Consolidated Quarterly Report as of March 31 st, 2007
GENERAL INFORMATION GENERAL INFORMATION... 3 SIGNIFICANT EVENTS IN THE FIRST QUARTER OF 2007... 5 SUMMARY OF RESULTS... 6 PROFIT AND LOSS ACCOUNT... 8 BALANCE SHEET... 9 STATEMENTS OF CASH FLOWS... 10 STATEMENTS OF SHAREHOLDERS EQUITY... 11 NOTES TO THE CONSOLIDATED QUARTERLY REPORT... 12 ECONOMIC, ASSET AND FINANCIAL MANAGEMENT... 13 SUBSEQUENT EVENTS... 19 FUTURE MANAGEMENT DEVELOPMENTS... 19 LIST OF SHAREHOLDINGS... 19 2
GENERAL INFORMATION General Information Current Group Structure The EEMS Group is as follows: 3
GENERAL INFORMATION Company Officers Parent Company s Board of Directors The Company s Board of Directors consists of the following five members: Position Name Date and place of birth President Chief Executive Officer Giovanni Battista Nunziante* Vincenzo D Antonio Salerno, 25 April, 1930 Orta di Atella (formerly Atella di Napoli) (NA), 11 April, 1945 Director Roberto Biondi Magenta (MI), 23 February, 1971 Director Guido Cottini * Cuneo, 15 April, 1942 Director Albert Ng Aik Khoon Singapore, 12 September 1962 * Independent Director Following the resignations of Mr Guido Paolo Gamucci, Mr Albert Ng has been co-opted in the Board of Directors on November 13th 2006. The Shareholders Meeting dated May 7 th, 2007 confirmed Mr Albert Ng as non independent director until next Shareholders Meeting for the approval of the December 31 st, 2007 annual report. The current Board of Directors was appointed by the Shareholders Meeting of April 28 th, 2005 and will remain in office until the approval of the December 31 st, 2007 annual report. For purposes of their positions at EEMS, the members of the Board of Directors reside at EEMS registered office, located in Viale delle Scienze, 5 Cittaducale, Rieti. Board of Statutory Auditors According to the Article 24 of the Articles of Association, the Board of Statutory Auditors is composed of three Regular Auditors and two Alternate Auditors appointed in such a way as to guarantee to the minority shareholders the appointment of one of the Regular Auditors and one of the Alternate Auditors. They are elected for a term of three Financial Years, and may be re-elected. The current Board of Statutory Auditors was appointed by the Shareholders Meeting of April 28 th, 2005 and will remain in office until the approval of the December 31 st, 2007 annual report. The Company s Board of Statutory Auditors consists of the following five members: Position Name Date and place of birth Chairman Vincenzo Donnamaria Roma, 4 October, 1955 Auditor Felice De Lillo Senise (PZ), 25 November, 1963 Auditor Francesco Masci L Aquila, 23 October, 1955 Alternate Auditor Alberto Santi Roma, 13 June, 1965 Alternate Auditor Massimo Pagani Guazzugli Bonaiuti Pesaro, 15 July, 1946 For the purposes of their position, the members of the Board of Statutory Auditors reside at EEMS registered office at Viale delle Scienze 5, Cittaducale, Rieti. Independent Auditors Reconta Ernst&Young S.p.A. 4
GENERAL INFORMATION Significant Events in the First Quarter of 2007 Reimbursement of Syndicate Loan Facility On February 22nd, 2007 following the request to reimburse in advance the outstanding amount of Syndicate Loan Facility obtained in 2005, the Company has reimbursed for an amount of USD 14,812 thousands the Syndicate of financing institution. On the same date the outstanding line of credit available has been cancelled and the securities granted have been returned. On the same date the forward contracts stipulated on June 8 th 2006, have been extinguished. Establishment of EEMSolar EEMSolar Spa has been established on March 2007, wholly owned by EEMS Italia Spa with a Share Capital of Euro 2,000 thousands fully subscribed and paid. The object of EEMSolar is the production and sale of solar cells and panels. Warrant Within the year 2001 warrant plan, during the Exercise period 1-10 February 2007, 302,045 warrants have been exercised with the relative acquisition of new ordinary shares of EEMS Italia S.p.A for a total of 374,535.80, of which 151,022.50 as nominal value and 223,513.30 as Paid in Capital reserve. As of today 1,215,840 warrants are still to be exercised. 5
