CONSOLIDATED FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2013 · AT SEPTEMBER 30, 2013 TERNIENERGIA...
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1 INTERIM FINANCIAL REPORT AT SEPTEMBER 30, 2013 TERNIENERGIA Disclaimer This interim Financial Report at 30 September 2013 has been translated into English solely for the convenience of the international reader. In the event of conflict or inconsistency between the terms used in the Italian version of the report and the English version, the Italian version shall prevail, as the Italian version constitutes the sole official document.
Transcript of CONSOLIDATED FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2013 · AT SEPTEMBER 30, 2013 TERNIENERGIA...
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INTERIM FINANCIAL REPORT AT SEPTEMBER 30, 2013
TERNIENERGIA
Disclaimer
This interim Financial Report at 30 September 2013 has been translated into English solely for the convenience of the international
reader. In the event of conflict or inconsistency between the terms used in the Italian version of the report and the English version,
the Italian version shall prevail, as the Italian version constitutes the sole official document.
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CORPORATE DETAILS
TerniEnergia S.p.A.
Registered office in Strada dello Stabilimento 1, 05035 Narni (TR)
Share Capital subscribed and paid: Euro 50.529.680
Company Register of Terni, no. 01339010553
Branches and Offices
Narni – Strada dello stabilimento, 1
Milano – Via Borgogna, 7
Lecce – Via Costadura, 3
Atene – 52, AKADIMIAS STREET
Cape Town - Boulevard office Park, 2nd floor, Block D, Searle. District of Woodstock
Cracovia - Sw. Tomasza 35/3, 30-127
Bucarest - Str. Popa Petre 5
Board of Directors
Chairman and CEO
Stefano Neri
Directors
Francesca Ricci
Fabrizio Venturi
Monica Federici
Paolo Ottone Migliavacca
Mario Marco Molteni
Domenico De Marinis
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Board of Statutory auditors
Ernesto Santaniello (Presidente)
Vittorio Pellegrini
Simonetta Magni
Independent auditors
PricewaterhouseCoopers S.p.A.
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INDEX
1. MANAGEMENT REPORT ............................................................................................................................... 6
1.1 BUSINESS AND MISSION OF THE GROUP................................................................................................ 6
1.2 THE GROUP STRUCTURE ......................................................................................................................... 9
1.3 SIGNIFICANT EVENTS OCCURRED AS AT SEPTEMBER 30, 2013………………………………………………….……….10
1.4 ECONOMIC DEVELOPMENT OF THE GROUP......................................................................................... 17
1.5 BALANCE SHEET .................................................................................................................................... 20
1.6 PRESENTATION OF ECONOMIC RESULTS WITH THE PROPORTIONAL CONSOLIDATION METODH OF JV AS AT
SEPTEMBER 30, 2013 …………………………………………....................................................23
1.7 OUTLOOK……………………………………………………………………….……………………………………………..………………..24
2. FINANCIAL STATEMENTS……………………………………………………………………………………………………………………….26
2.1 STATEMENT OF CONSOLIDATED FINANCIAL POSITION………………………………………………………..…………..26
2.2. CONSOLIDATED INCOME STATEMENTS………………………………………………………………………………..…………27
2.3 CONSOLIDARED STATEMENT OF COMPRHENSIVE INCOME……………………………………………………..………28
2.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY………………………………………………………………....….29
2.5 CONSOLIDARTED CASH FLOW STATEMENT…………………………………………………………………………………..….30
3. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2013………………………….31
3.1 GENERAL INFORMATION…………………………………………………………………………………………………………………..31
3.2 FORM, CONTENTS AND ACCOUNTING POLICIES ADOPTED………………………………………………………………..37
3.3 COMMENTS ON THE MAIN BALANCE SHEET ITEMS: ASSETS……………………………………………………………..37
3.3.1 INTANGIBLE ASSETS………………………………………………………………………………………………………………….39
3.3.2 TANGIBLE ASSETS……………………………………………………………………………………………………………………..41
3.3.3 EQUITY INVESTMENTS………………………………………………………………………………………………………………45
3.3.4 DEFFERED TAX ASSETS……………………………………………………………………………………………………….…….46
3.3.5 NON-CURRENT FINANCIAL RECEIVABLES………………………………………………………………………………….47
3.3.6 INVENTORIES……………………………………………………………………………………………………………………………48
3.3.7 TRADE RECEIVABLES…………………………………………………………………………………………………………………49
3.3.8 OTHER CURRENT ASSETS……………………………………………………………………………………………………….…50
3.3.9 FINANCIAL RECEIVABLES…………………………………………………………………………………………..……………..51
3.3.10 CASH AND CASH EQUIVALENT……………………………………………………………………………….…..………….51
3.4 COMMENTS ON THE PRINCIPAL LIABILITIES ........................................................................................ .52
3.4.1 NET ASSETS .......................................................................................................... …………………52
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3.4.2 PROVISION FOR EMPLOYEE BENEFIT ..................................................................................... 53
3.4.3 DEFERRED TAXATION ............................................................................................................. 53
3.4.4 NON CURRENT FINANCIAL RECEIVABLES ............................................................................... 54
3.4.5 OTHER NON-CURRENT LIABILITIES ......................................................................................... 55
3.4.6 DERIVATIVES ........................................................................................................................... 56
3.4.7 TRADE PAYABLE ...................................................................................................................... 57
3.4.8 DEBT AND OTHER FINANCIAL LIABILITIES ........................................................... …………………57
3.4.9 TAX DEBIT ON INCOME………………………………………………………………………………………………………..58
3.4.10 FURTHER CURRENT LIABILITIES……………………………………………………………………………………………60
3.4.11 COMMITMENTS AND GUARANTEES GIVEN ......................................................................... 61
3.5 COMMENTS ON THE MAIN INCOME ITEMS ......................................................................................... 63
3.5.1 REVENUES .............................................................................................................................. 63
3.5.2 CHANGES IN INVENTORIES OF SEMI-FINISHED PRODUCTS.................................................... 65
3.5.3 COSTS OF RAW MATERIALS, SUPPLIES AND GOODS .............................................................. 66
3.5.4 COSTS FOR SERVICES .............................................................................................................. 66
3.5.5 PERSONNEL COST ................................................................................................................... 67
3.5.6 FURTHER OPERATING COSTS ................................................................................................. 67
3.5.7 DEPRECIATION,IMPAIRMENT AND PROVISIONS .................................................................... 68
3.5.8 FINANANCIAL INCOME AND CHARGES .................................................................................. 68
3.5.9 JOINT VENTURE INCOME ....................................................................................................... 70
3.5.10 TAX ....................................................................................................................................... 71
3.6 RELATIONS WITH RELATED PARTIES ..................................................................................................... 71
3.7 ATYPICAL AND/OR UNUSUAL TRANSACTION………………………………………………………………………………………79
3.8 OTHER INFORMATION .......................................................................................................................... 80
4. CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS PURSUANT TO ARTICLE 154-BIS OF
LEGISLATIVE DECREE 58/98 AND ARTICLE 81-TER OF CONSOB REGULATION NO. 11971/99, AS AMENDED AND
SUPPLEMENTED.......................................................................................................................................... 83
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1. MANAGEMENT REPORT
1.1 BUSINESS AND MISSION OF THE GROUP
The Group TerniEnergia is the first Italian pure player in green industry, the production of energy from
renewable sources, the circular economy and energy efficiency, listed on the STAR segment of the Italian
Stock Exchange. In particular, the Group is a leading integrated environmental strategies in the European
and pursues the best practices identified by the main international agreements on limiting greenhouse gas
emissions and combat climate change.
Thanks to a policy of diversification of activities and the full technological independence and with a
portfolio of related and complementary activities, all related to the area of the green industry and
renewable energies, TerniEnergia itself as the only national player active in three segments of the "Climate
Package" of the European Union. In particular, the Group is active in increasing energy production from
renewable sources (particularly solar, biogas and solid biomass), energy savings through energy efficiency
investments, recovery of materials through technologically advanced equipment (tires and water treatment
purification) and reduction of CO2 emissions by means of investments to implement solutions and systems
with low environmental impact.
As at September 30, 2013 TerniEnergia made 270 photovoltaic systems with a total power of 272.8 MWp in
Italy, Greece and Romania, built and operates biomass plants totaling 1.5 MW and 2 MWt and has
implemented energy efficiency measures for more than 400 million kWh saved, contributing significantly to
the national energy mix, to the achievement of national objectives at Community level and making
significant innovations on the technological front.
Through an intensive development and diversification of activities, which has seen the business alongside
that of the EPC construction of plants for their own solar and biomass electricity generation and the sale of
equipment already connected to the network, TerniEnergia has assumed the configuration of a green
company "asset owner" active in the renewable energy segment.
The business model, based on the development of the main activities in-house, has enabled the rapid
growth of TerniEnergia in the industry and its affirmation of the main operators at national level. Following
the muato Italian regulatory framework, the Group has made the choice to internationalize their activities,
taking on the strategic direction of strengthening the EPC photovoltaic business outside the country, even
to react to the gradual decline of national policies to promote renewable energy . The Company, therefore,
has completed the establishment of foreign branches in Greece, South Africa, Poland and Romania, with
the objective to enable important projects of industrial partnership with utilities of international
importance.
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Consistent with the strategy of business diversification, TerniEnergia has recently initiated a process of
research aimed at the identification of new areas of development that can provide an opportunity for the
Company, always within the scope of the green industry. In particular, the Company has identified
attractive opportunities for growth in the segment of industrial energy efficiency and has started a research
in the energy storage.
At the national level, in the photovoltaic industry, the Group remains TerniEnergia operating in the
production of electricity by converting solar energy, through the joint venture jointly controlled with
partner tier and the systems made directly on their own behalf. In particular, the Group currently holds
33.3 MWp to 100% (taking into account the spin-off of the JV Fotosolare Seventh) and no. 7 JV partner with
national industrial, relating to the identification, development, financing, design, construction,
commissioning, operation and management of photovoltaic plants in Italy of industrial size, and the sale of
electricity produced by them for a total of 11.1 MWp.
Photovoltaic systems made by the Group generally have a power close to 1 MWp.
In relation to the objective of reducing energy consumption, however, TerniEnergia, through its subsidiary
Lucos Alternative Energies, has acquired considerable know-how in the field focusing the energy efficiency
of industrial scale, developing the business on the basis of the same scheme already used for photovoltaics.
TerniEnergia aims both as an EPC (manufacturer on behalf of clients interests) either as an investor through
the system FTT (via the schema defined Third Party Financing - ESCO). Lucos Alternative Energies has
already carried out, among others, energy saving measures in public lighting in different industrial
companies of considerable size, in various Italian towns, and created alliances and partnerships with
industry.
On the environmental side are operational plants for recovery of secondary raw material from tires (ELTs),
biodigestion and composting GreenAsm and finally purification of groundwater in Nera Montoro.
The Group, therefore, despite the significant changes described herein will continue to face, in essence, as
a provider of integrated plant once the installation of photovoltaic systems for industrial and / or
installations of efficiency and energy recovery. This type of business involves offering "turnkey" through a
business model that involves the integration and control of the entire process of development,
implementation and management of systems (business marketing, design, installation and maintenance of
the same ). The Group has in fact, progressively internalized all the "core" processes, from technical design
to the management of administrative relationships, the realization in their own facilities of the support
structure and the electrical panels, the design and implementation of remote control systems (TRSUN) and
safety (iGreen Patrol).
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1.2 THE GROUP STRUCTURE
TERNIENERGIA S.P.A.
100%
NEWCOENERGY S.R.L.
CAPITAL SOLAR S.R.L. 50% JOINT VENTURES CON EDF EN
INVESTIMENTI INFRASTRUTTURE S.R.L. FOTOSOLARE SETTIMA S.R.L.
CAPITAL ENERGY S.R.L.
ENERGIA NUOVA S.R.L.
MEET SOLAR S.R.L.
DT S.R.L. JOINT VENTURES CON ALTRI PARTNER
RINNOVA S.R.L. SAIM ENERGY 2 S.R.L.
ENERGIA BASILICATA S.R.L. COLLESANTO S.R.L.
ENERGIA LUCANA S.R.L. 50% INFOCACIUCCI S.R.L.
VERDE ENERGIA S.R.L. GIRASOLE S.R.L.
SOC AGR FOTOSOLARA CHEREMULE S.R.L. SOL TARENTI S.R.L.
SOC AGR FOTOSOLARA BONNANARA S.R.L. GUGLIONESI S.R.L.
SOC AGR FOTOSOLARA ORISTANO S.R.L. GREEN ASM S.R.L.
SOC AGR FOTOSOLARA ITTIREDDU S.R.L.
TECI S.R.L.
MEET GREEN ITALIA S.R.L. 70% LUCOS ALTERNATIVE ENERGIES S.P.A.
IGREEN PATROL S.R.L. 70%
SOCIETA' AGRICOLA PADRIA SRL LYTENERGY S.R.L.
TERNIENERGIA POLSKA Sp.z.o.o.
TERNIENERGIA SOLAR SOUTH AFRICA L.t.d.
TEVASA (Pty) Ltd
TERNiENERGIA PROJECT (Pty) Ltd
TERNIENERGIA S.p.A. HELLAS M.E.P.E.
TERNIENERGIAROMANIA S.R.L.
ALCHIMIA ENERGY 3
ENERGIA ALTERNATIVA S.R.L.
FESTINA S.R.L.
T.E.R.N.I. SOLARENERGY S.R.L.
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1.3 SIGNIFICANT EVENTS OCCURRED AS AT SEPTEMBER 30, 2013:
1.3.1 SET UP OF NEW SUBSIDIARIES IN ROMANIA (BUCHAREST)
On February 1, 2013 TerniEnergia completed the set up of TerniEnergia Romania Srl in Bucharest, 100%
owned. The Romanian subsidiary of TerniEnergia S.p.A. will work with the extreme efficiency to conduct
the considerable programs for the growth and development of TerniEnergia on Eastern European markets.
The signing of this important framework agreement represented an important confirmation of
internationalization strategies on the photovoltaic EPC business of the Company. Specifically, the
transactions to develop projects, both in energy industry through the creation of photovoltaic plants, and
environmental industry through the possible implementation of the circular economy activities, are still
under development phase.
1.3.2 ACQUISITION OF A PHOTOVOLTAIC PLAN IN UMBRIA FOR AN AGGREGATE INSTALLED POWER OF
APPROXIMATELY 0,8MW.
On march 1, 2013 TerniEnergia completed the acquisition of the total quotas of Alchimia Energy 3 Srl.This
acquisition was aimed at developing a new photovoltaic greenhouse plant of industrial size in the region of
Umbria, for an aggregate installed power of approximately 0.8 MWp, already in operation at tariffs of the
second "Energy Account”. The cost of operation amounted to Euro 2.16 million (Euro 0.07 million related to
the acquisition of the Capital Share and Euro 2.09 million to secure repayment of the shareholders’ loan)
fully funded in cash, Euro 1,052 thousand of which paid in advance. The remaining value will be paid in
subsequent tranches of equal value, the last of which by the month of January 2014.
1.3.3 THE SHAREHOLDERS’ MEETING OF TERNIENERGIA S.P.A. APPROVED THE AMENDMENTS RELATED TO THE
“FEMALE QUOTAS”.
On March 8, 2013 the Extraordinary Shareholders’ Meeting of the Parent Company examined and also
passed unanimously amendments to the by-laws in order to bring them into line with Legislative Decree
no.120 of 12 July 2011, in compliance with the balance of the genres in the constitution of the Group’s
Board of Directors and Board of Statutory Auditors, with a consequent change of the articles 13 e 21 and
introduction of the article 28 of the by-law.
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1.3.4 REALIZATION OF A PLANT IN CAMPANIA, FOR AN AGGREGATE INSTALLED POWER OF 21,7 MWP.
On March 25, 2013 the Parent Company TerniEnergia signed an agreement with a main European utility,
aimed at constructing a new photovoltaic plant in the Campania region for an aggregate installed power of
21.7 MWp. The agreement provided the realization of the plant with “EPC Contract” (turn-key formula)
without the panels supply for an annual consideration payable of Euro 16 million. The working sites have
already been opened and the expected completion is scheduled for June 30th, 2013.
1.3.5 EDF EN ITALY PURCHASE THE 50% OF THE JV ENERGIAALTERNATIVA SRL IN THE SECTOR OF THE VALORIZATION
OF THE PHOTOVOLTAIC ASSET.
On March 28, 2013, TerniEnergia signed an agreement with EDF EN Italia, that provided the transfer of the
50% of the corporate capital of EnergiaAlternativa Srl to TerniEnergia Srl. TerniEnergia Cda approved the
operation which was communicated to the market on December 19, 2012.
EnergiaAlternativa Srl owns 12 photovoltaic plants of industrial size for an aggregate installed power of
approximately 13.9 MWp. The value of the asset is given by the algebraic sum of the Enterprise Value,
related to the 100% of the JV, equal to Euro 54.3 million, and the value of the Amended Net Financial
Position resulting in the Half-year Financial Statement in the date of the assignment. The value of the share
acquired by TerniEnergia is, therefore, equal to the 50% of such sum. At the end of the operation, the final
price of the sales contract was equal to Euro 2.809 thousand and it has been remitted at the beginning of
May 2013, excluded some compensations.
1.3.6 APPROVAL OF THE FINANCIAL STATEMENTS AND RENEWAL OF THE CORPORATE BODIES
On April 29, 2013 The Shareholders’ Meeting approved unanimously the financial statements and noted
the presentation of the consolidated financial statements as at December 31, 2012. The Shareholders’
Meeting also approved the distribution of a dividend of Euro 0.055 per ordinary share, gross of tax.
The dividend shall be paid through authorized intermediaries, on May 30, 2013, with separation of coupon
no.3 on May 27, 2013.
