TAMBURI INVESTMENT PARTNERS S.P.A Annual Report. (Translation from the Italian original which remains the definitive version) Page 1

Transcription

1 TAMBURI INVESTMENT PARTNERS S.P.A 2012 Annual Report (Translation from the Italian original which remains the definitive version) Page 1

2 CONTENTS Page Corporate bodies 3 Directors Report 4 Financial statements 13 Income statement Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to financial statements at 31 December Appendices 51 Statement of the manager in charge of financial reporting List of investments Changes in available for sale financial assets at fair value Changes in equity-accounted investments Loans and receivables Report of the Board of Statutory Auditors Report of the Independent Auditors Disclosure of Independent Auditors fees Page 2

3 Corporate bodies Board of Directors of Tamburi Investment Partners S.p.A. Giovanni Tamburi Alessandra Gritti Cesare d Amico Vice Chairperson Claudio Berretti Giuseppe Ferrero (1) Independent Director * Claudio Gragnani (1)(2)(3) Independent Director * Carlo Magnani (2)(3) Independent Director * Mario Davide Manuli Independent Director Sandro Alberto Manuli Independent Director Marco Merati Foscarini (1)(2)(3) Independent Director * Bruno Sollazzo Independent Director * Chairperson and Managing Director Vice Chairperson and Managing Director Executive Director and CEO Board of Statutory Auditors Giorgio Rocco Silvia Chiavacci Enrico Cervellera Emanuele Cottino Andrea Mariani Chairperson Standing statutory auditor Standing statutory auditor Substitute statutory auditor Substitute statutory auditor Independent Auditors KPMG S.p.A. (1) Member of the remuneration committee (2) Member of the internal audit committee (3) Member of the related parties committee * In conformity with the Code of Conduct Page 3

4 Directors Report as at December 31, 2012 Tamburi Investment Partners S.p.A. (hereafter TIP ) ended 2012 with a net income of more than 9.2 million Euro. Compared to the 2.6 million Euro of the previous year, the result has more than tripled and, although 2012 benefited from significantly lower tax expense and from alignments also with an effect on P&L of the carrying amount of some investments, the result is in any case very positive. Given the nature of TIP s activity, the most relevant data is the amount of the Equity, above million Euro, the best result ever registered by TIP. At 31 December 2011, Equity was equal to million Euro and, therefore, it increased by more than 20% during the year. This element obviously reflects the steady increase of the global value of investments, in particular of those in listed companies classified as available for sale financial assets for which the amount of the related reserves is updated on a quarterly basis. The substance of the Net Equity and therefore regardless the accounting data is that the performance of the larger part of the companies in which TIP holds a stake has been, also in 2012, very positive. This result proves once again that companies that are really excellent, dynamic, with innovative products or projected at international level have not been significantly affected by the downturn in place for many years and although stock markets have not yet let shares price of almost all TIP s investees reach pre-crisis levels, the only mark to market appreciation at 31 December 2012 allows TIP to report Equity higher than the most recent market capitalization of TIP itself. If, as it seems logical to assume, in 2012 both stock markets and that of mergers and acquisitions touched the bottom, the expected market values of TIP should be able to reach much higher trading levels. Indeed it is not a coincidence that in the past weeks and therefore before disclosing the results of this report equity researches about TIP have been published with increasing target price ranging between 1.9 and 2.3 Euro per share, versus approximately 1.45 /1.5 Euro registered by TIP shares in the last weeks of Moreover at the end of 2012 the so called total return, that is the sum of the stock performance, the effect of the repurchases of treasury shares and of dividends, reserves and warrants distribution, was from the beginning of 2010 higher than 35%, with a quite limited implicit risk level; such return has to be compared with a loss of the FTSE MIB in the same period of approximately 25% has been another year of both investments and portfolio rationalizations. Indeed TIP has increased its stakes in Amplifon, Be (through its direct investee Data Holding), Bolzoni, d Amico, Interpump (through its direct investee Gruppo IPG Holding), Noemalife, Monrif and Servizi Italia while it has divested its stakes in Diasorin, De Longhi, DeLclima, IMA, NH Hoteles and Zignago Vetro. Many of the companies in which TIP increased its interest, executed capital increases in which it Page 4

