Consolidated annual account 2007

2007annualaccounts

annualaccounts

consolidated

the nautilusThe image on the cover and inside of this annual accounts represents the nautilus, shellfish

whose name derives from the greek nautilos (seafarers, navigator). Its shell is the symbol of natural

perfection, but also the exact geometric symmetry (golden section). These characteristics make it

object of curiosity and admiration in the world of science, architecture, technology.

We use the nautilus to synthesize and tell CPL Concordia identity: a group of women and men

moving in time (1899) and in space (from Emilian throughout Italy and the world).

A Cooperative who looks for perfection and works, as our mission tells, to the best of its ability, with

seriousness, consistency and professionalism.

2007annualaccounts

annualaccounts

consolidated

5

table of contents

CPL Concordia Group 8. Report on operations in relation to the consolidated annual accounts 33. Consolidated balance sheet of the CPL Concordia Group 40. Details of the profit and loss statement 44. Balance sheets of the companies belonging to the Group49. Report of the board of auditors on the consolidated annual accounts 51. Certification report

CPL Concordia Soc. Coop54. Report on the management of the financial year ending 89. Balance sheet of CPL Concordia Soc. Coop. 96. Details of the profit and loss statement 99. Board of auditors report to the shareholders’ meeting for the annual financial statements101. Certification report102. Certification UNI EN ISO 9001:2000

annualaccounts2007consolidated

6

7



8

annual report on the consolidated balance sheet

as of December 31, 2007

“Dear Shareholders,

First and foremost, we wish to emphasize that

the Parent Company’s directors have carried out

their mandate, in accordance with article 2 of

Law 59/92, with the aim of reaching the Coop-

erative’s mutual goals as provided for by the law

and Bylaws. Their actions have been consistent

with the goal of attaining continuity of work ac-

tivities and the best economic, company, and

professional conditions possible. The Directors

have acted with this spirit on behalf of all enti-

ties in our Group.

For these reasons, the Parent Company has act-

ed to maintain full employment of shareholders

and employees of companies within the Group,

compensating them for their work services un-

der the best contractual conditions possible,

while bearing in mind the market trends and

performance of the specific sector in which each

company operates. The company has operated,

moreover, towards improving the professional

and cultural qualifications of shareholders and

employees of the Group’s companies, making

investments to guarantee the best working

conditions.

The consolidated balance sheet for the fiscal

year ending on 31/12/2007, which was drafted

in conformity with the provisions of Legislative

Decree number 127 of 09/04/1991, reports a

consolidated value of production of Euro/000

230.905, with a Euro/000 11.929 or 5,4% in-

crease compared to the previous fiscal year.

This production has generated a pre-tax profit

of 11.070.127 Euro for the Group during the fis-

cal period. Net of current, deferred, and antici-

pated taxes, this determines a net profit equal

to 6.802.374 Euro. We consider this result to be

absolutely positive, in line with the budget, and

consider it one of the best results of the past five

years if we exclusively look at company activi-

ties.

Structure of the 2007 Consolidated Balance SheetThe consolidated balance sheet closed on 31

December 2007, in its capital, financial, and eco-

nomic structure, provides a snapshot of the CPL

CONCORDIA Group in a state of optimal health,

both in terms of economic performance as well

as its own financial accounts.

The excellent economic outturn of 2007 is due

to the constant growth of the group’s business

activities, as well as the reduced impact of cer-

tain areas of business that have contributed

negatively in the past and are currently in course

of being closed.

Even in 2004 and 2005, several areas of busi-

ness were being abandoned, such as the trade

of methane and maintenance of high-pressure

networks for Snam Gas Networks. In the past,

these activities have contributed sore losses to

the consolidated balance sheet. Other activities

abandoned in the previous fiscal year include

the maintenance, emergency, and other servic-

es for the Ottana petrochemical plant, another

business which has played no small part in erod-

ing the profit margin of company activities.

If we disregard the bad results achieved in the

9

Greek territory, the group has registered great results in all areas of business, as we will analyze in

detail when we discuss the profit and loss account.

As shown in the balance sheet for the last fiscal year, the capital and financial structure of the Group

has already been significantly affected by the planned closings from the 2004 – 2005 two year period.

Fiscal year 2007 registers clear continuity with the previous fiscal year as the group has continued its

own inevitable process of investment, both in the development of gas distribution networks as well

as in renovation projects for heat management plants. During 2007, the group also continued work-

ing with alternative energy: cogeneration, which has always been a strong point of the group, and

now photovoltaics. Despite these investments, the capital and financial structure today appears to be

extremely balanced, thanks in part to the group’s continuous net worth.

We will analyze the reclassified balance sheet in subsequent parts of this report. We will analyze the

balance sheet according to the principal of liquidity, and the profit and loss account according to the

method of added value.

The Balance SheetBalance sheets from the last five years are displayed in the following table. This provides a useful

method for analyzing the dynamic of this fiscal year in comparison to the previous four fiscal years:

CONSOLIDATED BALANCE SHEET(values expressed in Euro)

FINAL STATEmENTS As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

ASSETS Short term assets

Liquid assets 11,766,914 13,617,415 7,534,571 14,670,321 8,486,072

Non-permanent assets 115,881 84 0 0 1,350

Revenues from clients and others 130,329,690 130,870,797 127,978,596 132,019,289 104,106,354

Inventory 28,788,701 26,140,017 36,745,161 38,367,698 47,290,401

Subscribed capital, unpaid 1,261,737 1,250,904 1,250,006 1,269,712 1,155,086

Accruals and deferred income 6,475,179 6,635,666 8,517,982 5,235,733 1,190,397

Total short term assets 178,738,102 178,514,883 182,026,316 191,562,752 162,229,660 Fixed assets

Intangible assets 16,340,101 13,351,631 14,084,073 15,659,671 15,465,470

Tangible assets 93,061,164 80,844,348 62,550,349 117,368,410 120,442,662

Investments 17,881,743 17,174,232 18,339,281 14,050,038 19,692,039

Total fixed assets 127,283,008 111,370,210 94,973,703 147,078,119 155,600,171 Total ASSETS 306,021,110 289,885,093 277,000,018 338,640,871 317,829,831

LIABILITIES Short term liabilities

Amounts owed to banks 17,492,340 15,092,838 19,708,552 69,040,457 47,095,404


10

FINAL STATEmENTS As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

Amounts owed to shareholders and other financiers 6,154,891 4,950,419 4,264,103 8,516,870 2,676,232

Advance payments 14,881,644 12,878,459 15,426,293 11,742,131 4,903,198

Amounts owed to suppliers 92,894,949 74,125,417 71,148,370 72,422,732 69,687,827

Debts represented by bills of exchange 0 0 0 0 0

Amounts owed to subsidiary companies 0 0 0 2,205 2,759

Amounts owed to affiliated companies 332,760 303,761 885,376 167,236 437,850

Amounts owed to tax administration 4,579,699 7,935,892 4,244,144 5,622,354 4,366,111

Amounts owed to social security and welfare institutions 3,653,343 3,033,287 1,707,985 1,801,444 1,806,999

Other short term debts 5,809,331 7,500,789 7,303,347 5,906,281 8,174,627

Accruals and deferred income – liabilities 479,934 942,023 1,286,141 3,591,600 6,639,007

Total short term liabilities 146,278,891 126,762,884 125,974,310 178,813,309 145,790,014 Long term liabilities

Debenture loans 0 0 0 0 0


Amounts owed to shareholders and other financiers 0 0 0 0 3,312,864

Advance payments 0 0 0 0 0



Amounts owed to tax administration 0 0 0 0 0

Other debts from other fiscal periods 516,139 270,843 278,499 263,307 0

Provision for severance pay 6,450,792 6,955,065 7,431,485 7,115,472 6,995,220

Fund for social security and other welfare institution 21,526 21,526 21,526 36,426 45,825

Provisions for taxation 180,518 150,012 70,873 97,876 0

Other funds 2,455,799 2,942,883 3,111,398 5,010,409 3,503,360

Total medium/long term liabilities 61,416,508 70,530,483 68,733,514 82,122,684 86,239,123 Net equity

Share capital 13,706,084 12,952,749 12,702,218 13,335,213 14,878,043

Revaluation reserve 656,679 656,679 656,679 656,679 656,679

Legal reserve 72,387,954 69,866,959 67,692,238 67,692,238 66,683,567

Reserves foreseen by company bylaws 78,184 78,184 78,184 78,184 78,185

Capital gains reserve Lex 784/80 1,269,396 1,269,396 1,269,396 1,269,396 1,269,396

Consolidation reserve 2,256,942 2,565,595 (7,874,424) (6,624,127) (36,538,702)

Merger advance 235,597 235,597 235,597 3,102,096 3,102,096

Foreign currency conversion fund (79,039) 483,057 (79,316) (35,563) (338,671)

Profit/Loss carried forward 0 0 0 0 0

Fiscal year profit/loss 6,802,374 3,238,135 5,643,749 (4,351,051) 31,668,663

Total group net equity 97,314,172 91,346,351 80,324,322 75,123,065 81,459,255 Third party net capital 1,011,540 1,245,375 1,967,873 2,581,813 4,341,439 Total LIABILITIES 306,021,110 289,885,093 277,000,018 338,640,871 317,829,831

11

As it is possible to infer from the table, short

term assets have remained substantially un-

changed in comparison with the previous fiscal

year, even with the 5,4% increase in the value of

production.

Short term assets predominantly consist of re-

ceivables from both public and private clients.

The parent company directly manages receiv-

ables with internal resources and employees

and very limited recourse to external profes-

sionals. This management adheres to specific

decisions. In fact, because the majority of the

clientele (both direct clients and clients through

contracts purchased by consortiums) falls in

the category of public entities or public prop-

erty, the collection of receivables requires the

collaboration of all internal subjects that have

relationships with that client, in addition to

constant monitoring by the financial structure.

Subjects involved include the business compo-

nent that acquires the job order, the technical

structure that manages it, and in some cases

the Legal Office that evaluates potential actions.

Outsourcing is not considered a suitable meth-

od for managing receivables from this type of

client. External companies prevalently manage

private utilities.

The Parent Company performs monthly sur-

veys of receivables for the entire group. These

surveys are subdivided by area of business per-

taining to business managers, who among their

other duties have the responsibility to contain

the incidence of overdue receivables within pre-

determined limits. Surveys are also performed

by aging zones. Internal procedure provides

several operational steps for overdue receiv-

ables, including written notice/warning as well

as potential legal action towards the debtor (in

the meantime declared in arrears).

At the end of fiscal year 2007, the Consolidated

Balance Sheet shows, among the current assets,

client receivables for a total of 119,7 million Euro

in comparison to 121,5 million from the previ-

ous fiscal year. The incidence of total receivables

recorded in the current assets has also improved

in comparison to the total assets, which fell to

42,6% from 45,2% in the previous fiscal year.

On the same date, the total amount of receiv-

ables overdue was 33 million Euro, which is

better than the data from the last five years. Of

these, 21% were overdue by less than 30 days,

15% were overdue by 30 to 60 days, 11% were

overdue by 60 to 90 days, and 53% were overdue

by over 90 days. Among the receivables most

overdue, about half were attributable to a client

(public) that since 2003, the year of the contract

acquisition, has continually held a D.S.O. of over

180 days.

Generally, receivables are not backed by guar-

antees, as their counterparties are mostly public

entities. Guarantees are instead requested by

the Parent Company when drafting principal

service contracts for private clients, or whenever

it considers guarantees to be appropriate. The

Group’s intense supervision of receivables and

thorough understanding of individual situations

and D.S.O.’s allow it to make, when necessary,

bad debt provisions.

The total increase of assets, which are equal to

15,9 million Euro, can be attributed to invest-

ments in tangible and intangible assets, as men-

tioned before.

In particular, details on intangible assets are giv-

en in the following:


12

CHANGES OF TANGIBLE ASSETS (values expressed in Euro)

ItemInitial book value

Fiscal year variation Final book valuePurchases Accounting

variationsAmortiza-

tionsDevalua-

tionsDecre-ments

Costs of installation and expansion 288 130 0 102 0 2 314

Costs of installation and expansion 288 130 0 102 0 2 314

Costs of research, development, and advertising 155 75 0 149 0 0 81

Costs of research, development, and advertising 155 75 0 149 0 0 81 Industrial patent rights 0 0 0 0 0 0 0

Industrial patent rights 0 0 0 0 0 0 0 Concessions, licenses, and trade marks 51 44 0 54 0 0 41

Concessions, licenses, and trade marks 51 44 0 54 0 0 41 Goodwill 9 0 0 1 0 0 8

Goodwill 9 0 0 1 0 0 8 Consolidation difference 0 0 0 0 0 0 0

Consolidation difference 0 0 0 0 0 0 0 Assets in progress 898 751 (628) 0 0 0 1,021

Assets in progress 898 751 (628) 0 0 0 1,021 Other 11,951 7,371 628 4,360 0 715 14,875

Other fixed assets 11,951 7,371 628 4,360 0 715 14,875 INTANGIBLE ASSETS 13,352 8,371 0 4,666 0 717 16,340

It can be inferred from the table above that investment during the fiscal year totaled Euro/000 8.371,

amortization amounted to Euro/000 4.666, and alienation to Euro/000 717.

The change in tangible assets is summarized in the following table:

CHANGES OF TANGIBLE ASSETS (values expressed in Euro)

Item Initial book value

Fiscal year variationFinal

book valuePurchases Accounting variations

Amortiza-tions

Devalua-tions

Decre-ments

Land and buildings 2,633 4,343 0 124 0 2,621 4,231

Land and buildings 2,633 4,343 0 124 0 2,621 4,231 Plants and machinery 70,109 10,011 1,491 2,402 0 453 78,756

Plants and machinery 70,109 10,011 1,491 2,402 0 453 78,756 Equipment 343 402 17 269 0 12 481

Industrial and commercial equipment 343 402 17 269 0 12 481 Other assets 2,555 2,561 111 1,545 0 189 3,493

Other assets 2,555 2,561 111 1,545 0 189 3,493 Licensed gas networks 5,204 3,767 (2,832) 0 0 39 6,100

Assets in progress 5,204 3,767 (2,832) 0 0 39 6,100 TANGIBLE ASSETS 80,844 21,084 (1,213) 4,340 0 3,314 93,061

13

Investment, net of alienation and reclassification adjustments, amounts to Euro/000 16.557, while

amortization totals Euro/000 4.340.

Financial assets increased by Euro/000 924.

In particular, we wish to relate some important news on our affiliated companies.

Fontenergia S.p.a.: the group holds 49% of this company’s block of shares. The company con-

tinues to manage the distribution of LPG in the Ogliastra area, and seeks to widen its own activities

by building small networks powered by tanks installed near residential units not served by the main

network, in the Ogliastra area as well as for a large part of the Sardinian Region.

This fiscal year was also marked by the intense activity concerning assumption of grants provided for

by Resolution number 54/28 made by the Sardinian Region on 22/11/2005. The Region has collected

all the necessary documentation to liquidate grants and decided on 28 November 2007, with Com-

mittee number 49/29, to approve the rider contract for the Framework Agreement on the Metha-

nization of Sardinia. This agreement comprehensively covers the resources intended to finance, by

grants, provision of methane to specific areas, including area 22 of Ogliastra. A total of 13,2 million

Euro in grants is available for this initiative. Following this resolution, the company Directors recorded

this sum as a receivable from the Sardinian Region, lowering the value of investments as a counter-

party to which the specific grants refer. Thus the major amortizations accounted for in previous fiscal

years have generated a contingent asset of 1,5 million Euro in the 2007 balance sheet.

On the basis of this operation, Fontenergia’s Balance Sheet shows a profit equal to Euro 1.514.108.

The directors of the Parent Company, considering the procedural anomalies followed by the Sardin-

ian Region in liquidating grants, opted to account for the effects of the receipt of capital gains only

by liquidation of the same, thus fitting this both into accruals and cash.

Consequently, the evaluation of the company according to net worth accounting was performed

without considering the effects following the inclusion of capital gains.

Pegognaga Servizi S.r.l.: the company was incorporated in April 2005 with the purpose of

managing cemetery services for the Municipality of Pegognaga (MN). The group holds 50% of shares,

while the other 50% is held by the company Mazzola & Bignardi Servizi S.r.l..

The fiscal year’s outturn shows a profit equal to Euro 21.077, which is considered absolutely satisfac-

tory.

teclab S.r.l.: the Group holds 35% in this company, which was purchased on 22 April 2004, by

registered deed at the Business Registry of La Spezia at reference number 4365.

The company, which engages in the design and execution of distant remote control software, was

purchased as an ideal partner for our ex Systems Division.

During fiscal year 2007 it focused on increasing company net equity by Euro 100.000 through a 40.000

Euro increase in share capital and changing 60.000 Euro of share premiums to Reserve. In light of op-

erations, the decrease in orders was followed by a major restructuration and consequent reorganiza-

tion of the company. The fruit of these decisions should mature over the next several fiscal years.

The outturn for fiscal year 2007 shows, in fact, a loss equal to 91.808 Euro.

coimmgeSt S.p.a.: the company was incorporated on 14 May 2007, before Notary Silvio Vezzi of

Modena, who registered the deed at Record 114655 register 17735. The larger block of 55% is held by

Sofinco S.p.A., while the Group holds the remaining 45%. The company was established to manage

the Cooperative’s real estate equity and has at the moment acquired leasing contracts relevant to the

office real estate in Concordia sulla Secchia, Melegnano, Milano, Bologna and the new property at Via

Grandi, 43-45. The company then stipulated rent contracts with the Parent Company for each of these


14

properties. The company uses international ac-

counting principles in drafting its own balance

sheet for the fiscal year, and IAS 17 in particular

for evaluation of the leasing contracts.

We also wish to inform you that an option pact

exists on this company’s share quotas, which

the Parent Company can make use of in order to

purchase the remaining 55% owned by the ma-

jority shareholder. This option must be exercised

no earlier than 2 years after the establishment

and before 31 December 2017.

The fiscal year’s outturn for this company shows

a profit equal to 13.312 Euro.

The company holds, moreover, 100% of the

shares in the subsidiary Ristorotel S.r.l., whose

business consists of the management of real es-

tate used as hotel and classified as CH4. Ristoro-

tel’s profit and loss account substantially con-

sists of income and revenue from rent payments

invoiced to the Estate agent of Concordia S.r.l.

and the operational costs of the existing leasing

contract with ING Lease (Italy) S.p.A.. The com-

pany, which closed its first balance sheet on 30

June 2006, has made a profit equal to Euro/000

37.

criSt gaS S.r.l.: The Cooperative holds 50%

of the shares in this company, incorporated in

2002. The company was established as the sales

company for Cristoforetti Ser S.r.l. in accordance

with Legislative Decree number 164/2000. To

date, the company remains inactive.

The transfer of the remaining 50% of shares at

nominal value still owned by CPL CONCORDIA

is currently being finalized with the shareholder

Cristoforetti.

With regard to the Balance Sheet liabilities, a

strong increase in short term debt appears,

above all consisting of debt towards supplies,

which amounts to a total of 19,6 million Euro.

Contextually, there is a decrease in long term

debt, for 9,1 million Euro, generated mostly by

the transfer of the lending rate due in 2008 to

the short term.

Net equity on the consolidated balance sheet

amounts to 97,3 million Euro. In 2009, the Par-

ent Company will celebrate 110 years of history

and, with the entire group, a consolidated net

equity surpassing 100 million Euro. The group’s

net equity can be considered a factor of great

satisfaction.

Financial ManagementWe would like to first provide a brief analysis

of the macroeconomic context in which the

Group’s financial management operates. We will

then analyze the trends of major characteristic

elements of financial management during Fiscal

Year 2007.

The national context The second semester of 2007 was marked by

the subprime lending crisis in the United States,

which had wide repercussions on the global fi-

nancial system. The protracted turbulence has

not yet been overcome. Heavy losses were re-

ported by primary international banks that had

made wide use of progressive loan securitiza-

tion and greatly jeopardized the efficiency of

derivative financial instruments. This created

an unprecedented crisis of trust in the financial

markets, which constrained the Central Banks

to intervene by consistently issuing cash to pre-

vent the system from freezing.

In the United Kingdom, the government was

constrained to nationalize a bank in order to

avoid bank failure. In the United States, a strong-

ly expansive monetary policy consistently re-

duced interest rates in an attempt to avert a

recession. The Federal Reserve intervened with

specific instruments in favor of several primary

financial institutions.

In Europe, however, even with the rather re-

pressed growth of the economy and an incred-

ibly high quotation of the Euro, the Central

European Bank has, in its turn, introduced strong

cash flows into the market. However it has pre-

ferred to raise taxes, and is above all concerned

with the effects of inflation linked to the rising of

prices of raw materials for energy and food.

Despite the difficulties experienced in the sec-

ond period, the world economy overall contin-

15

ued expanding 2007 at the pace of 5%, much as it has over the past two years. This growth is still

principally led by China (+11%), India (+9%), and Russia (+8%), while the American economy has

registered a 2,2% increase in GDP, as compared to 2,9% in 2006.

In Europe, the economy grew by 2,6% thanks to the investment push, sustained exportations (de-

spite the strong revaluation of the Euro) and the drop in unemployment. In the latter months of the

year a slowdown took place, partly attributable to the erosion of purchasing power due to price

increases of raw materials, and partly attributable to the increased caution of families and companies

in a more uncertain economy. In December 2007, the rate of inflation reached 3,1% as compared to

1,8% around the beginning of the year, pushed by the rise in food prices and higher energy bills.

At the moment, resolution of the financial market crisis still appears to be far away. The recovery of

the Stock Market will require more time, and the strains on the prices of raw materials caused by

strong demand in emerging countries does not indicate that they will decrease, as petroleum hits

new records every day and the price of food also constantly rising. In the current 2008 fiscal year,

the European GDP is predicted to increase by a modest 1,8%, against inflation that reached 3,5% last

March, consequently causing negative effects on the income available and consumption.

During 2007, Italy’s GDP grew by 1,5%, below the European average, despite a moderate flow of the

balance of trade.

Negative performance was experienced in the low level of investment and low growth in consump-

tion, in turn burdened by the reduction of income purchasing power and the strong implications

of rent or interest on mortgages and energy bills. The ratio between debt and income available to

Italian families reached an average of 50% in at the end of 2007.

Better results were obtained by redevelopment projects in public finance. Though the stock of public

debt still reflected 105% of the GDP at the end of 2007 (however reduced from 106,8% in 2006), the

fiscal deficit dropped to1,9% (compared to the GDP), the lowest level since 2000. This caused the EU

infraction procedure brought against Italy to be suspended by two years or so. The data represents

a significant improvement in comparison to 2006, when this number was at 4,4%. It is also very

comforting on the level of its composition. In fact, the reduction reflects both an increase in the

incidence of revenue as well as a reduction in the weight on output, with progress in comparison to

2006. Improvement, net of extraordinary measures, was determined exclusively from the increase of

tax revenue.

The Italian unemployment rate fell to 6,1% in 2007, but this descent came to an end in the last tri-

mester.

Employment grew by 1%, mostly with regard to women and immigrants, however with a geographic

concentration in the center-North of the country. The category of employees especially increased,

although incidence of part time work also continued to grow.

A period of substantial stagnation is predicted for our country in 2008.

Consumption is predicted to remain stationary, given that debt service and energy costs will con-

tinue to greatly affect families.

The first data released regarding industrial production also foreshadows a dynamic of scarcity and

reflect low occurrence of operating investments in Italian companies, whose productivity indexes

remain, consequently, fixed.

The construction sector is experiencing a period of slowed growth, and further deceleration is pre-

dicted for real estate speculation. The prospects for this sector, which has traditionally led the Italian

economy, therefore appear strongly linked to the development of investments in infrastructure,

which financial resources and time will verify.

2007 has also brought about a troubling decrease in the characteristic profitability of companies,

above all because of the increase in interest rates. The greatest effect of this phenomenon is felt in

the Italian industrial structure, where companies are less capitalized as compared to those in other


16

countries, and are therefore more dependent

on sources of valuable funding. Company self-

funding is therefore reduced, and borrowing

requirements have grown.

Demand for credit remained, in fact, well sus-

tained and, despite the turbulence of the finan-

cial markets, bank credit to the private sector in-

creased to + 10,9%, greater than the Euro area.

Towards the end of the year, and above all in the

first period of 2008, a clear tendency towards

tightening criteria for granting credit emerged.

This is confirmed both by analyses made by the

Bank of Italy as well as the Central European

Bank. For now, the phenomenon has not led to

significant reductions in the amounts loaned,

but it has certainly affected price policies, with

average spread in snapback. Despite the diffi-

culties of the economic cycle, there is however

no sign, throughout the system, of a decline in

the quality of credit.

Interest rates were adjusted twice in 2007 by

the Governing Council of the Central European

Bank to the current rate of 4%., due to concerns

regarding the turbulence of financial markets

and risk of inflation. Due to these measures, the

official rate increased half a point in one year.

Expectations for the year currently underway

seem to indicate another increase, even if fears

of recessive effects have, for now, prevented an

increase that the same sources at the Central

European Bank gave at a discount for the first

semester of 2008.

Much more noticeable instead was the increase

of the Euribor tax during 2007: at the end of

the year, the 3 month rate rose to 4,765% from

3,775% on 02/01/2007, and the 6 month rate to

4,834% from 3,904% on 02/01/2007. After a brief

drop during the first two months of 2008, the

Eurobar resumed its growth: on today’s date it

remains higher by about 25 basis points in com-

parison with the 31/12/2007 rate.

This data confirms that, despite the continues

issuance of money performed by the Central

Banks, the request for money in the system re-

mains very high and trust is low: thereof the in-

crease of taxes on the inter-bank market higher

than those determined by the Central European

Bank.

Group financial operations in fiscal year 2007The result of the financial operations of many

companies was negatively characterized by fis-

cal year 2007, due to the economic reasons de-

tailed above. The progressive increase of taxes

during fiscal year 2006 continued throughout

2007 and is still underway, and has had a con-

tained impact on the group’s total financial

expenses. In fact, thanks to the restructuration

of the debt performed during 2005, all of the

Parent Company’s debt was structured into me-

dium/long term in 2007. Most loans received

by the Parent Company provide for interest and

capital liquidations at six-month rates: the refer-

ence rate has therefore been added twice, help-

ing to limit the negative effect of rising rates. The

survey performed at the end of the third semes-

ter (a reference for the rate on principal credit

lines which benefit the group) already showed

the significant effect of the financial crisis that

exploded on the markets in August.

It must also be mentioned that this year, im-

provement of the principal balance sheet indi-

cators, following the important decisions made

at the end of 2004 by the Parent Company’s

Board of Directors, have allowed for the restraint,

thanks to covenants foreseen by contracts, of

the spread reciprocated by the Parent Company

on two principal lines supplied by the banking

system: the pool directed by “Unicredit Banca

d’Impresa” on 04/08/2005 and that directed

by the “Banco Popolare di Verona e Novara” on

21/02/2003.

During all of fiscal year 2007, the Parent

Company did not access new medium to long

term lines of credit, despite share capital repay-

ment of over 7,5 million Euro on the lines that

were at its disposal at the beginning of the year.

The Parent Company only occasionally, and for

very limited amounts, used some of the short

term credit lines. It should be remembered that

during the last twelve months the value of pro-

duction moved from 217,6 to 230,9 million Euro.

This particularly positive trend of income, to-

gether with the deferment of payments granted

by several important suppliers, has allowed the

17

Group to dispose of a particularly considerable measure of liquidity during the second and third tri-

mester (during which, at any time, the Parent Company had at its disposal inventory over 20 million

Euro). Thus, financial operations at the group level were optimized as well as the result of the financial

operations on the consolidated balance sheet.

Reclassification of the profit and loss accounts on the consolidated balance sheet show a slight in-

crease in the incidence of financial management on the value of production in fiscal year 2007 as

compared to fiscal year 2006. However, the outturn remains the second best for the entire period:

1,81% in 2007, 1,70% in 2006, 2,14% in 2005, 2,21% in 2004, 1,92% in 2003. The variation was created

by the need to finance investments performed by the Group during 2007. Investments, net of amor-

tizations and dismissals, were equal to 15,9 million Euro.

During 2007, the Group took out four new lines of credit. The first, of 2,5 million Euro, was granted by

the “Banca Popolare di Verona” to “Immobiliare della Concordia S.r.l.” and on 31/12/2007 was supplied

for only 250.000,00, Euro, while the other three where obtained from “Cristoforetti Servizi Energia S.r.l.”

for a total of 1,13 million Euro.

