bilanciod’esercizio e

2010

statementsfinancial

consolidated

2010

1 . The corporate governance of CPL CONCORDIA 4 Governance 8 Supervisory Bodies 10 Organization

Table of contents

2 . Report on operation 16 Unified Report on operations for the Consolidated Financial Statements

3 . Balance sheet 2010 84 Rectified balance sheet 90 Board of auditors report for the annual balance statement 92 Certification Report 93 Certifications UNI EN ISO 9001:2008

4 . Consolidated balance sheet 2010 96 Consolidated balance sheet 102 Sales and distribution company balance statement

103 GPL Company balance statement 104 Energy company balance statement 105 Foreign company balance statements 106 Other controlled company balance statement 107 Summary other connected companies essential data for the annual balance statement 108 Board of auditors report for the consolidated annual balance statement 110 Certification Report

3pagina

1The corporate governance of CPL CONCORDIA

4pagina

The

corp

orat

e go

vern

ance

of C

PL C

ON

CO

RD

IA

1

shareholders’ assembly

It is the highest policy-making body in the Company.As envisaged by the Articles of Association, every year the Shareholders’ Assembly approves the Annual Accounts and appoints by election the members of the Cooperative’s Board of Directors.

All shareholders are entitled to attend all Assembly meetings, be they ordinary or extraordinary meetings. If the relevant issuing resolution so provides, Contributing Shareholders are also entitled to attend.

The Assembly appoints corporate bodies, introduces regulations pertaining to the Articles of Association and internal regulations, with the aim of improving the functioning of the Company. It issues resolutions concerning the establishment of mutual funds for the development of mutualistic activities as well as any other subject submitted by the Board of Directors. Besides the official governing organs, the Special Assembly of cooperative participation shareholders is also active.

Their Common Representative, in order to protect the Special Assembly’s rights, is also entitled to attend the company’s Assembly with a view to check the implementation of development plans.

board of directors

The company is managed by the Board of Directors, composed of 13 directors elected by the Shareholders’ Ordinary Assembly. The Board represents the Shareholders’ Assembly and each year it appoints, among its members, the President and the Vice President. It is also entitled to appoint one or more Managing Directors determining their relevant powers.

The Board of Directors is entitled to carry out any activity that is necessary to reach the company aim. It enforces the Assembly’s resolutions, draws up provisional and final accounts, lays out the company’s annual and multiannual plans, decides on the acceptance or lapse of Shareholders, appoints technical directors, managers in charge of areas, sectors, specializations and services, while also establishing their powers and roles.Moreover, Board meetings are also attended by two Legacoop (“National Association of Cooperatives”) territorial representatives, who are invited on a permanent basis.

Governance

5pagina

Mario Guarnieri

Enrico Benetti

Emanuele Malavasi

Elena Galeotti

Roberto Loschi

Nicola Verrini

Roberto Casari

Daniele Spaggiari

Alfredo Lupi

Arturo Caracciolo

Giulio Lancia

Carlo Porta

Lorenzo Moscetta

Members of the Board of Directors

Roberto Casari president

Mario Guarnieri vice president

Daniele Spaggiari managing director

Enrico Benetti adviser

Arturo Caracciolo adviser

Elena Galeotti adviser

Giulio Lancia adviser

Roberto Loschi adviser

Alfredo Lupi adviser

Emanuele Malavasi adviser

Lorenzo Moscetta adviser

Carlo Porta adviser

Nicola Verrini adviser

Appointed on 18 June 2011

6pagina

The

corp

orat

e go

vern

ance

of C

PL C

ON

CO

RD

IA

1

Executive Committee

The heart of the Cooperative’s Management lies in its Executive Committee. It is composed of 8 members: President, Vice President, Operative General Director, Director of Finance, Director of Administration and Information Systems, Director of Human Resources, Director of Sales, Director of Strategic and Foreign Affairs.

This is the so-called “technical structure”, that is required to possess high technical and specialistic skills and is responsible for forging the Cooperative’s strategic and operative activity in its entirety.

Administration, Finance, Control and Information Systems

The four administrative areas (Administration, Finance, Control and Information Systems) report to the Director of Administration, Finance and Control and are led by the relevant managers.

Administration, Finance, Control and Information Systems

Massimo Continati administration manager

Pierluigi Capelli finance manager

Mario Guarnieri controller

Iames Astolfi information systems manager

7pagina

Fabrizio Tondelli

Claudio Bonettini

Pierluigi Capelli

Massimo Continati

Jenny Padula

Mario Nevali

Mario Guarnieri

Roberto Casari

Members of the Executive Committee

Roberto Casari president

Mario Guarnieri vice president

Claudio Bonettini operative general director

Pierluigi Capelli director of finance

Massimo Continati director of administration and information systems

Jenny Padula director of human resources

Mario Nevali director of sales

Fabrizio Tondelli director of strategic and foreign affairs

8pagina

The

corp

orat

e go

vern

ance

of C

PL C

ON

CO

RD

IA

1

Audit Committee

The Audit Committeee supervises abidance by laws and articles of association, conformity with the principles of correct administration and, in particular, the adequacy of the organizational, administrative and accounting structure adopted by the Company and its actual functioning.

The Committeee, through its President, reports to the Assembly convened to approve the accounts on the criteria followed in managing the company in order to achieve the aims set forth in the Articles of Association.

The Committeee is composed of three standing members and two acting members appointed by the Assembly. The Assembly appoints the President of the Committee.

Supervisory Bodies

Componenti Collegio Sindacale

Carlo Alberto Pelliciardi president

Fausto Ascari standing auditor

Mauro Casari standing auditor

Cristina Clò acting auditor

Giosuè Pelliciari acting auditor

9pagina

Accounting Firm

Among the various management control activities operating on the Cooperative’s accounts, the main one - auditing - is performed by a selected accounting firm. Auditing is mandatory for the Cooperative in that it issues securities for the general public (share capital in the Cooperative).

The activities the auditors carry out aim at satisfying the dictates of article 15 of Law 59 (January 31th, 1992) and article 2409 ter of the Civil Code. Specifically, the accounting firm:periodically checks the regularity of social accounting and the exact

recognition of “fatti di gestione” in accounts;verifies whether the general balance-sheet and the consolidated

balance/consolidated financial statement match accounting records and if the accounting principles drawn up by the Italian Accounting Body and the International Accounting Standards for the consolidated balance (IAS-IFRS) have been applied correctly and on a continuous basis.

express a written evaluation on the general balance-sheet and the consolidated financial statement.

The Audit Letter of Compliance is essential for participating in tenders and obtaining loans and financing.

Supervision Board

It is the body in charge of supervising the effectiveness and evaluating the adequacy of the Model of organization, management and control pursuant to Legislative Decree 8/6/2001, n. 231, whose Ethical Code constitutes an integral part. The Supervision Board of CPL CONCORDIA carries out the following activities:supervising the application of

the Organization Model, with respect to the different types of crimes described in the Decree;

supervising the effectiveness of the Model and its capacity to prevent the crimes envisaged by the Decree;

identifies and suggests to the relevant bodies (Board of Di-rectors, Audit Committee) up-dates and amendments to the Model as a result of changes occurred in legislation or in the company situation.

Members of the Supervision Board

Igor Skuk president

Maurizio Rinaldi

Luca Costa

Appointed on 1 January 2011

10pagina

The

corp

orat

e go

vern

ance

of C

PL C

ON

CO

RD

IA

1Organization

Areas, Sectors and Specializations

A3

Areas A CPL CONCORDIA is split in 10 geographical Areas that feature uniform work skills.

Sectors NThe Sectors operate transversally with respect to the national territory as a whole.

N1 Plants Maintenance and Odorization

N2 Construction of Gas Plants

N3 Gas Distribution

N4 Information & Communications Technology

Specializations SThere are also some internal consultancy functions called Specializations.

S1 Gas Networks, Water Networks, Power Networks

S2 Construction of Energy Plants and District Heating

Networks

S3 Networks Maintenance

S4 Heat Management and Global Service

S5 Public Lighting

S6 Cogeneration

A1 ConcordiaMantova - Modena - Piacenza Parma - Reggio Emilia

A2 Rome - Tyrrhenian Sea Frosinone - Latina - Rieti - Roma Viterbo

A3 Milan - North-West Italy Alessandria - Aosta - Asti Bergamo - Biella - Brescia Cuneo - Como - Cremona Genova - Imperia - Lecco - Lodi Monza - Milano - Novara - Pavia Sondrio - La Spezia - Savona Torino - Varese - Verbania - Vercelli

A4 Sant’Omero - AdriaticaAscoli Piceno - L'Aquila - Bari Brindisi - Campobasso - Chieti Foggia - Isernia - Lecce - MacerataMatera - Pescara - PotenzaTaranto - Teramo

A5 Fano - Umbria Ancona - Forlì - Perugia Pesaro-Urbino - Ravenna - Rimini Terni

A6 Campania - Calabria - Sicily Agrigento - Avellino - Benevento Caserta - Caltanisetta - Cosenza Catania - Catanzaro - Enna Crotone - Messina - Napoli Palermo - Reggio Calabria Ragusa - Salerno - Siracusa Trapani - Vibo Valentia

A7 Padua - North-East Italy Belluno - Bolzano - Gorizia Padova - Pordenone - Rovigo Trento - Trieste - Treviso - Udine Venezia - Vicenza - Verona

A8 Tuscany Arezzo - Firenze - Grosseto Livorno - Lucca - Massa Carrara Pisa - Prato - Pistoia - Siena

A9 Bologna Bologna - Ferrara

AS Sardinia Cagliari - Nuoro - Oristano Sassari - Carbonia-Iglesias Medio Campidano - Ogliastra Olbia-Tempio

A7

A1 A9

A8

A5

A2 A4

A6

AS

A6

A6

11pagina

cpl concordia group in the world

The CPL CONCORDIA Group operates in Italy and in the world with established units, through associated and controlled companies, exporting know-how and expertise In the fields of gas, energy, renewable energy sources.

This map shows only some of the brands owned by CPL CONCORDIA Group

Argentina

Algeria

Tunisia

Italia

Romania

India

12pagina

The

corp

orat

e go

vern

ance

of C

PL C

ON

CO

RD

IA

1Organization chart

* Executive Committee members

Board of Directors

Vice President* President*

Supervision Board

Sales AreaManager

Director of Sales* Operative General Director*

Director of Human Resources*

Director of Strategic and Foreign Affairs

Director of Administration and

Information SystemsDirector

of Finance*

Aera Managers Sector Managers Specialization Managers

Production Services Technical Service

15pagina

2Report on operation

16pagina

Rep

ort

on o

pera

tion

2Unified Report on operations for the Consolidated Financial Statements for the tear as of December 31, 2010

Dear Shareholders,The Financial Statements for the year as of December 31, 2010 that are submitted for your approval show a Profit, net of taxes for the year and ordinary and extraordinary provisions, of 13,357,606 euros. We consider these results to be extremely positive, not only because they exceed expectations, but especially because they were achieved in a macroeconomic environment of evident stagnation affecting the national economy in particular.Production achieved during the fiscal year amounts to 330,620,265 euros, which represents an increase of 18.9% over the previous fiscal year.Total assets were 416,490,287 euros, net assets amounted to 123,914,901 euros, funds totaled 2,602,226 euros, the provisions for severance indemnity totaled 4,761,755 euros, and the total payables, accrued liabilities and deferred income amounted to 285,211,405 euros.As always, the directors of the Cooperative performed, in conformity with Article 2 of Italian Law no. 59/92, their duties with the intention of achieving for the Cooperative the mutual assistance objectives prescribed by law and by the Articles of Association, with the goal of providing continuity of employment and achieving the best financial, social, and working conditions possible. For these

Report drawn up in conformity with Article 2428 of the Italian Civil Code supplemented by Article 1, paragraph 2, of Italian Legislative Decree no. 32/2007 and by Article 40 of Italian Legislative Decree no. 127 of April 9, 1991

reasons the Cooperative has acted in order to maintain full employment of its shareholders, rewarding their performance at work with the best terms and conditions possible taking into account market conditions and the specific field of reference in which it operates. The company has also striven to improve the cultural and professional qualifications of its shareholders, making investments to ensure the best conditions in the working environment and in professional training courses.To continue the process of capitalizing the Cooperative and to increase the loyalty of, and reward, the contribution by the Cooperative’s shareholder base, in consideration of the good results achieved during the year, the Board of Directors proposes to allocate to each Cooperative Shareholder a shareholder distribution whose amount is to be determined on the basis of the quantity and quality of work performed in fiscal year 2010, in accordance with article 3, paragraph 2, subparagraph b, of Italian law no. 142 of April 3, 2001 and subsequent amendments. The amount that the Board of Directors proposes to the Shareholders’ Meeting to be divided among the shareholders on the basis of the criteria specified above is 1,700,000 euros, which has already been entered under item B9 of the Profit and Loss Statement under personnel costs

as an additional amount to be included in shareholder workers’ remuneration in 2010, 50% of which is to be allocated as a free increase in subscribed and paid-up share capital and the remaining 50% of which is to be used as an additional amount to be included in cooperative shareholders’ pay. Both of these methods are provided for in Article 62 of the articles of association and in conformity with, and for all legal purposes in conjunction with, article 6, paragraph 2, of Italian Law Decree no. 63/02, which was converted into Italian Law no. 112/02.In its role as parent company of a range of companies operating in the same business sector or in integration and completion of the production chain of the construction and management of methane gas and LPG distribution networks, including the sale, construction, and management of heating or air conditioning systems, district heating networks, and the construction and management of photovoltaic power systems, public lighting systems, and high-efficiency cogeneration systems, the Cooperative has drawn up its consolidated financial statements as of December 31, 2010 in accordance with Italian Legislative Decree no. 127 of April 9, 1991.The consolidated Financial Statements as of December 31, 2010 report a consolidated value of production of 383,175,272 euros,

17pagina

which represents an increase over the previous fiscal year of 64,852,257 euros or 20.4%. The Group’s results generated by this production show pre-tax profits for the period of 18,479,364 euros which, net of current, deferred, and prepaid taxes of 3,669,471 euros and the loss attributable to minority interests (or Group profit) of 371,987 euros, results in a net profit of 15,181,880 euros, which is to be considered completely satisfactory and in line with the projections and expectations of the Parent Company’s directors. Total assets were 500,418,355 euros, Group equity totaled 119,900,155 euros, minority interest equity totaled 671,060 euros, funds totaled 5,162,733 euros, provisions for severance indemnity totaled 5,247,411 euros, and the total payables, accrued liabilities, and deferred income amounted to 369,436,996 euros.

The cooperative and the value of the area

Development is achieved by means of the production of goods that create value, wealth, and therefore capital. Capital in an area can be represented by local companies or by multinational companies, as is the case in the Modena area with the biomedical manufacturing center (but it would be possible to give other different examples in our country). We believe that this international excellence has a weakness: that is, that the operational phases take place in our area, but the brain, the wallet, and perhaps even the heart are located elsewhere.

Therefore, when we talk about the value of an area, we are also talking about the concrete value of companies that are deeply rooted in those areas. Our company, with its 112 years of history, represents an important example of the ability to forge a strong economic and social link that is able to contribute to the vitality of an entire local community. For this to continue, of course, everyone must do their duty fully. For this purpose also infrastructure is fundamentally important. For example, there have not been any improvements to the “Padana Inferiore” road network (which includes the provinces of Modena, Mantua, and Ferrara) in the last 40 years (we are not even talking about Large Works, but just modernizing the road network). The result of this is that our area has not been able to establish the foundations for lasting and consolidated development.Another critical point is represented by the education and training of our young people, who have not been prepared for the fields of entrepreneurial excellence of their respective areas (in our case the biomedical and energy fields). Often we hire young people (last year the Cooperative hired approximately 249 new employees, with a positive balance of 100) to which we must provide specialist training; instead, we should have people who already possess a foundation in the fields of activities that are important in the area. This is a way to keep companies linked to an area, so that they are not tempted by relocation. Once companies went where there was an abundance of labor, low-cost energy, and services; and the local government’s role was to provide services to the area. It is unthinkable that an area can

be developed without the active presence of the local public institutions. In fact, companies develop due to the quality of the people, and areas develop due to the quality of the public administrations. Unfortunately, we are witnessing with great bitterness a progressive abandonment of development and the needs of companies to create economic and social value, by all levels of government.

The economy we can expect

Generally 2010 was a difficult year, after the crisis that began in 2008 affecting the entire international economic system (especially the West). We do not believe that 2011 will be a particularly strong year, and we expect that the economic recovery will not follow the path of a quick V-shaped bounce, but instead will be rather flat with an L-shaped trend representing extremely low growth, while global development is occurring in other countries in which it is necessary to be present. In fact, a recent document issued by Confindustria’s study center states that the projected growth of industrial production in our country in 2011 will not exceed 1%. With regard to our group, which has operations in various fields, especially in energy, this year we can achieve positive results, with an increase of approximately 20% in the consolidated revenues, which totaled 383 million euros, and a profit of more than 15 million euros. These results are in contrast to what might be expected, not due to a general effect of the economy, but due to specific actions in connection with operations (energy savings

18pagina

Rep

ort

on o

pera

tion

2and renewable energy) that we have steadfastly pursued for quite some time with determination and investments. In these difficult years we have been rewarded by several strategic choices and the ability to take action in the field of savings and energy management: the cost of energy will make sophisticated energy monitoring and measurement systems every more necessary.

Generational turnover and cooperative values

In the last five years our cooperative has experienced considerable generational turnover with the hiring of young people who are the bearers of hope and who possess strong operational ability and potential. Since one young person out of three in the general labor market is unemployed, a young person who works at a cooperative considers the good fortune of a job that allows him or her to plan the future, a family, and a home. We believe that cooperatives should also feel a responsibility to give a future to their employees. In turn the political class and those responsible for managing areas must keep well in mind these values, which are strongly reflected in our cooperatives’ mission.Moreover it must be emphasized that the considerable development of the Cooperative over the past few years was achieved without social tension and without people who consider their job a constraint, but instead as an opportunity to grow and to develop their abilities. A job that is tiring, but engaging. We

must always succeed in creating conditions that allow people to find satisfaction in their daily work, secure in the knowledge that working at a cooperative means working for yourself, with a share of the profits (this year more than 4 million euros will be distributed). In fact, our cooperative redistributes the wealth that is produced, not only to the capital shareholders, but also to the 1500 people who have used their ability to contribute to the Cooperative’s results. This is not an insignificant fact, and 150 years after the birth of the cooperative movement in Italy, this entrepreneurial form of business still seems brilliant and fresh. This entrepreneurial form of business knows well what the economic rules are and gives preference to them over politics, which have often been associated with the cooperative system, insinuating that “cooperatives work because of political relationships and support.” If administrations in the past facilitated cooperatives, whether they leaned to the right or to the left, they often did so due to the mainly social nature of the enterprise, which was an important concern to those who governed. Therefore, we do not believe that the entrepreneurial value of cooperatives can be dismissed by simply linking them to the fortunes of the relevant political parties. Today, through the activation of a process to unify the main cooperatives of the ACI (Associazione Cooperative Italiane [Association of Italian Cooperatives]), this business model will finally be considered with loyalty and justice; in our case this is a cooperative for the generation of work. With more than 650 cooperative shareholders and assets of more than 120 million euros, in the last five years we have doubled

turnover as well as employment, creating the conditions to provide a job to many young people, betting on the fact that these young people could love their work at the cooperative, become passionate about it, and contribute to its future development. We feel that these are the best conditions for facing the future, not only for the new generations (the average age at our organization is 37 years), but also for our cooperative, a social enterprise with a deep link to the people and to the area.

The services we offer: our activities

CPL CONCORDIA now mainly offers services relating to the gas and energy markets, to both the public and private sectors, as a result of its consolidated expertise in maintenance services and global service for plants and systems. CPL CONCORDIA responds to the demands of the market by offering products and services that are based on technological development, continuous innovation, and the desire to achieve energy savings.The activities performed by the Cooperative and its group can be categorized into four main operational areas: Energy Networks Gas Information & Communications Technology

The “Energy” division’s area of activity includes a range of specializations that involve traditional services such as Energy Services used in running

19pagina

schools, hospitals, sports centers, nursing homes, public and private buildings, Air-conditioning Services, Public Lighting Services, and Global Services, but also services with a large degree of technological innovation such as the supply, management, and maintenance of cogeneration and trigeneration systems, photovoltaic and solar thermal systems, biogas and biomass systems, and geothermal energy activities.

The “Networks” division, which represents the Cooperative’s traditional business, is involved in the construction and maintenance of methane gas and LPG distribution networks, water pipeline systems, and sewer systems as well as electrical power supply networks, fire-fighting, data networks, and district heating.

The “Gas” division is regarded as the financial heart that led to the previously mentioned development of both the Cooperative and the whole Group. Over time the Cooperative has covered the whole sector through distribution and the establishment of the sales company; at the same time it has created a dense network of additional services for the same distribution/sales chain that includes the construction and installation of pressure regulating stations; correction, measurement, and gas pressure reduction units; and odorizing, cathodic protection, and leak detection services. It has carried out research and development, installing systems such as the Total Data Service and a metrology laboratory. By creating this range of products and integrated services, the Cooperative in this field can now be defined as the most complete competitor on the market.

The “Information & Communications Technology” division was established at the beginning of the decade on the basis of experience gained in the traditional divisions and with the goal of developing innovative IT features to be offered to users within the group and to be placed on the market.This division offers ERP, web service, software billing, and CMS solutions. This division also offers call and contact center, home automation, video surveillance, access control, systems remote control, and counter telemetry services.The activities of the Cooperative and the Group are conducted mainly in Italy, with a clientele made up of public and private organizations, and in the case of gas sales, also the general public.As we will see in the section on strategies and the projected development of future management, a process of globalization is occurring which, with regard to long-term objectives, will result in the Cooperative and the Group earning at least 30% of revenues abroad in the next decade.Currently the Group’s interests are focused on Romania, North Africa (Algeria and Tunisia), and Argentina.With regard to the domestic market the Group is firmly established throughout the Italian peninsula, working through their respective offices. The Cooperative has divided its operating areas into ten domestic branches, together with another three (for the moment) foreign branches, which are listed below: Head office area: Concordia sulla Secchia

Bologna area: Bologna

Northwestern area: Melegnano office

Northeastern area: Padua and Lavis (TN) office

Fano area (Marches, Umbria, and Romagna): Fano office

Sant’Omero area (Abruzzo - Molise and Apulia):

Sant’Omero office

Tuscany area: Arezzo office

Central area (Latium): Rome office

Southern area: Naples office

Sardinia area: Nuoro office

Romania: Cluj Napoca office

Algeria: Algiers office

Tunisia: Tunis

Personnel, environment, and company social values

1. Personnel

Generating real work with respect toward individuals and their growth has been our cooperative’s mission for 112 years. Development, turnover, and innovation have been possible as a result of the irreplaceable work of our men and women. Without the contribution of those who have worked within the Cooperative and its group, the results in question would not have been possible. The human component inside a company is the real added and intangible value.In the last two years, in a

20pagina

Rep

ort

on o

pera

tion

2macroeconomic situation strongly affected by the crisis, the CPL Group has operated in stark contrast to other companies, even from the point of view of labor.In this respect, it seems appropriate to emphasize the strong employment growth that occurred in 2010, for both the Parent Company and the Group. The relevant data is analyzed below:

AvERAGE NUmBER OF PERSONNEL OF THE PARENT COmPANy

Number 2010 2009

Executives 29 24

Managers 25 24White-collar employees 530 463

Blue-col lar employees 660 613

TOTAL 1,244 1,124

The above table shows the average personnel data of 2010 in comparison to 2009. From this table it is possible to note an annual increase of 120 employees, to which can be added the increase of 150 employees from the previous year. In the last two difficult years of economic crisis the Cooperative has increased its average number of personnel by 270 people, or more than 25%.At the Group level the situation is not much different from that of the Cooperative, as can be seen in the table below:

AvERAGE NUmBER OF PERSONNEL OF THE GROUP

Number 2010 2009

Executives 32 28

Managers 29 26White-collar employees 611 536

Blue-col lar employees 746 691

TOTALE 1,418 1,281

The table above shows that in 2010 there was an average employment increase of 137

employees, mainly in Italy with the remainder working for our Romanian and Algerian subsidiaries. In the last two years the Group increased its average total headcount by 315 employees, or more than 28%.Regarding the labor contracts applied to the Group, there are currently four Italian contracts: Cooperative Building Contract, Cooperative Metalworkers Contract, Gas Fitters Contract, and Cooperative Managers Contract.By analyzing only the Parent Company’s data and taking into account the average number of personnel on December 31, 2010, the data can be broken down as follows:

CCNL membership Building metal and

mech. Gas Op. Co-op Dir. Co.co.pro TOTALIS

Manual 203 430 27 660

Administration 58 430 16 504

Executives 29 29

Managers 8 17 25

Collaborators 26 26

Total 269 877 43 29 26 1,244

With regard to the National Building Contract, it should be noted that this contract is integrated with the provincial contracts, while a supplementary company contract is required for all contracts.

2. Company Social Values

CPL’s mission is to promote the spirit inherent to a cooperative, that is, the spirit of mutual assistance. This is also underscored by the designation of “cooperative mainly providing mutual assistance,” which is mainly expressed in its relationship with its shareholders and with the area in which it operates.With regard to the first point, after overcoming the difficult period 2003-2004, the Cooperative has noted a constant increase in the confidence of its shareholder base encouraged by a loyalty campaign whose success is demonstrated by the constant increase in the shareholder base and their loans to the Cooperative.In this regard, the changes in the shareholder base over the last two years and in their loans to the Cooperative over the last five years can be seen in the two tables below:

vARIATIONS RECORDED IN SHAREHOLDERS’ BASE IN THE PAST TwO yEARS

Cooperating shareholders

01/01/2009 Admitted Lapsed

Balance as of

31/12/2009

Admitted LapsedBalance

as of 31/12/2010

Manual 216 38 -3 251 42 -9 284

Administration 268 33 -9 292 31 -9 314

Executives 16 8 -1 23 5 0 28

Total 500 79 -13 566 78 -18 626

The following is the amount of the loans from shareholders over the last

21pagina

five years: Year 2010: 7,057,188 euros Year 2009: 5,654,737 euros Year 2008: 4,258,627 euros Year 2007: 3,224,800 euros Year 2006: 2,545,157 euros

As can be seen from the two tables above, in two years the shareholder base has increased to 626 cooperative shareholders with an increase of 60 employees, or more than 10%.Due to the increasing loyalty of the shareholder base, the cost ratio between shareholders and non-shareholders, which is necessary to be considered a cooperative mainly providing mutual assistance, is 60.57% as compared to 39.43% for non-shareholders, including the cost of self-employed professionals and consultants.Whereas, regarding the collection of loans from shareholders, which has reached 7.1 million euros, this has almost tripled in comparison to 2006 and has experienced an increase of 1.4 million euros in the past fiscal year.The balance of the loans from lending shareholders as of December 31, 2010 is comprised of payments from 417 shareholders up to a maximum amount of 67,167 euros per person. These loans, which are remunerated according to normal market rates but never at a rate higher than that announced by the Ministry of Finance plus 2.5%, were remunerated at an annual gross rate of 5.125% (4.10% net) for 2010.

3. Environment and Safety

The Environment and Safety Division operates within the

Parent Company, for the whole Group. By means of its training and monitoring, it supervises and proceduralizes the relevant activities.The number of people who have received training and hours employed in the various types of courses are specified below: Basic courses: 182 Safety coordinator courses

(120 hours): 11 Safety coordinator refresher

courses (40 hours): 14 First-aid courses (16 hours):

111 First-aid refresher courses (6

hours): 109 High-risk fire-prevention

officers courses (16 hours): 120 Medium-risk fire-prevention

officers courses (8 hours): 1 Asbestos worker courses (32

hours): 11 Asbestos managers refresher

courses: 17 Workers’ safety

representatives refresher courses: 1

Personal protection device category 3 course (8 hours): 56

General environmental course: 34

Waste forms courses: 1 Experts and Instructed Persons

course (16 hours): 4 Forklift operator course (8

hours)The following was spent for medical examinations and for purchasing first-aid materials: 2,134.46 euros for first-aid materials and 103,394.20 euros for health monitoring.

Amounts of waste disposed of from the temporary storage facility at the Concordia sulla Secchia head office: Oils: 4,810 Kg Aqueous washing liquids

and mother liquors (odorizer cleaning service): 37,980 Kg

Cardboard: 21,240 Kg

Iron and steel: 95,662 Kg Wood: 18,000 Kg Mixed packing materials:

68,600 Kg

Amounts of the main types of waste sent to be disposed of or recovered directly by the worksites: Earth and rocks from

excavations at the office area: 373,580 Kg

Mixed waste from construction and demolition activities at the office area: 4,651,680 Kg

Cement poles from decommissioned electrical power lines: 37,780 Kg

For consulting on environmental matters the following amounts was spent: 1,423 euros (ASK) + 2,041.57 euros (eco research).For the purchase of personal protection devices and clothes was spent 231,249.18 euros; the personal protection devices were managed by the warehouse.For safety training courses was spent 175,443.28 euros.The Safety and Environment Division used a total budget of approximately 300,000 euros to perform its own activities.The division prepared 360 risk assessment documents (for both the Operational Safety Plan and article 26 in accordance with Italian Legislative Decree no. 81/08). This number only includes those documents drawn up for works contracts awarded and executed, but also all the documents drawn up for the Tenders Office must be added to it.To comply with Italian Legislative Decree no. 123/07, the principals and the contractors are required to draw up a DUVRI (Documento Unico di Valutazione dei Rischi da Interferenze [Consolidated Risk Assessment Document for Interfering and/or Concurrent

22pagina

Rep

ort

on o

pera

tion

2Work Processes]) under the division’s supervision and verification, otherwise the contract will be invalid.

The following are the safety goals achieved in 2010: A new online training/

information system via a multimedia platform, which is currently undergoing preparation, was completed and became operational at the beginning of 2010. This platform consists of the Manager of the Prevention and Protection Service recording lessons on issues regarding occupational safety and the environment. The course lasts eight hours. It can be accessed by every CPL employee by means of a password. No employee will be able to move on to the next issue until they have finished the one they are viewing. There is a test at the end of the course.

The safety management system has continued to be implemented, in accordance with standard OHSAS 18001:2007. Certification is expected to be obtained by the end of 2011.

The following are the environmental goals achieved in 2010: During the year we obtained

the three-year renewal of certification in accordance with standard UNI EN ISO 14001:2004.

The Area by Area inspection visits to assess the application of safety and environmental measures both at worksites and in plant and system management and maintenance operations have continued and will continue during 2011. This monitoring work will begin with an assessment of compliance with current safety

Regarding environmental protection and waste management, new software stations have been installed to record the waste forms (Padua and Bologna). In 2011 the SISTRI waste traceability system will enter into effect, which will radically change the way waste management is performed. SISTRI (Sistema di controllo della tracciabilità dei rifiuti [waste traceability control system]) was initiated in 2009 by means of an initiative of the Ministry of the Environment in the widest context of innovation and modernization of the public administration to allow the computerization of the entire special waste chain at a national level and the entire urban waste chain for the Campania Region. The subject of waste management has become ever more important and regards not only environmental protection, but also the defense of its legality. This is especially valid for dangerous waste, which is often subject to lucrative trafficking by criminal organizations that can cause serious damage to the environment and can put the public’s health at risk.For these reasons the government has decided to launch SISTRI, an electronic system that makes

and environmental regulations at each area office (verification of risk assessment documents, fire extinguisher maintenance, and vehicles) and will then move on to the various areas’ worksites. This will make it possible at the end of the year to understand the degree of implementation of the safety and environmental measures and how much remains to be implemented. This data will primarily be used by the Area Manager to understand what is happening in their area, and it will also be used by Company Management to understand how the Area Manager manages the responsibilities in connection with these issues.The following are the other goals: Completing the training of

Prevention and Protection Service Officers from the Safety Division, making them aware of the issues relating to the other companies in the Group that are under the direct responsibility of CPL’s Safety Division and the companies of the Group themselves.

Implementing the new security directives in accordance with regulation ADR2009 to make odorizer storage facilities and the operations in connection with them safer.

production value trend

184,118

198,997

225,418

278,091

330,620

2006

2007

2008

2009

2010

data in thousands of euros

23pagina

possible the traceability of the entire special waste chain as well as the entire urban waste chain in Campania, by means of advanced technologies. From now on all special waste can be followed at any phase in the production chain, without the possibility of concealment.SISTRI is a system for adequate monitoring that has been assigned to the Carabinieri Command for Environmental Protection.

(expressed in Euro) RECTIFIED DATA

31 Dec 2010 % 31 Dec

2009 % 31 Dec 2008 % 31 Dec

2007 % 31 Dec 2006 %

Proceeds from sales and performances 312,347,751 94.47% 243,437,301 87.54% 205,215,858 91.04% 179,562,310 90.23% 172,845,785 93.88%

Change invent. fin. prod. semifin. 0 0.00% 0 0.00% 0 0.00% 0 0.00% (1,552,050) -0.84%

Changes works in progress (6,514,113) -1.97% 7,472,352 2.69% 7,101,390 3.15% 2,658,347 1.34% (892,233) -0.48%

Works in economy 17,590,866 5.32% 20,127,269 7.24% 10,543,087 4.68% 12,604,307 6.33% 9,945,241 5.40%

Other proceeds 7,195,762 2.18% 7,053,783 2.54% 2,557,229 1.13% 4,172,220 2.10% 3,771,923 2.05%

vALUE OF PRODUCTION 330,620,266 100.00% 278,090,704 100.00% 225,417,564 100.00% 198,997,184 100.00% 184,118,665 100.00% Costs for purchases (137,132,994) -41.48% (94,469,596) -33.97% (68,603,208) -30.43% (63,885,797) -32.10% -54,226,507 -29.45%Variation in inventory of prime materials 7,382,108 2.23% (656,326) -0.24% 713,640 0.32% 9,455 0.00% 274,277 0.15%

Misc costs for services (110,507,263) -33.42% (91,959,486) -33.07% (76,946,495) -34.14% (66,632,270) -33.48% (67,308,739) -36.56%Expenses for use of third party property (15,075,102) -4.56% (13,949,275) -5.02% (11,168,159) -4.95% (8,445,660) -4.24% (9,881,067) -5.37%

Various management expenses (3,311,792) -1.00% (4,131,339) -1.49% (2,872,710) -1.27% (1,908,365) -0.96% (1,958,381) -1.06%

vALUE ADDED 71,975,225 21.77% 72,924,684 26.22% 66,540,633 29.52% 58,134,548 29.21% 51,018,249 27.71% Cost of labour and relative expenses (52,120,256) -15.76% (47,893,690) -17.22% (42,648,176) -18.92% (35,997,524) -18.09% (31,026,611) -16.85%

mOL 19,854,967 6.01% 25,030,994 9.00% 23,892,457 10.60% 22,137,024 11.12% 19,991,638 10.86%

Amortisations material fixed assets (1,637,143) -0.50% (1,800,681) -0.65% (2,375,049) -1.05% (1,967,731) -0.99% (1,673,715) -0.91%Amortisations material intangible

assets (6,264,766) -1.89% (4,714,592) -1.70% (4,214,726) -1.87% (4,170,443) -2.10% (4,178,341) -2.27%

Funds and devaluations (3,131,953) -0.95% (2,579,683) -0.93% (1,117,812) -0.50% (1,099,621) -0.55% (1,544,703) -0.84%Amortisation, depreciation and allocations (11,033,862) -3.34% (9,094,957) -3.27% (7,707,586) -3.42% (7,237,795) -3.64% (7,396,758) -4.02%

EBIT 8,821,105 2.67% 15,936,038 5.73% 16,184,870 7.18% 14,899,229 7.49% 12,594,880 6.84% Interests and the other financial burden (1,634,095) -0.49% (1,968,634) -0.71% (3,637,127) -1.61% (3,469,020) -1.74% (3,668,045) -1.99%

Other financial proceeds 581,589 0.18% 735,115 0.26% 1,015,957 0.45% 1,036,632 0.52% 904,825 0.49%

TOTAL FINANCIAL MANAGEMENT (1,052,506) -0.32% (1,233,520) -0.44% (2,621,170) -1.16% (2,432,387) -1.22% (2,763,220) -1.50%

CURRENT RESULT 7,768,599 2.35% 14,702,518 5.29% 13,563,700 6.02% 12,466,841 6.26% 9,831,661 5.34% Proceeds from shares 11,007,160 3.33% 178,829 0.06% 1,100,344 0.49% 91,550 0.05% 550,195 0.30%

Financial activity rectifications (1,858,950) -0.56% (1,153,119) -0.41% (2,658,698) -1.18% (1,406,642) -0.71% (2,347,069) -1.27%

Refunds to partners (1,700,000) -0.51% (1,500,000) -0.54% (1,200,000) -0.53% (1,100,000) -0.55% (750,000) -0.41%

Extraordinary management 126,852 0.04% 680,550 0.24% 11,902 0.01% (34,308) -0.02% 1,402,234 0.76%

PRE-TAX RESULT 15,343,662 4.64% 12,908,777 4.64% 10,817,248 4.80% 10,017,441 5.03% 8,687,021 4.72%

Taxes on the financial year income (1,986,056) -0.60% (4,311,305) -1.55% (3,979,189) -1.77% (4,137,754) -2.08% (5,134,301) -2.79%

NET RESULT 13,357,606 4.04% 8,597,472 3.09% 6,838,059 3.03% 5,879,687 2.95% 3,552,720 1.93%

A. Parent company financial statements

A.1. Economic Analysis

The profit and loss statements reclassified with the value-added method for the last five years are shown below:.CPL CONCORDIA COOPERATIvE COmPANy: EARNINGS STATEmENTS RECLASSIFIED wITH THE vALUE ADDED mETHOD

24pagina

Rep

ort

on o

pera

tion

2An analysis of the profit and loss statements reclassified with the value-added method makes it possible to identify the following characterizing elements: A decrease in the gross

operating margin and the operating results

A decrease in financial charges A large impact of financial

income from equity investments.