5 was logical to take part, also given TIP s industrial philosophy, aimed, as known, to speeding up the investee s development. The companies from which it was decided to divest - also excellent from both an industrial and financial perspective - on one hand represented investments that were not particularly relevant to TIP, on the other hand they were part of groups with which it was not easy to completely fulfil the function of active shareholder, participating directly and hopefully in the effective implementation of their business strategies. In 2012 TIP completed a 3-year period investment plan during which it invested - both directly and considering co-investments with other shareholders - approximately 350 million Euro. The single most relevant investment in terms of size remains that in Prysmian S.p.A. in which Clubtre S.r.l., a TIP investee set up specifically to carry out such investment, has invested about 169 million Euro. During 2012 also given the level of market prices always considered to be particularly interesting TIP continued to repurchase treasury shares limited solely by the constraints of the existing legislation. At 31 December 2012, it hold more than 2% of its share capital. TIP s advisory business in the field of acquisitions and divestments continued regularly and even though 2012 has not been a particularly brilliant year for this business both at national and international level, TIP revenue amounted to 4.7 million Euro, slightly below the previous year but with a satisfying turnover. Most of the deals closed were directly or indirectly related to cross border transactions. The network of financial boutiques that TIP has contributed to establish is developing steadily and this is of considerable comfort, given the choices made in the past in operations that are never of quick return. The company s fixed operating costs remained substantially stable while the variable component increased in connection with the good results achieved throughout the year. With regard to cash management in 2012, the results were good and, even through liquid resources were rather limited, the yield of the bonds in the portfolio was more than satisfactory. During the year TIP cashed in dividends of approximately 1.7 million Euro, realized gains on asset disposals for about 3 million Euro and recognised gains on securities for more than 2.1 million Euro and other income (net of financial expenses) of 0.1 million Euro. Moreover during the year, TIP entirely redeemed the 7-year bonds partially convertible to 4.25%, for a nominal amount of 40 million Euro. As already mentioned, with respect to 31 December 2011, the company s equity increased from million Euro to approximately million Euro, mainly due to the increase in stock prices of some of the main listed investees, but also due to the significant increase in the profit of the year. Page 5

6 At 31 December 2012, the company s net financial position, totally including the partially convertible bonds, was a positive 1.9 million Euro. INVESTMENTS At 31 December 2012 TIP held the investments indicated below. The financial data indicated refer, where available, to financial statements approved by the investee s Board of Directors, or otherwise to quarterly reports or the previous annual financial statements. A) ASSOCIATES Data Holding 2007 S.r.l. Investment % as at 31 December 2012: 46.71% The company owns 34.2% of Be S.p.A. (previously Bee Team S.p.A.), a listed company. Be s core business consists of the provision of back office services, payment systems, consultancy, IT outsourcing to banks and insurance companies, but also to the identification of solutions for utilities related to safety and video surveillance. In the first nine months of 2012 Be achieved total revenue of 58.3 million Euro, a gross operating profit of 6.6 million Euro and a profit before tax of 1.6 million Euro. At the end of 2012 Be s main shareholders, i.e. TIP, IMI Investimenti, Orizzonti and senior management Carlo and Stefano Achermann paid in in the form of a shareholders loan their respective stakes related to the capital increase deliberated by the company and currently under completion. Gruppo IPG Holding S.r.l. Investment % as at 31 December 2012: % The company holds % of Interpump Group S.p.A., a world leader in the production of piston pumps, power take-offs and hydraulic systems. At 31 December 2012, TIP owned % of Gruppo IPG Holding compared to % held at 31 December Gruppo IPG Holding was involved in the following corporate transactions during In October 2012, with the aim of permitting to IPGH to exercise the 5,498,400 warrants originally attributed as part of the capital increase of Interpump Group S.p.A. in November 2009, Gruppo IPG Holding S.r.l. s quota holders provided the company with an additional shareholders interest-free loan. The exercise price of the warrants was 5.1 Euro for each new subscribed share of Interpump Group S.p.A.. 2. In November 2012, the following transactions took place: i. Exercise of the call option by Giovanni Cavallini and Beryle Lassaussois TIP sold to Cavallini Family a stake of 0.429% of the capital of Gruppo IPG Holding; Page 6

