Euro 229,000 for miscellaneous deferred charges; Euro 1,733,000 for investments in third-party assets; Euro 4,000 from other investments. Item BI 7 "Other intangible fixed assets", which amounts to Euro 45,874,000, is made up mainly and more specifically of Euro 41,783,000 for investments in heat management and public lighting

systems which shall become the property of the customers at the end of the agreements, and Euro 1,132,000 for a call option to buy back shares. The remaining portion of the item is related to software and maintenance related to third party assets.

Composition, reasons for inclusion and amortisation criteria of the items:

Start-up and expansion costs Research, development and advertising cost

Euro/000 340 110

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

Tangible fixed assets

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

Variations Of Tangible Fixed Assets

Valori espressi in Euro/000 YEAR 2013

Values relating to previous financial years Items

Cost

Revaluation

Depreciation fund

Transfer

Variations during the financial year Starting accounting Deprecia- Devaluavalue Purchases Accounting variations tion tion

Transfer

End accounting value

Total revaluation

Land and buildings

16,148

0

4,796

22

11,330

900

273

218

0

919

11,366

0

B II 1

16,148

0

4,796

22

11,330

900

273

218

0

919

11,366

0

Plants and Machinery

169,700

0

38,159

50,085

81,456

24,330

6,749

3,926

497

664

107,448

0

B II 2

169,700

0

38,159

50,085

81,456

24,330

6,749

3,926

497

664

107,448

0

Equipment

6,279

0

5.393

53

833

646

0

626

0

11

842

0

B II 3

6.279

0

5,393

53

833

646

0

626

0

11

842

0

Other assets

31,562

33

25,860

1,880

3,855

3,333

189

2,343

0

122

4,912

0

B II 4

31,562

33

25,860

1,880

3,855

3,333

189

2,343

0

122

4,912

0

Gas network concessions and Real Estate

24,012

0

0

3,899

20,113

9,547

(7,211)

0

0

5,464

16,985

0

B II 5

Fixed assets in progress

24,012

0

0

3.899

20,113

9,547

(7,211)

0

0

5,464

16,985

0

B II TANGIBLE FIXED ASSETS

247.701

33

74,208

55,939

117.587

38,756

0

7,113

497

7,180

141,553

0

76

Land and buildings

Plants and Machinery

Industrial and Com. Equipment

Other assets

bilancio consolida to

Item B. II 1 “Land and Buildings", which amounts to Euro 11,366,000, has increased by Euro 36,000 compared to the previous year, due to the net balance of the investments and disinvestments made ​​during the financial year in relation to property owned by the group.

Item B II 2 "Plant and machinery", which mainly includes the residual value of the group’s gas distribution grids, amounts to Euro 107,448,000 and has increased by Euro 25,992,000 compared to the previous year, due to investments in owned plants and plants that were previously under construction and are now up and running.

It is also attributable to the inclusion of the company FONTENERGIA S.r.l. in the consolidation area.

Transfers highlighted in the table above refer to the gas concession for the city of San Francisco (Argentina) assigned to the company Emprigas SA, which is no longer

2013

chap.

included in the consolidation area, as reported in the relevant section.

The item “Other assets”, which amounts to Euro 4,912,000, mainly includes the residual values to be depreciated for cars, vehicles, and work vehicles. Fixed assets in progress, which amount to Euro 16,985,000, mainly include the amounts for the gas distribution grids in the Calabria 12 user area and on the island of Procida, as well as for the extension of the parent company’s headquarters.

Financial fixed assets

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

CPL CONCORDIA's financial statements and consolidated financial statements

4

Variations Of Holdings COMPANY NAME

Values espressed in Euro/000 Revaluation

% 2012

% 2013

Value as of 31/12/2012

0,0%

0,0%

0

0

0

0

0

0

0

0

TOTAL SUBSIDIARIES

Increase

Decrease

Devaluation

Other variations

Value as of 31/12/2013

0

0

0

0

0

0

FONTENERGIA S.r.l. - Lanusei (OG)

49,0%

51,0%

1,808

0

(1,808)

0

0

0

0

ICHNUSA GAS S.p.A. - Bologna

45,0%

45,0%

0

0

0

0

0

0

0 116

PEGOGNAGA SERVIZI S.r.l. - Concordia s/S (MO)

50,0%

50,0%

105

0

0

11

0

0

TECLAB S.r.l. - La Spezia

35,0%

0,0%

79

0

(79)

0

0

0

0

COIMMGEST S.p.A. - Modena

45,0%

45,0%

362

0

0

346

0

0

708

COMPAGRI in liquidazione S.p.A. - San Pietro in Casale (BO)

22,22%

22,22%

0

0

0

0

0

0

0

AGRIENERGIA S.p.A. - San Pietro in Casale (BO)

20,18%

20,41%

1,415

1,042

0

0

(109)

0

2,348

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

50,0%

50,0%

435

0

0

41

0

0

476

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

30,0%

30,0%

0

0

0

0

0

0

0

FONTENERGIA 38 S.r.l. - Cagliari

34,0%

0,0%

31

0

(31)

0

0

0

0

IES SOLARE S.r.l. - Livorno

25,0%

0,0%

194

0

(194)

0

0

0

0

INTERENERGIA S.p.A. - Bologna

47,0%

48,9%

0

0

0

0

0

0

0

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

49,0%

49,0%

0

0

0

0

0

0

0

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

49,0%

49,0%

0

0

0

0

0

0

0

GHIRLANDINA SOLARE S.r.l. - Concordia s/S (MO)

34,0%

34,0%

0

0

0

0

0

0

0

ANDINA SERVICIO TECNOLOGIES - Lima - PERU'

50,0%

50,0%

1

0

0

0

0

0

1

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

50,0%

100,0%

399

0

(399)

0

0

0

0

SOLARPLANT - Marina di Carrara (MS)

25,0%

0,0%

177

0

(177)

0

0

0

0 497

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

40,0%

40,0%

484

0

0

13

0

0

FONTENERGIA 4 S.r.l. - Cagliari

2,0%

2,0%

24

0

0

0

0

0

24

FONTENERGIA 6 S.r.l. - Cagliari

2,0%

2,0%

37

0

0

0

0

0

37

FONTENERGIA 7 S.r.l. - Cagliari

1,13%

1,13%

7

0

0

0

(3)

0

4

FONTENERGIA 9 S.r.l. - Cagliari

1,8%

1,8%

7

0

0

0

(1)

0

6 27

FONTENERGIA 10 S.r.l. - Cagliari

1,8%

1,8%

27

0

0

0

0

0

FONTENERGIA 11 S.r.l. - Cagliari

1,3%

1,3%

6

0

0

0

0

0

6

FONTENERGIA 15 S.r.l. - Cagliari

1,3%

1,3%

4

0

0

0

(1)

0

3

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

2,0%

2,0%

1

0

0

0

0

0

1

FONTENERGIA 26 S.r.l. - Cagliari

2,0%

2,0%

16

0

0

0

0

0

16

FONTENERGIA 27 S.r.l. - Cagliari

1,0%

1,0%

18

5

0

0

0

0

23

FONTENERGIA 35 S.r.l. - Cagliari

1,7%

1,7%

11

0

0

0

0

0

11

FONTENERGIA 37 S.r.l. - Cagliari

1,3%

1,3%

6

0

0

0

0

0

6

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

33,3%

33,3%

13

0

0

0

(2)

0

11

CENTRALE SASSINORO S.r.l. - Modena

10,0%

10,0%

0

5

0

0

0

0

5

BIOGENGAS - Truccazzano (MI)

50,0%

50,0%

5

0

0

0

(5)

0

0

CPL Fuel S.r.l. - Piancogno (BS)

0,0%

50,0%

0

5

0

0

(3)

0

2

CTG S.A. - Paranà - Argentina

0,0%

45,0%

0

6

0

0

0

0

6

Ecoenergy S.A. - Paranà - Argentina

0,0%

36,0%

0

309

0

0

0

0

309

TOTAL AFFILIATED COMPANIES

5,672

1,372

(2,688)

411

(124)

0

4,643

TOTAL SUBSIDIARIES AND AFFILIATED COMPANIES

5,672

1,372

(2,688)

411

(124)

0

4,643

BANCA POPOLARE DI VERONA

2

2

BANCA POPOLARE DELL'EMILIA ROMAGNA Modena

44

44

ISTITUTO BANCARIO SAN PAOLO DI TORINO S.p.A. - Torino

1

1

UNIPOL ASSICURAZIONI S.p.A. - Bologna AZIONI SOC. GOLF CLUB MODENA AZIONI AZIENDA LIBICO ITALIANA AZIONI BANCA POPOLARE DI S.FELICE - Modena AZIONI SOCIO SOVVENTORE COOPBILANCIAI Campogalliano (MO)

6

6

27

27

9

1

10

19

19

500

500

AZIONI GESTURIST

6

6

AZIONI BANCA MPS

15

15

AZIONI VENETO BANCA

0

20

20

OBBLIGAZIONI UNIPOL BANCA

0

70

70

INTSEC S.p.A. - Siena

3

3

21

21

5

5

39

39

ICIE - Istituto Cooperativo per l'innovazione ALIANTE - Modena F I N P R O - Modena

78

consolidated ba lance sheet

% 2012

COMPANY NAME

% 2013

Value as of 31/12/2012

Increase

Revaluation

Decrease

Devaluation

2013

3

chap.

Other variations

Value as of 31/12/2013

C.C.C. - CONSORZIO COOP.VE COSTRUZIONI Bologna

100

100

CCFR - Consorzio Coop.vo Ferrovie Reggiane Reggio Emilia

25

25

C.E.R. - Cons. Emiliano-Romagnolo fra Coop.

Prod. e Lav. - Bologna

36

36

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

1

1

50

50

CONS.NAZ.COOP. CIRO MENOTTI - Bologna

25

25

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

103

103

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

10

10

ISI SERVICE EMILIA ROMAGNA - Bologna

54

54

SOCIETA' CONSORTILE IDROENNA

8

8

IMMOBILIARE LA MARCHESA - Mirandola (MO)

8

8

260

260

HERA S.p.A. SOFINCO S.p.A. - Modena

977

INTERMEDIA FINANCE S.p.A.

100

10

3,572

(630)

1,087 2,942

SOCIETA CONSORTILE ALPI GAS

5

5

CONSORZIO CIPEA

4

4

CONSORZIO GLOBAL RIMINI

6

6

ACQUADUEO S.r.l.

3

3

CONSORZIO M.O.L.E.

1

1

CONSORZIO MICENES

2

2

MANUTENCOOP FACILITY MANAGEMENT S.p.A.

6

6

13

13

NOCSERVICE SOC. CONSORTILE

3

3

ATON PER IL PROGETTO

1

1

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

5

CONSORZIO IN.DA.CO

SEGLO SERVIZI GLOBALI S.c.a.rl.

5

11

(11)

SOC. CONSORTILE CAP 3-18

3

CONSORZIO ABI LAB TECNOLOGIA UTILE

1

COOPERARE S.p.A.

0

25

0

12

IMB AFFINITY S.r.l.

MULTIPROPRIETA' S.r.l.

CONSORZIO LEGNAGO 2001 S.c.a r.l.