The Shareholders’ Meeting also passed the following resolutions:
a) set in seven people the number of Directors and appointed the Board of Directors for three years, until
the Shareholders' Meeting which will be called to approve the financial statements as at December 31,
2015, people are the following :
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- Stefano Neri, President and CEO;
- Paolo Ricci, Administrator;
- Fabrizio Venturi, Administrator;
- Monica Federici, Administrator;
- Domenico De Marinis, Independent Director*;
- Paolo Migliavacca, Independent Director*;
- Mario Mauro Molteni, Independent Director*;
b) appointment of the Board of Auditors for three years , until the date of the Shareholders’ Meeting which
will be called to approve the financial statements as at December 31, 2015, people are the following:
- Ernesto Santaniello, President;
- Vittorio Pellegrini, Standing Statutory Auditor;
- Simonetta Magni, Standing Statutory Auditor
-Marco Chieruzzi, Alternate Statutory Auditor;
- Marco Rosatelli, Alternate Statutory Auditor.
There have been defined also gross annual remuneration payable to the Board of Directors (Euro 450
thousand).
Plus a variable fee equal to 15% of the remuneration , if the operating result as at the end of the year is
higher than 5% of the EBITDA of the approved business plan, in addition to reimbursement of expenses
incurred in the performance of the assignment) and the Statutory Auditors (Euro 70 thousand in addition to
reimbursement of expenses incurred in the performance of the assignment.
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The Board of Directors appointed the Remuneration Committee, the Audit and Risk Committee, the
Director in charge of the System of Internal Control and Risk Management, the Committee for Related
Parties and the Lead Independent Director. The Remuneration Committee, the Audit and Risk Committee,
the Director in charge of the System of Internal Control and Risk Management, the Committee for Related
Parties are composed of Domenico De Marinis, Paolo Migliavacca and Mario Mauro Molteni, to guarantee
the better transparent condition. Paolo Ricci has been appointed Director in charge of the System of
Internal Control and Risk Management. Paolo Ottone Migliavacca has been appointed Lead Independent
Director.
The Board of Directors also proceeded to attribute responsibilities and powers.
Specifically, the Chairman, Stefano Neri, was given the responsibility to follow:
• General Affairs, promotion of projects of strategic importance, internationalization of business
relationships with subsidiaries.
The Chief Executive Officer Paul Ricci (vice president) was given the responsibility related to:
• development, international expansion.
The Chief Executive Officer Fabrizio Venturi was given the responsibility relating to:
• Marketing, managing relationships with suppliers and customers, legal affairs, international
expansion, technical management, security, environmental protection, personnel managing.
1.3.7 FRAMEWORK AGREEMENT FOR THE DEVELOPMENT OF THE PROJECT “RA” RENEWABLE ASSETS
TerniEnergia, company active in the renewable energy fields, energy efficiency and waste management,
listed on the Star segment of Borsa Italiana, and Power Capital, a consulting company for investment, have
signed a framework agreement for the development of the project called "RA", Renewable assets, aimed at
structuring an Italian close-ended investment fund, involving real estate, to qualified investors, with the
contribution of real estate and cash payments. As at May 7, the agreement was presented to the business
and financial community and to the press at the headquarters of Borsa Italiana.
In particular, the fund shall be specialized in the production of energy from renewable sources and in the
green industry, proposing itself to represent a new investment instrument in a rapidly expanding sector.
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Objective of the operation will be to increase in a long-term time horizon the invested amount, through
cash flows generated steadily by the operation of industrial plants. The fund will have a structure, a
duration of twenty years and will guide investment choices towards an asset class, that of plants producing
energy from renewable sources, a constant and high cash generation, with a cycle of investment and
adjustment regime shorter than the traditional real estate development. The "RA" project expected risk-
adjusted, adequate, predictable returns and tenuously linked to the performance of financial markets,
more than 10% in terms of IRR. The advantages include a better taxation than the special purpose vehicle
where normally listed companies or private equity funds occur. Finally, the fund will ensure full
transparency and independence, as supervised party, segregated capital base, and with a better credit
rating than a vehicle company. According to the project, TerniEnergia will be the concessionaire company
of the operational production and distribution of energy risks, maximizing the predictability of future cash
flows, thanks also to the operating and insurance policies. The company will also be the strategic partner of
the fund for the EPC activity, for the development of projects and for the construction of plants, with the
turnkey formula through EPC contracts at market prices. Together with the Power Capital Advisor,
TerniEnergia will evaluate and propose new projects to the SGR in Italy and abroad for the construction of
plants, including high-power plants. Power Capital, a company of professionals with proven experience and
recognized track record in asset management, will act as advisor also for the fund’s structure, enhancing its
expertise in the assessment and implementation of investment projects related to property. Raising capital
is expected between Euro 50 and 100 million.
1.3.8 WARNING CONSOB ADJUSTMENT BOARD OF DIRECTORS TO THE LAW ON THE “FEMALE QUOTAS”.
As at June 20,2013, with Resolution No. 18583, Consob issued an order of formal notice to the Parent
Group to adapt to the allotment criteria established from Article. 147-ter, paragraph 1-ter of the TUF and
art. 2 of Law no. 120 of July 12,2011. With this resolution, CONSOB has therefore warned the parent group
to adjust the composition of its Board of Directors, appointed on April 29, 2013 by the shareholders, the
provisions relating to gender balance established by the regulations in force ("quotas") , within a maximum
period of 4 months. In the event of non-compliance, Consob shall impose an administrative fine ranging
from Euro 100,000 to Euro 1,000,000 and setting a new deadline of three months to comply. In case of
further non-compliance with respect to this new warning, the members appointed shall cease to hold
office.
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1.3.9 AGREEMENT BETWEEN PRELIOS SGR AND TERNIENERGIA FOR THE ESTABLISHMENT OF A RENEWABLE ENERGY
REAL ESTATE
As at June 24, Prelios SGR and TerniEnergia (a company operating in the renewable energy, energy
efficiency and waste management sectors, listed on the Star segment of Borsa Italiana) signed on today’s
date an agreement for the establishment of “RA” - Renewable Assets, a closed-end real estate mutual fund,
reserved for qualified investors, investing in assets functional to the generation of energy from renewable
sources. The Fund will be established, placed and managed by Prelios SGR, it will have an initial equity
raising target between 50 and 100 million euro and its term will be 20 years.
This speculative Fund may reach an LTV of 80%.
TerniEnergia will initially transfer to the Fund some renewable energy plants already operating at full
capacity for a gross OMV of about 75 million euro, with consequent and concurrent subscription of the
Fund units.
TerniEnergia, in agreement with Prelios SGR, will also play a strategic role in the development of a pipeline
of plants to be constructed or already existing in the photovoltaic sector or in other renewable energy
segments, that may be transferred to the Fund and managed by TerniEnergia as tenant. Prelios SGR will
rely on the specialist support of Power Capital, in its capacity as advisor, providing advisory services in
investment and divestment transactions. This agreement means for Prelios SGR a significant strategic
diversification in sectors close to the real estate industry with a high growth rate and capable to generate
steady cash flows for investors. The funds specialized in renewable energy actually benefit from an
investment cycle not strictly correlated to the traditional real estate market performance and are currently
developing a true asset class, also in Italy, for the investment strategies of the major institutional investors.
This agreement envisages the possibility to replicate the project through new periods for the subscription
of the Fund units and/or the start of operations of other real estate funds with like features.
1.3.10 TRANSFER OF THE SHARE OF GREENLED SRL TO T.E.R.N.I. RESEARCH S.P.A
At June 24, the Board of Directors of TerniEnergia , approved the sale of the shares held by Greenled Srl
TerniEnergia to its parent Terni Research SpA. On the transaction was expressed a prior positive opinion of
the Related Parties Committee, as required by the Rules for Transactions with Related Parties, as well as by
Consob Regulation no . 17221 of 12 March 2010.The shares sold by TerniEnergia account for 70% of the
share capital of Greenled , operating in the development and production of LED street lamp intelligent ,
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certified to operate under conditions of thermal stress particular of productive and / or industrial
environments (eg areas Foundry of steel mills, glass factories , cement works, etc. . ) or urban and suburban
areas particularly exposed to the elements. The remaining 30 % of the shares belongs to the company IST Srl,
lead developer of the utility model of LED lamps owned by the company .
1.3.11 ACQUIRED 50% OF THE JV T.E.R.N.I. SOLARENERGY SRL, SOLD 50% OF THE JV SOLAREN SRL
As at June 28, 2013 TerniEnergia signed two agreements with EDF EN Italy for the purchase and sale of
companies owning solar power plants in operation, held in joint venture by the two companies.
The first agreement provides the acquisition by TerniEnergia of the 50% share capital of the JV Terni
SolarEnergy Srl, owned by EDF EN Italy.
The company owns 7 industrial sized photovoltaic plants for a total of 6 MWp. The value of assets was
determined based on the sum of the Enterprise Value on 100% of the JV, amounting to Euro 22.6 million,
and the value of the adjusted net financial position resulting from the interim financial statements of the
company on the effective date the assignment. The price of the stake acquired by TerniEnergia was,
therefore, equal to 50% of the value of Euro 1,026 thousand.
The second agreement provides the transfer from TerniEnergia to EDF EN Italia of the 50% of the share
capital of the JV Solaren Ltd.
The company owns five industrial sized photovoltaic plants for a total of 4.5 MWp. The value of assets was
determined based on the sum of the Enterprise Value on 100% of the JV, amounting to Euro 17.8 million,
and the value of the adjusted net financial position resulting from the interim financial statements of the
company on the effective date the assignment. The price of the stake acquired by TerniEnergia was,
therefore, equal to 50% of the value of Euro 2.886 thousand.
1.3.12 CONCLUSION OF THE ENHANCEMENT OF PHOTOVOLTAIC ASSETS WITH EDF EN ITALY ; SPLIT THE JV
FOTOSOLARE SETTIMA SRL
As at July 15 2013, the Parent Company and EDF EN TerniEnergia Italy SpA signed an agreement for the
non-proportional demerger of the company Fotosolare Settima Srl, which owns 10 photovoltaic plants in
operation for a total of 9.4 MWp , previously held in the JV to 50 % . The agreement provides for the
establishment of a new company , to be known as Solter Srl , whose registered capital will be entirely made
out to TerniEnergia and to whom will be given the business that deals with the production of electricity by
photovoltaic systems of industrial size 4 for a total of 3.8 MWp. It will remain fully available to the
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demerged company EDF EN Italy with the remaining 6 for a total of 5.6 MWp photovoltaic systems . The
enterprise value of the assets acquired by TerniEnergia is Euro 13.56 million . The effectiveness of the
transaction is subject to the signing of the act of splitting from the members of Fotosolare Settima ,
scheduled for November 2013. With the conclusion of the path of asset allocation with EDF EN Italy , will
grow substantially , the installed capacity of photovoltaic systems wholly owned by TerniEnergia to the
business of power generation . The Group , in fact, will own 100% of a total of 33.3 MWp , to which you add
additional 11.1 MWp held in the JV to 50% with leading national operators .
1.3.13 CLOSING THE TAX AUDIT REPORT
As at July 30 2013, with the closing of the Assessment Report was completed tax audit started in March
2013 to TerniEnergia by the Inland Revenue , Regional Directorate of Umbria - office fiscal controls . The tax
inspectors have expressed some relief for the tax year 2010/2011 in relation to IRES , IRAP and VAT , to
which TerniEnergia filed for membership. The cost for TerniEnergia relating to such claims amounted to
Euro 157 thousand , entirely recorded in this Interim Report ended 30 September 2013.
17
1.4 ECONOMIC DEVELOPMENT OF THE GROUP
In the period ended on September 30, 2013, TerniEnergia Group achieved the targets set out in the
business plan in order to rationalize the power generation and develop the business in the environmental
industry and in the energy efficiency. Furthermore, the Group achieved the internationalization policy in
order to export own business model, yet consolidated in Italy.
During the 2013, the Parent Group concluded the 50% acquisition of Energia Alternativa S.r.l and of
TerniSolar Energy, owner, respectively, of 12 plants for 13.9 Mwp and 7 plants for 5.7 MWp, and put in
operation the preparatory activities to sign important contracts to create plants and parts of photovoltaic
plants in South Africa and in Romania through the respective overseas Companies consolidated.
Furthermore, the group has completed the construction of a photovoltaic plant of 21.0 MWp in Italy on
behalf of a major European companies operating in the development of renewable energy. Since the start
of its activities in 2006, the Group has constructed a total of 270 plants, with an accumulated capacity of
approximately 272.8 MWp. In the first nine months there was an intervention for energy efficiency of
about 1.100 area lights installed in an important shopping centre.
At the date of approval of the consolidated financial statements it has been opened a site to realize an
operation of energy-efficiency of an important Italian industrial group of more than 5,200 area lights,
whose completion is expected by the end of the year 2013. In addition, a contract was signed for the
realization of an additional operation of energy efficiency, which is expected to be completed within the
year, at a major industrial site of more than 2,200 area lights.
18
Below are summarised the Group’s economic highlights:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Net revenues from sales and services 45,926,160 41,097,173 4828,987 11.8%
Production costs (32,640,869) (33,347,903) 707,034 (2.1%)
Added value 13,285,291 7,749,270 5,536,021 71.4%
Personnel costs (4,326,917) (3,932,857) (394,060) 10.0%
EBITDA 8,958,374 3,816,413 5,141,961 134.7%
Amortisation, depreciation, provisions
and write-downs (4,578,180) (1466,088) (3,112,092) n.a.
EBIT 4380,194 2,350,325 2029,869 86.4%
Financial income and charges (190,720) (2,792,568) 2,601,848 (93.2%)
Portions of results attributable to the
JV 1257,399 3,201,495 (1944,096) (60.7%)
Pre-tax result 5,446,873 2,759,252 2,687,621 97.4%
Income taxes 597,149 45,415 551,734 n.a.
Net result 6,044,022 2,804,667 3,239,355 115.5%
Ebitda Margin 19.51% 9.29%
At 30 September 2013, the Group recorded consolidated revenues from sales and services for Euro 45,926
thousand, an increase of 11.75% over the same period of 2012 (Euro 41,097 thousand). Revenues of the
activity of EPC in the photovoltaic sector amount to Euro 24,881 thousand. Revenues from the
management of photovoltaic systems (Power Generation Fotovoltaico) amounted to Euro 10,407 thousand,
which, since April, also take into account the consolidation of the company Energia Alternativa srl and the
company TerniSolar Energy since, essentially, the month of July. The other business
lines (maintenance, energy efficiency and power generation) recorded revenues of more of Euro 6 million.
The direct production costs, for the most part of variable nature, amounted to Euro 32,641 thousand
recording a decrease of 2.12% compared to the previous year (Euro 33,348 thousand). This trend has
resulted in an increase of value added (71.4%) increased from € 7,749 thousand in the first nine months of
2012 to Euro 13,285 thousand in the first nine months of 2013.
EBITDA passed from Euro 3,816 thousand in the first nine months of 2012 to Euro 8,958 thousand in the
first nine months of 2013. The increase in EBITDA was due mainly to the consolidation of the Power
Generation (purchase of Alternative Energy and Terni SolarEnergy and subsequent consolidation of their
19
economic results), and the results of the activities "environment" that to 30 September 2013 posted
revenues of Euro 4,246,000 (remember that September 30, 2012, these activities were not present since
the merger with TerniGreen took effect in mid-September 2012).
Depreciation and amortization recorded an increase from Euro 1,466 thousand to Euro 4,578 thousand
attributable to the increase of the facilities fully owned by the Group.
The net finance income of approximately Euro 1,067 thousand, is mainly attributable to the following: the
recognition of income of Euro 3,416 million, resulting from the revaluation of 50% of the shares already
held in company Energia Alternativa Srl and TerniSolar Energy of which the Parent Company acquired the
remaining 50% respectively on 28 March and 28 June 2013, as well as the recognition of income resulting
from the application of IFRS 13 to the derivatives of the group, amounting to Euro 1,107 thousand, which,
together with the detection of share results JV recorded 30 September 2013 and Euro 1,257 thousand,
more than offset the increase in borrowing costs. .
The net result for the period to 30 September 2013 shows a surplus of Euro 6,044 thousand, recorded an
increase in absolute value of Euro 3,239 thousand compared to what is reported in the same period last
year (Euro 2,805 thousand) as a result of the above described.
Consolidated net revenues
Consolidated net revenues recorded in the first nine months of 2013 were higher than those of the
corresponding period last year, despite the decrease in the absolute number of MWp installed. This
increase is due, on the one hand, the increased incidence of other revenues, with the registration of the
proceeds from the disposal of shares of the company Solaren, on the other hand, the increase in revenues
from energy production of photovoltaic systems in full ownership. An important contribution to the
financial results to September 30, 2013 is represented also by revenues also "Environment", equal to Euro
4,246 thousand especially in terms of margins. They are represented mainly by revenues from the
management of the biodigestion in Nera Montoro, as well as the treatment plants of the PFU (Life Tyres)
and from the treatment of groundwater.
20
1.5 BALANCE SHEET
Consolidated reclassified balance sheet is the follow
As at September, 30 As at December, 31 Change Change%
(in Euro) 2013 2012
Intangible assets 4,873,435 5,555,935 (682,500) (12.28%)
Property, plant and equipment 143,535,913 67,605,402 75,930,511 112.31%
Financial asset 16,991,494 17,222,037 (230,543) (1.34%)
Fixed Assets 165,400,842 90,383,374 75,017,468 83.00%
Inventories 11,576,975 8,773,234 2,803,741 31.96%
Trade receivables 26,530,034 45,108,376 (18,578,342) (41.19%)
Other assets 12,715,282 9,538,845 3,176,437 33.30%
Trade payables (29,178,431) (26,909,257) (2,269,174) 8.43%
Other liabilities (7,279,415) (2,608,321) (4,671,094) n.a.
Net working capital 14,364,445 33,902,877 (19,538,432) (57.63%)
Provisions and other non-trade
liabilities (11,286,029) (13,178,881) 1,892,852 (14.36%)
Net Invested Capital 168,479,258 111,107,370 57,371,888 51.64%
Shareholders’ Equity 52,192,278 48,769,462 3,422,816 7.02%
Current net financial position 24,252,197 34,157,998 (9,905,801) (29.00%)
Non-current net financial position 92,034,783 28,179,910 63,854,873 n.a.