7 ii. iii. Acquisition by the quota holders of the stakes held in Gruppo IPG Holding by Giovanni Cavallini and Beryle Lassaussois, totalling a % stake in the share capital. TIP acquired an additional 2.801% of the capital of Gruppo IPG Holding. Acquisition by the quota holders, substantially pro-quota, of the interest-free shareholders loans provided by Giovanni Cavallini and Beryle Lassaussois to Gruppo IPG Holding. All the mentioned transactions took place with a reference price of 6 Euro for each Interpump Group S.p.A. share. In 2012, Interpump Group generated consolidated net sales of million Euro, a gross operating profit equal to 106 million Euro and a profit for the year of 52.3 million Euro. Such results are the best achieved to date. Clubtre S.r.l. Investment % as at 31 December 2012: 35.00% Clubtre S.r.l. is owned by TIP (35%), Angelini Partecipazioni Finanziarie S.p.A. (32.5%) and d Amico Società di Navigazione S.p.A. (32.5%) and its purpose is the acquisition of a significant investment in Prysmian S.p.A.. Prysmian is a world leader in the production of cables for energy and telecommunications with 91 production plants, 17 research and development centres and more than 20,000 employees in 50 countries in the world. Clubtre is currently the main shareholder of Prysmian S.p.A., with about 6.20% of its share capital. In 2012, the Prysmian group achieved total revenue of 7.8 billion Euro, an (adjusted) gross operating profit of approximately 647 million Euro and an (adjusted) profit for the year of 282 million Euro was its best performing year of all times and the Board of Directors proposed the distribution of a double dividend compared to Gatti & Co. GmbH. Investment % as at 31 December 2012: 29.97% Gatti & Co. GmbH is a corporate finance boutique headquartered in Frankfurt (Germany), mainly involved in M&A cross border transactions between Germany and Italy. The company was set up at the end of 2009 by Lorenzo Gatti, banker with Italian/German origins with over 20 years experience in the M&A sector in Germany. Its financial statements as at 31 December 2012 show revenue of 193 thousand Euro, operating costs of about 226 thousand Euro and a net loss of 28 thousand Euro. Palazzari & Turries Ltd Investment % as at 31 December 2012: 30.00% The core business of Palazzari & Turries Ltd is based on its expertise developed in China and Page 7

8 Hong Kong, providing assistance to a number of Italian companies in start ups, joint ventures and corporate finance in China. The financial statements at 31 December 2011 (expressed in Hong Kong dollars Exchange rate: ) report revenue from professional services of 8.0 million Hong Kong Dollars, costs of approximately 5.7 million HKD and a profit of 1.9 million HKD. Such results are the best recognised to date. B) OTHER INVESTMENTS IN LISTED COMPANIES Amplifon S.p.A. Investment % as at 31 December 2012: 4.27% Listed on the Italian stock exchange STAR segment The Amplifon group is the world leader in the distribution of customized application of hearing aids with a market share of 9%, about 3,250 shops and 2,400 assistance centres around the world. In 2012, Amplifon recorded revenue of million Euro, a gross operating profit of approximately million Euro and a profit for the year of 43.2 million Euro. Bolzoni S.p.A. Investment % as at 31 December 2012: 7.70% Listed on the Italian stock exchange STAR segment Bolzoni group designs, produces and markets forklift truck attachments and industrial handling equipment. In the first nine months of 2012 the company reported revenue of 89.8 million Euro, a gross operating profit of approximately 8.0 million Euro and a profit for the year of 1.3 million Euro. Datalogic S.p.A. Investment % as at 31 December 2012: 6.39% Listed on the Italian stock exchange STAR segment The Datalogic group is one of the leading global players in the production and marketing of systems and products in the field of identification, industrial automation, barcode readers, and portable devices. In 2012 the company reported revenue of million Euro the best performance ever recorded in the company s history a gross operating profit of approximately 62.7 million Euro, that includes some non-recurring costs, and a profit for the year of 9.9 million Euro, generated despite significant impairments of intangible assets due to growth estimates of a business area less significant than the past estimates. M&C S.p.A. Investment % as at 31 December 2012: 3.47% Listed on the Italian stock exchange MIV segment M&C S.p.A. (formerly Management & Capitali S.p.A.) is a company that mainly invests in underperforming assets. Its main investee is Treofan Holding GmbH. Page 8