OTHER HOLDINGS HOLDINGS

Decreases relating to the affiliates Fontenergia S.r.l. and Polargas S.r.l. refer to the reclassification of these companies as subsidiaries.

Financial receivables from subsidiary companies

The abovementioned item is made up as follows: COMPANY

NON-CURRENT RECEIVABLES - Euro/000

MARCHE SOLAR S.R.L. TRINOVOLT S.R.L.

852 2,073

TOTAL

2,925

Funding related to the companies Trinovolt S.r.l. and Marche Solar S.r.l., which are due to be sold, are temporary and will end with the assignment of the shares in the companies.

The item “Financial receivables from affiliates” is made up as follows:

0 1

4 1 25 12

23

23

2

2

6,015

227

(11)

0

(630)

12

5,613

11,687

1,599

(2,699)

411

(754)

12

10,256

COMPANY AGRIENERGIA S.P.A. BIOGENGAS S.R.L. COIMMGEST S.P.A. FIMETRA S.R.L. GHIRLANDINA SOLARE S.R.L. ICHNUSA GAS S.P.A. NOCI SOLAR 1 S.R.L. NOCI SOLAR 2 S.R.L. CENTRALE SASSINORO S.R.L.

TOTAL

NON-CURRENT RECEIVABLES - Euro/000 1,189 830 750 560 251 2,875 265 309 340

7,369

The financial loan relating to Agrienergia S.p.A. and amounting to Euro 1,189,000 refers to an interest-free loan with a maturity date of 31/12/2013, which has been renewed from 01/01/2014 to 31/12/2014.

The financial loan relating to Biogengas S.r.l. and amounting to Euro 830,000 refers to an interest bearing loan with a maturity date of 31/12/2013 and an interest rate of 4.5% which has been renewed from 01/01/2014 to 31/12/2014 with the right to increase the interest rate to a maximum of 5.50%.This funding was granted to cover the increased financial commitment required by

CPL CONCORDIA's financial statements and consolidated financial statements

79

the company during the year. The financial account receivable relating to Coimmgest S.p.A. and amounting to Euro 750,000 refers to an interest bearing loan with a maturity date of 31/12/2013, with a Euribor 3 month interest rate increased by 3.5%, which has been renewed from 01/01/2014 to 31/12/2014. This loan was granted following the advance final payment of a rent-to-own agreement on the building known as "Ex Nico", which was demolished following the May 2012 earthquake.

The financial account receivable relating to Fimetra S.r.l., which amounts to Euro 560,000, refers to an interest-bearing loan with an interest rate of 6% for the year 2013; the rate has also been confirmed for the entire 2014 period. This funding refers to the financial cover set up for multi-year investments planned by the company. The financial account receivable relating to Ghirlandina Solare S.r.l. and amounting to Euro 251,000 refers to an interest-free loan with a maturity date of 31/12/2013, which has been renewed for the 2014 business year. This loan is subordinated to receivables by "Banco Popolare". The financial loan relating to Ichnusa Gas S.r.l., amounting to Euro 2,875,000, refers to an interest-bearing loan with a maturity date of 31/12/2013 and an interest rate of 4.50%, which has been renewed from 01/01/2014 to 31/12/2014 with the right to increase the interest rate to a maximum of 5.50%.

This loan was granted to provide the financial resources required to cover the subsidiaries’ needs and for the repayment of bank loans. The financial account receivable relating to Noci Solar 1 S.r.l., amounting to Euro 265,000, refers to an interest-free loan with a maturity date of 31/12/2013, which has been renewed for 2014.

The financial account receivable relating to Noci Solar 2 S.r.l., amounting to Euro 309,000, refers to an interest-free loan with a maturity date of 31/12/2013, which has been renewed for 2014. The financial account receivable relating to Centrale Sassinoro S.r.l., amounting to Euro 340,000, refers to an interest-free loan granted

by Energia della Concordia S.r.l.

The item “non-current receivables from others” includes: EURO/000 SECURITIES AS GUARANTEE SEGLO SERVIZI GLOBALI ACTIVE INTEREST BEARING LOAN C.A.P. 3-18 S.C.A R.L. ACTIVE INTEREST FREE LOAN IMB AFFINITY S.R.L.- ACTIVE INTEREST-BEARING LOAN CONTRACTUAL DEPOSITS ON RENTS CAUTIONARY DEPOSITS ON LONGTERM LEASES

TOTAL

2013

2012

1,333

883

0

12

0

16

55

0

1

16

5,386

5,380

6,775

6,307

The long-term portion amounting to Euro 5,386,000, includes Euro 593,000 for cautionary deposits on rents for the premises of the registered office and for the premises of the branches in Melegnano, Bologna, Fano, and Padua invoiced by the company Coimmgest S.p.A.,

80

as well as Euro 195,000 for cautionary deposits for the various apartments, and Euro 4,598,000 from advance instalments on the rent for gas distribution grids, as part of the operation to transfer the said grids to the leasing companies. The item "Securities as guarantee" refers to cautionary deposits paid for gas, telephone, and water utilities.

Treasury shares

As of 31/12/2013, the group holds treasury shares in the parent company amounting to Euro 12,000.

Stock

Final stock of raw materials, consumables and ancillaries, amounting to Euro 3,575,000, comprises materials for the construction of gas and water distribution plants and heating plants, and materials at construction sites as of 31/12. The item "Products under processing and semi-finished products" amounting to Euro 1,239,000 mainly includes the sums valued for the supply orders and the contract orders relating to the natural gas and liquefied gas sectors. The estimated realisable value of those assets is not less than the value recorded at the date of the financial statements. The item “Work in progress on order” includes the valuation of the multi-year orders according to the percentage of completion principle. The following table gives a detailed breakdown of the work in progress on order: EURO/000 Headquarters area Rome Tyrrhenian area North West area Adriatic area Umbria area South area North East area Tuscany area Bologna area Sardinia area “Intragroup services” sector Foreign business area Provision for work in progress write-downs

TOTAL

2013

2012

1,316 16 3,451 2,020 482 8,983 2,927 234 463 4,029 1,303 3,820 (348)

1,341 2 5,710 2,124 71 0 4,884 405 535 3,233 767 1,445 (1,377)

28,696

19,140

The increase in this item, amounting to Euro 9,556, 000, is mainly related to an increase in works in progress under contract with local authorities, which tend to delay certification of the work progress reports and consequently the relevant invoicing.

The variations of the work in progress devaluation fund are shown below: EURO/000 Fund at the start of the financial year Amount used Provisions

Final fund

2013

2012

1,377 (1,029) 0

392 (63) 1,048

348

1,377

consolidated ba lance sheet

The item “Finished products and goods” includes the stock of odorant, natural gas, and diesel, as regards the sales activity, and the finished properties ready for sale.

The item, which amounts to Euro 6,134,000, has decreased by Euro 388,000 compared to the previous year.

This decrease was mainly due to the reduced amount of natural gas stocks allocated to the distribution networks in the group’s various user areas. The "Advances" post, which amounts to Euro 4,152, 000, includes advances on works in progress and supplies by subcontractors and suppliers amounting to Euro 2,335,000. It also includes down-payments to suppliers from the Greek permanent establishment amounting to Euro 100,000, as well as Euro 583,000 to suppliers from the Polish branch and Euro 1,134,000 for an advance to an estate agent for the purchase of a building. Compared to the previous financial year, there has been an overall increase of Euro 1,645,000.

Receivables from customers EURO/000

2013

2012

Third-party customers Gas sales customers Public bodies Cooperatives and consortiums Customers with invoices to be issued Bills for collection Withholdings for work and occupational safety guarantees Provisions for bad debt

101,009 1,939 20,507 20,202 68,700 85

113,552 105 18,739 18,828 60,798 311

2,640

1621

(7,071)

(6,598)

TOTAL

208,011

207,356

The values of receivables has increased by Euro 655,000 compared to the previous year.

The bad debt provisions are considered to be adequate with reference to the collectability of the receivables recorded in the consolidated financial statements.

The variations of the provisions for bad debt for the financial year are shown below: EURO/000 Balance 01/01/2013 Utilisation for reporting year Funds set aside for reporting year

Balance as of 31.12.2013

2013

2012

3

chap.

With regards to the geographical composition of receivables and payables, please note that, given the nature of the group’s activities, the receivables are mainly from local authorities and Italian customers in general; the payables to suppliers are to suppliers of raw materials and consumables and Italian subcontractors, except for receivables and payables present in permanent establishments abroad and foreign companies.

A summary is shown below:

EURO/000 Italia Algeria Argentina

RECEIVABLES

PAYABLES

197,715

176,175

5,941

519

348

192

Austria

0

276

Belgio

0

977

Cina

0

28

43

0

Croazia

9

0

Emirati Arabi Uniti

0

1

(8)

396

Città del Vaticano

This item is made up as follows:

2013

Francia Germania Grecia India

29

723

1,504

(22)

72

54

Irlanda

0

-7

Hong Kong

0

47

Malaysia

2

0

Malta

21

5

Messico

(4)

0

Paesi Bassi

0

8

854

26

Portogallo

0

1

Regno Unito

0

1

Repubblica Ceca

0

5

1,593

806

San Marino

7

0

Serbia

1

0

Polonia

Romania

Slovenia Spagna Svizzera

6,598 (1,218) 1,691

5,425 (225) 1,398

Tailandia

7,071

6,598

TOTALI

(6)

0

3

33

0

618

(187)

0

Tunisia

44

5

USA

30

387

208,011

181,254

CPL CONCORDIA's financial statements and consolidated financial statements

81

Receivables from subsidiaries and affiliates

cern the preliminary design phases carried out by the parent company; the more significant amounts concern the construction of gas distribution grids (user areas 7 and 9).

The breakdown is as follows:

Tax Receivables

Subsidiaries: Trinovolt S.r.l.

Euro/000

16

Marche Solar S.r.l.

Euro/000

16

Total - Subisidiaries

Euro/000

32

Affiliates:

EURO/000

2013

2012

Receivables from IRPEF (personal income tax) and withholding tax at the source

331

311

Receivables from Revenue Authority for IRAP (tax on productive activities) 2007/2011 – Legislative Decree 201/11

2,115

2,115

256

2,621

0

0

Sarda Reti Costruzioni S.r.l. Euro/000

225

Biogengas S.r.l.

Euro/000

456

Agrienergia S.p.A.

Euro/000

1,662

Receivables from Revenue Authority for R&D costs 2008-2009

Coimmgest S.p.A.

Euro/000

1,720

4,095

Euro/000

335

VAT receivables from/payables to Italian tax authority

2,134

Fontenergia 4 S.r.l.

Fontenergia 6 S.r.l.

Euro/000

759

VAT receivables from/payables to foreign tax authorities

1,336

1,224

Fontenergia 7 S.r.l.

Euro/000

2,022

Fontenergia 9 S.r.l.

Euro/000

1,826

Fontenergia 10 S.r.l.

Euro/000

347

Fontenergia 11 S.r.l.

Euro/000

102

Fontenergia 15 S.r.l.

Euro/000

958

Fontenergia 19 S.r.l.

Euro/000

440

Fontenergia 26 S.r.l.

Euro/000

413

Fontenergia 27 S.r.l.

Euro/000

299

Fontenergia 28 S.r.l.

Euro/000

56

Fontenergia 35 S.r.l.