The following table summarizes the existing Borrowings and Loans subscribed by the Group:

LIST OF OuTSTANDING BANk LOANS AS OF DECEmBEr 31, 2007(Values expressed in Euro/thousand)

Financing entity Amount delivered

Date of delivery Interest rate

AS OF DEC. 31, 2007Termination

date

rate with

expiry > 5 yearsCurrent Not

current Total

BPV-BSGSP Pool 15,000 21/02/2003 Euribor 3/6 months + 1,2% 3,000 4,500 7,500 21/02/2010 0

Min. act. Prod. L. 46/82 154 09/05/2003 4,110% 16 69 85 03/10/2012 0

Credito Emiliano S.p.A 2,000 10/06/2003 Euribor 3 months+ 1,1% 217 0 217 10/06/2008 0

BANCO DI SICILIA 4,500 30/07/2004 Euribor 6months/360 + 1,2% 527 3,947 4,474 31/12/2016 1,842

UNICREDITI S.P.A. 4,500 27/12/2004 Euribor 6 months + 0,5% 554 2,375 2,929 31/12/2012 0

CASSA DI RISP. FERARRA 2,000 13/06/2005 Media Euribor3-6 months+ 1,5% 352 0 352 12/06/2008 0

POOL UNICREDIT BANCA SPA 33,000 15/09/2005 Euribor 6 months/360 + 1% 3,771 25,457 29,228 30/09/2015 10,371

MCC (ACCOLLO ENERFIN) 948 15/11/2006 Fixed rate 6,20% 489 0 489 14/09/2008 0

CASSA RURALE LAVIS I 550 19/10/2005 Euribor 3 months + 1,5% 90 293 383 18/10/2011 0

CASSA DI RISPARMIO BOLZANO 400 19/12/2006 Euribor 3 months

+ 1,2% 76 252 328 31/12/2011 0

CASSA DI RISPARMIO TRENTO 650 14/11/2006 Euribor 3 months + 1,25% 101 454 555 14/11/2012 0

CASSA RURALE LAVIS III 600 19/06/2006 Euribor 3 months+ 1,2% 24 576 600 18/06/2018 360

CASSA RURALE LAVIS IV 600 24/07/2007 Euribor 3 months+ 1,2% 109 464 573 24/07/2012 0

BANCA INTESA 300 14/12/2007 Euribor 3 months+ 1,25% 53 247 300 14/12/2012 0

BANCA POPOLARE DI BERGAMO 150 29/03/2006 Euribor 3 months

+ 1,2% 52 13 65 20/03/2009 0

CASSA DI RISPARMIO BOLZANO 250 02/07/2007 Euribor 3 months

+ 1,2% 45 195 240 02/07/2012 0

BANCA POP. EMILIA ROMAGNA 6,000 07/12/2006 Euribor 3 months + 1,2% 0 100 100 07/12/2017 0

BANCA POP. VERONA E NOVARA 4,000 11/12/2006 Euribor 6 months 500 3,500 4,000 31/12/2016 2,500

BANCA POP. EMILIA ROMAGNA 5,000 07/12/2006 Euribor 3 months + 1,2% 0 3,703 3,703 07/12/2017 0

UNICREDIT ROMANIA S.A. 500 30/06/2006 Euribor 1 month+ 2,6% 0 422 422 30/09/2014 0

UNICREDIT ROMANIA S.A. 1,200 30/09/2006 Euribor 1 month + 2,6% 0 1,157 1,157 30/09/2014 0


18

Financing entity Amount delivered

Date of delivery Interest rate

AS OF DEC. 31, 2007 Termination date

rate with

expiry > 5 yearsCurrent Not

current Total

BPV - BSGSP 480 07/02/2005 Euribor 3 months + 1,25% 13 130 143 30/09/2016 194

BPV - BSGSP - Venture loan 2,500 09/10/2007 Euribor 3 months + 1,25% 0 250 250 09/10/2012 0

B.P.E. Unsecured loan 2,000 29/07/2004 Euribor 6 months/360 + 1,5% 211 1,478 1,689 29/07/2014 217

10,318 49,990 60,308 15,484

With the exception of financing granted by “MCC S.p.A.” at a fixed rate of 6,20% which presented a

residual debt of 0,489 million Euro at the end of the fiscal year, all other credit lines of the Parent Com-

pany are at a variable rate. On 31/12/2007 the Group had two existing hedging contracts, the first

of notional amounts of 20 million, accessed by the Parent Company on 29/10/2003 with “Unicredit

Banca d’Impresa”, expiring on 31/10/2008. This contract presents a negative mark to market of 0,585

million Euro. The second was stipulated on 13/6/2003 with UNICREDIT BANCA D’IMPRESA as a 5-year

“Convertible Swap” contract, expiring on 17/6/2008, with a reference amount of Euro/000 1.000 and

a bank reference rate of EURIB 3M. The contract was prudently considered non-hedging. Over the

fiscal year the operation generated active interest for a total amount of Euro/000 10. On 31/12/2007

the derived fair value of the contract was Euro/000 8 positive for the Group.

The Group manages rate risk through constant monitoring of market developments and continuous

comparison with average rates estimated in the budget. Any activation of new coverage can take

place only if the increases recorded and trend estimates correspond to rates higher than those used

in drafting the annual and tri-annual budgets, causing significant risks of damage to the accomplish-

ment of goals. The Group consults with qualified external professionals in monitoring rate trends.

With the exception of the emerging relations in Romania initiated by the Romanian Branch whose lo-

cal currency is the Ron, importations of raw materials and sales in currencies other than the Euro were

very limited. Given the low volume, no coverage of foreign exchange risk was taken out. When sev-

eral important procurements were performed abroad, the Parent Company purchased the amount

of currency coinciding with the times in which it needed to make payments in currency, thus elimi-

nating the risk of foreign exchange.

The Parent Company evaluated the risk of oscillations in the exchange rate when considering trans-

actions made in Ron, moving towards medium-term coverage by evaluating the most economically

advantageous and least risky opportunities.

Profit and Loss AccountThe profit and loss account statement, contained with the Consolidated Group Balance Sheet of

31 December 2007, is included below for analysis, complete with comparisons with the last 4 fiscal

years. The reclassified form is used, according to the method of added value, in order to emphasize

the most significant indexes.

19

CONSOLIDATED PrOFIT AND LOSS STATEmENTS rECLASSIFIED uSING THE vALuE ADDED mETHOD(values expressed in Euro)

Final Statements As of Dec. 31,2007 % As of Dec.

31,2006 % As of Dec. 31,2005 % As of Dec.

31,2004 % As of Dec. 31,2003 %

Income from sales and services 204,373,523 88,51% 201,310,854 92,50% 226,056,566 93,48% 227,537,890 88,52% 175,073,206 76,12%Variation in inventory of finished and semi-finished goods

1,078,802 0,47% (2,569,631) -1,18% (10,187,122) -4,21% 5,204,351 2,02% 6,363,772 2,77%

Variation of work in progress 1,360,421 0,59% (2,135,696) -0,98% 847,557 0,35% (14,750,459) -5,74% 791,819 0,34%

Low cost works 19,862,333 8,60% 17,294,210 7,95% 15,934,003 6,59% 23,075,550 8,98% 35,590,190 15,47%

Other proceeds 4,229,435 1,83% 3,728,427 1,71% 9,178,587 3,80% 15,986,119 6,22% 12,173,187 5,29%vALuE OF PrODuCTION 230,904,515 100,00% 217,628,163 100,00% 241,829,591 100,00% 257,053,450 100,00% 229,992,174 100,00%

Costs from purchases (82,776,468) -35,85% (69,336,134) -31,86% (91,571,513) -37,87% (110,830,619) -43,12% (91,990,382) -40,00%

Variation in inventory of raw materials (939,634) -0,41% (5,695,328) -2,62% 1,080,564 0,45% 4,640,637 1,81% 3,196,893 1,39%

Other costs for service (72,815,190) -31,53% (72,614,398) -33,37% (83,655,008) -34,59% (86,407,797) -33,61% (85,810,793) -37,31%Expenses for use of assets owned by others

(8,257,076) -3,58% (9,818,513) -4,51% (10,481,809) -4,33% (7,971,511) -3,10% (5,835,499) -2,54%

Other operational fees (2,492,213) -1,08% (2,700,807) -1,24% (3,490,490) -1,44% (3,970,689) -1,54% (3,931,721) -1,71%

ADDED vALuE 63,623,934 27,55% 57,462,984 26,40% 53,711,334 22,21% 52,513,470 20,43% 45,620,671 19,84%

Cost of labor and related fees (38,792,077) -16,80% (36,456,477) -16,75% (37,507,271) -15,51% (39,574,568) -15,40% (36,933,231) -16,06%GrOSS OPErATING mArGIN 24,831,857 10,75% 21,006,507 9,65% 16,204,064 6,70% 12,938,903 5,03% 8,687,440 3,78%

Amortization of tangible assets (4,338,661) -1,88% (3,660,616) -1,68% (4,456,592) -1,84% (5,669,249) -2,21% (6,749,324) -2,93%

Amortization of intangible assets (4,665,535) -2,02% (4,583,865) -2,11% (4,322,471) -1,79% (3,566,695) -1,39% (2,211,199) -0,96%

Accruals and devaluations (1,206,669) -0,52% (1,907,161) -0,88% (1,858,729) -0,77% (3,571,721) -1,39% (4,145,456) -1,80%

Amortization, accruals, and devaluations

(10,210,865) -4,42% (10,151,642) -4,66% (10,637,792) -4,40% (12,807,665) -4,98% (13,105,980) -5,70%

EBIT 14,620,993 6,33% 10,854,865 4,99% 5,566,272 2,30% 131,238 0,05% (4,418,539) -1,92%

Interest and other financial fees (4,844,780) -2,10% (4,198,165) -1,93% (5,543,328) -2,29% (5,983,193) -2,33% (4,866,351) -2,12%

Other financial proceeds 655,073 0,28% 503,898 0,23% 362,905 0,15% 312,889 0,12% 450,048 0,20%

TOTAL FINANCIAL mANAGEmENT (4,189,707) -1,81% (3,694,267) -1,70% (5,180,424) -2,14% (5,670,305) -2,21% (4,416,303) -1,92%

CurrENT PrOFIT/LOSS 10,431,286 4,52% 7,160,598 3,29% 385,848 0,16% (5,539,067) -2,15% (8,834,842) -3,84%

Income from equity investments 51,637 0,02% 550,224 0,25% 7,717,593 3,19% 2,203,675 0,86% 55,987,891 24,34%

Financial activity adjustments (431,123) -0,19% (664,559) -0,31% (1,410,864) -0,58% (528,335) -0,21% (6,156,504) -2,68%

Shareholder repayment (1,100,000) -0,48% (750,000) -0,34% (500,000) -0,21% 0 0,00% 0 0,00%

Extraordinary operations 2,118,327 0,92% 2,507,949 1,15% 3,139,422 1,30% 791,174 0,31% (722,991) -0,31%

PROFIT/LOSS BEFORE TAXES 11,070,127 4,79% 8,804,212 4,05% 9,331,999 3,86% (3,072,553) -1,20% 40,273,555 17,51%

Annual income tax (4,404,553) -1,91% (5,585,887) -2,57% (3,640,956) -1,51% (1,969,666) -0,77% (9,091,255) -3,95%

NET PrOFIT/LOSS 6,665,574 2,89% 3,218,325 1,48% 5,691,042 2,35% (5,042,219) -1,96% 31,182,300 13,56%

THIrD PArTY (PrOFIT) LOSS 136,800 19,810 (47,293) 691,168 486,363

GrOuP PrOFIT (LOSS) 6,802,374 3,238,135 5,643,749 (4,351,051) 31,668,663

Compared to other trends in the past, deviations between 2006 and 2007 were not determined by

particularly relevant extraordinary events, but are merely the product of regular operational activities.

Extraordinary events, though of little significance, are correctly noted in the item “Extraordinary Op-


20

erations” devoted to them. The values, and con-

sequently the indexes, are therefore consistent

with fiscal year 2006. Increases in turnover and

improvement of the indexes are the result of the

quality of work performed, loyal dedication and

preset objectives. The drop in turnover as com-

pared to fiscal years 2004 and 2005 is the conse-

quence of choices made to abandon projects,

sometimes partially as in the cession of the ma-

jority share packet in Fontenergia S.p.A., and at

other times total as in the cession of assets and

consequent pull-out and trading of methane

gas or the cession of assets and the consequent

maintenance and emergency service activities

in Ottana (NU) petrochemicals.

It is evident that there is a decrease in turnover,

but profit margins have also improved.

On this subject, the value of the Gross Operat-

ing Margin (GOM or EBIT) is indicative, reaching

24,8 million Euro in the Consolidated statement,

equal to 10,75% of the value of production. This

result is the best performance of the past five

years.

The same can be said for the EBIT and the cur-

rent operating results.

These two indexes have expressed a powerful

dynamic over the past five years.

Current operating results go from a negative re-

sult of 8,8 million Euro in 2003 to a positive result

of 10,4 million Euro in 2007.

This means that over five years, the Group has

improved its operations, including financial op-

erations, by almost 20 million Euro.

Operations were developed, at the level of the

Parent Company as well as for the entire group,

by territory as well as productive sectors.

The following analysis details the economic

progress of areas and sectors.

Headquarters The headquarters area includes construction

and maintenance activities of the gas distribu-

tion networks, as well as the requalification and

operation of thermal, heating, and district heat-

ing plants in the Emilia and Mantova regions.

Production hovers around 36,2 million Euro,

which is substantially unchanged in comparison

to the previous fiscal year. This area has almost

doubled its contribution margin. Among its

most important works are street maintenance

for the Municipality of Bologna PER Hera S.p.A.,

districting heating for AMPS in Parma, plant

management for the Province of Modena, and

Global Service for the Municipality of Mantova.

rome – Sardinia – tirrenian area The area has principally been active in the con-

struction, management, and conduction of

thermal and heating plants in Lazio. The area has

developed truly positive results with production

of 31,9 million Euro.

Major projects include IACP thermal plant man-

agement for the Municipality of Roma, thermal

plant management for the Auditorium of Roma,

and plant management for the Municipality of

Rome.

northwest – milan area Much like the headquarters area, the northwest

area has also put all of its group know-how to

work, forging a wide array of available services

performed in Piedmont, Lombardy, and Liguria.

The area has developed a production of 27 mil-

lion Euro with a constant profit margin as com-

pared to the previous fiscal year.

Major works performed include the extraordi-

nary maintenance of the Milan Subway, Linate

airport maintenance, thermal plant manage-

ment for the Cremona Hospital and the Prov-

ince of Milan.

Sant’omero area – adriaticThe area, which operates mainly in the regions

of Abruzzo, Molise and Puglia, has developed a

production of 13,2 million Euro with an increase

in respect to the previous year of 17%. It has

maintained a constant profit margin in compari-

son to the past and its most significant activi-

ties performed include network maintenance

for the Municipality of Serravalle in Chianti and

thermal plant management for the Province of

Ascoli Piceno, the ASL of Teramo, and the Mun-

cipality of Pescara.

Fano area – UmbriaThe area, which has its operational headquarters

21

in Fano (PU), includes Romagna, the provinces of Pesaro-Urbino and Ancona, and the Umbria region.

It has developed a production of 15,1 million Euro for a 30% increase over the previous fiscal year, but

experienced a significant decrease in the profit margin due to the Sna emergency services network

project.

Major works performed during 2007 include the maintenance of Aset gas, water, and sewage net-

works in Fano and thermal plant management in the Province of Pesaro-Urbino and the Municipality

of Riccione.

campania – calabria – Sicily areaThe area operating in the Southern part of the country undoubtedly has the greatest need for devel-

opment. This area has not encompassed distribution and gas sales activities, including the distribu-

tion sector, which will be the subject of separate analysis.

The value of production developed in 2007 to 3 million Euro. Major projects included the construc-

tion of the gas distribution networks for the island of Ischia, areas of Calabria and Campania, and the

management and conduction of thermal plants in the Province of Caserta.

Padova area – northeastThis area experienced the most development during 2007, thanks in part to innovative projects such

as the construction of the photovoltaic plant in the Municipality of Carano in Trentino.

The value of production in 2007 amounts to 21,6 million Euro with a 30% increase as compared to the

previous fiscal year sum of 4,9 million Euro, with good contribution profit margins.

In addition to the aforementioned photovoltaic plant in Carano, major projects include the mainte-

nance of water and gas distribution networks for the Municipality of Padova and Global Service for

the Province of Vicenza. The energy service contracts purchased in the Trentino Alto Adige region

significantly contribute to the determination of work totals.

tuscan areaThis area, one of the nation’s most particular regions, has developed a value of production equal to

6,7 million Euro with an increase of 0,7 million Euro equal to 12%.

Some of the major projects include the maintenance of electric plants operated by Enel S.p.A. and

ASL thermal plant management in Arezzo.

Foreign activityIn terms of activities performed outside the national territory, the Group has primarily operated in

Greece and Romania.

The Group developed a value of production of 2,9 million Euro in Greece, generating a loss of 1,2

million Euro. As previously mentioned, this is the only business in the group to generate losses. The

works performed include the construction of aqueducts and sewers in the Municipality of Salonicco.

These activities will end in 2008.

The losses estimated for 2008 have already been acknowledged in this balance sheet.

Retained earnings on future losses do not consider price and accounting revisions for work stoppage

caused by customers, which could generate additional proceeds not yet accounted for.

The projects undertaken in Romania include the construction and management of gas distribution

networks located in over 25 municipalities of the Cluj Napoca province in Transylvania.

During 2007, the area developed a production of 5,4 million Euro with an increase of over 1 million

Euro in comparison to the previous fiscal year and a profit of 0,6 million Euro.

The company that operated in the area during 2007 served over 10.400 users, selling 13,1 million

cubic meters of gas. Considering the process of great economic development underway in this


22

country, continued investment is considered

extremely profitable due to the increase in the

critical mass of users.

In fact, development plans for the Rumanian

territory already provide for new investments in

concessions in 2008.

Plant technology, odorants & Services SectorThese two sectors experienced an extremely sig-

nificant increase in turnover in 2007. Altogether,

they have developed a production equal to 26,4

million Euro with an increase of 7,8 million Euro

over the previous fiscal year, without the contri-

bution of particularly significant investments.

The increase in turnover is also linked to the mar-

keting of our products beyond national borders,

particularly in Croatia and Algeria. Specific con-

ditions have been created in Algeria for on-site

operation with a structure autonomous of local

law, in addition to a branch that has been useful

in diffusing our brand in a market in which gas

is one of the main goods used for the creation

of wealth.

Distribution SectorThe distribution sector, which includes the con-

struction of our networks, distribution, trading,

and sales, has always been one of the group’s

strong points, not just from a perspective of

absolute values but, above all, from a strategic

point of view.

During 2007 the Group developed a value of

production of 25,1 million Euro, in line with the

previous fiscal year despite a mild winter that

significantly contributed to decrease in con-

sumption and consequently the decrease in

revenue. Many companies in this sector record-

ed considerable losses in 2007. This was not the

case for the group, which recorded a good profit

margin, thanks to prudent management of gas

supplies in a season that was heavily affected by

rising crude prices and the products to which its

value is connected.

During 2007 the Group sold over 34 million cu-

bic meters of gas, summarized by area in the fol-

lowing table:

ArEA mC SALES

CALABRIA 20 2,239,502

CALABRIA 30 365,267

CAMPANIA 25 6,726,192

CAMPANIA 30 4,994,609

CITTANOVA 14,554

MARIGLIANO 2,585,948

MORFASSO 135,372

PALMA AND CAMASTRA 762,278

SAN GIUSEPPE VESUVIANO 395,848

SICILIA 12 460,696

SICILIA 17 2,324,077

BACINO CLUJ NAPOCA 13,051,957

SAPRI AND CAMEROTA 314,413

TOTAL 34,370,713

The table does not include gas transited and

sold by sales companies that do not belong to

the group, such as in the Calabria 30 area where

only part is sold by the Group. The rest is sold by

the Eon Group or other smaller companies.

46.174 total users were served, plus 6.544 users

in the areas of Calabria where the group per-

forms only transit activities. The 7.240 users of

the affiliated Fontenergia area can be added for

a total of almost 60 thousand users, out of 120

thousand potential users.

other sectors and incomeThe remaining portion of the value of produc-

tion was contributed by the sector called “In-

formation & Communications Technology”, the

building sector, and revenue generated by ac-

tivities in the process of divesture that present

other business codes.

The value of production, as it is said, amounts to

a total of Euro/000 230.905 and consists of the

provisions and services performed for third par-

ties and group companies: their allocation is the

following (to Euro/000):

Revenue from production projects 157,235 Sale and transit of gas 19,969 Sale of combustible energy 14

23

Sale of electric energy 1,882 Sale of materials 15,960 Services 5,272 Sale of buildings and land 2,105 Other revenue, services, and sales 1,937 TOTAL PRODUCTION REVENUE 204,374

Changes in stock 1,079 Variation of projects currently underway 1,360 Increase of tangible assets for

internal projects 19,862 OTHER REVENUE 4,230 TOTAL 230,905

Directly allocated costs amount to Euro/000

167.281 and consist of primary and subsidiary

materials, including gas, services to third par-

ties, rentals, leasing, rents, and other operational

charges.

Personnel costs, whether for Parent Company

shareholders or employees, amount to Euro/000

38.792. Personnel costs include all direct and

indirect charges related to the payment of pro-

fessional services for the fiscal year, including

bonuses and salary inclusions for employee per-

sonnel.

In comparison to the previous fiscal year, per-

sonnel costs increased by 2,2 million Euro.

This increase is partly attributable to the increase

of the cost of labor, determined by recognized

increases, salary inclusions and contractual in-

creases, and partly to the increase of the average

number of employees employed by the Group,

that equaled 24 in 2007.

The following table shows the dynamic of per-

sonnel in occupational terms:

Number 2007 2006

Senior Management 19 17

Middle Management 30 36

Office workers 391 343

Manual workers 501 521

Total 941 917

Amortizations and devaluations amount to a to-

tal of Euro/000 9.458.

The EBIT presents a profit of Euro/000 14.621,

financial management amounts to Euro/000

(4.190), value adjustments for financial assets

and investment income total Euro/000 (379),

shareholder repayment amounts to Euro/000

(1.100), extraordinary operations amount to

Euro/000 2.118. The pre-tax amount totals

Euro/000 11.070, third party interests contribute

positively for Euro/000 137, while current, de-

ferred, or anticipated taxes amount to Euro/000

(4.405). Composed as such, the final result de-

termines a profit for the period that amounts to

Euro/000 6.802.

300,000

250,000

200,000

150,000

100,000

50,000

0

vALuE OF PrODuCTION FOr “CPL CONCOrDIA” AND THE “CPL CONCOrDIA” GrOuP

amounts expressed in thousands of Euros

2003 2004 2005 2006 2007

229,992

155,819

257,053

176,464

241,830

180,929

217,628

184,119

230,905

198,997

CPL CONCOrDIA GrOuP CPL CONCOrDIA SOC. COOP.


24

Balance Sheet IndexesThe table below provides an overview with the most important indexes of the 2007 Consolidated

Balance Sheet, shown in comparison with the past four fiscal years:

PrINCIPAL INDExES uSED ON THE BALANCE SHEET

ECONOmIC ANALYSISStatement dates

As of Dec.31,2007

As of Dec.31,2006

As of Dec.31,2005

As of Dec.31,2004

As of Dec.31,2003

R.O.E. (Return on Equity) 7,52% 3,68% 7,56% -5,47% 63,60%

R.O.I. (Return on Investment) 4,78% 3,74% 2,01% 0,04% -1,39%

Gross Operating Margin Ratio/Value of Production 10,75% 9,65% 6,70% 5,03% 3,78%

Incidence of expenditures and revenue from extraordinary operations 53,48% 70,17% -1,39% 3415,40% 816,72%

Incidence of Net Financial Expenditures on the value of production 1,81% 1,70% 2,14% 2,21% 1,92%

Incidence of Net Financial Expenditures on the R.O. 28,66% 34,03% 93,07% 4320,63% -99,95%

FINANCIAL AND CAPITAL ANALYSISStatement dates

As of Dec.31,2007

As of Dec.31,2006

As of Dec.31,2005

As of Dec.31,2004

As of Dec.31,2003

Liquidity index 1,22 1,41 1,44 1,07 1,11

Leverage (gearing) 3,38 3,29 3,71 4,26 6,38

Ratio of Interest-paying debt 0,68 0,74 0,96 1,63 2,31

Elasticity index 1,40 1,60 1,92 1,30 1,04

EBITDA/DEBT 40,14% 32,36% 22,50% 9,98% 7,57%

DEBTI/EBITDA 2,49 3,09 4,44 10,02 13,22

Several of these indexes, especially those of an economic nature, have already been commented

upon. In any event, it must be emphasized that these indexes should be read positively, particularly

the index that measures the relationship between the EBIT and the debt. This index measures the

capacity of the group to pay its own debts with the profit from regular company activities. An index

of about 3 is considered optimal. The table above shows a ratio index of 2,49 that has consistently

improved over the past five years. A ratio close to 0 as measured by this index can indicate a lack of

investment, certainly a negative element in a continually evolving market that requires constant in-

vestment. Another positive factor is the ratio of interest-paying debt, an index derived from the ratio

between group capital and capital brought by financing entities.

Relationships with affiliated companiesThe following provides an economic analysis of the relationships with affiliated companies. Relation-

ships concerning capital have already been commented upon in the appropriate sections.

GrOuP rEvENuECOmPANY SErvICES SuPPLIES INTErEST TOTAL

FONTENERGIA 35,164 4,760 0 39,924

SARDA RETI 20,000 0 0 20,000

ENERFIN 0 0 0 0

TECLAB 0 0 0 0

PEGOGNAGA SERVIZI 17,915 0 0 17,915

25

GrOuP COSTSCOmPANY SErvICES SuPPLIES INTErEST TOTAL

FONTENERGIA 89 48 0 138

SARDA RETI 0 0 0 0

ENERFIN 0 0 0 0

TECLAB 74,097 33,305 0 107,402

Research and DevelopmentThe Group has, moreover, continued its research and development activities during the fiscal year. It

has particularly directed its energy to the following projects:

Activity 1: Study and design to optimize and extend the field of application for EDOR, EMET, and

EFOR electronic and telereading systems.

Activity 2: Structure, design and creation of a new electronic odor tank system called EASYDOR

Activity 3: Study, development, and implementation of a new service/product for the creation of

photovoltaic plants.

The activities listed above have been prevalently performed in the plant in Concordia sulla Secchia

(Mo), Via Achille Grandi number 39 and in the building at Mirandola, Via di Mezzo 64.

Foreseeable evolution of managementIt can be said that Fiscal Year 2006 was characterized by consolidation of the Group’s typical activities

and a reorganization process geared towards greater penetration of local markets with the full array

of services the Group is capable of providing. Fiscal Year 2007 was the year in which the fruits of this

labor, and results reached, were collected. There is, however, still more to do, especially with regard to

the difficult circumstances the world economy currently faces, with the exception of emerging coun-

tries such as China and India, and consequently the national economy that is also going through a

time of political transition.

One can see periods of stagnation on the horizon, which will undoubtedly slow down public invest-

ments and inevitably cause damage to those who work with them. This consequently interacts with

the private fabric, which remains the leading economic substratum in this country.

A major indicator of this trend is the decrease in demand for services and the contextually strong

increase of subjects competing to contract them, especially foreign multinationals.

In this macroeconomic climate, the Group is pushing both its own commercial organization as well

as the new territorial organization forward.

The challenges that lie ahead over the next few years will be difficult. However, we believe we are

sufficiently prepared to overcome them, while also pursuing our interests in new technologies.

A company that seeks to compete in a continually evolving market must also know how to evaluate

new technologies and the client’s evolving needs.

The last government administration, defeated in the last political election, as well as the current ad-

ministration consider the subject of energy to be one of the highest priorities. The government has

begun to tackle this issue, alongside security and trash, especially in light of the cost of petroleum

which devastated the market in 2007 and the first months of 2008. Nuclear power is once again

under consideration as a possible solution, but we believe that renewable sources must not be un-

dervalued, including biomass, wind power, and solar power. The Parent Company has been active in


26

cogeneration for many years, using it for the production of combustible electric energy (gasoline or

gas) as well as for gas discharge products.

To this end, during the first months of 2008 the Group purchased minority shares in a company that

is involved in composting and production of biomass energy.

After the experience with the Carano solar panel plant in Trentino, the Group has become interested

in making strong investments in this sector, both by itself and through partnerships with other na-

tional and foreign investors.

Finally, the Group retains a strong presence in construction activities and management of gas distri-

bution networks, particularly in the Sardinian Region where it has been awarded several important

areas and where, within the next 6-8 years, it should perform about 200 million Euro in investments.

Based on the projects in its portfolio and in consideration of projects purchased and under evalu-

ation, the Parent Company is currently updating the three year 2008 – 2010 plan, that will soon be

approved by the Board of Directors.

The 2008 budget has already been approved. The 2008 budget was drafted on the base of the proj-

ects purchased by the month of December 2007 as well as those in the process of being purchased.

This budget was adjusted on the basis of evaluations performed upon the closing of this balance

sheet.

In the following, we will analyze the balance sheets and the reclassified consolidated profit and loss

accounts of fiscal year 2008 as compared with the four previous fiscal years.