GENERAL INFORMATION Summary of Results The following table presents certain selected data from the consolidated profit and loss account: (in thousands of Euro) 1Q 2007 % 1Q 2006 % Total revenues and other income 39,641 100.0 33,010 100.0 Ebitda 13, 504 34.1 11,631 35.2 Ebit 2,674 6.7 2,306 7.0 Income before income taxes 1,984 5.0 1,728 5.2 Net income (loss) of the period 2,997 7.6 (184) (0.6) Attributable to parent company 2,997 7.6 (513) (1.6) Attributable to third parties - 329 1.0 Numbers of shares 42,435,345 31,643,850 - Italy number of employees 430 529 - Overseas number of employees 1,112 595 - The Group s total revenues and other income in the first quarter of 2007 was 39.6 million of Euros, with a growth of 20,1% compared to the same period of 2006, mainly attributable to the higher turnover generated by the Asian Companies. The operating margins have been influenced by the higher incidence of raw material costs compared to the same period of 2006. This is attributable to the increased volumes of DDRII produced during the first quarter of 2007; they are characterised by a greater incidence of material costs. The result of the period shows a profit of Euro 2,997 thousand, hence a strong growth in respect to the loss of Euro 184 thousand of first quarter of 2006. Furthermore the result of the period has been positively influenced by the fact that EEMS Test Singapore recognized deferred tax assets, having been recognised an Investment allowance by the Economic Development Board of Singapore; this allowance has been determined considering the investments made in 2004 and in 2005. In the same period, EEMS Italia released deferred taxes following the reversal of accelerated depreciation taken in the previous exercises. The following table presents selected data from the consolidated balance sheet (in thousands of Euro) 31.03.2007 31.12.2006 TOTAL NON CURRENT ASSETS 190,861 190,989 TOTAL CURRENT ASSETS 54,474 65,862 TOTAL ASSETS 245,335 256,851 Shareholders equity - Attributable to parent company 156,333 153,884 - Attributable to third parties - TOTAL SHAREHOLDERS EQUITY 156,333 153,884 TOTAL NON-CURRENT LIABILITIES 44,817 44,598 TOTAL CURRENT LIABILITIES 44,185 58,369 TOTAL LIABILITIES 89,002 102,967 TOTAL SHAREHOLDERS AND LIABILITIES 245,335 256,851 6
GENERAL INFORMATION Summary data from the cash flow statement (in thousands of Euro) 1 Q 2007 1 Q 2006 Net cash provided by operating activities 9,858 11,877 Net cash used in investing activities (13,400) (32,887) Net cash and cash equivalents used in financing activities (11,131) 10,898 Effect of change of exchange rate on cash and cash equivalents (267) 1 Increase (decrease) in cash and cash equivalent (14,940) (10,111) 7
PROFIT AND LOSS ACCOUNT Profit and Loss Account (in thousands of Euro) 1Q 07 1Q 06 Net sales 39,109 32,734 Other income 532 276 Total revenues and other income 39,641 33,010 Raw materials and other 12,612 8,705 Services 4,983 3,462 Labor 7,827 8,783 Other operating expenses 715 429 Ebitda 13,504 11,631 Depreciation and amortization 10,601 9,267 Impairments 229 58 Ebit 2,674 2,306 Financial income 268 191 Financial expense (958) (769) Income before income taxes 1,984 1,728 Income taxes (1,013) 1,912 Net income (loss) of the period 2,997 (184) Attributable to parent company 2,997 (513) Attributable to third parties - 329 Basic earnings (loss) per share 0.07 (0.006) 8