Euro/000

459

Fontenergia 37 S.r.l.

Euro/000

176

Fimetra S.r.l.

Euro/000

9

Ghirlandina Solare S.r.l.

Euro/000

14

X Datanet S.r.l.

Euro/000

23

Ichnusa Gas S.p.A.

Euro/000

402

Interenergia S.p.A.

Euro/000

127

Interenergia Uno S.r.l.

Euro/000

54

Interenergia Due S.r.l.

Euro/000

28

Interenergia Tre S.r.l.

Euro/000

102

Modena Football Club S.p.A Euro/000

223

Noci Solar 1 S.r.l.

Euro/000

16

Noci Solar 2 S.r.l.

Euro/000

13

Pegognaga Servizi S.r.l.

Euro/000

9

Ecoenergy S.A.

Euro/000

3

Total – Affiliates

Euro/000

13,278

The trade receivables from the affiliates mainly regard the various Fontenergia companies and they con-

82

The table below shows the breakdown of tax receivables:

Receivables from Revenue Authority for IRES (corporate income tax) – IRAP (tax on productive activities)

Receivables from/payables to tax authority for consumption tax

Total

352

1,138

6,524

11,504

This item has decreased by Euro 4,980,000 as a result of the group VAT and the Italian income tax (known as IRES) and the Italian regional tax on productive activities (IRAP) for the year. The item “Receivables from revenue authority for IRAP 2007/2011 – Legislative Decree 201/11” concerns the application for an IRAP refund foreseen by Art. 2, paragraph 1 of Legislative Decree n.201/2011, which states that IRAP can be deducted from taxable income. This is the taxable portion of the costs of employees and similar, net of deductions pursuant to Art. 11, paragraph 1, section a, of Legislative Decree n. 466/97.

Prepaid tax

Taxes paid in advance, amounting to Euro 8,789,000 are considered to be reasonably recoverable considering the relevant transfer to the next financial years, in view of taxable amounts estimated to be at least of the same value as the recoverable amount.

The receivables from the tax authority for prepaid taxes refer to the values recorded in the financial statements of the individual companies and to the tax effect generated by the application of the international accounting principles on the accounting of leasing arrangements.

The variations of prepaid taxes are shown below: EURO/000

2013

2012

Amount at the start of the financial year Decreases Increases

7,794 (53) 1.048

6,047 (113) 1,860

Final value

8,789

7,794

consolidated ba lance sheet

Sundry receivables

The table below shows the breakdown of the receivables from others: EURO/000 Receivables from receivership Nuova Warmflame Receivables from INPS – INAIL – CIG Receivables from ITALCOGIM Conca Casale Global Rimini financing Receivables from Gas/Electricity Authority Adjustment Fund Receivables from GSE (electrical services provider) for incentive rate Advance payments to employees and other companies Receivables from town councils of user area Calabria 12 for work progress reports issued Receivables from Sardinia regional council for subsidies yet to be collected Receivables from refineries for exemption from tax on diesel Advance payment for purchase of EX SMALTIFLEX patent Subsidies from Emilia Romagna regional council for damage from the 2012 earthquake Purchase of future shares in TECNOSERVIZI S.r.l.

Others

TOTAL

2013

2012

4 255 144 150

4 329 144 150

3,679

4,737

51

45

103

48

5,713

1,580

4,482

0

66

45

680

680

1,947

0

25 1,432

5 927

18,731

8,694

The balance, amounting to Euro 18,731,000, has increased by Euro 10,037,000 compared to the previous year, mainly due to the following factors: inclusion of the company Fontenergia S.p.A in the consolidation, given that the said company has reported receivables from the Sardinia regional council in the form of capital grants totalling Euro 4,482, for the construction of networks in user area n. 22; subsidies approved by the Emilia Romagna regional council but not yet received by the parent company for costs incurred for the relocation of staff (Decree n. 502 dated 31 March 2014) and for damage to the parent company’s real property (Decree n. 184 dated 14 February 2014) as a result of the earthquake which struck in May 2012; receivables from the local councils in the Calabria 12 user area for work progress reports relating to the construction of the gas network, which have been invoiced but not yet paid.

Non-fixed financial assets

This item totals Euro 1,819,000, Euro 288,000 of which concerns the subsidiary TRINOVOLT S.r.l., Euro 1,529,000 the affiliate INTERENERGIA S.p.A., and Euro 2,000 the company FONTENERGIA 28 S.r.l.. In 2011, TRINOVOLT S.r.l. completed the construction of two photovoltaic arrays in the town of Binetto and on 31 August 2011 it connected them to the grid, with the incentive rate of the so-called “IV conto energia” (feed-in tariff).

A private deed, dated 29 April 2014, has been entered into with the companies "Albergo Petroli S.r.l.", based in Bari and "Laterza Petroli S.r.l.” based in Santeramo in Colle (BA) concerning the assignment of shares, which is expected to be executed by the end of June 2014. Interenergia S.p.A. (owner of 100% of the shares in Interenergia Uno S.r.l., Interenergia Due S.r.l., Interenergia Tre S.r.l. and Interenergia Quattro S.r.l.), in which the group holds a 48.90% stake, is currently negotiating its assi-

2013

3

chap.

gnment to a German group. The corporate purpose of the company FONTENERGIA 28 S.r.l. is the design and development of the distribution grid in user area n. 28 in Sardinia, which includes the towns of Armungia, Ballao, Dolianova, Donori, San Nicolò Gerrei, Sant’Andrea Frius, Silius, Soleminis and Villasalto. On 20 April 2011, the company assigned a 69.5% stake in the company PEA S.r.l., which went on to assign 99.00 % of the company to Fiamma 2000 S.p.A.. The remaining 0.50% will be assigned directly by the parent company CPL CONCORDIA to Fiamma 2000 S.p.A. once the testing of the gas distribution network in the user area is complete.

Cash and cash equivalents

Cash funds, amounting to Euro 118,871,000, have increased

by Euro 16,632,000 compared to the previous financial year.

Accrued income and prepayments The breakdown is as follows: EURO/000 Prepayments on inquiries for loans and financing Prepayments on substitute taxes Prepayments on guarantee commissions Insurance prepayments Prepayments on advance rent of headquarters’ premises Prepayments on advance rent of premises of branches Prepayments on designs Others

Total

2013

2012 92

31

571 510 22

617 537 58

1,671

1,851

1,880

1,880

82 739

0 661

5,567

5,635

The balance of accrued income and prepayments for the year 2013 has decreased by Euro 68,000 compared to the previous year. The item "Prepayments on advance rent of headquarters’ premises" refers to the advance payment of 20 monthly rent instalments for the headquarters building totalling Euro 1,671,000, which were paid to Coimmgest S.p.A. and which refer to the last 20 monthly instalments of the rent agreement. “Prepayments on advance rent of premises of branches” refers to the advance payment of 20 monthly rent instalments for the branch offices of Melegnano and Bologna, as well as 18 monthly instalments for the building in Bologna (the former headquarters of the Consorzio Cooperative Costruzioni) and for the building in Fano, in addition to seven advance quarterly payments for the building in Padua, and likewise the refund for the registration fee and cautionary deposit paid to Coimmgest S.p.A. totalling Euro 1,880,000.

Also in these cases, the advance monthly instalments will be allocated to the last months foreseen by the agreement. “Prepayments on designs” refers to costs incurred for public and private tenders relating to contracts of considerable worth which, if secured, envisage that the design costs will be incorporated into the total. The costs deferred in this way will be transferred to the profit and loss account when the contract is definitely awarded, whether the contract is awarded to the group or to third parties.

"Others" includes prepayments on interests payable, advertising costs, rent and other minor costs whose economic effect pertains to future financial periods.

CPL CONCORDIA's financial statements and consolidated financial statements

83

Liabilities Share Capital

As of 31 December 2013 the share capital amounted to Euro 22,426,530 and was composed as follows: Euro 13.452.437 from the subscription of 738 cooperative members for a minimum share amount of not less than Euro 8,500; Euro 4,467,841 from the subscription (at the original issuance of shares relating to the Five-Year Plan 1998-2003) of 200,000 cooperative shares with a nominal value of Euro 51.64 each; 8,360 shares were subscribed by 49 cooperative members who exercised their legal right of option, while 186,440 shares were subscribed by 286 members of the general public and 5,200 shares were subscribed by 31 employees. As of 31 December 2010, a total of 113,481 cooperative shares were redeemed, amounting to Euro 5,860,159.

Euro 142,940 from the 2,768 cooperative shares issued as a stock option at the time of allocation of profits for the financial year 1999.

Euro 2,000,000 from the subscription and payment of the relevant cooperative shares newly issued under the new five-year plan approved by the board of directors on 26/11/2004 and approved by the members’ meeting on 4 December 2004 for an overall amount of Euro 10,000,000, details of which are described in the Combined Management Report; Euro 1,980,000 from the subscription and payment of the relevant cooperative shares newly issued under the new five-year plan 01/01/2009-31/12/2013 approved by the members’ meeting on 10 October 2008. The new issue, which amounted to Euro 10 million, concerned 20,000 cooperative shares sold at a price of Euro 500 each; Euro 383,313 for the subscription of 665 investor member shares with a nominal value of Euro 500 each, which were subscribed by 72 cooperative members meeting the requirements foreseen by the relevant regulation approved by the Ordinary Members’ Meeting of 22/12/2001, Euro 383,313 of which has been paid up; As of 31/12/2013, there were 35 honorary members without any amount paid in as share capital, as provided in the bylaws.

84

Revaluation reserves

This reserve, amounting to Euro 656,679, was established pursuant to the rules on property revaluation in accordance with Law 72/83.

Legal reserve

This is the indivisible ordinary reserve provided for by Art. 12 of Law 904/77, the balance of which amounted to Euro 113,363,193 as of 31/12/2013.. Euro 450,000 of this reserve was allocated for the financial coverage of the project 20133/13, as provided by Law 488/92. Euro 10,492 (set aside in the ordinary legal reserve during the 2010 financial year) refers to the share of profits that corresponds to the return of treasury shares held.

Reserve for treasury shares held

The amount allocated to this reserve is Euro 531,892.

This is the reserve established on the basis of the members’ resolution of 20 June 2009, based on which the parent company allocated part of the profits for the repurchase of 10,300 cooperative shares at a price of Euro 51.64 each. The allocation of the profits to this reserve was executed in compliance with the regulations approved by the members’ meeting held on 27 November 1998, which regulate the civil law aspects of the shares to be issued and the implementation of the withdrawal right provided for by Article 3, exercised in compliance with the law and the regulations; Article 5 grants the directors of the parent company the right to acquire treasury shares issued in favour of investor members and/or cooperative members, as foreseen by Art. 57 of the bylaws. From a tax point of view, Article 2, paragraph 36-bis, fourth section, of Legislative Decree n. 138/2011 clarifies that the share of taxed profits (40% for worker cooperatives) can be freely used in accordance with the destinations provided for by the Italian Civil Code.

To this end, it should be noted that in the proposed allocation of the profits from the financial year 2008, the amounts allocated to dividends and to the establishment of the reserve for the purchase of treasury shares did not exceed the aforesaid limit of 40% of the profits for the year corresponding to the taxed portion.

consolidated ba lance sheet

2013

3

chap.