27

Balance Sheet

CONSOLIDATED BALANCE SHEET(values expressed in Euro)

Estimate Final Statements

As of Dec.31,2008

As of Dec.31,2007

As of Dec.31,2006

As of Dec.31,2005

As of Dec.31,2004

ASSETS Short term assets

Liquid assets 5,260,421 11,766,914 13,617,415 7,534,571 14,670,321

Non-permanent investments 84 115,881 84 0 0

Receivables from clients and others 130,513,709 130,329,690 130,870,797 127,978,596 132,019,289

Inventory 29,431,018 28,788,701 26,140,017 36,745,161 38,367,698





Tangible assets 106,559,777 93,061,164 80,844,348 62,550,349 117,368,410

Investments 7,220,427 17,881,743 17,174,232 18,339,281 14,050,038

Total fixed assets 138,837,229 127,283,008 111,370,210 94,973,703 147,078,119 Total ASSETS 309,192,458 306,021,110 289,885,093 277,000,018 338,640,871 LIABILITIES Short term liabilities



Advances 9,204,964 14,881,644 12,878,459 15,426,293 11,742,131



Amounts owed to subsidiary companies 0 0 0 0 2,205




Other short term liabilities 5,842,307 5,809,331 7,500,789 7,303,347 5,906,281

Accruals and deferred income – liabilities 525,845 479,934 942,023 1,286,141 3,591,600

Total short term liabilities 129,226,212 146,278,891 126,762,884 125,974,310 178,813,309 medium/long term liabilities



Amounted owed to shareholders and other 0 0 0 0 0

Financiers 0 0 0 0 0


Amounts owed to suppliers 0 0 0 0 0


28


As of Dec.31,2008

As of Dec.31,2007

As of Dec.31,2006

As of Dec.31,2005

As of Dec.31,2004


Amounts owed to tax administration 508,138 516,139 270,843 278,499 263,307

Severance indemnity fund 7,285,385 6,450,792 6,955,065 7,431,485 7,115,472

Fund for social security and other welfare obligations 21,526 21,526 21,526 21,526 36,426

Tax fund 180,518 180,518 150,012 70,873 97,876

Other funds 2,625,738 2,455,799 2,942,883 3,111,398 5,010,409

Total medium/long term liabilities 75,666,630 61,416,508 70,530,483 68,733,514 82,122,684 Net equity

Share capital 14,000,000 13,706,084 12,952,749 12,702,218 13,335,213


Legal reserve 77,140,319 72,387,954 69,866,959 67,692,238 67,692,238

Reserve foreseen by company bylaws 78,184 78,184 78,184 78,184 78,184


Consolidation reserve 3,171,412 2,256,942 2,565,595 (7,874,424) (6,624,127)

Merger advance 235,597 235,597 235,597 235,597 3,102,096

Foreign currency conversion reserve (79,039) (79,039) 483,057 (79,316) (35,563)

Profit/loss carried forward 0 0 0 0 0

Fiscal year profit/loss 6,607,360 6,802,374 3,238,135 5,643,749 (4,351,051)

Total net equity of group 103,079,909 97,314,172 91,346,351 80,324,322 75,123,065 Net equity of third parties 1,219,708 1,011,540 1,245,375 1,967,873 2,581,813 Total LIABILITIES 309,192,458 306,021,110 289,885,093 277,000,018 338,640,871

As stated in the introduction, the 2008 budget is characterized by a strong incidence of investments.

In fact, the assets are characterized by a slight decrease in current assets, mostly due to a decrease in

liquidity and a consolidation of trade receivables. Contextually, a strong increase takes place in fixed

assets. What is truly significant is the increase of tangible and intangible assets, for a total increase of

22,2 million Euro.

A decrease in short term liabilities is foreseen, even in the presence of greater investments, as particu-

larly significant payment flows to suppliers will be made. Long term liabilities will increase, after new

lines of credit are taken out, as explained in the chapter dedicated to the financial management.

Net equity, finally, surpasses the threshold of 100 million Euro.

29

Profit and Loss Account

CONSOLIDATED PrOFIT AND LOSS STATEmENTS rECLASSIFIED uSING THE vALuE ADDED mETHOD(values expressed in Euro)


As of Dec. 31,2008 % As of Dec.

31,2007 % As of Dec. 31,2006 % As of Dec.

31,2005 % As of Dec. 31,2004 %

Income from sales and services 224,475,831 91,36% 204,373,523 88,51% 201,310,854 92,50% 226,056,566 93,48% 227,537,890 88,52%Variation in inven-tory of finished and semi-finished goods

(1,765,371) -0,72% 1,078,802 0,47% (2,569,631) -1,18% (10,187,122) -4,21% 5,204,351 2,02%

Variation of work in progress 653,765 0,27% 1,360,421 0,59% (2,135,696) -0,98% 847,557 0,35% (14,750,459) -5,74%

Low cost works 21,732,634 8,84% 19,862,333 8,60% 17,294,210 7,95% 15,934,003 6,59% 23,075,550 8,98%

Other proceeds 611,102 0,25% 4,229,435 1,83% 3,728,427 1,71% 9,178,587 3,80% 15,986,119 6,22%vALuE OF PrODuCTION 245,707,961 100,00% 230,904,515 100,00% 217,628,163 100,00% 241,829,591 100,00% 257,053,450 100,00%

Costs from purchases (93,863,374) -38,20% (82,776,468) -35,85% (69,336,134) -31,86% (91,571,513) -37,87% (110,830,619) -43,12%

Variation in inventory of raw materials (2,581,212) -1,05% (939,634) -0,41% (5,695,328) -2,62% 1,080,564 0,45% 4,640,637 1,81%

Other costs for services (72,919,123) -29,68% (72,815,190) -31,53% (72,614,398) -33,37% (83,655,008) -34,59% (86,407,797) -33,61%Expenses for use of assets owned by others

(10,147,579) -4,13% (8,257,076) -3,58% (9,818,513) -4,51% (10,481,809) -4,33% (7,971,511) -3,10%


ADDED vALuE 64,829,955 26,38% 63,623,934 27,55% 57,462,984 26,40% 53,711,334 22,21% 52,513,470 20,43%

Cost of labor and related fees (40,921,560) -16,65% (38,792,077 -16,80% (36,456,477) -16,75% (37,507,271) -15,51% (39,574,568) -15,40%GrOSS OPErATING mArGIN 23,908,395 9,73% 24,831,857 10,75% 21,006,507 9,65% 16,204,064 6,70% 12,938,903 5,03%



Accruals and devaluations (1,025,000) -0,42% (1,206,669) -0,52% (1,907,161) -0,88% (1,858,729) -0,77% (3,571,721) -1,39%

Amortization, accruals, and devaluations

(10,149,508) -4,13% (10,210,865) -4,42% (10,151,642) -4,66% (10,637,792) -4,40% (12,807,665) -4,98%

EBIT 13,758,887 5,60% 14,620,993 6,33% 10,854,865 4,99% 5,566,272 2,30% 131,238 0,05%


Other financial proceeds 65,550 0,03% 655,073 0,28% 503,898 0,23% 362,905 0,15% 312,889 0,12%

TOTAL FINANCIAL MANAGEMENT (4,813,973) -1,96% (4,189,707) -1,81% (3,694,267) -1,70% (5,180,424) -2,14% (5,670,305) -2,21%

CurrENT PrOFIT/LOSS 8,944,915 3,64% 10,431,286 4,52% 7,160,598 3,29% 385,848 0,16% (5,539,067) -2,15%

Income from equity investments 0 0,00% 51,637 0,02% 550,224 0,25% 7,717,593 3,19% 2,203,675 0,86%

Financial activity adjustments 1,385,689 0,56% (431,123) -0,19% (664,559) -0,31% (1,410,864) -0,58% (528,335) -0,21%

Shareholder repayment 0 0,00% (1,100,000) -0,48% (750,000) -0,34% (500,000) -0,21% 0 0,00%

Extraordinary operations 108,586 0,04% 2,118,327 0,92% 2,507,949 1,15% 3,139,422 1,30% 791,174 0,31%

PROFIT/LOSS BEFORE TAX 10,439,189 4,25% 11,070,127 4,79% 8,804,212 4,05% 9,331,999 3,86% (3,072,553) -1,20%

Annual income tax (3,623,461) -1,47% (4,404,553) -1,91% (5,585,887) -2,57% (3,640,956) -1,51% (1,969,666) -0,77%

NET PrOFIT/LOSS 6,815,728 2,77% 6,665,574 2,89% 3,218,325 1,48% 5,691,042 2,35% (5,042,219) -1,96%

THIrD PArTY (PrOFT) LOSS (208,368) 136,800 19,810 (47,293) 691,168

GrOuP PrOFIT (LOSS) 6,607,360 6,802,374 3,238,135 5,643,749 (4,351,051)


30

The 2008 consolidated profit and loss account table shows definite homogeneity with the recently

closed balance sheet. The value of production is equal to 245,7 million Euro, a sum greater than the

2007 value by 14,8 million Euro, equal to about 6,4%. The continuous increase of the value of produc-

tion is linked to the continual growth of gas distribution concessions and the continuous process of

investments.

Both gross operating margins as well as EBIT reflect upon the 2007 amounts in terms of absolute

values.

The slight dip is essentially due to market contraction and the continuous increase of the cost of

labor and raw materials, and most of all in relation to the strong increases of oil products.

The pre-tax result totals 10,4 million Euro and is in line with that of 2007, as is the net result.

In summary, the 2008 balance statement replicates the results of 2007. In a climate of market stagna-

tion, this should be considered a great success.

INDExES OF THE 2008 BuDGET

ECONOmIC ANALYSISStatement dates

As of Dec.31,2008 As of Dec.31,2007 As of Dec.31,2006 As of Dec.31,2005 As of Dec.31,2004

R.O.E. (Return on Equity) 6,85% 7,52% 3,68% 7,56% -5,47%

R.O.I. (Return on Investment) 4,45% 4,78% 3,74% 2,01% 0,04%


Incidence of expenditures and revenue from extraordinary operations 51,98% 53,48% 70,17% -1,39% 3415,40%


Incidence of Net Financial Expenditures on the R.O. 34,99% 28,66% 34,03% 93,07% 4320,63%

FINANCIAL AND CAPITAL ANALYSISStatement dates

As of Dec.31,2008 As of Dec.31,2007 As of Dec.31,2006 As of Dec.31,2005 As of Dec.31,2004

Liquidity index 1,32 1,22 1,41 1,44 1,07

Leverage (gearing) 3,20 3,38 3,29 3,71 4,26



EBITDA/DEBT 31,22% 40,14% 32,36% 22,50% 9,98%

DEBTI/EBITDA 3,20 2,49 3,09 4,44 10,02

After reading the indexes, it appears clear that the company, having predicted strong investment in

its own company activities, slightly drops its own economic indexes in comparison to the previous

fiscal year, as well as those of a financial nature, so as to be able to finance the investments scheduled

to occur to debt equity.

Note how the DEBT/EBITDA ratio, or the ratio between the operating margin and the debt, reaches

3,20. This is an index representing good financial balance between group profitability and the re-

course to credit needed to finance activities.

31

Finally, we wish to point out the important operations that have taken place since the closing of the balance sheet on 31 December 2007

On 5 March 2008, the company AI POWER S.p.A. was incorporated in Algiers (Algeria). The Group

holds shares of a nominal value of 10.800.000 Algerian dinar, equal to 54% of the share capital

totaling 20.000.000 Algerian dinar. The company will engage in the importation, creation, and

installation of afferent, energy, gas, water, and sewage systems, as well as the creation of tech-

nologies connected to these systems.

On 9 April 2008, the Cooperative purchased 20% of the block of shares in the company Com-

pagri S.p.A., a company that engages in the construction and operation of compost and waste

treatment plants.

On 9 April 2008, the Cooperative purchased 20% of the shares of the Agro-energy company

Consortile a.r.l., a company controlled by Compagri S.p.A and operating in the same sector.

On 13 May 2008, the group purchased 30% of the shares of the company Xdatanet S.r.l., a compa-

ny that designs and creates software and provides Information Technology consulting services.

Other informationWe wish to inform you that the Parent Company, within the terms foreseen by the appropriate de-

cree, provided for the inclusion of the policy paper on security, in compliance with the provisions

of enclosure B of Legislative Decree 196/03, cd. “Privacy Consolidation Act”, which relays the provi-

sions concerning technical methods to assume when handling sensitive data with electronic instru-

ments.

We wish to inform you that with the widest consideration for the transparent and correct manage-

ment of the company, and with respect for the active laws and fundamental principles of business

ethics in pursuit of company objectives, the Parent Company has approved the “Organization, man-

agement, and control system in accordance with Legislative Decree number 231 of 8/6/2001” and

has appointed the Supervisory Committee, for the 1/1/2008 – 31/12/2010 period.

Finally, we wish to inform you that the Parent Group, together with all the companies of the Group, is

drafting the tables foreseen by Legislative Decree number 164/2000 and Resolution number 311/01

made by the Gas and Electric Energy Authority, on the subject of account separation pertaining to

productive processes in the methane gas sector.

We would like to take this opportunity to thank you for your confidence in us. We invite you to ap-

prove the Balance Sheet closed on 31/12/2007, as it is presented.

Concordia, 19/05/2008 The Board of Directors

The President

(CASARI Roberto)


32

33

consolidated balance sheet of the CPL Concordia Group as of December 31, 2007


34

Statement of assets and liabilities Assets

ASSETS As of Dec. 31,2007Amounts in Euro

As of Dec. 31,2006Amounts in Euro

A) uNPAID SuBSCrIBED CAPITAL 1,261,737 1,250,904

already called-up 1,261,737 1,250,904

B) FIxED ASSETS

I INTANGIBLE ASSETS

1) Installation and expansion expenses 314,329 288,131

2) Research, development, and advertising expenses 81,188 155,196

3) Industrial patent and intellectual property rights 0 0

4) Concessions, licenses, trade marks and similar rights 41,279 50,907

5) Goodwill 7,652 9,342

5b) Difference by consolidation 0 0

6) Intangible assets in progress and advances 1,020,410 897,449

7) Other 14,875,243 11,950,606

Total 16,340,101 13,351,631

II TANGIBLE ASSETS

1) Land and buildings 4,231,488 2,633,438

2) Plants and machinery 78,756,106 70,108,797

3) Industrial and commercial equipment 480,626 342,992

4) Other assets 3,492,606 2,554,907

5) Tangible assets in course of construction and advances 6,100,337 5,204,213

Total 93,061,163 80,844,347

III INVESTMENTS:

1) Equity investments in:

a) subsidiary companies 0 0

b) affiliated companies 179,685 347,804

c) parent companies 0 0

d) other companies 3,500,653 1,696,172

2) Receivables: (within 12 months) (within 12 months)

a) from subsidiary companies

b) from affiliated companies 10,779,000 10,779,000 10,754,000 10,754,000

c) to parent companies

d) to other companies 1,234,065 1,864,471 533,908 2,601,975

3) Other investments 1,033 1,033

4) Own shares 0 0

Total 16,324,842 15,400,984

TOTAL FIxED ASSETS 125,726,106 109,596,962

35

ASSETS As of Dec. 31,2007Amounts in Euro


C) CurrENT ASSETS

I INVENTORY:

1) Raw materials, supplies, and consumbales 3,177,592 3,253,514

2) Works in progress and components 5,366,048 4,108,238

3) Contracts in progress 12,066,586 11,904,013

4) Finished goods and merchandise 6,613,629 5,157,002

5) Advance payments 1,564,846 1,717,249

Total 28,788,701 26,140,016

II RECEIVABLES: (over 12 months) (over 12 months)

1) Trade debtors: 1,556,902 119,739,229 1,765,146 121,493,423

2) Receivables from subsidiary companies: 664,502 0

3) Receivables from affiliated companies: 652,125 8,103 224,209

4) Receivables from parent company: 0 0

4 bis) Tax assets 3,878,380 2,852,787

4 ter) Advance taxes 1,724,397 2,262,000

5) Other receivables 5,227,959 5,811,626

Total 131,886,592 132,644,045

III NON-PERMANENT INVESTMENTS

1) Shares in subsidiary companies 115,797 0

2) Shares in affiliated companies 0 0

3) Other shares 0 0

4) Company shares 0 0

5) Other investments 84 84

Total 115,881 84

IV LIQUID ASSETS

1) Current bank and postal accounts 11,688,157 13,562,294

2) Bank cheques 1,207 38,500

3) Cash on hand 77,550 16,622

Total 11,766,914 13,617,416

TOTAL CurrENT ASSETS 172,558,088 172,401,561

D) ACCruALS AND DEFErrED INCOmE: 6,475,179 6,635,666

TOTAL ASSETS 306,021,110 289,885,093


36

Statement of assets and liabilities Liabilities

LIABILITIES As of Dec. 31,2007Amounts in Euro


A) NET EQuITY

I CAPITAL 13,706,084 12,952,749

II SHARE PREMIUM RESERVES 0 0

III REVALUATION RESERVES 656,679 656,679

IV LEGAL RESERVES 72,387,954 69,866,959

V RESERVES FORESEEN BY COMPANY BYLAWS 78,184 78,184

VI RESERVES FOR COMPANY SHARES 0 0

VII OTHER RESERVES:

a) CAPITAL GAINS L. 784/80 1,269,396 1,269,396

b) CONSOLIDATION RESERVE 2,256,942 2,565,595

c) MERGER SURPLUS 235,597 235,597

d) TRANSLATION RESERVE (79,039) 483,057

VIII PROFIT (LOSS) CARRIED FORWARD 0 0

IX FISCAL YEAR PROFIT (LOSS) 6,802,374 3,238,135

TOTAL GrOuP NET EQuITY 97,314,171 91,346,351

THIRD PARTY CAPITAL AND RESERVES 1,148,340 1,265,186

THIRD PARTY PROFIT (LOSS) (136,800) (19,811)

THIRD PARTY NET EQUITY 1,011,540 1,245,375

TOTAL 98,325,711 92,591,726

B) PrOvISIONS FOr LIABILITIES AND CHArGES

1) Provisions for pensions and similar obligations 21,526 21,526

2) For taxes 180,518 150,012

3) Other 2,455,799 2,942,883

TOTAL 2,657,843 3,114,421

C) SEvErANCE INDEmNITY 6,450,792 6,955,065

D) ACCOuNTS PAYABLE: (over 12 months) (over 12 months)

1) Debenture loans: 0 0

2) Convertible debenture loans: 0 0

3) Amounts owed to shareholders for financing: 3,224,800 2,723,657

4) Amounts owed to banks: 49,990,419 67,482,759 73,581,858

5) Amounts owed to other financiers: 2,930,091 2,226,762

6) Advance payments: 14,881,644 12,878,459

7) Amounts owed to suppliers: 1,801,315 94,696,264 75,826,551

8) Debts represented by bills of exchange: 0 0

9) Amounts owed to subsidiary companies: 0 0

10) Amounts owed to affiliated companies: 332,760 303,761

11) Amounts owed to parent companies: 0 0

12) Amounts owed to tax administration: 4,579,699 7,935,892

13) Amounts owed to social security and welfare institutions: 3,653,343 3,033,287

37

LIABILITIES As of Dec. 31,2007Amounts in Euro


14) Other accounts payable: 516,139 6,325,470 7,771,631

TOTAL 198,106,830 186,281,858

E) CCruALS AND DEFErrED INCOmE: 479,934 942,023

TOTAL LIABILITIES 306,021,110 289,885,093

mEmOrANDum ACCOuNTS:

I) Guarantees

- Securities 125,316,000

- Real guarantees 60,794,000

Total 186,110,000 190,529,741

II) Other memorandum accounts

- Subject to collection 7,000

- Other 4,021,830

Total 4,028,830 4,114,166

mEmOrANDum ACCOuNTS 190,138,830 194,643,907


38

Profit and loss statement

PrOFIT AND LOSS STATEmENT As of Dec. 31,2007Amounts in Euro


A) vALuE OF PrODuCTION:

1) Net turnover from sales and services 204,373,523 202,658,804

2) Variation in inventory of finished, in progress, and semi-finished goods 1,078,802 (2,569,631)

3) Variation in contracts in progress 1,360,421 (2,135,696)

4) Capital improvement investments for internal works 19,862,333 17,294,210

5) Other income and revenue

- miscellaneous 4,224,233 3,728,427

- transferred to the profit and loss account 5,203 4,229,436 0 3,728,427

Total 230,904,515 218,976,114

B) COST OF PrODuCTION:

6) For raw materials, consumable goods, and merchandise 82,776,468 69,336,134

7) For services 72,815,190 72,614,398

8) For use of assets owned by others 8,257,076 9,818,513

9) For staff:

a) salaries and wages 29,061,736 27,107,357

b) social security costs 9,005,220 8,371,880

c) severance indemnity 1,825,121 1,727,240

d) pension costs 0 0

10) Amortization and depreciation

a) amortization of intagible assets 4,665,535 4,583,865

b) amortization of tangible assets 4,338,661 3,660,616

c) other reductions in value of fixed assets 0 54,131

d) allowance for debtors included in current assets and other cash accounts 453,531 9,457,727 560,430 8,859,042

11) Variations in stocks of raw materials, consumable goods, and merchandise di consumo e merci 939,634 5,695,328

12) Amounts for risk provisions 0 0

13) Other accruals 753,138 1,292,600

14) Other operating charges 2,492,212 2,700,807

Total 217,383,522 207,523,299

DIFFErENCE BETWEEN vALuE AND COST OF PrODuCTION (A - B) 13,520,993 11,452,815

C) FINANCIAL rEvENuE AND ExPENDITurES:

15) Income from equity investments

- from subsidiary companies 0 511,454

- from affiliated companies 0 0

- from other companies 51,637 51,637 38,770 550,224

16) Other financial income:

a) from loans constituting part of fixed assets:

- from subsidiary companies 0 0


- from parent companies 0 0

- from other companies 0 0 0 0

39

PrOFIT AND LOSS STATEmENT As of Dec. 31,2007Amounts in Euro


b) from other permanent investments other than equity income

c) from other investments that are not permanent

d) other income not included above:


- from affiliated companies 2,072 323



17) Interest payable and other charges

- from subsidiary companies

- from affiliated companies

- from parent companies

- from other companies 4,627,182 4,627,182 4,350,069 4,350,069

17 bis) PROFIT AND LOSS FROM FOREIGN CURRENCY CONVERSION

Profit and loss from foreign currency conversion 217,598 (151,902)

Total ( 15 + 16 - 17 - 17 bis) (4,138,070) (3,144,044)

D) vALuE ADJuSTmENTS FOr INvESTmENTS

18) Revaluations:

a) of equity investments 350,665 60,905

b) of permanent investments that are not equity investments 0 0

c) of non-permanent investments which are not equity investments 0 350,665 0 60,905

19) Devaluations:

a) of equity investments 781,788 725,464


c) of non-permanent investments which are not equity investment 781,788 725,464

Total adjustments ( 18 - 19 ) (431,123) (664,559)

E) ExTrAOrDINArY rEvENuE AND ExPENSES:

20) Revenue:

a) gains from disposal of assets whose proceeds are not recorded at number 5 1,465,542 4,458,308

b) Capital gains 0 0

c) other 737,914 2,203,456 54,316 4,512,624

21) Expenses: a) losses from disposal of assets whose accounting effects are not recorded in number 14 16,346 49,947

b) taxes pertaining to prior fiscal year 60,308 0

c) other 8,475 85,129 3,302,678 3,352,625

Total extraordinary income and losses ( 20 - 21 ) 2,118,327 1,159,999

PrOFIT Or LOSS BEFOrE TAx ( A - B ± C ± D ± E ) 11,070,127 8,804,211

22) Income tax for the fiscal year: current, deffered, and anticipated (4,404,553) (5,585,887)

26) PROFIT (LOSS) FOR THE FISCAL YEAR 6,665,574 3,218,324

THIrD PArTY PrOFIT (LOSS) 136,800 19,811

GrOuP PrOFIT (LOSS) 6,802,374 3,238,135


40

Final Statements


31,2006 % As of Dec. 31,2005 % As of Dec.

31,2004 % As of Dec. 31,2003 %

Net turnover from sales and services 204,373,523 88,51% 201,310,854 92,50% 226,056,566 93,48% 227,537,890 88,52% 175,073,206 76,12%

Variation in inventory of finished and semi-finished goods 1,078,802 0,47% (2,569,631) -1,18% (10,187,122) -4,21% 5,204,351 2,02% 6,363,772 2,77%

Variation in contracts in progress 1,360,421 0,59% (2,135,696) -0,98% 847,557 0,35% (14,750,459) -5,74% 791,819 0,34%

Low-cost works 19,862,333 8,60% 17,294,210 7,95% 15,934,003 6,59% 23,075,550 8,98% 35,590,190 15,47%

Various income 4,229,435 1,83% 3,728,427 1,71% 9,178,587 3,80% 15,986,119 6,22% 12,173,187 5,29%

vALuE OF PrODuCTION 230,904,515100,00% 217,628,163100,00% 241,829,591100,00% 257,053,450100,00% 229,992,174100,00% Costs for purchases (82,776,468) -35,85% (69,336,134) -31,86% (91,571,513) -37,87% (110,830,619) -43,12% (91,990,382) -40,00%

Variation in inventory of raw materials (939,634) -0,41% (5,695,328) -2,62% 1,080,564 0,45% 4,640,637 1,81% 3,196,893 1,39%

Various costs for services (72,815,190) -31,53% (72,614,398) -33,37% (83,655,008) -34,59% (86,407,797) -33,61% (85,810,793) -37,31%

Expenses for use of assets owned by others (8,257,076) -3,58% (9,818,513) -4,51% (10,481,809) -4,33% (7,971,511) -3,10% (5,835,499) -2,54%

Other operational expenses (2,492,213) -1,08% (2,700,807) -1,24% (3,490,490) -1,44% (3,970,689) -1,54% (3,931,721) -1,71%

ADDED vALuE 63,623,934 27,55% 57,462,984 26,40% 53,711,334 22,21% 52,513,470 20,43% 45,620,671 19,84% Cost of work and related expenses (38,792,077) -16,80% (36,456,477) -16,75% (37,507,271) -15,51% (39,574,568) -15,40% (36,933,231) -16,06%

Gross Operating margin 24,831,857 10,75% 21,006,507 9,65% 16,204,064 6,70% 12,938,903 5,03% 8,687,440 3,78%



Retained earnings and depreciation (1,206,669) -0,52% (1,907,161) -0,88% (1,858,729) -0,77% (3,571,721) -1,39% (4,145,456) -1,80%

Amortizations, retained earnings, and depreciation (10,210,865) -4,42% (10,151,642) -4,66% (10,637,792) -4,40% (12,807,665) -4,98% (13,105,980) -5,70%

EBIT 14,620,993 6,33% 10,854,865 4,99% 5,566,272 2,30% 131,238 0,05% (4,418,539) -1,92% Interest and other financial income (4,844,780) -2,10% (4,198,165) -1,93% (5,543,328) -2,29% (5,983,193) -2,33% (4,866,351) -2,12%

Other financial income 655,073 0,28% 503,898 0,23% 362,905 0,15% 312,889 0,12% 450,048 0,20%


CurrENT PrOFIT Or LOSS 10,431,286 4,52% 7,160,598 3,29% 385,848 0,16% (5,539,067) -2,15% (8,834,842) -3,84% Income from equity investments 51,637 0,02% 550,224 0,25% 7,717,593 3,19% 2,203,675 0,86% 55,987,891 24,34%

Value adjustments for investments (431,123) -0,19% (664,559) -0,31% (1,410,864) -0,58% (528,335) -0,21% (6,156,504) -2,68%


Extraordinary operations 2,118,327 0,92% 2,507,949 1,15% 3,139,422 1,30% 791,174 0,31% (722,991) -0,31%

PrE-TAx PrOFIT Or LOSS 11,070,127 4,79% 8,804,212 4,05% 9,331,999 3,86% (3,072,553) -1,20% 40,273,555 17,51%

Taxes on operating profit (4,404,553) -1,91% (5,585,887) -2,57% (3,640,956) -1,51% (1,969,666) -0,77% (9,091,255) -3,95%

NET PrOFIT Or LOSS 6,665,574 2,89% 3,218,325 1,48% 5,691,042 2,35% (5,042,219) -1,96% 31,182,300 13,56% THIrD PArTY PrOFIT (LOSS) 136,800 19,810 (47,293) 691,168 486,363 GrOuP PrOFIT (LOSS) 6,802,374 3,238,135 5,643,749 (4,351,051) 31,668,663

CONSOLIDATED PrOFIT AND LOSS ACCOuNT rECLASSIFIED WITH THE vALuE-ADDED mETHOD(values expressed in Euro)

details of the profit and loss statement

41

Final StatementsAs of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

TOTAL ASSETS Short term assets

Liquid assets 11,766,914 13,617,415 7,534,571 14,670,321 8,486,072


Receivables from clients and others 130,329,690 130,870,797 127,978,596 132,019,289 104,106,354

Inventory 28,788,701 26,140,017 36,745,161 38,367,698 47,290,401


Accruals and deferred income - assets 6,475,179 6,635,666 8,517,982 5,235,733 1,190,397



Tangible assets 93,061,164 80,844,348 62,550,349 117,368,410 120,442,662

Investments 17,881,743 17,174,232 18,339,281 14,050,038 19,692,039

Total fixed assets 127,283,008 111,370,210 94,973,703 147,078,119 155,600,171 TOTAL ASSETS 306,021,110 289,885,093 277,000,018 338,640,871 317,829,831 TOTAL LIABILITIES Short-term liabilities






Amounts owed to subsidiary companies 0 0 0 2,205 2,759




Other short-term debts 5,809,331 7,500,789 7,303,347 5,906,281 8,174,627

Accruals and deferred income - liabilities 479,934 942,023 1,286,141 3,591,600 6,639,007

Total short-term liabilities 146,278,891 126,762,884 125,974,310 178,813,309 145,790,014 medium/long term liabilities



Amounts owed to shareholders and other financiers 0 0 0 0 3,312,864

Advance payments 0 0 0 0 0



Amounts owed to tax administration 0 0 0 0 0

CONSOLIDATED BALANCE SHEET rECLASSIFIED BY LIQuIDITY(values expressed in Euro)


42

Final StatementsAs of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

Other amounts owed beyond the fiscal year 516,139 270,843 278,499 263,307 0


Fund for social security and welfare institutions 21,526 21,526 21,526 36,426 45,825

Tax fund 180,518 150,012 70,873 97,876 0

Other funds 2,455,799 2,942,883 3,111,398 5,010,409 3,503,360

Total medium/long term liabilities 61,416,508 70,530,483 68,733,514 82,122,684 86,239,123 NET EQuITY

Share capital 13,706,084 12,952,749 12,702,218 13,335,213 14,878,043


Legal reserve 72,387,954 69,866,959 67,692,238 67,692,238 66,683,567

Reserves foreseen by company bylaws 78,184 78,184 78,184 78,184 78,185


Consolidation reserve 2,256,942 2,565,595 (7,874,424) (6,624,127) (36,538,702)

Merger advance 235,597 235,597 235,597 3,102,096 3,102,096

Foreign currency conversion fund (79,039) 483,057 (79,316) (35,563) (338,671)

Profit / loss carried forward 0 0 0 0 0

Fiscal year profit / loss 6,802,374 3,238,135 5,643,749 (4,351,051) 31,668,663

Total Group Profit or Loss 97,314,172 91,346,351 80,324,322 75,123,065 81,459,255 Third party net capital 1,011,540 1,245,375 1,967,873 2,581,813 4,341,439 TOTAL LIABILITIES 306,021,110 289,885,093 277,000,018 338,640,871 317,829,831

43

NET GrOuP DEBT AS OF 31.12.2007ITEmS As of Dec. 31,2007 As of Dec. 31,2006

SHORT TERM DEBTS OWED TO BANKS 17,492,340 15,092,838

LONG TERM DEBTS OWED TO BANKS 49,990,419 58,489,020

LOANS FROM COOPERATIVE MEMBERS AND OTHER FINANCIERS 6,154,891 4,950,419

- LIQUIDITY DEDUCTIONS (11,766,914) (13,617,415)

- GROUP LOAN DEDUCTIONS (11,229,142) (2,701,142)

NET DEBT 50,641,594 62,213,719

DEBT TOWArDS THE BANkING SYSTEm AND SHArEHOLDErSITEmS As of Dec. 31,2007 As of Dec. 31,2006



LOANS FROM COOPERATIVE MEMBERS AND OTHER FINANCIERS 6,154,891 4,950,419


NET DEBT 61,870,736 64,914,861

ECONOmIC ANALYSIS Statement Dates

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003




Incidence of expenditures and revenue from extraordinary operations 53,48% 70,17% -1,39% 3415,40% 816,72%



FINANCIAL AND EQuITY ANALYSIS Statement Dates

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

Liquidity index 1,22 1,41 1,44 1,07 1,11

Leverage (Gearing) 3,38 3,29 3,71 4,26 6,38

Leverage debt ratio 0,68 0,74 0,96 1,63 2,31


Debt/EBITDA 40,14% 32,36% 22,50% 9,98% 7,57%

Debt/EBITDA 2,49 3,09 4,44 10,02 13,22

PrINCIPAL INDExES uSED ON THE BALANCE SHEET


44

BALANCE SHEET mArIGLIANO GAS S.r.L.