The decrease in gross operating margin, which was projected last year, is attributable mainly to the transfer of the Cooperative’s gas distribution networks to the subsidiary CPL Distribuzione S.r.l. and to the consequent lack of their contribution to the profit margin on the Cooperative’s financial statements. In fact, the distribution activity is entered on the financial statements under revenues due to the distribution charges system, and under costs due to depreciation. It is evident that all the distribution revenues, and the corresponding margin, are missing from the Parent

Company’s gross operating profit. With the reorganization of the system for governing the gas distribution networks, almost all of which were assigned to the subsidiary CPL Distribuzione, it has become more coherent to include the valuations of profit margins, profitability, and also debt in the Group’s consolidated financial statements, instead of in the Parent Company’s financial statements.The same valuations are also

trend of operating resultoperating result / production value

2006

2007

2008

2009

2010

in thousands of euro / percentage

extended to the analysis of

the operating results, in whose

commentary notes are to be

included the information regarding

the policies on the provisions for

future risks and contingencies

and the assessment of risks

of collectability of accounts

receivable. In fact, it should be

noted that the Parent Company

has made total allocations to

these funds of more than 3.1

million euros in the current fiscal

6.84%

7.49%

7.18%

5.73%

2.67%

12,595

14,899

16,185

15,936

8,821

AREA 1: Concordia head offices-Emilia AREA 2: Rome -TyrrhenianAREA 3: Milan-North-WestAREA 4: Sant’Omero-AdriaticAREA 5: Fano-UmbriaAREA 6: Campania-Calabria-SicilyAREA 7: Padova - North - EastAREA 8: TuscanyAREA 9: BolognaAREA S: SardiniaAREA E1: GreeceSECTOR N1: Plants Maintenance and Odorization SECTOR N2: Construction of Gas PlantsSECTOR N3: Gas DistributionSECTOR N4: I.C.T.SECTOR N5: Intra-group ServicesSECTOR N6: Investments in company head officesSECTOR N7: ConstructionTechnical Department Services

contribution from the areas/sectors to forming the production value

11.12%9.30%

17.81%17.12%7.67%3.80%5.21%5.29%7.44%1.04%0.00%5.63%2.32%1.44%2.23%1.09%0.95%0.00%0.05%0.47%

25pagina

year.With regard to the decrease in the cost of borrowing, or more accurately in the burden of financial charges, it must be emphasized that the transfer of the concessions that occurred in 2009 resulted in considerable financial benefits that have translated into lower costs of the same type, despite the constant investments made.The increase in “Financial income from equity investments” result from the closure of the liquidation procedure for the subsidiary Si.Gas S.r.l. for 8.1 million euros, but also from dividends from companies of the group, an evident sign that the management processes of the subsidiaries and associated companies are beginning to bear significant fruit. The manner in which the various areas of activity have contributed to the value of production and consequently to company profits is analyzed below.

A.1.1. NetworksAs specified in the section describing the Group’s activities, the “Networks” division is involved in the construction and maintenance of methane gas and LPG distribution networks in Sardinia, water pipeline systems, and sewer systems as well as electrical power supply networks, fire-fighting, data networks, and district heating.The production achieved for the fiscal year totals 51.7 million euros and is substantially unchanged from the previous fiscal year.The movements regarding production for the last two years are shown in the table below:

ANNUAL BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %

NETwORK CONSTRUCTION AND mAINTENANCE

CONSTR. GAS WATER ELECTRIC NETWORKS 13,389,850 0.33 13,481,114 0.28

NETWORK MAINTENANCE 38,311,954 0.59 39,001,238 0.70

TOTAL NETwORK CONSTRUCTION AND mAINTENANCE 51,701,803 0.92 52,482,352 0.98

Some of the more significant contracts include network maintenance contracts for Hera in Bologna, Acegas in Padua, A2A for the municipalities of Milan and Brescia, the maintenance of the water pipelines in Apulia, the construction of gas distribution networks in the Bacino Calabria 12 catchment area, and the start of construction of networks in various catchment areas in Sardinia, especially the Bacino 7 catchment area, with Ittiri as the lead municipality.

cash flow

12,974

13,615

17,106

19,237

25,863

2006

2007

2008

2009

2010

shown in thousands of Euro

2006

2007

2008

2009

2010

net profit trend

3,553

5,880

6,838

8,597

13,358

shown in thousands of Euro

26pagina

Rep

ort

on o

pera

tion

2A.1.2. Energy

The “Energy” division’s area of activity is comprised of a range of specializations including the Energy Service; Global Service; Public Lighting; the supply, management, and maintenance of cogeneration systems and biogas systems; and the construction and management of photovoltaic systems. Over the last two fiscal years this area has experienced a large degree of development, predominantly due to the renewable energy sector, especially the photovoltaic sector.Overall, the Energy Area has reported an increase of 60.2 million euros, as specified in more detail in the table below:

ANNUAL BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %

ENERGy

CONSTR. ENERGY HEATING PLANTS 31,727,900 0.62 23,890,433 0.66

HEAT MANAGEMENT AND GLOBAL SERVICE 114,819,031 4.56 111,295,727 9.14

PUBLIC LIGHTING 5,362,520 0.18 4,954,945 0.23

COGENERATION AND RENEWABLE ENERGY SOURCES 79,954,482 4.11 31,494,087 0.35

TOTAL ENERGy 231,863,934 9.48 171,635,192 10.38

The main work orders executed in 2010 regard the heat management contracts, performed in accordance with Italian Legislative Decree no. 115/2008, for the hospital facilities of the region of Liguria, ATER in Rome, the province of Rome, and Consip Campania.The photovoltaic power systems built and hooked up in 2010 were constructed in the municipality of Turi (province of Bari) - 5 MW, the municipality of Noci (province of Bari) - 2 MW, the municipality of Pisa township of Navicelle - 3.7 MW, and other smaller systems for a total of another 5 MW.

A.1.3. Gas

For operations this department is divided into two sub-departments: Technological and odorizer systems DistributionThe “Technological and Odorizer Systems” department includes all the systems, services (including odorizing), and additional technologies in connection with gas sales and distribution.Regarding the odorizing service, the Cooperative is now one of the leaders in the Italian market.The movements regarding production in fiscal year 2010 are summarized in the table below:

ANNUAL BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %

TECHNOLOGICAL AND ODORANT PLANTS

ODORANT AND SERVICES 18,621,360 1.93 13,359,747 1.78

CONSTRUCTION TECHNOLOGICAL PLANTS 7,676,528 0.57 15,648,037 1.35

TOT. TECHNOLOGICAL AND ODOR. PLANTS 26,297,889 2.50 29,007,784 3.12

Overall, this area has experienced a slight drop in 2010, but with mixed signs.On the one hand, the Odorizing department and service has increased production and margins mainly due to the expertise gained in the construction and development of gas meters and correctors, of which resolution no. 155/2008 of the Regulatory Authority for Electricity and Gas has required the almost complete replacement by the end of 2016 with new electronic control models, which the Cooperative in particular has begun to market.

27pagina

On the other hand, the Technological Systems department has experienced a sharp drop resulting from a domestic market situation of complete stagnation. In fact, we are faced with a saturated market, which is waiting for 2012, when many concessions will expire in accordance with the Letta Decree, before making any new investments to upgrade natural gas distribution networks. In the last few years the department maintained its productivity due to foreign markets, but in 2010 it has experienced a large slowdown in orders due to the global economic crisis.The Distribution department includes only the distribution activity, as governed by Italian Legislative Decree no. 164/2000, which is also known as the Letta Decree.The movements for the fiscal year are summarized in the table below:

ANNUAL BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %

GESTIONE RETI DI DISTRIBUZIONE

GESTIONE CONCESSIONI 4,339,818 0.59 6,652,803 0.98

CAPITALIZZAZIONI 4,502 0.00 3,461,576 0.00

TOTALE DISTRIBUZIONE 4,344,320 0.59 10,114,379 0.98

The department’s large decrease is due exclusively to the transfer of the distribution activity to the subsidiary CPL Distribuzione, as is thoroughly explained above in this report. Currently the department, within the Cooperative, manages only the concession of San Giuseppe Vesuviano (province of Naples) and, on the basis of several supply contracts, is providing routine and special maintenance for the concessions being managed by various subsidiaries.

A.1.4. Information & Communications Technology

This division offers ERP, Web service, software billing, and CMS solutions. This division also offers call and contact center, home automation, video surveillance, access control, systems remote control, and counter telemetry services. In 2010, although the division increased its turnover, its margins remain unchanged, as can be seen in the table below:

Emilia RomagnaLombardiaPugliaLazioMarcheToscanaVenetoAbruzzoPiemonteCampaniaLiguriaSardegnaESTEROFriuli Venezia GiuliaCalabriaMoliseSiciliaTrentino Alto AdigeUmbria

84,004,98540,182,76136,616,55331,488,35527,445,59018,152,24617,050,95416,889,82915,290,77714,480,99213,409,1964,744,1002,806,9342,607,0712,429,0181,107,799

924,929703,679284,489

Year 2010 value of production by Regione

Euro

28pagina

Rep

ort

on o

pera

tion

2ANNUAL BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %

INFORmATION & COmmUNICATIONS TECHNOLOGy

INFORMATION & COMMUNICATIONS TECHNOLOGY 7,379,815 0.03 5,229,410 0.24

TOTALE I.C.T. 7,379,815 0.03 5,229,410 0.24

The division offers a range of consulting, billing, and call center services to many municipal utilities operating throughout Italy.

A.2. Analysis of assets and liabilities

After analyzing the Parent Company’s profit and loss statement we will now consider the statement of assets and liabilities by comparing it with the four previous fiscal years, from the point of view of the items liquidity.

CPL CONCORDIA COOPERATIvE COmPANy: BALANCE SHEETS RECLASSIFIED wITH THE ENTRIES LIqUIDITy mETHOD(expressed in Euro)

BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

ASSETS

Short-term assets

Liquid assets 36,661,185 34,311,437 23,873,723 9,820,928 11,127,629

Trade investments other than fixed assets 3,342,257 20,000 0 115,797 0

Receivables from customers and others 211,947,821 154,648,544 124,864,129 113,401,341 114,793,337

Inventories 38,400,538 36,365,119 29,810,535 21,612,224 19,608,968

Due from shareholders for outstanding payments 1,094,972 1,396,075 1,244,475 1,258,137 1,210,554

Accrued income and prepaid expenses 4,817,089 5,004,585 6,059,085 4,951,759 4,968,267

Total short-term assets 296,263,862 231,745,760 185,851,947 151,160,185 151,708,755 Fixed assets

Intangible assets 28,597,925 19,569,363 13,493,300 13,498,336 11,408,796

Tangible assets 12,198,005 15,445,124 51,850,543 47,827,824 42,099,293

Financial assets 79,430,494 72,196,722 65,369,052 53,307,242 55,983,102

Total fixed assets 120,226,425 107,211,209 130,712,895 114,633,402 109,491,190 TOTAL ASSETS 416,490,287 338,956,968 316,564,842 265,793,587 261,199,946 mEmORANDUm ACCOUNTS 253,613,303 182,130,348 180,665,326 171,468,227 177,431,671

LIABILITIES

Short-term liabilities

Payables to banks 17,338,595 7,331,833 5,610,510 1,880,749 49,577

Current quota Passive loans 0 0 8,925,450 8,925,450 10,652,228

Payables to other lenders 7,659,769 5,654,737 4,258,627 3,224,800 2,545,157

Financial payables to subsidiaries and associated companies 8,250,000 8,800,000 0 246,000 10,914,000

Advances 22,173,353 5,596,163 10,232,521 14,177,189 12,389,313

Payables to suppliers 139,875,465 133,231,097 111,333,871 84,072,192 63,749,194

Payables represented by securities 0 0 0 0 0

Payables to subsidiaries 17,915,313 14,467,384 2,501,232 2,568,636 4,306,318

Payables to associated companies 1,479,227 234,140 134,574 99,023 90,904

29pagina

BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

Tax payables 10,163,515 5,716,393 5,428,011 3,868,897 6,817,606

Payables to welfare and social security institutes 3,127,055 2,994,414 2,725,195 2,235,968 1,425,301

Other short-term payables 7,745,499 7,588,000 9,657,060 4,381,088 3,965,238

Accrued liabilities and deferred earnings 676,021 845,436 405,533 291,387 340,704

Total short-term liabilities 236,403,810 192,459,597 161,212,583 125,971,378 117,245,540 medium-long term liabilities

Bonds 0 0 0 0 0

Payables to banks 45,315,976 26,672,186 46,168,351 36,348,586 45,273,309

Payables to other lenders 0 0 0 0 0

Payables to suppliers 3,491,619 2,607,790 2,046,773 1,801,315 1,701,134

Payables represented by securities 0 0 0 0 0

Employees’ severance indemnity fund 4,761,755 5,336,207 5,721,027 6,101,664 6,507,062

Fund for pensions and similar obligations 21,526 21,526 21,526 21,526 21,526

Other funds 2,580,700 2,393,369 1,617,395 1,335,537 1,839,090

Total medium-long term liabilities 56,171,575 37,031,078 55,575,072 45,608,627 55,342,121 Shareholders’ Equity

Share Capital 18,312,536 15,938,753 13,558,953 13,706,084 12,952,749

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

Legal reserve 89,473,011 82,158,320 77,140,319 72,387,954 69,866,959

Exchange Rate Fluctuation Fund 531,892 531,892 0 0 0

Statutory reserves 78,184 78,184 78,184 78,184 78,184

Reserve for exchange rate fluctuations 0 0 0 0 0

Merger surplus 235,597 235,597 235,597 235,597 235,597

Capital contribution reserve lex 784/80 1,269,396 1,269,396 1,269,396 1,269,396 1,269,396

Profit /loss for year 13,357,606 8,597,472 6,838,059 5,879,687 3,552,720

Total Shareholder’s Equity 123,914,902 109,466,293 99,777,187 94,213,582 88,612,285 Total LIABILITIES 416,490,287 338,956,968 316,564,842 265,793,587 261,199,946 mEmORANDUm ACCOUNTS 253,613,303 182,130,348 180,665,326 171,468,227 177,431,671

The following considerations arise from the table above:An increase in quick assets of approximately 64 million euros was recorded due to an increase in the value of production (19%) and the accounts receivable. In fact, in the preceding pages we analyzed how significant the photovoltaic impact has been on these financial statements. However, the photovoltaic sector requires a large amount of financial resources during projects’ initial phase, which is then monetized when the documentation portion is completed. When the

operational networks and the networks under construction that have not yet been paid for are taken into consideration, the increase in current assets is the logical consequence.Therefore, the increase in current assets has caused an increase of 28 million euros in the Parent Company’s debts. However, it should be emphasized that on December 31, 2009 the Cooperative collected from CPL Distribuzione the payments for the transfer of the distribution networks; these amounts were immediately redeployed in the

production process and to pay off debts (Enel Gas) that had been blocked for years.It should also be underscored that the Cooperative has achieved a very significant level of equity of more than 123 million euros.

30pagina

Rep

ort

on o

pera

tion

2A.3. Financial statement indices

The financial statement indices for the fiscal year for the Parent Company are summarized in the table below:

CPL CONCORDIA SOC. COOP.: PRINCIPALI INDICI DI BILANCIO

ECONOmIC ANALySIS BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

R.O.E. (Return on Equity) 12.08% 8.52% 7.36% 6.66% 4.18%

R.O.I. (Return on Investment) 2.12% 4.70% 5.11% 5.61% 4.82%

MOI Ratio/Value of production 6.01% 9.00% 10.60% 11.12% 10.86%Burdens incidence and extra management proceeds -51.43% 46.05% 57.75% 60.54% 71.79%

Net Financial Burden Incidence on P.V. 0.32% 0.44% 1.16% 1.22% 1.50%

Net Financial Burden Incidence on R.O. 11.93% 7.74% 16.20% 16.33% 21.94%

FINANCIAL AND NET wORTH ANALySIS BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

Liquidity ratio 1.25 1.20 1.15 1.20 1.29

Leverage (leverage effect) 3.77 3.36 3.41 3.01 3.07

Interest-paying Debt Ratio 0.38 0.14 0.44 0.46 0.69

Elasticity ratio 2.46 2.16 1.42 1.32 1.39

EBITDA/DEBT 47.38 176.93 58.15 54.25 34.29

DEBT/EBITDA 2.11 0.57 1.72 1.84 2.92

DEBT 41,903,154 14,147,320 41,089,215 40,804,657 58,306,642

EBITDA 19,854,967 25,030,994 23,892,457 22,137,024 19,991,638

The economic indices have already been commented on previously in this report; the financial and assets indices have definitely remained positive.The liquidity index remains above 1.25%; although the leverage effect (3.77%) increased by 0.41%, it still remains within healthy parameters.Although the Debt/EBITDA ratio, which is considered to be a fundamental index by our main stakeholders, has increased, it still remains considerably below the optimal parameter of 3.

R.O.I.

4.82%

5.61%

5.11%

4.70%

2.12%

2006

2007

2008

2009

2010

Operating Income/Net Capital Employed, in percentage

R.O.E.

4.18%

6.66%

7.36%

8.52%

12.08%

2006

2007

2008

2009

2010

Operating Income/Equity capital, in percentage

31pagina

A.4. Relations with companies of the Group and related parties

The tables below summarize the asset, financial, and economic relations of the Parent Company with the subsidiaries and associated companies.

CREDITS/DEBTS TOwARD CONTROLLED COmPANIES

COmPANIES TRADING SECURITIES CREDITS

CURRENT ASSET CREDITS

SHORT TERm DEBTS

FINANCIAL DEBTS

AI POWER S.r.l. 0 320,120 68,472 0

COOPGAS S.r.l. 1,490,000 289,212 10,041,236 0

CPL DISTRIBUZIONE S.r.l. 0 3,890,732 140,726 3,250,000

CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l. 0 127,778 14,842 0

CPL HELLAS A.B.E.& T.E. 170,000 165,733 280,055 0

CRISTOFORETTI SERVIZI ENERGIA S.r.l. 0 368,922 0 0

ENERGIA DELLA CONCORDIA S.p.A. 2,680,000 3,708,180 365,157 0

ERRE.GAS S.r.l. 0 231,515 91,979 4,000,000

EUWATT PUGLIA S.r.l. 1,260,000 1,280,999 0 0

FONTENERGIA 4 S.r.l. 120,000 321,307 656,250 0

FONTENERGIA 6 S.r.l. 0 473,819 1,316,250 0

FONTENERGIA 7 S.r.l. 40,000 2,292,746 328,980 0

FONTENERGIA 9 S.r.l. 0 369,906 336,825 0

FONTENERGIA 11 S.r.l. 30,000 32,019 262,500 0

FONTENERGIA 15 S.r.l. 75,000 41,725 183,750 0

FONTENERGIA 19 S.r.l. 25,000 435,960 3,825 0

FONTENERGIA 26 S.r.l. 70,000 424,170 446,250 0

FONTENERGIA 27 S.r.l. 0 245,820 484,500 0

FONTENERGIA 28 S.r.l. 150,000 182,659 236,250 0

FONTENERGIA 37 S.r.l. 85,000 1,221,509 262,500 0

GHIRLANDINA SPORT S.r.l. 0 547 0 0

GRECANICA GAS S.r.l. 0 1,572,491 1,049,423 0

TRADENERGY S.r.l. 65,000 902,712 0 0

IMMOBILIARE DELLA CONCORDIA S.r.l. 1,370,000 24,385 296,604 0

ISCHIA GAS S.r.l. 150,000 2,538,987 662,001 0

leverage

3.07

3.01

3.41

3.36

3.77

2006

2007

2008

2009

2010

Invested Capital/Equity Capital

financial debt/own capital

0.69

0.46

0.44

0.14

0.38

2006

2007

2008

2009

2010

Financial debt / equity capital

32pagina

Rep

ort

on o

pera

tion

2 COmPANIES TRADING SECURITIES

CREDITSCURRENT ASSET

CREDITSSHORT TERm

DEBTSFINANCIAL

DEBTS

MARIGLIANO GAS S.r.l. 780,000 1,055,060 0 0

NUORO SERVIZI IN LIQUIDAZIONE S.r.l. 44,000 296,865 0 0

PROGAS METANO S.r.l. 165,000 8,315 15,687 0

SERIO ENERGIA S.r.l. 0 18,996 0 0

SBM ENERGIA S.r.l. 10,000 1,210,000 0 0

TORANO SOLAR S.r.l. 0 350 0 0

VIGNOLA ENERGIA S.r.l. 0 0 371,250 0

TOTALS 8,779,000 24,053,542 17,915,313 7,250,000

CPL RECEIvABLES/PAyABLES TO ASSOCIATED COmPANIES

COmPANIES TRADING SECURITIES CREDITS

CURRENT ASSET CREDITS

SHORT TERm DEBTS

FINANCIAL DEBTS

FONTENERGIA S.p.A. 5,769,250 73,169 310,200 0

FONTENERGIA 38 S.r.l. 0 0 25,500 0

SARDA FINANZIARIA S.r.l. 0 21,000 0 0

SARDA RETI COSTRUZIONIS.r.l. 0 79,083 3,549 0

COMPAGRI S.pA. 0 2,000 0 547,342

AGRIENERGIA S.p.A. 13,642 526,693 1,000,000 0

COIMMGEST S.p.A 0 241,267 13,970 0

ENERFIN S.r.l. 30,000 0 0 0

FANO SOLAR 1 S.r.l. 150,000 5,365,177 0 0

FANO SOLAR 2 S.r.l. 130,000 493,479 0 0

FIMETRA S.r.l. 0 0 315,000 0

GHIRLANDINA SOLARE S.r.l. 408,000 1,974,396 0 0

TECLAB S.r.l. 0 0 12,657 0

X DATANET S.r.l. 0 0 251,009 0

ICHNUSA GAS S.p.A. 0 96,330 0 0

INTERENERGIA S.r.l. 0 96,193 0 0

INTERENERGIA TRE S.r.l. 0 177,494 0 0

MODENA FOOTBALL CLUB S.p.A. 0 51,397 0 0

NOCI SOLAR 1 S.r.l. 1,127,000 1,761,819 0 0

NOCI SOLAR 2 S.r.l. 1,151,500 1,856,818 0 0

NOTARESCO SOLAR S.r.l. 665,000 6,236,177 0 0

SANT’OMERO SOLAR S.r.l. 470,000 3,204,980 0 0

PEGOGNAGA SERVIZI S.r.l. 0 19,150 0 0

TOTALS 9,914,392 22,276,622 1,931,885 547,342

CPL CONCORDIA PROCEEDS

COmPANy PROvISIONS SUPPLIES INTEREST TOTAL

AI POWER S.p.A. 95,440 367,754 0 463,194

COOPGAS S.r.l. 1,239,120 0 15,486 1,254,606

CPL DISTRIBUZIONE S.r.l. 3,585,104 82,970 1,227 3,669,301

CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l. 192,884 70,494 0 263,378

CRISTOFORETTI SERVIZI ENERGIA S.r.l. 292,344 120 0 292,464

ENERGIA DELLA CONCORDIA S.p.A. 9,797,677 7,384 89,063 9,894,125

ERRE.GAS S.r.l. 208,884 1,765 70,859 281,508

33pagina

COmPANy PROvISIONS SUPPLIES INTEREST TOTAL

EUWATT PUGLIA S.r.l. 10,499,999 0 0 10,499,999

FONTENERGIA 4 S.r.l. 97,275 0 210 97,485

FONTENERGIA 6 S.r.l. 434,454 0 0 434,454

FONTENERGIA 7 S.r.l. 2,212,450 26 290 2,212,766

FONTENERGIA 9 S.r.l. 338,962 0 0 338,962

FONTENERGIA 11 S.r.l. 13,750 0 461 14,211

FONTENERGIA 15 S.r.l. (75,530) 0 814 (74,717)

FONTENERGIA 19 S.r.l. 126,870 0 330 127,200

FONTENERGIA 26 S.r.l. 138,420 0 1,245 139,665

FONTENERGIA 27 S.r.l. 33,459 0 0 33,459

FONTENERGIA 28 S.r.l. (49,174) 0 2,580 (46,594)

FONTENERGIA 37 S.r.l. 577,942 0 2,005 579,947

GHIRLANDINA SPORT S.r.l. 0 0 498 498

GRECANICA GAS S.r.l. 1,584,031 0 0 1,584,031

SI.GAS IN LIQUIDAZIONE S.r.l. 10,000 0 0 10,000

IMMOBILIARE DELLA CONCORDIA S.r.l. 30,257 0 0 30,257

ISCHIA GAS S.r.l. 9,754,353 8,270 3,238 9,765,861

MARIGLIANO GAS S.r.l. 287,176 3,640 21,148 311,964

NUORO SERVIZI IN LIQUIDAZIONE S.r.l. 40,000 0 609 40,609

PROGAS METANO S.r.l. 4,229 0 3,854 8,083

SERIO ENERGIA S.r.l. 42,830 0 0 42,830

SBM ENERGIA S.r.l. 3,500,000 0 0 3,500,000

VIGNOLA ENERGIA S.r.l. 378,500 0 0 378,500

Total controlled Companies 45,391,707 542,423 213,916 46,148,045

FONTENERGIA S.p.A. 258,817 9,867 114,142 382,825

SARDA RETI COSTRUZIONI S.r.l. 3,500 0 0 3,500

COMPAGRI S.p.A. 1,000 0 0 1,000

AGRIENERGIA S.p.A. 285,391 0 0 285,391

COIMMGEST S.p.A. 171,267 0 0 171,267

FANO SOLAR 1 S.r.l. 4,886,702 0 300 4,887,002

FANO SOLAR 2 S.r.l. 6,000 0 229 6,229

GHIRLANDINA SOLARE S.r.l. 2,888,228 0 262 2,888,490

TECLAB S.r.l. 0 650 0 650

X DATANET S.r.l. 10,000 0 0 10,000

ICHNUSA GAS S.p.A. 86,710 0 0 86,710

INTERENERGIA S.r.l. 35,000 0 0 35,000

INTERENERGIA UNO S.r.l. 200,193 0 0 200,193

INTERENERGIA TRE S.r.l. 3,990,894 0 0 3,990,894

IES SOLARE S.r.l. 25,000 0 0 25,000

MODENA FOOTBALL CLUB S.p.A. 15,094 0 0 15,094

NOCI SOLAR 1 S.r.l. 3,470,500 0 0 3,470,500

NOCI SOLAR 2 S.r.l. 3,580,500 0 0 3,580,500

NOTARESCO SOLAR S.r.l. 5,362,907 0 1,054 5,363,961

SANT’OMERO SOLAR S.r.l. 2,745,884 0 1,757 2,747,641

PEGOGNAGA SERVIZI S.r.l. 34,846 0 0 34,846

Total Connected Companies 28,058,432 10,517 117,744 28,186,692

TOTALS 73,450,139 552,940 331,660 74,334,738

34pagina

Rep

ort

on o

pera

tion

2CPL CONCORDIA COSTS

COmPANy PROvISIONS SUPPLIES INTEREST TOTAL

AI POWER S.p.A. 65,691 2,863 0 68,553

COOPGAS S.r.l. 15,622 22,373,243 79,584 22,468,449 CPL DISTRIBUZIONE S.r.l. 0 0 217,432 217,432

CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l.

59 0 0 59

CRISTOFORETTI SERVIZI ENERGIA S.r.l.

45,640 0 0 45,640

ERRE.GAS S.r.l. 17,983 0 667 18,649 GRECANICA GAS S.r.l. 0 0 3,400 3,400

IMMOBILIARE DELLA CONCORDIA S.r.l.

685,181 0 0 685,181

ISCHIA GAS S.r.l. 21,429 0 0 21,429 MARIGLIANO GAS S.r.l. 0 9,282 0 9,282

Total controlled Companies 851,604 22,385,388 301,083 23,538,074

FONTENERGIA S.p.A. 258,500 0 0 258,500

COMPAGRI S.p.A. 1,023,759 0 0 1,023,759

AGRIENERGIA S.p.A. 0 0 4,083 4,083

TECLAB S.r.l.. 61,922 71,077 0 133,000

X DATANET S.r.l. 15,000 0 0 15,000 INTERENERGIA TRE S.r.l. 4,050,000 0 0 4,050,000

Total Connected Companies 5,409,181 71,077 4,083 5,484,342

TOTALS 6,260,785 22,456,465 305,166 29,022,416

With regard to all the economic and asset relations established with the companies of the Group, it should be noted that they are contractually governed at market values.

B. The GroupIn the last ten years we have witnessed the growth of the Parent Company and its subsidiaries and associated companies. The Group now has an intricate structure formed from various companies, all of which – with the exception of Immobiliare della Concordia and Ghirlandina Sport – operate in the complex energy division.

100%

50%

70%

90%

100%

99.80%

100%

70%

100%

90%

54%

Immobiliare dellaConcordia S.r.l. (IT)

AI Power S.p.A. (AL)

Concordia Service Maghreb S.a r.l. (TN)

Marigliano Gas S.r.l. (IT)

Cristoforetti ServiziEnergia S.r.l. (IT)

CPL Concordia Filiala Cluj Romania S.r.l.

(RO)

Fontenergia 4 S.r.l. (IT)

Progas Metano S.r.l. (IT)

Fontenergia 6 S.r.l. (IT)

Tradenergy S.r.l. (IT)

Fontenergia 9 S.r.l. (IT)

Enerfin S.r.l.in liquidazione (IT)

60%

100%

70%

70%

100%

34%

70%

51%

70%

70%

55%

100%

Euwatt Puglia S.r.l. (IT)

SBM Energia S.r.l. (IT)

Fontenergia 7 S.r.l. (IT)

Fontenergia 11 S.r.l. (IT)

Fontenergia 15 S.r.l. (IT)

Fontenergia 19 S.r.l. (IT)

Fontenergia 37 S.r.l. (IT)

Fontenergia 26 S.r.l. (IT)

Torano Solar S.r.l. (IT)

Fontenergia 27 S.r.l. (IT)

Fontenergia 28 S.r.l. (IT)

95% Grecanica Gas S.r.l. (IT)

GROUP STRUCTURE

35pagina

Group Leader

Directly controlled Company

Indirectly controlled Company

Directly connected Company

Indirectly connected Company

Other holding

Appointed on 31 December 2010

Ischia Gas S.r.l. (IT)

Erre.Gas S.r.l. (IT)

CoopGas S.r.l. (IT)

Ghirlandina Sport S.r.l. (IT)

Energia dellaConcordia S.p.A. (IT)

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

Serio Energia S.r.l. (IT)

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

CPL HellasA.B.E. & T.E. (GR)

Valle Versa Green Power Soc. Agricola

(IT)

CPL DistribuzioneS.r.l. (IT)

Pegognaga Servizi S.r.l. (IT)

Fontenergia S.p.A. (IT)

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

Teclab S.r.l. (IT)

Coimmgest S.p.A. (IT)

X Datanet S.r.l. (IT)

Interenergia S.p.A. (IT)

50%

35%

30%

47%

45%

49%

30%

100%

40%

100%

100%

100%

100%

82%

44%

100%

100%

49.60%

CPL CONCORDIA Group

Interenergia UnoS.r.l. (IT)

Interenergia DueS.r.l. (IT)

Interenergia TreS.r.l. (IT)

Interenergia QuattroS.r.l. (IT)

Fano Solar 1S.r.l. (IT)

Fano Solar 2S.r.l. (IT)

Notaresco SolarS.r.l. (IT)

Sant’Omero SolarS.r.l. (IT)

100%

100%

100%

100%

100%

100%

100%

100%

Hera S.p.A. (IT)

Sofinco S.p.A. (IT)

Intermedia Holding S.p.A.

0.0233%

1.23%

1.76%

Ichnusa Gas S.p.A. (IT)

Ies Solare S.r.l. (IT)

Fontenergia 38 S.r.l. (IT)

Ghirlandina Solare S.r.l. (IT)

Fimetra S.r.l. (IT)

Noci Solar 1 S.r.l. (IT)

Noci Solar 2 S.r.l. (IT)

45%

34%

49%

49%

40%

25%

34%

Euwatt Moglia S.r.l. (IT)

Euwatt Sesto S.r.l. (IT)

Compagri in liquidazione

S.p.A. (IT)

AgrienergiaS.p.A. (IT)

20%

22.22%

20.18%

20%

36pagina

Rep

ort

on o

pera

tion

2Description and performance of the companies of the Group

B.1. Subsidiaries

COOPGAS S.r.l.: This is the Group’s methane gas sales company in accordance with Italian Legislative Decree no. 164/2000.During the fiscal year the company provided service to more than 41,000 consumers, selling 67 million m³ of gas, which includes 26 million m³ to the Group’s channeled distribution networks.Due to a sound policy on purchasing raw materials, the company has produced an operating profit of 1,848,018 euros.The company’s equity is 6.6 million euros against an equity investment value of 2.5 million euros.

ENERGIA DELLACONCORDIA S.p.A.:This company, 100% of whose shares are held by Coopgas S.r.l., possesses two contracts for construction, sales, and management of plants for utilizing biogas: one is a small contract with an agricultural enterprise in the Pavese area and the other is a contract for approximately 4 million euros regarding the Francavilla Fontana waste disposal site in Apulia. During the previous fiscal year the company also began managing photovoltaic power systems. In 2009 the company acquired the rights and authorizations for a

photovoltaic array located in the municipality of Turi (province of Bari), designated Turi 2, while during fiscal year 2010 it acquired the authorizations to construct and subsequently manage another photovoltaic array also located in the municipality of Turi, designated Turi 8. During 2010 the company stipulated a company division transfer contract in reference to the photovoltaic array Turi 2, transferring it to the associated company Interenergia Due S.r.l. Also during the fiscal year the company completed the Turi 8 photovoltaic array, which will become operational in the first few months of 2011. Lastly, the company directors, taking into account the difficulties that arose in connection with the management of the plant for the production of biogas and electricity in Francavilla Fontana, have made provisions for future risks and contingencies of an amount of 250,000 euros to cover operating losses that could be realized over the next two years, during which time it is believed the relevant biogas extraction problems will be solved. The company’s financial statements for the fiscal year were closed with a profit of 71,008 euros.

ImmOBILIARE DELLACONCORDIA S.r.l.:During fiscal year 2010 the company managed two initiatives, just as it did for the previous fiscal year. One initiative regards the construction and sale of land and apartments in the Borgoverde lot located in the municipality of Carpi (province of Modena), and the other initiative involves the management of a hotel located in the municipality of San Possidonio. In recent years the company’s operational performance has been characterized by profits made from the Borgoverde

initiative and large losses resulting from the management of the hotel in San Possidonio. In 2010, in relation to the severe economic crisis that has hit industry in the Modena area, the increase in hotel stays did not occur that was expected on the basis of the growing prestige of the hotel managed by the company. The stagnant number of hotel stays, although compensated for by the good results of the restaurant, did not allow the company to achieve satisfactory results. In fact, the company experienced an operating loss of 159,823 euros.Taking into account the inherent value of the property, together with considerations regarding income, the Parent Company’s directors feel that the loss in 2010 is recoverable by means of future profits; therefore, they do not consider it to be appropriate to write down the value of the equity investment in the Cooperative’s financial statements.

CRISTOFORETTI SERvIZI ENERGIA S.r.l.:This company, which was established in April 1996 and operates in the heat management sector in the Trentino-Alto Adige region of Italy, is a considerable strongpoint in the Group’s strategic sector. Over the years the company has extended its operating range, acquiring contracts in the regions of Veneto and Friuli Venezia Giulia, and since 2009 in the region of Lombardy too.The company is also involved in LPG distribution in the municipalities of Ferrara di Monte Baldo (province of Verona) and Vigo di Ton (province of Trento).The company, whose profits for the year amount to 417,256 euros, has always reported good income results, and it is felt that the amount paid for the company

37pagina

fully represents its future potential.In fact, as a result of the profits made in recent years that were wisely used to increase the company’s equity, the difference between the equity investment value and the corresponding percentage of equity has been canceled out.