Capital contributions - Law n. 784/80 Translation difference reserve These are capital contributions received in previous financial years and entered directly in net worth, in accordance with the rules in force at the time. The item amounts to Euro 1,269,396.

Consolidation reserve

This reserve includes the differences that emerge during the consolidation between the book value of the holding and the corresponding portion of net worth; the differences usually represent the amounts of future or expected profits. As of 31/12/2013, the reserve amounted to Euro (4,999,668).

Merger surplus

This reserve, set up in previous years for the merger of Harmony Gas Ltd and originally totalling Euro 3,102,096, was reduced in 2005 when used to cover losses for the 2004 financial year amounting to Euro 2,866,499. The remaining balance, therefore, amounts to Euro 235,597.

This item consists of the conversion of foreign subsidiaries’ balance sheets and profit and loss account items into Euros. More specifically, these companies include the CPL company established under Romanian law, CPL CONCORDIA Filiala Cluj Romania S.r.l., the companies established in the Maghreb, i.e. the Algerian company AIPower S.p.A. and the Tunisian company TIPower S.a r.l., the Indian company CPL Energy India Private Ltd., the Argentinian member companies of the group headed by Inversiones Energia y Ambiente S.A., the British company CPWH Ltd, the US company CPL Distributed Generation group Inc, and the Polish company Joka CPL Polska Z.o.o.

On 31 December 2013, this item showed a negative total of Euro 1,402,957.

Minority net worth

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

Variations of Minority Holdings COMPANY

AIPower S.p.A.

Values espressed in Euro/000

Starting minority capital Exchange Shares Minority Balance as of and reserves rate differen- Minority pro- acquired / profits as of of the Balance 31/12/2012 of companies fit distribution transferred by financial ces year 31/12/2013 acquired in the Group 2013 161

0

(7)

(61)

14

91

198

Nuoro Servizi S.r.l.

(286)

0

0

0

179

(68)

(175)

Serio Energia S.r.l.

1,074

0

0

(300)

0

365

1,139

Progas Metano S.r.l.

48

0

0

0

0

(22)

26

Vignola Energia S.r.l.

5

0

0

0

0

(1)

4

Vega Energie S.r.l.

349

0

0

0

0

(84)

265

18

0

(3)

0

0

0

15

CPL Energy India Private Ltd.

103

0

(29)

0

137

(137)

74

Ghirlandina Sport S.r.l.

(20)

0

0

0

57

(29)

8

Gruppo Inversiones Energia y Ambiente S.A.

358

0

0

0

(351)

2

9 21,774

TIPower S.a r.l.

Gruppo European Gas Network S.r.l.

0

3,288

0

0

15,749

2,737

Grecanica Gas S.r.l.

0

0

0

0

35

(1)

34

GES Gas Energy Solutions S.r.l.

0

0

0

0

7

(35)

(28)

CPL Distributed Generation Group S.r.l.

0

0

2

0

0

(55)

(53)

1,810

3,288

(37)

(361)

15,827

2,763

23,290

The increase is due, primarily, to the inclusion of European Gas Network S.r.l. in the group.

CPL CONCORDIA's financial statements and consolidated financial statements

85

Funds for risks and charges

The item "Provisions for retirement pensions and similar obligations", which amounts to Euro 22,000, is composed exclusively of the parent company’s employees’ pension and long service funds. The "Fund for tax, including deferred tax", which amounts to Euro 529,000, includes Euro 12,000 for the provision of payable deferred tax made by Immobiliare della Concordia S.r.l., Euro 1,000 for deferred tax reported by the company CPL Energy India Ltd, and Euro 516,00 for the provision for deferred tax made by the company CPL CONCORDIA Filiala Cluj Romania. The item B3 "Others", which amounts to Euro 12,080,000, is composed as follows: EURO/000 Fondo Rischi ed oneri Ischia Gas Fondo Rischi ed oneri Biogengas Fondo Rischi ed oneri Compagri Fondo Rischi ed oneri Nuoro Servizi in liquidazione Fondo Rischi ed oneri Ghirlandina Sport Fondo per oneri e Rischi futuri Fondo ripristino lavori in Algeria Fondo studio e propaganda cooperativa Fondo sociale a favore lavorat.

Gruppo colpiti dal sisma Fondo Rischi Società Oltremare Fondo Rischi cong.adeguam. tariff. Regione Liguria Fondo Rischi Branch Grecia Fondo Rischi garanzia intervento correttori gas Fondo Rischi oneri urbanizzaz.

Lotto Energy Group Fondo Rischi garanzia imp. fotovolt. Navicelli (PI) Fondo Rischi garanzia sist. telecontr. “Gelsia Reti” Fondo Rischi su delibera AEEG 79/2007 Fondo Rischi ed Oneri da delibera AEEG 155/2008 Fondo Rischi da delibera AEEG 229/2012 conguagli gas Fondo Rischi Discarica Francavilla Fontana Fondo Rischi futuro valore impianti in concessione Fondo Rischi Smantellamento Depositi GPL Fondo Rischi pendenze Agenzia Entrate Fondo Rischi sanzioni AEEG Fondo Rischi ed oneri su avviamento ex SI.GAS Fondo Rischi da Valut. metodo P.N. Società Collegate

Total

2013

2012

1,173 78 128

1,290 0 121

105

0

0 3,593 108 39

315 2,666 50 39

0

1

10

10

1,224

1,224

1,000

1,000

462

840

292

82

188

187

6

6

162

162

522

418

150

0

200

250

267

134

396

426

154 23

0 0

456

467

1,344

1,248

12,080

10,936

“Fund for risks and charges - Ischia Gas”, amounting to Euro 1,173,000, concerns the estimated future losses on the management of the Ischia user area.

86

The Compagri fund for risks concerns the amounts to be covered for the losses of the subsidiary Compagri S.p.A. The fund for future risks and charges includes the provisions for estimated losses for the next financial years concerning production work orders and it amounts to Euro 3,593,000. The fund for risks amounting to Euro 162,000 relates to AEEG Resolution n. 79/2007 of 29 March 2007 "Recalculation of the economic terms and conditions of supply for the period between 1 January 2005 and 31 March 2007 and criteria for updating the economic terms and conditions for the supply of natural gas", which imposes a retroactive variation of the prices charged to end users. The fund for risks amounting to Euro 1,224 concerns the invoices for adjustments issued in relation to the rate adjustment for 2009 and 2010 for the work carried out according to the agreement “ Liguria Region – Integrated Management of the Public Health Services of Liguria”.

The Fund for risks for dismantling of LPG storage facilities refers to the provision relating to storage facilities that were not transferred as part of the sale of the ErreGas business unit relating to distribution grids; in fact, the buyer purchased the grids foreseeing their conversion for the use of natural gas in view of the imminent connection to the SNAM distribution grid. The “Fund for risks - Greek Branch”, amounting to Euro 1,000, refers to the closure of disputes with customers and suppliers in Greece in relation to the gasification of the cities of Thessaloniki and Alexandroupolis. The variations in the fund are as follows: EURO/000

Balance 01/01/2013 Use of Fund for future risks and charges Use of Fund for former Si.Gas goodwill Use of Fund for losses on future job orders Use of Fund for offshore pipeline - Ischia Gas Use of Fund for risks, Francavilla Fontana waste disposal site Use of Fund for risks, dismantling of LPG storage facilities Use of Fund for work under warranties Use of Fund for risks, meters service guarantee Use of Fund for risk for works in Algeria Use of Fund for risks on future losses of Nuoro Servizi Use of Fund for risks on future losses of Ghirlandina Sport Other provisions Fund for risks on AEEG Resolution n. 155/2008 Fund for risks on AEEG Resolution n. 229/2012 Provisions for Francavilla Fontana waste disposal site Provision for charges, Energy Group lot urbanisation Provisions for losses of the companies part of the group Provision for work under warranties Provisions for risks, future value of plants under concession Provisions for the Fund for future risks and charges

Balance 31/12/2013

10,936 (1) (11) (590) (117) (250) (29) (1,287) (378) (50) (27) (315) 274 104 150 200 210 170 621 134 2,336

12,080

76,45

0,73%

14,83

0,30%

83,85

0,29%

02,45

0,23%

26,80

0,00%

2012

3,91

2012 2012

0,48 3,91

2013

3,88

2013 2013

0,54 consolidated ba lance sheet 2013 3,88

Capitale investito / Capitale Proprio

20

Debiti finanziari / Capitale Proprio Capitale investito / Capitale Proprio

20

3

chap.

Debiti fi

Confronto tra capita Confronto tra cash flow e investimenti netti Investimenti netti per dipendente -16.125 -14.346

2009 2009 2010 2010

2011 2011 Severance pay

Confronto tra cash flow e investimenti netti

17.757

2009

23.564 18.942 24.938

2010

27.478 21.602

23.615

The variations remained virtually un27.683 2012 of this item, which 35.379 changed 2012 compared to the previous year, are shown in 21.923 14.272 2013 table: the following 19.267 2013

20.874

Dati in Euro

EURO/000

Balance 01/01/2013

4907

Adjustments to theDati Initial funddi Euro in migliaia Investimenti netti Allocation Payments and transfer to complementary pension funds

Cash flow

Balance 31/12/2013

182 3,113 (3,084)

5,118

The amount set aside for the current year is net of the amounts accrued and paid during the financial year for employees whose relationship terminated during the lle varie aree settori anno 2013 year.

120 Payables due to members for financing

This 106 item is made up as follows: Debt burden Ratio EURO/000 86

Loans from financing members 90 Loans Gas Energy Solutions 2009from GES 0,52 S.r.l.

81 Loans from SIC S.a.s.

2010 Total 80

0,90

2013

5.665

2009

2012

10,862

9,380

48

0

4

4

10,914

9,384

1,02 2011 55 balance as The of 31/12/2012 of loans from financing partners is comprised of payments made by 565 mem32 0,87 2012 bers with a maximum of Euro 72,187 each. These loans, 77 which on the basis of normal market rates, but 2013are paid0,81 20

160

-16.125

17.757

2010

23.564 24.938

2011

7.057 8.150

never higher than those set down by the Ministry of Fi27.478 2011 by 2.5%; for the year 2013, they were 2012 nance, increased 23.615 paid at the gross annual rate of 5.125% (4.10 % net) with 35.379 2013 an increase2012 of Euro 1,482,000.

21.923 2013

Payables due to banks

19.267 20.874

9.380 10.862

Dati in migliaia di Euro

Capitale

The exposure to banking institutes as of 31 December Dati in migliaia di Euro Investimenti netti Cash flow 2013 is shown below: Andamento patrimon EURO/000 2013 2012 Capitale sociale + Ris Current accounts Banks, other technical forms Loans/financing with banks Syndicated loans and special financing Tax financing following earthquake, Legislative decree 74/2012

5,591 747 147,972 20,600

Total

224,399

Debt burden Ratio

49,489

5,651 2,642 2009 115,776 41,200 2010

109.466 123.915

34,427

2011 199,696

132.448

2012

139.128

2013

144.046

Dati in migliaia di Euro

2009

0,52

2010

0,90

2011

1,02

2012

0,87

2013

0,81

Optimal Value of this index: <1,5

Value of

Optimal Value of this index: <1,5

2

Interest Cover Ratio 8 99 2009 3 2010 45

7,27 -2,55*

Rapporto Debt/Ebitda Interest Cover Ratio

2009 Rapport

2009 2009

1,64

2010 2009

2010 2010

3,14 -2,55*

187 2011 25 2012 47

6,23

2011 2011

2,95

7,95

2012 2012

2,52

2013 19

10,84

2013 2013

3,02

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

7,27

2011 2010 6,23

2012 2011

7,95

2013 2012

10,84

Optimal Value of this index: <4,5 Optimal Value of this index: >2

2013

Data expressed in Eu

Optimal Value of th

* In 2010 the Interest Cover Ratio was negative because, in the balance of financial items (OFN) to the ratio’s denominator, the income was greater than the financial charges.