COOP GAS S.r.L.

ISCHIA GAS S.r.L.

PrOGAS mETANO S.r.L.

SI.GASS.r.L.

ErrEGAS S.r.L.

OWNErSHIP PErCENTAGE 99,5% 100% 100% 100% 100% 100%

ASSETS

Subscribed capital, unpaid 3,600 - - - - -

Total intangible assets 654 38,874 93,155 2,304 249,572 123,887

Total tangible assets 7,472,692 3,273 3,823,729 146,993 12,805,814 5,948,371

Total investments 1,214 648,801 7,236 - 4,297 8,386

Total fixed assets 7,474,560 690,948 3,924,120 149,297 13,059,684 6,080,644

Total inventory - 3,264,847 - - 6,492 79,191

Total receivables 1,063,056 5,973,878 625,202 1,280 890,086 829,235

Total short term assets - - - - - -

Total liquid assets 4,833 91,562 38,966 125,132 25,298 36,239

Total current assets 1,067,889 9,330,286 664,168 126,412 921,876 944,665

Total accruals and deferred income 66,414 82,429 41,675 567 110,710 22,068

TOTAL ASSETS 8,612,463 10,103,663 4,629,964 276,276 14,092,270 7,047,377

LIABILITIES

Total net equity 3,352,388 5,238,632 2,499,805 219,192 9,031,440 598,936

Fund for risk and other charges - 181,720 - - 520,591 -

Severance indemnity - 52,841 - - 98,742 3,235

Financial payables 4,832,728 1,700,000 210,000 - 3,320,000 6,020,000

Commercial payables 412,405 2,882,691 1,919,754 57,084 1,108,929 423,566

Total accruals and deferred income 14,943 47,779 405 - 12,568 1,640

TOTAL LIABILITIES 8,612,463 10,103,663 4,629,964 276,276 14,092,270 7,047,377

PrOFIT AND LOSS ACCOuNT

Total value of production 726,051 15,902,245 14,476 - 2,500,604 1,373,189

Total cost of production (385,402) (15,486,522) (98,125) (3,907) (2,455,830) (1,305,083)

Total revenue and expenditures (250,426) (18,913) 586 3,099 (73,245) (269,273) Total value adjustments for investments - - - - - -

Extraordinary revenue and expenditures - 1,465,542 - - - -

Profit or loss before taxes 90,223 1,862,351 (83,063) (808) (28,471) (201,167)

Taxes on operating profit (14,668) (115,000) 26,843 - (1,106) 55,070

Profit or loss for the fiscal year 75,555 1,747,351 (56,220) (808) (29,577) (146,097)

BALANCE SHEET FOr GAS COmPANY ACTIvITY - mETHANE AND LPG AS OF DECEmBEr 31, 2007 FINANCIAL STATEmENTS

balance sheets of the companies belonging to the Group

45

BALANCE SHEET CrISTOFOrETTI S.E.r. S.r.l.

ENErGY OF CONCOrDIA S.r.l.

SErIO ENErGIA S..r.l.

OWNErSHIP PErCENTAGE 50% 100% 40%

ASSETS

Subscribed capital, unpaid - - -

Total intangible assets 3,675,234 - 13,806

Total tangible assets 1,450,802 2,269,467 2,692,326

Total investments 94,699 246,596 3,400

Total fixed assets 5,220,736 2,516,063 2,709,533

Total inventory 5,027,034 - -

Total receivables 11,995,912 605,020 551,766

Total short term assets 168 - -

Total liquid assets 1,686,451 2,791 196,281

Total current assets 18,709,565 607,811 748,047

Total accruals and deferred income 5,726 3,268 -

TOTAL ASSETS 23,936,027 3,127,141 3,457,579

LIABILITIES

Total net equity 1,685,657 520,522 1,196,748

Fund for risk and other charges - 30,000 -

Severance indemnity 355,728 - -

Financial payables 12,024,430 - 1,688,573

Commercial payables 9,831,612 2,576,620 571,687

Total accruals and deferred income 38,600 - 572

TOTAL LIABILITIES 23,936,027 3,127,141 3,457,579


Total value of production 19,625,838 199,104 1,881,869

Total cost of production (18,794,523) (249,021) (1,553,533)

Total revenue and expenditures (432,934) 13,337 (101,337)

Total value adjustments for investments - - -

Extraordinary revenue and expenditures - - -

Profit or loss before taxes 398,380 (36,579) 226,999

Taxes on operating profit (278,257) 8,668 (90,154)

Profit or loss for the fiscal year 120,123 (27,911) 136,845

BALANCE SHEET FOr ENErGY COmPANY ACTIvITY AS OF DECEmBEr 31, 2007 FINANCIAL STATEmENTS


46

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

CPL mAGHrEB SErvICE SArL

CPL CONCOrDIA FILIALA CLuJ S.r.L.

OWNErSHIP PErCENTAGE 100,0% 90,0% 100%

ASSETS

Subscribed capital, unpaid - - -

Total intangible assets 25,761 - 414,708

Total tangible assets 106,656 - 9,520,794

Total investments 21,902 - 7,512

Total fixed assets 154,319 - 9,943,014

Total inventory 69,420 - 23,134

Total receivables 1,447,523 - 1,209,507

Total short term assets - - -

Total liquid assets 106,696 11,000 98,477

Total current assets 1,623,638 11,000 1,331,117

Total accruals and deferred income - - -

TOTAL ASSETS 1,777,958 11,000 11,274,131

LIABILITIES

Total net equity 385,272 10,080 7,266,419

Fund for risk and other charges - - 114,083

Severance indemnity - - -

Financial payables 2,449 - 2,608,302

Commercial payables 1,306,767 920 1,285,327

Total accruals and deferred income 83,468 - -

TOTAL LIABILITIES 1,777,958 11,000 11,274,131


Total value of production 2,679,197 - 5,375,608

Total cost of production (3,832,003 ) - (4,725,583)

Total revenue and expenditures (19,985 ) - (332,204)


Extraordinary revenue and expenditures (16,346 ) - -

Profit or loss before taxes (1,189,136) - 317,821

Taxes on operating profit - - (77,361)

Profit or loss for the fiscal year (1,189,136) 240,460

BALANCE SHEET FOr FOrEIGN COmPANIESAS OF DECEmBEr 31, 2007 FINANCIAL STATEmENTS

47

BALANCE SHEET rEAL ESTATE AGENT OF CONCOrDIA S.r.L.

NuOrO SErvIZI S.r.L.

OWNErSHIP PErCENTAGE 100% 44%

ASSETS

Subscribed capital, unpaid - -

Total intangible assets 41,425 -

Total tangible assets 1,680,139 -

Total investments 115,354 30,307

Total fixed assets 1,836,918 30,307

Total inventory 3,708,826 -

Total receivables 308,724 5,404,003

Total short term assets - -

Total liquid assets 134,167 224,453

Total current assets 4,151,716 5,628,456

Total accruals and deferred income 1,193,426 -

TOTAL ASSETS 7,182,060 5,658,763

LIABILITIES

Total net equity 4,354,482 511,515

Fund for risk and other charges 39,952 19,037

Severance indemnity 16,446 -

Financial payables 594,138 2,519,569

Commercial payables 2,168,020 2,608,641

Total accruals and deferred income 9,021 -



Total value of production 2,949,969 210,253

Total cost of production (3,631,078) (343,938)

Total revenue and expenditures (219,505) (169,867)

Total value adjustments for investments - -

Extraordinary revenue and expenditures - -

Profit or loss before taxes (900,615) (303,551)

Taxes on operating profit 1,376 81,948

Profit or loss for the fiscal year (899,238) (221,603)

BALANCE SHEET FOr OTHEr SuBSIDIArY COmPANIESAS OF DECEmBEr 31, 2007 FINANCIAL STATEmENTS


48

BALANCE SHEET COImmGEST S.P.A.

FONTENErGIA S.P.A.

TECLAB S.r.L.

PEGOGNAGA SErvIZI S.r.L.

OWNErSHIP PErCENTAGE 45% 49% 35% 50,0%

ASSETS

Subscribed capital, unpaid - - - -

Total intangible assets 28,376 200,594 464,585 18,890

Total tangible assets 23,592,775 19,205,803 48,406 221,813

Total investments 10,000 444,911 8,227 239

Total fixed assets 23,631,151 19,851,308 521,218 240,942

Total inventory 3,264 528,106 201,490 -

Total receivables 95,071 16,789,704 726,642 19,410

Total short term assets - 500,000 - -

Total liquid assets 241,216 46,063 2,212 43,859

Total current assets 339,551 17,863,873 930,344 63,269

Total accruals and deferred income 5,999 77,460 11,028 1,004

TOTAL ASSETS 23,976,701 37,792,641 1,462,590 305,215

LIABILITIES

Total net equity 133,312 4,849,612 105,355 130,712

Fund for risk and other charges 25,324 - - -

Severance indemnity - 75,661 218,200 4,271

Financial payables 19,915,839 30,565,018 811,253 90,000

Commercial payables 612,804 2,194,808 327,782 78,650

Total accruals and deferred income 3,289,422 107,542 - 1,582

TOTAL LIABILITIES 23,976,701 37,792,641 1,462,590 305,215


Total value of production 892,162 7,542,386 1,612,331 186,258

Total cost of production (284,839) (6,511,529) (1,655,157) (144,264)

Total revenue and expenditures (537,528) -988,987 (58,559) (3,671)


Extraordinary revenue and expenditures - 1,519,273 -

Profit or loss before taxes 69,795 1,561,144 (101,385) 38,324

Taxes on operating profit (56,483) (146,696) 0 (17,247)

Profit or loss for the fiscal year 13,312 1,414,448 (101,385) 21,077

BALANCE SHEET FOr ASSOCIATED COmPANIESAS OF DECEmBEr 31, 2007 FINANCIAL STATEmENTS

49

board of auditors report on the consolidated balance sheet as of December 31, 2007

Dear Shareholders,

pursuant to the responsibilities bestowed upon us in accordance with article 41 of Legislative Decree

number 127 of 9 April 1991, we have checked the consolidated balance sheet of the CPL Group

together with the annual report. In summary, the consolidated Balance Sheet of the CPL group on

31/12/2007 presents the following given in €uro:

ASSETSAccounts receivable for sums still owed 1,261,737

Fixed assets 125,726,106

Current assets 172,558,088

Accruals and deferred income 6,475,179

Total assets 306,021,110

LIABILITIESGroup shareholder’s equity 97,314,171

Third party capital and reserves 1,011,540

Total equity 98,325,711

Provisions for liabilities and charges 2,657,843

Severance indemnities 6,450,792

Accounts payable 198,106,830

Accruals and deferred income 479,934

Total liabilities 306,021,110

Memorandum accounts are equal to €uro 190,138,830.

CONSOLIDATED PrOFIT AND LOSS ACCOuNT FOr FY 2007Value of production 230,904,515

Cost of production (217,383,522)

Difference between value and cost of production 13,520,993

Financial income and charges (4,138,070)

Value adjustments (431,123)

Extraordinary income and charges 2,118,327

Result before taxes 11,070,127

Annual income tax (current - deferred - anticipated taxes) (4,404,553)

Fiscal year profit 6,665,574

Third party equity loss 136,800

Group profit 6,802,374


50

The Balance sheet was drafted in conformity

with the dispositions of Legislative Decree num-

ber 127 from 9 April 1991, integrated with the

accounting principles detailed by the National

Council of Accountants and Tax Advisers, and,

in the absence of other standards, by the stan-

dards of the International Accounting Standards

Board (I.A.S., now I.F.R.S.)

The company balances recorded on the consoli-

dated balance sheet have been checked by the

respective Board of Auditors and/or, in absence

of the same as not required by law, by the audit

firm PriceWaterhouseCoopers SpA.

Based on the inspections made by the Board we

certify the following:

the companies included in the scope of

consolidation are correctly identified and

respond to the requirements for controlled

companies as foreseen by the legislation in-

dicated above;

the information conveyed by companies

included in the consolidating company’s

scope of consolidation conforms to the

evaluation, structure, and content crite-

ria defined by the consolidating company

itself, as confirmed by the administrative

bodies of each consolidated company.

the information received as well as the infor-

mation from the consolidating company’s

own account records was correctly used

for the creation of the consolidated balance

sheet;

the evaluation criteria and the consolidation

principles used conform to the regulations,

as do the consolidation method and crite-

ria:

the balance sheets for the companies in-

cluded in the scope of consolidation, op-

portunely reclassified, have fully recaptured

the assets and liabilities, as well as the rev-

enue and expenditures, according to the

criteria of the total consolidation method;

all operations of significant importance,

whether for their value or affect within the

group, that took place between companies

included in the scope of consolidation –

particularly receivables/payables, costs/rev-

enue and capital gains – have been elimi-

nated;

all operations of significant importance,

whether for their value or affect within the

group, that took place between companies

included in the scope of consolidation –

particularly receivables/payables, costs/rev-

enue and capital gains – have been elimi-

nated;

therefore the Board has adopted the total

consolidation method in cases of real and

de facto control of the management of as-

sociated companies,

the Board proceeded with the net equity

method for other companies;

we have given our consent for the inclu-

sion of installation and expansion costs in

the balance sheet, as well as the costs for

research, development, and advertising, for

314.329 Euro and 81.188 Euro, respectively;

the explanatory notes contain the informa-

tion foreseen by the regulations;

the data and information contained in the

annual report respect the content foreseen

by article 40 of Legislative Decree 127/91

and do not conflict with the data and infor-

mation contained in the statutory consoli-

dated balance sheet.

In our judgment, this consolidated balance

sheet correctly represents the equity and finan-

cial condition and the profits and losses of the

group heading the CPL Concordia cooperative

society for the fiscal year closing on 31/12/2007,

in conformity with the laws that govern the

drafting of the consolidated balance sheet.

Concordia sulla Secchia, 04 June 2008

The Board of Auditors

Pelliciardi Dott. Carlo Alberto (President)Ascari Rag. FaustoCasari Dott. Mauro

51

certification report

52annualaccounts 2007

53

annualaccounts2007


Dear Associates,

the Budget of the financial year ending 31.12.07 which is presented for approval

presents a Profit, net of the taxes of the financial year and of the allowances of ordinary and extraor-

dinary character, equal to Euro 5.879.687, a result in perfect line with the objectives which were fixed

in the budget and which represent the best performance of the last few years.

The production carried out during the course of the financial year amounts to Euro 198.997.185, with

an increment in respect of the previous financial year equal to 7.3%.

The Asset total works out as equal to Euro 265.793.587, the Net assets amounts to Euro 94.213.581,

the Funds amount to Euro 1.357.063, the Severance pay amounts to Euro 6.101.664 and the total of

the debts and the accruals and deferrals amount to Euro 164.121.279.

As ever, the administrators of the Cooperative, in accordance with art. 2 of Law 59/92, have carried

out their own mandate with the wish of having the Cooperative achieve the mutualistic goals ex-

pected by law and by Statute, consisting in the aim of obtaining continuity in employment and the

best possible economic, social and professional conditions. For these reasons, the Cooperative has

acted with the intent of maintaining full occupation of the associates and remunerating their work

services to the best possible contractual conditions, taking account of the market trend and of the

specific sector of reference in which it operates. The company has operated, moreover, in order to

improve the professional and cultural qualification of the associates, investing to guarantee optimal

conditions in the work environment.

With the aim of continuing the process of capitalisation of the Cooperative, as well as to loyalise and

reward the contribution of the social base, the Board of Directors proposes, by virtue of the good

results achieved in the financial year, to attribute to each partner, in accordance with art.3 par.2 item

b of Law 142 of 3 April 2001 and subsequent modifications, as a rebate, an amount determined in

relation to the quantity and to the quality of the work carried out during the course of the financial

year 2007. The amount that the Board of Directors proposes to the Assembly of partners to be at-

tributed to each individual partner, based on the criteria set out above, amounts to Euro 1.100.000,

which already appears recorded as item B9 of the Profit and Loss Account between the personnel

costs like the integration of the salaries paid out to the working partners during the course of 2007,

50% intended as a free increase of the underwritten and disbursed capital and the remaining 50%

as the integration of the salaries owed to cooperative partners, conditions, these, both expected by

article 62 of the social statute and in accordance and in effect of which to art.6 second paragraph of

the DL no 63/02 converted in the Law no 112/02.

With this significant Rebate proposal, which has naturally been made in respect of the limits expect-

ed by the law and by the Social Statute, we desire to give a strong signal not only to our partners, but

report on the management of the financial year ending as of December 31, 2007

55

also to those who are not yet partners but hope

soon to become one.

We believe that the forms of self-incentivisation

of the cooperative entity, such as the rebate,

and the relationship with both the social base

and with our “stakeholders” are noted also by

those that will read and analyse the data of our

budget, and they will only be able to ascertain

the uniqueness, not so much of our society, but

of an entity making part of a world, that of the

Cooperative, that is surely unique and exciting,

but which today unfortunately is still the sub-

ject of discussion for its fundamental values and

principles.

Indeed, under pressure from the European

Commission, the new government has already

announced that it wishes to intervene on the

legislation concerned, even to the limit of the

constitutional order that forecasts (article 45)

the promotion of the cooperative form, going

to limit further several institutions, including

that of the social loan. We consider it timely to

recall that the cooperative legislation began to

develop with the liberal governments of the be-

ginning of the 20th century, and it is fruit of the

idea that the cooperative movement represents

a part of the economy with precise characteris-

tics. Under the purely economic profile, among

these certainly not-unimportant peculiarities,

was inserted the now only partial non-taxable

status of the profits, provided that these be-

came set aside in an indivisible reserve, and

the social loan. Both of these institutions are

assigned in aid of the cooperative society for

its entrepreneurial and occupational develop-

ment, and as guarantee of its future. In fact, it

was for workers without economic means, often

unemployed and without social assistance, that

these institutions in the cooperative undertak-

ing were used, then as today, to capitalise. In

not taking care of these principles, the French

multinational groups have confused the foun-

dational principles of the cooperative system

with the presumed assistance of the State to the

cooperative system, deliberately ignoring that

the first to take advantage of this system are the

millions of people, the associates, who are seen

acknowledging several points of interest more

in their loan in respect of those of the banking

current accounts, and it allows the associate to

contribute financially to the development of his

or her own Cooperative undertaking.

At a time when a social disinterest in participa-

tion is perceived, we instead seek to effect de-

mocracy in people: not only in daily life, but do-

ing so that even in their projects, in their dreams,

they reason in democratic terms. We believe that

this is a fact which marks the life of a cooperator.

A great cooperator, our ex-President Giuseppe

Tanferri, who passed away not long ago, used to

say: “Living in the cooperative means that when

the workers are not happy with the directors,

they change them, whereas in a private enter-

prise when the directors are not happy with the

workers, they fire them,” and they transfer the

factories to where they earn the most.

In a society of precarious workers, living in a

cooperative like ours is a big expression of de-

mocracy, which often is not seen or appreciated

in the right way. Let us think of the property of

the enterprise; how many people today know

exactly who owns their company … For us, it is

normal to live in a cooperative knowing that it

belongs to the Partners, who are called at least

once a year to give their consensus to the work

of the directors, or to change them if they wish,

freely.

In its 110 years, our company has had several

generational changes, and if we are still ac-

tive today, we owe that to the good choices of

those who preceded us in the government of


the cooperative society and to the sacrifices of

the partners in safeguarding the cooperative

values.

As far as the cooperative context in which we

move is concerned, during the financial year

2007, the vivacity of the cooperative economy

and its capacity to produce rhythms of growth

superior to the averages of the Country was

once more confirmed, both on a national level

and across various territories.

Indeed, the full-year forecast data relative to the

cooperatives joining Legacoop show an incre-

ment of the turnover of +4.09%, confirming the

importance of the cooperation for national de-

velopment.

Employment has increased by 2.87%, with more

than 12.000 additional employees in respect

of the previous year. Another strongly positive

data is that relative to the partners, who grow

overall by 2.67%, coming to approximately eight

million people, confirming the social rooting ca-

pacity of the cooperation.

The positive dynamic of the turnover concerned

all sectors of the cooperative, with the excep-

tion of the food division which results stagnant,

due to the high increase in the costs of the raw

materials; particularly positive points are on the

other hand noted in the work and production

sector, the services sector and the social coop-

eration sector, which obtain results greater than

the cooperative average.

In the distribution sector, even with a modest

dynamic of the consumption of foodstuffs, the

consumer and retailer cooperatives have in-

creased sales and employees while continuing

with their development phase.

These are, perhaps, the last data to worry our

French competitors. The cooperative system

continues to develop even, and above all, in

those productive sectors that are attractive to

foreign multinationals. These, in attempting to

dismantle the scaffolding which holds up the

fiscal structure, as we have seen before, think to

have an easy life on the national market, com-

pletely ignoring the aspects of a social character

which are the real brand to be defended.

Measuring the effects of a social character that

the cooperative system produces is possible via

so-called social accounting. This operates in a

parallel mode to ordinary accounting, through

reclassification and indexing of all assets.

We will see the indices applied to our budget in

the following pages.

Social accounting is concentrated on the analy-

sis of the riches created and distributed by CPL

Concordia to the advantage of the whole sys-

tem with which the Cooperative itself interacts.

Under this profile, the social performance of

the cooperatives are measured through the

determination of the Gross Global Added Value

(GGAV).

The Gross Global Added Value is an economic

value which describes the riches that the Coop-

erative, through its own activity, is able to gen-

erate and allocate among all the subjects that

– directly (workers, partners, shareholders, back-

ers, public administration) or indirectly (commu-

nity, the cooperative world) – have an interest

them. The Gross Global Added Value (GGAV) is

determined by the difference between the pro-

duction value and the value of the conditions of

production acquired abroad; it is a set of verifi-

able and checkable data, obtained from a reclas-

sification of the profit and loss account which is

partially different in respect of that carried out at

head office, of analyses of the finance account.

The Gross Global Added Value, therefore, de-

scribes the economic undertaking towards

whoever, internally or externally to the Coopera-

tive, interacts with the same.

57

In the following table, the determination of the Gross Global Added Value is analysed:

GLOBAL GrOSS ADDED vALuE(values expressed in Euro)

2007 2006 2005

Income from sales and services 179,562,310 90,23% 172,845,785 93,88% 165,438,299 91,44%

Variation in inventory of finished and semi-finished goods and work in progress 2,658,347 1,34% (2,444,283) -1,33% (3,494,561) -1,93%

Other income and proceeds 4,172,220 2,10% 3,771,923 2,05% 8,510,074 4,70%

Income from Typical Production 186,392,877 93,67% 174,173,424 94,60% 170,453,812 94,21% Income for atypical production (increases in fixed assets for internal works) 12,604,307 6,33% 9,945,241 5,40% 10,475,074 5,79%

A) vALuE OF PrODuCTION 198,997,184 100,00% 184,118,665 100,00% 180,928,886 100,00% Consumption of Prime Materials and Materials of Consumption (63,848,770) -32,09% (53,925,418) -29,29% (53,029,303) -29,31%

Costs of services (62,556,747) -31,44% (63,688,996) -34,59% (68,481,472) -37,85%

Costs for use of third party property (7,677,374) -3,86% (9,169,583) -4,98% (10,622,070) -5,87%

Other operational fees (1,103,941) -0,55% (1,255,005) -0,68% (1,359,978) -0,75%

B) INTErmEDIATE COSTS OF PrODuCTION (135,186,833) -67,93% (128,039,002) -69,54% (133,492,822) -73,78% CHArACTErISTIC GrOSS ADDED vALuE 63,810,351 32,07% 56,079,664 30,46% 47,436,063 26,22% Proceeds from partnerships 91,550 0,05% 550,195 0,30% 4,527,721 2,50%

Corrections on financial activity (1,406,642) -0,71% (2,347,069) -1,27% (2,162,320) -1,20%

Balance of the Extraordinary Operations 0 0,00% 1,402,234 0,76% 1,831,359 1,01%

C) ACCESSOrY AND ExTrAOrDINArY COmPONENTS (1,315,093) -0,66% (394,640) -0,21% 4,196,760 2,32%

GLOBAL GrOSS ADDED vALuE 62,495,259 31,41% 55,685,024 30,24% 51,632,823 28,54%

GLOBAL GrOSS ADDED vALuE

Values expressed in Euro

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

62,4

95

55,6

85

51,6

33

2007 2006 2005


In the following table, how the GGAV is distributed among those with an interest is analysed:

PrOSPECT OF DISTrIBuTION OF THE GLOBAL GrOSS ADDED vALuE(values expressed in Euro)

2007 2006 2005

Gross Remuneration 263,489 224,445 159,301

Rebate 1,100,000 750,000 500,000

Re-evaluation of the share quota 74,655 74,815 60,180

Profits distributed to the Shareholders of Coop. 612,787 625,883 620,137

Burdens of Social Use 239,372 190,457 136,294

TOTAL OF PArTNErS AND SHArEHOLDErS 2,290,304 1,865,601 1,475,912

Incidence on the Added value 3,66% 3,35% 2,86% Direct Remunerations 30,800,065 26,775,219 25,894,533

Payments and salaries 25,900,306 22,444,016 21,907,066

Provision for severance pay 1,723,462 1,486,411 1,487,109

Personnel costs 3,176,297 2,844,793 2,500,359

Indirect Remuneration 8,373,756 7,096,185 7,299,499

Social costs 8,373,756 7,096,185 7,299,499

TOTAL PErSONNEL 39,173,821 33,871,404 33,194,032

Incidence on the Added value 62,68% 60,83% 64,29% Direct Taxes 4,172,062 5,134,301 2,608,176

Indirect Taxes and other Taxes or Expenses 1,214,608 1,034,795 649,243

TOTAL PuBLIC ADmINISTrATION 5,386,669 6,169,096 3,257,418

Incidence on the Added value 8,62% 11,08% 6,31% Net Financial Burden 2,432,387 2,763,220 3,487,241

Bank Rates 3,278,902 3,453,363 3,570,562

Rates on Debenture Loans 0 0 0

Rates on loans from Partners 150,029 108,723 100,560

Other 40,109 122,323 440,339

- Active Rates 1,036,653 921,189 624,221

Bank Expenses and Commissions 711,738 640,541 719,313

TOTAL ExTErNAL BACkErS 3,144,125 3,403,761 4,206,554

Incidence on the Added value 5,03% 6,11% 8,15% Mutual Funds 176,391 106,582 93,227

Cooperative League Association Contributions 183,817 184,635 184,628

TOTAL COOPErATIvE mOvEmENT 360,208 291,216 277,855

Incidence on the Added value 0,58% 0,52% 0,54% Donations 149,971 166,194 137,660

TOTAL COmmuNITY 149,971 166,194 137,660

Incidence on the Added value 0,24% 0,30% 0,27% Amortisations and Allowances 7,237,795 7,396,758 6,908,672

Profits assigned to the Reserve 4,752,365 2,520,995 2,174,721

TOTAL BuSINESS SYSTEm 11,990,160 9,917,753 9,083,393

Incidence on the Added value 19,19% 17,81% 17,59% GLOBAL GrOSS ADDED vALuE 62,495,258 55,685,024 51,632,824

59

“Generate real work” in the present and in the

future, starting with the work carried out in the

past. This is where the ability of CPL Concordia

to grow and develop together with the regions

and the individuals with which it has a relation-

ship comes from: the creation of riches in the

present is subject to the bind that links the part-

ners and the workers of today to the partners

and the workers of tomorrow. We hold it useful

to read and evaluate the last years of the Coop-

erative in the light of these considerations.