ERRE.GAS S.r.l.: This company’s business purpose is the distribution of liquid propane gas in the municipalities of Sapri and Camerota (province of Salerno). It ended the fiscal year with a profit of 630,252 euros.The fiscal year was characterized by the transfer of the company division containing the company assets, which are necessary for performing its core activities described above, to the company Cilento Reti Gas S.r.l. The deed for the transfer of the aforesaid division was signed on December 28, 2010 in the presence of Mr. Francesco Paolo Petrera, Notary Public in Bari, who recorded it with registration no. 26039 and file no. 10370.This transfer regards exclusively the distribution networks of the municipalities of Sapri and Camerota, as well as the meters. The storage facility was not included; its residual value to be depreciated was subject to provisions for risks. This asset was written down due to the fact that the company acquiring the company division is focusing on the changeover from LPG to methane gas as a fuel; therefore, it did not feel that the storage facility is necessary for it to pursue its activities. The price for the transfer of the company division was 7.3 million euros, but the net economic effect generated a profit of approximately 600 thousand euros. The receivables and payables accrued until the

transfer date were also excluded from this operation.However, in 2011 the company will provide management under subcontract for the purchaser, thereby guaranteeing management continuity. Essentially even financial results are expected for 2011. When the temporary period of management under subcontract ends, the company will be placed in liquidation or used for other catchment areas.Due to this operation and the consequent economic results, the difference between the recorded value of the equity investment and the corresponding percentage of equity has been canceled out.

mARIGLIANO GAS S.r.l.: This company was established in 2002 for the specific purpose of building and subsequently managing the gas concession of the municipality of Marigliano, of which the Cooperative is the sole shareholder.During the year this company expanded the gas distribution network of the municipality of Marigliano by distributing methane gas for the sales company Coopgas S.r.l. and for other sales companies. There were 6,882 active consumers on December 31, 2010, and 3,355,957 m³ of gas was distributed.The economic results for the year, due to the constant increase in consumers and the effects of the new rates system, constantly improved. Profits for the year 2010 amount to 623,297 euros, which is to be considered extremely positive and better than expected.Moreover it is worth noting that in fiscal year 2006 the company stipulated a financing contract with Banca Popolare dell’Emilia Romagna for 5,000,000 euros whose covenants included payments by shareholders of

amounts as a “Reserve for future share capital increase.” On the closing date of these financial statements the Parent Company paid 2.3 million euros, which was entered by the company under an equity heading.With regard to the financing disbursed by Banca Popolare dell’Emilia Romagna, a lien was established on the company’s shares in favor of said banking institute to guarantee the contract, for a maximum of 5 million euros.The company’s equity is 4.5 million euros against an equity investment value of 3.5 million euros.

SI.GAS in Liquidazione S.r.l.: This company, whose shares were acquired in July 2006, operates the gas distribution network for the Bacino Calabria 30 catchment area, which includes a dozen municipalities located in the province of Reggio Calabria, the largest of which is that of Villa San Giovanni, and another five municipalities located in the same province but outside of the Bacino Calabria 30 catchment area, such as Polistena, Melicucco, San Giorgio Morgeto, Rosarno, and Cinquefrondi. In July 2009 the company transferred the company divisions, containing the aforesaid concessions and related receivables and payables, to CPL Distribuzione S.r.l. This transfer stripped the company of its assets, and on November 16, before the Mr. Silvio Vezzi, Notary Public in Modena, it was placed in voluntary liquidation. The liquidation process ended in December 2010 with cancellation by the Modena Chamber of Commerce, Industry, Crafts, and Agriculture on December 21, 2010.The end of the liquidation of the company resulted in a capital

38pagina

Rep

ort

on o

pera

tion

2gain from liquidation, to the shareholder CPL Concordia, totaling 8,124,755 euros including dividends, recorded by the Parent Company as “Financial income from equity investments in subsidiaries” under item C 15 a) of the profit and loss statement.

NUORO SERvIZI in liquidazione S.r.l.: This company governed by Tunisian law was established in Tunis on December 18, 2007 as an offshore company, with the objective of becoming an observation point for future activities to be developed in the Maghreb area, which includes Morocco, Tunisia, and Algeria. In consideration of the interesting opportunities that arose in the area before the disorder occurring between the end of 2010 and the beginning of 2011, it has been decided to liquidate the company so as to establish a new onshore company.At the end of 2010 the Cooperative’s board of directors resolved to liquidate the company. The liquidation procedure is ending at this time.The Cooperative’s directors have prudently decided to completely write down the value of the equity investment in the company.

CPL HELLAS A.B.E. & T.E.: This Greek company performed its last production activities during the first few months of fiscal year 2008. Therefore, the company’s activities in 2010 focused on invoicing the recorded and certified works and closing the accounting of the works. It should be noted that the company’s sole customer is CPL’s Greek branch. The assessments of the risks of collectability of these accounts receivable, which total approximately 280 thousand euros, were performed under

the responsibility of CPL’s Greek branch. The recovery of the aforesaid accounts receivable was entrusted to the Gakidis law firm in Thessalonica, which instituted a series of lawsuits for the purpose of collecting them. Lastly, it should be noted that, in addition to the recorded works, unrecorded reserves of 1.8 million euros were required. The company experienced a loss in fiscal year 2010 of 50,325 euros due exclusively to overhead expenses and operating expenses.Consequently the Cooperative’s directors have written down this equity investment, adjusting it to the corresponding portion of net assets. CPL CONCORDIA FILIALA CLUJ ROmANIA S.r.l.: This company, which distributes and sells methane gas in approximately 30 municipalities located in the region of Transylvania in Romania, currently has more than 13,606 consumers, has achieved sales of more than 23 million m³ of gas, and has distributed almost 17 million m³ of gas.The company has reported an operating profit of 340,913 euros even though the local government has blocked the final selling price at 2009 values, despite the fact that there has been a sharp increase in the cost of the raw material.Despite the constant devaluation of the local currency, the company’s equity remained above 9 million euros against an equity investment value of 8.8 million euros.

CONCORDIA SERvICE mAGHREB S.a r.l.: This company governed by Tunisian law was established in Tunis on December 18, 2007

as an offshore company, with the objective of becoming an observation point for future activities to be developed in the Maghreb area, which includes Morocco, Tunisia, and Algeria. In consideration of the interesting opportunities that arose in the area before the disorder occurring between the end of 2010 and the beginning of 2011, it has been decided to liquidate the company so as to establish a new onshore company.At the end of 2010 the Cooperative’s board of directors resolved to liquidate the company. The liquidation procedure is ending at this time.The Cooperative’s directors have prudently decided to completely write down the value of the equity investment in the company.

SERIO ENERGIA S.r.l.: This company, which was established on February 27, 2003, was started to manage the heating systems of the Bolognini Hospital in Seriate (province of Bergamo). Although the Cooperative holds 40% of the company’s shares, it effectively controls the company due to the activities it performs with regard to the project for which it was established.The financial results for the period show a profit of 245,236 euros.The company’s equity is 1.4 million euros against an equity investment value of 0.4 million euros.

ISCHIA GAS S.r.l.: This company was established on April 1, 2005 by means of a deed drawn up by Mr. Silvio Vezzi, Notary Public in Modena, and recorded with registration number 111359, file no. 16678, for the construction and subsequent operation of the methane gas distribution service in the municipality of Ischia (province of Naples).

39pagina

During the year the gas distribution network was completed and consumer hookup phase continued; as of December 31 there were 544 consumers. In 2010 the company was hit by an event that is still being clarified, which resulted in damage to the underwater pipeline and consequent gas losses that have negatively affected the company’s profit and loss statement.Obviously the company’s financial results were affected by these factors, and it shows a loss of 179,736 euros.It should be noted that a financing contract exists with Banca Popolare dell’Emilia Romagna for 6,000,000 euros, whose covenants include the payment of specific amounts by the shareholders to the net assets reserve “Reserve for future share capital increase.” The Cooperative made these payments of 2,900,000 euros on December 31, 2009.With regard to the financing disbursed by Banca Popolare dell’Emilia Romagna, a lien was established on the company’s shares, in favor of the banking institute as a contract guarantee, for a maximum amount of 6 million euros.Due to the large investments made beyond projections and the small number of consumers, the three-year plan shows an initial phase of economic and financial difficulty.For this reason the Cooperative’s directors had allocated 400,000 euros to provisions for future risks and contingencies, which was used during this fiscal year for the recorded loss of 179,736 euros.

PROGAS mETANO S.r.l.: This company was established on April 23, 2007 in the presence of Mr. Silvio Vezzi, Notary Public in Modena, who recorded the relative deed with registration

no. 114585 and file no. 17714. This company was established for the installation of methane gas distribution networks on the island of Procida; currently it has performed exclusively preliminary activities. The operating results, which are derived exclusively from the overhead costs incurred, show a loss of 10,147 euros. The company’s future developments are still in the evaluation phase.

AI POwER S.p.A.: This company was established in Algiers on April 7, 2008 and confirmed on April 12, 2008 for the purpose of managing the Cooperative’s core business in Algeria. The Cooperative holds 54% of the shares, another Italian company holds 1% of the shares, and the remaining 45% of the shares are held by Algerian partners.During fiscal year 2010 the company managed contracts acquired directly or through the Parent Company. A value of production of approximately 760 thousand euros was achieved, while profits produced from turnover are 1,977 euros.Due to the excellent opportunities existing in the Algerian market, very interesting future developments are expected for this company.

CPL DISTRIBUZIONE S.r.l.: This company was established on November 28, 2008 by means of the relevant deed stipulated in the presence of Mr. Silvio Vezzi, Notary Public in Modena, who recorded it with registration no. 117045 and file no. 18486. The company’s shares are held entirely by the Cooperative. The company was established for the purpose of becoming the sole container that handles the methane gas distribution activity, as required by Article 14 of Italian

Legislative Decree no. 164/2000, and this in fact occurred.In fact, in July 2009 the Parent Company and Si.gas proceeded with the transfer of the company divisions containing the gas concessions, relative receivables and payables with CPL Distribuzione managed by them, effective as of August 1, 2009.The company divisions’ assets are comprised of the following gas distribution concessions: Bacino Calabria 30 Municipality of Campo Calabro Municipality of Polistena Municipality of San Giorgio a Morgeto Municipality of Cinquefrondi Municipality of Rosarno Municipality of Melicucco Bacino Campania 30 Municipality of Cittanova Bacino Calabria 20 Bacino Campania 25 Bacino Sicilia 35 Bacino Sicilia 12 Bacino Sicilia 17In December 2009 the company took a leading role in an extremely innovative operation, transferring to several leasing companies the value of only the distribution networks as of December 31, 2008. In turn the leasing companies stipulated leasing contracts with the property management company LCFC S.r.l., which in turn stipulated rental contracts for the networks with CPL Distribuzione. The transferred networks are those of the Campania 25, Calabria 20, Sicilia 35, Sicilia 12, and Sicilia 17 catchment areas. In January 2010 a leaseback operation was carried out with Unicredit Leasing S.p.A., the object of which was the networks of the Bacino Campania 30 catchment area. All the transfers were conducted at book values.With regards to ordinary operations, the company

40pagina

Rep

ort

on o

pera

tion

2incorporated the effects of Resolution no. 159/08 of the Regulatory Authority for Electricity and Gas and the adjustments made in subsequent Resolution no. 114 of July 2010. The 2010 profit and loss statement was positively affected by the latter resolution of the Regulatory Authority for Electricity and Gas, which fully incorporated the company’s requests, thereby rectifying the effects of preceding Resolution no. 197/09, which in fact negatively affected the 2009 financial statements.The rates approved by means of Resolution no. 114 of July 31, 2010 of the Regulatory Authority for Electricity and Gas have allowed the company to benefit from revenues in proportion to the investments that were effectively made, thereby permitting even the recovery on the profit and loss statement of the prudent amounts that the company set aside in the previous period. From the point of view of the dissolution of funds and achieving greater revenues, the economic effects of the application of the two resolutions have resulted in almost 900 thousand euros of extraordinary income.In light of the above, the company closed its financial statements with a profit for the period of 2,056,322 euros.

vIGNOLA ENERGIA S.r.l.:This company, established in 2009, 99% of whose shares are held by the Cooperative and 1% by Consorzio Cooperative Costruzioni di Bologna, was established to manage a district heating plant to be constructed in the municipality of Vignola (province of Modena). Due to problems of a political nature, the current municipal administration of Vignola, after having closed the tender, still has not authorized

the start of the works. For these reasons the company financial statements are currently comprised of overhead costs. The loss for the year is 4,477 euros.

GHIRLANDINA SPORT S.r.l.: This company, established in 2009, was started to manage the equity investment in the company Modena Football Club S.p.A. This company, which the Co-operative controls with 82% of the shares, acquired 22.5% of the shares of the company Modena Football Club S.p.A. in July 2009 from Immerfin S.p.A. In July 2010 this company acquired a further 27.1% of the shares, thereby achieving a total holding of 49.6% of the share capital. In the same period the exit of the Immerfin Group from Modena Calcio’s company structure, which will become effective in 2011, became official. The Immerfin Group pledged to cover the losses of the second half of 2010 of Modena Football Club S.p.A. by means of a fixed amount of 500,000 euros.The economic results of the company Modena Football Club S.p.A. as of December 31, 2010 show a loss of 3,976,835 euros, which was balanced by the Immerfin Group with 3,129,874 euros and by Ghirlandina Sport with 846,961 euros.As a result of this, Ghirlandina Sport’s financial statements show a loss of 853,788 euros, while the shareholders’ equity, which incorporates the effects of the Extraordinary Shareholders’ Meeting of September 29, 2010 regarding the balancing of losses in the first half of 2010 and further shareholder contributions to cover losses, totals 33,910 euros.On the basis of these results of the subsidiary, the Cooperative has adjusted the value of the equity investment in the subsidiary Ghirlandina Sport S.r.l.

to the corresponding portion of its net assets.During 2011 the level of control of Ghirlandina Sport S.r.l. by the Cooperative is expected to drop to approximately 60%.

GRECANICA GAS S.r.l.: This company, which was established on April 6, 2010 in the presence of Mr. Silvio Vezzi, Notary Public in Modena, who recorded the deed with registration no. 119122, file no. 19121, is 95% controlled by the Cooperative and 5% by CPL Distribuzione.The company was started for the construction of the gas distribution network and the relative operation of the Calabria 12 catchment area. The construction phase began in fiscal year 2010.The company experienced a loss of 7,190 euros, which was generated exclusively by overhead costs. The investments for the network under construction total 1.4 million euros.

vALLE vERSA GREEN POwER SOCIETA’ AGRICOLA S.r.l.: This company, which was established on May 10, 2010 in the presence of Mr. Silvio Vezzi, Notary Public in Modena, who recorded the deed with registration no. 119250, file no. 19159, is entirely controlled by the Cooperative.This company, which was established in conformity with article 2, paragraph 1, of Italian Legislative Decree no. 99 of March 29, 2004, was started for the construction and subsequent operation of a biomass system located in the municipality of Cunico, province of Asti, fueled by the direct cultivation of land managed by IAP in compliance with article 1, paragraph 3, of Italian Legislative Decree no. 99 of March 20, 2004.

41pagina

Unfortunately, problems of a technical nature in connection with the project and the availability of the assignments resulted in the blocking of this investment.In this period the Cooperative, after deciding to enter this field in force, is evaluating the various opportunities that could be managed by means of this vehicle.The economic results in reference to this situation show a loss of 2,705 euros, which were obviously generated exclusively by overhead expenses.

SARDINIA CATCHmENT AREASIn 2009 and 2010 various special purpose vehicles were established for managing the construction and distribution of gas in various Sardinian catchment areas, whose tenders were conducted in compliance with the regional resolutions regarding the installation of methane gas distribution networks in Sardinia.The Cooperative was awarded the announced concessions of 13 catchment areas, of which one, Bacino 28 managed by Società Fontenergia 28 S.r.l., was transferred in April 2011 to the company Fiamma 2000 S.p.A. The majority of the catchment areas were awarded to temporary associations of companies, to which the Cooperative belongs, and it will be possible to establish special purpose vehicles to take over the ownership of the concessions.The estimated investments in the catchment areas in question are approximately 164 million euros (net of VAT and contributions), of which public funding is anticipated on the basis of Italian Law no. 784/90, which is to be made available by the region of Sardinia in the amount of approximately 64.7 million euros.All 12 companies that are part of

this project will be managed by a holding company.This holding company is ICHNUSA GAS S.p.A.Taking into account the considerable financial commitment that will be required by this project, a search was undertaken for a financial partner able to steer the project as well as to handle the structuring of the financing package necessary to support the project. This partner is Intermedia Finance S.p.A.As a result of this, during the fiscal year the shares of Ichnusa Gas S.p.A. were transferred to the other partners in the project, Impresa Pellegrini S.r.l., to which was transferred 20% of the shares and Saf Costruzioni S.r.l., to which was transferred 10% of the shares.The following is now the company structure of the holding company Ichnusa Gas S.p.A.:CPL CONCORDIA Soc. Coop. 45%INTERMEDIA FINANCE S.p.A. 25%IMPRESA PELLEGRINI S.r.l. 20%SAF COSTRUZIONI S.r.l. 10%Due to this company reorganization, the equity investment in Ichnusa Gas S.p.A. was classified under associated companies.In 2011 almost all the shares of the individual special purpose vehicles belonging to the Ichnusa project will be transferred to the company Ichnusa Gas S.p.A. This will result in all the companies analyzed below becoming associated companies in fiscal year 2011.The already established and operational individual special purpose vehicles belonging to the Ichnusa project are analyzed below.

FONTENERGIA 4 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of

the gas distribution network for the Bacino 4 catchment area, which includes the municipalities of Osilo, Porto Torres, Sennori, Sorso, and Stintino in Sardinia.This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 17.8 million euros of investments, to which will be assigned 9 million euros of funding.The loss recorded by this company amounts to 14,856 euros, while its net assets total 1,229,155 euros.

FONTENERGIA 6 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 6 catchment area, which includes the municipalities of Alghero and Olmedo in Sardinia.This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 15.5 million euros of investments, to which will be assigned 7.4 million euros of funding. The loss recorded by this company amounts to 13,625 euros, while its net assets total 1,936,375 euros.

FONTENERGIA 7 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 7 catchment area, which includes the municipalities of Ittiri, Cargeghe, Muros, Ossi, Tissi, Usini, Uri, Putifigari, and Villenova Monteleone; the lead municipality is Ittiri.

42pagina

Rep

ort

on o

pera

tion

2This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 13.7 million euros of investments, to which will be assigned 5.2 million euros of funding.On March 15, 2011 the Cooperative transferred 54% of the shares of this company to the holding company Ichnusa Gas S.p.A., retaining a minority shareholding of 0.83%.The loss recorded by this company amounts to 44,280 euros, while its net assets total 749,338 euros.

FONTENERGIA 9 S.r.l.: This company, which was established on November 24, 2010, has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 9 catchment area, which includes the municipalities of Ozieri, Berchidda, Tula, and Ittireddu; the lead municipality is Ozieri.This catchment area will require 8.6 million euros of investments, to which will be assigned 3.5 million euros of funding.This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.The first financial statements close on December 31, 2011.

FONTENERGIA 11 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 11 catchment area, which includes the municipalities of Posada, San Teodoro, Budoni,

Lodè, Siniscola, and Torpè; the lead municipality is Posada.This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 11 million euros of investments, to which will be assigned 4.4 million euros of funding.The loss recorded by this company amounts to 14,637 euros, while its net assets total 477,077 euros.

FONTENERGIA 15 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 15 catchment area, which includes the municipalities of Dorgali, Galtellì, Irgoli, Loculi, Onifai, and Orosei; the lead municipality is Dorgali.This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 12.7 million euros of investments, to which will be assigned 4.3 million euros of funding.The loss recorded by this company amounts to 14,470 euros, while its net assets total 327,198 euros.

FONTENERGIA 19 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 19 catchment area, which includes the municipalities of Terralba, Marrubiu, Mogoro, Palmas Arborea, San Nicolò d’Arcidano, Santa Giusta, and Uras.This catchment area will require

12.3 million euros of investments, to which will be assigned 4.9 million euros of funding.The loss recorded by this company amounts to 7,790 euros, while its net assets total 11,465 euros.

FONTENERGIA 26 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 26 catchment area, which includes the municipalities of Barrali, Gesico, Goni, Guamaggiore, Pimentel, San Basilio, Selegas, Senorbì, and Suelli. This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 12.5 million euros of investments, to which will be assigned 3.4 million euros of funding.The loss recorded by this company amounts to 14,810 euros, while its net assets total 826,815 euros.

FONTENERGIA 27 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 27 catchment area, which includes the municipalities of Furtei, Guasila, Samassi, Samatzai, Sanluri, Segariu, Serramanna, and Serrenti.This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 23.2 million euros of investments, to which will be assigned 7.7 million euros of funding.The loss recorded by this company

43pagina

amounts to 13,382 euros, while its net assets total 1,880,672 euros.

FONTENERGIA 28 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 28 catchment area, which includes the municipalities of Armungia, Ballao, Dolianova, Donori, San Nicolò Gerrei, Sant’Andrea Frius, Silius, Soleminis, and Villasalto. This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.As previously stated, on April 20, 2011 the Cooperative transferred 69.5% of the shares of this company to the company PEA S.r.l., which in turn transferred 99% of said shares to the company Fiamma 2000 S.p.A. Due to this operation the equity investment in question was classified under current assets. The remaining 0.5% will be transferred to Fiamma 2000 S.p.A. after the completion of the works.

FONTENERGIA 37 S.r.l.: During the fiscal year this company has operated solely to achieve its company purpose, that is, the design and construction of the gas distribution network for the Bacino 37 catchment area, which includes the municipalities of Monastir, Nuraminis, San Sperate, Ussana, and Sestu. This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This catchment area will require 15.4 million euros of investments, to which will be assigned 6.8

million euros of funding. The loss recorded by this company amounts to 15,994 euros, while its net assets total 475,806 euros.The last two special purpose vehicles, Fontenergia 10 S.r.l. and Fontenergia 35 S.r.l., were established on April 20, 2011.

B.2. Associated companies

FONTENERGIA S.p.A.: This company, which is involved in the construction and operation of the gas distribution networks in the Bacino 22 catchment area or the Ogliastra catchment area, is now controlled by the following financial shareholders: Cooperare S.p.A. with 48% of the shares, Sofinco S.p.A. with 3% of the shares, and the Cooperative with 49% of the shares.With regard to the shareholders’ agreements, the company’s technical administrative management will be entrusted to CPL, while Sofinco S.p.A. and Cooperare S.p.A. will jointly handle the company governance.The company’s core business was strongly affected by a large decrease in the prices charged by local LPG vendors outside of normal channels, which forced the company to eliminate the fixed charge from its rate for the specific purpose of proposing competitive prices. Obviously this policy affected the profit margins and, therefore, also the final results. Furthermore, the severe economic crisis that has hit the island did not allow an acceptable increase in consumers, despite the continuous investments in branch roads.In spite of the various negative events that occurred over the course of the fiscal year, the

company has successfully maintained essentially break-even results, achieving a profit of 1,861 euros.

ICHNUSA GAS S.p.A.: This company, which has been discussed above in this report, after the acquisitions phase was completed, began coordinating the financial resources procurement activities that will drive the entire group of companies under its control.This company closed the fiscal year with a profit of 28,806 euros, while its net assets total 1,024,947 euros.

PEGOGNAGA SERvIZI S.r.l.: This company was established in April 2005 to manage the undertaking services of the municipality of Pegognaga (province of Mantua). The Cooperative holds 50% of the shares, while the company Mazzola & Bignardi Servizi S.r.l. holds the remaining 50% of the shares.The financial results for the fiscal year show a profit of 5,659 euros, which is to be considered simply in line with expectations.

TECLAB S.r.l.: lThis company, in which the Cooperative holds a 35% interest, was acquired on April 22, 2004 by means of a deed registered with the La Spezia Companies Registration Office, with reference no. 4365.This company, which is involved in the development and writing of software for remote control operation, was acquired as the ideal partner for our former Systems Division.After the reorganization which took place in 2007, this company began to produce its first good results, especially when taking into account the current stagnation

44pagina

Rep

ort

on o

pera

tion

2in its market of reference. The financial results for the fiscal year show a profit of 3,799 euros, while the value of the net assets totals 168,292 euros.

COImmGEST S.p.A.: This company was established on May 14, 2007 in the presence of Mr. Silvio Vezzi, Notary Public in Modena, who recorded the relative deed with registration no. 114655 and file no. 17735. The controlling interest of 55% is held by Sofinco S.p.A., while the Cooperative holds the remaining 45%. The company was founded to manage real estate assets in the cooperative sector, and currently it has acquired the leasing contracts for the properties of the Concordia sulla Secchia headquarters, the Melegnano office, the Milan office, the Bologna office, the Fano office, the Padua office, and the new property at Via Grandi 43-45. The company then stipulated rental contracts with the Cooperative for each of these properties. When preparing its financial statements for the fiscal year, this company employed international accounting principles, specifically for the valuation of the IAS 17 leasing contracts.It should also be noted that there is an option agreement on the company shares which the Cooperative can take advantage of to acquire the remaining 55% interest held by the majority shareholder, to be exercised no earlier than two years from the date of establishment and by December 31, 2017.The financial results for the fiscal year show a profit of 139,067 euros, while the value of the net assets totals 394,242 euros..

COmPAGRI S.p.A.: The Cooperative held a 22.22% interest in this company until the

beginning of fiscal year 2010, when Compagri was managing a waste composting plant employing aerobic technology. Unfortunately, the company’s economic results over the last few fiscal years have been completely unsatisfactory. In order to allow the company to produce income, its directors decided to add a second plant with anaerobic technology. Therefore, it was necessary to make large investments that the company was not able to sustain on its own. A project has been developed that calls for the assignment of the company assets at an assessed value to Compagri’s subsidiary, Agrienergia Soc. Consortile, the conversion of the latter into an incorporated company, and bringing on board a financial partner able to sustain the planned investments. The project was completely executed in 2010 when, on March 2, the Extraordinary Shareholders’ Meeting of Agrienergia was held, during which the share capital was increased with assignment of the company division represented by the aerobic composting plant for 2,400,000 euros and the company was converted from a consortium to an incorporated company.As regards Compagri, the assignment resulted in a capital loss being recorded, which essentially eliminated the shareholders’ equity.Subsequently on October 26, 2010 the company was placed in liquidation after transferring the shares held in the company Agrienergia S.p.A. following the assignment of the company division comprised of the composting plant, respectively to CPL Concordia Soc. Coop. for 840,000 euros and to the other shareholder in Agrienergia, Raccolto Soc. Coop. for 1,560,000 euros.This company reorganization

operation resulted in a series of contingent liabilities that were recorded by the company. The loss recorded for the fiscal year totals 1,232,571 euros. The Cooperative covered this loss by allocating 101,509 euros to provisions for future risks and contingencies.

AGRIENERGIA S.p.A.: As was thoroughly discussed in the previous section, as a result of the Extraordinary Shareholders’ Meeting of March 2, 2010 held in the presence of Mr. Umberto Tosi, Notary Public in Bologna, who recorded the relevant document with registration no. 27804, file no. 11748, the company during fiscal year 2010 increased its share capital from 10,000 euros to 7,010,000 euros, by means of an increase of 7 million euros. This increase was settled as follows: 1,800,000 euros by means of contributions from the shareholders of Agrienergia, 2,400,000 euros by means of the assignment in kind by Compagri S.p.A., and 2,800,000 euros by means of contributions to be subscribed to and paid up by the lending shareholder, which in this case is Cooperare S.p.A.As of fiscal year 2010, the operation of the aerobic plant and the construction and subsequent operation of the new aerobic plant will be performed by Agrienergia S.p.A.Fiscal year 2010 was characterized by the start of construction of the new aerobic plant, which it is hoped will begin operations by the end of the fiscal year. Unfortunately, due to a series of bureaucratic difficulties in connection with issuing permits, the construction work has experienced a considerable slowdown, causing the startup of the plants to be delayed by 6-8 months. In spite of this, the company has successfully

45pagina

maintained essentially break-even results, ending the fiscal year with a profit of 4,451 euros.

X DATANET S.r.l.: On May 13, 2008 the Cooperative acquired 30% of this company’s shares, as shown by the relevant deed stipulated in the presence of Mr. Silvio Vezzi, Notary Public in Modena, who recorded it with registration no. 116205 and file no. 18215. The amount paid for 30% of the shares of X DATANET S.r.l. is 195,000 euros. This company is involved in the development and maintenance of software, in integrated collaboration with the cooperative’s Information & Communications Technology division. This company closed fiscal year 2010 with a net profit of 149,862 euros, which is to be considered far beyond the rosiest expectations.

SARDA RETI COSTRUZIONI S.r.l.:This company, which has been operating for several years in Sardinia in the context of the drum sealing service and retail sales of LPG, was involved in a merger between the holding company Safin S.r.l. and Sarda Reti Costruzioni S.r.l. itself.In fact, on December 17, 2009, in the presence of Mr. Roberto Onano, Notary Public, of the Notarial District of Cagliari, the deed of merger through incorporation was drawn up between Safin S.r.l. and Sarda Reti Costruzioni S.r.l. The merger became effective as of January 1, 2010, after Safin S.r.l. changed its name to its current (and old) name of Sarda Reti Costruzioni S.r.l.As regards the company’s financial results, the financial statements show a loss of 526,745 euros. This loss is attributable to a series of prudent valuations made

on several financial statement items. These valuations were performed with the specific intent of launching the company as soon as possible from both a production and financial point of view. For this purpose the company’s directors asked the shareholders (who assented) to renounce the existing non-interest bearing financing. In spite of the heavy loss for the year, the company’s net assets total 1,277,686 euros.

FONTENERGIA 38 S.r.l.: This company was established on December 19, 2009 in the presence of Mr. Gianmassimo Sechi, Notary Public, of the Notarial District of Cagliari, who recorded the relative deed with registration no. 72191 and file no. 25183. This company was founded for the operation, maintenance, and distribution of gas in the municipality of Cagliari. This company was established as a “special purpose vehicle” in conformity with, and for all legal purposes in conjunction with, article 156 of Italian Legislative Decree no. 163 of April 12, 2006.This company is not included in the project financing of the holding company Ichnusa and is still inactive.

IES SOLARE S.r.l.: This company, whose shares were acquired in the previous fiscal year, is involved in the design, installation, and maintenance of photovoltaic power systems that are chiefly located in the region of Tuscany. From the point of view of the Cooperative, this acquisition is explained by the need to break into the alternative energy market in the region of Tuscany, which is generally reluctant to turn to non-local operators.The company, which took full advantage of the development of

the photovoltaic market at both a national and local level, closed fiscal year 2010 with a profit of 920,250 euros.

INTERENERGIA S.p.A.: lThis company, which was established in July 2009, is the product of Intermedia Holding S.p.A. and CPL’s desire to develop together a series of opportunities regarding the alternative energy market, and more specifically in the photovoltaic sector. During fiscal year 2010 the company, which effectively performs subholding activities, established or acquired a series of special purpose vehicles that own photovoltaic arrays in operation or in the production stage.Currently this subholding company directly controls the following 4 companies: Interenergia Uno S.r.l., which manages the photovoltaic arrays of Turi 1 and Turi 3 (located in the municipality of Turi in the province of Bari); Interenergia Due S.r.l., which manages the photovoltaic array of Turi 2; Interenergia Tre S.r.l., which manages the photovoltaic array of Torano in the province of Teramo; and Interenergia Quattro S.r.l. The latter company is in turn another subholding company that controls the following four operational companies: Fano Solar 1 S.r.l., Fano Solar 2 S.r.l., Sant’Omero Solar S.r.l., and Notaresco Solar S.r.l. The arrays managed by this company are located in the municipalities of Fano (province of Pesaro e Urbino), Sant’Omero (province of Teramo), and two in Notaresco (province of Teramo).The photovoltaic arrays located in the municipalities of Turi and Torano were acquired by the Interenergia Group in 2010, but they were already in operation at the end of 2009; therefore, they benefited from the Electrical

46pagina

Rep

ort

on o

pera

tion

2Services Provider’s incentive rate for 2009. The arrays owned by the companies headed by Interenergia Quattro S.r.l., which were partly hooked up at the beginning of 2011 and partly in the hookup phase, will benefit from the 2010 incentive rate.As these are the first true financial statements for the holding company, and since the subsidiaries did not distribute dividends, the company’s profit and loss statement records under revenues mainly amounts in connection with the operational and financial coordination of the subsidiaries.In fact, the financial statements for the year show a modest profit of 9,210 euros. The consolidated financial results of the Interenergia Group show a loss in connection with starting up the electricity producing operations of 30,419 euros.

NOCI SOLAR 1 S.r.l.: This company, which was initially established by the Cooperative alone, was started for the construction and subsequent operation of the photovoltaic array named Noci 1, a system with a rated power of just under one megawatt, and is located in the municipality of Noci (province of Bari). On December 15, 2010 the Cooperative transferred 51% of the shares of this company to the group WAMGROUP S.p.A., which now holds control of it.The array was completed and hooked up at the end of December; production began in 2011.The financial results on the financial statements, which were closed on December 31, 2010 and which reflect only the construction activities and the relative overhead costs, show an operating loss of 2,968 euros.

NOCI SOLAR 2 S.r.l.: This company, which was initially established by the Cooperative alone, was started for the construction and subsequent operation of the photovoltaic array named Noci 2, a system with a rated power of just under one megawatt, and is located in the municipality of Noci (province of Bari). On December 15, 2010 the Cooperative transferred 51% of the shares of this company to the group WAMGROUP S.p.A., which now holds control of it.The array was completed and hooked up at the end of December; production began in 2011.The financial results on the financial statements, which were closed on December 31, 2010 and which reflect only the construction activities and the relative overhead costs, show an operating loss of 3,026 euros.

EUwATT SESTO S.r.l.: This is another special purpose vehicle established in 2010 for operating a one-megawatt photovoltaic power system to be constructed together with its partner Euwatt S.r.l. of Cremona. Also in this case this is a system under construction, and the financial statements show essentially break-even financial results.

GHIRLANDINA SOLARE S.r.l.: This company, which was established in July 2010, was started for the construction and subsequent operation of a photovoltaic power system located in the municipality of Modena in collaboration with the multi-utility Hera S.p.A. Also in this case 2010 was characterized by the construction of the system and by the search for a financial partner able to finance the

project.The financial results as of December 31, 2010 who a loss of 4,800 euros generated exclusively from overhead costs.

EUwATT mOGLIA S.r.l.: This is another special purpose vehicle established in 2010 for operating a one-megawatt photovoltaic power system located in the municipality of Moglia (province of Mantua) to be constructed together with its partner Euwatt S.r.l. of Cremona. Also in this case this is a system under construction, and the financial statements show essentially break-even financial results.

FImETRA S.r.l.: This company, which was established on December 14, 2010, is the product of the collaboration of the two shareholders CPL Concordia and Coopbilanciai of Campogalliano to develop the new meter and corrector prototypes prescribed by resolution no. 155/2008 of the Regulatory Authority for Electricity and Gas.In 2011 the company will be involved in purchasing the production lines, the equipment, and the software necessary for constructing and marketing the meters and correctors prescribed by the aforesaid regulation, which must almost completely replace the entire national system of gas measurement by 2016.The first financial statements will close on December 31, 2011.

CRIST GAS S.r.l.: This company, 50% of whose shares are held by the Cooperative, was established in 2002 as a gas sales company to the end customers of Cristoforetti Servizi Energia S.r.l., in accordance with Italian Legislative Decree

47pagina

no. 164/2000. This company is currently still inactive.The transfer at nominal value of the remaining 50% of the shares still possessed by CPL Concordia is currently being finalized with the shareholder Cristoforetti.sseduto da CPL CONCORDIA.

mODENA FOOTBALL CLUB S.p.A.:This company, in which the CPL Concordia Group held a 49.6% interest as of December 31, 2010 through the subsidiary Ghirlandina Sport S.r.l., closed its financial statements with a loss of 3,976,835 euros, which represents a decrease in comparison to the previous fiscal year of almost 4 million euros.Significant cost reduction operations were implemented by means of large transfers at the end of the previous sporting season. During the next purchasing/sales campaign it will be attempted to achieve a further rebalancing by means of the valuation of the young sector and the valuation of the young loans, also counting on the positive effects that will result from the introduction of the Melandri Law that has rebalanced the system for dividing up television rights, benefiting also the B Series.

C. Consolidated Financial Statements

As noted in the introduction, over time the Consolidated Group financial statements have grown in both size and importance. In the fiscal year under examination the consolidated financial statements of the CPL Group significantly reflect the economic and financial dynamics of the development strategies planned over the last few years by the Cooperative’s managing group.In the statements which follow, the financial and asset structure of the consolidated financial statements and their relative indices will be analyzed, with a comparison of the trends of the four previous fiscal years.

C.1. Economic analysis

The consolidated financial statements for the last five years, reclassified according to the value-added method, are shown below.