The group’s loans and special financing situation as of 31 December 2013 is shown in the table below:

CPL CONCORDIA's financial statements and consolidated financial statements

87

List of bank loans as of 31/12/2013

Values expressed in Euro/000 BALANCE AS OF 31/12/2013

Financing institution

Date of granting

Non current

Current

Date of settlement

Total

Share expiring after 5 years

CASSA DI RISP. DI PARMA & PIACENZA

3,000

09/04/2004

317

0

317

09/04/2010

0

UNICREDIT - 4,5 ML

4,500

26/12/2000

312

0

312

29/06/2010

0

BPV - (ACCOLLO IDC)

2,500

25/05/2004

0

0

0

30/12/2009

0

COOPFOND

3,000

18/12/2004

600

1,200

1,800

30/12/2012

0

BANCO POP. S.FELICE

4,000

23/12/2004

378

2,639

3,017

23/03/2017

1,007

CRFERRARA

3,815

09/03/2005

829

631

1,460

30/06/2015

0

MEDIOCREDITO

6,000

29/12/2005

1,200

1,200

2,400

30/12/2011

0

BNL

7,000

2.000

3,000

5,000

13/06/2012

0

BANCA MPS

5,000

999

2,076

3.075

30/12/2012

0

DEUTSCHE BANK 1,50 ML

1,500

14/12/2005 15/02/2010 12/08/2010 09/06/2006

375

188

563

29/04/2011

0

CASSA DI RISPARMIO DI FERRARA

1,000

09/09/2006

200

465

666

08/03/2013

0

MEDIOCREDITO 4,00 ML

4,000

28/09/2006

800

1,200

2,000

30/06/2016

0

CREDEM

5,000

1,269

1,308

2,577

11/07/2011

0

CARIGE - CASSA DI RISPARMIO DI GENOVA

5,000

999

2,075

3,074

30/12/2012

0

UNIPOL BANCA

5,000

1,014

1,559

2,573

29/06/2012

0

BANCA POPOLARE DI MILANO

5,000

3,801

0

3,801

09/04/2010

0

20,600

20,600

41,200

15/11/2011

0

2,000

1,000

3,000

15/05/2011

0

491

1,526

2,017

0

0

8,825

GE CAPITAL

5,000

BPV - ACCOLLO ERREGAS

2,750

11/07/2006 12/10/2010 13/12/2010 10/10/2006 24/11/2010 15/12/2010 16/02/2011 08/08/2011 17/05/2011 19/10/2011 30/12/2007

10,000

13/10/2007

8,825

POOL BPV

51,500

CASSA DI RISPARMIO DI CENTO

1,000

15/05/2008

326

517

844

30/12/2013 14/10/2017 clausola revoca 29/06/2012

UNIPOL BANCA

1,500

09/07/2008

493

652

1,146

30/03/2012

0

54

244

299

04/02/2015

27

BANCO DI BRESCIA

MPS - ACCOLLO COMPAGRI

407

0 0

20,498

30,746

30/12/2012

0

5.000

14/12/2012 01/02/2013 28/03/2009

10.249

BANCA INTESA

1,000

3,500

4,500

28/03/2014

0

DEUTSCHE BANK 2,0 ML

2,000

27/06/2009

667

1,000

1,667

24/06/2012

0

495

29/06/2009

0

495

495

30/12/2012

0

BNL - FINANZIAMENTO BEI/SACE - 10,00 ML

10,000

30/07/2009

2,000

8,000

10,000

30/07/2014

0

CASSA DEPOSITI E PRESTITI - 15,00 ML

15,000

23/10/2009

1,500

13,500

15,000

29/06/2015

1,500

1,500

27/10/2009

273

1.227

1,500

30/10/2014

0

4.533

12/11/2009

1,133

3,400

4,533

30/12/2013

0

1,200

19/06/2006

45

688

732

28/06/2019

106

CASSA RURALE TRENTO II

500

04/08/2008

40

0

40

04/08/2014

0

CASSA DI RISPARMIO BOLZANO

250

13/12/2012

7

171

177

31/12/2016

0

2,000

30/11/2009

213

916

1,129

09/08/2014

0

500

01/07/2010

4

92

96

29/09/2012

0

1,000

30/09/2010

25

183

209

30/09/2016

0

BANCA POPOLARE DELL'EMILIA ROMAGNA

338

15/11/2012

18

222

240

15/11/2016

0

BANCA POPOLARE ALTO ADIGE

750

08/07/2013

139

577

716

08/07/2018

0

MEDIOCREDITO II

1,000

10/11/2013

102

898

1,000

10/11/2018

0

BANCA POP. EMILIA ROMAGNA

6,000

07/12/2006

770

3,969

4,739

07/06/2019

485

BANCA POP. EMILIA ROMAGNA

MPS - FIN. TRIBUTI SISMA D.L. 174/2012

UNIPOL BANCA (BULLET)

VENETO BANCA - 1,5 ML MPS - FIN. TRIBUTI SISMA D.lg 174/2012 (SECONDA FASE) CASSA RURALE LAVIS V

MEDIOCREDITO I BANCA POPOLARE DI VICENZA CREDITO VALTELLINESE

43,929

5,000

07/12/2006

625

2,500

3,125

07/12/2018

0

UNICREDIT ROMANIA S.A.

500

30/06/2006

0

47

47

30/09/2014

0

UNICREDIT ROMANIA S.A.

1,200

30/09/2006

0

129

129

30/09/2014

0

UNICREDIT ROMANIA S.A.

1,242 09/2011 - 2013

0

1,242

1,242

03/12/2013

0

INTESA

1,513

30/11/2009

0

930

930

31/10/2019

133

POOL UNICREDIT BANCA

33,000

15/09/2005

3,771

6,600

10,371

30/09/2016

0

UNICREDIT (EX BANCO DI SICILIA)

5,000

526

1,579

2,105

31/12/2017

0

MONTE PASCHI SIENA

5,000

999

2,076

3,075

31/12/2016

0

420

30/07/2004 15/02/2010 11/08/2010 07/02/2005

18

48

66

30/09/2017

0

65

08/2012

4

56

61

30/09/2026

38

BPV - BSGSP BPV - ACCOLLO BPER - FIN. TRIBUTI SISMA D.L 174/2012

241

14/12/2012

160

81

241

30/06/2015

0

Mutuo Chirografario B.P.E.R

2,000

29/07/2004

277

191

468

29/08/2015

0

Mutuo Chirografario B.P.E.R

180

36

57

93

08/06/2016

0

0

1.199

1,199

01/05/2021

831

2,000

08/06/2010 30/06/2011 10/11/2011 29/06/2012

235

1,765

2,000

29/06/2018

824

13,309

2012 2013

4,277

8,553

12,830

30/12/2012

0

1,138

285

854

1,138

30/12/2013

0

0

2,400

2,400

15/07/2021

1,944

246

514

761

22/12/2012

0

UNIPOL BANCA UNICREDIT SPA BPER - FIN. TRIBUTI SISMA D.L 174/2012 MPS - FIN. TRIBUTI SISMA D.lg 174/2012 (SECONDA FASE) BANCA DELLA CAMPANIA

1,199

BPER - FIN. EURO 1,00 ML

1,000

13/11/2013 16/01/2013 02/08/2013 23/12/2010

BANCO DI SARDEGNA - FIN. 2,00 ML

3,000

19/12/2007

198

1,126

1,324

30/12/2015

251

CARISBO - MUTUO BEI 7,7 ML

7,700

17/12/2003

856

1,283

2,139

14/06/2012

0

CARISBO - MUTUO BEI 3,3 ML

3,300

12/10/2004

413

206

619

14/06/2011

0

CARISBO - MUTUO CHIROG. 5,00 ML

5,000

03/04/2007

714

2,500

3,214

02/04/2014

0

UNIPOL BANCA - MUTUO 1,00 ML

1,000

03/10/2013

319

681

1,000

30/12/2012

80,028

138,033

218,061

TOTAL 88

Amount granted

2,400

0

7,145

consolidated ba lance sheet

It should be noted that, until 30 June 2013, following a bilateral suspension agreed during the last financial year as a result of the earthquake in May 2012, the company has made use of a facility envisaged by law to suspend mortgage repayments. As a result of Legislative Decree n. 74/2012, new lines of interest-free funding were granted and the second instalment was disbursed in 2013.

During the year, the group obtained new lines of funding, the main ones being: Euro 15 million with Cassa Depositi e Prestiti, which matures on 30 June 2019; Euro 10 million with BNL, with maturity date 31 July 2018; Euro 5 million with Banca Intesa, with maturity date 29 March 2018; Euro 2.4 million with Banca della Campania, with maturity date 16 July 2025; Financial accounting covenants exist on the following bank loans: Banca Popolare di San Felice sul Panaro, BNL, CREDEM, POOL Banco San Geminiano San Prospero, GE CAPITAL, Banco di Brescia, BNL-BEI, Banca Intesa, DeutscheBank, Veneto Banca and Cassa Deposito e Prestiti S.p.A.. All the covenants were fulfilled. All other information about the group’s financial position can be found in the Combined Management Report to the Financial Statements and Consolidated Financial Statements for the year 2013.

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

2013

2012

Financing from leasing companies Financing from factoring companies Other financing

11,773 1,045 32

13.048 98 0

Total

12,850

13,146

This value has decreased by Euro 296,000 compared to the previous year due to the payment of leasing fees pertaining to the reporting year relating to the Campania 30 gas grid user area.

Advances

The balance, amounting to Euro 9,548,000, down from the previous year by Euro 715,000, is mainly attributable to the reduction in advances to "business" customers and “cooperative and consortium” customers.

2013

3

chap.

Payables due to suppliers

“Payables due to suppliers” is broken down as follows: 2013

2012

Suppliers Suppliers, for guarantees

EURO/000

176,952 4,302

179,677 4,275

Total

181,254

183,952

The balance has decreased by Euro 2,698,000 compared to the previous year, mainly due to the end of the payment extensions resulting from the suspension of payment terms following the earthquake in May 2012.

“Suppliers, guarantee withholding account” represents the sub-contractors’ amounts to be redeemed at the end of the contract.

Payables to affiliates

This item, amounting to Euro 1,673,000, is made up as follows: Amounts in Euro/000

Compagri S.p.A. Coimmgest S.p.A. Sarda Reti Costruzioni S.r.l.

Fontenergia 4 S.r.l.

Fontenergia 6 S.r.l.

Fontenergia 7 S.r.l.

Fontenergia 9 S.r.l.