In past years, the cooperative invested in new

businesses but the regulations and the condi-

tions of the markets did not permit to achieve

quite as much as was expected (especially with

regards to the liberalisation of the energy sec-

tor).

The process of dismission and restructuring

which arose between 2004 and 2005 has re-

defined the business lines and has permitted

a re-balancing of the financial structure for the

medium and long term, maintaining high pro-

ductivity and work capacity, however.

The Cooperative is living through a phase of

growth and development. The year 2007 is an

integral part of a journey begun in 2004 and

which is guaranteeing the hoped-for results.

With the company policies adopted in the two-

year period 2005-2006, CPL Concordia finan-

cially structured itself and now remains of those

cooperatives that is highly capitalised.

The excellent result of 2007 (the GGAV grew by

12.23% in respect of 2006 and by 21.04% in re-

spect of 2005) makes it even more evident how

much the will, the sense of belonging, the shar-

ing of ideas and the motivational aspect must

always constitute the reference view of our Co-

operative.

The above-mentioned principles and the regu-

lations associated with the cooperative model

define and regulate the methods of distribution

of the Added Value among the various holders

of interest. From the analysis of the 2007 results

emerge some reflections regarding the follow-

ing subjects: personnel, external backers, public

administration, enterprise system, community,

cooperative movement, partners and share-

holders.

Internal Personnel The employed Personnel are the stakeholders

that obtain from the Cooperative the most rel-

evant share of the Added Value (over 39.1 mil-

lion Euro, equal to 62.68% of the overall Global

Added Value produced, in respect of the 33.8

million Euro from 2006, equal to 60.83%).

The value assigned for the workers is a tangible

sign of how much the cooperative remains loyal

to its mission of “generating real work” in the re-

gions of reference.

The Added Value assigned for the Personnel is

distinguished in two categories of costs for the

company: direct remuneration and indirect re-

muneration.

The direct remunerations comprise all those

components (financial or in kind) which com-

bine to measure the immediate (or deferred)

benefit that the employee obtained from the

relationship with the company.

These make up therefore the direct remunera-

tions of the personnel (corresponding to the

item “Payments and Salaries” of the Financial

Statement), the shares of the “golden hand-

shake” (TFR), the other Personnel expenses, in-

cluding all those costs sustained by the Coop-

erative on behalf of its own personnel

(insurance, meals, travel, training courses, medi-

cal examinations, clothing).

The indirect remunerations represent the so-

cial contributions charged to the company. The

Shareholders and partners

3,66%

Internal Personnel 62,68%

Public Administration 8,52%

ExternalBackers5,03%

Cooperative movement 0,58%

Enterprise system19,19%


costs sustained by the company for the personnel are not perceived as remuneration by the inter-

locutor, insofar as they transform in benefits acquired in an indirect manner, through the Company in

charge of the management of the social service.

The significant increase in the cost of the personnel in respect of previous years is to be attributed in

part to the new company organisation which, together with the acquisition of important orders, has

generated new requirements for human resources, increased by 129 units during the course of the

year. This increase is principally due to the assumption of young graduates.

The personnel cost is a fundamental element for the development of a work production cooperative.

At the same time, it can become a problem if the cost is not supported by positive economic results

in the production activity, both immediate and prospective.

The analysis of the Value of Production in respect of the number of employees reveals a drop in pro-

ductivity (from € 241.309 in 2006 to € 234.944 in 2007); this data is however justified by the choice to

increase considerably the company staff in the face of investments which will bring results in future.

The following table analyses the production factor of the employees, as well as the investments in

training and the occupational dynamic::

INDICATOr OF EmPLOYEE PrODuCTIvITY*2007 2006 2005 2004 2003 2002

* Value of production/No of employees at 31/12 of the year 234.944 241.309 231.071 228.877 214.038 201.069

Average staff per year 847 763 783 771 728

INvESTmENT IN HumAN rESOurCES2007 2006 2005 2004 2003 2002

TRAINING COSTS 814.013 469.688 370.906 520.411 579.639 404.678

WORK POSITIONS CREATED NET OF RESIGNATIONS 129 31 -38 42 94 19

External BackersThe External Backers are the Credit Institutes and other financers (among which are, once again, the

partners of CPL Concordia through the savings accounts) who supply the Cooperative with the finan-

cial sources necessary for the continuation and the development of its activities.

The remuneration of the credit capital is composed of the total of the financial burdens (net of the

proceeds) and the Expenses that the Cooperative has sustained for the banking services enjoyed.

In 2007, this value amounts to 3.1 million Euro with an incidence of 5.03% on the distribution of the

Added Value.

The reduction of the costs for the financial burdens continues, despite the progressive increase on

taxes recorded during the two-year period 2006-2007 and still now underway. These last have been

mitigated at the hands of the Cooperative through a restructuring of the debt already since 2005. All

the details which have arisen from the constant improvement of the financial structure of the Coop-

erative will be provided in the chapter dedicated to the financial analysis.

Public administrationThe Public Administration received 8.62% of the Added Value under the form of direct taxes (4.1

million Euro) and indirect taxes, as well as other expenses relative to the relationships with Public

Agencies (1.2 million Euro).

The Cooperative is subject to an elevated fiscal load, just as the whole entrepreneurial sector of the

61

country: we are an integral part of a system

which must sustain itself and guarantee com-

mon equity and development, even through

the payment of taxes.

In 2007, CPL Concordia produced a fiscal supply

equal to 2.1 million Euro of Corporate Tax (equal

to 33% of the same) and 2 million Euro in re-

gional tax on business activities (equal to 4.25%

of the net value of production).

Enterprise systemThe Enterprise System reserved itself 11.9 million

Euro, equal to 19.19% of the wealth produced,

against the 9.9 million Euro of 2006, with an in-

cidence of 17.81% on the Gross Global Added

Value distributed.

In 2007, the Company set aside more than one

million Euro as risk cover on work carried out,

but it has above all paid 4.7 million Euro into a

closed reserve, contributing to the increase in its

net assets.

The total amortisation represents the most im-

portant share of the distributed Added Value, for

a value equal to 6.1 million Euro, which is nev-

ertheless in line with previous financial years.

The amortisation is the cost of the systems, the

concessions and the costs sustained through in-

vestments, distributed for their value over the fi-

nancial years in which these same are used and/

or develop activity.

CommunityA total of 150 thousand Euro has been distrib-

uted to the Community, 0.24% of the gener-

ated wealth. These contributions have gone

to finance associated companies, cultural and

sporting associations for a non-lucrative aim,

initiatives and events of a cultural, sporting and

folkloristic character.

CPL Concordia is very sensitive to the activities

of Council Administrations – for the organisa-

tion of events – and of Sporting Associations,

especially with regards to the activities of the

youth sectors.

List by Category of Contributions to the Community 2007

CULTURAL ASSOCIATIONS 56,345

LOCAL SPORTS ASSOCIATIONS 25,650

AGENCIES AND COUNCILS 8,682

EVENTS 4,500

MOVEMENTS 14,955

SCHOOL 6,960

ENTREPRENEURIAL COMPANIES AND ASSOCIATIONS 32,880

TOTAL 149,971

Cooperative movementBy contributing to the diffusion of the model

which it promotes, CPL Concordia sustains the

Cooperative Movement, both through the pay-

ment of a share of the Profits from the financial

year to Mutual Funds for the promotion and the

development of the Cooperation, and through

the Associative Contributions.

According to the regulations which regulate

the cooperation (Law 59/92), the setting aside

amounts to 3% of the profits of the financial

year.

The Associative Contributions towards the Co-

operative League (183 thousand Euro) are in-

cluded in Added Value, which amounts to 360

thousand Euro (0.58% of the Distributed Added

Value) for 2007.

Partners and ShareholdersThe Added Value assigned for the Partners and

Shareholders (owners of the capital of the Coop-

erative) amounts to 2.29 million Euro, equal to

3.66% of the wealth produced, unlike the values

distributed in 2006, 1.86 million Euro and 3.35%

respectively. The increase of this value is of con-

siderable importance, since it guarantees a suit-

able remuneration and a sign of continuity and

improvement.

Over and above the gross remuneration of the

partner’s capital (equal to 6.00% gross of the So-

cial Capital), the partners can benefit from the

distribution of a rebate equal to 1.1 million Euro,

according to the directives prescribed by the

regulations and by the Cooperative.


Whereas, in relation to 2006, the gross remuneration has remained almost unvaried (equal to 6%), the

rebate delivered has increased by 350 thousand Euro (in 2006, it was equal to 750 thousand Euro).

Finally, CPL Concordia has assigned 239 thousand Euro for the costs of social burdens during the

course of 2007. This value is the fruit of the following factors: contributions in kind, social trips, social

dinners and parties for partners and their families, contracts for subscriptions to magazines, theatres

and others.

The capital of the Cooperative is also formed from the capital underwritten by the Cooperative Partic-

ipation Shareholders, equal to 7.5 million Euro, 3 million of which are underwritten in relation to the

new five-year plan decided upon by the Board of Directors in 2004. The shareholders have obtained

for 2007 a yield of their own capital equal to 8% gross of the shares.

Under this aspect, even 2007 has recorded a satisfying number of admissions to partnership, a fact

that certifies the level of loyalty that is to be found in our reality at this time. In the view that follows,

the movements of the financial year can be analysed:

ADmISSIONS AND WITHDrAWALS IN THE FINANCIAL YEAr 2007

Working Partners on 01/01/2007 admissions withdrawals mov. Internal movements on 31/12/2007

workers 184 27 5 -6 200

office workers 214 33 8 4 243

directors 15 0 0 2 17

totals 413 60 13 0 460

Considering the entire Group, among our approximately 1000 employees, there are 460 partners

spread across the national territory. Especially for young people (our average age is 38 years), the

cooperative represents an example and a gymnasium of industrial democracy.

CPL Concordia is composed of the partners and their families. It is in respect of them and the under-

taking to improve their quality of life both in the present and the future that the Cooperative oper-

ates, also through the continuous process of investments.

Investments that create valueNet Investments 2007 2006 2005

INTANGIBLE FIXED ASSETS 6,259,983 3,343,989 4,335,435

MATERIAL FIXED ASSETS 7,696,263 7,057,044 (5,676,980)

PARTNERSHIPS (1,325,351) 1,734,233 520,488

FINANZIAM. FUNDING TO THE GROUP AND OTHER BUSINESSES (106,905) (6,519,511) 5,861,500

TOTAL INvESTmENTS 12,523,990 5,615,755 5,040,443

With the strategic objective of consolidating our own characteristic assets achieved, as already indi-

cated several times, the level of investments has undoubtedly grown in 2007, in respect of previous

years.

The value of the capital assets has increased on the whole, despite the reduction in participations as

the effect of the reduction of the capital of the Coopgas S.r.l. company following the merger opera-

tion for incorporation into the Gas company of Concordia S.p.A.

Considerable growth also for the values inherent to the material capital assets as an effect of the

investments on the gas distribution networks, with a notable increase of the Councils served.

The net investments in immaterial capital assets are predominantly linked to multi-year undertakings

for the construction of plants for heat management and public illumination which, at the end of the

contract, will remain the property of the customer.

63

Research and DevelopmentThe Cooperative has, moreover, continued dur-

ing the course of the financial year in its activ-

ity of research and development and has ad-

dressed its efforts on the following projects in

particular:

activity 1: Study and design for the optimisa-

tion and extension of the field of application

of the electronic and remote reading systems

known as EDOR, EMET, EFOR.

activity 2: System, design and implementa-

tion of a new electronic scent system known as

EASYDOR.

activity 3: Study, development and implemen-

tation of a new service/product for the realisa-

tion of solar plants.

The activities here above were predominantly

carried out in the plant of Concordia sulla Sec-

chia (Mo), Via Achille Grandi no 39 and in the

building of Mirandola, Via di Mezzo 64.

For the development of the projects indicated

above, the Company has sustained costs per a

total value equal to € 256,851.26.

On this value, the company has the intention

of making use of the tax credit expected by the

law 296/06 art.1 paragraphs 280-283 modified

by the law 244/07 art.1 paragraphs 53 and 66.

On the cost of the personnel, equal to €

204,288.22, the company has the intention of

availing itself of the tax abolition provided for

regional tax on business activities art.11 of the

DL no446 of 15 December 1997, modified by

art.17 para 3 of DL no247 of 18 November 2005,

acknowledged by law 296/06 art.1 para 266.

The material capital assets present a positive

balance of 7.7 million Euro. The principal invest-

ments refer to the distribution networks and to

the meters relative to the concessions of gas

distribution in activity during the financial year

2007; investments that guarantee more than 4.5

million Euro.

In particular, the concessions that have carried

out their distribution activity refer to fields “Cam-

pania 25”, “Campania 30”, “Calabria 20”, “Sicilia 12”,

“Sicilia 17” and to the Municipality of Cittanova

(Calabria), Palma di Montechiaro (Sicilia), Camas-

tra (Sicilia) and San Giuseppe Vesuviano (Cam-

pania).

The other significant item that concerns the in-

vestments in material capital assets is given by

the buyback of the land adjacent to the head

office of the Cooperative at Concordia s/s, for an

amount equal to 1.7 million Euro.

The 7.7 million increase in the material capital

assets are attributable to 4.5 million Euro for

internal works and 3.2 million Euro for external

acquisitions.

The balance of the variation on the financial

capital assets, equal to 106,905 Euro, is princi-

pally attributable to: increase in financial cred-

its towards companies of the group in the form

of profitable financing, for an amount equal to

695,000 Euro; decrease of financial credits to-

wards others, for an amount equal to 800,000

Euro.

The financial movements which have had the

greatest impact during the course of the finan-

cial year were the following:

reduction of the capital of the Coopgas S.r.l.

company following the merger operation

for incorporation of the Gas company of

Concordia S.p.A

increase of capital for 900,000 Euro in the

Marigliano Gas S.r.l. company, concession-

holder for gas distribution in the municipal-

ity of Marigliano (NA)

increase in capital of 1.25 million Euro for the

Ischia Gas S.r.l. company, concession-holder

for gas distribution in the municipality of Is-

chia (NA), as expected among the covenants

of financing provided to the Company from

the Banca Popolare dell’Emilia Romagna for

6 million Euro

CPL Concordia finances the companies control-

led and connected by the Group. The Coopera-

tive agrees a holding role with functions of co-

ordination and support of the activities carried

out. The companies of the Group that made the

greatest use of the resources of CPL Concordia

in 2007 are: ERRE.GAS S.r.l., Marigliano Gas S.r.l.,

CPL Concordia Filiala Cluj Romania S.r.l., Si.Gas

S.r.l.. Financing under the form of profitable and

non-profitable financing was granted to these.

During the course of 2007, the cover of the fi-

nancial demand of the controlled and connect-


ed companies, through the implementation of

taxing bank financing, has allowed the Group

Leader to reduce its financial exposure towards

the companies of the CPL Concordia group.

The Added Value reinvested in the Cooperative

which was calculated in this head office, is in

fact very similar to the Cash Flow of the finan-

cial year inasmuch as the non-distributed prof-

its were added together with the amortisation

and the allowances. The difference between the

two quantities, therefore, is uniquely due to the

absence, in the Added Value, of the amount set

aside to the TFR Fund (this figure makes up part

of the added value in favour of the employees)

and of the variation of the net circulating capital

(which expresses in brief terms the undertaking

in assets, net of the assigned sources). The Add-

ed Value is understood in this case in its mean-

ing of source of financing par excellence and

measures the revenue generated by the man-

agement used for financing the investments.

The trend of the relationship between the In-

vestments Total and the Added Value assigned

to the Enterprise System shows how the con-

solidation of the historical assets and the rela-

tive plan of dismissions for the two-year period

2005-2006 has brought a phase of new material

and immaterial investments in 2007, in which

the enterprise system contributes in part to the

covering of the costs.

The value of the Net Investments per Employee

highlights that the Cooperative, following im-

portant efforts in the two-year period 2005-2006

to re-balance its own financial and economic

structure and to redefine its business model, has

been able to best take advantage of the oppor-

tunities created in the preceding years, invest-

ing a large part of the resources generated by

the management in new projects.

The year 2007 represents an important goal for

CPL Concordia which expresses the strength of

the Cooperative in pursuing its assumed com-

mitments. The partners and the employees,

each by their own contribution, have guaran-

teed the continuity, the reaching of objectives

and the possibility of thinking of the future with

serenity and awareness of its own means.

Safety and the EnvironmentUntil now, the elements of a financial and eco-

nomic character with a strict social impact

have been analysed, underlining that the term

“social” does not refer exclusively to the com-

pany sphere, but also and especially to all the

interlocutors or stakeholders of reference. In this

context, that which the Cooperative has carried

out for years in terms of safety and environmen-

tal impact assumes particular relevance.

Our Safety and Environment office carries out a

series of tasks which are across all the activities

of the company, such as the drafting of safety

plans and the management of the waste com-

ing from the construction sites.

In order to be able to best carry out this task,

the office has produced a document of opera-

tional safety plans or risk evaluation, which must

always be completed upon request. This docu-

ment is available to all the workers who manage

the sites and permits the collection in a coordi-

nated manner of the data that is required by the

safety inspectors for the completion of the risk

evaluation documents. Moreover, it has been in-

tegrated with a part that concerns the manage-

ment and the disposal of waste. This, in order to

support the decisions of those in charge when

they are concerned with finding the best way

for disposing the waste products of the sites.

Moreover, the following waste was disposed of

in the head office’s temporary deposit: 5.600 kg

of oils; 18.615 kg of wash water solutions and

NET INvESTmENT FOr EmPLOYEE

Values expressed in Euros

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

13,7

17

7,16

3

6,69

4

2007 2006 2005

65

mother liquor (odorising reclamation service);

1.320 kg of polyethylene, 19.320 kg of paper and

cardboard; 1.000 kg of electrical and electronic

waste; 54.780 kg of steel; 13.210 kg of wood;

61.820 kg of mixed packaging; 5.455.930 kg

of earth and excavated rocks; 11.522.030 kg of

mixed construction and demolition waste; and

324.260 of cement piles.

As for the evaluation, 123 risk evaluation docu-

ments were edited (POS and art.7 of law 626)

which, including the ongoing adjudication

works, become 250.

In this regard, it should be noted that the Coop-

erative has made itself the promoter of an initia-

tive which has turned into research carried out

in collaboration with the University of Modena

and Reggio Emilia in regard to the perception of

risk in the company.

Fortunately, our Cooperative has a very low ac-

cident index, just as the index of the seriousness

of these same is also low.

The accidents of the last decade can be ana-

lysed from the following table:

YEAR ACCIDENTS OCCURRING

N°

1997 54

1998 50

1999 42

2000 30

2001 61

2002 49

2003 48

2004 71

2005 65

2006 41

2007 54

In 2007, there were 54 accidents among an an-

nual average of employees equal to 847 units.

This means, therefore, an incidence of 6.4%, with

a frequency of 39.02, as can be inferred from the

following table.

FREQUENCY INDEX SERIOUSNESS INDEX

Fa Sa

81,04 1,44

66,47 1,36

52,14 0,84

32,99 0,36

53,27 1,69

44,58 0,87

38,18 1,21

52,78 0,93

46,73 1,50

31,84 0,52

39,02 0,83

The seriousness index is determined from the

relationship between the hours lost and total

hours worked, per thousand.

Also in this case, the resulting index is extremely

low.

It is important to note, however, that the Coop-

erative constantly checks on the use of the PPE

(personal protection equipment) and the means

of collective protection, even if many studies af-

firm that the most decisive factor in the reduc-

tion of accidents is training.

During the course of the financial year 2007, in

fact, 318 hours of basic training courses were

carried out, as were 66 hours of first aid, 55 of

fire safety, 9 for waste disposal, 64 on forms, 15

for category 3 PPE and 4 on PES PEI.

For the sanitary medical examinations and ma-

terial acquisition for first aid, 67.750.00 Euro was

spent.

All the necessary interventions for improving

the efficiency and the control of the safety sys-

tems have already been developed for the year

2008.

The financial economic elements that character-

ise the balance sheet of the financial year 2007

are analysed below.


Analyses of the economic and financial indicators of the financial year 2007

It is useful to state beforehand that having done an analysis of the data that emerge from the finan-

cial year 2007, there is a clear continuity of values in respect of the previous financial year, both under

the economic profile and the financial one. That which has changed in respect of the previous finan-

cial year was not the strategy, but the profitability of the distinctive management.

Throughout our analysis, the principal elements which have characterised the formulation of the

balance sheet of the financial year 2007, seen under the patrimonial, economic and financial profile,

will be provided.

Patrimonial analysesIn order best to proceed to a rapid analysis of the patrimonial structure of the Cooperative, we here

analyse the Balance Sheet 2007 when compared with that pertaining to the 4 previous financial

years, in order to provide the data for an entire five-year period.

rECLASSIFIED ASSETS ACCOrDING TO THE mETHOD OF LIQuIDITY OF THE POSTS(values expressed in Euro)

Balance sheet dates AS OF DEC. 31,2007

AS OF DEC. 31,2006

AS OF DEC. 31,2005

AS OF DEC. 31,2004

AS OF DEC. 31,2003

ASSETS

Short term activity

Liquid assets 9,820,928 11,127,629 5,046,492 12,719,079 3,972,279


Credits towards clients and others 113,401,341 114,793,337 109,284,631 100,511,093 92,118,130

Stocks 21,612,224 19,608,968 21,519,647 24,311,527 21,353,911

Credits towards partners for payments still owing 1,258,137 1,210,554 1,246,406 1,265,512 992,886

Accruals and deferred income 4,951,759 4,968,267 4,909,661 4,930,132 565,767

Total short-term assets 151,160,185 151,708,755 142,006,836 143,737,343 119,004,324 Fixed assets

Intangible fixed assets 13,498,336 11,408,796 12,243,148 11,929,375 9,221,627

Material fixed assets 47,827,824 42,099,293 36,715,963 44,255,988 48,267,180

Financial fixed assets 53,307,242 55,983,102 62,679,434 58,742,296 59,647,266

Total fixed assets 114,633,402 109,491,190 111,638,544 114,927,659 117,136,073 Total ASSETS 265,793,587 261,199,946 253,645,380 258,665,001 236,140,397

OrDEr COuNT 171,468,227 177,431,671 184,742,912 167,041,130 157,174,363

LIABILITIES Short term liabilities

Bank debts 10,806,199 10,701,805 9,645,384 40,298,359 23,604,381

Debts with other backers 3,224,800 2,545,157 2,331,665 2,427,745 3,545,959

Financial debts towards controlled/connected companies 246,000 10,914,000 10,650,000 1,700,000 0


Debts towards suppliers 84,072,192 63,749,194 55,066,894 52,715,486 46,032,160

67

Balance sheet dates AS OF DEC. 31,2007

AS OF DEC. 31,2006

AS OF DEC. 31,2005

AS OF DEC. 31,2004

AS OF DEC. 31,2003


Debts towards controlled companies 2,568,636 4,306,318 4,927,300 5,784,269 1,065,922

Debts towards connected companies 99,023 90,904 503,126 167,236 437,850

Tax debts 3,868,897 6,817,606 3,474,793 4,058,863 2,690,631

Debts towards social security and welfare institutions 2,235,968 1,425,301 1,321,314 1,376,026 1,259,661


Accruals and deferred income - liabilities 291,387 340,704 507,784 576,489 482,595

Total short-term liabilities 125,971,378 117,245,540 106,860,718 123,173,712 90,009,810 medium-long term liabilities


Bank debts 36,348,586 45,273,309 50,097,220 39,361,654 46,586,869

Debts with other backers 0 0 0 0 0




Fund for social security and other welfare institutions 21,526 21,526 21,526 21,633 45,825

Other funds 1,335,537 1,839,090 2,836,404 4,494,620 3,705,046

Total medium-long term liabilities 45,608,627 55,342,121 61,042,784 52,223,982 57,707,593 Net equity

Share capital 13,706,084 12,952,749 12,702,218 13,335,213 14,878,043

Re-evaluation reserve 656,679 656,679 656,679 656,679 656,679

Legal reserve 72,387,954 69,866,959 67,692,238 67,692,238 66,683,567

Reserves foreseen by company by-laws 78,184 78,184 78,184 78,184 78,184

Foreign currency conversion fund 0 0 0 0 0

Merger advance 235,597 235,597 235,597 3,102,096 3,102,096

Capital gains reserve Law 784/80 1,269,396 1,269,396 1,269,396 1,269,396 1,269,396

Financial year profit/loss 5,879,687 3,552,720 3,107,566 -2,866,499 1,755,028

Total net equity 94,213,582 88,612,285 85,741,878 83,267,307 88,422,994

Total LIABILITIES 265,793,587 261,199,946 253,645,380 258,665,001 236,140,397 OrDEr COuNTS 171,468,227 177,431,671 184,742,912 167,041,130 157,174,363

As established above, the financial year 2007 is

characterised by elements of continuity in re-

spect of the previous financial year.

The patrimonial asset, which amounts to 265.8

Euro/000, increased in respect of the previous

financial year, exclusively for the effect of the

increase in the capital assets. The current assets

remained substantially unchanged, which high-

lights a reduction of the credits compensated

by an increase in the remainder.

As far as the trend of the credits of the current

assets is concerned, which are principally cred-

its towards our clients, it is noted that despite

the certainly not rosy situation of our national

economy, during the course of the financial

year, and thanks also to a careful management

of the credits, a disinvestment through the tak-

ings was provided, of significant values.

The increase of the investments is native to

the characteristic activities of the cooperative,

in particular the investments in plants for heat

management, registered in the immaterial capi-

tal assets, and investments in the construction

of gas distribution networks, registered in the

material capital assets. The Financial capital as-

sets are instead reduced, above all as effect of

the reduction of social capital by redundancy,

paid off by the controlled company Coopgas


S.r.l. for 10.5 million Euro. As far as the movement of the shareholdings is concerned and the com-

ment of these same, please refer to that mentioned in the Additional Note of the balance sheet of

the financial year. As far as the Balance Sheet of Liabilities is concerned, not without satisfaction we

underline that the Net Assets of the Cooperative has reached 94.2 million Euro, assets in which the

group reserve stands out, for an amount equal to 72.4 million Euro. Among the positive elements,

we note the reduction of bank debt – the short-term quota remains constant, the long-term quota

reduced by 9 million Euro – as effect of the loan quotas paid in the financial year without embarking

on new forms of financing. On the other hand, the short-term debts have increased, principally as

effect of the increase in debts towards our suppliers.

Economic analysisIn order best to proceed to a rapid economic analysis of the Cooperative, we here analyse the Profit

and Loss Account 2007 when compared with that pertaining to the 4 previous financial years, in

order to provide the data for an entire five-year period.

ECONOmIC ACCOuNTS rECLASSIFIED WITH THE ADDED vALuE mETHOD(values expressed in Euro)

Balance sheet dates

AS OF DEC. 31,2007 % AS OF DEC.

31,2006 % AS OF DEC. 31,2005 % AS OF DEC.