Total net financial position 116,286,980 62,337,908 53,949,072 86.54%
Net Invested Capital 168,479,258 111,107,370 57,371,888 51.64%
21
Net invested capital
As at September 30, 2013 Fixed assets amounted to Euro 165,401 thousand, with an increase of Euro
75,017 thousand compared to December 31, 2012, primarily due to Euro 55,221 thousand to plants owned
by the companies acquired during the first quarter (Alternative Energy srl and Alchemy srl) and € 20,722
thousand due to the purchase of 50% of the company TerniSolar Energy srl., net of depreciation amounting
to Euro 4,578 thousand. As at September 30, 2013, the Group held in full ownership of the overall power of
photovoltaic 33.3 MWp (taking into accont the spin-off of the JV Fotosolare Seventh), while others are held
11,1 MWp in JV with other national industrial partners. The Group is also the owner of the following plants
in operation relating to the "environment" means a facility biodigestion and for the treatment of biowaste
composting (Organic Fraction of Municipal Solid Waste), a treatment plant PFU (Life Tyres) and a plant
purification of groundwater, all present in the plant in Nera Montoro. Finally, a second treatment plant PFU
is , pyrogasification (already connected to the grid at the end of December 2012) a plant and a composting
plant in Puglia are under construction.
Net working capital amounted to Euro 14,364 thousand a decrease of 57.63% compared to December 31,
2012 (Euro 33,903 thousand). This change is a result of a direct action of the company aims to redress the
balance of payables and trade receivables through an acceleration of collection activities and an increase in
average payment provided for in the new main supplies.
The dynamics of net invested capital in the first nine months of 2013 reflects the objectives stated in the
“Baseline” business plan and the mission and activities of the Group. It is clear an increase in tangible result
of the consolidation of the assets held in the first JV and due to investments in the Environment (Biomass
and gas recovery plants Tires Exhausted). As far as the evolution of net working capital showed a significant
decrease compared to 31 December 2012 mainly due to the disposal of trade receivables. As for the funds
and other liabilities, while changing the composition, there was a decrease of more than one million Euros.
As for the funds and other liabilities while changing the composition there was a decrease of more than
one million Euros.
22
Net financial position
As at September, 30 As at December, 31 Change Change%
(in Euro) 2013 2012
Cash (19,077) (21,373) 2,296 (10.74%)
Available bank current accounts (9,674,216) (3,363,025) (6,311,191) n.a.
Liquidity (9,693,293) (3,384,398) (6,308,895) n.a.
Current bank debt (current account overdraft) 6,661,863 3,421,723 3,240,140 94.69%
Current bank debt (advance) 16,111,706 33,687,152 (17,575,446) (52.17%)
Financial payables to other lenders 2,124,845 155,075 1,969,770 n.a.
Financial payables /(Receivables) 2,954,324 974,483 1,979,841 n.a.
Current financial debt (other lenders) 9,937,720 8,680,765 1,256,955 14.48%
Current financial receivables (3,844,968) (9,376,802) 5,531,834 (58.99%)
Current financial debt 33,945,490 37,542,396 (3,596,906) (9.58%)
Net short-term financial position 24,252,197 34,157,998 (9,905,801) (29.00%)
Non-current financial debt (other lenders) 35,618,471 1,495,824 34,122,647 0.00%
Financial payables to other lenders - 101,639 (32,373) (31.85%)
Non-current financial debt (Leasing) 56,347,046 26,582,447 29,764,599 111.97%
Non-current net financial position 92,034,783 28,179,910 63,854,873 n.a.
Total net financial position 116,286,980 62,337,908 53,949,072 86.54%
Net debt as at September 30, 2013 amounted to Euro 116,287 thousand and registers a significant increase
compared to December 31, 2012 (Euro 62,338 thousand) due to the full consolidation of the joint venture
incorporated in the first half. As at September 30 the debt held by the firm Alternative Energy Ltd.
amounted to Euro 41,727 thousand and society Terni Solar Energy is Euro 19,838 thousand. The net
financial position was divided into short-term portion of Euro 24,252 thousand (Euro 34,158 thousand at
December 31, 2012) and long-term portion of Euro 92,035 thousand (Euro 28,180 thousand at December
31, 2012). The long-term portion is attributable to the loan agreements (mainly leases) entered into with
major financial institutions to cover the financial requirements needed for the development of photovoltaic
parks taught entirely at the full disposal of the Group. Please note that the plants not yet funded to
September 30, 2013 the net financial position to weigh short for a total amount of approximately Euro 15,5
23
million (Euro 20,500 thousand at December 31, 2012). In this figure, mainly fall plants still in progress at the
date of the consolidated financial report.
The financial position in the short term for an amount of Euro 24,252 thousand (Euro 34,158 thousand at
December 31, 2012) essentially consists of short-term debt to banks for overdrafts (Euro 6,662 thousand )
or advances on invoices and / or contracts (Euro 16,112 thousand), from Euro 15,017 thousand represented
by short-term financing from banks and current portion of lease payables, from Euro 9,693 thousand of
cash. As for short term financial receivables, amounted to Euro 3,845 thousand mainly consist of the
current portion of financial receivables from the JV (Euro 2,845 thousand), and cash (Euro 1,000,000)
placed as security for credit facilities granted to the Parent Company by the Monte dei Paschi di Siena
warranty.
During the first nine months of 2013, there was a significant increase in non-current financial position , the
dynamics of which must be seen in relation to the increase in the value of Fixed Assets. With regard to the
current financial position, it improved significantly mainly due to significant redemptions during the first
half on the short-term credit lines (see in particular the change in "current bank loans - advances") that led
to the NFP / short equity, to 0.46 x, remaining well below the unit in an area of complete safety. The Parent
Group showed a project of a medium-term syndicated loan to a pool of lenders in order to harmonize the
credit lines with the evolution of the business model aimed at integrating the activities of EPC photovoltaic
power generation with investment activities in the environmental industry sector (waste management) and
energy efficiency.
Equity
Shareholders' equity, including net for the period to 30 September 2013 amounted to Euro 52,192
thousand an increase over the previous year to 3,422 thousand. This change is due mainly to the ex-
dividend amounting to Euro 2,068 thousand (which took place at the end of the month of May, 2013) and
to the corresponding period in the amount of Euro 6,044 thousand.
24
1.6 PRESENTATION OF ECONOMIC RESULTS WITH THE PROPORTIONAL CONSOLIDATION METODH
OF JV AS AT SEPTEMBER 30, 2013
As st 30 September 2013, the Group had the joint control with partners - primary level - some of the
companies whose object is the identification , development, financing, design, construction ,
commissioning, operation and management in Italy photovoltaic systems of industrial size , and the sale of
electricity produced by them.
Pursuant to the provisions of IAS 31 – “Interests in Joint Ventures”, the Group opted for using the equity
method for accounting for joint ventures pointing out , therefore, the results of the Group in the
consolidated and separated income statement line “Share of income JV “. The following table shows the
results of the Group as at September 30, 2013 in case the results of the joint ventures were accounted by
using the proportionate method:
30 September
2013 2012
Total Total
Revenues 53,254,469 56,335,558
EBITDA 15,148,087 17,059,130
EBIT 8,405,722 11,679,982
Net Results 6,044,022 2,804,667
Ebitda Margin 28.44% 30.28%
This method of accounting would not result in any adjustment to the Group's net profit in the period under
review.
The decrease in economic performance expressed by the proportional method is due to the different
number of megawatts that contribute to the result for the first nine months of 2012 compared to the first
nine months of 2013. In particular, the sale of the JV Energie Srl (owns 13 plants totaling 16.7 MWp) which
took place in late 2012 resulted in the failure to include the plants of the same proportional results in the
first nine months of 2013. The effect was not offset by the acquisition of 100% of the assets of the
Alternative Energy took place on 28 March 2013 taking into account that it owns 12 plants with a total
capacity of 13.9 MWp.
25
1.7 OUTLOOK
TerniEnergia has achieved better results compared to 30 September 2012 and the previous quarter ,
broadly in line with expectations expressed in previous reports management .
With the introduction of new industrial plan "Discover the new green era", TerniEnergia outlined the
objectives of the strategic, industrial and financial , characterized by the stability of the client to the
business of EPC and the programmability of productive activity. By the year is expected to the end of the
phase of funding , managed by Prelios SGR and the advisor with Capital Power , which will allow the full
operation of the Mutual fund closed real estate , qualified investors , "RA - Renewable Assets " . This
integration tool of the financial structure of the Group, which will invest in operating assets to the
production of energy from renewable sources and environmental management , and will strengthen the
process of internationalization of the company , which started in Europe and South Africa.
An intense scouting activity, related to the most interesting national contexts and the most attractive
markets, in under development phase in several respects: the emerging countries characterized by strong
growth in demand for energy , markets characterized by replacement demand of renewable energy supply
and energy efficiency electrical systems ; geographic areas close to the achievement of grid parity or
alternatively areas in which you can work through PPA ( power purchase agreement ) . TerniEnergia
expected to shortly launch of major projects in Ukraine , has undertaken an analysis of the market Central
and South American and received major industry recognition on the outcome of the third bid of the South
African Government for the construction of large power fotovoltaiche.con subscription two framework
agreements for the construction of photovoltaic systems of industrial size of the total power of 148.5 MWp
in South Africa and an amount of approximately Euro 147 million .
This approach confirms the trend that will see the average growth of the size of individual projects and the
choice to concentrate the market share of high-standing partners and customers to enable new ways of
accessing capital .
TerniEnergia will benefit , on an international scale , expectations of recovery in Europe and worldwide
photovoltaic industry after about 18 months of recession. The most recent studies of the international
market , in fact, delineate an exponential growth in installations in the countries "driver" , with forecasts of
new capacity for 40 total GWP in 2014, and only a gradual shift in countries outside Europe , which will
retain shares in question between the 25 and 30% of the installed worldwide .
In this scenario TerniEnergia will target to the domestic market and the European market in general
strengthening its capacity for action in the field of energy efficiency and environmental industry (waste
management and recovery of materials and energy) , consistent with the concrete measures for
sustainability environmental launched by the EBU with the Climate Energy . In particular, the new plan
26
includes substantial investments dedicated to activities of ESCO with the formula of Third Party Financing (
TPF ), which can be realized thanks to the completion of the integration of the subsidiary Lucos Alternative
Energies within the Group TerniEnergia .
The Group will continue , finally, the process of strengthening the scope of the environmental asset ,
completing a new facility for the treatment and recovery of " secondary raw material " of tires (ELTs ) in
Northern Italy and enhancing a new plant in South Italy for energy recovery through anaerobic biodigestion
and production of biogas and compost through the integration of a second phase of aerobic biodigestion of
matter. Finally, the new plant will be completed for the treatment of industrial waste fluids in Nera
Montoro ( TR ) , at an advanced authorization phase , which will intercept a substantial demand in a market
segment with high technological content and high growth prospects .
27
2.FINANCIAL STATEMENTS
2.1 STATEMENT OF CONSOLIDATED FINANCIAL POSITION
Note As at September, 30 As at December, 31
(in Euro) 2013 2012
ASSETS
Intangible assets 3.3.1 4,873,435 5,555,935
Property, plant and equipment 3.3.2 143,535,913 67,605,402
Equity investments 3.3.3 27,383 45,287
Deferred tax assets 3.3.4 8,177,442 5,334,327
Non-current financial receivables 3.3.5 8,786,669 11,842,423
Total non-current assets 165,400,842 90,383,374
Inventories 3.3.6 11,576,975 8,773,234
Trade receivables 3.3.7 26,530,034 45,108,376
Other current assets 3.3.8 12,715,282 9,538,845
Financial receivables 3.3.9 3,844,968 9,376,802
Cash and cash equivalents 3.3.10 9,693,293 3,384,398
Total current assets 64,360,552 76,181,655
TOTAL ASSETS 229,761,394 166,565,029
LIABILITIES AND SHAREHOLDERS’ EQUITY
Share capital 50,529,819 50,529,680
Reserves (4,500,464) (8,872,466)
Result for the period 6,014,936 6,880,120
Total Group equity 52,044,291 48,537,334
Equity attributable to minority 118,901 233,384
Profit for the period of the third 29,086 (1,256)
Total equity 3.4.1 52,192,278 48,769,462
Provision for employee benefits 3.4.2 678,793 520,748
Deferred tax liabilities 3.4.3 1,060,017 1,074,049
Non-current financial payables 3.4.4 92,034,783 28,179,910
Other non-current liabilities 3.4.5 4,559,214 11,334,070
Derivatives 3.4.6 4,988,005 250,014
Total non-current liabilities 103,320,812 41,358,791
Trade payables 3.4.7 29,178,431 26,909,257
Payables and other financial liabilities 3.4.8 37,790,459 46,919,198
Taxes payable 3.4.9
791,917
Other current liabilities 3.4.10 7,279,414 1,816,404
Total current liabilities 74,248,304 76,436,776
TOTAL LIABILITIES 177,569,116 117,795,567
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUTY 229,761,394 166,565,029
28
2.2 CONSOLIDATED INCOME STATEMENT
As at September, 30 As at September, 30
(in Euro) 2013 2012
Revenues 3.5.1 32,996,390 37,586,342
Other operating income 12,929,770 3,510,831
Change in inventories of semi-finished and finished products 3.5.2 3,442,519 1,592,942
Costs for raw materials, consumables and goods for resale 3.5.3 (18,701,266) (17,215,426)
Costs for services 3.5.4 (16,180,565) (16,906,417)
Personnel costs 3.5.5 (4,326,917) (3,932,857)
Other operating costs 3.5.6 (1,201,557) (819,002)
Amortisation, depreciation, provisions and writedowns 3.5.7 (4,578,180) (1,466,088)
Operating result 4,380,194 2,350,325
Financial income 3.5.8 4,884,890 570,790
Financial charges 3.5.8 (5,075,610) (3,363,358)
Portion of result attributable to the joint venture 3.5.9 1,257,399 3,201,495
Net profit before taxes 5,446,873 2,759,252
Taxes 3.5.10 597,149 45,415
Net profit for the period 6,044,022 2,804,667
- of which: attributable to the Group 6,014,936 2,798,994
- of which: attributable of Other 29,086 5,673
Earnings per share – Basic and diluted 0,160 0,099
29
2.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
30 September
(in Euro) 2013 2012
Net profit for the period 6,044,022 2,804,667
Change in cash flow hedge reserves of joint ventures (600,212) (3,521,936)
Fiscal effect 165,058 968,533
Other comprehensive (435,153) (2,553,404)
Net profit for the period - Group 5,608,869 251,263
- of which: attributable to the Group 5,579,783 245,590
- of which: attributable to others 29,086 5,673
2.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Description
Share
Capital
Reserves
Total
reserves
Result for
the period Total equity
Equity of
third
parties
Total Equity
(in Euro)
Share
premium
reserve
Statutory
reserve
Extraordina
ry reserve
Other
Reserves
Balance as at 31
December 2011 23,210,000 5,123,322 1,505,750 10,566,697 (17,359,119) (163,349) 9,050,061 32,096,712 188,309 32,285,021
Profit Allocation - - 397,389 2,264,598 6,388,074 9,050,061 (9,050,061) - - -
Dividend Distribution - - - - (5,285,800) (5,285,800) - (5,285,800) - (5,285,800)
27,319,680 - - - (8,719,832) (8,719,832) - 18,599,848 - 18,599,848
Other operation - - - - 85,555 85,555 - 85,555 (82,308) 3,247
Operation with
Shareholders 27,319,680 - 397,389 2,264,598 (7,532,003) (4,870,016) (9,050,061) 13,399,603 (82,308) 13,317,295
Net Profits - - - - - - 2,798,994 2,798,994 5,673 2,804,667
Other comprensive
income - - - - (2,553,404) (2,553,404)
- (2,553,404) - (2,553,404)
Comprehensive income
for the period - - - - (2,553,404) (2,553,404) 2,798,994 245,590 5,673 251,263
Balance as at September,
30 2012 50,529,680 5,123,322 1,903,139 12,831,295 (27,444,526) (7,586,769) 2,798,994 45,741,905 111,674 45,853,579
30
Description
Share
Capital
Reserves
Total
reserves
Result for
the period Total equity
Equity of
third
parties
Total Equity
(in Euro)
Share
premium
reserve
Statutory
reserve
Extraordinary
reserve
Other
Reserves
Balance as at 31
December 2012 50,529,680 5,123,322 1,903,139 12,831,295 (28,730,223) (8872,466) 6,880,120 48,537,334 232,128 48,769,462
Profit Allocation - - 58,765 - 6,821,355 6,880,120 (6,880,120) - - -
Dividend Distribution - - - (952,117) (1,116,543) (2,068,660) - (2,068,660) - (2,068,660)
Other operation - - - - (4,165) (4,165) - (4,165) (113,227) (117,392)
Operation with
Shareholders - - 58,765 (952,117) 5,700,647 4,807,295 (6,880,120) (2,072,825) (113,227) (2,186,052)
Net Profits - - - - - - 6,014,936 6,014,936 29,086 6,044,022
Other comprensive
income - - - - (435,153) (435,153) - (435,153) - (435,153)
Comprehensive income
for the period - - - - (435,153) (435,153) 6,014,936 5,579,783 29,086 5,608,869
Balance as at
September, 30 2013 50,529,680 5,123,322 1,961,905 11,879,177 (23,464,729) (4,500,325) 6,014,936 52,044,291 147,987 52,192,278
31
2.5 CONSOLIDATED CASH FLOW STATEMENT
As at September, 30 As at September, 30
(in Euro) 2013 2012
Profit before taxes 5,446,873 2,759,252
Amortisation and depreciation 4,578,180 1,466,088
Provision for employee benefits 156,204 63,819
Result of joint ventures accounted for at equity and reversal of margin (1,257,399) (3,201,495)
Gain (7,485,238) 4,346,010
Change in inventories (2,773,863) 6,164,403
Change in trade receivables 23,345,850 (545,441)
Change in other assets (811,836) (17,203,484)
Change in trade payables 182,869 564,891
Change in other liabilities (647,490) (9,969)
Net cash flow (used in)/generated by operating activities 20,734,150 (5,595,926)
Investments in property, plant and equipment (7,528,795) (3,338,784)
Investments in intangible assets 54,193 (810,562)
Disposals of intangible assets 530,000 129,873
JV Consolidated 3,325,991 605,782
Dividends/investments in Joint Ventures 1,246,942 943,904
Change in receivables and other financial assets (90,544) 2,131,785
Disposal of AHFS - 1,625,000
Net cash flow used in investing activities (2,462,214) 1,286,997
Change in payables and other financial liabilities (14,240,554) 1,418,352
Increase in non-current financial payables 4,463,566 2,228,579
Other changes in equity (117,393) 3,247
Payment of dividends (2,068,660) (5,285,800)
Net cash flow generated by financing activities (11,963,041) (1,635,622)
Comprehensive cash flow for the period 6,308,895 (5,944,551)
Cash and cash equivalents at the beginning of the period 3,384,398 10,623,880
Cash and cash equivalents at the end of the period 9,693,293 4,679,330
Interest (paid)/ collected (4,412,612) (2,126,085)
Income taxes paid
32
3.0 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2013
3.1 GENERAL INFORMATION
TerniEnergia S.p.A (“TerniEnergia”, “Company” or “Parent Company”) is a joint-stock company domiciled in
Narni (Italy), strada dello stabilimento 1, listed on the Electronic Stock Market of Borsa Italiana. As from 28
December 2010 the ordinary shares of TerniEnergia are traded on the STAR segment of the Electronic Stock
Market.