Fontenergia 10 S.r.l.

Fontenergia 11 S.r.l.

Fontenergia 15 S.r.l.

Fontenergia 26 S.r.l.

Fontenergia 27 S.r.l.

Fontenergia 28 S.r.l.

Fontenergia 35 S.r.l.

Fontenergia 37 S.r.l.

X Datanet S.r.l.

Interenergia Tre S.r.l.

Modena F.C. S.p.A. Econergy S.A. Total payables due from affiliates

140 (218) 4 19 29 7 6 20 5 4 13 18 2 8 5 745 385 250 231 1,673

CPL CONCORDIA's financial statements and consolidated financial statements

89

Tax payables

The breakdown is as follows: EURO/000 Payables due for consumption tax Payables due for VAT with deferred collection Personal income tax (IRPEF) to be paid Corporate income tax (IRES) and regional tax on production (IRAP) Direct and indirect foreign tax Withholdings on loans from members Payables due for Decembers’ VAT

Total

2013

2012

2,276

71

3,748

3,271

1,871

1,513

584

263

533 103 350

509 89 481

9,465

6,197

This item, which amounts to Euro 9,465,000, has increased by Euro 3,268,000 compared to the previous year.

This increase is primarily due to the account payable for settlement of consumption taxes, deferred collection VAT, and withholdings on income tax (IRPEF) payable.

Payables due to social security

Deferrals and accruals

In more detail:

EURO/000

2013

In more detail:

2012

National social security contributions National occupational accident insurance contributions Executives' contributions Contributions for members’ Christmas bonus and supplementary pay Fund for operators in the building sector and chemists Complementary pensions Foreign social security institutions Social security charges for redundancy of personnel at Nuoro Servizi Others (including advance payments for accidents and illnesses)

2,517

2,220

8

1

Total

12

11

567

709

89

71

356 445

348 97

186

222

(9)

(7)

4,171

3,672

The increase in this item compared to the previous year, which amounting to Euro 499,000, is mostly attributable to sums payable to the Italian institute for social security and foreign social security institutes.

In more detail:

90

EURO/000

2013

2012

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

298

327

1,534

1,368

Total

8,829

8,680

55

28

3,140 349

3,644 325

1,743

2,263

328

7

40

40

68

68

1,224

471

50

139

2013

2012

Accruals on interest payable Others

1,363 3,811

2,744 2,084

Total

5,174

4,828

The amount of accruals on interest payable concerns, in addition to the interest on bank loans and other technical financing forms, leasing fees pertaining to the reporting year that will be charged in the future and income attributable to future years, for which invoices have already been issued.

Memorandum accounts

The breakdown of commitments and risks outstanding as of 31 December 2013 entered under the memorandum accounts is as follows: EURO/000

Other payables EURO/000

The payables due to councils concern the amounts collected on their behalf that are to be paid to them.

The payables due to employees include the wages and salaries for December, the holidays accrued and not used, and the additional monthly wage accrued, as well as supplements to individual salaries and/or supplements foreseen by trade unions. The "Collections made on behalf of a temporary association of companies as representative head company" refer to collections made by the parent company as representative of a temporary association of companies at the end of December and paid to the companies during the first days of January 2014. The “Payables due to final balance adjustments fund for energy sector” refer to the amounts that the group received for the equalization system implemented following Resolution n. 159/08 and which must be returned as provided for by subsequent Resolution 197/09.

Bills for discount subject to collection that have been presented.

Guarantees issued to third parties and companies part of the group Liens and mortgages Leasing fees for motor vehicles, equipment and property Guarantees issued by third parties Guarantee deposits for agreements Letters of credit for imports, foreign documents Derivatives – MTM IRS – Coverage agreements

Total

2013

2012 38

311

159,993

160,965

30

1,324

7,868

5,016

2,719 67,717

12,493 59,365

279

0

77

234

238,721

239,708

The item “Bills for discount subject to collection that have not expired as of December 31" includes the amount of the bank receipts issued by the group to customers and presented to banks for payment but not yet expired on 31/12/2013. This item also includes the amount of the bills of exchange issued to the group by our customers, which have been presented to banks for payment but had not yet expired on 31/12/2013.

consolidated ba lance sheet

The item “Guarantees issued to third parties and companies part of the group” includes the value of the guarantees as of 31/12/2013 provided by the group in favour of banks for the issue of bank and insurance credit lines/loans.

The item "Leasing fees for motor vehicles, equipment and property" includes the residual debt of the leasing fees existing as of 31/12/2013 for leasing agreement for the purchase of financially leased vehicles and instrumental goods.

The item "Guarantees issued by third parties" includes the value of the guarantees issued by banks/insurance companies to the parent company to the benefit of third parties to guarantee contractual obligations mainly made up of subcontracting agreements.

The item "Guarantees deposits for agreements" includes the value of the guarantees provided by Insurance companies in favour of third parties in the interest of the group for participation in tenders and for the issue of guarantees for contractual obligations, the value of the guarantees provided by foreign banks in favour of third parties in the interest of companies part of the group, and the value of the co-obligations as of 31/12/2013 for the issue of insurance policies regarding the Temporary Association of Companies to participate in tenders or to guarantee contractual obligations.

Derivatives - MTM IRS: this item includes the Mark to Market value of the two interest rate coverage IRS agreements entered into on 28/10/2010 with Intesa San Paolo S.p.A. and an interest rate coverage IRS agreement entered into on 04/04/2011 with Banco San Geminiano e San Prospero.

The agreements make it possible to eliminate the interest rate risk on three loans outstanding as of 31/12/2013, with a remaining debt of Euro 2,400,000

2013

3

chap.

and Euro 2,000,000 granted by Medio Credito Italiano S.p.A. and of Euro 4,500,000, which amounts to 50% of the amount of the Head Bank (Banco San Geminiano e San Prospero - Gruppo Banco Popolare) of the syndicated loan totalling Euro 51,500,000.

The notional amount of derivatives is equal to the remaining debt of the above mentioned loans. Following the earthquake that struck the parent company’s headquarters on 29 May 2012, the suspension envisaged by law (Italian Legislative Decree 74/2012) was applied to all loans in relation to the instalments due for payment through to 30 November 2012. Following on from that period, a bilateral suspension concerning solely the repayment of the shares relating to the principals of loans was sought and applied for a total duration of 12 months (from the date of the earthquake) The loans subject to bilateral suspension include those with interest rate coverage agreements (IRS). Therefore, from 29 May 2012 there was a difference between the residual value of the loan agreements (Medio Credito Italiano and Banco Popolare) - which remained unchanged - and the notional value of the interest rate coverage agreements, which was reduced as provided by the initial amortisation plan.

A brief summary of the IRS coverage agreements is shown below: DATE OF EXECEUTION

EXPIRY DATE

NOTIONAL (€)

MARK TO MARKET (€)*

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

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

1,200,000,00 1,200,000,00 2,500,000,00

- 13,699.00 - 18,836.00 - 44,674.65

*The Mark to Market is the current market value of each agreement calculated as of 31/12/2013, whose positive sign (+) or negative (-) sign refers to the position of the parent company CPL CONCORDIA Soc. Coop..

CPL CONCORDIA's financial statements and consolidated financial statements

91

Profit and loss account A. Value of Production

Amounts in Euro/000

The breakdown is as follows: EURO

2013

2012

Revenues from sales and services Income from production work orders Sale and distribution of gas Fuel sales Sale of thermal power Sale of electricity Sale of green certificates Sale of materials Revenues from consultancy and services Connection contributions Revenues from equalisation of rate system Sale of immovable property Revenues from hotel and restaurant services Rents and leases

268,278 42,906 6 168 4,112 107 31,617 13.416 375 8,796 9 1,739 4

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

Total

371,533

368,755

(1,879)

(3,518)

(696) 36,437

7,054 30,130

Contingent assets Miscellaneous accrued earnings Capital gain on transfer of assets Reimbursements for insurance claims Rents and leases Other earnings Subsidies for operating expenses Capital contributions

3,441 4,602 156 292 380 394 461 245

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

Total

9,971

9,014

415,366

411,435

Variation of the stock of products under processing, semi-finished and finished goods.

Variation of works in progress on order Increase in internally generated fixed assets

Other income

TOTAL

The value of production of the group for the financial year 2013 has increased by Euro 3,931,000 compared to the previous year. The details and the analysis of this item are described in the Management Report to the Financial Statements and Consolidated Financial Statements.

As regards the determination by geographical area of the revenues from sales and services, the breakdown is shown below:

92

Algeria Argentina Bangladesh Francia Grecia India Israele Messico Polonia Romania Svizzera Tailandia Tunisia USA Italia Total

15,732 1,822 40 158 6 126 10 90 2,340 6,684 11 46 64 92 344,312 371,533

The item "Increase in internally generated fixed assets", amounting to Euro 36,437,000, consists of work performed with in-house personnel for the construction or expansion of intangible assets, mainly made up of heat management systems owned by third parties, and tangible assets, consisting of the construction of gas distribution systems.

Subsidies for operating expenses mainly include the amounts paid by the electrical services provider (GSE) as part of the energy produced by photovoltaic and cogeneration plants transferred to the provider. Other revenues also include contingent assets from different sources, including transactions with suppliers and customers, or from the evaluation of payables made​​ in previous financial years that were higher than the amounts ​​actually incurred.

The item "Other earnings" includes the charge of costs incurred on behalf of third parties.

The item “Capital gain on transfer of assets” includes the effects of the assignment of equipment and other low-value assets.

consolidated ba lance sheet

Value of production

2011 2010 2012 2011 2013 2012

2013

Data expressed in Euro/000

Data expressed in Euro/000

330,620 278,091383,175 318,323 332,058 388,212 330,620 383,175 344,888 411,435 332,058 388,212 335,770 344,888415,366 411,435

335,770 CPL CONCORDIA Soc. Coop.

415,366

2009 1,289 Employment data for the CPL Group

2011 2013

1,511 1,722

2012

1,540

2013amounting 1,722 This item, to Euro 3,975,000 is made up as follows: CPL CONCORDIA Group

Number of employees as of Dec. 31, 2013

This item, which amounts to Euro 161,949,000, has increased by Euro 2,813,000 compared to the previous year, mainly due to the increase in the value of production and despite a reduction in purchasing costs for raw materials, ancillaries, and consumables due to the significant reduction in the purchase of photovoltaic panels; on the other hand, there has been an increase in the cost of gas consumption relating to heat management agreements and of costs for the purchase of fuel and lubricants.

B7. Services

This item, which amounts to Euro 122,989,000, has increased by Euro 5,914,000 compared to the previous year, i.e. by 5.05%, mainly due to the increase in contracts for technical and administrative consultancy services, in advertising costs, in costs for third-party services and subcontracting, in insurance costs and in ancillary personnel costs, such as costs for restaurants, accommodation, canteen, and in employee travel costs in general, due to the increased number of operating units.

B8. For the employment

of third-party assets

This item, which amounts to Euro 16,135,000, has increased by Euro 152,000 compared to the previous year mainly due to increased costs of rent and gas, water and electricity concession fees.