9 In the first nine months of 2012, the company reported a loss of 0.6 million Euro and, at 30 September 2012, it showed net financial assets of approximately 41.2 million Euro. In the first nine months of 2012, its main investee, Treofan, recorded revenue of million Euro and a gross operating profit of 17.6 million Euro. Monrif S.p.A. Investment % as at 31 December 2012: 8.00% Listed on the Italian stock exchange Monrif S.p.A. is an holding company operating in the following sectors: publishing, printing, hotels, real estate, internet and multimedia technologies. In the first nine months of 2012, the group reported revenue of million Euro, a gross operating profit of approximately 6.7 million Euro and a loss for the period of 9.0 million Euro. Noemalife S.p.A. Investment % as at 31 December 2012: 9.97% Listed on the Italian stock exchange Noemalife is one of the global leaders in the diagnostic and clinical processes of health structures. In the first half of 2012, the company completed a capital increase, subscribed for about 90%, aimed at financing a significant acquisition abroad. In the first nine months of 2012, the company reported consolidated revenue of 44.5 million Euro, a gross operating profit of approximately 1.3 million Euro and a loss for the year of 5.5 million Euro. INVESTMENTS IN UNLISTED COMPANIES Borletti Group Finance S.C.A. Investment % as at 31 December 2012: 6.19% (14.81% of class A shares reserved to financial investors) Borletti Group Finance owns 30% of Printemps, the second most important chain of department stores in France. The residual 70% is owned by RREEF (Deutsche Bank Group). The company s reporting date is 31 March. During the year ended 31 March 2012, Printemps reported total revenue of 1,193.1 million Euro and a gross operating profit before rent of million Euro (unaudited data). Dafe 4000 S.p.A. Investment % as at 31 December 2012: 17.94% Dafe 4000 S.p.A. is the company that owns all class D shares issued by Intercos S.p.A., one of the world leaders in the research, development and production of make-up products for the main international operators involved in the cosmetic industry. Page 9

10 Class D shares have no voting rights in the Shareholders Meeting, they have preferential treatment for the distribution of earnings and assets and they will be automatically converted into Intercos S.p.A. ordinary shares on 31 December Intercos group specializes in full outsourcing in the cosmetic industry, specifically in make up and skin care areas; it is also the player that has made - in recent years the most investments in research, development and innovation in make-up in all the world, creating its own formulations, raw materials and technologies, as well as a portfolio of highly innovative products. In 2012 (management pre-closing data), Intercos reported consolidated revenue of about million Euro and a gross operating profit of 45 million Euro. C) OTHER INVESTMENTS In addition to the above mentioned investments, TIP annually holds investments in other listed and unlisted companies, that are not considered to be significant in terms of the invested amount. THE ADVISORY BUSINESS In 2012 the advisory business performed well and reported total revenue just under 5 million Euro. Given that, as at 30 September 2012, revenue totalled about 2.5 million Euro, the fourth quarter of the year confirmed TIP s ability to conclude transactions. In consideration of the worldwide reduction in mergers and acquisitions during 2011 and 2012, this result, together with the significant number of transactions finalized during the year once again leads to the inclusion of TIP s advisory business among the main Italian operators in the medium size companies segment. In 2012 most of the transactions were concluded with clients or counterparts located abroad, as proof of the constant development in similar transactions and indeed TIP benefited, more than in the past, both from the contribution of investees located abroad operating in the financial advisory segment and the international network of specialized boutiques set up some years ago. RELATED PARTY TRANSACTIONS Transactions with related parties are detailed in note (34) to the financial statements. EVENTS AFTER THE REPORTING PERIOD Following the general rise in prices of listed companies during the first two months of 2013, the listed part of TIP s portfolio saw additional value increases. Indeed, this component that had already recorded an increase of about 35 million Euro at 31 December 2012 compared to 31 December 2011 increased again at the end of February 2013, exceeding 49 million Euro. With regard to one of the most relevant investments in unlisted companies, some weeks ago, a Page 10