TerniEnergia S.p.A (“TerniEnergia”, “Company” or “Partent company”) is a joint –stock Company with
registered office in Narni (Italy, strada dello stabilimento 1, listed on Borsa Italiana. From December 28th,
listed on Star Segment of MTA.
TerniEnergia Group operates in the field of renewable energy sector and is active in the photovoltaic field.
The Group focuses its activities mainly in Italy. The parent company is set up, primarily as a provider of
integrated medium and large size of photovoltaic plant. Through the subsidiaries held in joint venture with
EDF EN Italy SpA (as subsidiary of EDF Energies Nouvelles SA, listed on the Paris Stock Exchange) and other
primary partners TerniEnergia Group is also active in the production of electricity from photovoltaic plants.
3.2. FORM, CONTENTS AND ACCOUNTING POLICIES ADOPTED
This Consolidated financial statements was prepared in compliance with in the on-going of the company as
Directors have verified the absence of financial, managerial indicators , or other critical issues that could
point out Group’s ability to meet its foreseeable future obligations and in particular in the next 12 months.
This Consolidated financial statements was prepared in compliance with the International Accounting
Standards (IFRS), issued by the IASB and approved in the European Community under Regulation (EC) No
1606/2002 of the European Parliament and the Council of July 22, 2002, and in particular IAS 34 - Interim
Financial Reporting, as well as measures taken to implement art. 9 D. Decree No 38/2005.
As part of the options provided by IAS 34, the Group choose to publish together with this short first quarter
consolidated financial statements, a summery note. 19
The information herein should be read in conjunction with the consolidated financial statements for the
year ended December 31, 2012, prepared under IFRS, to which it is referred to.
33
The consolidated financial statements are expressed in euro (Euros) since this is the currency in which the
transactions of the Group companies are carried out. All data reported in the notes to the financial
statements are expressed in Euros, except as otherwise stated.
The Group has opted to use the income statement by nature, while assets and liabilities in the financial
balance sheet are divided into current and non-current items. The cash flow statement has been prepared
according to the indirect method. It should be noted that, in order to comply with the indications contained
in Consob Resolution no. 15519 of 28 July 2006 “Provisions on financial statement formats” (Disposizioni in
materia di schemi di bilancio), note 3.6 reports the consolidated income statement, the consolidated
financial balance sheet and the consolidated cash flow statement, specifying the significant amounts of
positions or settlement agreements arising from transactions carried out with related parties, for any
individual item in the accounts.
The preparation of consolidated short first quarter financial statements requires the directors to make
estimates and assumptions that affect the reported amounts of assets and liabilities and the related
disclosures, as well as on the assets and liabilities at the reporting date.
The estimates and associated assumptions are based on historical experience and other factors considered
reasonable in the circumstances and they are adopted when the book value of assets and liabilities are not
immediate to be understood from other sources.
The actual results could differ from these estimates. The estimates and assumptions are periodically
reviewed and the effects of any changes are reflected in the income statement, when it concerns the
exercise itself. If the audit concerns both current and future periods, the change is recognized in the period
in which the revision is made and in their future years.
The actual results may differ, even significantly, from these estimates due to possible changes in the factors
considered in determining these estimates.
These consolidated financial statements were approved by the Parent Company’s Board of Directors on 12
November 2013.
34
RECENTLY ISSUED ACCOUNTING STANDARDS
The following table contains the list of international accounting standards and interpretations approved by
the IASB and endorsed for adoption in Europe and applied for the first time in the current year:
Description Date of
Approval
Pubblication in
G.U.C.E.
Effective Date of
planned
Date of Efficiency for
TerniEnergia
Updating International principle
2009 - 2011
March, 27
2013 March 28, 2013
Financial Year start
January 1, 2013 January 1, 2013
IFRS 1 Changes – First Adoption of
International principle March, 4 2013 March 5, 2013
Financial Year start
January 1, 2013 January 1, 2013
IFRS 7 – Finacial Instruments:
Disclosure – Offsetting Financial
Assets and Financial Liabilities
December,13
2012
December, 29
2012
Financial Year start
January 1, 2013 January 1, 2013
Changes IFRS 1 First time adoption
of International Financial
Reporting Standard severe
hyperinflation and removal of
fixed dates for first-time adopters
December,11
2012
December, 29
2012
Financial Year start
January 1, 2013 January 1, 2013
Changes to IAS 12 – Income tax –
Deferred tax recovery of
underlying assets
December,11
2012
December, 29
2012
Financial Year start
January 1, 2013 January 1, 2013
IFRS 13 – Fair Value Valutation December,11
2012
December, 29
2012
Financial Year start
January 1, 2013 January 1, 2013
IFRIC 20 - excavation costs in the
production phase of a mine open
December,11
2012
December, 29
2012
Financial Year start
January 1, 2013 January 1, 2013
Changes IAS 1 – Presentation
Financial Statements - Disclosure
of other components of
comprehensive income
June, 5 2012 June, 6 2012 Financial Year start
January 1, 2013 January 1, 2013
Changes IAS 19 – Employee
Benefif June, 5 2012 June, 6 2012
Financial Year start
January 1, 2013 January 1, 2013
35
The adoption of these standards and interpretations has not resulted and will not result in the future affect
the valuation of assets, liabilities, costs and revenues of the Group and the related disclosures , with the
exception as noted below. In particular:
- The adoption of the amendments to IFRS 7 - Financial Instruments: Disclosures, which require
explanatory notes on the effects or potential effects arising from the rights to offsetting financial
assets and financial liabilities on the statement of financial position had no impact on the
information included in this half-yearly report ;
- The adoption of IFRS 13 - Fair Value Measurement , which clarifies the determination of fair value
for financial reporting purposes had no effect on the valuation of balance sheet items included in
this interim report ( for further details, reference should be made in note 3.5 .8 ) ;
- The adoption of the amendment the adoption of the amendments to IAS 19 employee benefits
determines the allocation of profits and losses in comprehensive income . In view of the effect is
not significant , the standard was applied prospectively . In accordance with the new definition of
net financial expenses outlined in the amendments all net financial expense of defined benefit
plans are recognized as income (expense) in the income statement ;
- The adoption of the amendment to IAS 1 - Presentation of Financial Statements , which requires
entities to group items presented in other income ( loss) , depending on whether or not they can be
reclassified subsequently to profit or loss, no any effect on the valuation of balance sheet items and
had limited effects on the information provided in this report.
Changes in consolidation
The Interim Consolidated Financial Statements as at September 30, 2013 the Group include the financial
statements of the Parent Company TerniEnergia TerniEnergia and the financial statements of all the
companies in which it holds a direct or indirect control.
Below are listed the companies included in the scope of consolidation and the related percentages of
ownership held by the Group, either directly or indirectly, as at September 30, 2013:
36
List of Companies consolidated on a line-by-line basis:
Name Location % %
Capital Energy S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Newcoenergy S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Capital Solar S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Investimenti Infrastrutture S.r.l. Nardò- Via Don Milani, n.4 100% 100%
MeetSolar S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Festina S.r.l. Terni - Via Garibaldi n.43 100% 100%
Energia Basilicata S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Energia Lucana S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Energia Nuova S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Verde Energia S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Rinnova S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Soc. Agric. Fotosolara Cheremule S.r.l. Sassari – Viale Mameli n. 63 100% 100%
Soc. Agric. FotosolaraBonannaro S.r.l. Sassari – Viale Mameli n. 63 100% 100%
Soc. Agricola Fotosolara Oristano S.r.l. Sassari – Viale Mameli n. 63 100% 100%
Soc. Agricola Fotosolara Ittireddu S.r.l. Sassari – Viale Mameli n. 63 100% 100%
T.e.c.i. costruzioni & ingegneria S.r.l. Gioia del Colle – Via Giosuè Carducci n. 122 100% 100%
Meet Green Italia S.r.l. Nardò- Via Don Milani, n.4 100% 100%
Lucos Alternative Energies S.p.A. Narni - Via dello Stabilimento, 1 100% 100%
LyteEnergy S.r.l. Narni - Via dello Stabilimento, 1 70% 70%
Soc. Agricola Padria S.r.l. Sassari – Viale Mameli n. 63 100% 100%
TerniEnergia. Hellas M.EPE. Atene – 52, Akadimiasstreet 100% 100%
TerniEnergia Polska Zoo Krakow, Sw. Tomasza 35/3, 30-127 100% 100%
TEVASA (Pty) Ltd Cape Town, 1 Waterhouse Place, Century City, 7441 80% 80%
D.T. S.r.l. Narni - Via dello Stabilimento, 1 100% 100%
IGreen Patrol S.r.l Narni - Via dello Stabilimento, 1 100% 100%
Companies included in the scope of consolidation during the 2013 financial year:
Alchimia Energy 3 S.r.l. Narni - Via dello Stabilimento, 1 100% 100%
TerniEnergia Romania Srl Str. Popa Petre 5 – Bucarest 100% 100%
GreenAsm S.r.l.(**) Narni - Via dello Stabilimento, 1 50% 50%
Energia Alternativa S.r.l (*) Narni - Via dello Stabilimento, 1 100% 100%
TerniEnergia Project (Pty) Ltd Cape Town, Woodstock,Boulev. Searle Street, 7925 80% 80%
TerniEnergia Solar South Africa (Pty) Ltd Cape Town, Woodstock,Boulev. Searle Street, 7925 100% 100%
SolarEnergy S.r.l (***) Narni - Via dello Stabilimento, 1 100% 100%
Companies included in the scope of consolidation during the 2013 financial year:
GreenLed S.r.l. Narni - Via dello Stabilimento, 1 70% 70%
(*) Control acquired on 28.03.2013 with purchase method of the remaining 50% consolidated shares with equity method until that date.
(**) The company from January 1, 2013 is consolidated with integral method.
(***) Control acquired on 28.03.2013 with purchase method of the remaining 50% consolidated shares with equity method until that date.
37
List of Companies consolidated at Equity:
Name Location % %
Fotosolare Settima S.r.l Narni - Via dello Stabilimento, 1 50% 50%
Collesanto S.r.l. Narni - Via dello Stabilimento, 1 50% 50%
Saim Energy 2 S.r.l. Narni - Via dello Stabilimento, 1 50% 50%
InfocaciucciS.r.l. Narni - Via dello Stabilimento, 1 50% 50%
GirasoleS.r.l.. Narni - Via dello Stabilimento, 1 50% 50%
SolTarenti S.r.l. Narni - Via dello stabilimento 1 50% 50%
Guglionesi S.r.l. Narni - Via dello stabilimento 1 50% 50%
Companies escluded in the scope of consolidation during the 2013 financial year:
GreenAsm S.r.l. Narni - Via dello stabilimento 1 50% 50%
Energia Alternativa S.r.l (*) Narni - Via dello Stabilimento, 1 50% 50%
SolarEnergy S.r.l (***) Narni - Via dello Stabilimento, 1 50% 50%
Solaren S.r.l. Narni - Via dello Stabilimento, 1 50% 50%
(*) Control acquired on 28.03.2013 with purchase method of the remaining 50% consolidated shares with equity method
until that date.
(**) The company from January 1, 2013 is consolidated with integral method.
(***) Control acquired on 28.03.2013 with purchase method of the remaining 50% consolidated shares with equity
method until that date.
We note that, from January 1, 2013 the company GreenASM Srl, 50% owned by TerniEnergia, is
consolidated on a line-by-line basis. The passage from the consolidation at Equity is due to the
application of the new Accounting Standards IFRS10 (applicable from January 1, 2013).
3.3 COMMENTS ON THE MAIN BALANCE SHEET ITEMS: ASSETS
NON-CURRENT ASSETS
3.3.1 INTANGIBLE ASSETS
The tables below report the breakdown of changes in the “Initial cost” (Table 1), “Accumulated
38
amortisation” (Table 2) and “Net values” (Table 3), respectively, relating to intangible assets as at
September 30, 2013
(Table 1)
Intangible assets INITIAL COST
(in Euro) 31 december 2012 Increases
Decreases for
disposals Write-downs
As at September, 30
2013
Software 571,223 3,570 - - 574,793
Others 767,530 18,243 (7,725) (116,097) 661,951
Building lease 331,452 - - - 331,452
Authorisations 1,818,977 - - - 1,818,977
Goodwill 2,335,176 - - - 2,335,176
Patents 546,450 - (430,000) - 116,450
Total 6,370,808 21,813 (437,725) (116,097) 5,838,799
(Table 2)
Intangible assets Provision for depreciation and write-downs
(in Euro) 31 december 2012
Amortisation
and depreciation
Decreases
for disposals As at September, 30
Software 385,781 54,224 - 440,005
Patents 114,305 944 - 115,249
Others 314,787 120,322 (25.000) 410,110
Total 814,874 175,491 (25,000) 965,365
39
(Table 3)
Intangible assets Net Value
(in Euro) 31 December 2012 As at September, 30 2013
Initial Cost
Provision for
depreciation and
write-downs Net Values Initial cost
Provision for
depreciation and write-
downs Net Values
Software 571,223 (385,781) 185,442 574,793 (440,005) 134,788
Others 767,530 (314,787) 452,743 661,951 (410,110) 251,841
Building lease 331,452 - 331,452 331,452 - 331,452
Authorisations 1,818,977 - 1,818,977 1,818,976 - 1,818,976
Goodwill 2,335,176 - 2,335,176 2,335,176 - 2,335,176
Patents 546,450 (114,305) 432,145 116,450 (115,249) 1,200
Total 6,370,809 (814,874) 5,555,935 5,828,799 (889,021) 4,873,434
The parts of intangible assets in progress includes costs related to already obtained or still in progress
administrative rights for the construction of photovoltaic plants, acquired through subsidiaries.
The amount of Euro 1.819 thousand involves Authorisations acquired will be recovered through the future
construction of photovoltaic plants; therefore, based on the business plans of the Parent Company, it is
expected that this value will be fully recovered; therefore, there were no evidence of impairment which
entailed a reduction in the value entered in the accounts.
The "Patents", register a decrease of Euro 430 thousand as a result of the sale of shares held in the
company GreenLed Ltd.
The goodwill recorded in the previous year and amounted to Euro 2,335 thousand, relates entirely to the
acquisition of control in Lucos Energies Alternatives SpA, a company engaged in the business of energy
efficiency. Being an indefinite life is not amortized but subject to verification at least annually (impairment
test). As at 30 September 2013 there are no indicators such as to presuppose possible impairment of
goodwill. This goodwill is justified by the expected synergies from the integration of the activities at the
time of the Ternienergia with the same Lucos.
40
3.3.2 TANGIBLE ASSETS
The tables below report respectively, the analysis of changes in the “Initial cost” (Table 1), “the
Accumulated depreciation and impairment (Table 2) and “Net values” ( Table 3) related to tangible assets
as at September 30, 2013 and as at 31 December 2012:
(Table 1)
INITIAL COST
Property Plant and
Equipment
As at 31 December
2012 Increases
Decreases
for
disposals
Reclassifications As at September, 30
2013
Land and buildings
- Historical cost 3,521,104 15,303 - - 3,536,407
Plant and machinery
- Historical cost 41,764,796 91,813,493 - 12,714,868 146,293,157
Industrial equipment
- Historical cost 779,226 - - - 779,226
Other assets
- Historical cost 964,505 39,364 (5,647) - 998,222
Construction in progress
- Historical cost 24,419,143 2,802,135 - (12,714,868) 14,506,410
Total 71,448,773 94,670,295 (5,647) - 166,113,421
41
(table 2)
Property Plant and
Equipment
PROVISION FOR AMORTISATION AND WRITE-DOWNS
As at 31 December
2012
Amortisation
and depreciation
Decreases
for
disposals
Reclassifications As at September, 30
2013
Land and buildings
- depreciation 133,970 38,312 - - 172,282
Plant and machinery
- depreciation 2,722,681 2,356,251 14,285,922 - 19,364,854
Industrial equipment
- depreciation 490,469 52,638 - - 543,107
Other assets
- depreciation 496,251 66,763 - - 563,014
Total 3,843,371 2,513,964 14,285,922 - 20,643,257
(table 3)
Property, Plant and
Equipment
NET VALUES
As at december, 31 2012 As at September, 30 2013
Initial cost
Provision for
depreciation and
write-downs
Net Values Initial cost
Provision for
depreciation and write-
downs
Net Values
Land and buildings 3,521,104 (133,970) 3,387,134 3,536,407 (191,309) 3,345,098
Plant and machinery 41,764,796 (2,722,681) 39,042,115 146,293,157 (21,231,613) 125,061,544
Industrial equipment 779,226 (490,469) 288,757 779,226 (551,981) 227,245
Other assets 964,505 (496,251) 468,254 998,222 (602,605) 395,617
Construction in progress 24,419,143 - 24,419,143 14,506,410 - 14,506,410
Total 71,448,773 (3,843,371) 67,605,402 166,113,421 (22,577,508) 143,535,913
42
The investments in land amounted to Euro 3,345 thousand and include the value of the assets acquired by
the Group through the fusion with TerniGreen. Such assets are made up of two industrial plants located in
the Nera Montoro industrial plant, and transferred by Nuova Terni Industrie Chimiche S.p.A and Nuova TIC
S.r.l. (actually Italeaf S.p.A.) to TerniGreen during the precedent financial years, and also the value of a land
transferred by the GR Ambiente Srl in order to realize a photovoltaic plant nearby Lecce.