48pagina

Rep

ort

on o

pera

tion

2

In particular, the statement above shows a slight decrease in the gross operating margin with respect to previous fiscal years. This decrease is largely due to the reorganization of the gas distribution sector that occurred in the previous fiscal year with

the transfer of the distribution networks to a series of leasing companies which then stipulated contracts with a property management company which in turn leased out the networks. The effect of this operation, which had an evident financial nature, on the

profit and loss statement was the replacement of the depreciation and financial charges with rents that are recorded in the upper portion of the reclassified profit and loss statement with obvious effects on the indices in relation to the gross operating margin and

CPL CONCORDIA COOPERATIvE COmPANy: EARNINGS STATEmENTS RECLASSIFIED wITH THE vALUE

(expressed in Euro)

BALANCE DATA

31 Dec 2010 % 31 Dec 2009 % 31 Dec 2008 % 31 Dec 2007 % 31 Dec 2006 %

Proceeds from sales and performances 344,071,757 89.79% 273,434,698 85.90% 233,464,825 89.24% 204,373,523 88.51% 201,310,854 92.50%

Change invent. fin. prod. semifin. 2,087,663 0.54% 19,406 0.01% 576,641 0.22% 1,078,802 0.47% (2,569,631) -1.18%

Changes works in progress (3,461,488) -0.90% 4,218,113 1.33% 2,641,285 1.01% 1,360,421 0.59% (2,135,696) -0.98%

works in economy 31,224,727 8.15% 33,330,291 10.47% 22,465,251 8.59% 19,862,333 8.60% 17,294,210 7.95%

other proceeds 9,252,613 2.41% 7,320,507 2.30% 2,460,153 0.94% 4,229,435 1.83% 3,728,427 1.71%

vALUE OF PRODUCTION 383,175,272 100.00% 318,323,015 100.00% 261,608,155 100.00% 230,904,515 100.00% 217,628,163 100.00% Costs for purchases (156,041,443) -40.72% (113,228,853) -35.57% (89,412,039) -34.18% (82,776,468) -35.85% (69,336,134) -31.86%

Variation in inventory of prime materials 7,926,827 2.07% (876,791) -0.28% (673,653) -0.26% (939,634) -0.41% (5,695,328) -2.62%

Misc costs for services (124,648,765) -32.53% (100,320,174) -31.52% (86,395,614) -33.02% (72,815,190) -31.53% (72,614,398) -33.37%

Expenses for use of third party property (16,509,697) -4.31% (13,043,466) -4.10% (10,512,305) -4.02% (8,257,076) -3.58% (9,818,513) -4.51%

Various management expenses (4,328,331) -1.13% (4,610,026) -1.45% (3,214,075) -1.23% (2,492,213) -1.08% (2,700,807) -1.24%

vALUE ADDED 89,573,864 23.38% 86,243,706 27.09% 71,400,469 27.29% 63,623,934 27.55% 57,462,984 26.40% Cost of labour and relative expenses (55,354,294) -14.45% (50,757,875) -15.95% (45,503,326) -17.39% (38,792,077) -16.80% (36,456,477) -16.75%

mOL 34,219,569 8.93% 35,485,831 11.15% 25,897,143 9.90% 24,831,857 10.75% 21,006,507 9.65%

Amortisations material fixed assets (6,086,569) -1.59% (5,372,843) -1.69% (4,538,904) -1.74% (4,338,661) -1.88% (3,660,616) -1.68%

Amortisations material intangible assets (7,235,051) -1.89% (5,478,904) -1.72% (4,798,687) -1.83% (4,665,535) -2.02% (4,583,865) -2.11%

Funds and devaluations (4,472,280) -1.17% (3,231,300) -1.02% (1,604,081) -0.61% (1,206,669) -0.52% (1,907,161) -0.88%

Depreciation and devaluation (17,793,899) -4.64% (14,083,047) -4.42% (10,941,672) -4.18% (10,210,865) -4.42% (10,151,642) -4.66%

EBIT 16,425,670 4.29% 21,402,784 6.72% 14,955,472 5.72% 14,620,993 6.33% 10,854,865 4.99% Interests and the other financial burden (3,316,780) -0.87% (3,544,259) -1.11% (5,359,997) -2.05% (4,844,780) -2.10% (4,198,165) -1.93%

Other financial proceeds 508,963 0.13% 539,387 0.17% 555,815 0.21% 655,073 0.28% 503,898 0.23%

TOTAL FINANCIAL MANAGEMENT (2,807,817) -0.73% (3,004,872) -0.94% (4,804,182) -1.84% (4,189,707) -1.81% (3,694,267) -1.70%

CURRENT RESULT 13,617,853 3.55% 18,397,913 5.78% 10,151,290 3.88% 10,431,286 4.52% 7,160,598 3.29% Proceeds from shares 9,257,797 2.42% 59,546 0.02% 61,928 0.02% 51,637 0.02% 550,224 0.25%

Financial activity rectifications (4,751,321) -1.24% (1,448,209) -0.45% 583,754 0.22% (431,123) -0.19% (664,559) -0.31%

Refunds to partners (1,700,000) -0.44% (1,500,000) -0.47% (1,200,000) -0.46% (1,100,000) -0.48% (750,000) -0.34%

Extraordinary management 2,055,035 0.54% 709,155 0.22% 225,746 0.09% 2,118,327 0.92% 2,507,949 1.15%

PRE-TAX RESULT 18,479,364 4.82% 16,218,405 5.09% 9,822,717 3.75% 11,070,127 4.79% 8,804,212 4.05%

Taxes on the financial year income (3,669,471) -0.96% (5,163,187) -1.62% (4,280,480) -1.64% (4,404,553) -1.91% (5,585,887) -2.57%

NET RESULT 14,809,893 3.87% 11,055,217 3.47% 5,542,237 2.12% 6,665,574 2.89% 3,218,325 1.48% THIRD PARTy PROFIT (LOSS) 371,987 131,114 (79,118) 136,800 19,810 PROFIT (LOSS) 15,181,880 11,186,331 5,463,119 6,802,374 3,238,135

49pagina

made in a macroeconomic environment such as the current one, underscore the large degree of attention focused on current operations, and represent satisfactory results.The trends of the areas of activity are analyzed below.

C.1.1. Networks

This activity was performed exclusively by the Parent Company, also for the companies of the Group; therefore, the values shown have already been discussed.

CONSOLIDATED BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %NETwORK CONSTRUCTION

AND mAINTENANCE

CONSTR. GAS WATER ELECTRIC NETWORKS 13,212,830 0.25 13,294,569 0.13

NETWORK MAINTENANCE 38,311,954 0.53 39,001,238 0.62TOTAL NETwORK CONSTRUCTION AND mAINTENANCE 51,524,783 0.77 52,295,807 0.74

C.1.2. Energy

The contracts managed directly by the subsidiaries Serio Energia, Energia della Concordia, and Cristoforetti have been added to the main work orders commented on in the parent company’s operations. They include the management of the Francavilla Fontana waste disposal site in Apulia, the Turi 2 photovoltaic power system located in the municipality of Turi (province of Bari), the Bolognini Hospital in Seriate (province of Bergamo), and Consip Trentino.

CONSOLIDATED BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %

ENERGy

CONSTR. ENERGY HEATING PLANTS 31,720,273 0.56 23,658,201 0.57HEAT MANAGEMENT AND GLOBAL SERVICE 131,850,944 4.55 124,862,179 8.61

PUBLIC LIGHTING 5,362,520 0.16 4,954,945 0.20COGENERATION AND RENEWABLE ENERGY SOURCES 77,484,406 3.84 28,381,081 0.33

TOTAL ENERGy 246,418,143 9.10 181,856,406 9.71

C.1.3. Gas

On a consolidated level, this area of activity is divided into three sub-departments:Technological systems and odorizingDistributionGas trading and sales

the operating results. However, it is significant that the 2010 projections forecast a gross operating margin of 7.93% and operating results of 3.8%. Both of these indices improved in the final results.However, these considerations,

CPL CONCORDIA COOPERATIvE COmPANy: EARNINGS STATEmENTS RECLASSIFIED wITH THE vALUE

(expressed in Euro)

BALANCE DATA

31 Dec 2010 % 31 Dec 2009 % 31 Dec 2008 % 31 Dec 2007 % 31 Dec 2006 %

Proceeds from sales and performances 344,071,757 89.79% 273,434,698 85.90% 233,464,825 89.24% 204,373,523 88.51% 201,310,854 92.50%

Change invent. fin. prod. semifin. 2,087,663 0.54% 19,406 0.01% 576,641 0.22% 1,078,802 0.47% (2,569,631) -1.18%

Changes works in progress (3,461,488) -0.90% 4,218,113 1.33% 2,641,285 1.01% 1,360,421 0.59% (2,135,696) -0.98%

works in economy 31,224,727 8.15% 33,330,291 10.47% 22,465,251 8.59% 19,862,333 8.60% 17,294,210 7.95%

other proceeds 9,252,613 2.41% 7,320,507 2.30% 2,460,153 0.94% 4,229,435 1.83% 3,728,427 1.71%

vALUE OF PRODUCTION 383,175,272 100.00% 318,323,015 100.00% 261,608,155 100.00% 230,904,515 100.00% 217,628,163 100.00% Costs for purchases (156,041,443) -40.72% (113,228,853) -35.57% (89,412,039) -34.18% (82,776,468) -35.85% (69,336,134) -31.86%

Variation in inventory of prime materials 7,926,827 2.07% (876,791) -0.28% (673,653) -0.26% (939,634) -0.41% (5,695,328) -2.62%

Misc costs for services (124,648,765) -32.53% (100,320,174) -31.52% (86,395,614) -33.02% (72,815,190) -31.53% (72,614,398) -33.37%

Expenses for use of third party property (16,509,697) -4.31% (13,043,466) -4.10% (10,512,305) -4.02% (8,257,076) -3.58% (9,818,513) -4.51%

Various management expenses (4,328,331) -1.13% (4,610,026) -1.45% (3,214,075) -1.23% (2,492,213) -1.08% (2,700,807) -1.24%

vALUE ADDED 89,573,864 23.38% 86,243,706 27.09% 71,400,469 27.29% 63,623,934 27.55% 57,462,984 26.40% Cost of labour and relative expenses (55,354,294) -14.45% (50,757,875) -15.95% (45,503,326) -17.39% (38,792,077) -16.80% (36,456,477) -16.75%

mOL 34,219,569 8.93% 35,485,831 11.15% 25,897,143 9.90% 24,831,857 10.75% 21,006,507 9.65%

Amortisations material fixed assets (6,086,569) -1.59% (5,372,843) -1.69% (4,538,904) -1.74% (4,338,661) -1.88% (3,660,616) -1.68%

Amortisations material intangible assets (7,235,051) -1.89% (5,478,904) -1.72% (4,798,687) -1.83% (4,665,535) -2.02% (4,583,865) -2.11%

Funds and devaluations (4,472,280) -1.17% (3,231,300) -1.02% (1,604,081) -0.61% (1,206,669) -0.52% (1,907,161) -0.88%

Depreciation and devaluation (17,793,899) -4.64% (14,083,047) -4.42% (10,941,672) -4.18% (10,210,865) -4.42% (10,151,642) -4.66%

EBIT 16,425,670 4.29% 21,402,784 6.72% 14,955,472 5.72% 14,620,993 6.33% 10,854,865 4.99% Interests and the other financial burden (3,316,780) -0.87% (3,544,259) -1.11% (5,359,997) -2.05% (4,844,780) -2.10% (4,198,165) -1.93%

Other financial proceeds 508,963 0.13% 539,387 0.17% 555,815 0.21% 655,073 0.28% 503,898 0.23%

TOTAL FINANCIAL MANAGEMENT (2,807,817) -0.73% (3,004,872) -0.94% (4,804,182) -1.84% (4,189,707) -1.81% (3,694,267) -1.70%

CURRENT RESULT 13,617,853 3.55% 18,397,913 5.78% 10,151,290 3.88% 10,431,286 4.52% 7,160,598 3.29% Proceeds from shares 9,257,797 2.42% 59,546 0.02% 61,928 0.02% 51,637 0.02% 550,224 0.25%

Financial activity rectifications (4,751,321) -1.24% (1,448,209) -0.45% 583,754 0.22% (431,123) -0.19% (664,559) -0.31%

Refunds to partners (1,700,000) -0.44% (1,500,000) -0.47% (1,200,000) -0.46% (1,100,000) -0.48% (750,000) -0.34%

Extraordinary management 2,055,035 0.54% 709,155 0.22% 225,746 0.09% 2,118,327 0.92% 2,507,949 1.15%

PRE-TAX RESULT 18,479,364 4.82% 16,218,405 5.09% 9,822,717 3.75% 11,070,127 4.79% 8,804,212 4.05%

Taxes on the financial year income (3,669,471) -0.96% (5,163,187) -1.62% (4,280,480) -1.64% (4,404,553) -1.91% (5,585,887) -2.57%

NET RESULT 14,809,893 3.87% 11,055,217 3.47% 5,542,237 2.12% 6,665,574 2.89% 3,218,325 1.48% THIRD PARTy PROFIT (LOSS) 371,987 131,114 (79,118) 136,800 19,810 PROFIT (LOSS) 15,181,880 11,186,331 5,463,119 6,802,374 3,238,135

CPL CONCORDIA COOPERATIvE COmPANy: EARNINGS STATEmENTS RECLASSIFIED wITH THE vALUE

(expressed in Euro)

BALANCE DATA

31 Dec 2010 % 31 Dec 2009 % 31 Dec 2008 % 31 Dec 2007 % 31 Dec 2006 %

Proceeds from sales and performances 344,071,757 89.79% 273,434,698 85.90% 233,464,825 89.24% 204,373,523 88.51% 201,310,854 92.50%

Change invent. fin. prod. semifin. 2,087,663 0.54% 19,406 0.01% 576,641 0.22% 1,078,802 0.47% (2,569,631) -1.18%

Changes works in progress (3,461,488) -0.90% 4,218,113 1.33% 2,641,285 1.01% 1,360,421 0.59% (2,135,696) -0.98%

works in economy 31,224,727 8.15% 33,330,291 10.47% 22,465,251 8.59% 19,862,333 8.60% 17,294,210 7.95%

other proceeds 9,252,613 2.41% 7,320,507 2.30% 2,460,153 0.94% 4,229,435 1.83% 3,728,427 1.71%

vALUE OF PRODUCTION 383,175,272 100.00% 318,323,015 100.00% 261,608,155 100.00% 230,904,515 100.00% 217,628,163 100.00% Costs for purchases (156,041,443) -40.72% (113,228,853) -35.57% (89,412,039) -34.18% (82,776,468) -35.85% (69,336,134) -31.86%

Variation in inventory of prime materials 7,926,827 2.07% (876,791) -0.28% (673,653) -0.26% (939,634) -0.41% (5,695,328) -2.62%

Misc costs for services (124,648,765) -32.53% (100,320,174) -31.52% (86,395,614) -33.02% (72,815,190) -31.53% (72,614,398) -33.37%

Expenses for use of third party property (16,509,697) -4.31% (13,043,466) -4.10% (10,512,305) -4.02% (8,257,076) -3.58% (9,818,513) -4.51%

Various management expenses (4,328,331) -1.13% (4,610,026) -1.45% (3,214,075) -1.23% (2,492,213) -1.08% (2,700,807) -1.24%

vALUE ADDED 89,573,864 23.38% 86,243,706 27.09% 71,400,469 27.29% 63,623,934 27.55% 57,462,984 26.40% Cost of labour and relative expenses (55,354,294) -14.45% (50,757,875) -15.95% (45,503,326) -17.39% (38,792,077) -16.80% (36,456,477) -16.75%

mOL 34,219,569 8.93% 35,485,831 11.15% 25,897,143 9.90% 24,831,857 10.75% 21,006,507 9.65%

Amortisations material fixed assets (6,086,569) -1.59% (5,372,843) -1.69% (4,538,904) -1.74% (4,338,661) -1.88% (3,660,616) -1.68%

Amortisations material intangible assets (7,235,051) -1.89% (5,478,904) -1.72% (4,798,687) -1.83% (4,665,535) -2.02% (4,583,865) -2.11%

Funds and devaluations (4,472,280) -1.17% (3,231,300) -1.02% (1,604,081) -0.61% (1,206,669) -0.52% (1,907,161) -0.88%

Depreciation and devaluation (17,793,899) -4.64% (14,083,047) -4.42% (10,941,672) -4.18% (10,210,865) -4.42% (10,151,642) -4.66%

EBIT 16,425,670 4.29% 21,402,784 6.72% 14,955,472 5.72% 14,620,993 6.33% 10,854,865 4.99% Interests and the other financial burden (3,316,780) -0.87% (3,544,259) -1.11% (5,359,997) -2.05% (4,844,780) -2.10% (4,198,165) -1.93%

Other financial proceeds 508,963 0.13% 539,387 0.17% 555,815 0.21% 655,073 0.28% 503,898 0.23%

TOTAL FINANCIAL MANAGEMENT (2,807,817) -0.73% (3,004,872) -0.94% (4,804,182) -1.84% (4,189,707) -1.81% (3,694,267) -1.70%

CURRENT RESULT 13,617,853 3.55% 18,397,913 5.78% 10,151,290 3.88% 10,431,286 4.52% 7,160,598 3.29% Proceeds from shares 9,257,797 2.42% 59,546 0.02% 61,928 0.02% 51,637 0.02% 550,224 0.25%

Financial activity rectifications (4,751,321) -1.24% (1,448,209) -0.45% 583,754 0.22% (431,123) -0.19% (664,559) -0.31%

Refunds to partners (1,700,000) -0.44% (1,500,000) -0.47% (1,200,000) -0.46% (1,100,000) -0.48% (750,000) -0.34%

Extraordinary management 2,055,035 0.54% 709,155 0.22% 225,746 0.09% 2,118,327 0.92% 2,507,949 1.15%

PRE-TAX RESULT 18,479,364 4.82% 16,218,405 5.09% 9,822,717 3.75% 11,070,127 4.79% 8,804,212 4.05%

Taxes on the financial year income (3,669,471) -0.96% (5,163,187) -1.62% (4,280,480) -1.64% (4,404,553) -1.91% (5,585,887) -2.57%

NET RESULT 14,809,893 3.87% 11,055,217 3.47% 5,542,237 2.12% 6,665,574 2.89% 3,218,325 1.48% THIRD PARTy PROFIT (LOSS) 371,987 131,114 (79,118) 136,800 19,810 PROFIT (LOSS) 15,181,880 11,186,331 5,463,119 6,802,374 3,238,135

50pagina

Rep

ort

on o

pera

tion

2C.1.3.1. Technological systems and odorizing

This activity is performed exclusively by parent company; therefore, the values expressed in the consolidated financial statements are those of the parent company, with the sole exception of intra-group work orders, here excluded.

CONSOLIDATED BALANCE STATEmENT yEAR 2010 yEAR 2009

SECTOR OF ACTIvITy AmOUNT % AmOUNT %

GAS AND ODORIZATION PLANTS

Plants Maintenance and Odorization 18,621,360 1.71 13,359,747 1.57

Construction of Gas Plants 7,996,411 0.51 15,515,534 1.24

TOTAL AmOUNT 26,617,771 2.22 28,875,281 2.80

established by Italian Legislative Decree no. 164/2000, can be performed directly by sales companies, but not by distribution companies. Within the group this activity is performed by Coopgas S.r.l.The last phase of the supply chain is comprised of the sale of natural gas to the end customers; this activity is performed by companies that operate on a freely competitive basis, in accordance with a ministerial authorization.Italian Decree no. 164/2000 guarantees the use of the networks by all sales companies (at the same terms and conditions), including those that are owned by distributors that do not belong to the same group.The result of this decree is that as of January 1, 2003 all of the final customers, including domestic customers, can choose their natural gas provider freely.The sales company invoices consumption to the final customer, and then pays the distributor the portion regarding the gas distribution service through the local network.With regard only to the consolidated companies, 56,144 consumers received service in 2010, which represents an increase of 2,414 consumers, broken down as shown in the following table:

C.1.3.2. Distribution

Distribution is the activity of transporting natural gas through local gas pipeline networks at medium and low pressures. The high cost of reproducing the networks on a local level give this portion of the supply chain a natural monopoly. The distribution companies continue to operate under concession for a period of twelve years.This activity is remunerated through the distribution rates, as established by the Regulatory Authority for Electricity and Gas in resolution ARG/GAS 159/08 (and subsequent amendments), and is performed in compliance with the Network Code, which is the body of rules established by the Authority for the correct use of infrastructure, approved with resolution 108/06. This document contains the standardized procedures for access to the network and for recording all the information regarding the delivery points that are served.In reference to the remuneration system for the distribution activity, it is necessary to consult resolution 197/09 of the Regulatory

Authority for Electricity and Gas, which has been amended regarding the equalization system by subsequent resolution 114 of July 31, 2010 of the Regulatory Authority for Electricity and Gas.The quality and safety of the distribution service, on the other hand, are regulated by the Consolidated Act approved with resolution ARG/GAS 120/08.The distribution companies’ revenues are comprised of the distribution invoiced to the sales companies. Besides Filiala Cluj Romania, which operates in Romania with a regulatory framework differing from that of Italy, almost all the Group’s distribution companies have the sales company Coopgas as their main customer.

C.1.3.3. Trading and sales

The trading activity managed within the group makes it possible to approach the market with the expertise necessary to acquire the raw material at the lowest possible price. Trading activity, in accordance with the principles

51pagina

USERS TABLE TO 31/12/2010

BASIN USERS 2010 USERS 2009

CALABRIA 20 5,412 5,451

CALABRIA 30 2,121 1,809

PALMA E CAMASTRA 1,545 1,500

CAMPANIA 25 8,191 8,355

CAMPANIA 30 8,540 8,333

MARIGLIANO 6,273 6,225

CITTANOVA 36 2

SAN GIUSEPPE VESUVIANO 2,275 2,194

SICILIA 12 1,267 1,186

SICILIA 17 4,539 4,329

POLISTENA 413 6

ISCHIA 315 20

SAPRI E CAMEROTA 1,611 1,612

BACINI CLUJ 13,606 12,708

TOTAL USERS 56,144 53,730

If also the consumers of the associated company Fontenergia S.p.A. are taken into account, the Group provided service to more than 63 thousand consumers in 2010.A volume of 84.3 million m³ of both methane gas and LPG was sold by the Group in fiscal year 2010, as can be seen in the table below:

SOLD GAS CUBIC mETRES

BASIN m3/ 2010 m3/ 2009

CALABRIA 20 2,730,679 2,566,196

CALABRIA 30 1,034,314 914,876

PALMA E CAMASTRA 887,022 861,037

CAMPANIA 25 6,078,124 6,203,947

CAMPANIA 30 6,389,521 5,322,754

MARIGLIANO 3,174,870 2,921,618

CITTANOVA 56,292 15,213

SAN GIUSEPPE VESUVIANO 1,711,967 1,579,216

SICILY 12 730,730 636,547

SICILY 17 3,068,237 2,941,573

PROVINCE OF ALESSANDRIA 0 3,222,058

CAPRINO VERONESE 22,259 5,692

POLISTENA 114,762 12,600

ISCHIA 80,296 821

UTENZE PRIVATE VARIE 103,879 0

SAPRI AND CAMEROTA 331,201 359,043

BASIN CLUJ 16,792,147 16,974,065

CUBIC mETERS SOLD IN CONCESSIONS 43,306,300 44,537,256

ENERGY SUPPLY SERVICES 40,980,097 13,168,545

COmPREHENSIvE TOTAL 84,286,397 57,705,801

The item “supply of energy services” refers to the procurement of methane gas by Group to fuel the heat management systems under contract. The Group supplied the domestic market with more than 72 million m³

of natural gas for a total cost of 19 million euros. In comparison to the previous fiscal year, the average cost of raw materials increased due to the considerable increase in the price of petroleum and its derivatives.In addition to the main supply of approximately 32.2 million m³ distributed by Spigas S.r.l., the company has stipulated other secondary supply contracts: with BP LNG S.p.A. for approximately 19.3 million m³, with ENI Gas & Power for approximately 6.8 million m³, with ENOI S.p.A. for approximately 9.7 million m³, with Hera Trading S.p.A. for approximately 1.6 million m³, with Premium S.p.A. for approximately 1.6 million m³, and with Sonatrach Italia S.p.A. for approximately 0.8 million m³.

C.1.4. Information & Communications Technology

This division is contained completely within the parent company; therefore the values, the work orders, and the content are the same as were commented on in the section dedicated to the financial statements.

C.2. Analysis of assets and liabilities

The statements of assets and liabilities for the last five years, according to the items liquidity method, are provided below.

52pagina

Rep

ort

on o

pera

tion

2CPL CONCORDIA COOPERATIvE COmPANy: BALANCE SHEETS RECLASSIFIED wITH THE ENTRIES LIqUIDITy mETHOD

(expressed in Euro)

BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

ASSETS

Short-term assets

Liquid assets 39,934,258 44,382,965 25,450,671 11,766,914 13,617,415

Trade investments other than fixed assets 3,342,341 20,084 84 115,881 84

Receivables from customers and others 235,533,153 176,503,149 148,416,906 130,329,690 130,870,797

Inventories 45,354,244 36,997,411 32,925,820 28,788,701 26,140,017

Due from shareholders for outstanding payments 1,106,117 1,865,121 1,307,851 1,261,737 1,250,904

Accrued income and prepaid expenses 5,336,495 5,781,392 6,328,906 6,475,179 6,635,666

Total short-term assets 330,606,607 265,550,122 214,430,237 178,738,102 178,514,883 Fixed assets

Intangible assets 33,886,680 23,383,972 16,518,794 16,340,101 13,351,631

Tangible assets 99,280,777 100,354,860 110,904,449 93,061,164 80,844,348

Financial assets 36,644,291 23,987,705 18,805,022 17,881,743 17,174,232

Total fixed assets 169,811,748 147,726,538 146,228,266 127,283,008 111,370,210 TOTAL ASSETS 500,418,355 413,276,660 360,658,502 306,021,110 289,885,093 LIABILITIES

Short-term liabilities

Payables to banks 38,670,512 24,222,993 23,111,934 17,492,340 15,092,838

Payables to shareholders and other lenders 11,219,383 9,972,513 8,626,554 6,154,891 4,950,419

Advances 22,879,506 5,978,711 10,542,116 14,881,644 12,878,459

Payables to suppliers 154,141,960 145,301,471 122,129,652 92,894,949 74,125,417

Payables represented by securities 0 0 0 0 0

Payables to subsidiaries 4,517,880 2,215,200 0 0 0

Payables to associated companies 2,479,227 419,162 134,574 332,760 303,761

Tax payables 19,449,532 11,417,379 7,273,227 4,579,699 7,935,892

Payables to welfare and social security institutes 4,606,420 4,450,611 4,166,163 3,653,343 3,033,287

Other short-term payables 10,172,417 12,665,648 11,375,041 5,809,331 7,500,789

Accrued liabilities and Deferred earnings 768,200 955,321 477,122 479,934 942,023

Total short-term liabilities 268,905,034 217,599,010 187,836,383 146,278,891 126,762,884 medium-long term liabilities

Bonds 0 0 0 0 0

Payables to banks 83,941,505 68,520,018 60,046,242 49,990,419 58,489,020

Payables to shareholders and other lenders 12,538,863 0 0 0 0

Advances 0 0 0 0 0

Payables to suppliers 3,491,619 2,607,790 2,053,233 1,801,315 1,701,134

Payables represented by securities 0 0 0 0 0

Tax payables 0 0 0 0 0

Other payables beyond the fiscal year 559,973 593,432 208,297 516,139 270,843

Employees’ severance indemnity fund 5,247,411 5,796,182 6,132,307 6,450,792 6,955,065

Fund for pensions and similar obligations 21,526 21,526 21,526 21,526 21,526

Tax fund 307,161 234,609 233,177 180,518 150,012

Other funds 4,834,046 3,932,389 2,307,990 2,455,799 2,942,883

53pagina

BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

Total medium-long term liabilities 110,942,104 81,705,947 71,002,772 61,416,508 70,530,483 Shareholders’ Equity

Share Capital 18,312,536 15,938,753 13,558,953 13,706,084 12,952,749

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

Legal reserve 89,473,011 82,158,320 77,140,319 72,387,954 69,866,959

Statutory reserves 78,184 78,184 78,184 78,184 78,184

Reserve for own shares 531,892 531,892 0 0 0

Capital contribution reserve lex 784/80 1,269,396 1,269,396 1,269,396 1,269,396 1,269,396

Consolidation reserves (4,368,775) 1,726,778 3,096,761 2,256,942 2,565,595

Merger surplus 235,597 235,597 235,597 235,597 235,597

Exchange rate fluctuation fund (1,470,245) (1,416,124) (874,376) (79,039) 483,057

Profit / loss carried forward 0 0 0 0 0

Profit /loss for year 15,181,880 11,186,331 5,463,119 6,802,374 3,238,135

Total Shareholders’ Equity of the Group 119,900,157 112,365,807 100,624,633 97,314,172 91,346,351 minority Interests 671,060 1,605,897 1,194,714 1,011,540 1,245,375 Total LIABILITIES 500,418,355 413,276,660 360,658,502 306,021,110 289,885,093

The factors that characterize the structure of the Group’s statement of assets and liabilities are the same ones that characterize the financial statements for the fiscal year.The main difference can be identified as the amount of the consolidated tangible assets which, in comparison to the financial statements for the fiscal year, are of a significant size as established by the value of the gas distribution networks. The offsetting entry on the consolidated statement of assets and liabilities for that item consists of the larger debt of the Group generated by the investments made to construct the networks themselves.Considerations regarding the other items of the consolidated statement of assets and liabilities in comparison to the financial statements for the fiscal year remain unchanged.

C.3. Indices of the consolidated financial statements

The indices of the consolidated financial statements for the last five years are listed below:

CPL CONCORDIA GROUP: mAIN FINANCIAL STATEmENT RATIOS

ECONOmIC ANALySIS BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

R.O.E. (Return on Equity) 14.50% 11.06% 5.74% 7.52% 3.68%

R.O.I. (Return on Investment) 3.28% 5.18% 4.15% 4.78% 3.74%

MOI Ratio/Value of production 8.93% 11.15% 9.90% 10.75% 9.65%

Burdens incidence and extra management proceeds 7.57% 47.73% 63.47% 53.48% 70.17%

Net Financial Burden Incidence on P.V. 0.73% 0.94% 1.84% 1.81% 1.70%

Net Financial Burden Incidence on R.O. 17.09% 14.04% 32.12% 28.66% 34.03%

54pagina

Rep

ort

on o

pera

tion

2FINANCIAL AND NET wORTH ANALySIS BALANCE DATA

31 Dec 2010 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006

Liquidity ratio 1.23 1.22 1.14 1.22 1.41

leverage (leverage effect) 4.78 4.08 3.79 3.38 3.29

Interest-paying Debt Ratio 1.02 0.58 0.70 0.68 0.74

Elasticity ratio 1.95 1.80 1.47 1.40 1.60

EBITDA/DEBT 31.85 60.83 39.04 40.14 32.36

DEBTI/EBITDA 3.14 1.64 2.56 2.49 3.09

DEBT 107,436,005 58,332,560 66,334,059 61,870,736 64,914,861

EBITDA 34,219,569 35,485,831 25,897,143 24,831,857 21,006,507

CPL CONCORDIA GROUP: mAIN FINANCIAL STATEmENT RATIOS

The decrease in the economic indices has already been discussed in the commentary on the profit and loss statement reclassified for value added.With regard to the assets indices, substantial continuity with previous fiscal years is noted, with the exception of the Debt/Ebitda ratio, which has returned to values similar to those of 2006. The increase in this ratio is essentially due to the increase in debt resulting from the investments made in 2010 and the nature of said investments. The large investments made by the Group in the photovoltaics field have resulted in advance expenditures in relation to collections that will occur in 2011, with a consequent increase in the receivables of current assets and bank debt.All further considerations on financial dynamics are analyzed in the next section.

D. Financial Situation

With regard to the financial management of the Cooperative and the Group, first of all we will provide a brief analysis of the macroeconomic environment, and then we will analyze the trend of the main elements characterizing operations in fiscal year 2010..

D.1.The economic environment

Three and a half years after the beginning of the crisis and after the decrease in the global economy of 0.6% recorded in 2009, in 2010 there has been a return to global growth of approximately 5.0%, a value that is considerably greater than expectations at the beginning of the year and that is in line with pre-crisis values.Growth was particularly strong in emerging markets, facilitated by a better debt situation, while growth remained moderate in industrialized countries. With regard to the latter, which also benefited from the actions of the central banks and the

better-than-expected progress of international business, after returning to the levels of 2008, the economic crisis continued to make its effects felt, as a result of the weight on the governments’ budgets due to the operations to save the financial system. While industrialized countries still employ expansive monetary policies based on unconventional instruments, a growing number of rapidly growing countries are dealing with restrictive monetary policies and with measures whose purpose is to control the movement of capital, to cool down domestic demand and to prevent the formation of bubbles fueled by foreign investment.On a geographical area level, the United States recorded an increase in gross national product of 2.8% in 2010, after the drop in the previous year of 2.6%. To promote growth, after a recession phase that lasted a record amount of time for the period since after World War II, extremely loose monetary and budgetary policies have been established; the central bank and the US government have implemented large operations to support the economy and markets. The difficulties in connection with a recovery of the job market are evident, with an unemployment rate that has risen to an average of 9.6% in 2010 in comparison to

55pagina

9.3% in 2009. Lastly, the inflationary pressure is moderate, but increasing, with an average rate of inflation in 2010 of 1.6%, after the drop of 0.3% in 2009.Japan, whose economy is chiefly sustained by exports, recorded an increase in gross national product of 4.3% in 2010 on the coattails of the global recovery, after the large decrease of 6.3% it experienced in 2009. However, deflation continues to grip the country, with price levels dropping by 0.6% on average in 2010, after the drop of 1.4% of 2009. In 2010 the average unemployment rate was 5.1%, which is about the same as the 2009 levels (5.2% on average).China has experienced strong economic growth which has allowed it to close 2010 with a double-digit gross national product of 10.3% after achieving 9.2% in 2009. The acceleration of growth in India is evident, with an increase in the gross national product for 2010 of 9.7%, in comparison to the 5.7% of 2009. Growth throughout Asia has been sustained by a considerable increase in domestic demand and exports.Also in Europe 2010 was characterized by a return of growth, with gross national product in the Eurozone that increased by 1.8% after the drop of 4.1% recorded in 2009. Within the European Union, the dynamism of Germany is counterbalanced by the weakness of the peripheral countries, for which the uncertainty regarding the sustainability of the public debt and the foreign debt contributes to keeping onerous the financing terms for the economy which, combined with restrictive budget policies, tend to restrict the recovery phase.In 2010 the sovereign debt problem has intensified: an important event occurred at the beginning of May when the three-year plan for Greece was approved and at the same time were launched the European Financial Stability Facility (EFSF) of 440 billion euros and the plan to purchase bonds by the European Central Bank (ECB). Then the operation in favor of Ireland was carried out at the end of November.In December 2010 the inflation rate experienced a cyclical increase that was unexpectedly high, which brought the average in 2010 to 1.6%, after the 0.3% of 2009. The increase in prices in December chiefly occurred on the most volatile components, that is, energy and food, while base inflation remained moderate. The employment recovery has still not occurred, with the adjustment in the labor market that is expected to slow in all the large countries, with the exception of Germany: the average unemployment rate rose to 10% in 2010, from 9.4% in 2009.

(Percentage values)

Gross national product Inflation (annual average) Unemployment (annual average)

2009 2010e 2011p 2009 2010e 2011p 2009 2010e 2011p

United States -2.6 2.8 3.0 -0.3 1.6 2.0 9.3 9.6 9.4

Japan -6.3 4.3 1.6 -1.4 -0.6 0.2 5.2 5.1 5.2

European Monetary Union -4.1 1.8 1.5 0.3 1.6 2.2 9.4 10.0 10.0

Italy -5.0 1.0 1.0 0.8 1.6 2.2 7.8 8.5 9.2

Germany -4.7 3.6 2.2 0.2 1.2 2.1 7.5 6.9 6.6

France -2.5 1.6 1.6 0.1 1.7 2.1 9.4 9.8 9.7

Spain -3.7 -0.2 0.6 -0.3 1.8 3.0 18.0 20.1 20.7

Great Britain -4.9 1.7 2.0 2.0 3.2 3.6 7.6 7.8 7.6

China 9.2 10.3 9.6 -2.1 4.8 4.7 n.d. n.d. n.d.

India 5.7 9.7 8.4 5.7 11.5 10.9 n.d. n.d. n.d.

Sources: IMF for gross national product data and Prometeia for estimates and forecasts on inflation and unemployment.

e=estimate | p=projected

Italy, which experienced a large drop in its gross national product in 2009 of 5.0%, in 2010 had growth of 1.0%, which was considerably less than the European average. The gap in growth in comparison to the major European countries, especially Germany, seems destined to widen, making obligatory the management of public debt and paying back debt, even though there are no crises involving a loss of faith in our country. The labor market situation remains difficult, with an average unemployment rate of 8.5% in 2010, rising from 7.8% in 2009. In line with what has occurred in the other European countries, inflation has accelerated in the last few months of 2010 in conjunction with the increase in petroleum products: the average for the year was 1.6%, which is double the 0.8% of the previous year.

56pagina

Rep

ort

on o

pera

tion

2D.2. The currency and financial markets situation

D.2.1. Public Finance

The information available on the Italian public accounts in 2009 shows a slight improvement in the balances in comparison to the previous year, after the significant deterioration that was recorded in 2008-2009.As can be noted in the document “Public finance decision for years 2011-2013,” approved by the Cabinet Meeting of September 29, 2010, the net debt is expected to decrease to 5.0% of the gross national product in 2010, after the 5.3% that was recorded in 2008. The stock of the public debt should be approximately 118.5% of the gross national product in 2010, an increase of approximately 2.5% in comparison to 2009 (115.9%). The value which is increasing in 2010, even though there is an improvement in the estimates of the nominal gross national product, is also affected by the larger emissions necessary to finance the Italian contribution to the Greek crisis, which effectively neutralize the improvement in the needs.For the current year, the public finance results should result in a further decrease in indebtedness, which in 2011 should go to 3.9% of the gross national product, to which the freeze of the individual economic treatment of public employees to 2010 levels would contribute. In spite of the fact that the recession seems to be ending, our country’s budget

policy is still operating in a situation that is unfavorable for an improvement in the public accounts. The slow economic recovery, which will neutralize the majority of the effects of consolidation, combined with the consequences of the tensions regarding European sovereign debts, should bring the stock of the public debt above 119% of gross national product.