31,2004 % AS OF DEC. 31,2003 %

Income from sales and services 179,562,310 90,23% 172,845,785 93,88% 165,438,299 91,44% 163,812,968 92,83% 126,624,794 81,26%

Variation in inventory of finished and semi-finished goods

0 0,00% (1,552,050) -0,84% 0 0,00% 0 0,00% 0 0,00%

Variation in work in progress 2,658,347 1,34% (892,233) -0,48% (3,494,561) -1,93%(15,099,987) -8,56% 1,722,321 1,11%

Works in economy 12,604,307 6,33% 9,945,241 5,40% 10,475,074 5,79% 14,111,186 8,00% 17,285,600 11,09%

Other proceeds 4,172,220 2,10% 3,771,923 2,05% 8,510,074 4,70% 13,639,837 7,73% 10,186,712 6,54%

vALuE OF PrODuCTION 198,997,184100,00% 184,118,665100,00% 180,928,886100,00% 176,464,004100,00% 155,819,427100,00%

Costs for acquisitions (63,885,797) -32,10% (54,226,507) -29,45% (52,715,594) -29,14% (49,754,348) -28,20% (46,642,774) -29,93%

Variation in inventory of prime materials 9,455 0,00% 274,277 0,15% (346,772) -0,19% (482,830) -0,27% (378,994) -0,24%

Various costs for services (66,632,270) -33,48%(67,308,739) -36,56%(71,767,063) -39,67% (73,695,523) -41,76%(68,682,473) -44,08%

Expenses for the use of third party property

(8,445,660) -4,24% (9,881,067) -5,37%(10,826,715) -5,98% (8,310,388 -4,71% (6,013,257) -3,86%


ADDED vALuE 58,134,548 29,21% 51,018,249 27,71% 43,108,568 23,83% 41,978,484 23,79% 31,420,185 20,16%

Cost of work and relative costs (35,997,524) -18,09%(31,026,611) -16,85%(30,693,673) -16,96%(30,686,348) -17,39%(28,128,605) -18,05%

GrOSS OPErATING mArGIN 22,137,024 11,12% 19,991,638 10,86% 12,414,895 6,86% 11,292,136 6,40% 3,291,580 2,11%

Amortisation of

material fixed assets (1,967,731) -0,99% (1,673,715) -0,91% (1,863,046) -1,03% (2,581,728) -1,46% (2,075,324) -1,33%

Amortisation of material intangible

assets(4,170,443) -2,10% (4,178,341) -2,27% (4,021,661) -2,22% (2,884,484) -1,63% (1,515,615) -0,97%

Allowances and devaluations (1,099,621) -0,55% (1,544,703) -0,84% (1,023,965) -0,57% (643,054) -0,36% (1,179,448) -0,76%

Amortisations and allowances (7,237,795) -3,64% (7,396,758) -4,02% (6,908,672) -3,82% (6,109,266) -3,46% (4,770,388) -3,06%

EBIT 14,899,229 7,49% 12,594,880 6,84% 5,506,223 3,04% 5,182,870 2,94% (1,478,808) -0,95%

69

Balance sheet dates

AS OF DEC. 31,2007 % AS OF DEC.

31,2006 % AS OF DEC. 31,2005 % AS OF DEC.

31,2004 % AS OF DEC. 31,2003 %


Other financial proceeds 1,036,632 0,52% 904,825 0,49% 579,726 0,32% 317,057 0,18% 935,438 0,60%


CurrENT LOSS 12,466,841 6,26% 9,831,661 5,34% 2,018,981 1,12% 1,586,367 0,90% (3,757,598) -2,41%

Proceeds from partnerships 91,550 0,05% 550,195 0,30% 4,527,721 2,50% 2,336,675 1,32% 20,404,475 13,09%

Corrections on financial activity (1,406,642) -0,71% (2,347,069) -1,27% (2,162,320) -1,20% (5,131,523) -2,91%(10,946,643) -7,03%

Rebate to partners (1,100,000) -0,55% (750,000) -0,41% -500,000 -0,28% 0 0,00% 0 0,00%

Extraordinary operations (34,308) -0,02% 1,402,234 0,76% 1,889,160 1,04% 1,449,751 0,82% (1,058,513) -0,68%

rESuLT BEFOrE TAxES 10,017,441 5,03% 8,687,021 4,72% 5,773,543 3,19% 241,271 0,14% 4,641,721 2,98%

Income taxes for the year (4,137,754) -2,08% (5,134,301) -2,79% (2,665,977) -1,47% (3,107,770) -1,76% (2,886,693) -1,85%

NET rESuLT 5,879,687 2,95% 3,552,720 1,93% 3,107,566 1,72% (2,866,499) -1,62% 1,755,028 1,13%

Even from the brief analysis of the principal

items of the profit and loss account, it is pos-

sible to sustain that the results of the financial

year being analysed are the best of the five-year

period.

Over and above the result of the financial year,

there appears an improvement in all the assessed

indices, beginning with EBITDA (earnings before

interest, taxes, depreciation and amortization)

which, in percentage terms, exceeds 11%.

The operative result, which amounts to 14.9 mil-

lion Euro, has a percentage incidence of 7.49%,

this too the best of the five-year period.

To underline the index of the financial manage-

ment that, in the presence of a system that has

seen the constant raising of interest rates, im-

poses as a financial burden for 2.4 million Euro,

a decrease in respect of the previous financial

year. In the chapter dedicated to the financial

management, the dynamics of the credit sys-

tem and the trend of our financial system will

be analysed in detail. The latter, as mentioned

under the patrimonial structure of the Coopera-

tive, has been in constant improvement over a

number of years.

The principal costs relative to the operational

management were as follows:

personnel costs 35,997

rebate costs 1,100

raw material costs, subsidies, etc 63,877

costs for services and third party assets 75,078

burdens other than management 1,908

interest and financial burdens 3,469

depreciation of shareholdings 1,407

The production, and the margin produced by it,

have made use of the production reorganisation

in territorial areas initiated at the end of 2006.

The proceeds earned in the financial year (value

of production) amount to Euro/000 198.997 and

this amount is due to the supply and services

vALuE OF PrODuCTION TrEND

amounts expressed in thousands of Euros

200,000180,000160,000140,000120,000100,00080,00060,00040,00020,000

0

184,1

18

198,9

97

155,8

19

176,4

64

180,9

29

2003 2004 2005 2006 2007


carried out for third parties and connected and/

or controlled companies, details of which are

available on the following pages; their allocation

is as follows (amounts in Euro/000):

Head Office Area 37,514

Area Roma Sardegna Tirreno 31,872

Area Milano – North West 27,008

Area S,Omero Adriatica 13,205

Area Fano - Umbria 15,107

Area Campania-Calabria-Sicilia 4,366

Area Padova – North East 11,935

Area Toscana 6,665

Overseas 2,717

Technological and Odorising plants 26,803

Distribution Sector 9,759

Information Technology 2,780

Services to companies of the Group 2,319

Construction 1,088

Other Proceeds 5,859

TOTAL 198,997

As it is possible to infer from the above table, the

Head Office Area (which includes Emilia and the

province of Mantova) still represents an impor-

tant reference for the business of the Coopera-

tive. There are, in fact, important clients, such as

Hera Bologna e Modena, Tea of Mantova, Sorgea

and others for whom we are able to offer our

know-how, which runs from the construction

and maintenance of distribution networks for

gas, water and sewerage, emergency interven-

tion, energy services, the Global Services up to

the billing of the consumer.

Of great importance is the Area that includes

Lazio and Sardegna, where the Cooperative de-

cidedly carries out the Heat Management activ-

ity for I.A.C.P. of Rome, the municipality of Rome

and the province of Rome.

Of particular prestige is the thermal manage-

ment of the Auditorium della Musica in Rome,

famous for its large concerts of classical music

and other events of national and international

prominence.

In the next few financial years, the area will

certainly see a strong development due to the

acquisition of important orders concerning the

methanisation of Sardegna. The area will carry

out investments for more than 200 million Euro

in 6 to 8 years.

The other Area that provides a strong impulse is

the north west Area, that includes the regions of

Lombardia, Piemonte, Valle d’Aosta and Liguria,

in which all the activities of the Cooperative for

public, municipal and private clients are carried

out, as for the head office area.

The activities, therefore, range from emergency

intervention and the maintenance of networks

for AEM Milano, through heat management for

the provinces of Alessandria, Asti and Milano,

to thermal management for the Hospitals of

Desenzano and Cremona.

As far as the other areas are concerned, it is con-

sidered that across the greater market presence

outlined by the new company organisation, ever

more interesting numbers can be developed in

the short term. A particular mention is made of

the north east area, protagonist in 2007 of the

construction of one of the largest solar power

plants installed in Italy, in the municipality of

Carano, in Trentino, to be precise. Over an area

of approximately 15.000 m2, at an altitude of

1.200m, CPL Concordia has installed a ground-

based solar power plant comprised of 2.946 so-

lar panels in monocrystal silicon.

AREA OFFICE 1: Headquarters (Concordia and Emilia)AREA OFFICE 2: Rome, Sardinia, and TyrrheneAREA OFFICE 3: Milan and NorthwestAREA OFFICE 4: Sant’Omero and AdriaticAREA OFFICE 5: Fano and UmbriaAREA OFFICE 6: Campania, Calabria, and SicilyAREA OFFICE 7: Padua and NortheastAREA OFFICE 8: TuscanyGreeceDEPARTMENT NO. 1: Odorizers & ServicesDEPARTMENT NO. 2: Technological SystemsDEPARTMENT NO. 3: Supply NetworksDEPARTMENT NO. 4: Information & Comm.TechnologyDEPARTMENT NO. 5: Intergroup ServicesDEPARTMENT NO. 6: Investments in officesDEPARTMENT NO. 7: BuildingTechnical ServiceDivisions being closedServices

18,85% 16,02% 13,57% 6,64% 7,32% 2,19% 6,00% 3,61% 1,37% 5,47% 8,00% 4,90% 1,40% 1,17% 0,33% 0,55% 0,43% 0,89% 1,31%

TOTA

L 19

8,997

,184.4

0

CONTrIBuTION OF THE ArEA OFFICES AND DEPArTmENTS TOWArDS TOTAL WOrkS

71

Some 2.856 of these are fixed and 90 are tracking, that is, that they follow the movement of the sun

by rotating on a vertical axis.

The solar panels, of 170 Wp each one, produce a total of 600 thousand kWh a year which, when intro-

duced in the national transmission network, allows the municipality to earn, through the old Energy

Account, 0.47 Euro for kWh of energy produced. The energy produced by the plant covers the energy

needs of more than ¾ of the resident population.

The Overseas area in 2007 is composed exclusively of orders for the construction of waterworks and

sewerage at Salonicco in Greece. This activity will finish in the first half of 2008. The contribution of

the sectors that deal with the construction of gas reduction groups and the commercialisation of

odoriser was important. The plant construction sector has begun to overcome the national borders

by acquiring important orders in Algeria, where in 2008 a company (AI Power S.p.A.) was formed

which we expect will be able to open up the market in a country of great development potential. The

gas distribution sector, for which we are directly present in important fields in Campania, Calabria and

Sicily, continues to hold a role of great strategic importance for the Cooperative. In 2007, some 29.600

users out of a potential of approximately 100.000 users were served by the distribution service.

The principal indices of the Balance SheetHaving analysed the Net Worth and the profit and loss account, the following table provides the

principal indices of the balance sheet for the five-year period:

PrINCIPAL INDICES OF THE BALANCE SHEETECONOmIC ANALYSIS Actual data

AS OF DEC. 31,2007

AS OF DEC. 31,2006

AS OF DEC. 31,2005

AS OF DEC. 31,2004

AS OF DEC. 31,2003



Ratio of Gross Operating Margin to Value of Production 11,12% 10,86% 6,86% 6,40% 2,11%

Incidence of expenditures and revenue from extraordinary operations 60,54% 71,79% 43,56% 155,31% 218,68%


Incidenza Oneri Finanz. Incidence of Net Financial Expenditures on the R.O. 16,33% 21,94% 63,33% 69,39% -154,10%

FINANCIAL AND CAPITAL ANALYSIS Actual data

AS OF DEC. 31,2007

AS OF DEC. 31,2006

AS OF DEC. 31,2005

AS OF DEC. 31,2004

AS OF DEC. 31,2003

Liquidity index 1,20 1,29 1,33 1,17 1,32




EBITDA/DEBT 54,25% 34,29% 18,34% 15,89% 4,72%

DEBT/EBITDA 1,84 2,92 5,45 6,29 21,19

From the analysis of the indices, it can be noted that, as previously stated, all of the indices are in

constant improvement. In particular, the economic indices of R.O.E. and R.O.I. are to be underlined,

as are those of assets inherent to the ratio of interest-paying debt, or rather the relationship between

the debts towards backers and Net Equity and the classic relationship between DEBT and EBITDA,

which in 2007 was 1.84. The financial world considers this index as balanced when it turns around 3.

The value that emerges from the 1.84% encourages investments, that the Cooperative has already

programmed for the next three-year period and that will be analysed in their own chapter.


Financial Analysis

As far the as the financial management of the

Cooperative is concerned, we provide at first a

brief analysis of the macro-economic context

of reference and will subsequently analyse the

trend of the principal elements characteristic

of the management during the financial year

2007.

The National and International ContextThe year 2007 was marked in the second se-

mester by the sub-prime mortgages crisis in

the United States. This has had considerable re-

percussions on the world financial system, with

protracted trouble in the markets which we can-

not yet say has been overcome. The heavy loss-

es reported by primary international banks that

had made large-scale use of progressive secu-

ritisations on credits, and who were greatly ex-

posed in the practicality in derived instruments,

created a crisis of confidence without precedent

in the financial markets. This forced the Central

Banks to intervene with substantial inputs of li-

quidity to avoid the blocking of the system.

At present, the resolution of the crisis of the fi-

nancial markets seems still far away, the recov-

ery of the runs on the Stock Exchange will re-

quire time and the strains on the prices of prime

materials caused by the strong demand of the

emerging countries give no hint of reducing,

with oil prices hitting new record highs every

day. In Italy, during the course of 2007, the GDP

grew by 1.5%, therefore below the European

average, despite a moderate trend in the com-

mercial balance.

The low level of investments and low growth

in consumption have had a negative influence.

The reduction in purchasing power and in sala-

ries, the strong incidence of energy bills and of

rents or mortgage interest rates have all had a

bearing upon these factors. The relationship

between debt and disposable income of Italian

families has reached an average of 50% at the

end of 2007.

A situation of substantial stagnation is forecast

for our country for 2008.

Even the first industrial production data fore-

shadow a lean dynamic and reflect the scarce

propensity for capital investments expressed

by Italian enterprise, the productivity indices of

which remain fixed, however.

The construction sector is in a slowdown phase

and further deceleration of real estate prices is

forecast. The prospects of this traditionally com-

pelling sector for the Italian economy appear

therefore strongly linked to the development

of investments in infrastructure, for which the

times and financial cover remain to be verified.

The year 2007 has moreover signalled a worry-

ing decline in the characteristic profitability of

the businesses, especially due to the increase in

interest rates. This has the greatest effect on the

Italian industrial system, the businesses of which

are less capitalised in respect of those of other

countries, and therefore are more dependent on

more taxing financial sources. The self-financing

of companies has therefore reduced, and the fi-

nancial requirements are increasing.

Towards the end of the year, and above all in

this first part of 2008, a clear tendency towards

the tightening of criteria for granting credit has

emerged. This has been confirmed by both the

analyses of the Banca d’Italia and those of the

European Central Bank. For now, the phenom-

enon has not brought significant reductions in

the quantity of credits, but it has without doubt

had an effect on the price policy, with the aver-

age spreads in net recovery. Notwithstanding

the difficulty of the economic cycle, no dete-

rioration in the quality of the credit, at a system

level, has been noted however.

The interest rates have been retouched twice by

the Governing Council of the European Central

Bank during the course of 2007, for concerns

linked to the troubles of the financial markets

and the risks of inflation. The rates thus arrived

at the present level of 4%. The bank rate has in-

creased by half a point in one year, as an effect

of these measures.

The estimates for the current year seem to be

73

based on a further increase, even if fears of recessionary effects have for the time being avoided an

increase that the same sources of the European Central Bank took for granted for the first semester

of 2008.

More marked on the other hand was the increase in the Euribor rate recorded during the course

of 2007: at the end of the year, the 3-month rate had risen to 4.765% from the 3.775% of 02.01.07,

whereas the 6-month rate quoted 4.834% against the 3.904% of 02.01.07. Following a brief drop

recorded during the first two months of 2008, the Euribor recovered its growth: at today’s date, it is

approximately 25 basis points higher than the quotation of 31.12.07.

These data confirm that, despite the continuous inputs of money made by the Central Banks, the

request for money on the system remains highly elevated and confidence is scarce: from this, the

increase in taxes on the interbank market so they are greater than those determined by the European

Central Bank.

Trend of CPL Concordia financial management in financial year 2007The financial year 2007 has negatively characterised the result of the financial management of many

businesses, because of the economic reasons seen above. It is of great satisfaction to be able to af-

firm that the same negative reflections are not encountered on the balance sheet of CPL Concordia

which, on the contrary, presents in a very difficult year the best result of the last five years of the

financial management.

From the reclassification of the profit and loss accounts, this affirmation appears evident: the inci-

dence of the financial management brought to the value of production was 1.22% in 2007, 1.50% in

2006, 1.93% in 2005, 2.04% in 2004 and 1.46% in 2003.

The progressive increase of taxes recorded by the financial year 206, continued throughout 2007 and

still now underway, had in impact contained within the overall financial burdens of CPL Concordia:

indeed, thanks to the restructuring of the debt already carried out in 2005, during the entire course

of 2007 all the debt of the Cooperative was structured in the medium-long term. The greater part of

the funding plans received by the Company expect the liquidation of interests and capital with half-

yearly instalments; the reference tax was consequently updated twice, contributing to the limiting

of the negative effect coming from the increasing taxes. This, in spite of the survey carried out at the

end of the third quarter (reference for the tax on the principal line of credit by which the Company

benefits) having already felt in significant measure the financial crisis that exploded onto the markets

in the month of August.

It should moreover be specified that also this year, the improvement in the principal balance indica-

tors resulting from the important decisions made at the end of 2004 by the Board of Directors, has

permitted, thanks to the covenants provided for by the contracts, the containing of the spread paid

out by the Cooperative on the two principal lines supplied by the banking system: the pool pro-

moted by “Unicredit Banca d’Impresa” of 04.08.05 and that promoted by “Banco Popolare di Verona e

Novara” of 21.02.03.

During the entire financial year 2007, the Company did not open any new lines of medium-long term

credit, notwithstanding a reimbursement of capital shares of more than 7.5 million Euro on the lines at

its disposal at the start of the year. The Company used only occasionally and for very limited amounts

part of the short-term bank credit lines. It should be noted that during the course of the last twelve

months, the value of production has gone from 185.5 to 199.0 million Euro. The particularly positive

trend of the takings, together with payment deferments conceded by several important suppliers,

has permitted CPL to make use of liquidity in particularly important measure during the second and

third quarters (during which, at any time, the Company had stock at its disposal of more than 20


million Euro). This liquidity was invested with the

opening of short-term bank deposits or, in case

of need by the Controlled Companies, loaned to

these same, thereby avoiding their getting into

debt with the credit system at rates greater than

those that CPL would have realised.

If the Controller had not opened any new mul-

ti-year line, four new lines were obtained from

two Controlled Companies: one, of 2.5 million

Euro, was granted by “Banca Popolare di Verona”

to “Immobiliare della Concordia S.r.l.”, and on

31/12/2007 turned out to be supplied for only

250.000.00 Euro, whereas the other three were

obtained from “Cristoforetti Servizi Energia S.r.l.”

for a total of 1.13 million Euro.

With the exception of funding granted by “MCC

S.p.A.” which predicts a fixed rate of 6.20%, and

which at the end of the financial year present-

ed a residual debt of 0.489 million Euro, all the

other credit lines of the Cooperative predict

a variable rate. On 31/12/2007, the Company

had a still active contract of rate cover for the

notional value of 20.0 million Euro, opened on

29/10/2003 with “Unicredit Banca d’Impresa”, ex-

piring on 31/10/2008. This contract presented a

negative mark to market of 0.585 million Euro.

The Company manages the tax risk through the

constant monitoring of the trends of the mar-

ket and with continuous comparing with the

average rates estimated from the budget: any

activation of new cover can only occur if the re-

corded increments and the expectations of the

trends will show rates higher than those used

in the compilation of the annual and three-year

budgets, thereby causing significant risks of

prejudice in achieving the objectives. In this ac-

tivity of monitoring the trends of the rates, the

Cooperative also makes use of consultations by

qualified external professionals.

The imports of prime materials and sales in cur-

rencies other than the Euro are very limited and,

given their low amount, no currency risk cover is

in force. On the occasion of any important sup-

plies being carried out abroad, the Company

has carried out forward buying in currency, co-

inciding with the times at which it had to carry

out currency payments, eliminating thereby the

exchange risk.

The management of credits is carried out direct-

ly by the Company, with the assistance of inter-

nal resources and experience, and with limited

recourse to external professionals. This manage-

ment is consequent to a precise choice made:

indeed, since the greater part of the clientele is

composed of public bodies or public property

(either directly or through purchasing contracts

via a consortium), the collection of credits re-

quires, over and above constant monitoring on

the part of the financial structure, the collabora-

tion of all the internal subjects who have rela-

tionships with the client: the commercial struc-

ture that acquires the order, the technical one

that manages it, and, in some cases, the Legal

Office that evaluates any shares. Outsourcing is

held not to be appropriate for managing credits

held towards this type of clientele.

The Company carries out monthly surveys of the

credits, subdivided by business areas, with refer-

ence to the business managers who, among oth-

ers, are charged with containing the incidence

of overdue credits within predetermined limits.

The surveys are then also carried out according

to age. The internal procedure predicts several

steps of management of the overdue credit,

which go from the written advice/warning up

to possible legal action towards the debtor (in

arrears, in the meantime).

At the end of the financial year 2007, the final

balance of CPL highlights, in the current assets,

credits towards clients for a total of 103.6 mil-

lion Euro, in respect of the 106.6 million of the

previous financial year; there is an improvement

also on the incidence of the total of the credits

registered in the current assets, down to 43.25%

from 44.62% of the previous financial year.

On the same date, the total amount of the over-

due credits was 31 million Euro, the best figure

of the last five years. Of these, 21% presented de-

lays of less than 30 days, 15% delays of between

30 and 60 days, 11% delays of between 60 and

90 days, and 53% delays of more than 90 days.

Among the credits that presented the greatest

delays, approximately half were in reference to a

(public) client that, since 2003, the year of acqui-

sition of the contract, constantly presents a DSO

of more than 180 days.

75

The credits, seeing as they are principally counterparts to public bodies, are generally not associated

with guarantees. On the other hand, these are requested by the Company during the drawing up of

the principal contracts of supply to private clientele, or whenever they are held to be appropriate.

These amounted to a total, at the end of the financial year 2007, of 1.2 million Euro.

The strong presence made on the credits, the perfect knowledge of the individual situations and the

DSOs, permit the Company to make in a precise manner, where necessary, the risk fund allowances

on credits.

As far as the trend of the financial management of CPL during the course of the first months of the

2008 financial year is concerned, an increase in exposure towards the credit system is noted. This is

for approximately 4 million Euro, funded for 3.0 million Euro with the granting of a new line of credit

over a five-year period contracted with “Cassa di Risparmio di Parma e Piacenza”. The slight worsening

of the net financial position of the Group Leader finds it justification in the worsening of the trend

of income: in the same period, the amount of overdue credits rose by approximately 5.0 million

Euro, and the Company managed only in part to unload the greater requirements of the circulating

capital onto the suppliers. This situation is absolutely in line with that which is encountered by other

competitors and the cause is attributable to the difficulties of financial procurement that ever more

businesses encounter following the current liquidity crisis.

If the financial crisis does not resolve in the short term, it is probable that CPL will have to open new

lines of credit before the end of the financial year, possibly at medium-long term. These will be nec-

essary to finance the investments expected by the 2008 budget, over and above the greater require-

ments of the circulating capital.

Controlled companiesRelationships with associate companiesIn the area of its own activities and during the course of the financial year 2007, the Cooperative has

entertained the following relationships with the companies controlled by it, or linked to it:

CPL PrOCEEDS – COmPANY COSTS OF THE GrOuPCOmPANY PErFOrmANCE SuPPLY rATES TOTAL

PROGAS METANO 0 55,000 0 55,000

COOPGAS 4,504,202 0 68,469 4,572,671

CPL CONCORDIA FILIALA CLUJ ROMANIA 123,634 65,629 52,017 241,279

CPL HELLAS 0 0 0 0

CONCORDIA SERVICE MAGHREB 0 0 0 0

CRISTOFORETTI SERVIZI ENERGIA 100,824 850 0 101,674

ENERGIA DELLA CONCORDIA 33,620 2,346,216 0 2,379,837

ERRE.GAS 386,873 26,140 59,389 472,402

SI.GAS 513,669 59,248 73,849 646,765

TRADENERGY 425,000 0 0 425,000

IMMOBILIARE DELLA CONCORDIA 1,217,762 11,572 210,051 1,439,384

ISCHIA GAS 1,295,408 0 8,672 1,304,080

MARIGLIANO GAS 320,282 1,731 75,371 397,384

NUORO SERVIZI 71,725 0 369 72,094

SERIO ENERGIA 121,612 5,120 0 126,732

Totals 9,114,610 2,571,506 548,187 12,234,303


COmPANY PErFOrmANCE SuPPLY rATES TOTAL

FONTENERGIA 35,164 4,760 0 39,924

SARDA RETI COSTRUZIONI 20,000 0 0 20,000

ENERFIN 0 0 0 0

TECLAB 0 0 0 0

PEGOGNAGA SERVIZI 17,915 0 0 17,915

TOTALS 9,187,689 2,576,266 548,187 12,312,142

CPL COSTS – COmPANY PrOCEEDS OF THE GrOuPCOmPANY PErFOrmANCE SuPPLY rATES TOTAL

PROGAS METANO 0 0 0 0

COOPGAS 2,534 81,491 0 84,025

CPL CONCORDIA FILIALA CLUJ ROMANIA 7,486 0 0 7,486

CPL HELLAS 2,538,522 0 0 2,538,522

CPL NUPI PIPE CINA 0 0 0 0

CRISTOFORETTI SER 176,811 0 0 176,811

ENERGIA DELLA CONCORDIA 9,057 0 13,557 22,614

ERRE.GAS 60,982 0 0 60,982

SI.GAS 3,838 0 0 3,838

ISCHIA COM 0 0 0 0

IMMOBILIARE DELLA CONCORDIA 141,945 0 0 141,945

ISCHIA GAS 40,466 0 0 40,466

MARIGLIANO GAS 0 0 0 0

NUORO SERVIZI 0 0 0 0

Totals 2,981,641 81,491 13,557 3,076,689

FONTENERGIA 89 48 0 138

SARDA RETI COSTRUZIONI 0 0 0 0

ENERFIN 0 0 0 0

TECLAB 74,097 33,305 0 107,402

PEGOGNAGA SERVIZI 0 0 0

TOTALS 3,055,827 114,845 13,557 3,184,229

These relationships, all regulated by normal market conditions, arise from the nature of the business

purpose of those shared companies that carry out similar and/or complementary activities to the

activity of the cooperative.