The item "Plant and equipment" to 30 September 2013 includes the value of 29 photovoltaic systems with
a total capacity of 29.5 MW , as well as the value of the treatment plant PFU ( Life Tyres ) inside the plant in
Black Montoro, the sewage treatment plant of groundwater Italeaf SpA acquired by the end of the previous
year. The change in the period under review was due to acquisitions , dated 28 March 2013 and 28 June
2013, of the control in the company Energia Alternativa Srl and T.E.R.N.I. SolarEnergy S.r.l. (previously 50%
owned by the Group and consolidated using the equity method of accounting until the date of purchase of
the remaining 50 % of the shares by EDF EN SpA Italy ) , respectively, holders of 12 photovoltaic systems
with a total capacity of 13.9 and 7 MWp of photovoltaic systems with a total capacity of 5.7 MWp , as well
as the acquisition, on March 1 , 2013, the entire share capital of the company Alchemy Energy 3 Srl , owner
of a photovoltaic plant with a capacity of approximately 0 , 8 MWp. The reclassification from " work in
progress " to " plant and machinery " represents the value of the plant biodigestion in Nera Montoro ,
which went into operation in January 2013.
The item “fixed assets under construction”, equal to Euro 14,506 thousand, includes the investments not
yet entered into operation as at 30 September 2013. These investments concern:
- biodigester and composting plant in the Municipality of Calimera (town of Lecce);
- cogeneration plant through the pirogasification of wood in order to produce Electricity and heat, in
the Municipality of Borgosesia (town of Vercelli); the plant has been connected to the electricity
grid in the month of December 2012;
- a second plant for end of life tires.
Among tangible assets in progress are also capitalized costs incurred in previous years for the development
of the wind farm from by 18 MWp located in the town of Stroncone, amounting to Euro 1,090 thousand.
43
3.3.3 EQUITY INVESTMENTS
The table below reports the breakdown of investments in Joint Ventures valued at Equity and the related
change that occurred on September 30, 2013 and December 31, 2012:
As at September, 30 As at December, 31 Change Change%
2013 2012
Investments in JV 26,383 44,287 (17,904) (40.4%)
Other investments 1,000 1,000 - 0.0%
Total Investments in JV 27,383 45,287 (17,904) (40.4%)
The joint ventures are active in the identification, development, financing, design, construction and the
putting into operation of photovoltaic plants in Italy, as well as in the sale of electricity produced by the
same.
Below is reported the value of investments in Joint Ventures as at September 2013 and the related
measurement at equity divided according to the companies:
Investments As at September, 30 2013 Equity investments Deferred margins
Fotosolare Settima S.r.l. (1,674,325) - (1,674,325)
Solaren S.r.l. - - -
Collesanto S.r.l. (392,624) - (392,624)
Saim Energy 2 S.r.l. (112,360) - (112,360)
Infocaciucci S.r.l. (106,401) - (106,401)
Girasole S.r.l.. (423,228) - (423,228)
Dt S.r.l. - - -
Soltarenti S.r.l. (269,303) - (269,303)
Guglionesi S.r.l. 26,383 26,383 -
Totale (2,951,857) 26,383 (2,978,240)
It is stated that the application of equity method has resulted in previous years the elimination of
significant margin in relation to the volume of work undertaken on behalf of joint ventures, with the
consequent reduction in the value of the investment until the zeroing of itself. After resetting the value of
the investment, the further reduction is recognized as a liability. This liability called “Margin Deferred”, is
recognized under other liabilities (current and not current), because it is not representative of a legal or
constructive obligation to cover the losses of the investee, but a reduction in the value of the investment in
44
joint venture consequent elision of margins in future years will find that deferred recognition in the
consolidated income statement, according to the amortization of the transferred plants.
The following content represents a detail with the movement occurred in the first nine months of 2013 the
referred to value of investments in joint ventures (defined as net value between the value of equity
investments and the value of deferred margin), with evidence of the effects of accounting under the equity
method:
Investments in joint ventures accounted with equity method As at September, 30 As at September, 30
(Euro) 2013 2012
1° january (9,735,634) (11,183,492)
Additional paid-in capital - 5,000
Refund payments cf.a.c.s - (1,878,905)
Other changes 5,157,041 2,193,507
- -
share's result 1,241,916 3,288,785
Reserve for cash flow hedges, net of tax 384,818 (2,160,530)
As at September, 30 (2,951,857) (9,735,634)
- Of which investments in shares 26,383 44,287
- Of which Margin deferred (2,978,240) (9,779,919)
The investment in Joint Ventures is classified, in the balance sheet, for Euro 26 thousand under item
“equity investments” and for Euro 2,978 thousand under item “Deferred margin”, under other liabilities
(current liabilities of Euro 369 thousand and non-current liabilities of Euro 2,609 thousand). The item
“Other changes” mainly includes the effect due to the purchase of the 50% of the Company Energia
Alternativa Srl.
45
For the purposes of a more complete disclosure, the table below reports the aggregate net financial debt of
the main joint ventures as at 30 September 2013.
Fotosolare
Settima Collesanto
Saim Energy
2 Infocaciucci Girasole Sol Tarenti
Guglionesi
S.r.l. Total
cash 62 - - - - - - 62
Bank accounts 1,233,721 46,168 197,135 152,266 10,087 329,474 65,957 2,034,808
Liquidity (A) 1,233,783 46,168 197,135 152,266 10,087 329,474 65,957 2,034,870
Current financial payables - - - - - - - -
Current bank debt (advance) - - - - - - - -
Mortgages - - - - - - - -
- sale and lease back (1,518,048) (247,735) (142,634) (149,783) (263,650) (406,974) (92,789) (2,821,613)
- to other (1,369,113) (141,499) (91,606) (190,814) - (211,048) - (2,004,080)
- to TerniEnergia (1,369,113) (141,499) (93,331) (222,279) - (211,048) - (2,037,270)
Non-current financial payables - - - - - - - -
Mortgages - - - - - - - -
- project financing - - - - - - - -
- sale and lease back (28,522,639) (4,676,072) (2,513,402) (2,533,129) (5,227,292) (8,594,081) (2,323,315) (54,389,931)
- to other (1,274,475) (648,001) - - (1,234,853) (1,051,115) (395,468) (4,603,912)
- to TerniEnergia (1,369,113) (669,488) - - (1,267,850) (1,051,371) (381,436) (4,739,258)
Financial Debt (B) (35,422,500) (6,524,293) (2,840,974) (3,096,004) (7,993,646) (11,525,638) (3,193,009) (70,596,063)
Net Financial debt (A+B) (34,188,717) (6,478,125) (2,643,838) (2,943,738) (7,983,559) (11,196,164) (3,127,052) (68,561,193)
It should be noted that the values of the net financial debt reported in the table above refer to the
TerniEnergia Group for 50%, equal to the stakes held by the Group itself in the Joint Ventures.
The joint ventures generally fund the investments in photovoltaic plants through loans granted by the
shareholders or through medium to long-term loans granted by financial institutions. Non-current bank
debt is mainly guaranteed by mortgages on the photovoltaic plants of the joint ventures, by pledges on
receivables and cash and cash equivalents of the joint ventures and by guarantees issued by the
shareholders. The Parent Company provided the joint ventures with sureties for Euro 20,05 million as at 30
September 2013 (for more details, reference is made to 3.4.11 Commitments and guarantees given and 3.6
Related parties). Furthermore, the Parent Company pledged its quotas in Terni Solar Energy Srl in favour of
the financial institutions which granted a project financing to the joint venture.
46
Some of the loans require both the shareholders and the joint ventures to satisfy certain corporate and
financial parameters. Specifically, the corporate parameters provide for the right for the lending institutions
to demand early repayment of the loans disbursed in case of any changes in the majority shareholders of
the joint ventures, whereas the financial parameters provide for:
• the obligation for the joint ventures to satisfy certain equity/debt ratios - generally 15%/85%;
• the right for the financial institutions to demand early repayment in case of:
i) a debt service cover ratio generally lower than 1.05 (the debt service cover ratio is the ratio
between a) expected cash flows in a given year from the financed project and b) interests,
including payments related to derivative instruments, and the capital quota of the debt
due on the same year);
ii) a loan life coverage ratio of less than 1.10 (i.e. the present value of the cash flows expected
from the project compared with the amount of the sums disbursed and not yet repaid).
The possibility for the joint ventures to distribute dividends is i) subject to a debt service cover ratio which
generally must be equal to or higher than 1.15 and a loan life coverage ratio which generally must be equal
to or higher than 1.20 and ii) limited to the amount of cash and cash equivalents available as defined in the
agreement.
As at 30 September 2013 all the covenants were met. It should be borne in mind that cash flows serving the
financial debt of the Joint Ventures are generated from the incentive tariffs of the GSE and from the sale of
the electricity produced by the photovoltaic plants owned by the Joint Ventures themselves.
3.3.4 DEFERRED TAX ASSETS
The table below reports the breakdown of deferred tax assets as at 30 September 2013, as at 31 December
2012 and the related change:
As at September, 30 As at December, 31 Change Change%
2013 2012
Deferred tax assets 8,177,442 5,334,327 2,843,114 53.3%
Total Deferred Taxes 8,177,442 5,334,327 2,843,114 53.3%
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Deferred tax assets mainly relate to the Parent TerniEnergia. The change recorded in the first nine months
of 2013 was primarily due to deferred tax assets of the company Alternative Energy, fully consolidated as
from 28 March 2013 and deferred tax assets of the company Solarenergy Terni, fully consolidated as from
28 June 2013.
Finally, the balance also consists of the tax effect relating to the settlement of inter-company profits.
Deferred tax assets relating to the reversal of the margins will be recovered in future years, when the
deferred margins will be recognized in the income statement.
3.3.5 NON –CURRENT FINANCIAL RECEIVABLES
The table below reports the breakdown of current financial receivables as at September 30, 2013, as at
December 31, 2012 and the related changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Terni SolarEnergy S.r.l. - 1,688,823 (1,688,823) (100.0%)
Collesanto S.r.l. 663,914 652,825 11,089 1.70%
Infocaciucci S.r.l. - - - n.a.
Dt S.r.l. - - - n.a.
Soltarenti S.r.l. 1,051,371 577,788 473,583 82.0%
Energie S.r.l. - - - n.a.
Energia Alternativa S.r.l. - 2,882,710 (2,882,710) (100.0%)
Fotosolare Settima S.r.l. 1,357,712 1,826,609 (468,897) (25.7%)
Girasole S.r.l. 1,267,850 999,072 268,778 26.9%
Solaren s.r.l. - 97,666 (97,666) (100.0%)
Guglionesi S.r.l. 381,436 - 381,436 n.a.
Financial asset 3,451,025 3,116,932 334,093 10.7%
Security deposits 613,361 - 613,361 n.a.
Total non-current loans receivable 8,786,669 11,842,423 (3,055,756) (25.8%)
Non- current financial receivables include Euro 3,451 thousand the financial receivables recorded as a
result of the application of IFRIC 12 and IFRIC 4 to contracts for energy efficiency and for the difference in
interest-bearing loans granted to the Joint Venture that are renewed automatically from year to year unless
48
canceled. The increase in the item "Financial assets energy efficiency" compared to the previous year is due
to a contract for energy efficiency concluded during the quarter. The change in financial receivables to the
Joint ventures is primarily attributable to the purchase of 50% of shares of the company Energia Alternativa
Srl and 50% of the company SolarEnergy Terni Srl, which has resulted in the consolidation the same as in
March 28, 2013 and from June 28, 2013 and therefore the elimination of intercompany loans to the
company.
As at September 30, 2013 part of the financial accrued to the Joint Venture has been classified as current,
this amount represents the sum to be reimbursed in the short term, given the liquidity in the subsidiary and
any financial covenants. Information is reported in note 3.3.9.
As mentioned above, under "financial assets energy efficiency" are registered financial receivables arising in
respect of contracts for energy efficiency. The latter represent the fair value of cash flows expected from
the 'energy efficiency activities carried out in several municipalities and industrial plants. These contracts
are intended to improve the energy efficiency of public lighting systems. The performance consists of the
planning and design of interventions aimed at efficiency.
CURRENT ASSETS
3.3.6 INVENTORIES
The table below reports the breakdown of this item as at September 30, 2013, as at December 31, 2012
and the related change:
As at September, 30 As at December, 31 Change Change%
2013 2012
Commodities 1,710,648 2,223,300 (512,652) (23.1%)
Semifinished 12,573 72,837 (60,264) (82.7%)
Finished Products 571,223 522,404 48,820 9.3%
Products in process 9,282,531 5,954,693 3,327,838 55.9%
Total inventories 11,576,975 8,773,234 2,803,741 32.0%
As at September 30, 2013, the products work in progress mainly include the costs incurred for other
activities related to the construction of photovoltaic plants and parts of them that are not yet recognized
49
accounting for its recognition as revenue. The change in the period is mainly due to plants under
construction in Romania.
Inventories of finished products to September 30, 2013 relate mainly to the technological equipment "TR-
WOC" and "TR gridless", as well as to the raw material, second arising from the recovery of “end of life
tires”.
The raw materials belong to inventories of different materials (mainly steel structures) to be used on
contracts in progress in the second semester.
3.3.7 TRADE RECEIVABLES
The table below reports the breakdown of this item as at September 30, 2013, and as at December 31,
2012 and the related changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Loans to customers 27,209,537 42,349,591 (15,140,053) (35.8%)
Receivables from joint venture 276,844 2,511,186 (2,234,342) (89.0%)
Receivables from parent 189,002 1,095,355 (906,353) n.a.
Loans to subsidiaries 128,216 425,506 (297,290) (69.9%)
Provision for doubtful (1,273,565) (1,273,261) (305) 0.0%
Total trade receivables 26,530,034 45,108,376 (18,578,342) (41.2%)
Trade receivables, mainly to customers and joint ventures, as at September 30, 2013 amounted to Euro
26,530 thousand, of which € 4,392 thousand of receivables for invoices to be issued. The change in trade
receivables compared to the same period of the previous year is mainly due to receipts recorded during the
period under review by TerniEnergia Hellas for work done in Greece and the parent company in respect of
work carried out in Italy.
Among the receivables is a receivable of approximately Euro 7 million ( 10.4 million euro at December 31,
2012) which represents the remaining part of the consideration , originally amounting to Euro 40 million ,
the sale concluded in 2011 two photovoltaic plants of total capacity of about 12 megawatts currently in full
operation. In relation to this credit, in the month of December 2012 was reached a settlement agreement
for the payment of the amount due, which, however, was left partially unexecuted . Despite repeated
attempts to close the matter as extra-judicial TerniEnergia it was forced to start in August 2013, the
50
appropriate legal action . In particular, the parent company , with the assistance of its legal counsel ,
believes specious reasons to refuse the payment by the counterparty in the light of the factual and legal
serious and concrete and therefore, at the date of the interim report, has reasonable grounds to believe
not configurable likely a liability against the company .
The amount of trade receivables is adjusted by a provision for doubtful debts of Euro 1,273 thousand to
cover the risk of default of certain receivables arising in previous years.
For a breakdown of receivables from joint ventures, please refer to the paragraph 3.6 that lists all the
transactions with the related parties as at September 30, 2013.
As at September 30, 2013 the nominal value of trade receivables approximates their fair value.
3.3.8 OTHER CURRENT ASSETS
The table below reports the breakdown of this item as at September 30, 2013, as at December 31,2012 and
the related change:
As at September, 30 As at December, 31 Change Change%
2013 2012
VAT credit 3,800,355 930,186 2,870,169 n.a.
Advances to suppliers 591,573 36,200 555,373 n.a.
prepayments 1,101,540 712,031 389,509 54.7%
Other credits 7,221,813 7,860,429 (,638,616) (8.1%)
Total other current assets 12,715,282 9,538,846 3,176,435 33.3%
The item "Other receivables" mainly includes receivables from EDF EN Italy following the sale of shares
representing 50% of the share capital of Solaren Srl This credit, equal to Euro 2,486 thousand, will be fully
paid during the second half of 2013. Solaren Srl was owned of 5 industrial sized photovoltaic plants for a
total of 4.5 MWp. The value of assets was determined based on the sum of the Enterprise Value, for 100%
of the company, amounting to Euro 17.8 million, and the value of the adjusted net financial position
resulting from the interim financial statements of the company on the effective date of the assignment.
The price of the share of TerniEnergia was, therefore, equal to 50% of that value.
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This item also includes the credit accrued to the parent Terni Research SpA, amounting to € 2,256 thousand
for the tax at corporate income tax as a result of the option of the Company for the fiscal consolidation
carried out in June 2011 and valid for fiscal years 2011, 2012 and 2013. This credit is represented mainly by
a consolidated tax gain acquired by the parent company TerniEnergia on the tax loss recorded in 2012 and
the first nine months of 2013.