B9. Costs for personnel

This item includes all charges incurred on an ongoing basis for employees. The amount transferred to the profit and loss account for the financial year 2013 amounts to Euro 69,290,000, making an increase of Euro 4,638,000, mainly due to the increase in units engaged in the production process. The average number of employees in the group during the financial year, broken down by category, is as follows:

Total

1,416 1,289 1,511 1,416 1,540

Number of employees as of Dec. 31, 2013

B6. Purchases

Number

2010 2009 2011 2010 2012

B13. Other provisions

CPL CONCORDIA Group

CPL CONCORDIA Soc. Coop.

Top management Executives White collar Blue collar

3

chap.

Employment data for the CPL Group

278,091 Value of production 2009 318,323 2010 2009

2013

2013

2012 38 44 746 802

1,630

37 33 693 765

1,528

Provisions for losses on future job orders Provisions for risks on work orders for future guarantees Provisions for risks on Algeria work orders for future guarantees Provisions for future losses of Francavilla Fontana waste disposal site Provisions for charges for urbanisation of Energy Group Lot Provisions for risks from pending tax authority proceedings Provisions for risks relating to AEEG penalties Provisions for risks from value variations of concession plants.

Provisions for risks for the payment of employees and contributions of Nuoro Ser. Provisions for risks from final balance adjustments for gas Provisions for meter replacements

TOTAL

EURO/000 2,294 621 97 200 210 110 23 134 32 150 104

3,975

These provisions refer to: Euro 2,294,000 to cover the risks associated with future losses on production orders; Euro 621,000 allocated as direct prudential provisions on work orders for assistance under warranty in subsequent years, as costs that will be almost entirely incurred in the next financial year; Euro 97,000 for risks for work carried out under warranty on the works in Algeria; Euro 200,000 to cover future operating losses that are expected to be generated by the management of the plant at the Francavilla Fontana waste disposal site; Euro 210,000 as provisions to cover the costs of urbanisation relating to the Energy Group lot on the council-owned land in the town of San Possidonio (MO), which are yet to be incurred; Euro 110,000 to cover potential risks relating to ongoing disputes with the Italian tax authority; Euro 23,000 for potential risks generated by an AEEG penalty demand; Euro 134,000 to cover the risk arising from the difference detected by an assessment required by us to determine the residual value of the equipment under concession; Euro 32,000 for any additional charges for the payment of employees and national social security contributions for Nuoro Servizi; Euro 150,000 for provisions booked in compliance with AEEG Resolution n. 229/2012, which established new procedures for final balance adjustments applicable to gas allocated to the sellers; Euro 104,000 for the phasing-out of conventional meters, which must be completed by 31/12/2016.

CPL CONCORDIA's financial statements and consolidated financial statements

93

B14. Sundry operating expenses

This item, which amounts to Euro 6,866,000, has increased by Euro 1,422,000, mainly due to corporate social responsibility expenses, contract costs, charitable donations, and other taxes paid.

C15. Earnings from holdings

This item, amounting to Euro 1,579,000, is made up as follows: EURO/000 Capital gain on assignment of Energia Anonima FV2 S.r.l.

Capital gain on liquidation of Tradenergy S.r.l. in receivership Capital gain on assignment of 25% share in I.E.A. S.A. Capital gains from recovery of margins on devaluation of VEGA facilities

390

Total from subsidiaries

678

Dividend from Ies Solare S.r.l.

Dividend from Ghirlandina Solare S.r.l.

Dividend from Interenergia S.p.A. Capital gain on assignment of 25% share in Ichnusa Gas S.p.A. Capital gain on assignment of Solarplant S.r.l.

Capital gain on assignment of Teclab S.r.l.

Capital gains on assignment of Fontenergia 38 S.r.l.

75 20 201 347 221 3

Total from affiliates

868

125 110 53

1

Dividend from Hera shares Dividend from Sofinco shares Dividend from Finpro shares

21 10 2

Total from other companies

33

C16. Other financial income From subsidiaries From affiliates From other companies

Total

2013

2012

0 206 2,864

3,070

81 288 2,760

3,129

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

C17. Interest and other The breakdown is as follows: Interest on loans and financing Interest on current accounts Interest on funding from members Interest on hot money, eurolire and bills subject to collection.

Interest on advance payment of invoices Interest on leasing contracts Charges for SWAP coverage Other interest

Total

2013

2012

3,699 315 517

4,114 432 444

173

72

509 344 149 558

341 348 132 245

6,264

6,128

This item, amounting to Euro 6,264,000, has increased

by Euro 136,000 compared to the previous year, mainly due to higher interest on advances on invoices. The financial management of the group is better analysed in the Combined Management Report to the Financial Statements and Consolidated Financial Statements.

94

This item, which amounts to Euro 73,000, consists in payables produced when items valued in currencies other than Euros at the exchange rate on 31 December 2013 differ from the exchange rate applicable when the receivable or payable was actually booked. The items considered refer to receivables and payables in foreign currencies accounted for by CPL CONCORDIA Filiala CLUJ ROMANIA S.r.l., which reported Euro 5,000, CPL ENERGY INDIA PRIVATE Ltd, which booked Euro 2,000, CPL DISTRIBUTED GENERATION GROUP S.r.l. which posted Euro 9,000, and by AIPOWER S.p.A., which reported Euro 28,000. The largest part of the entry, which amounts to Euro 29,000, refers to the same items reported by the permanent establishments in Romania, Argentina, Poland, and Algeria, as well as receivables and payables due from and by Algerians customers and suppliers which were outstanding on 31 December.

D18. Revaluations a) of equity investments

This item, which amounts to Euro 2,066,000, comprises the assessed values of the affiliates following assessment using the net worth method, the details of which are as follows: Coimmgest S.p.A. Pegognaga Servizi S.r.l.

Interenergia S.p.A. Noci Solar 1 S,r.l.

Noci Solar 2 S.r.l.

Ghirlandina Solare S.r.l.

Fimetra S.r.l.

XDatanet S.r.l.

Centrale Sassinoro S.r.l.

Redengas S.A.

346 11 1,492 77 71 6 13 40 8 2

Total of Revaluation of holdings

3,873

D19. Devaluations a) of equity investments

financial charges EURO/000

and losses

EURO/000

The breakdown is as follows: EURO/000

C17.bis. Exchange rate gains

This item, which amounts to Euro 3,874,000, is made up as follows: EURO/000 Safin-Sarda Reti Costruzioni Modena Football Club S.p.A. Agrienergia S.p.A. Compagri in Liquidazione S.p.A. Ies Solare S.r.l.

Solarplant S.r.l.

Gruppo Ichnusa Fontenergie Bacini Sardegna CPL Fuel S.r.l.

Intermedia Holding S.p.A. Biogengas S.r.l.

Interenergia Quattro S.r.l.

Energetski Servis D.o.o.

CPL CONCORDIA USA Inc. Emprigas S.A. Winding up of inactive companies

95 420 109 7 149 175 289 11 3 630 83 185 1 1,606 80 30

Total devaluation and losses of holdings

3,874

consolidated ba lance sheet

charges

This item, which amounts to Euro 388,000, is made up as follows:388 è cosÏ composta: EURO/000 109

Use of risk funds

29

Donations relating to May 2012 earthquake

1

Insurance refunds relating to May 2012 earthquake

1,151

Subsidies from Emilia Romagna regional council for damage from May 2012 earthquake

1,762

Special charges relating to earthquake May 2012

(2,232)

Negotiation with Apahida town council, Romania

(357)

Tax for previous years

(49)

Others from previous financial years

(26)

Total extraordinary earnings and charges

388

Income tax for reporting year: current, deferred, and prepaid This item includes:

EURO/000 Current corporate income tax (IRES)

4,104

Current regional tax on production (IRAP)

2,805

Prepaid tax

(595)

Foreign income taxes

Total tax

Receivables and payables with a residual duration of more than five years

3

chap.

Remuneration of directors, auditors and external auditors

E. Extraordinary earnings and

Contingent assets from Polargas valuation

2013

Remuneration to auditors and directors for performing their duties at the other companies included in the consolidation for the year 2013 amount to Euro 428,000, Euro 250,000 of which refers to the board of auditors and Euro 178,000 the directors. Fees paid to the various auditing firms during the year amount to Euro 266,000, Euro 149,000 of which is for the performance of statutory audit duties pursuant to Art. 14 of Italian Legislative Decree n. 39/2010. Euro 81,000 is for the certification activities relating to the financial statements as of 31/12/2013 pursuant to Italian Law n.59/92, Euro 30,000 is for auditing the separate annual financial statements pursuant to Art. 21 paragraph 21.2 of the integrated text approved by the AEEG with Resolution n. 11 dated 18/1/2007 and subsequent amendments and supplements thereto, and finally Euro 6,000 is for sundry expenses.

Supplementary tables

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

133

6,447

cash flow statement variations of group net worth reconciliation of parent company's net worth according to Italian Civil Code with consolidated net worth.

The balance of payables with a residual duration greater than five years amounts to Euro 7,145,000 and is composed exclusively of bank loans included in item D3 of the liabilities. There were no receivables with duration of more than 5 years as of 31 December 2013.

CPL CONCORDIA's financial statements and consolidated financial statements

95

Financial statement for the year ending as of 31/12/2013 SOURCES Profit of the financial year

Amounts in Euro/000 2013

2012 4,483

8,929

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

11,115 7,113 754 3,295 4,280 (3,055)

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

Net Working Capital generated from operating activities

27,985

33,236

Payments of contributions to share capital Net value of transferred intangible fixed assets Net value of transferred tangible fixed assets Decreases of holdings Decrease of long-term receivables Decrease of long-term receivables from customers Variation of translation reserve Variation of minority reserve New funding and bank loans Increase of other long-term payables Increase of long-term payables to suppliers

2,022 1.875 7,677 2,699 3,451 0 625 21,468 43,949 0 491

1,236 1,741 6,658 4,115 0 138 0 721 17,046 494 692

TOTAL SOURCES

112.242

66,077

38,756 18,588 1.300 203 636 0 5,129 3,084 0 1,347 19,186 0 87 1,611 411

22,184 18,206 686 267 378 424 241 2,980 7,035 0

TOTAL USES

90,338

53,637

VARIATION OF NET WORKING CAPITAL

21,904

12,440

Receivables from members for payments still due Stock Receivables Cash and cash equivalents Financial assets Accrued income and prepayments

163 3,213 7,009 16,632 (2,591) (68)

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

VARIATION OF CURRENT ASSETS

24,358

39,329

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

1,530 (60) (296) 715 (3,189) (1,400) 805 4,003 346

1,160 12,549 (1,446) (6.302) 24,361 1,400 (757) (6,966) 2,890

VARIATION OF CURRENT LIABILITIES

2,454

26,889

21,904

12,440

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

480 0 497 259

Variation of net working capital components CURRENT ASSETS

CURRENT LIABILITIES

VARIATION OF NET WORKING CAPITAL

96

consolidated ba lance sheet

Variations of Group net equity Share Capital Balance as of 01/01/2013 Allocation of 2012 profit Allocation of holding company dividends Allocation to mutual benefits fund Payment of contributions to share capital Repayment of contributions to share capital Variation of translation reserve Variation of consolidation reserve for acquisition of holdings and other consolidation variations Consolidated profit (loss) of the financial year

Balance as of 31/12/2013

20,714

2013

Amounts in Euro/000 StaReserve for Revaluation tutory Own Shares Reserve Reserve Held 108,867 657 78 532

Legal Reserve

Surplus Capital Conversion Consolida- Profit/loss from of the fin reserve tion reserve ancial merger contributions year 236 1,269 (2,028) (2,024) 8,929

4,946

(2,976)

2,349

TOTAL 137,230

(4,946)

(2,976)

(1,300)

(1,300)

(203)

(203)

(327)

2,022

(636)

(636) 625

22,427

3

chap.