D.2.2. The financial market and rates

In 2010 several factors have greatly affected the trend of the financial markets; one of these was the state of health of the situation with related debate on a possible new phase of contraction of the economy. Its influx was felt in the summer, when lower-than-expected macroeconomic data arriving from overseas rocked the stock markets.The other important phenomenon was the explosion of the sovereign risk of the peripheral countries of the Eurozone, which took its cue from the Greek crisis and reached a culmination in May, continuing between October and November with Ireland and the other countries designated as PIGS (an acronym for Portugal, Ireland, Greece, and Spain).

Monetary policy in the US remained particularly loose. The official rates remained unchanged at exceptionally contained levels, and the implementation of an exit strategy, that is, a normalization of monetary policy, was postponed. At the end of August a new phase of quantitative easing was announced whose stated goal is to contain the growth of medium-term and long-term

rates, which could put a brake on the economic recovery. Although it maintained a stricter policy, also the European Central Bank shelved the normalization of monetary policy.Although it stands firm on the official rates, the Bank in fact continued to provide abundant liquidity to the markets with a series of extraordinary operations.Rates are being held near zero also by the Bank of Japan, which has also adopted various initiatives for the purpose of containing the appreciation of the yen. Also the Bank of England pursued the policy of quantitative easing and a blocked reference rate. The risks of the sovereign bond market and the effects they could have on the banking system, together with the persistence of unemployment at high levels, leads us to assume that monetary policies will remain loose for quite awhile.

The central banks of emerging countries and the central banks of industrialized countries in which the recovery is consolidated are taking a completely different path. The increase in the official rates, which are often accompanied by an increase in the compulsory reserve ratios, has in fact already begun, for example, in China, Canada, and Norway.The abundant liquidity has had effects on the dynamism of the stock markets. The global indices, which experienced difficulty until mid-year, indicated a strong rise beginning in the middle of August when the president of the Federal Reserve announced the launch of a new phase of quantitative easing. Since then the US market has maintained a solidly rising trend, sustained also by the economic recovery, closing the year with an increase of almost 13 percentage points in the local currency.

57pagina

Good results were also recorded in the European market, which overall increased by almost 9 percentage points. The weakness of the financial sector, which in the latter part of the year returned to the minimum values reached in spring during the Greek crisis, was compensated by the positive movement of the other sectors that responded to the improvement in industrial activity and the growth of the raw materials market. However, the differences between the individual markets of Europe have been considerable: The Milan Stock Exchange, which was only slightly affected by the PIGS crisis but penalized by the considerable weight of the bank stocks, dropped by more than 11%. Japan was unchanged; around the middle of the year it was negatively affected by yet another political crisis and the strength of the yen. The emerging countries experienced a strong gain; however, the weakness of the Chinese stock market, which lost more than 14 percentage points, affected the global index, which rose by 12% in local currency.

The government bond market was influenced by the subject of sustainability of the public debt in the peripheral countries of the Eurozone: the deterioration of the public finances is one of the many side effects produced by the subprime crisis that began in 2007. Despite the loose monetary policy, the last few months of 2010 experienced an increase in the nominal yields of the ten-year bonds of the US and Germany. This movement is attributable to the improvement in the situation and to the increase in the expectations of inflation in the medium term, but also to the perception of a higher degree of credit risk of sovereign issuers.

Germany, specifically, could discount the effect of the expected costs for supporting the countries of the Eurozone that are in difficulty and its own banking system, which has a high degree of exposure to them. The differences in yield between the PIGS and Germany hit a higher level in November than those of the spring at the time of the Greek crisis. The market remains affected by the uncertainty regarding the timing and the methods of resolving the European sovereign debt crisis, especially if other countries find themselves in difficulty in the politics of refinancing their own public debt. It should be noted that European government securities have been strongly affected by the actions taken by the authorities. On the one hand, the European Central Bank began to acquire the securities of the peripheral countries in trouble, on the other hand, the countries of the Eurozone launched support programs with the goal of providing resources to those countries that find it impossible to procure them autonomously on the market. In terms of returns, Great Britain and the United States have had the most satisfactory results in local currency, with gains of 8% and 6% respectively, while the Eurozone stalled with an absolute return of around 1%.The problems that have characterized the market of government securities have motivated the operators to focus their attention on corporate securities. After the considerable increases recorded in 2009, due to the reduction in the spreads following the excesses at the end of 2008, the differences in yield stabilized, thereby limiting the capital gains. European investment grade securities recorded returns of around 4

percentage points. The riskier high-yield corporate securities did considerably better; they generated returns exceeding 10% due to the reduction in the spreads and to the interest paid which, however, remains at historically high levels.With regard to currencies, the trend of the main exchange ratios was affected to a large degree by the same factors that influenced the financial markets overall, that is, the expectations regarding economic growth, the risk regarding the PIGS, and liquidity. The US dollar strengthened against the euro by 7% at the end of a market cycle characterized by high volatility. The British pound had a similar trend, with the gain limited to 3%. The truly strong currency was the Japanese yen, which gained nearly 23 percentage points against the euro during the year, with a large part of the revaluation taking place at the same time as the Greek crisis. The Japanese currency recorded large gains even against the US dollar (approximately +15%) with an exchange rate that touched levels that had not been seen since 1995. The strength of the local currency led the Japanese authorities, whose economy depends on exports to a significant degree, to take action to weaken the exchange rate, implementing a series of actions whose effects were, however, limited over time.

D.2.3. The banking system and internal rates

The year 2010 was characterized by high levels of tension on government securities of the peripheral countries of the

58pagina

Rep

ort

on o

pera

tion

2Eurozone. First the vicissitudes of Greece (saved by means of the combined action taken by the EU, the IMF, and the ECB) and then those of Ireland (which received equal financial support) caused growing tension in the area, with an increase of the yields of the government securities in question (increased perception of issuer risk) and large losses in the market for the bank securities (Greek and Irish first of all), which traditionally hold a large amount of European public debt securities in their portfolios. The exposure of the credit institutes to the situations of the respective local economies and in particular to the weak real estate market (particularly Ireland and Spain) further sharpened the tensions on several banks that requested government intervention to support them to avoid a very dangerous chain-reaction of bankruptcies. In response to this the monetary authorities of the most important industrialized countries continued to practice a monetary policy of low rates and guaranteed a large increase in liquidity in the system, even by means of various actions of quantitative easing. However, all these stimuli risk reigniting inflation, and the bond markets took immediate notice; in fact, the yields on US and European ten-year notes increased by almost a percentage point during the last months of 2010.Although last year the credit institutes, in light of a significant widening of the spreads in the bond market, reduced the issues especially on the wholesale market, thereby increasing the shortest-term components, it would be difficult to confirm such choices also in the future. In fact, the new regulatory system of Basel 3 requires them to increase the stable components of the liabilities and the degree of

liquidity of the assets, changing the choices for managing bank deposits. In fact, they must achieve a lengthening of the average duration of their liabilities by means of issuing bonds mainly in the form of covered bonds placed with institutional investors.Taking into account the stability of the ECB reference rate at 1.0% during all of 2010, in the last quarter of the year the three-month money market rate experienced increases that continue today. The 3-month Euribor (base 360) was 0.7% at the end of December 2009, 1.365% on April 29, 2011, and 1.01% on December 31, 2010.

D.2.4. The regional economy

In a national economic environment still characterized by a fragile recovery that is extremely differentiated by sector and by geographical area, the region of Emilia Romagna recorded a 1.5% increase in regional GNP in 2010, recovering, however, only partially the drops that occurred during the period of 2008-2009 (7.4% overall).This increase in regional GNP, which was greater than the 1% increase in the national GNP, was made possible above all by the strong predisposition of companies in Emilia Romagna to export and also by their business ability in foreign markets. For the companies that are more internationalized and more dimensionally structured, the recovery in foreign sales has inverted the negative cycle of production, orders, and revenue.In fact, exports have achieved growth in real terms of 6.4%, thereby partially recovering

the drop recorded in 2009. The foreign outlet markets that have facilitated the modest recovery in many industrial sectors have been, like for the regions of Lombardy and Veneto, Europe, the United States, Southeast Asia, and China in particular.In spite of the signs of recovery, the labor market is still weak with a drop in employment of approximately 1.0%, after the drop of 1.2% in 2009. This factor was limited also in 2010 by the massive use of social “shock absorbers,” such as ordinary and extraordinary earnings supplement funds, which have continued to be applied to both white-collar and blue-collar employees in a strict sense.The growth in GNP has been accompanied by a similar trend for domestic demand (+0.7% in real terms), which is showing signs of recovery after the large drop in 2009 (-3.2%). Final consumption has shown more restrained growth of approximately 0.5% due to the reduction in consumption by the public administration and private social institutions; this was only partially compensated for by consumption by families, which has increased slightly from 2009 (0.8% as compared to 0.3% of the previous year), thereby providing proof that the recovery can no longer be considered stable.

D.3. Progress of the financial management of CPL Concordia in fiscal year 2010

The macroeconomic environment of the last few years has negatively characterized many companies’ financial management results. It is with great satisfaction that we

59pagina

can confirm that such negative effects cannot be found in CPL Concordia’s financial statements. On the contrary, they show continuous improvement in the company’s financial management over the past five years.From the reclassifications of the Parent Company’s profit and loss statements, the following statement is evident: the effect of the net financial management in comparison to the value of production was of 1.50% in 2006, 1.22% in 2007, 1.16% in 2008, 0.44% in 2009, and has dropped further in 2010 to 0.32%.The same indicator, analyzed on the consolidated financial statements of the CPL Concordia Group, was respectively 2.14% in 2005, 1.7% in 2006, 1.81% in 2007, 1.84% in 2008, 0,94% in 2009, and 0.73% in 2010.

This large reduction, verified at the end of the last two fiscal years, in the value of this ratio in comparison to that recorded at the end of 2008 was caused by both the reduction in debt (which reached its minimum value at the end of 2009 and then increased in 2010) and the drop in the rates noted in the markets since the last few months of 2008 and which have not increased over both 2009 and 2010.In any case note should be taken of the information indicated in the 2008 report on operations, that is, that even in the pre-crisis period, which was characterized by large increases in the rates, CPL Concordia was able to contain the negative economic effects of the increase in the rates recorded from fiscal year 2006 to October 2008.

In fact, the data listed above shows how the progressive increase in the rates recorded in the markets in the period 2006-2008 is

followed, from fiscal year to fiscal year, by a constant reduction in the effect of the financial charges of the Cooperative and of the Group; this reduction reached its minimum value during 2010.

Therefore, until 2008 this was a completely counter-cyclic trend, which subsequently reached its minimum in conjunction with the second year of the expansive monetary policies implemented by the ECB. The origin of this progressive strong containment of the effect of the financial charges can be searched for in the restructuring of the debt to the medium term and the long term that was performed in 2005, in the effective strategy implemented by the Cooperative regarding the procurement of sources of debt as well as equity or transfer of capital assets, and in the constant goal of containing current assets, which decreased continuously until fiscal year 2009.

However, with regard to this last element, it should be noted that at the end of fiscal year 2008 the Group hit the lowest value in recent history in relation to the use of current assets; we were aware of the importance of this value, but also of the difficulty in maintaining it in subsequent years. Furthermore, in the last two fiscal years some unsettled situations with large energy suppliers were defined (and subsequently liquidated). Even though the stipulation of this agreement has contributed to worsening the use of current assets, it should be noted that these situations generated a financial benefit (with consequent savings of financial charges) in the previous relevant fiscal years.One of the largest repercussions resulting from the current economic crisis is the constant

search for financing by all of the financial players. In this context it becomes increasingly more difficult for the Group to further improve payment terms with its suppliers. At the same time a progressive slowdown in collections from customers has been noted. Both of these elements have worsened slightly despite the careful attention that the Cooperative has always paid regarding the observance of contractual terms and conditions.As of December 31, 2010 the amount of accounts receivable overdue to the Cooperative has worsened in comparison to this figure at the end of 2009. However, it should be noted that, despite the increase in the absolute value of the overdue amount in comparison to this figure at the end of 2009, the ratio between overdue accounts receivable and the value of production (net of capitalizations) remains within percentages that are absolutely consistent with past figures. In fact, this ratio was 15.41% at the end of 2010, 16.05% at the end of 2009, 12.18% at the end of 2008, 16.63% at the end of 2007, 25.89% at the end of 2006, and 25.89% at the end of 2005.

Furthermore, note should be taken of the increasingly frequent requests made to the Cooperative by potential customers regarding making investments in connection with multi-year management contracts, which have traditionally been the responsibility of the customer. Typical examples are improvements to be made to heating plants owned by third parties or a request to lease an asset (for example, a cogenerator) instead of selling it. As an alternative to these requests, the possibility is offered to stipulate contracts with a longer duration than the current ones.

60pagina

Rep

ort

on o

pera

tion

2These new elements, while representing very important information for the consolidation of the portfolio of works and the consequent medium-term planning, result in a worsening of the Group’s debt position, which must be contained, even by means of capitalization or transfers of non-strategic assets.The Cooperative and the Group’s goal, which is discussed in the three-year industrial plan that is updated annually, is to continue to maintain in complete equilibrium the current rating and the main economic and asset indicators.At this point the reasons seem clear for the transfer of assets operation carried out by CPL Distribuzione S.r.l. in December 2009 and the increase in capital by 234 cooperative shareholders, who subscribed and paid in approximately 1.5 million euros, which was executed in December 2010 (it should be noted that other shareholders executed the same operation in the first few days of 2011, which resulted in a total of 241 cooperative shareholders joining, who subscribed and paid in approximately 1.6 million euros).

These operations reinforced the net assets (which as of the end of 2009 were 112 million euros) and improved the net financial position, so as to be able to procure on the credit market the debt financing sources necessary to support the three-year industrial plan.In fiscal year 2010 the company opened new medium- and long-term lines of credit, granted by: “Banca MPS” (5 million euros, duration of 60 months), “Cassa di Risparmio di Ferrara” (1 million euros, duration of 60 months), “Deutsche Bank S.p.A.” (1.5 million euros, duration of 60 months), “Mediocredito Italiano S.p.A.

(4 million euros, duration of 60 months), “Carige” (5 million euros, duration of 60 months), “Credito Emiliano” (5 million euros, duration of 48 months), “UGF Banca” (5 million euros, duration of 60 months), and “Banca Popolare di Milano” (5 million euros, duration of 60 months).Other large long-term lines of credit were opened by the subsidiary “CPL Distribuzione S.r.l.” with “Banca MPS” (5 million euros, duration of 60 months) and by the subsidiary “Cristoforetti Servizi Energia S.r.l.” with “Banca Popolare di Vicenza” (0.5 million euros, duration of 60 months).At the end of 2010 both the Parent Company and the subsidiaries indicated above had at their disposal the liquidity and lines of credit necessary to make the large expenditures planned for the first four months of 2011, especially regarding the stocks necessary for the activity in the renewable energy sector or for supplying the correctors required by resolution 155/08 of the Regulatory Authority for Electricity and Gas.During the first few months of current fiscal year 2011, two large lines of credit were defined by the Parent Company. The first one is a syndicated loan headed by “Banca Popolare di Verona – BSGSP” for 51.5 million euros, opened on February 9, 2011, with a duration of 48 months. The organization of this line of credit began in the month of November 2010 with the goal of achieving its closing in January, with an amount of approximately 35-40 million euros. The increase in the positive decisions in comparison to expectations are considered to be indicative of the good credit standing of the Cooperative at this time, which is even more evident if one considers the spread that was granted for this line of credit that is even lower than

that of many recent issuances of bank bonds with an equivalent duration. Thirteen credit institutes joined the syndication, which is to be used to finance projects involving the energy sector, especially renewable energy. As of May 16, 2011, CPL Concordia had obtained the disbursement of 26 million euros, with a further 25.5 million euros available to be drawn.The second line of credit, for 5 million euros and having the same intended use as the syndicated loan above, was opened on May 10, 2011 with “GE Capital S.p.A.” As of May 16, 2011 an amount of 1.7 million euros of this line of credit had been disbursed.

It should also be noted that on May 2, 2011 the subsidiary “Grecanica Gas S.r.l.”, owner of the concession for the construction and subsequent operation of the gas distribution network in the areas of the municipalities belonging to the catchment area “Calabria 12,” stipulated with “UGF Merchant S.p.A.” a loan of 5 million euros with a duration of 14 years, including 4 years of pre-amortization and drawing. This line of credit, together with the equity that the Cooperative will pay to the subsidiary, will be used to complete the financial requirements of the project. This is a line of credit that is very suitable for financing investments of this type with long-term break-even points.The Group made the decision some time ago to procure all the sources necessary to support its needs in the medium and long term (with the exception of some for the purpose of temporarily covering cash imbalances). Even though the amounts available on the two lines of credit mentioned above have not yet been completely disbursed,

61pagina

currently further grants of medium- and long-term credit lines are being defined with other credit institutes for the purpose of sustaining the commitments contained in the 2011-2013 three-year plan. Furthermore, the subsidiary “Ichnusa Gas S.p.A.” appointed “BNL” to organize a loan for the purpose of providing the sources of debt required for the construction and subsequent operation of the gas distribution networks in twelve catchment areas located in the region of Sardinia to provide service to more than 100 municipalities and 500 thousand residents, for the construction of more than 1500 km of network, owned by the same number of special purpose vehicles established and currently controlled by Ichnusa Gas S.p.A. Overall the project requires approximately 190 million euros of investment in reference to which Ichnusa’s subsidiaries will receive 64 million euros of public funding from the region of Sardinia. Ichnusa will be capitalized with 24 million euros of equity and must syndicate a line of debt of approximately 95 million euros. As of May 16, 2011 the arranger BNL had accepted its appointment and decided its share of participation.The first few months of fiscal year 2011 were characterized by a worsening of the net financial position of both the Cooperative and the Group (as of April 30, 2011 the net financial position of CPL Concordia had increased with respect to December 31, 2010 by approximately 43 million euros; this amount is practically the same as that relating to the companies belonging to the consolidation). Further worsening of the net financial position is expected during the summer months, a time when a large portion of the

supplies are paid for that will be used for the construction of the photovoltaic arrays to be executed in the current fiscal year, as well as the procurement of the natural gas (Coopgas S.r.l.) to be used for heat management services. Furthermore, similarly to what is seen fairly regularly during the first four months of each fiscal year, also the amount of the Cooperative’s overdue accounts receivable increased: as of April 30, 2011 it was 13 million euros higher than the amount at the end of 2010, and it was approximately 15 million euros higher than the amount recorded twelve months previously. It should be noted, however, that during the first four-month period the Cooperative increased turnover by approximately 18 million euros (+21%) in comparison to the figure recorded at the end of the first quarter 2010.

When current fiscal year 2011 closes, the net financial position is expected to worsen in comparison to the figure recorded at the end of fiscal year 2010. This is due not only to the reasons discussed above, but also to the investments for the Ichnusa Gas project and the financing of the increase in current assets generated chiefly by the activity in the renewable energy sector. However, this deterioration should result in a fairly limited impact on the main indicators of the financial statements, which should remain within the values representing complete equilibrium (the DEBT/EBITDA ratio expected at December 31, 2011 should be approximately 3.55 for the Parent Company and approximately 3.8 for the consolidated financial statements).The cancellation by the government on March 3, 2011 of the third feed-in tariff (approved

by the government itself just six months earlier for the entire three-year period 2011-2013) and the issuing of the new decree on May 12, 2011 generated a dual negative effect: in fact, they contributed not only to slowing down the Group’s production in the renewable energy sector (all the projects on the market that were being defined were suspended for two months on March 3, waiting for the new decree), but also to making more onerous the stocks acquired at the end of 2010 and paid for taking into account the incentive tariffs that should have been valid for three years. The Group will attempt to recover the time it was forced to lose, but the new regulations, which have added various variables to the preliminary definition of the incentive tariffs that the photovoltaic power systems could benefit from, have significantly complicated the situation. The possibility of transferring (and at the same time collecting payment for) several companies established for the construction of photovoltaic arrays could slow down, as a result of factors outside the Group, in comparison to what could have been planned at the time the budget was drawn up, and might not be concluded by December 31, 2011. These factors were taken into account when updating the budget for current fiscal year 2011, which expresses the ratios specified below. However, it should also be noted that the activity in the renewable energy sector is only one of the many activities performed by the Group in the energy sector.The liquidity the Cooperative benefited from during all of fiscal year 2010 was placed in short-term bank deposits or, in the case of temporary need by the subsidiaries, was loaned to

62pagina

Rep

ort

on o

pera

tion

2them (the balance of the inter-group financing, however, was reduced by more than 8 million euros during the fiscal year), so as to allow them to avoid taking on debt (at least temporarily) from the credit institutes at higher rates than those that CPL would have received if used. In this manner the financial management at the Group level was optimized, and the results of the financial management of the consolidated financial statements were also optimized.

E. Information in compliance with article 2428, paragraph 2, subparagraph 6 “bis”

Also in 2010 many activities employing liquidity were affected by the investments of the local cooperative system (Finpro and CCFS).The CPL Concordia Group has an organizational structure, company processes, human resources, and expertise that are suitable for ensuring the identification, monitoring, control, and management of the various risks that characterize its activities. The process of managing, monitoring, and, if necessary, covering risks is developed at various levels of the internal organization structure.The types of risks to which the Group is subject while carrying out its normal activities are outlined below.

Interest rate risk: This risk arises if the Cooperative and Group sustain higher costs following a variation in market

interest rates. In fact, all credit lines, with very few insignificant exceptions, require payment of a variable rate to the lenders. As of December 31, 2010 the Group had two agreements partially covering this risk, stipulated on two credit lines granted by Mediocredito Italiano S.p.A., whose remaining debt totals 8.4 million euros. Furthermore, on April 4, 2011 the Cooperative stipulated a new agreement for the partial coverage (5 million euros) of a loan, with a remaining duration of 48 months.Risk is managed by the constant monitoring of market trends and continuous comparison with the average rates estimated by the financial budget: new coverage can be implemented only if the recorded increases and the expected trends indicate higher rates than those used to draw up the three-year plan, posing significant detrimental risks in achieving objectives. For monitoring the rates trend, the Group will consult with qualified outside professionals.

Foreign currency exchange risk The Parent Company imports very few raw materials and has very few sales in currencies other than the euro; therefore, no coverage of foreign currency exchange risks has been stipulated. Only to purchase some important supplies abroad has the company made forward purchases of foreign currency, corresponding to those times it needed to make payment using foreign currency. In the future, the Company will continue to operate in this manner and will evaluate coverage only if required, unless the importation of raw materials becomes much more significant in relation to total purchases.The subsidiary Coopgas S.r.l. procures natural gas (which is

then resold to the Parent Company and to external customers), and its purchase price depends on the euro/USD exchange rate and the price of crude oil. To date, no coverage has been stipulated for this risk, also due to the low values of the supply contracts carrying this risk. However, a study is being evaluated, with the help of a specialist advisor, of a type of coverage to predetermine the value of the financial movements on the various dates on which payments for supplies occur. The instrument selected is an interest rate swap (IRS) contract. Its cost is currently under assessment by the subsidiary’s directors.The Romanian subsidiary “CPL Concordia Filiala Cluj S.r.l.” has two loans denominated in euros, and due to the devaluation of the local currency against the euro, the company has incurred a currency exchange loss. The amount of the two debt lines compared to total liabilities is quite limited, and the company is very well capitalized.

Credit risk: This risk is posed by insolvencies or delays by customers of the Group in fulfilling their obligations. Credit management is performed directly by the companies of the Group, using internal resources and expertise and with limited use of outside professionals. This type of management is the result of a specific choice. In fact, because the majority of the customers are public institutions or are government-owned (both directly and by means of contracts acquired through consortiums), collecting the accounts receivable requires constant monitoring by the relevant financial structure and the collaboration of all the internal parties that have relationships with the customer: from the business structure that acquires the work orders to the

63pagina

technical structure that manages them, and in some cases the legal department, which evaluates any actions of debt collection. Outsourcing is not considered a suitable option for managing accounts receivable due from this type of clientele.The company compiles monthly surveys of accounts receivable, divided by business area attributable to business managers who have, among other duties, the duty of limiting the impact of overdue accounts receivable within pre-established limits. The surveys are then carried out by aging bracket. The internal procedure sets out some procedures for managing overdue accounts receivable, which range from a written notice to possible legal action against the debtor (who, in the meantime, would have been placed in default).At the end of fiscal year 2010 the Parent Company’s financial statements showed, under current assets, accounts receivable due from customers for a total of 163 million euros as compared to 139 million euros for the previous fiscal year. Their impact in comparison to total assets decreased to 39.35% from 40.64% recorded in 2009. In the consolidated financial statements this ratio was 37.24% at the end of 2010 and 38.48% at the end of 2009. In both the statutory financial statements and the consolidated financial statements can be noted, instead, a large increase in accounts receivable due from associated companies, which are almost completely attributable to receivables due for the construction of turnkey photovoltaic power systems. These accounts receivable will be paid when the subsidiaries procure the financial resources by means of project financing operations. This confirms what

was previously stated regarding the heavy use of current assets elicited by the renewable energy sector.Generally, since the accounts receivable are mainly due from public institutions, they are not accompanied by guarantees. However, these guarantees are required by the company when drawing up the main supply contracts for supply to private customers or whenever they are deemed necessary. At the end of fiscal year 2010 they totaled 3.13 million euros.The heavy protection on accounts receivable, and the perfect awareness of individual situations and the DSO allow the Group to make provisions for risks regarding accounts receivable when necessary and in a precise manner.

Liquidity risk: This risk is a possible state of instability resulting from a negative imbalance between incoming and outgoing cash flows, if it is not adequately covered by liquidity reserves. This risk is managed by advance planning by the treasury, in spite of the fact that the large number of public customers makes the precision of the forecast difficult. All the customers of the Parent Company were assigned a rating, resulting from the internal DSO, indicating the punctuality of the payment of their debt. However, forecasting the outgoing cash flow is much easier. Consequently, advance planning by the treasury can be carried out for increasing customer ratings and with various sensitivity steps. In this manner credit availability to face any cash deficits is always possible.

market risk: This refers to the possibility of the Group earning less revenue than originally

forecast at the time of planning, making a loss in value of assets or an economic capital loss in relation to works performed but not yet invoiced as of the end of the financial year. This risk is periodically monitored using a careful management control system.

Operational risk: This risk occurs if a company makes losses resulting from the inadequacy or incorrect functioning of company procedures, errors or deficiencies in human resources or other internal systems, or external events. Major sources of operational risk include: the instability of operational processes, a lack of computer security, the growing use of automation, the outsourcing of company functions, the use of a reduced number of suppliers, strategy changes, fraud, errors, recruitment, employee training and retention, and social and environmental impact. It is not possible to identify a sufficiently stable main source of this risk as it is a risk that is inherent to all the processes regarding the company’s activities. This feature will lead the Group to implement risk mitigation, both through the strict governing of company functions (during fiscal year 2009 the risks pertaining to production activities were completely remapped) and the continuous improvement of processes, and also through the transfer to third parties through insurance instruments.

Commercial risk: This is the risk of the company earning lower revenues and/or lower margins following the renewal of the portfolio of works. The Group can try to limit this risk by constantly monitoring the portfolio of acquired works and company

64pagina

Rep

ort

on o

pera

tion

2processes that establish the methods of drawing up the offers aimed at predetermining the economic and financial parameters of reference.

Strategic risk: This is defined as the risk of a decline in profits or capital resulting from changes in the competitive environment or incorrect strategic company decisions, inadequate implementation of strategic decisions, or inadequate or complete lack of reaction to changes in the competitive environment. Constant monitoring of management trends, of the most significant company aspects, and all the other relevant variables, both internal and external to the Group, allows company bodies with strategic responsibilities to reduce this risk to a minimum, allowing for timely adjustment actions and/or corrections, also with regard to modifying the company’s stance in the competitive and market environments.

Risk to reputation: This is the risk of a decline in profits or capital resulting from a negative perception of the company’s image by customers, counterparties, investors and, more generally, stakeholders, due to the demonstration of critical events involving, for example, specific operational areas, products, or processes. The Group, which has always been particularly attentive to its image and consolidating its reputation, implements a prevention policy with the following aims: 1) to protect its stakeholders,

ensuring they will be provided with adequate information regarding the company’s progress;

2) to implement an attentive and incisive verification process,

not just of a formal nature, verifying the consistency of operational procedures and company conduct in accordance with external norms, regulations and internally adopted principles.

F. Research & Development

During 2010 CPL CONCORDIA continued its research and development activities, with the aim of:a) improving remote automatic

survey and data management systems

b) increasing software and information technology services that are available to the CPL group and its clients

A total of 21 projects were conducted, indicated below:

Project no. 01: EvOLUTION OF THE SOFTwARE FOR DATA EXCHANGE BETwEEN mETHANE GAS DISTRIBUTION COmPANIES AND SALES COmPANIES

Several years ago the Parent Company adopted the Microsoft Dynamics NAV platform to create two distinct vertical software applications called “Energy & Environment Distribution - DiGas” to manage distribution activities and “Energy & Environment Sales” to manage methane gas sales activities.The need to optimize common data management activities between gas distribution companies and gas sales companies for the two applications and the need to comply with the resolutions of the

Regulatory Authority for Electricity and Gas (Resolutions 294/06, 134/08, 185/08) has led to the creation of an automatic software system for data exchange (new PDR, movement of consumers, technical data, etc.) between the sales application and the distribution application and vice versa.The software system is based on a standard of open communication (data and charts in XML format) and on two well-defined communications systems, Certified E-mail and WEB-based procedures with web service for direct exchange between the distribution and sales systems.This system was created to comply with specifications of the sales companies, which make operational requests, and specifications of the distribution companies, which must respond to and operate in accordance with the requests made by the sales companies and must also make available to the vendors adequate information technology support tools.In 2010 the software for managing distribution was developed further to manage the online booking function prescribed by resolution 147/10 of the Regulatory Authority for Electricity and Gas, which requires the distributor to make available to the vendor, in the context of the data exchange system, a system for setting an appointment directly with the end customer, on the basis of the online availability of the distributor’s appointment calendar.The latter activity of the information technology development of online booking will be completed in 2011.

Project no. 02: DEvELOPmENT OF A NEw SySTEm FOR THE CONTROL

65pagina

AND mANAGEmENT OF BILL PRINTING FLOwS

With the increase of clients and operators dedicated to billing activities, it became necessary to identify a new work method which would channel and adequately manage the bill printing flows.This system, still in its production phase, collects information from internal operators and any external clients regarding the number of bills to be printed, the printing characteristics, any attachments, enveloping type, and delivery method and then follows and coordinates the operational process.This procedure has been studied to be used independently from the technical resources used (internal printing center and external typography) and makes it possible to monitor the arrival times of the bill information, the generation of trial PDFs for validation, physical printing, enveloping, and delivery to destination companies (mail, specialized firms, courier delivery, other).The procedure manages the generation of copies of the bills in PDF format, uploading these copies onto the sales company’s WEB portal. It is also possible to directly manage sending these PDFs to the end customers who have requested them.

Project no. 03: EvOLUTION AND DEvELOPmENT OF A SOFTwARE SySTEm FOR ELECTRICITy BILLING AND FOR PRINTING GAS AND ELECTRICITy BILLS IN COmPLIANCE wITH THE REqUIREmENTS OF RESOLUTION 202/09 OF THE REGULATORy AUTHORITy FOR ELECTRICITy AND GAS

Many gas sales companies are

evaluating the possibility of selling electricity on the free market as a “Dual Fuel” method (one bill for both gas and electricity consumption), as a further business proposal. Using the Microsoft Dynamics NAV platform, a specific vertical for Billing and Metering was implemented called “NAV Energy & Environment,” which allows consumers to manage electricity sales billing, taking into account the new commercial requirements and offers which the free market demands. In 2010 functions were developed for importing, from the Ed_Light chart of Enel Distribuzione, data for verifying transfer options.Also, electricity consumption advance charging procedures have been refined for when consumption data is not available, with the possibility of billing the advance reading calculated by the electricity distributor. The function for recording the energy produced, drawn, and input for customers having a photovoltaic power system with onsite exchange was completed with the latest development in billing the consumption of electricity produced by photovoltaic solar panels. Front-office display functions have also been developed for viewing the technical data from the photovoltaic power system.New methods for calculating the energy tariffs (taxes, managing discounts) have been developed. At the end of 2010 an analysis began of the developments necessary for indexed price billing (PUN, ITEC, BRENT, etc.). To make these new calculation methods operational, the contractual data management function was expanded with additional input parameters (type of energy index, type of discount, etc.).Furthermore, to comply with the

requirements of resolution 202/09 of the Regulatory Authority for Electricity and Gas, which has made standard (by means of specific regulations), for all gas and electricity vendors, the methods and information to be included in the printing of the billing documents regarding these services, a format for outputting data in TXT format files has been developed, which when integrated with the graphic layout management software applications allows final printing on paper or in PDF format files.

Project no. 04: COmPLETION OF ANALySIS, DESIGN, AND CREATION OF A NEw SOFTwARE mODULE FOR mANAGING AND mONITORING ELECTRICITy CONSUmPTION

In order to improve the monitoring of the growing costs of electricity for the Parent Company, engineering and development was continued on the software procedures for managing all personal information of the meters and for recording all the readings on the ARCHISTAT system, with a reporting function, for the electricity consumed, and for photovoltaic power systems, the electricity produced and the electricity supplied to the national power grid.Furthermore, by simulating the consumption bills for every POD, it is possible to calculate the allocations for each electricity customer. This project involves the following systems:

Archistat (a module was implemented for entering the readings directly from a handheld device, with relative procedure for analyzing and validating the consumption, allowing identification of

66pagina

Rep

ort

on o

pera

tion

2excess consumption and the power factor per individual time period with the goal of optimizing the power systems and reducing procurement costs).

Microsoft Dynamics “Nav Energy & Environment” (for calculating the standard cost of electricity by means of simulating the bills using actual readings or the calculation of periodic advance payments based on the past and probable consumption of each POD)

SAP R/3 (general and analytic accounting management software)

Project no. 05: STUDy AND DESIGN FOR THE OPTImIZATION AND EXTENSION OF THE RANGE OF APPLICATION OF ELECTRONIC REmOTE-READING SySTEmS, BOTH EXISTING (EDOR, EmET, EFOR, ETC.) AND NEw (EDATCOm)

The implementation activities have continued for improving the existing functions of the Parent Company’s equipment, and in some cases new functions have been implemented. A new remote-reading product has been created, to replace a previous product, for the remote reading of gas consumption data from the existing ECOR2 correctors and from the new ECOR3 correctors introduced in 2010.This device, which is called EDATCOM, required the study and implementation of ECOR3’s proprietary communication protocol; it allows the remote reading of consumption by SNAM through a GSM connection or a fixed line. For connection with the SNAM center, it was also necessary to implement the

SRG (Snam Rete Gas) proprietary protocol.The optimization of the new device’s consumption allowed installation of some units powered with photovoltaic solar panels, allowing us to acquire expertise in this type of power supply.

Project no. 06: CONTINUATION OF STUDy, DESIGN, AND EXPERImENTATION TO DEvELOP PROTOCOLS FOR THE ACqUISITION AND TRANSmISSION OF DATA FROm ELECTRONIC vOLUmE CONvERTERS

The activities continued regarding the study of the DLMS protocol and implementation of the CTR protocol, in light of the repeated release updates issued by CIG, for acquiring data from fiscal volume correctors.We focused on the implementation of the protocol tests from both the control center side and the peripheral unit side.Specifically, the data encryption procedure was implemented on both the center side and the device side (ECOR3 and ECOR3TOP) in observance of the requirements of resolution 155/08 of October 22, 2008.

Project no. 07: STUDy, DESIGN, AND DEvELOPmENT OF A NEw wEB SySTEm (E-CENTRAL) FOR REmOTELy mONITORING PROCESS PLANTS

The implemented WEB system is a unique and flexible platform (called E-Central) which, on the one hand, can be quickly adapted to various types of equipment used to manage process plant data and, on the other hand, to various operational needs, data viewing needs, and report

generation needs, depending on the application domain.The system will allow CPL Concordia to propose WEB supervision services in line with the latest technological developments in the field of plant management in the geographic field.

Project no. 08: ANALySIS AND DEvELOPmENT OF THE SOFTwARE SySTEm FOR GAS BILLING FOR wHOLESALERS

In the last few months of 2010 was initiated the analysis and development of a further software module to be integrated with Microsoft Dynamics NAV “Energy & Environment,” which will allow the management and billing of gas from the wholesalers to sales companies. More specifically, a procedure was developed to import consumption from SNAM’s reports, with corresponding automation of the billing processes.The automatic calculation of the quarterly update of some data in SNAM’s reports regarding the PDRs was also developed. The automatic calculation of the “fixed term” was also developed.In 2011 will continue the development of the functions to calculate the “exceeded capacity” for indirect consumers (not connected directly to a SNAM gas pressure regulating station) and other specific functions for the market of the wholesalers.