The "VAT credit" increased during the period due to the VAT status of TerniEnergia Hellas, as well as for the
consolidation of the companies and Terni Energia Alternativa Srl and SolarEnergy Srl.
3.3.9 FINANCIAL RECEIVABLES
The table below reports the breakdown of current financial receivables as at September 30, 2013, as at
December 31, 2012 and the related change:
As at September, 30 As at December, 31 Change Change%
2013 2012
Financial receivables from
joint venture 2,054,245 5,191,126 (3,136,881) (60.4%)
Financial receivables from MPS 1,000,000 1,000,000 - 0.0%
Financial receivables from others 790,723 3,185,676 (2,394,953) (75.2%)
Total loans receivable 3,844,968 9,376,802 (5,531,834) (59.0%)
Current financial receivables, amounted to Euro 2,054 thousand, relate for Euro 1,419 thousand, to the
interest-bearing loans at normal market conditions, granted to the Joint Venture to meet specific financial
requirements, and Euro 635 thousand granted in credits for dividends to be paid by the JV. The variation in
the period is mainly attributable to the purchase of 50% of the shares of Energia Alternativa and 50% of
the shares of Terni SolarEnergy srl, and to the subsequent consolidation with the elimination of
intercompany transactions with the company.
The item "Other financial receivables" includes mainly the financial credit to the company Solaren Srl
whose participation was sold on June 28, 2013. The balance relating to financial receivables from Monte dei
Paschi di Siena SpA refers to the stock in an escrow account to guarantee the relationship between the
Parent Company and the same institution.
52
3.3.10 CASH AND CASH EQUIVALENT
Follow the detail as at September 30, 2013, as at December 31, 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Bank accounts 9,674,216 3,363,025 6,311,192 n.a.
cash 19,078 21,373 (2,296) (10.7%)
Total Cash 9,693,294 3,384,398 6,308,896 n.a.
For an analysis of the variation shown above, please refer to the Financial Statements.
3.4 COMMENTS ON THE PRINCIPAL LIABILITIES
3.4.1 NET ASSETS
As at September 30, 2013, the Parent Company share capital subscribed and paid amounted to Euro
50,529,680 divided into no. 37,612,000 ordinary shares of no par value. The legal reserve has been
increased by an amount equal to Euro 59 thousand as a result of the resolution of profit for the year ended
December 31, 2012. The item Other reserves was detected variation due to the distribution of the dividend
resolved by the General Meeting of April 29,2013, amounting to Euro 2.068 thousand using partially also
the extraordinary reserve of Euro 952 thousand.
At September 30, 2013 under "Other reserves" include the change in the reserve for cash flow hedges
amounted to € 435 thousand. This change consists of the positive change of € 954 thousand, the reserve
for cash flow hedges of joint ventures accounted for using the equity method, and the decrease of Euro
1,389 thousand, the reserve for cash flow hedges of the Parent TerniEnergia ( the latter change was mainly
due to the full consolidation of the company Alternative Energy and Terni SolarEnergy). This reserve
reflects the negative fair value, net of related tax effects of derivative instruments to hedge the exposure to
variability in cash flows related to fluctuations in interest rates of some medium - long term. These
derivative contracts meet the requirements of IFRS to be considered of hedge accounting and therefore
changes in the fair value of these derivatives are recognized, only referring to the "effective" in a specific
equity reserve ("Reserve for cash flow hedge "). The change in this reserve is indicated in the statement of
comprehensive income. The total value of the cash flow hedge reserve at September 30, 2013 was a loss of
Euro 4,932 thousand.
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The minority shareholders' equity is represented mainly by capital and reserves belonging to the minority
shareholders of LyteEnergy Srl, it should be noted that the latter company is owned directly by Lucos
Alternatives Energies SpA, which owns 70% of the shares. The change in this item is attributable to the sale
of its stake in the company GREENLED Srl, resulting in the deconsolidation of the corresponding minority
interests. The company at September 30, 2013 did not have treasury shares.
3.4.2 PROVISION FOR EMPLOYEE BENEFIT
The table below reports the breakdown of provision foe employee benefits as at September 30, 2013, as at
December 31, 2012 and the related change:
As at September, 30 As at December, 31 Change Change%
2013 2012
Provision for employee benefits 678,793 520,748 158,045 30.3%
Total Employee Benefits Fund 678,793 520,748 158,045 30.3%
The change represents the provision for the first nine months of 2013, net of the amounts paid to employees.
3.4.3 DEFERRED TAXATION
Follow the detail as at September 30, 2013, as at December 31, 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Deferred tax Deferred 1,060,017 1,074,049 (14,032) (1.3%)
Total Deferred taxation 1,060,017 1,074,049 (14,032) (1.3%)
The provision for deferred tax liabilities amounting to Euro 427 thousand, recognized as a result of the
allocation, including intangible assets, the cost incurred for the purchase of certain subsidiaries included in
the consolidation. The remainder of the balance mainly relates to deferred tax assets recognized on the
transition of the financial statements of certain subsidiaries under Italian GAAP "Italian GAAP" to IFRS.
54
3.4.4 NON CURRENT FINANCIAL RECEIVABLES
Follow the detail as at September 30, 2013, as at December 31, 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Due to financial leasing 56,347,046 26,582,447 29,764,599 112.0%
Non-current
borrowings (other funders) 69,267 101,640 (32,373)
(31.9%)
Non-current debt (mortgages) 35,618,471 1,495,824 34,122,647 n.a.
Total non-current financial debts 92,034,784 28,179,910 63,854,873 n.a.
Receivable due to financial leasing amounted to € 56,347 thousand relate to debts contracted to finance
the systems of ownership. In particular it comes to debt "non-recourse" related to photovoltaic systems 16
of the total power of 17.6 MWp .The lease liability also includes donations made by the leasing company in
the face of the completion of the FORSU treatment plant in Nera Montoro, as well as the leasing loan of the
photovoltaic plant of PFU. These loans do not include covenants and restrictions to the distribution of
profits generated. The item "Non-current debt (loans)", equal to Euro 35,618 thousand, mainly includes the
non-current portion of loans related to 12 photovoltaic systems with a total capacity of 11.1 MWp. These
loans were granted in the form of mortgage loans for those covers 5 photovoltaic plants owned by the
company's Alternative Energy, while for the other 7 plants owned by the company Terni SolarEnergy were
provided with the mode of project financing. To ensure this latest funding, signed in 2010, was made a
pledge on the shares of the same Terni SolarEnergy. The remainder of the balance relates to corporate
loans granted to the Parent TerniEnergia. The remaining portion of non-current borrowings, amounting to
Euro 69 thousand, refers to debt with a maturity of over 12 months of a loan used to purchase vehicles.
The increase in the item "Loans for lease" is attributable for Euro 24.6 million, non-current portion of
financial debt to leasing companies present in Alternative Energy, while the rest of the variation is
attributable to the financing occurred during the first nine months of 2013 of two photovoltaic plants and
the treatment plant PFU in Nera Montoro held directly by the Company. The change from the item "Non-
current debt (loans)" refers, with regard to Euro 18,8 million, non-current portion of the project financing
of Terni SolarEnergy, while with regard to Euro 14,9 million, non-current portion of mortgage company's
Alternative Energy.
55
Overall, the net non-current as of September 30, 2013, includes loans granted by leasing institutions and
lenders in the face of 28 photovoltaic systems with a total capacity of 28.7 MWp, biodigestion a plant and a
sewage treatment plant PFU.
3.4.5 OTHER NON-CURRENT LIABILITIES
Follow the detail as at September 30, 2013, as at December 31, 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Other non-current liabilities 1,950,000 1,950,000 - 0.0%
Net Deferred 2,609,214 9,384,070 (6,774,856) (72.2%)
Total Other non current liabilities 4,559,214 11,334,070 (6,774,856) (59.8%)
The item “other non-current liabilities products” includes long-term portion (short-term portion of Euro
369 thousand) of the deferred margin budgeted after the reset of the investments to recognize the
additional reduction will generated by the reversal of the margins, equal Euro 2,609 thousand.
This margin was eliminated upon revenue recognition, was subsequently realized by TerniEnergia from the
moment they begin the process of amortization of the corresponding system by the Joint Ventures.
Accordingly, at the end of each year, determine the amount of margin that can be considered achieved,
recovering the same by increasing the value of the investment or reduction of the liability in question.
The amount in question is the Deferred margin which will be recognized in the consolidated statement of
no more than 12 months.
The change compared with the corresponding balance of the previous year is attributable mainly to the
purchase of 50% of the shares in Alternative Energy with the consequent consolidation of assets and
liabilities at the acquisition date (28 March 2013) and the elimination of the effects related to the previous
method of consolidation (equity) . The change is also due to the sale of 50% of the share of Solaren with the
resulting deconsolidation of the effects resulting from accounting with the equity method recognized in
previous years.
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The item "Other non-current liabilities" includes the fair value of the call that the parent company may, in
the month of June 2014 in respect of the exercise Lucos Alternative Energies SpA for the acquisition of 30%
share of Euro 1,950 thousand.
3.4.6 DERIVATIVES
Follow the detail as at September 30, 2013, as at December 31, 2012 and changes:
As at September, 30 As at December, 31 Change Change%
(in Euro) 2013 2012
Hedging Derivatives 4,819,639 69,048 4,750,591 n.a.
Other derivatives on interest rates 168,366 180,966 (12,600) (7,0%)
Total Derivatives 4,988,005 250,014 4,737,991 n.a.
The Group, as at September 30, 2013, does not hold derivative instruments quoted. The fair value of OTC
derivatives is measured with reference to the financial valuation techniques: in particular, is calculated by
discounting future cash flows according to the parameters of the market.
The caption "Hedging derivatives", equal to Euro 4,820 thousand, relates to different derivative contracts
IRS (Interest Rate Swap), to cover any fluctuations in interest rates. These derivative contracts mainly relate
to funding of companies and Terni Energia Alternativa Solarenergy.
For the effects recorded at September 30, 2013 following the application of IFRS 13 is referred to the
comments in note 3.5.8.
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3.4.7 TRADE PAYABLE
Follow the detail as at September 30, 2013, as at December 31, 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Payables to suppliers 28,065,996 26,097,197 1,968,799 7.5%
Payables to parent 615,757 492,334 123,423 25.1%
Payables to subsidiaries 398,694 133,539 265,155 n.a.
Payables to Joint Venture 97,985 186,187 - (47.4%)
Total trade payables 29,178,431 26,909,257 2,357,376 8.80%
Trade payables amounted to Euro 29,178 million at September 30, 2013, relate to the supply of materials
as well as the acquisition of goods and services. Trade payables include Euro 2,226 thousand invoices to be
received September 30, 2013.
This item includes payables of € 398 thousand to the subsidiary Italeaf SpA and for Euro 615 thousand to
the parent Terni Research SpA, for the consideration of the corporate service.
3.4.8 DEBT AND OTHER FINANCIAL LIABILITIES
Follow the detail as at September 30, 2013 as at December 31, 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Current bank debt (current account overdraft) 6,661,863 3,421,723 3,240,140 94.7%
Current bank debt (advance) 16,111,706 33,687,152 (17,575,446) (52.2%)
Financial payables to other lenders 2,124,845 155,075 1,969,770 n.a.
Financial payables /(Receivables) 2,954,324 974,483 1,979,841 n.a.
Current financial debt (other lenders) 9,937,720 8,680,765 1,256,955 14.5%
Total debts and other liabilities 37,790,458 46,919,198 (9,128,740) (19.5%)
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The item “Accounts payable and other financial liabilities” mainly refers to payables to banks for overdrafts
and advances on account contracts and invoices, as well as the short-term portion of debt for financing and
leasing.
The increase in the period of the items "Current portion of lease" and "Short-term" is due mainly to the
purchase of 50% of the shares in Alternative Energy and 50% of the company SolarEnergy Terni and the
consequent consolidation company with its short-term debt. The current portion of borrowings relating to
companies and Terni Energia Alternativa SolarEnergy September 30, 2013 amounted to Euro 3.3 million.
The increase in "borrowings from other financial institutions" refers, with regard to Euro 1,800 thousand in
funding towards the outgoing shareholder EDF EN SpA Italy which will be settled by the end of the year
2013.
The change in the item "Short-term borrowings (anticipation)" reflects the significant repayments made by
the parent company over its short-term credit lines.
It is noted that the current financial liabilities comprise part of the payments incurred for investments
already made or still under construction and for which at 30 September 2013 had not yet been entered into
a specific contract financing in the medium - long term. In particular it is a photovoltaic power of 0.8 MWp,
the second treatment plant PFU in progress, of a plant pyrogasification already connected to the network in
December 2012 and a composting plant in the course of realization in Puglia.
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The following table presents the net financial debt at September 30, 2013 and December 31, 2012:
As at September, 30 As at December, 31
(in Euro) 2013 2012
Cash (19,077) (21,373)
Available bank current accounts (9,674,216) (3,363,025)
Liquidity (9,693,293) (3,384,398)
Current bank debt (current account overdraft) 6,661,863 3,421,723
Current bank debt (advance) 16,111,706 33,687,152
Financial payables to other lenders 2,124,845 155,075
Financial payables /(Receivables) 2,954,324 974,483
Current financial debt (other lenders) 9,937,720 8,680,765
Current financial receivables (3,844,968) (9,376,802)
Current financial debt 33,945,490 37,542,396
Net short-term financial position 24,252,197 34,157,998
Non-current financial debt (other lenders) 35,618,471 1,495,824
Financial payables to other lenders 69,266 101,639
Non-current financial debt (Leasing) 56,347,046 26,582,447
Non-current net financial position 92,034,783 28,179,910
Total net financial position 116,286,980 62,337,908
Current financial assets at September 30, 2013 include the current account with Monte dei Paschi di Siena
SpA, amounting to Euro 1 million as security for bank overdrafts and advances on invoices with the same.
For more details on the net financial position of the Group is provided in the Report on Operations in the
"statement of financial position."
As previously mentioned, the increase in the net financial position recorded during the first nine months of
2013 is due mainly to acquisitions of 50% of the company Alternative Energy and 50% of the company Terni
SolarEnergy.
TERNIResearch SpA, the parent company of the Parent Company, issued bank guarantees in favor of the
Parent Company for a total amount of Euro 42.9 million at the date of approval of these financial
statements.
60
At the date of approval of the consolidated financial statements, the Group has available credit lines with
various banks for Euro 70.3 million.
3.4.9 TAX DEBIT ON INCOME
Follow the detail as at September 30, 2013, December 31 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2012
Direct Taxex - 791,917 (791,917) (100.0%)
Total current tax liabilities - 791,917 (791,917) (100.0%)
The item "direct taxes" in the balance of the previous year referred to the amount of Euro 389 thousand to
the debt of the subsidiary Hellas TerniEnergia for accrued taxes on income for the year ended December
31,2012.
3.4.10 FURTHER CURRENT LIABILITIES
Follow the detail as at September 30, 2013, December 31 2012 and changes:
As at September, 30 As at December, 31 Change Change%
2013 2011
Withholding tax 246,253 187,927 58,326 31.0%
Due to personnel 740,472 580,486 159,986 27.6%
Payables to social security institutions and welfare 307,432 336,032 (28,600) (8.5%)
Net Deferred 369,026 395,850 (26,824) (6.8%)
Debt for Merger&Acquisition 1,026,192 - 1,026,192 n.a
Other current liabilities 4,590,040 316,109 4,273,931 n.a.
Total other current liabilities 7,279,414 1,816,404 5,463,011 n.a.
This item includes payables to employees and social security institutions.
The item "Deferred margin" refers to the short-term (long-term portion of Euro 2,609 thousand) of the
deferred margin budgeted after the reset of the investments to recognize the additional reduction
61
generated by the reversal of margins. The "debt for purchase of investments", amounting to Euro 1,026
thousand , refers to the purchase price of 50% of the shares in Terni SolarEnergy.
The change in other current liabilities on the previous year is due almost entirely to the advances paid by
the customer for several photovoltaic plants under construction in Romania.
3.4.11 COMMITMENTS AND GUARANTEES GIVEN
GUARANTEES
In some cases, customers of the Parent Company have funded the purchase of the photovoltaic system
through lease agreements with leasing companies. For some of these customers, the Parent has signed
with the leasing company for a takeover agreement to the customer in the lease in the event of, and
subordinate to, the failure by its customers. Customers are also involved in this case, to transfer to
TerniEnergia the lease agreement and any debt outstanding at the date of transfer, if generated by power
plant under contract.
The directors of the TerniEnergia believe that the probability of occurrence of transfers is extremely
remote, since , in practice and with the exception of the initial balloon payments , the lease agreements are
structured so that the income flows generated by the plant financial coverage of the installments. Whereas
the existence of an initial deposit paid by the customer to the leasing company , the data at the time of a
takeover , based on the development plan of the cash flows of photovoltaic interested , they would see a
future excess flows generated by the production of energy compared to the outflows for the fees due .
As at 30 September 2013, the remaining debts of customers to leasing companies for which they were
hired these agreements amounted to Euro 63.9 million , of which Euro 55.7 million for companies managed
or owned by related parties (17.7 million from subsidiaries to 100%), Euro 20.5 million for joint ventures,
Euro 4,8 million for the controlling Terni Research SpA and Euro 8.2 million for third-party clients .
For the same reasons outlined above, the directors also believe that the taking over of the Parent Company
in the lease agreements would not result in a negative effect on the economic situation of TerniEnergia .
See also note 3.6 related parties.
As at 30 September 2013, major banks and insurance companies have issued guarantees on contractual
obligations of the Parent Company TerniEnergia against third parties, for Euro 9.4 million.
62
POTENTIAL LIABILITIES
Disputes investigations and legal proceedings
As at September 30, 2013 there were no legal proceedings or litigation pending against the TerniEnergia or
other Group companies, except as outlined below. We give evidence that the expiry of the contract
provided for the sale of a photovoltaic system power of 997 kWp the customer has not paid anything by
way of compensation for the work performed by the Company.