77

Audit of the final Balance of the new multi-year programme of investments from April 1, 2004 to December 31, 2008 With effect from the financial year 2004, the analysis of the accomplishment of the Programme of

investments is carried out on the data of the new multi-year plan approved by the Partner’s Assem-

bly of 04.12.04. Attachment 1 reports the five-year plan of the CPL investments, in the Assembly-

approved version of 04.12.04, and Attachment 2 the analysis of the gap between the estimated and

the final data, with reference to the financial years 2004-2007.

muLTI-YEAr PLAN OF INvESTmENTS 2004-2008 (APPrOvED BY THE OrDINArY ASSEmBLY OF PArTNErS OF 04/12/04)(values expressed in thousands of Euro)

Description 2004 2005 2006 2007 2008 Total

A) INTANGIBLE FIXED ASSETS

- Application programmes 200 279 300 300 300 1,379

- Works on third party property 6,500 4,800 5,000 5,250 5,500 27,050

- Others 0 0 0 0 0 0

TOTAL INTANGIBLE FIxED ASSETS 6,700 5,079 5,300 5,550 5,800 28,429

B) MATERIAL FIXED ASSETS

- Real estate (8,500) (400) 0 0 0 (8,900)

- Granted plants 20,000 371 3,500 3,500 3,500 30,871

- Industrial and commercial apparatus 1,800 500 750 1,000 1,000 5,050

- Others 0 0 0 0 0 0

TOTAL mATErIAL FIxED ASSETS 13,300 471 4,250 4,500 4,500 27,021

C) FINANCIAL FIXED ASSETS

- Various 1,000 (30,000) 500 500 500 (27,500)

TOTAL FINANCIAL FIxED ASSETS 1,000 (30,000) 500 500 500 (27,500)

TOTAL INvESTmENTS 21,000 (24,450) 10,050 10,550 10,800 27,950

OuTGOINGS FOr INvESTmENTS (21,000) 24,450 (10,050) (10,550) (10,800) (27,950)

FORMS OF FUNDING

Operative Cash Flow 500 7,500 10,500 11,500 12,500 42,500

Share Capital payments (APC) 6,800 (800) (5,000) (1,000) 0 0

variation of debts for investments (13,700) 31,150 (4,550) (50) 1,700 14,550


muLTI-YEAr PLAN OF INvESTmENTS 2004-2008 (GAP ANALYSIS FOr FINANCIAL YEAr 2007)(values expressed in thousands of Euro)

Estimate Actual data Delta Estimate Actual data Difference Preventivo Consuntivo Delta Preventivo Consuntivo Delta Preventivo Totale su consuntivi Totale piano

Description 2004 2004 2005 2005 2006 2006 2007 2007 2008

A) INTANGIBLE FIXED ASSETS

- Application programmes 200 105 (95 279 381 102 300 366 66 300 542 242 300 1,694 1,379

- Works on third party property 6,500 4,792 (1,708) 4,800 3,560 (1,240) 5,000 1,987 (3,013) 5,250 5,368 118 5,500 21,207 27,050

- Others 0 695 695 0 395 395 0 991 991 0 349 349 0 2,430 0

TOTAL INTANGIBLE FIxED ASSETS 6,700 5,592 (1,108) 5,079 4,336 (743) 5,300 3,344 (1,956) 5,550 6,259 709 5,800 25,331 28,429

B) MATERIAL FIXED ASSETS

- Real estate (8,500) (8,303) 197 (400) (257) 143 0 264 264 0 1,768 1,768 0 (6,528) (8,900)

- Granted plants 20,000 7,242 (12,758) 371 (4,962) (5,333) 3,500 5,715 2,215 3,500 4,733 1,233 3,500 16,228 30,871

- Industrial and commercial apparatus 1,800 681 (1,119) 500 (521) (1,021) 750 911 161 1,000 685 (315) 1,000 2,756 5,050

- Others 0 (1,049) (1,049) 0 63 63 0 167 167 0 511 511 0 (308) 0

TOTAL mATErIAL FIxED ASSETS 13,300 (1,429) (14,729) 471 (5,677) (6,148) 4,250 7,057 2,807 4,500 7,697 3,197 4,500 12,148 27,021

C) FINANCIAL FIXED ASSETS

- Various 1,000 (681) (1,681) (30,000) 4,407 34,407 500 (6,375) (6,875) 500 (2,468) (2,968) 500 (4,617) (27,500)

TOTAL FINANCIAL FIXED ASSETS 1,000 (681) (1,681) (30,000) 4,407 34,407 500 (6,375) (6,875) 500 (2,468) (2,968) 500 (4,617) (27,500)

TOTAL NET INVESTMENTS 21,000 3,482 (17,518) (24,450) 3,066 27,516 10,050 4,026 (6,024) 10,550 11,488 938 10,800 32,862 27,950

TOTAL OuTGOINGS FOr INvESTmENTS (21,000) (3,482) 17,518 24,450 (3,066) (27,516) (10,050) (4,026) 6,024 (10,550) (11,488) (938) (10,800) (32,862) (27,950)

FUNDING SOURCES

Operative Cash Flow 500 4,691 4,191 7,500 8,100 600 10,500) 9,502 (998) 11,500 11,479 (21) 12,500 46,272 42,500

Payments/Reimbursements of Share Capital (APC) 6,800 (1,200) (8,000) (800) 341 1,141 (5,000) (1,720) 3,280 (1,000) (164) 836 0 (2,743) 0

TOTAL FuNDING SOurCES 7,300 3,491 (3,809) 6,700 8,441 1,741 5,500 7,782 2,282 10,500 11,315 815 12,500 43,529 42,500

Incr (-) / red (+) financial debts for investments (13,700) 9 13,709 31,150 5,375 (25,775) (4,550) 3,756 8,306 (50) (173) (123) 1,700 10,667 14,550

Financial Year 2007During the course of the financial year 2007, the Cooperative has sustained outgoings for invest-

ments (net of transfers) for approximately 11.5 million Euro.

The figure differs from the formulated estimate of net investments for the financial year to the amount

of 938.000 Euro.

CPL has made net investments in Intangible Fixed Assets to a value of approximately 6.3 million Euro,

of which approximately 5.4 million Euro are relative to “works on third party property”. These con-

cern, predominantly, the investments made by the Division denominated “Energy” (which supplies

the greatest contribution to the making of the Value of Production), the principal activities of which

concern the management of heat and cogeneration. These activities, characterised by the improve-

ment of multi-year contracts with the client, initially require the execution of investments in property

which, at the end of the contract, will remain third party property. Their repayment is made through

the good marginality produced by the orders. Being able to lay claim to a portfolio of work acquired,

formed from various contracts, of considerable amounts, having multi-year durations and good mar-

ginality, are held to be a valid guarantee for the future activity of the Cooperative. From the financial

point of view, this type of order generates commitments of circulating capital, since the clientele is

79

CASH FLOW

amounts expressed in thousands of Euros70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

12,974 13,61518,682

9,395

10,891

2003 2004 2005 2006 2007

Preventivo Consuntivo Delta Preventivo Consuntivo Delta Estimate Actual data Difference Estimate Actual data Difference Estimate Total of actual data Total of plan

Descrizione 2004 2004 2005 2005 2006 2006 2007 2007 2008

A) IMMOBILIZZI IMMATERIALI

- Programmi applicativi 200 105 (95 279 381 102 300 366 66 300 542 242 300 1,694 1,379

- Opere su beni di terzi 6,500 4,792 (1,708) 4,800 3,560 (1,240) 5,000 1,987 (3,013) 5,250 5,368 118 5,500 21,207 27,050

- Altre 0 695 695 0 395 395 0 991 991 0 349 349 0 2,430 0

TOTALE ImmOBILIZZ. ImmAT. 6,700 5,592 (1,108) 5,079 4,336 (743) 5,300 3,344 (1,956) 5,550 6,259 709 5,800 25,331 28,429

B) IMMOBILIZZAZIONI MATERIALI

- Immobili (8,500) (8,303) 197 (400) (257) 143 0 264 264 0 1,768 1,768 0 (6,528) (8,900)

- Impianti in concessione 20,000 7,242 (12,758) 371 (4,962) (5,333) 3,500 5,715 2,215 3,500 4,733 1,233 3,500 16,228 30,871

- Attrezzature industriali e comm.li 1,800 681 (1,119) 500 (521) (1,021) 750 911 161 1,000 685 (315) 1,000 2,756 5,050

- Altre 0 (1,049) (1,049) 0 63 63 0 167 167 0 511 511 0 (308) 0

TOTALE ImmOBILIZZ. mATErIALI 13,300 (1,429) (14,729) 471 (5,677) (6,148) 4,250 7,057 2,807 4,500 7,697 3,197 4,500 12,148 27,021

C) ImmOBILIZZAZIONI FINANZIArIE

- Diverse 1,000 (681) (1,681) (30,000) 4,407 34,407 500 (6,375) (6,875) 500 (2,468) (2,968) 500 (4,617) (27,500)

TOTALE IMMOBILIZZ. FINANZIARIE 1,000 (681) (1,681) (30,000) 4,407 34,407 500 (6,375) (6,875) 500 (2,468) (2,968) 500 (4,617) (27,500)

TOTALE INVESTIMENTI NETTI 21,000 3,482 (17,518) (24,450) 3,066 27,516 10,050 4,026 (6,024) 10,550 11,488 938 10,800 32,862 27,950

TOT. uSCITE PEr INvESTImENTI (21,000) (3,482) 17,518 24,450 (3,066) (27,516) (10,050) (4,026) 6,024 (10,550) (11,488) (938) (10,800) (32,862) (27,950)

FONTI DI FINANZIAMENTO

Cash Flow Operativo 500 4,691 4,191 7,500 8,100 600 10,500) 9,502 (998) 11,500 11,479 (21) 12,500 46,272 42,500

Vers./ rimborsi di Capitale Sociale (A.P.C.) 6,800 (1,200) (8,000) (800) 341 1,141 (5,000) (1,720) 3,280 (1,000) (164) 836 0 (2,743) 0

TOT. FONTI DI FINANZIAmENTO 7,300 3,491 (3,809) 6,700 8,441 1,741 5,500 7,782 2,282 10,500 11,315 815 12,500 43,529 42,500

Aum.(-) / Dim. (+) debiti finanziari per investimenti (13,700) 9 13,709 31,150 5,375 (25,775) (4,550) 3,756 8,306 (50) (173) (123) 1,700 10,667 14,550

predominantly public. Anyway, the very charac-

teristics of the clientele allow the Cooperative to

liquidate the claimed credit, as the rating of this

clientele is generally high.

Together, the “Intangible Fixed Assets” recorded

greater investments in respect of the forecast,

for approximately 700.000 Euro: the difference

is attributable to the choice of the Cooperative

to invest mainly in application programmes and

software to use principally for the management

of services for public bodies and Public Utilities.

As to the macro-class of “Material Fixed Assets”,

the plan of investments estimated net outgo-

ings of 4.5 million Euro; the final balance shows

net investments for approximately 7.7 million

Euro. The gap is principally attributable to the

following items:


“Real estate”, which presents an increase equal to approximately 1.8 million Euro, attributable

to the reacquisition of the land sited in Via Provinciale at S.Possidonio and attached to the reg-

istered office. I would like to remind that, in the area of reorganisation and restructuring of the

activities of the Group, the Cooperative had evaluated as important to grant, during the course

of 2004, the real estate of the registered office of Concordia sulla Secchia, assigning the financial

resources to cover the investments in activities inherent to its traditional core business.

“Granted plants”, that present an increase equal to 4.7 million Euro (in respect of the 3.5 million

forecast in the Plan), attributable to the greater costs sustained for the construction of the gas

distribution networks, stations and meters, with particular reference to the concessions relative

to the fields denominated “Campania 25”, “Campania 30”, “Calabria 20”, “Sicilia 12”, “Sicilia 17”, to the

municipalities of Palma di Montechiaro and Camastra in Sicily, to the municipality of Cittanova

in Calabria and to the municipality of San Giuseppe Vesuviano in Campania. Recall that, follow-

ing transfer to the former controlled company Co.Gas S.p.A. of the company arm denominated

“Administrations”, CPL began the construction of the networks in the above-mentioned fields,

awarded through public tender. Once completed, these fields should also have been ceded to

Co.Gas S.p.A., but the subsequent development of events prevented this from occurring. CPL,

therefore, held it appropriate to resume direct management, the natural complement to the

construction of the distribution network, in spite of this bringing raised investments, concen-

trated above all in the initial phase.

Finally, as far as the financial fixed assets are concerned, at the end of the financial year 2007 the

Cooperative recorded net dismissions for approximately 2.5 million Euro (against a forecast of invest-

ments for 0.5 million Euro). The reduction was determined as follows:

increases in partnerships for 10.5 million Euro (in particular: 5.0 million in Real Estate of Concordia

S.r.l. for payments into capital increase account; 1.25 million in Ischia Gas S.r.l. for payments into

capital increase account; 1.1 million for the coverage of losses in Cpl Hellas, with head office at

Athens; 0.9 million in Marigliano Gas S.r.l. for payments into capital increase account; 1.65 million

for the acquisition of partnerships in the company Intermedia S.p.A.);

reductions in partnerships for 11.9 million Euro (10.5 million for reduction in share capital of

Coopgas S.r.l., held to be redundant following the merger with Gas of Concordia S.p.A. during

the previous financial year; 1.1 million for the cancellation of partnerships in Borgoverde S.r.l., fol-

lowing the merger for incorporation into Real Estate of Concordia S.r.l.; 0.25 million for transfer of

partnerships in Enerfin (S.r.l.);

net increase of credits towards controlled or connected companies for 0.7 million Euro;

reduction of locked credits towards others for 0.8 million Euro (reduction of non-profitable fi-

nancing granted to Nebrodi Gas Service);

81

devaluation of partnerships for approxi-

mately 964.000 Euro (in particular: Cpl Hel-

las for 0.8 million; Nuoro Servizi S.r.l. for 0.1

million and Enerfin S.r.l. for 0.1 million).

It is appropriate to recall that in the process

of restructuring of the Group, in 2005 the

controlled company Gas della Concordia

S.p.A. relinquished the company arm repre-

sented by the activity of research and culti-

vation of liquid petroleum and gas products

(activity denominated “E & P”). In 2006, Gas

della Concordia conferred on Coop Gas S.r.l.

the production and commercialisation ac-

tivity for natural gas, contextually acquiring

partnership in the control of the same. Later

on, it was decided to incorporate Coop Gas

S.r.l. into Gas della Concordia, which took

the name Coopgas S.r.l. (operation com-

pleted in December 2006).

The gap between the forecast values and those

of the final balance (approximately 3 million

Euro), with reference to the Fixed Financial As-

sets, finds its explanation principally in the re-

duction of the charge value of several partner-

ships, following the Coopgas operation and the

necessity to cover losses on several controlled/

connected companies.

Financial cover of investmentsas a consequence of the gaps noted in respect

of the data forecast by the Five-year Investment

Plan, described in the preceding pages, we note

that during the course of the financial year 2007

the Cooperative sustained outgoings for invest-

ments, net of income deriving from dismissions,

for an amount of 11.5 million Euro.

The financial cover of these investments was

entirely guaranteed through the resources (cash

flow) produced by the characteristic company

management. The net variation of the share

capital represented by APC results as negative

for approximately 164.000 Euro, following the

reimbursement of shares underwritten in 1999.

As is apparent from reading the bottom line of

the outline reported in Attachment 1, with refer-

ence to the final balance of 2007, the net invest-

ments sustained by the Cooperative were fund-

ed practically without recourse to further debt

with the credit system (the net financial position

on 31.12.07 is equal to 40.8 million Euro, with

a reduction in respect of the previous financial

year equal to approximately 17.5 million Euro).


Conclusions

The data of the CPL final balance relative to the

investments sustained in the financial year 2007

highlight a gap equal to approximately 900,000

Euro, reasonably contained and, above all, con-

siderably less than the gaps shown in reference

to previous financial years. This difference in the

values on the balance sheet is explained by the

various choices of investment and disinvest-

ment made with reference to the various com-

ponents of the fixed assets.

These greater undertakings found complete

cover in the self-funding generated by the Co-

operative, which was able to avoid recourse

to bank credit and, better still, through overall

management, was able to reduce the net finan-

cial position in significant measure.

It is possible to express a decidedly positive opin-

ion on the validity of the new strategic choices

adopted by the Board of Directors of CPL since

the financial year 2004. These choices, in large

part, determined the gaps shown in the last sev-

eral financial years.

The choice to bring a large part of the business

back into the area of the traditional core busi-

ness has been the source of much satisfaction

which has in the past allowed even us share-

holders to benefit from the significant results

obtained by CPL (materialised in the payment

of significant dividends). This choice has also

brought the Cooperative to recover effective

production and profitability, as was already

hoped for at our Meeting on the occasion of the

evaluation of the balance sheet for the financial

years 2004 and 2005.

Even the credit system in these few years

has shown a positive opinion of the strategic

choices made by the Cooperative: this is dem-

onstrated by the 3.0 million Euro of new APC

underwritten by institutional investors, issued in

the month of December 2004 based on the new

plan of investments for 2004 – 2008, as well as

the significant medium-long term financial op-

erations that CPL and its controlled companies

completed in the last few financial years.

Future growth of management

Considering the cost of a barrel of oil reached in

these last few months, our country, and others,

will have to work hard to incentivise any form of

renewable energy. The cooperative has already

activated plants and has launched a strong

campaign on solar power. Moreover, in the next

3 years, we think to invest approximately 200

million Euro, together with collaboration with

other companies, for the construction of solar

power field for approximately 40 megawatt. The

cooperative will moreover be committed to the

methanisation of Sardinia, which will see us as

protagonists with powerful investments influ-

encing our balances in a significant manner.

Based on the orders in the portfolio, and in

consideration of the projects in solar power

and wind power that we are considering, and

the methanisation of Sardinia, the Cooperative

working on updating the three-year plan 2008

– 2010, which will be approved by the Board of

Directors in a short time.

The 2008 budget has already been approved, on

the other hand. This was edited based on the

orders acquired up to the month of December

2007, over and above those under acquisition,

and corrected based on the updates carried out

on the results of the first quarter of 2008. The

balance sheets and the reclassified profit and

loss accounts for the financial year 2008 are ana-

lysed below, in comparison with the four previ-

ous financial years.

83

ECONOmIC ACCOuNTS rECLASSIFIED WITH THE ADDED vALuE mETHOD(values expressed in Euro)

Estimate Balance sheet dates


31,2007 % As of Dec. 31,2006 % As of Dec.

31,2005 % As of Dec. 31,2004 %

Income from sales and services 195,319,445 91,33% 179,562,310 90,23% 172,845,785 93,88% 165,438,299 91,44% 163,812,968 92,83%


0 0,00% 0 0,00% (1,552,050) -0,84% 0 0,00% 0 0,00%

Variation in work in progress 652,880 0,31% 2,658,347 1,34% (892,233) -0,48% (3,494,561) -1,93%(15,099,987) -8,56%

Works in economy 17,304,134 8,09% 12,604,307 6,33% 9,945,241 5,40% 10,475,074 5,79% 14,111,186 8,00%

Other proceeds 585,102 0,27% 4,172,220 2,10% 3,771,923 2,05% 8,510,074 4,70% 13,639,837 7,73%

vALuE OF PrODuCTION 213,861,561100,00% 198,997,184100,00% 184,118,665100,00% 180,928,886100,00% 176,464,004100,00%

Amortisation of material fixed assets

(74,766,727) -34,96%(63,885,797) -32,10%(54,226,507) -29,45%(52,715,594) -29,14%(49,754,348) -28,20%

Amortisation of material intangible assets

(144,237) -0,07% 9,455 0,00% 274,277 0,15% (346,772) -0,19% (482,830) -0,27%

Various costs for services (70,000,000) -32,73%(66,632,270) -33,48%(67,308,739) -36,56%(71,767,063) -39,67%(73,695,523) -41,76%

Expenses for the use of third party property

(9,700,000) -4,54% (8,445,660) -4,24% (9,881,067) -5,37%(10,826,715) -5,98% (8,310,388) -4,71%


ADDED vALuE 58,250,597 27,24% 58,134,548 29,21% 51,018,249 27,71% 43,108,568 23,83% 41,978,484 23,79%

Cost of work and relative costs (38,550,000) -18,03%(35,997,524) -18,09%(31,026,611) -16,85%(30,693,673) -16,96%(30,686,348) -17,39%

GrOSS OPErATING mArGIN 19,700,597 9,21% 22,137,024 11,12% 19,991,638 10,86% 12,414,895 6,86% 11,292,136 6,40%

Amortisation

of material fixed assets

(2,136,000) -1,00% (1,967,731) -0,99% (1,673,7159 -0,91% (1,863,046) -1,03% (2,581,728) -1,46%

Amortisation of material intangible

assets(4,500,000) -2,10% (4,170,443) -2,10% (4,178,341) -2,27% (4,021,661) -2,22% (2,884,484) -1,63%

Allowances and devaluations (900,000) -0,42% (1,099,621) -0,55% (1,544,703) -0,84% (1,023,965) -0,57% (643,054) -0,36%

Amortisations and allowances (7,536,000) -3,52% (7,237,795) -3,64% (7,396,758) -4,02% (6,908,672) -3,82% (6,109,266) -3,46%

EBIT 12,164,597 5,69% 14,899,229 7,49% 12,594,880 6,84% 5,506,223 3,04% 5,182,870 2,94%


Other financial proceeds 214,060 0,10% 1,036,632 0,52% 904,825 0,49% 579,726 0,32% 317,057 0,18%


CurrENT LOSS 9,014,597 4,22% 12,466,841 6,26% 9,831,661 5,34% 2,018,981 1,12% 1,586,367 0,90%

Proceeds from partnerships 1,000,000 0,47% 91,550 0,05% 550,195 0,30% 4,527,721 2,50% 2,336,675 1,32%

Corrections on financial activity 0 0,00% (1,406,642) -0,71% (2,347,069) -1,27% (2,162,320) -1,20% (5,131,523) -2,91%

Rebate to partners 0 0,00% (1,100,000) -0,55% (750,000) -0,41% (500,000) -0,28% 0 0,00%




31,2007 % As of Dec. 31,2006 % As of Dec.

31,2005 % As of Dec. 31,2004 %

Extraordinary operations 0 0,00% (34,308) -0,02% 1,402,234 0,76% 1,889,160 1,04% 1,449,751 0,82%

rESuLT BEFOrE TAxES 10,014,597 4,68% 10,017,441 5,03% 8,687,021 4,72% 5,773,543 3,19% 241,271 0,14%

Taxes on the finan-cial year income (3,204,709) -1,50% (4,137,754) -2,08% (5,134,301) -2,79% (2,665,977) -1,47% (3,107,770) -1,76%

NET rESuLT 6,809,888 3,18% 5,879,687 2,95% 3,552,720 1,93% 3,107,566 1,72% (2,866,499) -1,62%

The financial year 2008 feels the effect of two fundamental factors under the economic profile. The

first, of a general character, contains the general moment of national economic difficulty on the bal-

ance sheet of the Cooperative, which is reflected through a contraction of the orders and the mar-

ginality. The second, of special character, acknowledges the impact of the investments, which for the

financial year 2008 are expected to be in the order of approximately 20 million Euro.

It is however comforting to note that the forecasted net profits near 7 million Euro.

rECLASSIFIED ASSETS ACCOrDING TO THE mETHOD OF LIQuIDITY OF THE POSTS(values expressed in Euro)

Estimate Balance sheet datesAs of Dec. 31,2008

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

ASSETS

Short term activity

Liquid assets 3,487,369 9,820,928 11,127,629 5,046,492 12,719,079

Non-permanent assets 0 115,797 0 0 0

Credits towards clients and others 121,868,720 113,401,341 114,793,337 109,284,631 100,511,093

Stocks 24,450,000 21,612,224 19,608,968 21,519,647 24,311,527

Credits towards partners for payments still owing 1,300,000 1,258,137 1,210,554 1,246,406 1,265,512


Total short-term assets 154,556,090 151,160,185 151,708,755 142,006,836 143,737,343 Fixed assets

Intangible fixed assets 21,792,726 13,498,336 11,408,796 12,243,148 11,929,375

Material fixed assets 49,168,069 47,827,824 42,099,293 36,715,963 44,255,988

Financial fixed assets 39,368,304 53,307,242 55,983,102 62,679,434 58,742,296

Total fixed assets 110,329,098 114,633,402 109,491,190 111,638,544 114,927,659 Total ASSETS 264,885,188 265,793,587 261,199,946 253,645,380 258,665,001 OrDEr COuNTS 170,000,000 171,468,227 177,431,671 184,742,912 167,041,130

LIABILITIES

Short term liabilities

Bank debts 6,395,367 10,806,199 10,701,805 9,645,384 40,298,359

Debts with other backers 3,000,000 3,224,800 2,545,157 2,331,665 2,427,745

Financial debts towards controlled/connected companies 0 246,000 10,914,000 10,650,000 1,700,000




Debts towards controlled companies 2,405,513 2,568,636 4,306,318 4,927,300 5,784,269

Debts towards connected companies 50,000 99,023 90,904 503,126 167,236

85


As of Dec. 31,2008

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

Tax debts 7,046,130 3,868,897 6,817,606 3,474,793 4,058,863

Debts towards social security and welfare institutions 2,398,651 2,235,968 1,425,301 1,321,314 1,376,026


Accruals and deferred income - liabilities 400,000 291,387 340,704 507,784 576,489

Total short-term liabilities 113,028,930 125,971,378 117,245,540 106,860,718 123,173,712 medium-long term liabilities


Bank debts 41,348,586 36,348,586 45,273,309 50,097,220 39,361,654

Debts with other backers 0 0 0 0 0




Fund for social security and other welfare institutions 21,526 21,526 21,526 21,526 21,633

Other funds 1,948,803 1,335,537 1,839,090 2,836,404 4,494,620

Total medium-long term liabilities 51,666,195 45,608,627 55,342,121 61,042,784 52,223,982 Net equity

Share capital 14,000,000 13,706,084 12,952,749 12,702,218 13,335,213

Re-evaluation reserve 656,679 656,679 656,679 656,679 656,679

Legal reserve 77,140,319 72,387,954 69,866,959 67,692,238 67,692,238

Reserves foreseen by company by-laws 78,184 78,184 78,184 78,184 78,184

Foreign currency conversion fund 0 0 0 0 0

Merger advance 235,597 235,597 235,597 235,597 3,102,096

Capital gains reserve Law 784/80 1,269,396 1,269,396 1,269,396 1,269,396 1,269,396

Financial year profit/loss 6,809,888 5,879,687 3,552,720 3,107,566 (2,866,499)

Total net equity 100,190,063 94,213,582 88,612,285 85,741,878 83,267,307

Total LIABILITIES 264,885,188 265,793,587 261,199,946 253,645,380 258,665,001 OrDEr COuNTS 170,000,000 171,468,227 177,431,671 184,742,912 167,041,130

Under the profile of the asset structure of the

Cooperative’s balance sheet, a certain continu-

ity with the values expressed in previous bal-

ance sheets can be noted. Two elements stand

out – the first concerns the increase in long term

debts in connection with the investments men-

tioned in these pages, whereas the second con-

cerns the Net assets which exceed 100 million

Euro, this in the very year that the Cooperative

nears the celebration of 110 years of history.

The principal economic and asset indices of the

five-year period are given below, with particular

attention to those which come out of the 2008

budget:


PrINCIPAL INDICES OF THE BALANCE SHEET

ECONOmIC ANALYSISBalance sheet dates

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

R.O.E. (Return on Equity) 7,29% 6,66% 4,18% 3,76% -3,33%

R.O.I. (Return on Investment) 4,59% 5,61% 4,82% 2,17% 2,00%

Ratio of Gross Operating Margin to Value of Production 9,21% 11,12% 10,86% 6,86% 6,40%



Incidenza Oneri Finanz. Incidence of Net Financial Expenditures on the R.O. 25,89% 16,33% 21,94% 63,33% 69,39%

FINANCIAL AND CAPITAL ANALYSISBalance sheet dates

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

Liquidity index 1,37 1,20 1,29 1,33 1,17




EBITDA/DEBT 41,67% 54,37% 34,29% 18,34% 15,89%

DEBT/EBITDA 2,40 1,84 2,92 5,45 6,29

Important events occurring following the end of the financial year On 5 March 2008, the AI POWER S.p.A. company was formed in Algiers (Algeria). The Cooperative

holds shares to the nominal value of 10.800.000 Algerian dinars, equal to 54% of the share capital,

which amounts to 20.000.000.00 Algerian dinars.

The company will take care of the importation, production and assembly of plants related to

energy, gas, water and the sewerage system, as well as the production of technologies related to

these.

On 9 April 2008, the Cooperative acquired 20% of the shares in Società Compagri S.p.A., a com-

pany which operates in the construction and management of composting and waste treatment

plants.

On 9 April 2008, the Cooperative acquired 20% of the shares in Agrienergia, a limited consortium

company controlled by the same Compagri S.p.a and operating in the same sector of activity.

On 13 May 2008, the Cooperative acquired 30% of the shares in Xdatanet S.r.l., a company which

carries out software design and implementation activities, as well as Information Technology

consultancy.

87

Other informationIt is noted, moreover, that the Cooperative has

organised the updating of the safety program-

me document, within the terms expected by

the appropriate decree, in accordance with that

expected by attachment B of D.Lgs. 196/03, “Per-

sonal Data Protection Code”. This makes arran-

gements for the technical methods to be adop-

ted in the case of the treatment of sensitive data

on electronic instruments.

It is further noted that, in the area of the widest

policy of making aware of the transparent and

correct management of the company, in respect

of existing regulations and the fundamental ethi-

cal business principles in the carrying out of the

business purpose, the Cooperative has appro-

ved the “Model of organisation, administration

and control in accordance with D. lgs. 8/6/2001,

n. 231” and has nominated the Supervision Body

for the period 1/1/2008 – 31/12/2010.

It is further noted that the Cooperative, together

with the Group companies concerned, is arran-

ging for the editing of the outlines required by

Decreto Legislativo n° 164/2000 and Delibera

Del’Autorità per L’Energia Elettrica ed il Gas n°

311/01, in the separation of accounting relati-

ve to the production processes inherent to the

methane gas sector.

It is specified that, in accordance with art. 2497

of the civil code, the Cooperative is not subject

to management and coordination activities. Ho-

wever, the Cooperative exercises management

and coordination activities in the following con-

trolled companies:

Coopgas S.r.l. Energia della Concordia S.p.A. Immobiliare della Concordia S.r.l. Borgoverde S.r.l. Progas Metano S.r.l. Erre.Gas S.r.l. Marigliano Gas S.r.l. Ischia Gas S.r.l. Si.gas S.r.l. Nuoro Servizi S.r.l. Serio Energia S.r.l. Cpl Filiala Cluj Romania S.r.l. Cpl Hellas A.B.& T.E.