11 primary investor located in the Middle East publicly expressed its interest in acquiring the stakes owned by Borletti Group Finance S.A.. Should this transaction go ahead and TIP sell its stake, it could make a significant gain. OUTLOOK As already mentioned at the beginning of this report, if the global and in particular European macroeconomic picture appears and probably is improved, this situation should lead to potential profits in the future, in particular for a group like TIP, which has a portfolio of companies that are not experiencing particular difficulties created by the existing crisis. Considering that the main investees and the advisory business performed positively in years of economic slowdown, it seems reasonable to expect even better results at the start of a more encouraging business cycle. During the last few years, all of the main investees executed strategic acquisitions strengthening their leadership positions, with clear consequences on the related income statements, on dividends that could be distributed and fact much more relevant for TIP the intrinsic value of the investees is likely to increase. Many of these companies are still in the acquisition stage and have sound financial positions, allowing them to accelerate their growth projects. TIP s intention of providing all the necessary support, both financial and consulting, remains not only unchanged but even strengthened by the better mid-term forecasts in brief: 1. TIP confirms its intention to continue the cycle of investments started three years ago in order to continue being a real partner for the acceleration of the development of European industry leading companies, eager to engage in ambitious industrial growth projects, always backed by a strong financial structure. 2. TIP seeks to continue to increase its foreign interaction through both a more effective use of the international network and of the subsidiaries in Germany and Hong Kong, and by making acquisitions outside the Italian borders. 3. Although acknowledging the fact that in order to maximize the implied value of the investees it is necessary to wait for a general and structural improvement of the economic situation, TIP is beginning to conceive more significant divestment processes than in the recent past, with the aim to further demonstrate both portfolio quality and the dimension in economic terms of the potential gains, differing them in the course of time. RESEARCH AND DEVELOPMENT ACTIVITIES During the year, the company did not incur research and development costs. Page 11

12 TREASURY SHARES Treasury shares in portfolio at 31 December 2012 amounted to 2,791,532. Treasury shares in portfolio at 14 March 2013 amounted to 3,745,086. ALLOCATION OF THE PROFIT FOR THE YEAR OF TAMBURI INVESTMENT PARTNERS S.P.A. Dear shareholders, We ask you to approve the 2012 financial statements of Tamburi Investment Partners S.p.A. as submitted and we propose that: a) 12,483,119 Euro be transferred from the share premium reserve to the legal reserve in order to fulfil the minimum legal reserve requirement (ex art of the Italian Civil Code); b) The profit of 9,250,563 Euro be allocated as follows: - a gross dividend of Euro per share (*) to ordinary shares existing at the exdividend date; - the remaining part to retained earnings. (*) as at 14 March 2013, TIP holds 3,745,086 treasury shares. ON BEHALF OF THE BOARD OF DIRECTORS GIOVANNI TAMBURI CHAIRPERSON (signed on the original) Milan, 14 March 2013 Page 12

13 Income Statement Tamburi Investment Partners S.p.A. (Euro) Note Revenue from sales and services 4,711,760 5,468,717 4 Other revenue 132, ,127 Total revenue 4,844,542 5,669,844 Costs for materials, services and other costs (1,636,081) (1,544,312) 5 Personnel expense (4,142,661) (3,465,665) 6 Depreciation, amortisation and impairment loss (78,722) (45,898) Operating profit (1,012,922) 613,969 Financial income 7,497,498 3,894,571 7 Financial expense (630,529) (1,328,115) 7 Profit before adjustments to investments 5,854,047 3,180,425 Share of profit (loss) of equity-accounted investees 4,333,699 1,385,437 8 Net impairment losses on available-for-sale financial assets (87,443) (1,185,074) 9 Profit before tax 10,100,303 3,380,788 Current and deferred taxes (849,740) (748,964) 10 Profit for the year 9,250,563 2,631,824 Basic earnings per share Diluted earnings per share Number of outstanding shares (net of treasury shares) 133,255, ,341,122 Page 13

14 Statement of comprehensive income Tamburi Investment Partners S.p.A. (Euro) Note 2 3 Income and expense recognised directly in equity: - Fair value gains (losses) on available-for-sale financial 8,985,176 (5,688,981) assets - Changes in equity-accounted investments 24,076,989 (15,520,221) Total income and expense recognised directly in equity 33,062,165 (21,209,202) Profit for the year 9,250,563 2,631,824 Total comprehensive income (expense) 42,312,728 (18,577,378) Total comprehensive income (expense) per share 0.32 (0.14) Total diluted comprehensive income (expense) per share 0.31 (0.14) Number of outstanding shares (net of treasury shares) 133,255, ,341,122 Page 14