Consequently, the parent company only after repeated requests of payment:
• has taken steps to remove the solar panels and other removable materials from the site (in perfect
conformity to what was decided in the previous private documents between the parties);
• proposed subpoena to appear before the Court of Terni, in order to ascertain the gross misconduct of the
customer obligations in the contracts and therefore, to obtain the termination of such contract pursuant to
Art. 1453 cc, resulting in condemnation of the customer to pay all damages suffered and the amount of €
1,046,890.00 (the amount identified in the loss of earnings, classified in 30% of the contract price which the
total amount was equal to a total EUR 3,489,640.00) or in greater or smaller amount that will be
determined in the course of the proceedings.
The case was registered with the role R.G. 2005/11. Therefore, it stops the natural randomness that
characterizes all types of litigation and based on the assessments already esposteci by our lawyers, the
Parent Company believes that there are reasonable grounds for considering the high probability of success
in the civil case above. Based on the above analysis brief survey of the facts, translated in the civil case that
the parent company has promoted and considered a possible reconciliation with the customer resulting in
the conclusion of the supply, it is not considered appropriate to provide to affix any residual impairment
costs (approximately € 0.4 million) are not representative of the material removed (panels, inverter etc.)
between the products of work in progress at September 30, 2013.
In the course of the proceedings referred to in the previous point, it was notified TerniEnergia an
instrument of appointment of arbitrator and arbitration request, on 7 December 2011. It 'been appealed to
arbitration by serving a deed December 27, 2011 and, in any case, identifying its arbitrator in the unlikely
event that it was not deemed competent Judge Ordinary.
The Arbitration Board was duly constituted, has completed its investigation (hearing of witnesses) and is
currently in reserve on the decision.
63
The Parent company is involved in two disputes with the Inheritors Kingdoms, arose as a result of the
failure by the latter to grant a right of easement necessary for the passage of conduits of a photovoltaic
system owned by the Group . The first dispute is pending before the Council of State , in the second
instance and the appeal concerning the order for demolition and restoration of part of conduits made
without the authorization of enslavement title of the land on which it insists , issued by the Municipality of
Perugia. The second dispute was promoted by TerniEnergia against the heirs Kingdoms before the Court of
Perugia in order to obtain the grant of easement of , on the basis of the commitments made by the same
contractually Kingdoms, at the time gave way to the design of photovoltaic TerniEnergia and the surface
rights relating to the land on which to make it happen.
In reference to the first has been granted suspension of the effect of the judgment of the Tar authorizing
the demolition and restoration and is waiting for the hearing on the merits. In reference to the second was
arranged a referral for negotiations. In fact , pending lawsuits, the heirs of the two kingdoms have made
proposals transaction . The negotiations are still ongoing.
The parent company, with the support of its lawyers , has reasonable grounds to believe a non-configurable
probable liability borne by the company , nor, at present, there were some evidence to configure a loss in
value of the PV system in question.
3.5 COMMENTS ON THE MAIN INCOME ITEMS
3.5.1 REVENUES
The following table provides details of the item in question for the first nine months ended on September
30, 2013 and December 31, 2012:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Revenues installation of photovoltaic 24,880,819 33,376,253 (8,495,434) (25.5%)
Revenue from operating Photovoltaic 1,903,548 977,713 925,835 94.7%
Revenues from maintenance 1,277,035 1,699,446 (422,411) (24.9%)
Revenues from "Environment" 4,246,133 - 4,246,133 n.a.
Revenues from Energy Saving 523,377 320,532 202,844 63.3%
Other Revenues 165,479 - (1,046,920) (86.4%)
Total 32,996,390 37,586,342 (4,589,954) (12.2%)
64
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Energy Contribution
8,504,001 2,761,689 5,742,312 n.a.
Other Revenues 4,425,769 749,142 3,676,627 n.a.
Total 12,929,770 3,510,831 9,418,939 n.a.
Total Revenue 45,926,160 41,097,174 4,828,987 11.8%
As at September 31 2013, the Group recorded consolidated revenues from sales and services for Euro
45,926 thousand , an increase of 12% compared to the same period of 2012.
Revenue from installation of photovoltaic systems, equal to Euro 24,881 thousand are made primarily by
the parent company and primarily relate to the realization of a photovoltaic system power of 21 MWp in
Italy (without the supply of panels) on commission of a major utility European Union and by three solar
power plants in Romania the total capacity of 3 MWp (with the supply of panels).
"Revenues from operating Photovoltaic Systems", equal to Euro 1,903 thousand, and the voice
Contribution c / energy ", equal to Euro 8,504 thousand, include revenues derived respectively from the
production and sale of electricity from solar energy produced by photovoltaic systems owned by the Group
and the feed-in tariff granted to them. Please note that the facilities owned by the company SolarEnergy
Terni (5.7 MWp) did not contribute to the Group's operating results for the period , taking into account that
the acquisition of 50% of the shares of the company took place on 28 June 2013. Besides the 12 plants
owned by the company's Alternative Energy (13.9 MWp) have contributed to the Group's operating results
only since the end of March 2013, taking into account that the acquisition of 50% of the shares of the
company took place on 28 March 2013.
"Revenues for maintenance", equal to Euro 1,277 thousand, refer to maintenance services carried out by
the Parent Company TerniEnergia, based on long-term contracts, the photovoltaic system is made on
behalf of its clients.
"Revenues Environment", equal to Euro 4,246 thousand, derived from the assets acquired in the merger by
incorporation of TerniGreen SpA, which took effect in September, 2012, and in particular relate mainly to
revenues from the plant and biodigestion composting in Nera Montoro (these revenues are composed not
65
only of the consideration received for collection of waste - MSW - Organic Fraction of Municipal Solid
Waste - but also from the sale of electricity generated through the recovery of biogas resulting from the
anaerobic process biodigestion), from 'processing activities PFU (Life Tyres) and the management of the
purification of groundwater of the Nera Montoro.
"Revenues Energy Efficiency", equal to Euro 523 thousand, including revenues recorded by the subsidiary
Lucos Alternative Energies for energy saving measures implemented during the first nine months.
The item "Other income" amounting to Euro 4,425 thousand, welcomes, with regard to Euro 2,690
thousand, the gain from the sale of 50% of the shares held in the company Solaren Ltd. This income has
been detected in this item, being in substance operation of an operational nature (sale of photovoltaic
systems). For further details on this see also refer to note 3.3.8.
3.5.2 CHANGES IN INVENTORIES OF SEMI-FINISHED PRODUCTS
The following table provides details of the item in question for the first nine months ended September 30,
2013 and 2012:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Finished Products 63,568 - 63,568 n.a.
Semifinished 114,880 - 114,880 n.a.
Products in process 3,264,071 1,592,942 1,671,129 104.,9%
Total 3,442,519 1,592,942 1,849,577 116.1%
The products work in progress mainly include the costs incurred for other activities related to the
implementation of photovoltaic systems and parts thereof. The change in the period is mainly due to plants
under construction in Romania.
Inventories of finished products to 30 June 2013 relate mainly to the technological equipment "TR-WOC"
and "TR gridless", as well as to the matter-before the second arising from the recovery of tires.
66
3.5.3 COSTS OF RAW MATERIALS, SUPPLIES AND GOODS
The following table provides details of the item in question for the first nine months ended September 30,
2013 and 2012:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Purchase of materials 16,724,292 10,543,291 6,181,001 58.6%
Materials consumption 1,028,704 495,886 532,818 107.4%
Fuels and lubricants 306,435 208,797 97,638 46.8%
Administrative costs of acquiring rights - 28,500 (28,500) -100%
Change in inventories of raw materials,
consumables 241,168 6,174,178 (5,933,010) (96.1%)
Total 18,701,265 17,215,426 1,485,839 8.6%
3.5.4 COSTS FOR SERVICES
The following table provides details of the item in question for the first nine months ended September 30,
2013 and 2012:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Outwork 6,565,138 9,294,695 (2,729,557) (29.4%)
Consultancy and external collaborators 1,402,740 1,294,872 107,868 8.3%
Rental and hire 640,051 918,121 (278,070) (30.3%)
parent services 1,461,411 1,107,236 354,174 32.0%
Leases 91,611 70,781 20,830 29.4%
Transportation 1,015,142 865,323 149,819 17.3%
Maintenance and repairs and assistance 784,212 576,398 207,814 36.1%
Supervision and Insurance 1,629,822 1,459,438 170,384 11.7%
Other operating costs 2,590,439 1,319,620 1,270,819 96.3%
Total 16,180,565 16,906,483 (725,918) (4.3%)
This item includes costs for the consulting and collaboration, supervision and transportation, insurance and
other benefits. The item " Parent Services " includes the cost of the services provided by the parent Terni
Research SpA. For more details see also refer to note 3.7.
67
3.5.5 PERSONNEL COST
The following table provides details of the item in question for the first nine months ended September 30,
2013 and 2012:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Wages and salaries 2,274,778 2,116,340 158,439 7.5%
social security contributions 949,264 671,786 277,478 41.3%
remuneration of directors 339,500 393,363 (53,863) (13.7%)
Provision for fund benefits 139,186 132,325 6,861 5.2%
temporary staff 624,188 619,044 5,144 0.8%
Total 4,326,916 3,932,857 394,059 10.0%
3.5.6 FURTHER OPERATING COSTS
Follow the detail as at September 30, 2013, June 30 2012 and changes:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Taxes other than income 340,599 63,300 277,299 n.a.
Fines and penalties 180,149 13,350 166,799 n.a.
Other operating costs 680,809 742,352 (61,543) (8.3%)
Total 1,201,558 819,002 382,556 46.7%
68
3.5.7 DEPRECIATION,IMPAIRMENT AND PROVISIONS
The following table provides details of the item in question for the first nine months ended September 30,
2013 and 2012:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Amortization of intangible assets 154,007 81,937 72,070 88.0%
Depreciation of tangible fixed assets 4,424,173 1,384,151 3,040,022 n.a.
Total 4,578,180 1,466,088 3,112,092 n.a.
The change in the item "Depreciation" compared to the previous year is attributable to the increase in the
number of solar power plants in operation owned by the Group over the entry into service in the first
quarter 2013 of biodigestion plant at the industrial site of Nera Montoro.
3.5.8 FINANANCIAL INCOME AND CHARGES
Follow the detail as at September 30 2013, June 30 2012 and changes:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Interest expense on debt (4,391,572) (2,685,967) (1,705,605) 63.5%
banking Commission (642,782) (647,862) 5,080 (0.8%)
Other financial charges (41,256) (29,529) (11,727) 39.7%
Total finance costs (5,075,610) (3,363,358) (1,712,252) 50.9%
Interest earned on bank accounts 72,019 9,205 62,814 n.a.
Interest income / joint venture 185,682 550,729 (365,047) (66.3%)
Other financial income 4,627,189 10,856 4,616,333 n.a.
Total financial income 4,884,890 570,790 4,314,100 n.a.
Total (190,720) (2,792,568) 2,601,848 (93.2%)
The increase in financial expenses is mainly due to the incidence of interest expense attributable to the
company Alternative Energy.
69
The item "Other financial income" is registered with the proceeds, amounting to Euro 2,760 thousand,
resulting from the revaluation of 50% of the shares already held in the company Energia Alternativa Srl, in
which the Parent Company acquired the remaining 50% on 28 March 2013, as well as income of Euro 656
thousand, resulting from the revaluation of 50% of the shares already held in the company SolarEnergy
Terni Srl, in which the Parent Company acquired the remaining 50% on June 28, 2013. Finally in this item
was also detected a gain of Euro 1107 thousand, resulting from the application of IFRS 13 on derivatives of
the Group.
On December 11, 2012 was issued the EC Regulation no. 1255-2012, which implemented at Community
level, IFRS 13, the objective of which is the “coerentizzazione” and comparability in fair value
measurements through the cd. "Hierarchy" of fair value. Said IFRS, which should be applied prospectively, it
does not expand the use cases of the fair value, but provides guidance on how it should be applied.
In particular, the IFRS 13:
• defines the concept of fair value;
• establishes a single set of forecasts for all fair value measurements;
• introduces specific requirements on information to be provided on the measurement of fair value.
Although many of the concepts in IFRS 13 are consistent with the current practice, some aspects of the new
standard have any impact on the Group TerniEnergia, the main of which is given by the clarifications
introduced with reference to the measurement of default risk in determining the fair value of contracts
derivatives. This risk includes both changes in the creditworthiness of the counterparty to those of the
Group TerniEnergia. The application of IFRS 13 in the first half of 2013 resulted in a positive effect on net
income and shareholders' equity amounted to Euro 1,107 thousand.
70
3.5.9 JOINT VENTURE INCOME
The following table provides details of the item in question for the first nine months ended September 30,
2013 and 2012:
As at September, 30 As at September, 30 Change Change %
(in Euro) 2013 2012
Terni Solar Energy S.r.l. 15,528 151,567 (136,039) (89.8%)
Energia Alternativa S.r.l. (150,507) 625,429 (775,936) (124.1%)
Energie S.r.l. - 970,110 (970,110) (100.0%)
Fotosolare Settima S.r.l. 271,188 333,360 (62,172) (18.7%)
Solaren S.r.l. 107,945 304,361 (196,416) (64.5%)
Collesanto S.r.l. 135,266 153,611 (18,344) (11.9%)
Saim Energy 2 S.r.l. 114,320 106,779 7,541 7.1%
Infocaciucci S.r.l. 103,478 91,545 11,933 13.0%
Girasole S.r.l.. 229,755 159,891 69,864 43.7%
Soltarenti S.r.l. - 235,399 153,273 65.1%
Guglionesi S.r.l. 41,753 69,442 (27,689) (39.9%)
Total 1,257,399 3,201,495 (1,944,096) (60.7%)
The item "share result of Joint Venture" includes both the profit for the period according to IFRS on equity
investments in joint ventures, for the portion attributable to the Group, both the positive effect of the
recovery of margins eliminated as a result of accounting with the equity method. See also provided in note
3.3.3.
The results of the Group registered by the company Energia Alternativa Srl were recorded as "share result
of Joint Venture" to the acquisition of control occurred at the end of the quarter ended March 31, 2013.
The results pertaining to the registered group companies Terni Solarenergy were recorded as "share result
of Joint Venture" to the acquisition of control occurred at the end of the six months ended 30 June 2013.
The results pertaining to the registered group companies Solaren were recorded as "share result of Joint
Venture" to the loss of control occurred at the end of the six months ended 30 June 2013.
The change compared with the corresponding figure of the previous year is due to the lower number of
joint ventures in the Company. The Company Energie S.r.l. was entirely sold during the last quarter of 2012
as the Company's DT S.r.l the Parent Company acquired total control during the second half of 2012.
71
3.5.10 TAX
The following table provides details of the item in question for the first nine months ended September 30,
2013 and 2012:
As at September, 30 As at September, 30 Change Change%
(in Euro) 2013 2012
Current taxes 1,145,328 797,710 347,618 43.6%
Deferred tax assets (786,579) (831,994) 45,414 (5.5%)
Deferred 50,437 (11.131) 61,568 n.a.
Revenues from taxes consolidation (1,006,335) - (1,006,335) n.a.
Total (597,149) (45,415) (551,735) n.a.
Current taxes refer to tax on productive activities gained in the first nine months of 2013 by the Group
companies as well as IRES mainly the responsibility of the Group's proprietary photovoltaic systems
The change compared to the previous year is due to a consolidated tax gain recognized on tax loss accruing
in the first nine months of 2013 mainly by the parent company TerniEnergia and transferred to the
consolidating Terni Research under the tax consolidation agreement.
3.6 RELATIONS WITH RELATED PARTIES
Below The financial statements with evidence of related party transactions pursuant to CONSOB. 15519 of
27/7/06.
72
STATEMENT OF FINANCIAL STATEMENT FOR THE PURPOSES OF CONSOB n. 15519
of 27/7/06
As at September,
30 of which
As at December,
31 of which
(in Euro) 2013 related parties 2012 related parties
ASSETS
Intangible assets 4,873,435 - 5,555,935 -
Property, plant and equipment 143,535,913 - 67,605,402 -
Equity investments 27,383 - 45,287 -
Deferred tax assets 8,177,442 - 5,334,327 -
Non-current financial receivables 8,786,669 4,722,283 11,842,423 8,725,492
Total non-current assets 165,400,842 4,722,283 90,383,374 8,725,492
Inventories 11,576,975 - 8,773,234 -
Trade receivables 26,530,034 3,076,894 45,108,376 7,577,550
Other current assets 12,715,282 - 9,538,845 -
Financial receivables 3,844,968 2,056,015 9,376,802 5,191,127
Cash and cash equivalents 9,693,293 - 3,384,398 -
Total current assets 64,360,552 5,132,908 76,181,655 12,768,677
TOTAL ASSETS - - - -
LIABILITIES AND SHAREHOLDERS’ EQUITY
Share capital 50,529,819 - 50,529,680 -
Reserves (4,500,464) - (8,872,466) -
Result for the period 6,014,936 - 6,880,120 -
Total Group equity 52,044,291 48,537,334
Equity attributable to minority 118,901 - 233,384 -
Profit for the period of the third 29,086 - -1,256 -
Total equity 52,192,278 48,769,462
Provision for employee benefits 678,793 - 520,748 -
Deferred tax liabilities 1,060,017 - 1,074,049 -
Non-current financial payables 92,034,783 - 28,179,910 -
Other non-current liabilities 4,559,214 - 11,334,070 -
Derivatives 4,988,005 - 250,014 -
Total non-current liabilities 103,320,812 41,358,791
Trade payables 29,178,431 1,214,435 26,909,257 812,06
Payables and other financial liabilities 37,790,459 - 46,919,198 -
Taxes payable - - 791,917 -
Other current liabilities 7,279,414 42,353 1,816,404 42,353
Total current liabilities 74,248,304 1,256,533 76,436,776 854,413
TOTAL LIABILITIES 177,569,116 1,256,533 117,795,567 854,413
LIABILITIES AND SHAREHOLDERS’ EQUITY 229,761,394 1,256,533 166,565,029 854,413
73
CONSOLIDATED INCOME STATEMENT FOR THE PURPOSES OF CONSOB n. 15519 of
27/07/06
As at September, 30 of which As at September, 30 of which
(in Euro) 2013 related parties 2012 related parties
Revenues 32,996,390 - 37,586,342 2,099,500
Other operating income 12,929,770 724,653 3,510,831 1952,218
Change in inventories of semi-finished and
finished products 3,442,519 - 1,592,942 -
Costs for raw materials, consumables and
goods for resale (18,701,266) - (17,215,426) -
Costs for services (16,180,565) (1,902,886) (16,906,417) (1,337,354)
Personnel costs (4,326,917) (430,534) (3,932,857) (430,534)
Other operating costs (1,201,557) - (819,002) -
Amortisation, depreciation, provisions and
writedowns (4,578,180) - (1,466,088) -
Operating result 4,380,194 - 2,350,325 -
Financial income 4,884,890 151,688 570,790 538,674
Financial charges (5,075,610) (348,475) (3,363,358) (153,765)
Portion of result attributable to the joint
venture 1,257,399 - 3,201,495 -
Net profit before taxes 5,446,873 - 2,759,252 -
Taxes 597,149 - 45,415 -
Net profit for the period 6,044,022 - 2,804,667 -
74
CONSOLIDATED CASH FLOW STATEMENT PURSUANT TO CONSOB RESOLUTION NO.