Project no. 09: CONFIGURATION AND DESIGN OF A DOCUmENT mANAGEmENT SySTEm

In 2010 was installed the document management software called EDOC. This software required specific configuration

67pagina

and development mainly for cataloging and filing technical documentation regarding the design of devices and their production/testing, and for filing and managing the receivable contracts of the ICT division. In relation to the management of the receivable contracts, specific functions were developed for the following:

Monitoring the quotations (currently valid, accepted, refused, etc.);

Monitoring the contract expiration dates (with the possibility of extracting a corresponding report);

Managing the versioning;Monitoring the issuing of the

receivable invoices linked to these contracts; and

Filing the expired contracts.

Further future development of the application will address the possibility of managing payable contracts of the ICT division, with the possibility of linking them to the corresponding currently valid receivable contract.Also further functions are under development for the traceability of breakdowns of the equipment in the field, with problem solving modules guided and subject to management control, in order to allow continuous monitoring of the project and construction processes as well as an analysis of the breakdowns and average service times.

Project no. 10: DESIGN AND DEvELOPmENT OF A REmOTE-CONTROL SySTEm FOR PHOTOvOLTAIC POwER SySTEmS (ESUN)

During 2009-2010 a complete system was created to remotely control photovoltaic power systems, called ESUN.

To create this system it was necessary to design a remote-control unit equipped with multiple connections and a data receiving service for subsequent publication on the web. To guarantee interfaceability with the various inverter solutions on the market, it was necessary to analyze and implement their various communication protocols and to choose and integrate precise meteorological sensors. The web portal, in addition to viewing the production data of the entire plant, allows monitoring of the functioning status of each inverter and sensor, in order to signal any problem quickly.

Project no. 11: DESIGN AND DEvELOPmENT OF A REmOTE-CONTROL SySTEm FOR COGENERATORS

In 2010 was initiated the development of a remote-control unit for asynchronous cogenerators Development began with an analysis of cogenerators’ operation, to acquire sufficient expertise in this field and the subsequent construction of a “simulator” to reproduce in the laboratory the signals necessary for the remote control of the motor. Then a dedicated circuit board was built.The development also involved the control unit’s firmware, that is, the program that is “loaded” onto the circuit board to manage its operation.

Project no. 12: DESIGN AND DEvELOPmENT OF A REmOTE-CONTROL SySTEm FOR HEAT COUNTERS

At the beginning of 2010 was initiated the development of a remote-reading system for heat consumption by means of heat

counters with serial output. This project has made possible designing a remote-control unit that can be interfaced with various heat counters and a data collection center, and publication, based on the E-Central platform. To guarantee the connection with the heat counters it was necessary to study and implement a proprietary communication protocol. For connectivity, instead, it was decided to use the GPRS standard with direct TCP-IP/UDP connection with fixed IP SIM cards. This resulted in a study of the functioning of the GPRS standard and of the choice of the best type of connection, for data transfer and for updating the “telecommunications vitality” status of the peripheral units.A graphic interface was also implemented on the control center, dedicated to the heat environment, which can be reused also in other fields of application.

Project no. 13: DESIGN OF A NEw LOw-POwER HARDwARE PLATFORm FOR THE REmOTE-CONTROL EqUIPmENT

In 2010 was initiated the study of a new low-power hardware platform powered by general-purpose type primary batteries, in order to be used in various applications that are useful for the Parent Company. This new platform replaces hardware that is present, such as EDOR, with a new lower-cost solution with superior performance, and allows the new projects to be completed with experience residing within the company. The project required difficult hardware analysis to study the behavior of the low-power components and difficult software analysis to optimize their functioning. This equipment

68pagina

Rep

ort

on o

pera

tion

2is furnished with GPRS, Ethernet, PSTN (fixed line), and radio connectivity in order to allow its integration in all the services that are currently available.

Project no. 14: DESIGN OF A mETHANE GAS vOLUmE CORRECTOR, CPL BRAND

In 2010 was initiated the development of a battery-powered volume corrector, designed and built by CPL Concordia. To begin the project it was necessary to study the standards in force, in the context of metrology (UNI TS, MID, and WELMEC) as well as explosives (ATEX), and to create an ultra low-power hardware platform to guarantee a battery life longer than that required by the standards. Consequently it was necessary to begin an internal design modeling phase, carried out by means of the adoption of software for controlling the sources (versioning), electronic circuits design and layout software (electronic CAD), and document filing and management software (EDOC). The project dovetailed with the study and implementation of CTR and DLMS communication protocols (project no. 6).

Project no. 15: DESIGN OF A vOLUmE CORRECTOR FOR LPG

At the beginning of 2010 began the development of a LPG volume corrector, power requirements 230 VAC, equipped with a GPRS modem for the long-distance transmission of data, and a local serial connection for interfacing with remote-control panels present in the vicinity. Implementation required the study of a correction formula for

LPG and the analysis of the error committed by the hardware used. It became necessary to study and test the pressure and temperature sensors suitable for operation in LPG. To guarantee reliability superior to traditional volume correctors, intelligent pressure and temperature transducers were used, which communicated by means of RS485 serial line digital protocol: this made it possible to increase the distance between control unit and sensors and improve the precision and reliability of the data read.

Project no. 16: STUDy, DESIGN, AND DEvELOPmENT OF A NEw wEB SySTEm (ESAC) FOR ACqUIRING DATA FROm THE GAS vOLUmE CORRECTORS IN ACCORDANCE wITH THE PROvISIONS OF RESOLUTION ARG/gas 155/08 OF THE REGULATORy AUTHORITy FOR ELECTRICITy AND GAS

In 2010 was initiated the development of solutions dedicated to managing resolution ARG/gas155/08 of the Regulatory Authority for Electricity and Gas, for the remote reading of the of the units for measuring methane gas.Beginning from the E-Central project, a path was taken to specialize a product dedicated to the management of the massive remote reading (central acquisition system, as specified in the resolution itself). The WEB system that we began to develop, in contrast to the E-Central project from which it originated, does not need to manage a large variety of devices with very different protocols, but is dedicated to managing the measurement systems of only methane gas with protocols authorized by the Regulatory Authority for Electricity

and Gas (for now only CTR and DLMS).Specifically, the ESAC project, which is still in development, is oriented toward optimizing the operational activities and the data collection activities in the presence of large amounts of data originating from remote readings of the correctors (it is estimated that in Italy there are 18 million methane gas measurement units to be adapted to remote reading by 2016), similarly to what occurred for electricity over the past few years.The procedure, even though it is still being developed, already has a set of minimum functions that allow us to manage the remote reading activity, proposing ad hoc services for all the distribution companies that want to comply with resolution 155/08 of the Regulatory Authority for Electricity and Gas.

Project no. 17: DEvELOPmENT OF A SySTEm FOR mANAGING GAS BONUS REqUESTS

In 2010 was initiated the development of a system for managing gas bonus requests from end customers, for the purpose of distributing the bonus to those entitled to it, on the basis of the information contained in resolution Arg/gas 88/09 of the Regulatory Authority for Electricity and Gas.This system was implemented on the software for distribution (“Energy & Environment Distribution - DiGas”) and on the software for sales (“Energy & Environment Sales”). For distribution, the software was developed:To acquire the bonus requests

originating from the SGATE portal;

To verify their validity by means

69pagina

of automated checks;To provide the results to

SGATE; andTo compile the lists to be sent

to the vendors, containing those who are entitled to the bonus, and to disburse the amount of the bonus to the vendor by means of invoicing the distribution.

For sales, the software was adapted to receive the lists of customers compiled by the distributor, to verify that the data received matches the personal information, to manage any adjustments, to calculate in the billing phase the amounts to be disbursed to the customers with periodic invoicing until the bonus amount is exhausted.

Project no. 18: STUDy, EXPERImENTATION, AND CREATION OF A REmOTE-CONTROL AND AUTOmATION SySTEm FOR COGENERATION SySTEmS THAT USE DDC REGULATORS wITH wEB-SERvER TECHNOLOGy

The Parent Group’s “Cogeneration and renewable energy” division is involved in the experimentation of different types of machines able to produce electricity and heat, beginning with the combustion of methane gas (cogeneration systems). The ICT division is involved in the design, installation, and startup of remote-control systems at a distance from the above-mentioned cogeneration systems.DDC controllers were used, equipped with Web-Server technology; they manage the machine’s entire operating cycle, including auxiliary systems.

Project no. 19:INTEGRATION OF DIFFERENT

THIRD-PARTy SySTEmS By mEANS OF STANDARD PROTOCOLS (BACNET, mETERBUS, mODBUS, OPC) ON A SINGLE REmOTE-CONTROL PLATFORm

In 2010 the Parent Company acquired the management of various system for which was necessary to integrate several existing data acquisition systems on a single platform. It was the ICT Division’s job to search for the best solutions on the market, in order to guarantee compatibility between different brands, making use of the protocols that are currently more widely available in the field of Building Automation and Remote Reading of energy consumption.The Sassuolo hospital integrated the existing Johnson Controls brand heat regulation system in a wing of the building, with the Honeywell SymmetrE platform, employing the Bacnet over IP protocol.At the company Salov in Viareggio, instead, the communication between the energy management system of the company ABB was integrated with the Hawk web-server regulator of Honeywell’s line of control units, on an OPC (open connectivity via open standards) software platform.The same regulator was used, instead, on the Terzo Peep district heating system in Modena to read the data via Modbus from refrigeration units and a cogenerator and via Meterbus from heat/cooling meters.

Project no. 20: STUDy, DESIGN, AND DEvELOPmENT OF THE NEw ICT CENTER INFRASTRUCTURE FOR THE mULTISERvICES CONTACT CENTER SySTEm

In the second half of 2010 was studied and implemented the new infrastructure of the Multiservices Contact Center, in conjunction with domain change of the Ecenter portal to IctCenter. This implementation increased exponentially the standard of high reliability so as to eliminate any machine down-time resulting from breakdowns, due to the use of:An H/W system based on

BLADE Server technology, a shared storage system with considerable capacity and speed;

A highly reliable virtual infrastructure;

Geographic and local network redundancy of the equipment; and

Balanced electric power for all the equipment.

Also the protection levels were increased by means of a double level of access through Microsoft AD and Microsoft FBA. The processing speed was increased as well, by means of an unlimited bandwidth (now the publication servers no longer have a limitation on the bandwidth available) and with a quadrupled power of calculation of the servers dedicated to all the online procedures.

Project no. 21: STUDy OF NEw RELEASE AND RESTyLING OF THE CONTACT CENTER SERvICE

At the end of 2010 was initiated the study to restyle the contact center system, the Parent Company’s traditional service and software that has been used for all the divisions and other external partners.Beginning with the consolidated functions, and on the basis of the new needs indicated by the

70pagina

Rep

ort

on o

pera

tion

2users and further analyzed by the contact center system’s directors, various implementations have been studied, which by the end of the first half of 2011 will lead to the creation of the new system release, the objective of which is to optimize its use by all of the users, and at the same time to achieve a complete restyling of the graphic layout (in line with company standards).

G. Report from the common representative of the cooperative shares

Evaluation of the results of the new multi-year investment program running from january 1, 2009 to december 31, 2013

In fiscal year 2010 the Cooperative recorded total outflows, consisting of the amount of the investments and disinvestments (including transfers), of approximately 21.1 million euros. This figure differs from the forecast for fiscal year 2010 by approximately 7.4 million euros. These movements are detailed below:

G.1. Intangible Assets

The net investments in intangible assets were 15.51 million euros in fiscal year 2010, thus higher than forecasted in the investment plan, which projected investments of 13.25 million euros. They are

described in detail below:

The item “Assets under construction” records investments of 3.45 million euros, relating to: costs incurred for feasibility studies for constructing odorizing systems, remote-reading equipment, and volume correctors; for investments relating to the construction of two cogeneration systems (owned by the customer) and the requalification of existing systems.

The item “Other assets,” which records net investments of approximately 9.80 million euros, relating to: investments in software, extraordinary maintenance on rented company property, and investments in heat management systems and public lighting systems, which at the end of the contract will remain the property of the customers in order to increase their efficiency.

G.2.Tangible Assets

With regard to tangible assets, in fiscal year 2010 there were net disinvestments of approximately 1.82 million euros, whereas the investment plan had forecast investments of 0.82 million euros, mainly attributable to the variation in the item “Other tangible assets” (-2.66 million euros). This variation is in connection with the acquisition operations carried out on the distribution networks and the meters in reference to the methane gas distribution concession in the municipality of San Giuseppe Vesuviano, in the region of Campania, but especially

due to the disinvestments resulting from the transfer of two photovoltaic arrays located in the municipality of Turi (region of Bari).

G.3. Financial Assets

This item, which totaled 7.41 million euros in 2010, shows a considerable decrease in comparison to the figure forecast by the investment plan. This difference is due to minor investments for the delays inherent to the construction of the networks in the catchment areas in Sardinia, which are managed internally within special purpose vehicles, of which the majority were established in the period 2009-2010, in relation to larger investments for executing the projects regarding renewable energy/photovoltaic power. We can summarize this item in detail as follows:An increase, net of

reclassifications, disposals, and writedowns, of equity investments in companies of 6.29 million euros; in relation to this item the main operations regarding increases in equity investments in the companies Grecanica Gas S.r.l. (+1.39 million), Agrienergia S.p.A. (+1.43 million), Interenergia S.p.A. (+2.93 million), Intermedia Finance (+0.75 million), and regarding decreases in equity investments in the company Si.Gas S.r.l. in liquidation (-1.36 million).

An increase in financial loans to companies of the Group of 1,362,250 euros, resulting from intercompany financing operations, financial loans to other companies of 297,622 euros, and the reduction in its own shares of 531,892 euros.

71pagina

CPL CONCORDIA SOC. COOP.: mULTI-yEAR INvESTmENT PROGRAmmE 01 GEN 2009 – 31 DEC 2013

(expressed in Euro)

Description quotes 31 Dec 2010

Balance Data 31 Dec. 2010 difference

A) INTANGIBLE FIXED ASSETS

- application programs 600 371 (229)

- works leasehold 12,000 14,574 2,574

- others 650 562 (88)

TOTAL 13,250 15,507 2,257

B) TANGIBLE FIXED ASSETS

- building 120 94 (26)

- plants concessions 0 180 180

- systems and machinery 500 567 67

- others 200 (2,663) (2,863)

TOTAL 820 (1,822) (2,642)

C) FINANCIAL FIXED ASSETS

- others 14,400 7,414 (6,986)

TOTAL 14,400 7,414 (6,986)

TOTAL FIXED ASSETS 28,470 21,099 (7,371)

PAYMENTS FOR FIXED ASSETS (28,470) (21,099) 7,371

FINANCING FORMS

OPERATIVE CASH FLOW 16,000 23,079 7,079

Social Capital payments (A.P.C.) 4,000 2,344 (1,656)

Change in fixed assets debts (8,470) 4,324 12,794

shares (Bipop Carire and Mr. Vaccari) and regarding which the Shareholders’ Meeting of June 20, 2009 resolved to establish the own share purchase provision in accordance with the Italian Civil Code and with Article 58, paragraph d of the Articles of Association. In fiscal year 2010 these shares were completely transferred at the par value of 51.64 euros each.

I. Organizational model - italian legislative decree no. 231/01 Code of ethics

The Supervisory Board’s activity was predominantly focused, on the one hand, on ensuring the application of the procedures specified in the organizational and management model in force and, on the other hand, on identifying points for improvement in the model.During fiscal year 2010 the Supervisory Board performed the following activities:

1) Monitoring procedural conformity with the goal of ensuring not only the conformity of the concrete activities and duties carried out at the Cooperative to the procedures validated by the organizational model, but also of verifying the suitability for the purposes properly assumed pursuant to Italian Legislative Decree no. 231/2001.

Furthermore, in reference to the purposes mentioned in the previous paragraph, the Supervisory Board monitored the effectiveness of procedures

Financial coverage of investments

Following the above, during the fiscal year that just ended, the Cooperative recorded investments totaling approximately 21.1 million euros. However, following the new lines of financing granted by the banks together with the cash flow generated by the core business and the operations resulting from the transfers regarding the photovoltaic energy operations, also for 2010 it was possible to establish a substantial cash reserve of 36.66 million euros. At the same time, at the end of the fiscal year CPL CONCORDIA recorded an increase in its

share capital by the cooperative shareholders of approximately 1.5 million euros.Liquid assets were partially placed in bank deposits while awaiting disbursement in relation to the progress of the investment plan forecast for 2011 as indicated in the 2009-2013 plan.

H. Own Shares

As of December 31, 2009 the Parent Company held 10,300 cooperative shares with a par value of 51.64 euros each for a total of 531,892 euros, in relation to which the right to withdraw was exercised by December 31, 2008 by the possessors of these

72pagina

Rep

ort

on o

pera

tion

2regarding occupational health and safety implemented by the Cooperative, by monitoring the worksite operations.

The Supervisory Board does not make corrective observations or reprimand, ensuring observance of the procedures.

2) Takes note of the possibilities of change of the “Management Procedures.” The Supervisory Board believes the company procedures in force, regarding the finance/control/information systems division, are compatible with the expected new assignments of powers and functions.

In reference to the management of the strategic and foreign affairs, it is necessary to verify the need to develop procedures in reference to the new function and its concrete execution.

Takes note of the authority granted to the managers of the production divisions and the department managers, with regard to the management of the work orders. In this sense the Supervisory Board will perform a further examination for the purpose of verifying the compatibility of the procedural variations that have occurred in relation to the decision processes with the organizational and management model in force.To date, the Supervisory Board has not detected censurable facts or violations of the provisions contained in the management and organizational model and has not received notifications regarding any violations of said model.

L. Parent company’sadministrative bodies

The Cooperative’s ruling body is the Shareholders’ Meeting. The Shareholders’ Meeting appoints the Board of Directors. The following is the composition of the current Board of Directors:

COmPONENTS OF THE BOARD OF DIRECTORS

COmPONENTS qUALIFIED mEmBER POSITION HELD

CASARI ROBERTO Working member Chairman of the Board of Directors

GUARNIERI MARIO Working member Vice-Chairman of the Board of Directors

SPAGGIARI DANIELE Working member Managing Director

PORTA CARLO Working member Director

BENETTI ENRICO Working member Director

LANCIA GIULIO Working member Director

GALEOTTI ELENA Working member Director

CAPELLI PIERLUIGI Working member Director

VERRINI NICOLA Working member Director

LOSCHI ROBERTO Working member Director

MALAVASI EMANUELE Working member Director

CARACCIOLO ARTURO Working member Director

Nobody from outside the Cooperative is a member of the Board of Directors.In conformity with article 2409 “ter” of the Italian Civil Code, accounting control is entrusted to the auditing firm PriceWaterhouseCoopers S.p.A. The controls carried out to ensure proper management pursuant to article 2403 of the Italian Civil Code are performed by the Board of Statutory Auditors. The following is the current composition of the Parent Company’s Board of Statutory Auditors:

COmPONENTS OF THE BOARD OF AUDITORS

COmPONENTS qUALIFICATION

PELLICIARDI CARLO ALBERTO Auditor President

CASARI MAURO Auditor

ASCARI FAUSTO Auditor

PELLICIARI GIOSUE’ Additional auditor

CLO’ CRISTINA Additional auditor

73pagina

M. Expected evolution of operations three-year plan

1. General Principles

The three-year plan, as always, is drawn up starting from the preparation of the operational profits and loss statements of the individual companies, and, on the basis of the investment plan, their asset structure takes shape, with the consequent definition of the Group’s financial needs.The 2011-2013 three-year plan, in observance of the principle of continuity of information, with regard to both the internal control bodies and our stakeholders, considers the first financial statements of the 2011-2013 three-year plan to be the 2011 budget.The consolidated financial statements for fiscal years 2012 and 2013 contain a theoretical company called “Various foreign strategies,” which consists of the initiatives regarding foreign markets that could emerge in the next few months. This instrument projects investments for a total of 3.8 million euros, with equivalent financial commitment, partially consisting of capital and partially of financing.

2. Investment plan

The 2011-2013 three-year investment plan projects 97.7 million euros of investments, structured as follows:

Amounts expressed in millions of euros

years 2011 2012 2013 Total

Intangible Assets 15.3 15.1 13.9 44.3

Tangible Assets 14.8 12.3 12.8 39.9

Financial Assets 6.6 1.9 5.0 13.5

Total 36.7 29.3 31.7 97.7

The investments in intangible assets are mainly focused on the parent company, and to a lesser degree on Cristoforetti.These investments regard works on third-party assets, mainly in the context of heat management; software implementation; public lighting; and works for the expansion of the company offices, which are owned by leasing companies.The investments in tangible assets regard almost exclusively the construction and extension of the gas distribution networks of the subsidiaries CPL Distribuzione, Ischia Gas, Filiala Cluj Romania, and Grecanica Gas. Also investments are projected of approximately 3 million euros in CPL Energy India and 3.8 million euros in initiatives in other foreign markets.With regard to the investments in financial assets, it should be noted that the balance in the three-year period of 13.5 million euros represents the balance of the investments, the disinvestments, and the valuations of the associated companies using the equity method. In fact, it should be noted that also the portion of the margins eliminated from intra-group works contributes to the equity value of the associated companies. From the point of view of the economic evaluation, the table above is correct; from the financial point of view the real investments are larger by the portion of the eliminated margins, which in our case regard almost exclusively the associated company Ichnusa Gas S.p.A.

According to the financial method the investments of the three-year period are approximately 22 million euros, to be attributed almost exclusively for approximately 10 million euros to CPL Distribuzione and to Ichnusa Gas.

3. Core activities plan

More than 80% of the value of production of the consolidated financial statements is comprised of the Parent Company’s activities. The remaining 20% is divided among Coopgas, CPL Distribuzione, Cristoforetti, Filiala di Cluj, and to a lesser degree among the other companies.The core activities that comprise the profit and loss statement are the core business that the Group has developed over the last few years.More than 50% of the value of production is comprised of the “Energy” sector, which consists of the construction of energy systems and remote-heating systems; energy service contracts stipulated in accordance with Italian Legislative Decree no. 115 of May 30, 2008 and Global Service; public lighting contracts; and sales, maintenance, and service for cogeneration systems contracts. Also included in the sector are construction, management, and maintenance of photovoltaic power systems and biomass systems. The value of production taken into account in the three-year period, with

74pagina

Rep

ort

on o

pera

tion

2regard to alternative energies, was estimated as 50 million euros per year.In absolute values, for the Energy division, the value of production increases from 246 million euros in 2010 to 290 million euros estimated in 2013, and in percentage values we go from 68% for the department out of the total value of production in 2010 to 56% in 2013.The “Construction and maintenance of gas and water distribution networks” department was forecast to grow, despite the evident stagnation of the market.The growth forecast in the three-year plan is due almost exclusively to the construction of the gas distribution networks in the catchment areas of Sardinia in the context of the Ichnusa project, for more than 1500 km of network providing service to more than 100 municipalities.In fact, the estimated value of production for the entire department of 51.7 million euros in 2010 increases to 93.6 million euros in 2013.The Ichnusa project has the following impact: 3.7 million euros in 2010, 17.2 million euros in 2011, 38.9 million euros in 2012, and 40.2 million euros in 2013.The other activities included in this department regard the expansion of the Group’s networks in concession and the maintenance and construction contracts, which generally and traditionally are included in the Parent Company’s portfolio.The “Technological and Odorizer Systems” department records a very significant increase during the three-year period: the current 26 million euros increases to 67 million euros in 2013.This increase is chiefly due to the effects of resolution ARG/gas 155/2008 of the Regulatory

Authority for Electricity and Gas, requiring the almost complete replacement of meters, which must be equipped with devices that correct the measurement according to temperature and pressure. Over the years the Group has prepared itself to bring onto the market its own technologically advanced and patented products, with the reasonable belief that it could become a player in the market, also on the basis of large contracts that have already been acquired.Lastly, the diversification into foreign markets has had an impact on the increase in the department’s production.The “Gas concessions management” department, which includes the activities of gas distribution, trading, and sales, mainly in the concessions managed by the Group, is always important.The three-year value of production is constant at approximately 40 million euros, with an impact on the total value of production of about 10%.It should be noted that during the three-year period even some contracts regarding the distribution concessions in large municipalities will expire, in conformity with the requirements of Italian Legislative Decree no. 164/2000. No acquisitions were contemplated in the three-year plan.Less significant from a numerical point of view, but important in a strategic context, the department called “Information Technology” has a value of production of approximately 8 million euros, with an impact on the total value of production of around 1.7%. This department allows the Group to present itself to both public and private organizations, offering a wide range of complete and strategic services in a business

context.With regard to the other remaining items that comprise the total value of production outlined in the three-year plan, it should be emphasized that new activities to be developed exist in new foreign markets, especially in South America (Brazil and Peru), on which work has already begun from a commercial point of view, in India, and in the Balkan area.

(expressed in Euro)

PREvENTIvI CONSUNTIvI

31/12/2013 % 31/12/2012 % 31/12/2011 % 31/12/2010 % 31/12/2009 %

Proceeds from sales and performances 419.007.952 94,80% 418.057.952 94,53% 367.611.360 93,91% 312.347.751 94,47% 243.437.301 87,54%

Change invent. fin. prod. semifin. 0 0,00% 0 0,00% 0 0,00% 0 0,00% 0 0,00%

Changes works in progress 8.357.599 1,89% 8.357.599 1,89% 8.357.599 2,13% (6.514.113) -1,97% 7.472.352 2,69%

works in economy 13.615.770 3,08% 14.815.770 3,35% 14.499.790 3,70% 17.590.866 5,32% 20.127.269 7,24%

other proceeds 1.000.000 0,23% 1.000.000 0,23% 1.000.000 0,26% 7.195.762 2,18% 7.053.783 2,54%

vALUE OF PRODUCTION 441.981.321 100,00% 442.231.321 100,00% 391.468.748 100,00% 330.620.266 100,00% 278.090.704 100,00% Costs for purchases (167.640.768) -37,93% (166.058.428) -37,55% (146.820.482) -37,51% (137.132.994) -41,48% (94.469.596) -33,97%

Variation in inventory of prime materials (100.000) -0,02% (100.000) -0,02% (100.000) -0,03% 7.382.108 2,23% (656.326) -0,24%

Misc costs for services (152.272.748) -34,45% (151.531.337) -34,27% (141.454.706) -36,13% (110.507.263) -33,42% (91.959.486) -33,07%

Expenses for use of third party property (18.492.176) -4,18% (18.328.530) -4,14% (16.493.532) -4,21% (15.075.102) -4,56% (13.949.275) -5,02%

Various management expenses (5.208.300) -1,18% (5.198.000) -1,18% (4.598.000) -1,17% (3.311.792) -1,00% (4.131.339) -1,49%

vALUE ADDED 98.267.328 22,23% 101.015.026 22,84% 82.002.029 20,95% 71.975.223 21,77% 72.924.684 26,22% Cost of labour and relative expenses (67.081.543) -15,18% (65.935.952) -14,91% (57.828.874) -14,77% (52.120.256) -15,76% (47.893.690) -17,22%mOL 31.185.785 7,06% 35.079.074 7,93% 24.173.155 6,17% 19.854.967 6,01% 25.030.994 9,00%

Amortisations material fixed assets (1.391.335) -0,31% (1.379.023) -0,31% (1.240.959) -0,32% (1.637.143) -0,50% (1.800.681) -0,65%

Amortisations material intangible assets (8.871.313) -2,01% (8.791.915) -1,99% (7.905.351) -2,02% (6.264.766) -1,89% (4.714.592) -1,70%

Funds and devaluations (1.000.000) -0,23% (1.000.000) -0,23% (1.631.595) -0,42% (3.131.953) -0,95% (2.579.683) -0,93%

Depreciation and devaluation (11.262.648) -2,55% (11.170.937) -2,53% (10.777.905) -2,75% (11.033.862) -3,34% (9.094.957) -3,27%

EBIT 19.923.137 4,51% 23.908.137 5,41% 13.395.250 3,42% 8.821.105 2,67% 15.936.038 5,73% Interests and the other financial burden (5.658.709) -1,28% (4.694.531) -1,06% (3.200.000) -0,82% (1.634.095) -0,49% (1.968.634) -0,71%

Other financial proceeds 727.689 0,16% 602.917 0,14% 0 0,00% 581.589 0,18% 735.115 0,26%

TOTAL FINANCIAL MANAGEMENT (4.931.020) -1,12% (4.091.614) -0,93% (3.200.000) -0,82% (1.052.506) -0,32% (1.233.520) -0,44%

CURRENT RESULT 14.992.116 3,39% 19.816.523 4,48% 10.195.250 2,60% 7.768.599 2,35% 14.702.518 5,29% Proceeds from shares 1.280.000 0,29% 1.180.000 0,27% 2.350.000 0,60% 11.007.160 3,33% 178.829 0,06%

Financial activity rectifications (777.546) -0,18% (879.903) -0,20% (318.405) -0,08% (1.858.950) -0,56% (1.153.119) -0,41%

Refunds to partners 0 0,00% 0 0,00% 0 0,00% (1.700.000) -0,51% (1.500.000) -0,54%

Extraordinary management 0 0,00% 0 0,00% 0 0,00% 126.852 0,04% 680.550 0,24%

PRE-TAX RESULT 15.494.570 3,51% 20.116.619 4,55% 12.226.845 3,12% 15.343.662 4,64% 12.908.777 4,64%

Taxes on the financial year income (5.131.114) -1,16% (5.595.891) -1,27% (4.137.740) -1,06% (1.986.056) -0,60% (4.311.305) -1,55%

NET RESULT 10.363.456 2,34% 14.520.729 3,28% 8.089.105 2,07% 13.357.606 4,04% 8.597.472 3,09%

75pagina

With regard to the three-year plan, since there is not yet any objective data that can be processed, an estimate of 5 million euros was made for the production in 2012 and an estimate of another 10 million euros was made for 2013.The following is an analysis of the profit and loss statement of the financial statements for the fiscal year of the Cooperative and the Group, with relative economic and assets indices.

M.1. Financial Statements for the fiscal year Profit and Loss Statement - 2011-2013 three-year period

CPL CONCORDIA: COOPERATIvE COmPANy: BALANCE SHEET FORECAST

(valori espressi in Euro)

qUOTES BALANCE DATA

31 Dec 2013 % 31 Dec 2012 % 31 Dec 2011 % 31 Dec 2010 % 31 Dec 009 %

Ricavi delle vendite e delle prestazioni 419,007,952 94.80% 418,057,952 94.53% 367,611,360 93.91% 312,347,751 94.47% 243,437,301 87.54%

Variazione rimanenze prodotti fin e semil. 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%

Variazione lavori in corso 8,357,599 1.89% 8,357,599 1.89% 8,357,599 2.13% (6,514,113) -1.97% 7,472,352 2.69%

Lavori in economia 13,615,770 3.08% 14,815,770 3.35% 14,499,790 3.70% 17,590,866 5.32% 20,127,269 7.24%

Proventi diversi 1,000,000 0.23% 1,000,000 0.23% 1,000,000 0.26% 7,195,762 2.18% 7,053,783 2.54%

vALORE DELLA PRODUZIONE 441,981,321 100.00% 442,231,321 100.00% 391,468,748 100.00% 330,620,266 100.00% 278,090,704 100.00% Costi per acquisti (167,640,768) -37.93% (166,058,428) -37.55% (146,820,482) -37.51% (137,132,994) -41.48% (94,469,596) -33.97%

Variazione rimanenze materie prime (100,000) -0.02% (100,000) -0.02% (100,000) -0.03% 7,382,108 2.23% (656,326) -0.24%

Costi vari per servizi (152,272,748) -34.45% (151,531,337) -34.27% (141,454,706) -36.13% (110,507,263) -33.42% (91,959,486) -33.07%

Spese per godimento beni di terzi (18,492,176) -4.18% (18,328,530) -4.14% (16,493,532) -4.21% (15,075,102) -4.56% (13,949,275) -5.02%

Oneri diversi di gestione (5,208,300) -1.18% (5,198,000) -1.18% (4,598,000) -1.17% (3,311,792) -1.00% (4,131,339) -1.49%

vALORE AGGIUNTO 98,267,328 22.23% 101,015,026 22.84% 82,002,029 20.95% 71,975,223 21.77% 72,924,684 26.22% Costo del lavoro ed oneri relativi (67,081,543) -15.18% (65,935,952) -14.91% (57,828,874) -14.77% (52,120,256) -15.76% (47,893,690) -17.22%mOL 31,185,785 7.06% 35,079,074 7.93% 24,173,155 6.17% 19,854,967 6.01% 25,030,994 9.00%

Ammortamenti immob. materiali (1,391,335) -0.31% (1,379,023) -0.31% (1,240,959) -0.32% (1,637,143) -0.50% (1,800,681) -0.65%

Ammortamenti immob. immateriali (8,871,313) -2.01% (8,791,915) -1.99% (7,905,351) -2.02% (6,264,766) -1.89% (4,714,592) -1.70%

Accantonamenti e svalutazioni (1,000,000) -0.23% (1,000,000) -0.23% (1,631,595) -0.42% (3,131,953) -0.95% (2,579,683) -0.93%

Ammortamenti e accantonamenti (11,262,648) -2.55% (11,170,937) -2.53% (10,777,905) -2.75% (11,033,862) -3.34% (9,094,957) -3.27%

RISULTATO OPERATIvO 19,923,137 4.51% 23,908,137 5.41% 13,395,250 3.42% 8,821,105 2.67% 15,936,038 5.73% Interessi ed altri oneri finanziari (5,658,709) -1.28% (4,694,531) -1.06% (3,200,000) -0.82% (1,634,095) -0.49% (1,968,634) -0.71%

Altri proventi finanziari 727,689 0.16% 602,917 0.14% 0 0.00% 581,589 0.18% 735,115 0.26%

TOTALE GESTIONE FINANZIARIA (4,931,020) -1.12% (4,091,614) -0.93% (3,200,000) -0.82% (1,052,506) -0.32% (1,233,520) -0.44%

RISULTATO CORRENTE 14,992,116 3.39% 19,816,523 4.48% 10,195,250 2.60% 7,768,599 2.35% 14,702,518 5.29% Proventi da partecipazioni 1,280,000 0.29% 1,180,000 0.27% 2,350,000 0.60% 11,007,160 3.33% 178,829 0.06%

Rettifiche attività finanziarie (777,546) -0.18% (879,903) -0.20% (318,405) -0.08% (1,858,950) -0.56% (1,153,119) -0.41%

Ristorno ai soci 0 0.00% 0 0.00% 0 0.00% (1,700,000) -0.51% (1,500,000) -0.54%

Gestione straordinaria 0 0.00% 0 0.00% 0 0.00% 126,852 0.04% 680,550 0.24%

RISULTATO ANTE ImPOSTE 15,494,570 3.51% 20,116,619 4.55% 12,226,845 3.12% 15,343,662 4.64% 12,908,777 4.64%

Imposte sul reddito d’esercizio (5,131,114) -1.16% (5,595,891) -1.27% (4,137,740) -1.06% (1,986,056) -0.60% (4,311,305) -1.55%

RISULTATO NETTO 10,363,456 2.34% 14,520,729 3.28% 8,089,105 2.07% 13,357,606 4.04% 8,597,472 3.09%

(expressed in Euro)

PREvENTIvI CONSUNTIvI

31/12/2013 % 31/12/2012 % 31/12/2011 % 31/12/2010 % 31/12/2009 %

Proceeds from sales and performances 419.007.952 94,80% 418.057.952 94,53% 367.611.360 93,91% 312.347.751 94,47% 243.437.301 87,54%

Change invent. fin. prod. semifin. 0 0,00% 0 0,00% 0 0,00% 0 0,00% 0 0,00%

Changes works in progress 8.357.599 1,89% 8.357.599 1,89% 8.357.599 2,13% (6.514.113) -1,97% 7.472.352 2,69%

works in economy 13.615.770 3,08% 14.815.770 3,35% 14.499.790 3,70% 17.590.866 5,32% 20.127.269 7,24%

other proceeds 1.000.000 0,23% 1.000.000 0,23% 1.000.000 0,26% 7.195.762 2,18% 7.053.783 2,54%

vALUE OF PRODUCTION 441.981.321 100,00% 442.231.321 100,00% 391.468.748 100,00% 330.620.266 100,00% 278.090.704 100,00% Costs for purchases (167.640.768) -37,93% (166.058.428) -37,55% (146.820.482) -37,51% (137.132.994) -41,48% (94.469.596) -33,97%

Variation in inventory of prime materials (100.000) -0,02% (100.000) -0,02% (100.000) -0,03% 7.382.108 2,23% (656.326) -0,24%

Misc costs for services (152.272.748) -34,45% (151.531.337) -34,27% (141.454.706) -36,13% (110.507.263) -33,42% (91.959.486) -33,07%

Expenses for use of third party property (18.492.176) -4,18% (18.328.530) -4,14% (16.493.532) -4,21% (15.075.102) -4,56% (13.949.275) -5,02%

Various management expenses (5.208.300) -1,18% (5.198.000) -1,18% (4.598.000) -1,17% (3.311.792) -1,00% (4.131.339) -1,49%

vALUE ADDED 98.267.328 22,23% 101.015.026 22,84% 82.002.029 20,95% 71.975.223 21,77% 72.924.684 26,22% Cost of labour and relative expenses (67.081.543) -15,18% (65.935.952) -14,91% (57.828.874) -14,77% (52.120.256) -15,76% (47.893.690) -17,22%mOL 31.185.785 7,06% 35.079.074 7,93% 24.173.155 6,17% 19.854.967 6,01% 25.030.994 9,00%