15 Statement of financial position Tamburi Investment Partners S.p.A. (Euro) 31 December December 2011 Note Non-current assets Property, plant and equipment 65,515 99, Goodwill 9,806,574 9,806, Other intangible assets 1,806 3, Equity-accounted investments in associates 69,643,267 39,075, Investments in associates measured at fair value 8,085,000 8,085, Available for sale financial assets 103,672, ,396, Loans and receivables 19,483,480 18,571, Tax assets 219,443 13, Deferred tax assets 503, , Total non-current assets 211,481, ,477,461 Current assets Trade receivables 2,664,262 2,001, Current financial assets 3,753,801 13,650, Cash & cash equivalents 928, , Loans and receivables 37,400, Tax assets 20,417 3, Other current assets 89, ,583 Total current assets 44,856,209 15,962,792 Total assets 256,338, ,440,253 Equity Share capital 70,744,317 70,744, Reserves 129,543, ,045, Retained earnings (losses carried forward) 1,747,740 1,741,051 Profit for the year 9,250,563 2,631, Total equity ,162,667 Non-current liabilities Post-employment benefits 163, , Financial liabilities 39,904, Deferred tax liabilities 1,072, , Total non-current liabilities 41,140, ,484 Current liabilities Trade payables 444, ,597 Current financial liabilities 293,777 16,897, Tax liabilities 502, , Other liabilities 2,671,018 1,970, Total current liabilities 3,911,331 19,699,102 Total liabilities 45,052,036 20,277,586 Total equity and liabilities 256,338, ,440,253 Page 15

16 Statement of changes in equity Share Share LegalExtraordinary Fair value reserve Reserve for Other IFRS reserve Negative Retained Profit Total capital premium reserve reserve related to repurchase reserves for business goodwill earnings for the year Equity reserve (financial assets of treasury combinations available for sale) shares Balance at 1 January 2011 consolidated ( ) ( ) Change in fair value of AFS financial assets ( ) ( ) Total income (expense) recognised directly in equity ( ) ( ) Profit (loss) Total comprehensive income ( ) ( ) Capital increase ( ) ( ) Allocation of the profit for 2010/merger effect Dividend distribution ( ) ( ) Repurchase of treasury shares ( ) ( ) Balance at 31 December ( ) ( ) 0 ( ) Balance at 1 January ( ) ( ) 0 ( ) Change in fair value of AFS financial assets Total income (expense) recognised directly in equity Profit (loss) Total comprehensive income Transfer to fair value reserves related to equity investments ( ) Allocation of the profit for 2011 / dividend distribution ( ) ( ) Dividend distribution ( ) ( ) Reserves related to convertible bond Employees benefits Warrant conversion Repurchase of treasury shares ( ) ( ) Balance at 31 December ( ) ( ) Page 16

17 Statement of cash flow Tamburi Investment Partners S.p.A A.- OPENING NET CASH & CASH EQUIVALENTS B.- CASH FLOW FROM OPERATING ACTIVITIES Profit for the year 9,251 2,632 Depreciation & amortisation Impairment losses (reversal of impairment losses) on investments (4,247) (200) Impairment losses (reversal of impairment losses) on current financial assets (loans and receivables) Gain from the sale of investments in associates 0 0 Change in employee benefits (15) 15 Change in deferred tax assets and liabilities 595 (148) 5,662 2,345 Decrease/(increase) in trade receivables (695) (950) Decrease/(increase) in other current assets Decrease/(increase) in tax assets (222) 9 Decrease/(increase) in loans and receivables (38,312) 2,336 Decrease/(increase) in other current securities 9,897 20,694 (Decrease)/increase in trade payables 46 (254) (Decrease)/increase in financial liabilities 23,302 13,397 (Decrease)/increase in tax liabilities 68 (1,514) (Decrease)/increase in other current liabilities 701 (1,031) Cash flows from operating activities ,087 C.- CASH FLOWS FROM / USED IN INVESTING ACTIVITES Intangible assets a) Purchases 0 (2) Property, plant and equipment a) Purchases (10) (65) b) Disposals net of accrued depreciation 0 0 Non-current financial assets Disposal (purchase) of investments in subsidiaries (1) 0 0 (net of net cash and cash equivalents of subsidiaries) a) Purchases (6,937) (34,194) b) Disposals 14,015 1,954 c) Gain from the sale of investments in associates 0 0 Cash flows from /used in investing activities 7,068 (32,307) Page 17