15519 OF 27 JULY 2006
As at September,
30
As at September,
30
(in Euro) 2013 2012
Profit before taxes 5,138,067 1,939,715
Amortisation and depreciation 4,578,180 1,466,088
Write-downs of fixed assets 156,204 63,819
Provision for employee benefits (1,257,399) (3,201,495)
Result of joint ventures accounted for at equity and reversal of margin (7,485,238) 4,346,010
Change in inventories (2,773,863) 6,164,40
Change in trade receivables 23,345,850 (545,441)
Change in other assets (811,836) (17,203,484)
Change in trade payables 182,869 564,891
Change in other liabilities (647,490) (9,969)
Net cash flow (used in)/generated by operating activities 20,734,150 (5,595,926)
of which related parties 4,902,776 2,276,606
Investments in property, plant and equipment (7,528,795) (3,338,784)
Investments in intangible assets 54,193 (810,562)
Disposals of intangible assets 530 129,873
Consolidated soc. JV 3,325,991 605,782
JV Consolidated 1,246,942 943,904
Change in receivables and other financial assets (90,544) 2,131,785
Disposal of AHFS - 1,625,000
Net cash flow used in investing activities (2,462,214) 1,286,997
of which related parties 2,739,245 1,685,366
Change in payables and other financial liabilities (14,240,554) 1,418,352
Increase in non-current financial payables 4,463,566 2,228,579
Other changes in equity (117,393) 3,247
Payment of dividends (2,068,660) (5,285,800)
Net cash flow generated by financing activities (11,963,041) (1,635,622)
of which related parties - -
Comprehensive cash flow for the period 6,308,895 (5,944,551)
Cash and cash equivalents at the beginning of the period 3,384,398 10,623,880
Cash and cash equivalents at the end of the period 9,693,293 4,679,330
Interest (paid)/ collected (4,412,612) (2,126,085)
Income taxes paid - -
75
Transactions with related parties
Below are reported the related parties of the Group:
Surname or Name Status
Skill & Trust Holding S.r.l. Controlling companies
T.E.R.N.I. Research S.p.A. Controlling companies
Fotosolare Settima S.r.l. Joint venture
Collesanto S.r.l. Joint venture
Saim Energy 2 S.r.l. Joint venture
Infocaciucci S.r.l. Joint venture
Girasole S.r.l.. Joint venture
GreenASM S.r.l Joint venture
Soltarenti S.r.l. Joint venture
Guglionesi S.r.l. Joint venture
Gubela S.p.A. Company held or managed by a related parties
Serramenti del Chiese S.r.l. Company held or managed by a related parties
Ferrero Mangimi S.p.A. Company held or managed by a related parties
Italeaf SpA Company held or managed by a related parties
Lizzanello S.r.l. Company held or managed by a related parties
Boschetto Srl Company held or managed by a related parties
Gala Srl Company held or managed by a related parties
Camene Srl Company held or managed by a related parties
Royal Club Snc di Lucia e Francesco Urbani Company held or managed by a related parties
Studio Ranalli & Associati Company held or managed by a related parties
Stefano Neri Company held or managed by a related parties
Fabrizio Venturi CDA Member
Paolo Ricci Company Attorney
Domenico De Marinis CDA Member
Paolo Ottone Migliavacca CDA Member
Giovanni Ranalli CDA Member
Francesca Ricci Company held or managed by a related parties
76
The Parent Company is controlled, since its incorporation, by T.E.R.N.I. Research S.p.A..
The transactions effected with related parties are attributable to activities which relate to ordinary
operations and are settled at arm’s length, as interest-bearing receivables. As at September 30, 2013 no
significant transactions had been effected with related parties including transactions of a non-recurring
nature or unusual and/or atypical transactions.
Transactions between the Parent Company, the Controlling Company, the Joint Ventures and other related
parties mainly concern:
• business relations relating to the construction of photovoltaic plants and maintenance services with
joint ventures and companies managed or owned by related parties and companies which participate
in Joint Ventures with TerniEnergia;
• financial relations relating to loans granted to joint ventures (see also 3.3.5 and 3.3.9 financial
receivables);
• agreements for taking over finance lease agreements related to purchased photovoltaic plants, in
case of, and subject to, default by some companies managed or owned by related parties, joint
ventures and the controlling company Terni Research S.p.A. (see also note 3.4.11 commitments and
guarantees given);
• relations connected with contracts for performance of (technical, organisational, property leases,
legal and administrative) services with the controlling company Terni Research S.p.A.;
• professional services rendered by the firm Ranalli & Associati, by the director Paolo Ricci and by Mrs.
Francesca Ricci.
The table below reports the breakdown of economic and financial effects of business and financial
transactions with related parties as at September 30, 2013.
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Business transactions
(in Euro) As at September, 30 2013 Balance as at September, 30 2013
Credits Debts Costs Revenues
Name Assets Services Personnel Assets Services
Parent Companies
T.E.R.N.I. Research S.p.A. 2,445,529 615,757 - 1,392,660 - - 158,900
Joint venture
Fotosolare settima S.r.l. 63,045 97,985 - - - - 183,916
Infocaciucci S.r.l. 7,260 - - - - - 9,000
Saim Energy 2 S.r.l. 73,679 - - - - - -
Collesanto S.r.l. 24,400 - - - - - 75,037
Girasole S.r.l. 63,086 - - - - - 45,000
Sol tarenti S.r.l. 20,691 - - - - - 51,300
Guglionesi S.r.l. 24,684 - - - - - 15,400
Subsidiaries
Italeaf S.p.A. 128,216 398,694 - 278,682 - - 120,650
Related Parties
Francesca Ricci - - - 36,544 - - -
Lizzanello S.r.l. 34,684 - - - - - 9,130
Boschetto S.r.l. 40,250 - - - - - 8,160
Studio Ranalli& Associati 18,000 - - - - - -
Alta direzione - 42,353 - 195,000 430,534 - -
Gianni Ranalli 29,205 - - - - - -
Ferrero Elettra S.r.l. 4,515 - - - - - 11,193
Ferrero Mangimi S.p.A. 4,542 - - - - - 11,217
Gubela S.p.A. 70,260 101,745 - - - - 7,110
Serramenti del Chiese S.r.l. 24,850 - - - - - 18,640
Total 3,076,894 1,256,533 - 1,902,886 430,534 - 724,653
Value 26,530,034 29,178,431 18,701,266 16,180,565 4,326,917 33,024,916 12,901,244
Effect % 11.60% 5.60%
* Credits are inclusive of the credit for the tax consolidation amounted to Euro 2,256 thousand.
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Financial transactions
As at September, 30 2013 Balance as at September, 30 2013
Name Receivables Guarantees
received Suretiesgiven
Take-over
commitments Charges Proceeds
Parent Companies
T.E.R.N.I. Research S.p.A. - 48,520,866 - 4,894,983 227,173 -
Joint venture
Fotosolare settima S.r.l. 2,715,424 - - - - 45,032
Infocaciucci S.r.l. 222,022 - - 2,719,697 - 1,025
Saim Energy 2 S.r.l. 143,353 - - 2,691,055 - -
Collesanto S.r.l. 945,414 - - 4,984,580 - 10,921
Girasole S.r.l. 1,457,149 - - 1,250,000 - 20,972
Sol tarenti S.r.l. 1,402,112 - - 9,100,431 - 19,499
Guglionesi S.r.l. 463,728 - - - - 3,481
Related Parties
Boschetto S.r.l. - - - 3,378,930 - -
Gala S.r.l. - - - 3,072,410 - -
Camene S.r.l. - - - 3,203,783 - -
Royal Club Snc - - - 3,158,898 - -
Lizzanello S.r.l. 1,770 - - - - -
Total 6,778,298 48,520,866 38,068,221 348,475 151,688
Value 12,631,636 5,075,610 4,884,890
Effect % 53,70% 6,90% 3,10%
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Below are summarised the transactions effected between the Group and the related parties:
Business transactions
Business transactions mainly related to
• framework agreement for the development of photovoltaic projects for plants with a capacity not
lower than 500 kWp between the Company and the Joint Ventures, as well as O&M contracts for
photovoltaic plants and its reactivation in case of thefts;
• construction and transfer of a photovoltaic plant with a power of 998 Kwp to Serramenti del Chiese Srl,
a company managed by a member of the Company’s Board of Directors, for a value of Euro 3.184
thousand, towards of which the Parent has a receivable of Euro 1.795 thousand;
• framework agreement between the Parent Company and the controlling company Terni Research
S.p.A. related to the provision of administrative and logistic services, including the lease of the
properties located in Terni, at via Luigi Casale snc, in Narni, Strada dello stabilimento 1, in Milan at via
Borgogna and in Lecce, the management of legal and corporate affairs, as well as the management of
human resources and IT systems;
• construction and transfer of a photovoltaic plant with a power of 1 MWp to Terni Research Spa, for a
value of Euro 1.097 thousand;
• earnings from executive members of Board of Directors.
Financial transactions
Current and non-current financial receivables, as well as financial income, for the financial year ended 30
September 2013, relate to interest-bearing loans with the Joint Ventures. It should be noted that, as at
September 30, 2013, the controlling company Terni Research S.p.A. had granted to primary credit
institutions guarantees on the banking credit facilities of the Parent Company for Euro 48,5 million for
which it asked the subsidiary to pay Euro 348 thousand as fees on sureties, which were entered under
financial charges. For some customers who funded the purchase of the photovoltaic plant through finance
lease agreements entered into with leasing companies, the Parent Company entered into agreements for
taking over lease agreements with the relevant leasing companies, in the event of, and subject to, default
by the respective customers. As at September 30, 2013 the residual payables of lease agreements for which
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the abovementioned commitments had been undertaken amounted to Euro 63,9 million, of which Euro
55,7 million to related parties and Euro 8,2 million to other third-party customers.
3.7 ATYPICAL AND/OR UNUSUAL TRANSACTIONS
Pursuant to Consob notice no. DEM/6064293 of July 28, 2006 “Corporate disclosures of listed issuers and of
issuers having financial instruments offered to the public referred to in article 116 of the TUF – Requests
pursuant to article 114, paragraph 5, of Legislative Decree no. 58/98” (Informativa societaria degli emittenti
quotati e degli emittenti aventi strumenti finanziari diffusi tra il pubblico di cui all’art.116 del TUF – Richieste
ai sensi dell’ art.114, comma 5, del D.Lgs. 58/98”), it should be noted that:
• No transactions were carried out and no events occurred of a non-recurring nature, nor any transactions
or events which only rarely occur in the ordinary conduct of business;
• No atypical and/or unusual transactions were carried out.
3.8 OTHER INFORMATION
Earnings per share
The calculation of basic earnings per share attributable to the holders of the company’s ordinary shares is
based on the average number of shares of the relevant period.
As At September, 30
(in Euro) 2013 2012
Net profit for the period - Group 6,014,936 2,804,667
Average number of shares for the
period 37,612,000 28,391,796
Earnings per share – Basic and diluted 0.160 0.099
No differences have been reported between basic and diluted earnings per share as there are no classes of
shares with dilutive effects.
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Information relating to the opt-out
In compliance with the provisions of Article 70, paragraph 8 of the “Regolamento Emittenti” are also
informs that the Board of Directors, meeting on 19 December 2012, decided to join the scheme to "opt-
out" referred to in Articles 70 , paragraph 8, and 71, paragraph 1-bis of the Issuers, therefore making use of
the possibility to derogate from their obligations to publish information documents prescribed at significant
mergers, spin-offs, capital increase by contribution in kind, acquisitions and disposals.
Subsequent events
TERNIENERGIA PRESENTS THE NEW BUSINESS PLAN 2014-16 AND UPDATE TARGET 2013
As at October 1, 2013 the Parent Company presented the industrial plan 2014-16 in London. The operating
model that will carry out the plan maintains and enhances the 3 business units through which It is possible
to get a full diversification and organizational skills:
- Indipendent Power Producer (Power generation)
- Integrated energy solutions (EPC e system integration, energy efficiency through the company Lucos
Alternative Energies).
- Enviromental Resources Solutions (biomass plant recovery of used tyres, decontamination, water
purification).
For the next period 2014-2016, the Company will increase its international activities by carefully selecting
the geographical areas of intervention depending on the opportunities, focusing on:
- emerging markets where the demand for energy is increasing
- markets characterized by replacement demand of renewable energy supply and efficiency of
electrical systems
- geographical areas in which it is closer to achieve grid parity, or in which you can work through PPA
(power purchase agreement).
The internationalization process has already been started . The company is starting with important projects
in Ukraine. Works in South Africa have already started in order to realized a big power plant and in the
coming weeks are expected interesting news about the award of the third South African government’s bid
to build large solar power plants.
The size of individual projects will continue to grow and give priority to partners and customers of high
standing to enable new ways of accessing capital.
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TerniEnergia shows to have adjusted to the changing needs of the market, ensuring to important customers
IRR double digit, with limited risk for the investor, both because the process is absolutely under control and
also because TerniEnergia minimizes the impact of the investment, sharing the part of the risk with a
technically efficient plant system management.
TerniEnergia is able to maximize this value by covering the process with absolute mastery from the project
development to the EPC and from built to operate and transfer (BOT), until to the power generation activity
and and the O & M.
CO-OPTATION DIRECTORS FOR FULFILLING “female quotas”
As at October 17, 2013 the company took note of the resignation of the executive director and vice-
president Mr. Paolo Ricci, who resigned on account of the need to ensure compliance with the cd " Gender
quotas " and thanked him for the important and constructive contribution to the start of today. The ing.
Ricci will continue to operate within the corporate group , maintaining , by means of a proxy , all
operational duties already assigned to it by the Board of Directors on May 7, 2013.
At the same time the Board of Directors , in compliance with the provisions introduced by Law No 120 of 12
July 2011, in the area of gender balance in the composition of the Board of Directors and Board of Statutory
Auditors and taking into account the provisions of art . 13 of the bylaws , co-opted as a non-executive
director the lawyer. Francesca Ricci. As a result of this requirement, Consob has taken steps to terminate
the proceedings initiated by resolution no. 18583/2013.
TERNIENERGIA PROJECT ( PTY ) Ltd SIGNS TWO EPC CONTRACTS FOR A TOTAL POWER OF 148.5 MWP
As at October 31, 2013 The TerniEnergia Project ( Pty ) Ltd signed two framework agreements with a
leading Italian utility for the installation of photovoltaic systems of industrial size for a total power of 148.5
MWp in South Africa.
In particular, the agreements - which became effective following the award of preferred bidder status of
the client - form the basis for negotiation of the two projects and provide for the creation by Terni Energia
Project PTY Ltd, a subsidiary of South African TerniEnergia of two rigs PV with the formula "EPC Contract " (
turnkey ) with the supply of panels and inverters, respectively, in the locality Paleisheuwel to 82.5 MWp
and 66 MWp location Tom Burke of installed capacity and for a total consideration of approximately ZAR 2
corresponding billion at current exchange rates, to Euro 147 million approximately . The time schedule of
construction sites will be opening within the month of August 2014 and completion by August 2015.
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4. CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS PURSUANT TO ARTICLE 154-
BIS OF LEGISLATIVE DECREE 58/98 AND ARTICLE 81-TER OF CONSOB REGULATION NO.
11971/99, AS AMENDED AND SUPPLEMENTED
1. The undersigned Stefano Neri, in the capacity as Chairman and Chief Executive Officer, and Mr. Paolo
Allegretti, in the capacity of Manager responsible for preparing corporate accounting documents of
TerniEnergia S.p.A. hereby certify, also taking account of provisions under article 154-bis, paragraphs 3 and
4, of Legislative Decree no. 58 of 24 February 1998:
• the adequacy with reference to the characteristics of the enterprise;
• the actual application of the administrative and accounting procedures for the preparation of the
consolidated financial statements as at September, 30 2013.
2. To this regard, no further significant aspects emerged.
3. We further certify that the consolidated financial statements:
a) correspond to the results reported in the books and in the accounting records;
b) are prepared in compliance with the applicable international accounting standards recognised in the
European Community pursuant to Regulation (EC) no. 1606/2002, and, to the best of our knowledge, they
adequately provide a true and correct representation of the equity, economic and financial position of the
issuer and of the group of companies included in the scope of consolidation.
4. Finally, we certify that the report on operations includes a reliable analysis of the relevant events that
occurred during the financial year and of their impact on the consolidated financial statement, together
with a description of the main risks to which the Group is exposed. The report on operations also includes a
reliable analysis of the significant information with related parties.
5. This certification is issued pursuant to and for the purposes of article 154-bis, paragraphs 2 and 5, of
Legislative Decree no. 58 of 1998.
Narni, 12 November 2013