Amortisations material fixed assets (1.391.335) -0,31% (1.379.023) -0,31% (1.240.959) -0,32% (1.637.143) -0,50% (1.800.681) -0,65%

Amortisations material intangible assets (8.871.313) -2,01% (8.791.915) -1,99% (7.905.351) -2,02% (6.264.766) -1,89% (4.714.592) -1,70%

Funds and devaluations (1.000.000) -0,23% (1.000.000) -0,23% (1.631.595) -0,42% (3.131.953) -0,95% (2.579.683) -0,93%

Depreciation and devaluation (11.262.648) -2,55% (11.170.937) -2,53% (10.777.905) -2,75% (11.033.862) -3,34% (9.094.957) -3,27%

EBIT 19.923.137 4,51% 23.908.137 5,41% 13.395.250 3,42% 8.821.105 2,67% 15.936.038 5,73% Interests and the other financial burden (5.658.709) -1,28% (4.694.531) -1,06% (3.200.000) -0,82% (1.634.095) -0,49% (1.968.634) -0,71%

Other financial proceeds 727.689 0,16% 602.917 0,14% 0 0,00% 581.589 0,18% 735.115 0,26%

TOTAL FINANCIAL MANAGEMENT (4.931.020) -1,12% (4.091.614) -0,93% (3.200.000) -0,82% (1.052.506) -0,32% (1.233.520) -0,44%

CURRENT RESULT 14.992.116 3,39% 19.816.523 4,48% 10.195.250 2,60% 7.768.599 2,35% 14.702.518 5,29% Proceeds from shares 1.280.000 0,29% 1.180.000 0,27% 2.350.000 0,60% 11.007.160 3,33% 178.829 0,06%

Financial activity rectifications (777.546) -0,18% (879.903) -0,20% (318.405) -0,08% (1.858.950) -0,56% (1.153.119) -0,41%

Refunds to partners 0 0,00% 0 0,00% 0 0,00% (1.700.000) -0,51% (1.500.000) -0,54%

Extraordinary management 0 0,00% 0 0,00% 0 0,00% 126.852 0,04% 680.550 0,24%

PRE-TAX RESULT 15.494.570 3,51% 20.116.619 4,55% 12.226.845 3,12% 15.343.662 4,64% 12.908.777 4,64%

Taxes on the financial year income (5.131.114) -1,16% (5.595.891) -1,27% (4.137.740) -1,06% (1.986.056) -0,60% (4.311.305) -1,55%

NET RESULT 10.363.456 2,34% 14.520.729 3,28% 8.089.105 2,07% 13.357.606 4,04% 8.597.472 3,09%

76pagina

Rep

ort

on o

pera

tion

2M.2. Financial Statements for the fiscal year: Indices - 2011-2013 three-year period

CPL CONCORDIA COOPERATIvE COmPANy: INDICATIONS

ECONOmICAL ANALySIS qUOTES BALANCE DATA

31 Dec 2013

31 Dec 2012

31 Dec 2011

31 Dec 2010

31 Dec 2009

R.O.E. (Return on Equity) 7.27% 11.17% 6.57% 12.08% 8.52%

R.O.I. (Return on Investment) 3.99% 5.11% 3.13% 2.12% 4.70%

Mol Value / Value of production 7.06% 7.93% 6.17% 6.01% 9.00%

Impact Fees and extra income management 47.98% 39.26% 39.61% -51.43% 46.05%

Impact on net financial expense Vp 1.12% 0.93% 0.82% 0.32% 0.44%

Impact of net financial expense on R.O. 24.75% 17.11% 23.89% 11.93% 7.74%

CPL CONCORDIA COOPERATIvE COmPANy: INDICATIONS

FINANCIAL AND BALANCE SHEET ANALySIS

qUOTES BALANCE DATA

31 Dec 2013

31 Dec 2012

31 Dec 2011

31 Dec 2010

31 Dec 2009

Liquidity index 1.61 1.47 1.41 1.25 1.20

Leverage 3.51 3.60 3.48 3.77 3.36

Report unduly onerous 0.81 0.79 0.70 0.38 0.14

Elasticity index 2.18 2.20 2.21 2.46 2.16

EBITDA/DEBT 26.87 34.03 28.17 47.38 176.93

DEBT/EBITDA 3.72 2.94 3.55 2.11 0.57

DEBT 116,076,680 103,096,680 85,804,430 41,903,154 14,147,320

EBITDA 31,185,785 35,079,074 24,173,155 19,854,967 25,030,994

(expressed in Euro)

qUOTES BALANCE DATA

31 Dec 2013 % 31 Dec 2012 % 31 Dec 2011 % 31 Dec 2010 % 31 Dec 009 %

Proceeds from sales and performances 482,509,033 92.60% 469,195,148 92.14% 414,345,138 91.85% 344,071,757 89.79% 273,434,698 85.90%

Change invent. fin. prod. semifin. 317,029 0.06% 588,308 0.12% 3,391,430 0.75% 2,087,663 0.54% 19,406 0.01%

Changes works in progress 8,382,599 1.61% 8,482,599 1.67% 8,407,599 1.86% (3,461,488) -0.90% 4,218,113 1.33%

works in economy 28,774,820 5.52% 29,844,770 5.86% 23,805,420 5.28% 31,224,727 8.15% 33,330,291 10.47%

other proceeds 1,093,959 0.21% 1,093,959 0.21% 1,176,565 0.26% 9,252,613 2.41% 7,320,507 2.30%

vALUE OF PRODUCTION 521,077,440 100.00% 509,204,784 100.00% 451,126,151 100.00% 383,175,272 100.00% 318,323,015 100.00% Costs for purchases (217,591,579) -41.76% (210,683,570) -41.38% (172,341,347) -38.20% (156,041,443) -40.72% (113,228,853) -35.57%

Variation in inventory of prime materials (115,550) -0.02% (115,550) -0.02% (370,902) -0.08% 7,926,827 2.07% (876,791) -0.28%

Misc costs for services (154,375,226) -29.63% (149,959,791) -29.45% (153,797,549) -34.09% (124,648,765) -32.53% (100,320,174) -31.52%

Expenses for use of third party property (22,729,563) -4.36% (22,228,538) -4.37% (20,146,214) -4.47% (16,509,697) -4.31% (13,043,466) -4.10%

Various management expenses (6,083,767) -1.17% (6,069,662) -1.19% (5,643,758) -1.25% (4,328,331) -1.13% (4,610,026) -1.45%

vALUE ADDED 120,181,755 23.06% 120,147,673 23.60% 98,826,381 21.91% 89,573,864 23.38% 86,243,706 27.09% Cost of labour and relative expenses (72,297,026) -13.87% (70,522,585) -13.85% (61,825,564) -13.70% (55,354,294) -14.45% (50,757,875) -15.95%

mOL 47,884,728 9.19% 49,625,088 9.75% 37,000,817 8.20% 34,219,569 8.93% 35,485,831 11.15%

Amortisations material fixed assets (6,111,589) -1.17% (5,302,544) -1.04% (4,401,179) -0.98% (6,086,569) -1.59% (5,372,843) -1.69%

Amortisations material intangible assets (9,993,203) -1.92% (9,900,872) -1.94% (8,869,894) -1.97% (7,235,051) -1.89% (5,478,904) -1.72%

Funds and devaluations (1,269,488) -0.24% (1,269,488) -0.25% (1,901,083) -0.42% (4,472,280) -1.17% (3,231,300) -1.02%

Depreciation and devaluation (17,374,280) -3.33% (16,472,904) -3.24% (15,172,156) -3.36% (17,793,899) -4.64% (14,083,047) -4.42%

EBIT 30,510,449 5.86% 33,152,184 6.51% 21,828,661 4.84% 16,425,670 4.29% 21,402,784 6.72% Interests and the other financial burden (8,430,154) -1.62% (7,355,038) -1.44% (6,168,748) -1.37% (3,316,780) -0.87% (3,544,259) -1.11%

Other financial proceeds - 0.00% - 0.00% - 0.00% 508,963 0.13% 539,387 0.17%

TOTAL FINANCIAL MANAGEMENT (8,430,154) -1.62% (7,355,038) -1.44% (6,168,748) -1.37% (2,807,817) -0.73% (3,004,872) -0.94%

CURRENT RESULT 22,080,295 4.24% 25,797,147 5.07% 15,659,913 3.47% 13,617,853 3.55% 18,397,913 5.78% Proceeds from shares - 0.00% - 0.00% 262,500 0.06% 9,257,797 2.42% 59,546 0.02%

Financial activity rectifications (2,783,975) -0.53% (2,013,784) -0.40% (2,832,250) -0.63% (4,751,321) -1.24% (1,448,209) -0.45%

Refunds to partners - 0.00% - 0.00% - 0.00% (1,700,000) -0.44% (1,500,000) -0.47%

Extraordinary management (0) 0.00% (0) 0.00% 19,037 0.00% 2,055,035 0.54% 709,155 0.22%

PRE-TAX RESULT 19,296,320 3.70% 23,783,363 4.67% 13,109,199 2.91% 18,479,364 4.82% 16,218,405 5.09%

Taxes on the financial year income (6,572,156) -1.26% (7,011,988) -1.38% (5,524,113) -1.22% (3,669,471) -0.96% (5,163,187) -1.62%

NET RESULT 12,724,164 2.44% 16,771,374 3.29% 7,585,086 1.68% 14,809,893 3.87% 11,055,217 3.47% THIRD PARTy PROFIT (LOSS) (281,951) (182,658) (9,409) 371,987 131,114 PROFIT (LOSS) 12,442,213 16,588,716 7,575,677 15,181,880 11,186,331

77pagina

M.3. Consolidated Financial Statements: Profit and Loss Statement - 2011-2013 three-year period

CPL CONCORDIA GROUP: INCOmE(expressed in Euro)

qUOTES BALANCE DATA

31 Dec 2013 % 31 Dec 2012 % 31 Dec 2011 % 31 Dec 2010 % 31 Dec 009 %

Proceeds from sales and performances 482,509,033 92.60% 469,195,148 92.14% 414,345,138 91.85% 344,071,757 89.79% 273,434,698 85.90%

Change invent. fin. prod. semifin. 317,029 0.06% 588,308 0.12% 3,391,430 0.75% 2,087,663 0.54% 19,406 0.01%

Changes works in progress 8,382,599 1.61% 8,482,599 1.67% 8,407,599 1.86% (3,461,488) -0.90% 4,218,113 1.33%

works in economy 28,774,820 5.52% 29,844,770 5.86% 23,805,420 5.28% 31,224,727 8.15% 33,330,291 10.47%

other proceeds 1,093,959 0.21% 1,093,959 0.21% 1,176,565 0.26% 9,252,613 2.41% 7,320,507 2.30%

vALUE OF PRODUCTION 521,077,440 100.00% 509,204,784 100.00% 451,126,151 100.00% 383,175,272 100.00% 318,323,015 100.00% Costs for purchases (217,591,579) -41.76% (210,683,570) -41.38% (172,341,347) -38.20% (156,041,443) -40.72% (113,228,853) -35.57%

Variation in inventory of prime materials (115,550) -0.02% (115,550) -0.02% (370,902) -0.08% 7,926,827 2.07% (876,791) -0.28%

Misc costs for services (154,375,226) -29.63% (149,959,791) -29.45% (153,797,549) -34.09% (124,648,765) -32.53% (100,320,174) -31.52%

Expenses for use of third party property (22,729,563) -4.36% (22,228,538) -4.37% (20,146,214) -4.47% (16,509,697) -4.31% (13,043,466) -4.10%

Various management expenses (6,083,767) -1.17% (6,069,662) -1.19% (5,643,758) -1.25% (4,328,331) -1.13% (4,610,026) -1.45%

vALUE ADDED 120,181,755 23.06% 120,147,673 23.60% 98,826,381 21.91% 89,573,864 23.38% 86,243,706 27.09% Cost of labour and relative expenses (72,297,026) -13.87% (70,522,585) -13.85% (61,825,564) -13.70% (55,354,294) -14.45% (50,757,875) -15.95%

mOL 47,884,728 9.19% 49,625,088 9.75% 37,000,817 8.20% 34,219,569 8.93% 35,485,831 11.15%

Amortisations material fixed assets (6,111,589) -1.17% (5,302,544) -1.04% (4,401,179) -0.98% (6,086,569) -1.59% (5,372,843) -1.69%

Amortisations material intangible assets (9,993,203) -1.92% (9,900,872) -1.94% (8,869,894) -1.97% (7,235,051) -1.89% (5,478,904) -1.72%

Funds and devaluations (1,269,488) -0.24% (1,269,488) -0.25% (1,901,083) -0.42% (4,472,280) -1.17% (3,231,300) -1.02%

Depreciation and devaluation (17,374,280) -3.33% (16,472,904) -3.24% (15,172,156) -3.36% (17,793,899) -4.64% (14,083,047) -4.42%

EBIT 30,510,449 5.86% 33,152,184 6.51% 21,828,661 4.84% 16,425,670 4.29% 21,402,784 6.72% Interests and the other financial burden (8,430,154) -1.62% (7,355,038) -1.44% (6,168,748) -1.37% (3,316,780) -0.87% (3,544,259) -1.11%

Other financial proceeds 0 0.00% 0 0.00% 0 0.00% 508,963 0.13% 539,387 0.17%

TOTAL FINANCIAL MANAGEMENT (8,430,154) -1.62% (7,355,038) -1.44% (6,168,748) -1.37% (2,807,817) -0.73% (3,004,872) -0.94%

CURRENT RESULT 22,080,295 4.24% 25,797,147 5.07% 15,659,913 3.47% 13,617,853 3.55% 18,397,913 5.78% Proceeds from shares 0 0.00% 0 0.00% 262,500 0.06% 9,257,797 2.42% 59,546 0.02%

Financial activity rectifications (2,783,975) -0.53% (2,013,784) -0.40% (2,832,250) -0.63% (4,751,321) -1.24% (1,448,209) -0.45%

Refunds to partners 0 0.00% 0 0.00% 0 0.00% (1,700,000) -0.44% (1,500,000) -0.47%

Extraordinary management 0 0.00% 0 0.00% 19,037 0.00% 2,055,035 0.54% 709,155 0.22%

PRE-TAX RESULT 19,296,320 3.70% 23,783,363 4.67% 13,109,199 2.91% 18,479,364 4.82% 16,218,405 5.09%

Taxes on the financial year income (6,572,156) -1.26% (7,011,988) -1.38% (5,524,113) -1.22% (3,669,471) -0.96% (5,163,187) -1.62%

NET RESULT 12,724,164 2.44% 16,771,374 3.29% 7,585,086 1.68% 14,809,893 3.87% 11,055,217 3.47% THIRD PARTy PROFIT (LOSS) (281,951) (182,658) (9,409) 371,987 131,114 PROFIT (LOSS) 12,442,213 16,588,716 7,575,677 15,181,880 11,186,331

(expressed in Euro)

qUOTES BALANCE DATA

31 Dec 2013 % 31 Dec 2012 % 31 Dec 2011 % 31 Dec 2010 % 31 Dec 009 %

Proceeds from sales and performances 482,509,033 92.60% 469,195,148 92.14% 414,345,138 91.85% 344,071,757 89.79% 273,434,698 85.90%

Change invent. fin. prod. semifin. 317,029 0.06% 588,308 0.12% 3,391,430 0.75% 2,087,663 0.54% 19,406 0.01%

Changes works in progress 8,382,599 1.61% 8,482,599 1.67% 8,407,599 1.86% (3,461,488) -0.90% 4,218,113 1.33%

works in economy 28,774,820 5.52% 29,844,770 5.86% 23,805,420 5.28% 31,224,727 8.15% 33,330,291 10.47%

other proceeds 1,093,959 0.21% 1,093,959 0.21% 1,176,565 0.26% 9,252,613 2.41% 7,320,507 2.30%

vALUE OF PRODUCTION 521,077,440 100.00% 509,204,784 100.00% 451,126,151 100.00% 383,175,272 100.00% 318,323,015 100.00% Costs for purchases (217,591,579) -41.76% (210,683,570) -41.38% (172,341,347) -38.20% (156,041,443) -40.72% (113,228,853) -35.57%

Variation in inventory of prime materials (115,550) -0.02% (115,550) -0.02% (370,902) -0.08% 7,926,827 2.07% (876,791) -0.28%

Misc costs for services (154,375,226) -29.63% (149,959,791) -29.45% (153,797,549) -34.09% (124,648,765) -32.53% (100,320,174) -31.52%

Expenses for use of third party property (22,729,563) -4.36% (22,228,538) -4.37% (20,146,214) -4.47% (16,509,697) -4.31% (13,043,466) -4.10%

Various management expenses (6,083,767) -1.17% (6,069,662) -1.19% (5,643,758) -1.25% (4,328,331) -1.13% (4,610,026) -1.45%

vALUE ADDED 120,181,755 23.06% 120,147,673 23.60% 98,826,381 21.91% 89,573,864 23.38% 86,243,706 27.09% Cost of labour and relative expenses (72,297,026) -13.87% (70,522,585) -13.85% (61,825,564) -13.70% (55,354,294) -14.45% (50,757,875) -15.95%

mOL 47,884,728 9.19% 49,625,088 9.75% 37,000,817 8.20% 34,219,569 8.93% 35,485,831 11.15%

Amortisations material fixed assets (6,111,589) -1.17% (5,302,544) -1.04% (4,401,179) -0.98% (6,086,569) -1.59% (5,372,843) -1.69%

Amortisations material intangible assets (9,993,203) -1.92% (9,900,872) -1.94% (8,869,894) -1.97% (7,235,051) -1.89% (5,478,904) -1.72%

Funds and devaluations (1,269,488) -0.24% (1,269,488) -0.25% (1,901,083) -0.42% (4,472,280) -1.17% (3,231,300) -1.02%

Depreciation and devaluation (17,374,280) -3.33% (16,472,904) -3.24% (15,172,156) -3.36% (17,793,899) -4.64% (14,083,047) -4.42%

EBIT 30,510,449 5.86% 33,152,184 6.51% 21,828,661 4.84% 16,425,670 4.29% 21,402,784 6.72% Interests and the other financial burden (8,430,154) -1.62% (7,355,038) -1.44% (6,168,748) -1.37% (3,316,780) -0.87% (3,544,259) -1.11%

Other financial proceeds - 0.00% - 0.00% - 0.00% 508,963 0.13% 539,387 0.17%

TOTAL FINANCIAL MANAGEMENT (8,430,154) -1.62% (7,355,038) -1.44% (6,168,748) -1.37% (2,807,817) -0.73% (3,004,872) -0.94%

CURRENT RESULT 22,080,295 4.24% 25,797,147 5.07% 15,659,913 3.47% 13,617,853 3.55% 18,397,913 5.78% Proceeds from shares - 0.00% - 0.00% 262,500 0.06% 9,257,797 2.42% 59,546 0.02%

Financial activity rectifications (2,783,975) -0.53% (2,013,784) -0.40% (2,832,250) -0.63% (4,751,321) -1.24% (1,448,209) -0.45%

Refunds to partners - 0.00% - 0.00% - 0.00% (1,700,000) -0.44% (1,500,000) -0.47%

Extraordinary management (0) 0.00% (0) 0.00% 19,037 0.00% 2,055,035 0.54% 709,155 0.22%

PRE-TAX RESULT 19,296,320 3.70% 23,783,363 4.67% 13,109,199 2.91% 18,479,364 4.82% 16,218,405 5.09%

Taxes on the financial year income (6,572,156) -1.26% (7,011,988) -1.38% (5,524,113) -1.22% (3,669,471) -0.96% (5,163,187) -1.62%

NET RESULT 12,724,164 2.44% 16,771,374 3.29% 7,585,086 1.68% 14,809,893 3.87% 11,055,217 3.47% THIRD PARTy PROFIT (LOSS) (281,951) (182,658) (9,409) 371,987 131,114 PROFIT (LOSS) 12,442,213 16,588,716 7,575,677 15,181,880 11,186,331

78pagina

Rep

ort

on o

pera

tion

2M.4. Consolidated Financial Statements: Indices

CPL CONCORDIA GROUP: INDICATIONS

ECONOmICAL ANALySIS qUOTES BALANCE DATA

31 Dec 2013

31 Dec 2012 31 Dec 201131 Dec 201031 Dec 2009

R.O.E.(Return on Equity) 8.81% 13.11% 6.31% 14.50% 11.06%

R.O.I. (Return on Investment) 5.11% 5.96% 4.26% 3.28% 5.18%

Mol Value / Value of production 9.19% 9.75% 8.20% 8.93% 11.15%

Impact Fees and extra income management 59.22% 49.96% 65.29% 7.57% 47.73%

Impact on net financial expense Vp 1.62% 1.44% 1.37% 0.73% 0.94%

Impact of net financial expense on R.O. 27.63% 22.19% 28.26% 17.09% 14.04%

CPL CONCORDIA GROUP: INDICATIONS

FINANCIAL AND BALANCE SHEET ANALySIS

qUOTES BALANCE DATA

31 Dec 2013

31 Dec 2012 31 Dec 201131 Dec 201031 Dec 2009

Liquidity index 1.49 1.38 1.34 1.23 1.22

Leverage 4.23 4.40 4.27 4.78 4.08

Report unduly onerous 1.24 1.26 1.20 1.02 0.58

Elasticity index 1.87 1.86 1.81 1.95 1.80

EBITDA/DEBT 27.38 31.18 25.60 31.85 60.83

DEBTI/EBITDA 3.65 3.21 3.91 3.14 1.64

DEBT 174,908,944 159,143,330 144,536,769 107,436,005 58,332,560

EBITDA 47,884,728 49,625,088 37,000,817 34,219,569 35,485,831

From a simple interpretive analysis of the statements shown above, it can be noted that, in a situation of general stagnation of the market, the Group is focusing on maintaining constant its portfolio and its profitability, but in any case making inevitable investments which will result in a slight, but constant, increase in debt, which is being kept at levels that are under complete control.

N. Important events occurring after the end of the fiscal year

In the months following the closing of the financial statements no events occurred that could in any manner significantly affect the Group’s results. Even the Renewable Energy Decree, which is more properly known as the Romani Decree, did not prevent the Group from continuing its activities in the field of photovoltaics, even though it fully understood that the introduction of this legislation will cause the market to experience a severe slowdown and a reduction of margins on new construction.The events occurring after the end of the fiscal year mainly involved the acquisition, establishment, and transfer of companies; these events are described below:

On January 27, 2011 was established the company Vega Energie S.r.l., in which the Cooperative holds a 65% interest. Its company purpose is to manage the energy multi-utilities of Parco Scientifico e Tecnologico di Venezia – Vega. The company’s share capital is 700,000 euros.

On February 9, 2011 the Parent Company stipulated a financing contract with a financing pool headed by Banca Popolare di Verona - San Geminiano e San Prospero S.p.A. for a total amount of 51,500,000 euros with a duration of 48 months.

On February 10, 2011 the special purpose entity Atri Solar S.r.l. was established with

79pagina

share capital of 10,000 euros, 100% of whose shares are held by the Parent Company, with company purpose of managing a photovoltaic array.

On February 10, 2011 the special purpose entity Marche Solar S.r.l. was established with share capital of 10,000 euros, 100% of whose shares are held by the Parent Company, with company purpose of managing a photovoltaic array.

On February 10, 2011 the special purpose entity Mosciano Solar 2 S.r.l. was established with share capital of 10,000 euros, 100% of whose shares are held by the Parent Company, with company purpose of managing a photovoltaic array.

On February 10, 2011 the special purpose entity Sant’Omero Solar 2 S.r.l. was established with share capital of 10,000 euros, 100% of whose shares are held by the Parent Company, with company purpose of managing a photovoltaic array.

On February 10, 2011 the special purpose entity Turi Solar 9 S.r.l. was established with share capital of 10,000 euros, 100% of whose shares are held by the Parent Company, with company purpose of managing a photovoltaic array.

On February 10, 2011 the special purpose entity Turi Solar 10 S.r.l. was established with share capital of 10,000 euros, 100% of whose shares are held by the Parent Company, with company purpose of managing a photovoltaic array.

On February 16, 2011 Cpl

Distribuzione acquired 50% of the shares of the company governed by Indian law CPL Energy India Private Ltd, with a value of 300,000 rupees (equivalent to approximately 4,900 euros).

On April 15, 2011 the Parent Company acquired 100% of the shares of the company PEA Progetti Energia Ambiente S.r.l. at a price of 1,865,000 euros. This company holds minority interests in various catchment areas included in the Ichnusa Project, specifically 30% of Fontenergia 4 S.r.l. and 10% of Fontenergia 6 S.r.l.

On April 20, 2011 was established the company Fontenergia 10 S.r.l., a special purpose vehicle that will manage the Sardegna 10 catchment area, in which the Parent Company holds a 1.7% interest. 98% of the shares are held by Ichnusa Reti S.r.l. The company is included in the Ichnusa Project for the installation of methane gas distribution networks in Sardinia.

On April 20, 2011 was established the company Fontenergia 35 S.r.l., a special purpose vehicle that will manage the Sardegna 35 catchment area, in which the Parent Company holds a 1.6% interest. 98% of the shares are held by Ichnusa Reti S.r.l. The company is included in the Ichnusa Project for the installation of methane gas distribution networks in Sardinia.

On April 20, 2011 the Parent Company transferred to PEA Progetti Energia Ambiente S.r.l. 69.5% of the shares of

Fontenergia 28 S.r.l. at a price of 140,000 euros; on this same date PEA transferred 99% of the shares of the same company to Fiamma 2000 S.p.A. at a price of 200,000 euros. This operation resulted in Fontenergia 28 S.r.l. leaving the Ichnusa Project.

O. Other information

It should also be noted that the Cooperative has updated, by the deadline established by the relevant decree, the safety implementation plan in observance of Annex B of Italian Legislative Decree no. 196/03, also known as the “Consolidated Privacy Act,” which contains the provisions on the technical procedures to be adopted when processing sensitive data with electronic instruments.It should be noted that, pursuant to article 2497 of the Italian Civil Code, the Cooperative is not subject to management or coordination activities by others.The Cooperative does, however, exercise management and coordination activities over the following subsidiaries:AiPower S.p.A.Coopgas S.r.l.Cpl Distribuzione S.r.l.Cpl Concordia Filiala Cluj

Romania S.r.l.CPL Hellas A.B.E. & T.E.Energia della Concordia S.p.A.Erre.Gas S.r.l.Ghirlandina Sport S.r.l.Marigliano Gas S.r.l.Tradenergy S.r.l.Immobiliare della Concordia

S.r.l.Ischia Gas S.r.l.Progas Metano S.r.l.

80pagina

Rep

ort

on o

pera

tion

2Nuoro Servizi in Liquidazione

S.r.l.Serio Energia S.r.l.Vignola Energia S.r.l.

Allocation of Profits

The Board of Directors, on the basis of the results for the year and after having also considered the informed opinion of the Special Cooperative Shareholders’ Meeting, recommends to the Shareholders’ Meeting that it approve the implementation of the multiyear investment plan for fiscal year 2010 and that the net profits for the year of 13,357,606 euros be allocated in the following manner:

379,766.49 euros - to be distributed to the Cooperative Shareholders (subscribers) as a dividend (for the period from January 1, 2010 to December 31, 2010) of 8.50% gross per share with a nominal value of 51.64 euros (code IT00011295960) as of December 31, 2010, payable as of July 1, 2011.

12,149.90 euros - to be distributed to the Cooperative Shareholders (stock options) as a dividend (for the period from January 1, 2010 to December 31, 2010) of 8.50% gross per share with a nominal value of 51.64 euros (code IT00011295960) as of December 31, 2010, payable as of July 1, 2011.

170,000.00 euros - to be distributed to the Cooperative Shareholders (subscribers) as a dividend (for the period

from January 1, 2010 to December 31, 2010) of 8.50% gross per share with a nominal value of 500.00 euros (code IT0003794788) as of December 31, 2010, payable as of July 1, 2011.

100,300.00 euros - to be distributed to the Cooperative Shareholders (subscribers) as a dividend (for the period from January 1, 2010 to December 31, 2010) of 8.50% gross per share with a nominal value of 500.00 euros (code IT0004431083) as of December 31, 2010, payable as of July 1, 2011.

470,463.69 euros - to be distributed to the Cooperative Shareholders and to the Financing Shareholders as a dividend of 6.50% gross in proportion to effectively paid-up share capital, payable as of July 1, 2011.

115,806.46 euros - equal to 1.60%, as a free increase (in accordance with Italian Law no. 59/92) of effectively paid-up share capital, capitalizable.

400,728.18 euros - equal to 3.00% (three percent), to the mutual assistance funds for the

promotion and development of the cooperative movement, in conformity with article 11 of Italian Law no. 59 of January 31, 1992.

4,007,281.80 euros - equal to 30%, to the indivisible legal reserve fund, as required by the Articles of Association and in conformity with article 12 of Italian Law no. 904 of December 16, 1977.

7,701,109.48 euros - to the Reserve Fund which cannot be distributed among the shareholders during the life of the Cooperative or at the time of its dissolution, as stipulated by the Articles of Association and in conformity with article 12 of Italian Law no. 904 of December 16, 1977.

We would like to thank you for the confidence and trust you have placed in us, and we recommend that you approve the Financial Statements as of December 31, 2010 as they have been presented to you.

Concordia sulla Secchia, May 16, 2011

For the Board of DirectorsThe Chairman

Casari Roberto

Evaluation of Shareholders share capital 0.87 %

PCA Dividends (underwritten)4.87 %

Ordinary Reserve87.65 %

PCA Dividends (Stock Option)0.09 %

Shareholders divivdends3.52 %

National insurance Funds3.00%

general annual traget for 2010

83pagina

3Balance sheet 2010

84pagina

Bal

ance

she

et 2

0103

Rectified balance sheet closed on 31 Dec 2010

Balance sheet Assets

ASSETS 31 December 2010Amount in Euro

31 December 2009Amount in Euro

A) SUBSCRIBED CAPITAL UNPAID 1,094,972 1,396,075

requested 1,094,972 1,396,075

B) FIXED ASSETS

I INTANGIBLE FIXED ASSETS:

1) Set-up and expansion costs 1,068 2,431

2) Costs for research, development and advertising 36,878 0

3) Industrial patent rights and intellectual property rights 0 0

4) Concessions, licenses, trademarks and other similar rights 97,452 162,248

5) Set-up 0 0

6) Current fixed assets and payments on accounts 3,447,988 1,819,814

7) Others 25,014,539 17,584,869

Total 28,597,925 19,569,362

II TANGIBLE FIXED ASSETS:

1) Land and buildings 2,883,347 2,846,587

2) Systems and machinery 4,568,622 3,630,806

3) Industrial and commercial apparatus 643,178 456,639

4) Other goods 2,697,938 1,716,002

5) Current fixed assets and payments on accounts 1,404,920 6,795,091

Total 12,198,005 15,445,125

III FINANCIAL FIXED ASSETS:

1) Shares in:

a) subsidiary companies 42,077,241 42,111,233

b) associated companies 9,342,715 4,017,144

c) parents companies 0 0

d) other companies 6,003,486 5,008,769

2) Accounts receivable: (due within 12months) (due within 12months)

a) from subsidiary companies: 8,779,000 8,779,000 12,387,000 12,387,000

b) from associated companies: 8,695,142 9,914,392 4,944,142 4,944,142

c) from parent companies: 0 0

d) from other companies: 930,328 1,702,451 644,468 1,404,828

3) Other accounts receivable 0 0

4) Own shares 0 531,892

Total 77,819,285 70,405,008

TOTAL FIXED ASSETS 118,615,215 105,419,495

C) CURRENT ASSETS

I RESIDUE:

1) Raw and subsidiary materials and consumables 10,018,747 2,753,199

85pagina

ASSETS 31 December 2010Amount in Euro

31 December 2009Amount in Euro

2) Works in progress and semi-finished works 3,294,600 7,084,984

3) Works in progress on order 22,645,784 25,387,731

4) Finished products and merchandise 348,759 232,199

5) Payments to accounts 2,092,648 907,006

Total 38,400,538 36,365,119

II ACCOUNTS RECEIVABLE: (due after 12 months) (due after 12 months)

1) From trade: 1,611,209 163,893,203 1,791,713 137,756,192

2) From subsidiary companies: 24,053,542 13,805,519

3) From associated companies: 0 22,276,622 0 1,277,082

4) From parent companies: 0 0

4.2) Tax Assets 1,260,782 1,824,258

4.3) Advanced paid tax 1,349,533 918,686

5) Other accounts receivable: 725,349 858,520

Total 213,559,031 156,440,257

III FINANCIAL ASSETS: NON-FIXED:

1) Shares in subsidiary companies 3,342,257 20,000

2) Shares in associated companies 0 0

3) Other shares 0 0

4) Own shares 0 0

5) Other securities 0 0

Total 3,342,257 20,000

IV LIQUID ASSETS

1) Bank and post office deposits 28,600,336 34,305,140

2) Cheques 8,040,110 500

3) Monies and cash values 20,739 5,797

Total 36,661,185 34,311,437

TOTAL CURRENT ASSETS 291,963,011 227,136,813

D) ACCRUALS AND DEFFERALS: 4,817,089 5,004,585

TOTAL ASSETS 416,490,287 338,956,968

86pagina

Bal

ance

she

et 2

0103

Rectified balnce sheet closed on 31 Dec 2010

Balance sheet LiabilitiesLIABILITIES 31 December 2010

Amount in Euro31 December 2009

Amount in Euro

A) NET EqUITy

I CAPITAL 18,312,536 15,938,753

II SHARE PREMIUM RESERVE 0 0

III REVALUATION RESERVE 656,679 656,679

IV LEGAL RESERVE 89,473,011 82,158,320

V STATUTORY RESERVE 78,184 78,184

VI OWN SHARES RESERVE (HELD IN PORTFOLIO) 531,892 531,892

VII OTHER RESERVES:

MERGER PROVISION 235,597 235,597

EXCHANGE ADJUSTMENT RESERVE 0 0

CAPITAL ACCOUNT CONTRIBUTIONS 784/80 1,269,396 1,269,396

VIII PROFITS (LOSS) CARRIED FORWARD 0 0

IX PROFITS (LOSS) OF FINANCIAL YEAR 13,357,606 8,597,472

TOTAL 123,914,901 109,466,293

B) RISK AND CHARGE PROvISIONS:

1) Lay-off funds and similar 21,526 21,526

2) tax 0 0

3) Others 2,580,700 2,393,369

TOTAL 2,602,226 2,414,895

C) EmPLOymENT SEvERANCE INDEmNITy 4,761,755 5,336,207

D) ACCOUNTS PAyABLE (due after 12 months) (due after 12 months)

1) Bonds: 0 0 0 0

2) Convertible obligations: 0 0 0 0

3) Accounts payable to shareholders for loans 0 7,057,188 0 5,654,737

4) Accounts payable to banks: 45,315,976 62,654,570 26,672,186 34,004,019

5) Accounts payable to other creditors: 0 602,580 0 0

6) Payments to accounts: 0 22,173,353 0 5,596,163

7) Accounts payable to suppliers: 3,491,619 143,367,084 2,607,790 135,838,887

8) Accounts payable to credit securities: 0 0 0 0

9) Accounts payable to subsidiary companies: 0 25,165,313 0 23,267,384

10) Accounts payable to associated companies: 0 2,479,227 0 234,140

11) Accounts payable to parent companies: 0 0 0 0

12) Tax liabilities: 0 10,163,515 0 5,716,393

13) Accounts payable to pension companies and NI: 0 3,127,055 0 2,994,414

14) Other accounts payable: 0 7,745,499 0 7,588,000

TOTAL 284,535,384 220,894,137

87pagina

LIABILITIES 31 December 2010Amount in Euro

31 December 2009Amount in Euro

E) ACCRUALS AND DEFERRALS: 676,021 845,436

TOTAL LIABILITIES 416,490,287 338,956,968

mEmORANDUm ACCOUNTS:

I) Guarantees provided

- Sureties 199,282,404 143,759,718

- Real Guarantees 1,294,000 1,294,000

Total 200,576,404 145,053,718

II) Other memorandum accounts

- Subject to collection of bills 260,914 70,097

- Others 52,775,985 37,006,534

Total 53,036,899 37,076,631

TOTAL mEmORANDUm ACCOUNTS 253,613,303 182,130,349

88pagina

Bal

ance

she

et 2

0103

Income statementINCOmE STATEmENT 31 December 2010

Amount in Euro31 December 2009

Amount in Euro

A) PRODUCTION vALUE:

1) Sales and services revenue 312,347,751 243,437,301

2) Variations in residue of works in progress, semi-finished works and finished works 0 0

3) Variations in works in progress on order (6,514,113) 7,472,352

4) Increased fixed assets for internal works 17,590,866 20,127,269

5) Other income and revenue:

- various 6,025,256 7,028,195

- contributions for operating expenses 1,170,505 7,195,761 25,588 7,053,783

Total 330,620,265 278,090,705

B) PRODUCTION COSTS:

6) For raw and subsidiary materials, consumables and merchandise 137,132,994 94,469,596