18 31 December December 2011 D.- CASH FLOW USED IN FINANCING ACTIVITIES New financings 0 0 Capital increase and capital injections for future capital increase 0 2,264 Repurchase of treasury shares (1,612) (1.,523) Capital increase costs 0 0 Payment of dividends (4,689) (4,675) Change in reserves (504) 680 Cash flow used in financing activities (6,805) (3,254) E.- CASH FLOW FOR THE YEAR 722 (474) F.- CLOSING NET CASH & CASH EQUIVALENTS Closing net cash & cash equivalents consisted of: Cash & cash equivalents Current bank loans and borrowings year 0 0 Closing net cash & net cash equivalents Page 18

19 NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2012 (1) Company business activities TIP is an independent investment / merchant bank focusing on medium-sized Italian companies active in: - minority investments, as an active investor, in listed and unlisted companies able to express excellence in their respective sectors; - advisory activities in corporate finance transactions, through Tamburi & Associati division (T&A); - secondary private equity activities: investing in investments held by private equity funds, banks, financial firms or insurance companies and purchasing stakes of entities that operate in the private equity sector or similar activities. (2) Accounting policies The company was incorporated as a company limited by shares under Italian law and its registered office is based in Italy. The company was listed in November 2005 on the Expandi segment of the stock market, organized and managed by Borsa Italiana S.p.A.. On 20 December 2010, Borsa Italiana S.p.A. promoted the company to the STAR segment where its ordinary shares are now traded. The draft financial statements as at and for the year ended 31 December 2012 have been approved by the Board of Directors on 14 March They have been drawn up on a going concern basis and in conformity with the International Financial Reporting Standards and International Accounting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the related interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as endorsed by the European Community Commission with regulation no. 1725/2003 as subsequently amended, as per regulation no. 1606/2002 of the European Parliament. In accordance with IAS 1, the financial statements consist of the income statement, statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and these notes and are accompanied by the Directors report. The financial statements have been drawn up in Euros, without decimals. The accounting policies adopted to draw up these financial statements are the same as those adopted in the previous year for the consolidated financial statements, except for that described in the New standards section. Presentation and disclosures concerning financial instruments are based on the requirements of IAS 32, as amended and supplemented by IFRS 7. During the year, no exceptional cases occurred to make the use of the exceptions included in IAS 1 necessary. Page 19

20 The financial statements at 31 December 2012 have been prepared using the general historical cost criterion, with the exception of derivative financial instruments that are measured at fair value, investments in associates that are measured using the equity method or at fair value and current financial assets and AFS financial assets that are measured at fair value. Preparation of the annual financial statements requires judgments, estimates and assumptions to be made that affect the application of accounting policies and the carrying amounts of assets, liabilities, costs and revenue. These estimates and related assumptions are based on previous experience and other factors deemed reasonable in the circumstances. However, since estimates are involved, the actual results will not necessarily be the same as those shown herein. Estimates have been used to recognise allowances for impairment, the fair value of financial instruments, impairment losses, employee benefits and taxes. The main accounting policies adopted in the drawing up of the financial statements, as well as the content and the variations of the individual captions, are detailed hereunder. New standards The new documentation issued by IASB and endorsed by the EU, as applicable to these financial statements, is listed hereunder: - IAS 1 Presentation of financial statements the captions related to other comprehensive income components of the period must be distinguished between components that will never be reclassified in profit / (loss) for the period and components that could be subsequently reclassified in profit / (loss). The new IAS 1 is applicable for periods starting from 1 July 2012; - IFRS 7 - Financial Instruments - disclosures - transfers of financial assets. The amendment to this standard have been introduced to enable users of financial statements to understand the relationship between the transferred financial assets, not entirely derecognised, and the associated liabilities and to evaluate the nature and risks associated with the entity s continuing involvement in the derecognised financial assets. Amendments to IFRS 7 are mandatory for annual periods beginning on or after 1 July The IASB and the IFRIC have both approved some modifications to existing standards and issued new IFRS standards and new IFRIC interpretations. As the effective date of these documents is deferred, they have not been adopted in the preparation of these financial statements. The main changes include: - IAS 12 Income taxes The amendment, issued by the IASB in December 2010, introduces the presumption for deferred tax assets that the underlying asset will be recovered entirely through sale unless there is clear evidence of its recovery can occur with the use. The presumption will be applied to investment property and assets recorded as plant and equipment or intangible assets recognised or revaluated at fair value. As a result of these changes the interpretation SIC 21 Page 20