NET PrOFITS

amounts expressed in thousands of euros

2003 2004 2005 2006 2007

30,000

25,000

20,000

15,000

10,000

5,000

0

-5,000

1,755

-2,866

3,108 3,5535,880


Destination of the profitBased on the results achieved and having obtained the motivated opinion of the Special Assembly of

shareholders, the Board of Directors proposes that the Partners Assembly approve the implementa-

tion of the multi-year investment plan relative to the financial year 2007 and that the Net Profits of

the financial year of 5.879.687 Euro be assigned in the following manner:

361.351.94 Euro to the Cooperative Shareholders (underwriters) by way of dividend (for the pe-

riod 01.01.07 – 31.12.07) in measure of the 8.00% gross per share of the nominal value of 51.64

Euro at 31.12.07, payable on 02.07.08;

11.435.16 Euro to the Cooperative Shareholders (Stock Option) by way of dividend (for the period

01.01.07 – 31.12.07) in measure of the 8.00% gross per share of the nominal value of 51.64 Euro

at 31.12.07, payable on 02.07.08;

240.000.00 Euro to the Cooperative Shareholders (underwriters) by way of dividend (for the pe-

riod 01.01.07 – 31.12.07) in measure of the 8.00% gross per share of the nominal value of 500.00

Euro at 31.12.07, payable on 02.07.08;

263.489.19 Euro by way of dividend to the cooperative partners and voting partners in measure

equal to the 6.00% gross compared to the Share Capital actually paid, payable on 02.07.08;

74.655.36 Euro, equal to 1.70% to the free increase (in accordance with Law 59/92) of the share

capital actually paid, able to be capitalised;

176.390.61 Euro, equal to 3.00% (three percent) to the Mutual Funds for the Promotion and De-

velopment of the Cooperative, in accordance with art.11 of Law 59 of 31.01.1992;

1.763.906.10 Euro, equal to 30%, to the Legal Reserve Fund, as expected by the Statute and in

conformity with art.12 of L. 16/12/77 N. 904.

2.988.458.64 Euro to the Ordinary Reserve Fund, indivisible among the partners both during the

lifetime of the Cooperative and at its dissolution, as expected by the Statute and in conformity

with art.12 of L. 16/12/77 N. 904.

We thank you for the confidence accorded to us and we invite you to approve the Balance sheet

closed on 31/12/07 as presented.

Concordia s/S, 19.05.2008

The Board of Directors

President

(CASARI Roberto)

ALLOCATION OF PrOFITS FOr FISCAL YEAr 2007

revaluation of the Shareholders’ Share Capital1,27%

Dividend to Cooperative Shareholders (subscribers)10,23%

reserve Fund80,83%

Dividend to Cooperative Shareholders (stock options)0,19%

Dividend to Cooperating Shareholders and Supporting Shareholders4,48%

mutual Assistance Funds3,00%

89

balance sheet of CPL Concordia Soc. Coop. as of December 31, 2007


Statement of assets and liabilities Assets

ASSETS AS OF DECEmBEr 31, 2007 Amounts expressed in euros

AS OF DECEmBEr 31, 2006 Amounts expressed in euros

A) SuBSCrIBED CAPITAL, uNPAID 1,258,137 1,210,554

already called-up 1,258,137 1,210,554

B) FIxED ASSETS

I INTANGIBLE ASSETS:

1) Installation and expansion expenses 0 0

2) Research, development, and advertising expenses 81,186 155,196

3) Industrial patent and intellectual property rights 0 0

4) Concessions, licenses, trade marks and similar rights 41,279 50,907

5) Goodwill 0 0

6) Difference by consolidation 471,401 831,912

7) Other intangible assets 12,904,470 10,370,781

Total 13,498,336 11,408,796

II TANGIBLE ASSETS:

1) Land and buildings 3,080,083 1,411,515

2) Plants and machinery 41,819,395 38,060,370

3) Industrial and commercial equipment 319,005 283,566

4) Other assets 1,786,316 1,318,574

5) Tangible assets in course of construction and advances 823,025 1,025,267

Total 47,827,824 42,099,292

III INVESTMENTS:

1) Equity investments in:

a) subsidiary companies 24,453,945 28,471,622

b) affiliated companies 2,349,412 2,495,112

c) parent companies 0 0

d) other companies 3,457,447 1,654,782

2) Receivables: (within 12months) (within 12months)

a) from subsidiary companies 9,180,000 9,180,000 8,485,000 8,485,000

b) from affiliated companies 10,779,000 10,779,000 10,754,000 10,754,000

c) from parent companies 0 0

d) from other companies 1,025,130 1,530,536 381,299 2,357,440


4) Own shares 0 0

Total 51,750,340 54,217,956

TOTAL FIxED ASSETS 113,076,500 107,726,044

91

ASSETS AS OF DECEmBEr 31, 2007 Amounts expressed in euros


C) CurrENT ASSETS

I INVENTORY:

1) Raw materials, supplies, and consumbales 2,806,748 2,675,373

2) Works in progress and components 5,366,048 3,858,438

3) Contracts in progress 11,928,182 11,305,318

4) Finished goods and merchandise 121,336 243,257

5) Advance payments 1,389,909 1,526,582

Total 21,612,223 19,608,968

II RECEIVABLES: (over 12 months) (over 12 months)

1) Trade debtors: 1,556,902 105,177,878 1,765,146 108,441,689

2) Receivables from subsidiary companies: 6,594,872 5,394,431

3) Receivables from affiliated companies: 652,125 8,103 224,209

4) Receivables from parent company: 0 0

4 bis) Tax assets 1,450,347 415,835

4 ter) Advance taxes 656,478 1,187,597

5) Other accounts receivables: 426,543 894,723

Total 114,958,243 116,558,484

III NON-PERMANENT INVESTMENTS:

1) Shares in subsidiary companies 115,797 0

2) Shares in affiliated companies 0 0

3) Other shares 0 0

4) Company shares 0 0


Total 115,797 0

IV LIQUID ASSETS:

1) Current bank and postal accounts 9,795,803 11,116,883

2) Bank cheques 1,207 1,903

3) Cash on hand 23,918 8,843

Total 9,820,928 11,127,629

TOTAL CurrENT ASSETS 146,507,191 147,295,081

D) ACCruALS AND DEFErrED INCOmE: 4,951,759 4,968,267

TOTAL ASSETS 265,793,587 261,199,946


Statement of assets and liabilities Liabilities

LIABILITIES AS OF DECEmBEr 31, 2007 Amounts expressed in euros


A) NET EQuITY

I CAPITAL 13,706,084 12,952,749

II SHARE PREMIUM RESERVES 0 0

III REVALUATION RESERVES 656,679 656,679

IV LEGAL RESERVES 72,387,954 69,866,959

V RESERVES FORESEEN BY COMPANY BYLAWS 78,184 78,184

VI RESERVES FOR COMPANY SHARES 0 0

VII OTHER RESERVES:

MERGER SURPLUS 235,597 235,597

EXCHANGE RATE FLUCTUATION RESERVES 0 0

CAPITAL GAINS L. 784/80 1,269,396 1,269,396

VIII PROFIT (LOSS) CARRIED FORWARD 0 0

IX FISCAL YEAR PROFIT (LOSS) 5,879,687 3,552,720

TOTAL 94,213,581 88,612,284

B) PrOvISIONS FOr LIABILITIES AND CHArGES

1) Provisions for pensions and similar obligations 21,526 21,526

2) For taxes 0 0

3) Other 1,335,537 1,839,090

TOTAL 1,357,063 1,860,616

C) SEvErANCE INDEmNITY 6,101,664 6,507,062

D) ACCOuNTS PAYABLE: (over 12months) (over 12months)

1) Debenture loans: 0 0

2) Convertible debenture loans: 0 0

3) Amounts owed to shareholders for financing: 3,224,800 2,545,157

4) Amounts owed to banks: 36,348,586 47,154,785 45,273,309 55,975,114

5) Amounts owed to other financiers: 0 0

6) Advance payments: 14,177,189 12,389,313

7) Amounts owed to suppliers: 1,801,315 85,873,507 1,701,134 65,450,328

8) Debts represented by bills of exchange: 0 0

9) Amounts owed to subsidiary companies: 2,814,636 15,220,318

10) Amounts owed to affiliated companies: 99,023 90,904

11) Amounts owed to parent companies: 0 0

12) Amounts owed to tax administration: 3,868,897 6,817,606

13) Amounts owed to social security and welfare institutions: 2,235,968 1,425,301

14) Other accounts payable: 4,381,087 3,965,239

TOTAL 163,829,892 163,879,280

E) ACCruALS AND DEFErrED INCOmE: 291,387 340,704


93

LIABILITIES AS OF DECEmBEr 31, 2007 Amounts expressed in euros


mEmOrANDum ACCOuNTS:

I) Guarantees

- Securities 106,099,073 113,817,505

- Real guarantees 60,794,000 59,500,000

Total 166,893,073 173,317,505

II) Other memorandum accounts

- Subject to collection 7,000 199,420

- Other 4,568,154 3,914,746

Total 4,575,154 4,114,166

TOTAL mEmOrANDum ACCOuNTS 171,468,227 177,431,671


Profit and loss statement

PrOFIT AND LOSS ACCOuNT AS OF DECEmBEr 31, 2007 Amounts expressed in euros


A) vALuE OF PrODuCTION:

1) Net turnover from sales and services 179,562,310 174,193,735

2) Variation in stocks of finished, in progress, and semi-finished goods 0 (1,552,050)

3) Variation in contracts in progress 2,658,347 (892,233)

4) Capital improvement investments for internal projects 12,604,307 9,945,241

5) Other income and revenue

-miscellaneous 4,167,018 3,771,923

- transferred to the profit and loss account 5,203 4,172,221 0 3,771,923

Total 198,997,185 185,466,616

B) COST OF PrODuCTION:

6) For raw materials, consumable goods, and merchandise 63,885,797 54,226,506

7) For services 66,632,270 67,308,739

8) For use of assets owned by others 8,445,660 9,881,067

9) For staff:

a) salaries and wages 27,000,306 23,194,016

b) social security costs 8,373,756 7,096,185

c) severance indemnity 1,723,462 1,486,410

d) pension costs 0 0

e) other costs 0 37,097,524 0 31,776,611

10) Amortization and depreciation

a) amortization of intagible assets 4,170,443 4,178,341

b) amortization of tangible assets 1,967,731 1,673,715

c) other reductions in value of fixed assets 0 1,731

d) allowance for debtors included in current assets and other cash accounts 370,000 6,508,174 417,000 6,270,787

11) Variations in stocks of raw materials, consumable goods, and merchandise (9,455) (274,277)

12) Amounts for risk provisions 0 0

13) Other accruals 729,621 1,125,972

14) Other operating charges 1,908,365 1,958,381

Total 185,197,956 172,273,786

DIFFErENCE BETWEEN vALuE AND COST OF PrODuCTION (A - B) 13,799,229 13,192,830

C) FINANCIAL rEvENuE AND ExPENDITurES:

15) Income from equity investments

- from subsidiary companies 40,000 511,454



16) Other financial income:

a) from receivables included in fixed assets:



95

PrOFIT AND LOSS ACCOuNT AS OF DECEmBEr 31, 2007 Amounts expressed in euros



- from other companies 0 0 0 0

b) from other permanent investments other than equity income

c) from other investments that are not permanent

d) other income not included above:

- from subsidiary companies 548,187 531,726

- from affiliated companies 2,072 323


- from other companies 486,373 1,036,632 372,777 904,826

17) Interest payable and other charges

- from subsidiary companies 13,557 0

- from affiliated companies 0 2,403


- from other companies 3,450,427 3,463,984 3,673,965 3,676,368

17bis) PROFIT AND LOSS FROM FOREIGN CURRENCY CONVERSION

Profit and loss from foreign currency conversion 5,036 5,036 (8,323) (8,323)

Total ( 15 + 16 - 17 - 17 bis ) (2,340,838) (2,213,024)

D) vALuE ADJuSTmENTS FOr INvESTmENTS

18) Revaluations:

a) of equity investments 0 0

b) of permanent investments that are not equity investments

c) of non-permanent investments which are not equity investments 0 0

19) Devaluations:

a) of equity investments 1,406,642 2,347,069


c) of non-permanent investments which are not equity investments 1,406,642 2,347,069

Total adjustments (18 - 19 ) (1,406,642) (2,347,069)

E) ExTrAOrDINArY rEvENuE AND ExPENSES:

20) Revenue:

a) gains from disposal of assets whose proceeds are not recorded at number 5 0 0

b) Capital gains 0 0

c) Other 0 0 54,284 54,284

21) Expenses:

a) losses from disposal of assets whose accounting effects are not recorded in number 14 0 0

b) taxes pertaining to prior fiscal year 34,308 0

c) other 0 34,308 0 0

Total extraordinary income and losses ( 20 - 21 ) (34,308) 54,284

PrOFIT Or LOSS BEFOrE TAx ( A - B ± C ± D ± E ) 10,017,441 8,687,021

22) Annual income tax (4,137,754) (5,134,301)

22 a) Current taxes for the fiscal year (3,606,635) (4,167,849)

22 b) Anticipated (deferred) taxes (531,119) (966,452)

26) PrOFIT (LOSS) FOr THE FISCAL YEAr 5,879,687 3,552,720


CONSOLIDATED PrOFIT AND LOSS ACCOuNT rECLASSIFIED WITH THE vALuE-ADDED mETHOD (values expressed in Euro)

Statement Dates


31,2006 % As of Dec. 31,2005 % As of Dec.

31,2004 % As of Dec. 31,2003 %

Net turnover from sales and services 179,562,310 90,23% 172,845,785 93,88% 165,438,299 91,44% 163,812,968 92,83% 126,624,794 71,76%


0 0,00% (1,552,050) -0,84% 0 0,00% 0 0,00% 0 0,00%

Variations in contracts in progress 2,658,347 1,34% (892,233) -0,48% (3,494,561) -1,93% (15,099,987) -8,56% 1,722,321 0,98%

Low-cost works 12,604,307 6,33% 9,945,241 5,40% 10,475,074 5,79% 14,111,186 8,00% 17,285,600 9,80%

Various income 4,172,220 2,10% 3,771,923 2,05% 8,510,074 4,70% 13,639,837 7,73% 10,186,712 6,54%

vALuE OF PrODuCTION 198,997,184 100,00% 184,118,665 100,00% 180,928,886 100,00% 176,464,004 100,00% 155,819,427 100,00% Costs for purchases (63,885,797) -32,10% (54,226,507) -29,45% (52,715,594) -29,14% (49,754,348) -28,20%(46,642,774) -29,93%Variations in inventory of raw materials 9,455 0,00% 274,277 0,15% (346,7729 -0,19% (482,830) -0,27% (378,994) -0,24%

Various costs for services (66,632,270) -33,48% (67,308,739) -36,56% (71,767,063) -39,67% (73,695,523) -41,76%(68,682,473) -44,08%Expenses for uses of assets owned by others (8,445,660) -4,24% (9,881,067) -5,37% (10,826,715) -5,98% (8,310,388) -4,71% (6,013,257) -3,86%

Other operational expenses (1,908,365) -0,96% (1,958,381) -1,06% (2,164,174) -1,20% (2,242,431) -1,27% (2,681,744) -1,72%

ADDED vALuE 58,134,548 29,21% 51,018,249 27,71% 43,108,568 23,83% 41,978,484 23,79% 31,420,185 20,16% Cost of work and related charges (35,997,524) -18,09% (31,026,611) -16,85% (30,693,673) -16,96% (30,686,348) -17,39%(28,128,605) -18,05%

Gross Operating Margin 22,137,024 11,12% 19,991,638 10,86% 12,414,895 6,86% 11,292,136 6,40% 3,291,580 2,11%



Retained earnings and depreciation (1,099,621) -0,55% (1,544,703) -0,84% (1,023,965) -0,57% (643,054) -0,36% (1,179,448) -0,76%

Amortizations and retained earnings (7,237,795) -3,64% (7,396,758) -4,02% (6,908,672) -3,82% (6,109,266) -3,46% (4,770,388) -3,06%

EBIT 14,899,229 7,49% 12,594,880 6,84% 5,506,223 3,04% 5,182,870 2,94% (1,478,808) -0,95% Interest and other financial income (3,469,020) -1,74% (3,668,045) -1,99% (4,066,967) -2,25% (3,913,559) -2,22% (3,214,228) -2,06%

Other financial income 1,036,632 0,52% 904,825 0,49% 579,726 0,32% 317,057 0,18% 935,438 0,60%TOTAL FINANCIAL MANAGEMENT (2,432,387) -1,22% (2,763,220) -1,50% (3,487,241) -1,93% (3,596,502) -2,04% (2,278,790) -1,46%

CurrENT PrOFIT Or LOSS 12,466,841 6,26% 9,831,661 5,34% 2,018,981 1,12% 1,586,367 0,90% (3,757,598) -2,41% Income from equity investments 91,550 0,05% 550,195 0,30% 4,527,721 2,50% 2,336,675 1,32% 20,404,475 13,09%

Value adjustments for investments (1,406,642) -0,71% (2,347,0699 -1,27% (2,162,320) -1,20% (5,131,523) -2,91%(10,946,643) -7,03%


Extraordinary management (34,3089 -0,02% 1,402,234 0,76% 1,889,160 1,04% 1,449,751 0,82% (1,058,513) -0,68%

PRE-TAX PROFIT OR LOSS 10,017,441 5,03% 8,687,021 4,72% 5,773,543 3,19% 241,271 0,14% 4,641,721 2,98%

Taxes on operating profit (4,137,754) -2,08% (5,134,301) -2,79% (2,665,977) -1,47% (3,107,770) -1,76% (2,886,693) -1,85%

NET PrOFIT Or LOSS 5,879,687 2,95% 3,552,720 1,93% 3,107,566 1,72% (2,866,499) -1,62% 1,755,028 1,13%

details of the profit and loss statement

97

CONSOLIDATED BALANCE SHEET rECLASSIFIED BY LIQuIDITY (values expressed in Euro)

Statement Dates

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

TOTAL ASSETS Short term assets Liquid assets 9,820,928 11,127,629 5,046,492 12,719,079 3,972,279 Non-permanent assets 115,797 0 0 0 1,350 Receivables from clients and others 113,401,341 114,793,337 109,284,631 100,511,093 92,118,130 Inventory 21,612,224 19,608,968 21,519,647 24,311,527 21,353,911 Subscribed capital, unpaid 1,258,137 1,210,554 1,246,406 1,265,512 992,886 Accruals and deferred income - assets 4,951,759 4,968,267 4,909,661 4,930,132 565,767Total short term assets 151,160,185 151,708,755 142,006,836 143,737,343 119,004,324 Fixed assets Intangible assets 13,498,336 11,408,796 12,243,148 11,929,375 9,221,627 Tangible assets 47,827,824 42,099,293 36,715,963 44,255,988 48,267,180 Investments 53,307,242 55,983,102 62,679,434 58,742,296 59,647,266Total fixed assets 114,633,402 109,491,190 111,638,544 114,927,659 117,136,073 Total ASSETS 265,793,587 261,199,946 253,645,380 258,665,001 236,140,397 MEMORANDUM ACCOUNTS 171,468,227 177,431,671 184,742,912 167,041,130 157,174,363TOTAL LIABILITIES Short-term liabilities Amounts owed to banks 10,806,199 10,701,805 9,645,384 40,298,359 23,604,381 Amounts owed to other financiers 3,224,800 2,545,157 2,331,665 2,427,745 3,545,959 Financial debt owed to subsidiary/affiliated companies 246,000 10,914,000 10,650,000 1,700,000 0 Advance payments 14,177,189 12,389,313 12,218,806 9,540,411 4,898,788 Amounts owed to suppliers 84,072,192 63,749,194 55,066,894 52,715,486 46,032,160 Debts represented by bills of exchange 0 0 0 0 0 Amounts owed to subsidiary companies 2,568,636 4,306,318 4,927,300 5,784,269 1,065,922 Amounts owed to affiliated companies 99,023 90,904 503,126 167,236 437,850 Amounts owed to tax administration 3,868,897 6,817,606 3,474,793 4,058,863 2,690,631 Amounts owed to social security and welfare institutions 2,235,968 1,425,301 1,321,314 1,376,026 1,259,661 Other short-term debts 4,381,088 3,965,238 6,213,651 4,528,828 5,991,864 Accruals and deferred income - liabilities 291,387 340,704 507,784 576,489 482,595Total short-term liabilities 125,971,378 117,245,540 106,860,718 123,173,712 90,009,810 medium/long term liabilities

Debenture loans 0 0 0 0 0 Amounts owed to banks 36,348,586 45,273,309 50,097,220 39,361,654 46,586,869 Amounts owed to other financiers 0 0 0 0 0 Amounts owed to suppliers 1,801,315 1,701,134 2,255,596 2,884,933 2,164,004 Debts represented by bills of exchange 0 0 0 0 0 Provision for severance pay 6,101,664 6,507,062 5,832,038 5,461,142 5,205,849 Fund for social security and welfare institutions 21,526 21,526 21,526 21,633 45,825 Other funds 1,335,537 1,839,090 2,836,404 4,494,620 3,705,046Total medium/long term liabilities 45,608,627 55,342,121 61,042,784 52,223,982 57,707,593 NET EQuITY Share capital 13,706,084 12,952,749 12,702,218 13,335,213 14,878,043 Revaluation reserve 656,679 656,679 656,679 656,679 656,679 Legal reserve 72,387,954 69,866,959 67,692,238 67,692,238 66,683,567 Reserves foreseen by company bylaws 78,184 78,184 78,184 78,184 78,184 Foreign currency conversion fund 0 0 0 0 0 Merger Advance 235,597 235,597 235,597 3,102,096 3,102,096 Capital gains reserve Lex 784/80 1,269,396 1,269,396 1,269,396 1,269,396 1,269,396 Fiscal year profit / loss 5,879,687 3,552,720 3,107,566 -2,866,499 1,755,028TOTAL NET EQuITY 94,213,582 88,612,285 85,741,878 83,267,307 88,422,994 TOTAL LIABILITIES 265,793,587 261,199,946 253,645,380 258,665,001 236,140,397MEMORANDUM ACCOUNTS 171,468,227 177,431,671 184,742,912 167,041,130 157,174,363


CPL CONCOrDIA COOPErATIvE SOCIETYNET DEBT OF THE PArENT COmPANY AS OF 31.12.2007

ITEM AS OF 31.12.2007 AS OF 31.12.2006



LOANS FROM COOPERATIVE MEMBERS 3,224,800 2,545,157

FINANCIAL DEBT OWED TOWARDS OTHER ENTITIES 246,000 10,914,000


- CASH DEDUCTIONS (25,124) (10,746)

- GROUP FINANCING DEDUCTIONS (20,410,142) (21,940,142)

NET DEBT 20,394,515 36,366,500

DEBT OWED TO THE BANkING WOrLD AND PArENT COmPANY SHArEHOLDErS AS OF 31.12.2007



LOANS FROM COOPERATIVE MEMBERS 3,224,800 2,545,157


- CASH DEDUCTIONS (25,124) (10,746)

FINANCIAL DEBT 40,558,657 47,392,642

GROUP 246,000 10,914,000

DEBT 40,804,657 58,306,642

PrINCIPAL INDExES uSED ON THE BALANCE SHEET ECONOmIC ANALYSIS Statement Dates

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003







FINANCIAL AND EQuITY ANALYSIS Statement Dates

As of Dec. 31,2007

As of Dec. 31,2006

As of Dec. 31,2005

As of Dec. 31,2004

As of Dec. 31,2003

Liquidity index 1,20 1,29 1,33 1,17 1,32


Leverage debt ratio 0,46 0,69 0,82 0,83 0,80


Debt/EBITDA 54,25% 34,29% 18,34% 15,89% 4,72%

Debt/EBITDA 1,84 2,92 5,45 6,29 21,19

99

board of auditors report to the shareholders’ meeting for the annual financial statements as of December 31, 2007

Dear Shareholders,

In compliance with the tasks and duties assigned to the Board of Auditors, we hereby inform you

of the supervisory activities we have performed during the past fiscal year in fulfillment of the

responsibilities reserved to us by article 2403 of the Italian Civil Code.

The Board of Auditors participated in the meetings and conferences of the Board of Directors, performed

in respect for the legislative and statutory laws that regulate its operations. We have obtained the

information requested regarding the general progress of operations and their predictable evolution,

as well as information regarding featured operations performed by the company and companies

under its control. In particular, the Board has overseen that all actions performed remain in conformity

with the Law and Company Bylaws, and are not demonstrably ill-advised, risky, in potential conflict

of interest or in opposition to resolutions made, or could in any other way compromise the integrity

of company assets. The Board, in its supervisory activities, kept close contact with the audit firm

PriceWaterhouseCoopers SpA, responsible for the audit of financial statements for our accounts.

The Board of Auditors, in its supervisory activities, performed its control and consultation duties,

actively participated in meetings of the Board of Directors and in meetings with the administrative

and financial directors of the Cooperative, and provided consultation to supervisory committees

on specific company problems. Last year, in support of the almost complete internal company

reorganization by geographic sector and area, we met with different sector managers to control the

evolution of administrative efficiency in the company’s different “business units”.

In these meetings, we noted the growing degree of professionalism shown by managers, increased

education of staff, and manager involvement in dynamic organization of several sectors.

Young and motivated staff create a satisfying and appreciative environment.

We also acknowledge the administrative efficiency that we noticed during these meetings,

indispensable for the comprehension of the Cooperative’s central and peripheral organization. These

meetings allowed the controlling committee to express judgments and suggestions in the most

opportune office, that of the Board of Directors.

Proof of consolidated efficiency is revealed in the different financial, equity, and economic indicators

of the company, reported in the balance sheet dossier submitted for your approval.

During the fiscal year ending on 31/12/2007, our activity was inspired by the Behavior Rules for

the Board of Auditors recommended by the National Council of Accountants and Tax Advisers.

Therefore, in the fiscal year specific to the supervisory activities devolved to us, we have acquired

knowledge of and supervised the appropriateness of the company organization; we acknowledge


that the supervisory managers, the Council

members invested with powers to supervise

internal control of management, have openly

collaborated with the Board of Auditors and

provided the Board with the appropriate

information regarding different problems that

mark the progress of the Cooperative.

As always, collaboration between the Board of

Auditors, the administrative body and general

Management has continued. This has allowed

us to elaborate upon our knowledge of the

company organization in sectors in which this

relationship exists, and thus perform our own

supervisory activity with mindful certainty.

This year, the Board also thanks Accountant

Massimo Continati and his close administrative

collaborators for their proactive collaboration

and availability and collaboration offered to the

Board of Auditors. This allowed us to obtain the

necessary information requested in real time.

Evaluating and supervising the appropriateness

of the administrative and accounting system,

as well as the reliability of the latter to correctly

represent the facts of management, we have

obtained a flux of information from office

mangers and through examination of company

documents. During the past year, accusations

pursuant to article 2408 of the Italian Civil Code

were not received by the Board of Auditors.

As described above, no other significant facts

emerged from supervisory activities that would

require being mentioned in this report.

As per our responsibility, we examined the

balance sheet for the fiscal year ending on

31/12/2007. We were not asked to perform

an analytical inspection of the content of the

balance sheet, but we did supervise the general

arrangement of the same and its general

conformity to the law pertaining to formation

and structure. With regard to this, we have no

particular observations to report.

To the best of our knowledge, the Directors, in

drafting the balance sheet, have not departed

from the law in accordance with article 2423,

fourth paragraph, of the Italian Civil Code. We

have verified that the balance sheet corresponds

to facts and information we are aware of, in

performing our duties With regard to this, we

have no observations to report.

We have verified that laws were observed

during the preparation of the annual report

and with regard to this, we have no particular

observations to report. The same is also valid

regarding the content of the Explanatory Notes

that are expressed clearly and comprehensibly

to the company body and to third parties, and

that takes in the further information required by

the law and specific rules regarding production

and work oriented cooperative societies and,

in their absence, those regarding joint stock

companies.

In accordance with article 2426 of the Italian

Civil Code we express our consent to record the

following assets in the balance sheet:

Research, development, and advertising

costs;

while, already, the “start-up” and “costs of

installation and expansion” entries have

been reset for depreciation.

The Explanatory Notes specify the criteria

followed for these entries regarding the

depreciation policy according to a plan

programmed with the allowed criteria.

In accordance with article 2 of Law 59/92 the

Board of Auditors acknowledges that during

the past year, in fulfillment of their duties,

the directors have operated and managed

the company in pursuit of the company’s

goals according to the cooperative’s mutual

principles.

The Annual Report takes into account the

requirements of article 2428 number 6 bis of the

Italian Civil Code.

Dear Shareholders,

in light of what is put forth above, we express

our favorable opinion towards approval of the

31/12/2007 balance sheet, as well as the proposal

made by the Board of Directors regarding the

destination of operating profits.

Concordia sulla Secchia, 04 June 2008

THE BOARD OF AUDITORS

Pelliciardi Dott. Carlo Alberto (President)Ascari Rag. FaustoCasari Dott. Mauro

101

certification report


certificationUNI EN ISO 9001:2000

CPL CONCORDIA aderisce a Legacoop

CPL CONCORDIA è un’azienda sostenitrice di UNICEF

CPL CONCORDIA Soc. Coop.

Via A. Grandi 39 - 41033 Concordia s/S. (MO) Italy

tel. +39.535.616.111 - fax +39.535.616.300

[email protected] - w w w . c p l . i t

Consolidated annual account 2007

Documents

Transcript of Consolidated annual account 2007