113,813

657

78

532

236

1,269

(1,403)

625

(5,000)

Reconciliation of holding company's net equity according to Italian civil code with consolidated net equity

(2,153)

4,483

4,483

4,483

137,092

Amounts in Euro/000 Net Equity as of 31/12/2013

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

(2,153)

Result of the financial year as 31/12/2013

144,046 73,861 (1,507) 0 (6,831) 1,412 (4,162) (44,711) (1,735) 9

5,035 7,458 (43) (4,810) 152 (186) 1,513 420 (2,296) 3

I.E.A. sub-consolidation effect

160,382

7,246

Minority net equity and result

(23,290)

(2,763)

137,092

4,483

Group net equity and result of the financial year

These consolidated financial statements, provide a truthful and correct portrayal of the groupâ&#x20AC;&#x2122;s net worth and financial situation, in addition to the economic result of the reporting year, and tally with the results of the accounting records.

Concordia sulla Secchia, 19th May 2014 for the Board of Directors

Chairman, Roberto Casari

CPL CONCORDIA's financial statements and consolidated financial statements

97

Certification Report

98

consolidated ba lance sheet

2013

3

chap.

CPL CONCORDIA's financial statements and consolidated financial statements

99

CHAPTER 4 balance sheet 2013

Balance Sheet 2013 as of December 31, 2013

Statement of

assets COMPANY DATA December 31, 2013 Amounts expressed in Euros

A)

RECEIVABLES FROM MEMBERS FOR PAYMENTS STILL DUE - Portion called in

B)

COMPANY DATA December 31, 2012 Amounts expressed in Euros

1,192,565 1,192,565

1,176,488 1,176,488

FIXED ASSETS

I INTANGIBLE FIXED ASSETS 1) Start up and expansion costs

10,777

4,829

2) Research, development, and advertising costs

78,381

86,191

0

0

37,988

63,455

3) Industrial patent rights and rights for the exploitation of intellectual properties 4) Concessions, licenses, trademarks, and similar rights 5) Goodwill

0

0

3,525,373

2,916,262

39,365,110

35,127,990

43,017,629

38,198,727

1) Land and buildings

2,921,772

3,403,798

2) Plants and machinery

6,776,964

6,546,771

6) Fixed assets in progress and payments on account 7) Other intangible fixed assets

Total II TANGIBLE FIXED ASSETS

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

711,349

725,171

2,856,584

2,445,197

6,415,010

3,877,320

19,681,679

16,998,257

a) Subsidiary companies

43,802,792

48,810,526

b) Associated companies

5,373,720

8,339,583

Total III FINANCIAL FIXED ASSETS 1) Holdings in:

c) Parent companies

0

0

d) Other companies

5,556,605

5,959,318

2) Receivables:

(entro 12 mesi)

29,060,647

29,060,647

19,239,653

19,239,653

b) From associated companies

7,028,720

7,028,720

8,916,542

10,135,792

0

0

0

0

937,840

1,725,493

763,871

1,547,075

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

Total Total Fixed Assets

102

(entro 12 mesi)

a) From subsidiary companies

0

0

12,239

289,184

92,560,216 155,259,524

94,321,131 149,518,115

balance sheet 20 13

C)

4

chap.

CURRENT ASSETS

I STOCK 1) Raw materials, ancillary and consumables

10,431,231

2) Products under processing and semi-finished products 3) Works in progress on order 4) Finished products and goods 5) Payments on account

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

Total

(after 12 months) 2,639,540 1,684,535 87,591 0 0 0 0

9,683,333

1,282,369

1,605,189

31,874,077

25,483,234

717,398

1,052,505

2,475,029

2,132,095

46,780,104

39,956,356

177,440,831 15,438,797 13,274,987 0 4,125,288 3,278,854 3,534,208

217,092,965

(after 12 months) 1,621,038 0 0 0 0 0 0

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

216,962,435

III FINANCIAL ASSETS WHICH ARE NOT FIXED ASSETS 1) Holdings in subsidiary companies

297,500

537,743

2) Holdings in associated companies

3,560,921

7,209,202

1,945

1,945

3) Other holdings 4) Own shares

0

0

5) Other securities

0

0

3,860,366

7,748,890

110,647,214

96,604,400

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

Total TOTAL CURRENT ASSETS D) ACCRUED INCOME AND PREPAYMENTS

TOTAL ASSETS

0

0

28,080

16,575

110,675,294 378,408,729

96,620,975 361,288,656

4,766,181

4,909,897

539,626,999

516,893,156

CPL CONCORDIA's financial statements and consolidated financial statements

103

Statement of

liabilities COMPANY DATA December 31, 2013 Amounts expressed in Euros

COMPANY DATA December 31, 2012 Amounts expressed in Euros

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

22,426,530

20,713,737

0

0

656,679

656,679

113,813,193

108,867,183

78,184

78,184

531,892

531,892

235,597

235,597

VII OTHER RESERVES: SURPLUS FROM MERGER EXCHANGE RATE FLUCTUATION RESERVE CAPITAL CONTRIBUTIONS, LAW NO, 784/80 VIII PROFITS (LOSSES) CARRIED FORWARD IX PROFIT (LOSS) OF THE FINANCIAL YEAR

Total

0

0

1,269,396

1,269,396

0

0

5,034,688

6,775,661

144,046,159

139,128,329

21,526

21,526

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

Total C) SEVERANCE PAY FOR EMPLOYMENT TERMINATION

104

0

0

7,056,039

6,541,705

7,077,565

6,563,231

4,124,526

4,230,090

balance sheet 20 13

D) PAYABLES

(after 12 months)

(after 12 months)

1) Debentures

0

0

0

2) Convertible debentures

0

0

0

0

3) Payables due to members for financing

0

10,862,360

0

9,380,143 148,630,818

4) Payables due to banks

0

93,699,607

158,722,739

99,048,212

5) Payables due to other funders

0

1,045,285

0

98,608

6) Advances

0

11,202,499

0

10,084,096 161,140,389

7) Payables due to suppliers

4,301,508

157,086,248

4,274,916

8) Payables represented by negotiable instruments

0

0

0

0

9) Payables due to subsidiary companies

0

26,650,604

0

19,964,907

10) Payables due to associated companies

0

1,423,103

0

858,072

11) Payables due to parent companies

0

0

0

0

12) Tax payables

0

5,687,980

0

4,606,426

13) Payables due to social security institutions

0

3,613,670

0

3,187,169

14) Other payables

0

6,072,464

0

6,137,345

Total E) ACCRUED LIABILITIES AND DEFERRED INCOME

TOTAL LIABILITIES

4

chap.

382,366,952

364,087,973

2,011,797

2,883,533

539,626,999

516,893,156

MEMORANDUM ACCOUNTS I) Guarantees granted: - Sureties - Collateral

194,116,089

185,092,924

30,400

Total

1,324,400

194,146,489

186,417,324

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

Total TOTAL MEMORANDUM ACCOUNTS

38,027

311,302

29,177,134

40,914,512

29,215,161

41,225,814

223,361,650

227,643,138

CPL CONCORDIA's financial statements and consolidated financial statements

105

profit and loss account 31 DICEMBRE 2013 importi in Euro

31 DICEMBRE 2012 importi in Euro

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

6,695,686 89,983

Total

304,471,044

309,339,397

0

0

5,041,077 19,471,744

11,395,089 18,511,748

6,785,669

5,544,845 97,134

5,641,979

335,769,534

344,888,213

6) For raw materials, ancillaries, consumables and goods

132,449,375

135,065,081

7) For services

105,574,332

101,939,902

13,574,333

14,063,180

B) COSTS OF PRODUCTION

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

46,340,410

44,628,836

b) Social security contributions

13,457,050

12,668,901

2,786,180

2,766,367

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

0

e) Other costs

0

0 62,583,640

0

60,064,104

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

9,271,615

9,621,620

b) Depreciation of tangible fixed assets

2,046,208

1,838,909

0

0

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

1,000,000

12,317,823

700,624

(412,790)

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

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

12,161,153 3,413,018

0

0

3,034,156

4,134,292

4,786,389

3,972,042

333,907,258

334,812,772

1,862,276

10,075,441

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

5,378,455

- Related to associated companies

794,721

- Related to other companies

32,897

3,180,000 59,000 6,206,073

52,102

3,291,102

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

106

- Related to subsidiary companies

0

0

- Related to associated companies

0

0

- Related to parent companies

0

- Related to other companies

0

0 0

0

0

balance sheet 20 13

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

0

0

0

0

4

chap.

d) Other earnings: - Related to subsidiary companies

906,270

599,801

- Related to associated companies

206,259

287,863

- Related to parent companies - Related to other companies

0 2,746,992

0 3,859,521

2,581,424

3,469,088

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

698,724

129,173

- Related to associated companies

0

0

- Related to parent companies

0

- Related to other companies

0

4,468,857

5,167,581

4,190,599

4,319,772

28,558

28,558

50,738

50,738

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

Total ( 15 + 16 - 17 - 17 bis )

4,869,455

2,389,680

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

0

752,537

b) of financial fixed assets which are not holdings

0

0

c) of securities recorded as current assets che non costituiscono partecipazioni

0

0

0

752,537

19) Devaluation: a) of holdings

3,112,666

b) of financial fixed assets which are not holdings

0

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

0

Total adjustments ( 18 - 19 )

2,709,129 0 3,112,666

0

(3,112,666)

2,709,129

(1,956,592)

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

0

0

0 16,255,518

0 16,255,518

2,075,048

2,075,048

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

0

0

0 13,237,515

0 13,237,515

3,244,800

3,244,800

Total special items ( 20 - 21 )

3,018,003

(1,169,752)

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

6,637,068

9,338,777

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

(1,602,380) (1,862,829) 260,449

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

26) PROFIT (LOSS) OF THE FINANCIAL YEAR

5,034,688

6,775,661

CPL CONCORDIA's financial statements and consolidated financial statements

107

108

balance sheet 20 13

4

chap.

CPL CONCORDIA's financial statements and consolidated financial statements

109

UNI EN ISO 9001:2008 Certification

110

balance sheet 20 13

4

chap.

CPL CONCORDIA's financial statements and consolidated financial statements

111

the annual report was prepared under the responsibility of: Massimo Continati Administration and Information Systems Manager Pierluigi Capelli Financial Manager Samuele Righi Administrative Manager of the Group Companies Division Paolo Cavicchioli Administrative Management Assistant Massimo Greco Head of Accounting of CPL Virna Iodice Press Office Sts italiana Graphics and Layout Nuovagrafica s.c. Printing Print run completed September 2014

CPL CONCORDIA Soc. Coop.

Via A. Grandi, 39 - 41033 Concordia s./S (Mo) tel. +39.0535.616.111 - fax +39.0535.616.300 info@cpl.it - www.cpl.it