7) Per For services 110,507,263 91,959,486

8) For asset leasing 15,075,102 13,949,275

9) For staff:

a) Salaries and wages 39,500,209 36,188,939

b) national insurance charges 11,865,703 11,125,731

c) employment severance indemnity 2,454,345 2,079,021

d) lay-off funds and similar 0 0

e) other costs 0 53,820,257 0 49,393,691

10) Amortisations and depreciations:

a) intangible fixed asset amortisation 6,264,766 4,714,592

b) tangible fixed asset amortisation 1,637,143 1,800,681

c) other fixed asset depreciations 6,413 0d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponibilità liquide 2,200,000 10,108,322 1,100,000 7,615,273

11) Variations in residue of raw and subsidiary materials, consumables and merchandise (7,382,108) 656,326

12) Risk provision 0 0

13) Other provisions 925,540 1,479,683

14) Various management charges 3,311,792 4,131,339

Total 323,499,162 263,654,669

DIFFERENCE BETwEEN PRODUCTION vALUE AND COSTS (A-B) 7,121,103 14,436,036

C) FINANCIAL INCOmE AND CHARGES:

15) Income from shares:

- in subsidiary companies 9,874,755 120,000

- in associated companies 57,000 0

- in other companies 1,075,405 11,007,160 58,829 178,829

16) Other financial income:

a) from fixed asset securities:

- in subsidiary companies 0 0

Income statement

89pagina

INCOmE STATEmENT 31 December 2010Amount in Euro

31 December 2009Amount in Euro

- in associated companies 0 0

- in parent companies 0 0

- in other companies 0 0 0 0

b) from non-share fixed assets securities

c) from non-share current assets securities

d) income differing from previous income:

- from subsidiary companies 213,916 378,734

- from associated companies 117,744 88,941

- from parent companies 0 0

- from other companies 249,929 581,589 267,440 735,115

17) interest and other financial charges:

- from subsidiary companies 301,082 408

- from associated companies 4,083 0

- from parent companies 0 0

- from other companies 1,354,430 1,659,595 1,926,604 1,927,012

17.2 PROFITS AND LOSS DUE TO FOREIGN CURRENCY EXCHANGE- Profits and loss due to foreign currency exchange (25,503) (25,503) 41,622 41,622

Total ( 15 + 16 - 17 - 17.2) 9,954,657 (1,054,690)

D) ADJUSTmENT TO vALUE OF FINANCIAL ASSETS:

18) Revaluations:

a) of shares 0 0

b) of non-share financial fixed assets

c) of non-share current asset securities 0 0

19) Depreciations:

a) of share 1,858,950 1,153,119

b) of non-share financial fixed assets 0 0

c) of non-share current asset securities 0 1,858,950 0 1,153,119

Total Adjustments ( 18 - 19 ) (1,858,950) (1,153,119)

E) EXTRAORDINARy INCOmE AND CHARGES:

20) income:a) capital gains on sale which cannot be entered at N° 5) 0 150,000

b) Capital account contributions 0 0

c) Others 131,369 131,369 530,550 680,550

21) Charges: a) capital losses from sale which cannot be entered at N° 14) 0 0

b) tax for previous financial years 4,517 0

c) others 0 4,517 0 0

Total extraordinary income and charges ( 20 - 21 ) 126,852 680,550

RESULT BEFORE TAX ( A - B ± C ± D ± E ) 15,343,662 12,908,777

22) Financial Year Income Tax (1,986,056) (4,311,305)

22 a) financial year tax owed (2,416,903) (4,584,999)

22 b) of which is advanced paid/(deferred) 430,847 273,694

26) PROFIT (LOSS) FOR FINANCIAL yEAR 13,357,606 8,597,472

90pagina

Bal

ance

she

et 2

0103

Dear Shareholders,During the fiscal year that ended on December 31, 2010, we undertook the supervisory activities that we were requested to conduct by the Shareholders’ Meeting, performing the examinations stipulated by Article 2429, paragraph 2 of the Italian Civil Code, in conformity with the rules of conduct for Boards of Statutory Auditors recommended by the National Council of Professional Accountants. From the information we obtained from the managers of the various departments, offices, and operations and from our examination of the required documentation, we researched and monitored, to the extent of our responsibility, the adequacy of the company’s organizational structure, of the internal control system, and of the administrative accounting system, and the degree of reliability of the company to properly represent the facts and details of operations represented by the items in the financial statements presented to you for your approval.To perform our duties, during 2010 we attended Shareholders’ Meetings and Meetings of the Board of Directors and, in accordance with statutory requirements, we were regularly informed on company management progress and on its expected development, as well as any operations considered important, from the point of view of both size and type, performed by the Cooperative with the prior

appropriate resolutions made by the administrative body during its regular meetings.In 2010, in keeping with the standard procedures adopted in previous years, during its examination the Board focused particular attention on the analysis of the risks with regard to the various company divisions. Specifically, the Board monitored the operations executed and ensured that they are in compliance with the law and with the Articles of Association, are not obviously imprudent or dangerous, do not conflict with the resolutions that have been passed or represent a potential conflict of interests, and do not jeopardize the integrity of company assets.In the performance of its supervisory duties, the Board obtained, when necessary, requests for information on the accounting oversight activities performed by the appointed auditing firm, PriceWaterhouseCoopers S.p.A. We actively took part in meetings of the Board of Directors, meetings with the administrative and financial managers of the Cooperative whenever the Board was requested to express its opinion on problems arising from matters requiring closer examination of legitimacy and consistency, as well as meetings requested by us to discuss specific matters.In 2010 the meetings continued between the Board of Statutory Auditors and several service and

production managers, in order to take note of the efficiency of the relations between the various divisions into which the company is organized, to identify the risks inherent to individual divisions or departments and to identify which measures were adopted to deal with the specific risks in the best possible manner. The Board has taken due note that a constantly updated manual exists, which governs the company’s procedures.These meetings have permitted the Board of Statutory Auditors to understand in ever greater detail the administrative organization of the Cooperative and, therefore, to have an up-to-date idea of the development of its management. The results achieved by your Cooperative are reflected in the information in the financial statements presented for your approval.

The Board would like to thank the administrative body and the General Management for their complete and open collaboration in fiscal year 2010 while performing their institutional monitoring and supervision activities. The Board would also particularly like to thank Mr. Maurizio Rinaldi and his closest colleagues, Mr. Massimo Continati and Mr. Pierluigi Capelli, for the collaboration and willingness to help they showed to the Board of Statutory Auditors.During the fiscal year, in observance of the provisions of the articles of association, we

Board of Auditors report for the annual balance statementat 31 December 2010

91pagina

were kept regularly informed by the directors on the progress of the company’s operations and on their expected development. We can reasonably ensure that the operations executed are in compliance with the law and with the Articles of Association, are not obviously imprudent or dangerous, do not conflict with the resolutions that have been passed by the Shareholders’ Meeting or represent a potential conflict of interests, and do not jeopardize the integrity of company assets.The Board of Statutory Auditors did not note any atypical or unusual operations, including those operations executed with related parties.In the Report on Operations the Directors adequately indicate and explain the related-party operations, including the characteristics of the operations and their economic effects.During the fiscal year the Board of Statutory Auditors did not receive any notices pursuant to Article 2408 of the Italian Civil Code.The Board of Statutory Auditors did not receive any instances.During the fiscal year the Board of Statutory Auditors did not issue any opinions in conformity with the law.To the extent of our responsibility, we examined the financial statements as of December 31, 2010. As it was not our responsibility to perform an in-depth analytical analysis of the contents of the financial statements, we checked its general layout and its general compliance with the law with reference to its preparation and layout; we have no particular observations to report in that regard.The Directors, in drawing up the financial statements, did not depart from legal provisions of

law, in conformity with Article 2423, paragraph 4, of the Italian Civil Code.We confirm that the Report on Operations is set out in a consistent, detailed, and thorough manner and fulfils all informative obligations required by law.The above is valid also with regard to the Notes to the Financial Statements.The Statement of Assets and Liabilities shows a profit for the year of 13,357,606 euros, as summarized below:

Assets: 4 16,499,902 euros

Liabilities: 292,585,001 euros

Shareholders’ equity (including profits for the year) 123,914,901 euros

Commitments, risks, and other memorandum accounts 253,986,422 euros

The following is a summary of the Profit and Loss Statement:

Value of Production (non-financial revenues) 330,620,265 euros

Costs of Production (non-financial costs) 323,499,162 euros

Difference 7,121,103 euros

Financial income and charges 9,954,657 euros

Adjustments to the value of financial assets (1,858,950) euros

Extraordinary income and charges 126,852 euros

Profit (loss) before taxes 15,343,662 euros

Income taxes (1,986,056) euros

Profit (loss) for the year 13,357,606 euros

Pursuant to Article 2426, paragraph 5, of the Italian Civil Code, the Board of Statutory Auditors expressed its approval of the entry under the assets of the Statement of Assets and Liabilities of the residual amount of the research, development, and advertising costs of 36,878 euros as well as the residual amount of the capital and expansion costs of 1,068 euros.The supervisory and monitoring activities did not bring to light any significant facts warranting mention in this report.In compliance with Article 2 of Italian Law no. 59/92, the Board of Statutory Auditors declares that the directors, during the past fiscal year in the performance of their duties, acted and managed the company in pursuit of the corporate purposes in accordance with the principles of cooperative

mutual assistance.With regard to the preceding, the Board of Statutory Auditors does not note any reasons preventing the approval of the financial statements as of December 31, 2010, nor does it have any objections regarding the proposed resolution submitted by the Board of Directors for the allocation of the profits for the year.

Concordia sulla Secchia, May 27, 2011

The Board of Statutory Auditors

The Chairmanmr. Carlo Alberto Pelliciardi

Regular Auditormr. mauro Casari

Regular Auditormr. Fausto Ascari

92pagina

Bal

ance

she

et 2

0103

Certification report

93pagina

Certification UNI EN ISO 9001:2008

95pagina

4Consolidated balance sheet 2010

96pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Consolidated balance sheet closed on 31 Dec 2010

Balance sheet Assets

ASSETS 31 December 2010Amount in Euro

31 December 2009Amount in Euro

A) SUBSCRIBED CAPITAL UNPAID 1,106,117 1,865,121

requested 1,106,117 1,865,121

B) FIXED ASSETS

I INTANGIBLE FIXED ASSETS:

1) Set-up and expansion costs 414,679 552,977

2) Costs for research, development and advertising 53,848 9,937

3) Industrial patent rights and intellectual property rights 0 0

4) Concessions, licenses, trademarks and other similar rights 357,725 504,566

5) Start up 244,168 4,366

5.2) Difference of condolidation 0 0

6) Current fixed assets and payments on accounts 4,853,645 2,723,140

7) Others 27,962,615 19,588,986

Total 33,886,680 23,383,972

II TANGIBLE FIXED ASSETS:

1) Land and buildings 10,802,505 10,539,794

2) Systems and machinery 65,163,978 66,335,587

3) Industrial and commercial equipment 755,450 557,479

4) Other goods 5,346,623 4,831,671

5) Current fixed assets and payments on accounts 17,212,221 18,090,329

Total 99,280,777 100,354,860

III FINANCIAL FIXED ASSETS:

1) Shares in:

a) subsidiary companies 4,848,040 2,914,716

b) associated companies 5,860,682 2,372,777

c) parents companies 0 0

d) other companies 6,058,914 5,065,469

2) Accounts receivable:: (due within 12months) (due within 12months)

a) from subsidiary companies: 1,930,000 1,930,000 0 105,000

b) from associated companies: 0 9,914,392 0 4,944,142

c) from parent companies: 0 0 0 0

d) from other companies: 1,033,162 6,405,071 884,507 6,246,012

3) Other accounts receivable 15,983 15,983

4) Own shares 0 531,892

Total 35,033,082 22,195,991

TOTAL FIXED ASSETS 168,200,539 145,934,823

97pagina

ASSETS 31 December 2010Amount in Euro

31 December 2009Amount in Euro

C) CURRENT ASSETS Amount in Euro

I RESIDUE:

1) Raw and subsidiary materials and consumables 10,921,925 3,459,669

2) Works in progress and semi-finished works 3,294,600 7,084,984

3) Works in progress on order 19,586,791 19,250,559

4) Finished products and merchandise 8,306,385 5,675,216

5) Payments to accounts 3,244,543 1,526,984

Total 45,354,244 36,997,412

II ACCOUNTS RECEIVABLE: (due after 12 months) (due after 12 months)

1) From trade: 1,611,209 187,025,397 1,791,713 159,026,025

2) From subsidiary companies: 0 9,435,703 0 3,502,273

3) From associated companies: 0 22,276,622 0 1,277,082

4) From parent companies: 0 0 0 0

4.2) Tax Assets 0 3,572,172 0 3,970,965

4.3) Advanced paid tax 0 3,859,342 0 2,352,543

5) Other accounts receivable: 0 10,975,125 0 8,165,974

Total 237,144,361 178,294,862

III FINANCIAL ASSETS NON-FIXED:

1) Shares in subsidiary companies 3,342,257 20,000

2) Shares in associated companies 0 0

3) Other shares 0 0

4) Own shares 0 0

5) Other securities 84 84

Total 3,342,341 20,084

IV LIQUID ASSETS

1) Bank and post office deposits 31,843,412 44,363,874

2) Cheques 8,040,110 500

3) Monies and cash values 50,736 18,591

Total 39,934,258 44,382,965

TOTAL CURRENT ASSETS 325,775,204 259,695,323

D) ACCRUALS AND DEFERRALS: 5,336,495 5,781,392

TOTAL ASSETS 500,418,355 413,276,659

98pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Consolidated balance sheet closed on 31 Dec 2010

Balance sheet Liabilities

LIABILITIES 31 December 2010Amount in Euro

31 December 2009Amount in Euro

A) NET EqUITy

I CAPITAL 18,312,536 15,938,753

II SHARE PREMIUM RESERVE 0 0

III REVALUATION RESERVE 656,679 656,679

IV LEGAL RESERVE 89,473,011 82,158,320

V STATUTORY RESERVES 78,184 78,184

VI OWN SHARES RESERVE (HELD IN PORTFOLIO) 531,892 531,892

VII OTHER RESERVES:

a) CAPITAL ACCOUNT CONTRIBUTIONS 784/80 1,269,396 1,269,396

b) CONSOLIDATION RESERVE (4,368,775) 1,726,778

c) MERGER PROVISION 235,597 235,597

d) TRANSLATION RESERVE (1,470,245) (1,416,124)

VIII PROFITS (LOSS) CARRIED FORWARD 0 0

IX PROFITS (LOSS) OF FINANCIAL YEAR 15,181,880 11,186,331

TOTAL GROUP NET EqUITy 119,900,155 112,365,806

MINORITY INTEREST CAPITAL AND RESERVES 1,043,047 1,737,011

PROFIT (LOSS) OF MINORITIES (371,987) (131,114)

NET CAPITAL OF MINORITIES 671,060 1,605,897

TOTAL 120,571,215 113,971,703

B) RISK AND CHARGE PROvISIONS:

1) Lay-off funds and similar 21,526 21,526

2) Tax 307,161 234,609

3) Others 4,834,046 3,932,389

TOTAL 5,162,733 4,188,524

C) EmPLOymENT SEvERANCE INDEmNITy 5,247,411 5,796,182

D) ACCOUNTS PAyABLE:: (due after 12 months) (due after 12 months)

1) Bonds: 0 0 0 0

2) Convertible bonds: 0 0 0 0

3) Accounts payable to shareholders for loans 0 7,057,188 0 5,660,737

4) Accounts payable to banks: 83,941,505 122,612,017 68,520,018 92,743,011

5) Accounts payable to other creditors: 12,538,863 16,701,057 0 4,311,776

6) Payments to accounts:: 0 22,879,506 0 5,978,711

7) Accounts payable to suppliers: 3,491,619 157,633,579 2,607,790 147,909,261

8) Accounts payable to credit securities: 0 0 0 0

9) Accounts payable to subsidiary companies: 0 4,517,880 0 2,215,200

10) Accounts payable to associated companies: 0 2,479,227 0 419,162

99pagina

LIABILITIES 31 December 2010Amount in Euro

31 December 2009Amount in Euro

11) Accounts payable to parent companies: 0 0 0 0

12) Tax liabilities: 0 19,449,532 0 11,417,379

13) Accounts payable to pension companies and NI: 0 4,606,420 0 4,450,611

14) Other accounts payable: 559,973 10,732,390 593,432 13,259,081

TOTAL 368,668,796 288,364,929

E) ACCRUALS AND DEFERRALS: 768,200 955,321

TOTAL LIABILTIES 500,418,355 413,276,659

mEmORANDUm ACCOUNTS:

I) Guarantees provided

- Sureties 219,729,662 143,709,645

- Real guarantees 1,294,000 1,294,000

Total 221,023,662 145,003,645

II) Other memorandum accounts

- Subject to collection of bills 260,914 70,097

- Others 52,775,985 49,237,217

Total 53,036,899 49,307,314

TOTAL mEmORANDUm ACCOUNTS 274,060,561 194,310,958

100pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Income statement

Income statementPROFIT AND LOSS STATEmENT 31 December 2010

Amount in Euro31 December 2009

Amount in Euro

A) PRODUCTION vALUE:

1) Sales and services revenue 344,071,757 273,434,698

2) Variations in residue of works in progress, semi-finished works and finished works 2,087,663 19,406

3) Variations in works in progress on order (3,461,488) 4,218,113

4) Increased fixed assets for internal works 31,224,727 33,330,291

5) Other income and revenue:

- various 7,592,995 7,294,919

- contributions for operating expenses 1,659,618 9,252,613 25,588 7,320,507

Total 383,175,272 318,323,015

B) PRODUCTION COSTS:

6) For raw and subsidiary materials, consumables and merchandise 156,041,443 113,228,853

7) For services 124,648,765 100,320,174

8) For asset leasing 16,509,697 13,043,466

9) For staff:

a) salaries and wages 41,861,908 38,268,106

b) national insurance charges 12,599,659 11,789,523

c) employment severance indemnity 2,592,727 2,200,246

d) lay-off funds and similar 0 57,054,294 0 52,257,875

10) Amortisations and depreciations:

a) intangible fixed asset amortisation 7,235,051 5,478,904

b) tangible fixed asset amortisation 6,086,569 5,372,843

c) other fixed asset depreciations 9,872 0

d) depreciation on current securities and cash assets 2,697,818 16,029,310 1,395,636 12,247,383

11) Variations in residue of raw and subsidiary materials, consumables and merchandise (7,926,827) 876,791

12) Risk provision 0 0

13) Other provisions 1,764,590 1,835,663

14) Various management charges 4,328,331 4,610,026

Total 368,449,603 298,420,231

DIFFERENCE BETwEEN PRODUCTION vALUE AND COSTS (A - B) 14,725,669 19,902,784

C) FINANCIAL INCOmE AND CHARGES:

15) Income from shares:

- in subsidiary companies 8,124,755 0

- in associated companies 57,000 0

- in other companies 1,076,042 9,257,797 59,546 59,546

16) Other financial income:

a) from fixed asset securities:

- in subsidiary companies 0 0

- in associated companies 0 0

101pagina

PROFIT AND LOSS STATEmENT 31 December 2010Amount in Euro

31 December 2009Amount in Euro

- from parent companies 0 0

- from other companies 0 0 0 0

b) from non-share fixed assets securities

c) from non-share current assets securities

d) income differing from previous income:

- in subsidiary companies 7,935 146

- in associated companies 117,744 88,941

- from parent companies 0 0

- from other companies 383,285 508,964 450,300 539,387

17) interest and other financial charges:

- in subsidiary companies

- in associated companies

- from parent companies

- from other companies 3,352,202 3,352,202 3,340,263 3,340,263

17.2) PROFITS AND LOSS DUE TO FOREIGN CURRENCY EXCHANGE- Profits and loss due to foreign currency exchange (35,423) 203,996

Total ( 15 + 16 - 17 - 17 bis) 6,449,982 (2,945,326)

D) ADJUSTmENT TO vALUE OF FINANCIAL ASSETS:

18) Revaluations:

a) of shares 421,728 503,753

b) of non-share financial fixed assets 0 0

c) of non-share current asset securities 0 421,728 0 503,753

19) Depreciations:

a) of shares 5,173,049 1,951,962

b) of non-share financial fixed assets 0 0

c) of non-share current asset securities 0 5,173,049 0 1,951,962

Total Adjustments ( 18 - 19 ) (4,751,321) (1,448,209)

E) EXTRAORDINARy INCOmE AND CHARGES:

20) Income: a) capital gains on sale which cannot be entered at N° 5) 2,155,051 150,000

b) Capital account contributions 0 0

c) Other 311,199 2,466,250 603,079 753,079

21) Charges: a) capital losses from sale which cannot be entered at N° 14) 0 0

b) tax for previous financial years 4,741 2,100

c) other 406,475 411,216 41,824 43,924

Total extraordinary income and charges ( 20 - 21 ) 2,055,034 709,155

RESULT BEFORE TAX ( A - B ± C ± D ± E ) 18,479,364 16,218,404

22) Financial Year income tax owed, deferred and advanced paid (3,669,471) (5,163,187)

26) PROFIT (LOSS) FOR FINANCIAL YEAR 14,809,893 11,055,217(PROFIT) LOSS ATTRIBUTABLE TO mINORITy INTERESTS 371,987 131,114

PROFIT (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF PARENT COmPANy 15,181,880 11,186,331

102pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Sales and distribution company balance statementat 31 December 2010

BALANCE SHEET mARIGLIANO GAS S.r.l.

CPL DISTRIBUZIONE

S.r.l. GRECANICA

GAS S.r.l. COOPGAS

S.r.l. ISCHIA GAS

S.r.l.PROGAS

mETANO S.r.l.

PERCENTAGE OF POSSESSION 100.0% 100.0% 100,0% 100% 100% 70%

ACTIvITy

Total credits towards Shareholders for deposits due - - 1.101.000 - - -

Total intangible fixed assets 2,960 536,165 3,137 2,018 310,713 576

Total tangible fixed assets 9,763,116 23,386,680 2,419,175 1,095 11,648,303 325,308

Total Financial fixed assets 16,207 7,923,187 - 537,619 22,345 -

Total fixed assets 9,782,283 31,846,032 2,422,313 540,731 11,981,360 325,885

Total stocks - - 2,625,000 6,857,024 - -

Total credits 1,249,580 8,522,553 1,931,516 16,907,325 706,074 39,213

Total non fixed assets - - - - - -

Total liquid assets 726 165,770 74,710 368,368 1,344 8,100

Total current assets 1,250,306 8,688,322 4,631,226 24,132,717 707,418 47,313

Total Accruals and deferrals 24,101 2,275,973 39,643 14,908 49,243 563

TOTAL ASSETS 11,056,689 42,810,327 8,194,182 24,688,357 12,738,022 373,760

LIABILITIES

Total net equity 4,503,701 6,263,465 1,460,810 6,595,631 2,501,470 193,120

Total Risks and expenses funds 50,590 646,720 - 161,720 - -

Severance indemnity - 67,598 - 68,690 - -

Financial Debts 5,245,589 29,142,359 - 3,490,000 5,579,163 165,000

Business Debts 1,250,262 6,284,130 6,733,372 14,364,000 4,647,538 15,640

Total liability accruals and deferrals 6,548 406,055 - 8,315 9,852 -

TOTAL LIABILITIES 11,056,689 42,810,327 8,194,182 24,688,357 12,738,022 373,760

INCOmE STATEmENT

Total production value 1,669,012 16,097,330 - 33,508,221 152,198 -

Total production costs (622,483) (12,365,808) (10,698) (31,766,862) (400,179) (10,150)

Total income and financial burden (111,143) (446,074) 3,508 123,045 277 3

Total financial proceeds value rectifications - - - - - -

Extraordinary income and burdens - - - 95 - -

Pre-tax result 935,387 3,285,448 (7,190) 1,864,499 (247,704) (10,147)

Taxes on the financial year income (312,090) (1,229,126) - (16,481) 67,968 -

FINANCIAL yEAR RESULT 623,297 2,056,322 (7,190) 1,848,018 (179,736) (10,147)

103pagina

GPL Company balance statementat 31 December 2010

BALANCE SHEET ERRE.GAS S.r.l.

PERCENTAGE OF POSSESSION 100.0%

ACTIvITy

Total credits towards Shareholders for deposits due -

Total intangible fixed assets 2,960

Total tangible fixed assets 615,085

Total Financial fixed assets 4,009,828

Total fixed assets 4,624,914

Total stocks -

Total credits 1,087,360

Total non fixed assets -

Total liquid assets 301,158

Total current assets 1,388,518

Total Accruals and deferrals 12,874

TOTAL ASSETS 6,026,306

LIABILITIES

Total net equity 2,019,871

Total Risks and expenses funds 484,562

Severance indemnity 12,914

Financial Debts 3,000,317

Business Debts 508,641

Total liability accruals and deferrals -

TOTAL LIABILITIES 6,026,306

INCOmE STATEmENT

Total production value 1,621,061

Total production costs (1,981,346)

Total income and financial burden (130,826 )

Total financial proceeds value rectifications -

Extraordinary income and burdens 1,154,280

Pre-tax result 663,169

Taxes on the financial year income (32,917)

FINANCIAL yEAR RESULT 630,252

104pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Energy Company balance statementat 31 December 2010

BALANCE SHEET CRISTOFORETTI S.E.R. S.r.l.

ENERGIA DELLA CONCORDIA S.r.l.

vIGNOLA ENERGIA S.R.L.

SERIO ENERGIA S.r.l.

PERCENTAGE OF POSSESSION 50% 100% 99% 40%

ACTIvITy

Total credits towards Shareholders for deposits due - - 375,000 -

Total intangible fixed assets 6,605,863 742,490 2,407 7,063

Total tangible fixed assets 1,573,929 6,407,478 241,074 2,570,827

Total Financial fixed assets 52,164 659 556 4,008

Total fixed assets 8,231,956 7,150,627 244,038 2,581,897

Total stocks 1,707,816 - - -

Total credits 22,374,220 999,248 10,857 724,376

Total non fixed assets 168 - - -

Total liquid assets 2,752,355 361,429 61,215 154,525

Total current assets 26,834,559 1,360,677 72,072 878,902

Total Accruals and deferrals 14,776 6,159 624 -

TOTAL ASSETS 35,081,291 8,517,463 691,734 3,460,799

LIABILITIES

Total net equity 3,313,922 666,561 490,798 1,406,693

Total Risks and expenses funds - 250,000 - -

Severance indemnity 537,875 - - -

Financial Debts 16,432,902 2,691,430 - 1,134,618

Business Debts 14,734,122 4,904,472 200,936 918,892

Total liability accruals and deferrals 62,469 5,000 - 596

TOTAL LIABILITIES 35,081,291 8,517,463 691,734 3,460,799

INCOmE STATEmENT

Total production value 30,163,918 1,321,061 - 2,017,288

Total production costs (28,992,165) (1,518,549) (4,574) (1,609,142)

Total income and financial burden (377,077) (96,722) 97 (43,485)

Total financial proceeds value rectifications - - - -

Extraordinary income and burdens - 416,198 - -

Pre-tax result 794,677 121,988 (4,477) 364,661

Taxes on the financial year income (377,421) (50,980) 0 (119,426)

FINANCIAL yEAR RESULT 417,256 71,008 (4,477) 245,236

105pagina

Foreign Company balance statementsat 31 December 2010

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

CPL CONCORDIA FILIALA CLUJ S.r.l. AI POwER S.p.A.

PERCENTAGE OF POSSESSION 100% 100% 54%

ACTIvITy

Total credits towards Shareholders for deposits due - - 7,395

Total intangible fixed assets 8,424 333,632 9,630

Total tangible fixed assets 0 11,170,949 41,444

Total Financial fixed assets 16,612 17,209 4,531

Total fixed assets 25,036 11,521,790 55,605

Total stocks - 602,121 116,938

Total credits 705,835 1,210,465 206,105

Total non fixed assets - - -

Total liquid assets 2,891 102,698 219,053

Total current assets 708,726 1,915,284 542,095

Total Accruals and deferrals - - -

TOTAL ASSETS 733,762 13,437,074 605,095

LIABILITIES

Total net equity 247,813 9,050,223 234,551

Total Risks and expenses funds - 291,396 -

Severance indemnity - - -

Financial Debts 170,000 3,380,889 -

Business Debts 315,949 714,566 370,544

Total liability accruals and deferrals - - -

TOTAL LIABILITIES 733,762 13,437,074 605,095

INCOmE STATEmENT

Total production value 31,329 5,934,203 756,706

Total production costs (81,465) (5,339,567) (758,973)

Total income and financial burden 35 (175,039) 5,712

Total financial proceeds value rectifications - - -

Extraordinary income and burdens (224) - -

Pre-tax result (50,325) 419,597 3,444

Taxes on the financial year income - (78,684) (1,467)

FINANCIAL yEAR RESULT (50,325) 340,913 1,977

106pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Other controlled Company balance statementat 31 December 2010

BALANCE SHEET ImmOBILIARE

DELLA CONCORDIA S.r.l.

NUORO SERvIZI S.r.l.

GHIRLANDINA SPORT S.r.l.

PERCENTAGE OF POSSESSION 100% 44% 82%

ACTIvITy

Total credits towards Shareholders for deposits due - - -

Total intangible fixed assets 29,847 - 3,563

Total tangible fixed assets 7,080,238 - -

Total Financial fixed assets 23,592 13,176 30,793

Total fixed assets 7,133,677 13,176 34,356

Total stocks 2,340,723 - -

Total credits 499,118 5,054,285 850

Total non fixed assets - - -

Total liquid assets 46,788 28,119 -

Total current assets 2,886,630 5,082,404 850

Total Accruals and deferrals 15,610 - 838

TOTAL ASSETS 10,035,916 5,095,580 36,043

LIABILITIES

Total net equity 7,592,720 -624,638 33,910

Total Risks and expenses funds 15,765 19,037 -

Severance indemnity 67,517 - -

Financial Debts 1,477,926 3,112,159 547

Business Debts 871,372 2,589,022 1,587

Total liability accruals and deferrals 10,616 - -

TOTAL LIABILITIES 10,035,916 5,095,580 36,043

INCOmE STATEmENT

Total production value 1,898,642 - 1,392

Total production costs (2,033,751) (86,306) (7,736)

Total income and financial burden 85 (186,356) (483)

Total financial proceeds value rectifications - - (846,961)

Extraordinary income and burdens - (376,000) -

Pre-tax result (135,024) (648,663) (853,788)

Taxes on the financial year income (24,799) (29) 0

FINANCIAL yEAR RESULT (159,823) (648,692) (853,788)

107pagina

Summary other connected Companies essential data for the annual balance statementat 31 December 2010

COmPANy NET EqUITy PERIOD RESULT CPL qUOTA

A) Non-consolidated controlled Companies

VALLE VERSA GREEN POWER S.r.l. 7,296 (2,705) 100%

FONTENERGIA 4 S.r.l. 1,229,154 (14,856) 70%

FONTENERGIA 6 S.r.l. 1,936,375 (13,625) 90%

FONTENERGIA 7 S.r.l. 749,338 (44,280) 54%

FONTENERGIA 11 S.r.l. 477,077 (14,637) 70%

FONTENERGIA 15 S.r.l. 327,198 (14,470) 70%

FONTENERGIA 19 S.r.l. 11,465 (7,790) 51%

FONTENERGIA 26 S.r.l. 826,815 (14,810) 70%

FONTENERGIA 27 S.r.l. 1,880,672 (13,382) 34%

FONTENERGIA 37 S.r.l. 475,806 (15,994) 70%

b) Connected Companies

FONTENERGIA S.p.A. 7,268,989 1,861 49%

ICHNUSA S.p.A. 1,024,947 28,806 45%

SARDA RETI COSTRUZIONI S.r.l. 1,420,033 (496,587) 30%

TECLAB S.r.l. 168,292 3,799 35%

COMPAGRI IN LIQUIDAZIONE (456,838) (1,196,416) 22%

AGRIENERGIA S.p.A. 7,011,190 4,451 20%

X DATANET S.r.l. 307,954 149,862 30%

PEGOGNAGA SERVIZI S.r.l. 219,299 5,659 50%

COIMMGEST S.p.A. 394,242 139,067 45%

SUBCONSOLIDATO INTERENERGIA S.p.A. 6,279,092 (30,419) 47%

IES SOLARE S.r.l. 1,011,022 920,250 25%

NOCI SOLAR 1 S.r.l. 7,032 (2,968) 49%

NOCI SOLAR 1 S.r.l. 6,974 (3,026) 49%

GHIRLANDINA SOLARE S.r.l. 55,200 (4,800) 34%

MODENA CALCIO FC S.p.A. (494,227) (3,976,835) 41%

108pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Board of Auditors report for the consolidated annual balance statementat 31 December 2010

Dear Shareholders,In fulfilment of the duties assigned to us in accordance with Article 41 of Italian Legislative Decree no. 127 of April 9, 1991, we have examined CPL Group’s Consolidated Financial Statements and Report on Operations for fiscal year 2010. The following is a summary of CPL Group’s Consolidated Financial Statements as of December 31, 2010 (all values are expressed in euros):

AssetsCapital due from shareholders 1,106,117

Capital assets 168,200,539

Current assets 325,775,204

Accrued income and prepayments 5,336,495

Total assets 500,418,355

LiabilitiesShareholders’ equity of the group 119,900,155

Minority interest capital and reserves 671,060

Total equity 120,571,215

Provisions for risks and contingencies 5,162,733

Provisions for severance indemnity 5,247,411

Payables 368,668,796

Accrued liabilities and deferred income 768,200

Total liabilities 500,418,355

The memorandum accounts balance at 274,060,561 euros.

Consolidated profit and loss statement for fiscal year 2010Value of production 383,175,272

Costs of production 368,449,603

Difference between the value and costs of production 14,725,669

Financial income and charges 6,449,982

Adjustments to the value of financial assets (4,751,321)

Extraordinary income and charges 2,055,034

Profit (loss) before taxes 18,479,364

Income taxes for the year (current taxes, deferred taxes, and taxes paid in advance) (3,669,471)

Profits (loss) for the year 14,809,893

(Profits) loss attributable to minority interest 371,987

Profits of the group 15,181,880

109pagina

The Financial Statements were drawn up in compliance with the provisions of Italian Legislative Decree no. 127 of April 9, 1991 as well as the accounting principles issued by the National Council of Professional Accountants and, when necessary, by the accounting principles issued by the International Accounting Standards Board (previously known as IAS accounting principles, now IFRS accounting principles). The companies’ financial statements included in the consolidated financial statements were examined by the companies’ respective Boards of Statutory Auditors and/or by the auditing firm PriceWaterhouseCoopers S.p.A. in their stead if a Board of Statutory Auditors does not exist because it is not legally required.On the basis of its examinations the Board of Statutory Auditors has ascertained the following:

The companies included in the consolidation are correctly identified and possess the requisites to be classified as subsidiary companies as stipulated by the aforementioned decree.

The information provided to the parent company by the companies included in the consolidation complies with the assessment criteria, the layout, and the content established by the parent company, as confirmed by the administrative bodies of each consolidated subsidiary.

The information received, together with information from the parent company’s own accounting records, was properly used by the parent company to draw up

the consolidated financial statements.

The assessment criteria and principles of consolidation that were adopted, as well as the consolidation method and criteria, comply with the reference regulations, with the exception of the accounting treatment of the capital gains resulting from the liquidation of Si.gas, which the Group debited to the Profit and Loss Statement although the accounting principles would advise their direct entry under Net Assets; however, the two different accounting treatments result in the same Consolidated Net Assets. Aside from this, the following should be noted:

The asset and liability items, as well as the costs and revenues, were taken in their entirety from the financial statements of the companies included in the consolidation, after appropriate reclassification, in accordance with the criteria of the integral consolidation method.

All significant operations, in terms of value as well as consequences within the group, that took place between the companies included in the consolidation – specifically accounts payable, accounts receivable, costs, revenues, and capital gains – were removed.

Therefore, the Board of Directors adopted the integral consolidation method in cases in which real control is exercised over the management of the subsidiaries.

For the other companies the Board of Directors employed the equity method.

We gave our approval to entry in the financial statements of the capital and expansion costs and the research, development, and advertising costs of 414,679 euros and 53,848 euros respectively.The notes to the financial statements contain all the information required by the reference regulations.

The data and information contained in the Report on Operations are in conformity with Article 40 of Italian Legislative Decree no. 127/91 and include the data and information from the statutory consolidated financial statements.

In our opinion these consolidated financial statements properly represent the financial asset position and economic results of the group headed by the cooperative society CPL Concordia for the fiscal year ending on December 31, 2010, in conformity with applicable regulations governing drawing up a consolidated balance sheet.

Concordia sulla Secchia, May 27, 2011

The Board of Statutory Auditorsmr. Carlo Alberto Pelliciardi

(Chairman)mr. Fausto Ascarimr. mauro Casari

110pagina

4C

onso

lidat

ed b

alan

ce s

heet

201

0 Certification report

These annual accounts were prepared by:

Massimo Continati Administration ManagerPierluigi Capelli Finance ManagerPaolo Cavicchioli Cost Accounting OfficeMarco Dal Dosso Management Control OfficeGabriele Greco Communications and Press Office

Enrica Bergonzini Strategie Grafiche Graphics and layoutLITOSERVICE S.r.l. Print

Printed on il 10/10/2011

CPL CONCORDIA Soc. Coop.

Via A. Grandi 39 - 41033 Concordia s/S. (MO) Italy

tel. +39.535.616.111 - fax +39.535.616.300

info@cpl.it - www.cpl.it