BALANCE SHEET Balance Sheet (in thousands of Euro) 31.03.2007 31.12.2006 NON-CURRENT ASSETS Intangible assets: - Goodwill 11,463 11,494 - Intangible assets with a defined useful life 774 395 Tangible assets: - Property, plant and equipment, net 160,015 158,755 - Asset held hunder finance lease 18,421 20,158 Other non-current assets: - Miscellaneous receivables and other non-current assets 188 187 TOTAL NON-CURRENT ASSETS 190,861 190,989 Current assets: - Inventories 6,570 6,625 - Trade receivables 23,774 20,331 - Tax receivables 934 1,715 - Cash and cash equivalents 21,600 36,540 - Other current assets 1,596 651 TOTAL CURRENT ASSETS 54,474 65,862 TOTAL ASSETS 245,335 256,851 Shareholder equity - Attributable to parent company 156,333 153,884 - Attributable to third parties - TOTAL SHAREHOLDERS EQUITY 156,333 153,884 Non-current liabilities: - Non-current financial liabilities 27,706 26,330 - Employee severance indemnities (TFR) and other 7,881 7,927 employee-related accruals - Deferred taxes 8,871 10,115 - Provision for future risks and charges 359 226 TOTAL NON-CURRENT LIABILITIES 44,817 44,598 Current liabilities: - Current financial liabilities 11,749 25,020 - Trade payables 25,815 26,627 - Taxes payables 849 867 - Other current liabilities 5,772 5,855 TOTAL CURRENT LIABILITIES 44,185 58,369 TOTAL LIABILITIES 89,002 102,967 TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 245,335 256,851 9
STATEMENTS OF CASH FLOWS Statements of Cash Flows (in thousands of Euro) 1Q 07 1Q 06 Net income (loss) of the period 2,997 (184) Adjustment to reconcile net income (loss) of the period to net cash provided by operating activities: Depreciation and amortization 10,601 9,267 Provision for employee severance indemnities 215 428 Interest expense on TFR calculation 94 Other non-monetary elements 251 49 Net change in accrual for risks and charges 135 - Impairment of long-lived assets 229 58 Deferred taxes (1,273) 1,384 Net gain on asset disposal (54) (258) Employee severance indemnities paid (355) (2,772) Change in operating assets and liabilities: Receivables (2,850) (6,462) Inventories 10 18 Account payable net of capital items 1,048 1,525 Tax payables (111) 340 Other (1,079) 8,574 Net cash provided by operating activities 9,858 11,877 Proceeds from sales of property, plant and equipment 797 1,400 Payment for the acquisition of subsidiary - (11,751) Purchase of property, plant and equipment (13,780) (22,536) Purchases of intangible assets (414) - Net change in guarantee deposit (3) - Net cash used in investing activities (13,400) (32,887) Proceeds from loans 4,031 12,617 Repayments of loans (13,992) Principal paid for leased equipment (1,545) (1,580) Other - (139) Capital contribution by shareholders 375 - Net cash and cash equivalents used in financing activities (11,131) 10,898 Effect of change of exchange rate on cash and cash equivalent (267) 1 Increase (decrease) in cash and cash equivalents (14,940) (10,111) Cash and cash equivalents at the beginning of the period 36,540 26,620 Cash and cash equivalents at the end of the period 21,600 16,509 Supplementary information: Taxes paid in the period - 10 Interest paid in the period 900 700 10
STATEMENTS OF SHAREHOLDERS EQUITY Statements of Shareholders Equity (in thousands of Euro) Share Capital Paid in capital Legal Reserve FTA reserve Other reserves Retained earnings Currency translation reserve Income (loss) of the period Total equity attributable to group Equity attributable to third parties Total Shareholders Equity Balance as of January 1 st, 21,067 73,996 3,165 1,125 (2,433) 49,758 (199) 7,405 153,884 0 153,884 2006 Reclassification to retained 7,405 (7,405) 0 earnings Warrant 151 224 375 375 Currency translation reserve (969) (969) (969) Change IAS Reserves 46 46 46 Net income of the period 2,997 2,997 2,997 Balance as of March 31th, 2007 21,218 74,220 3,165 1,125 (2,387) 57,163 (1,168) 2,997 156,333 0 156,333 11
EXPLANATORY NOTES Notes to the consolidated quarterly report Basis of presentation EEMS Group s consolidated quarterly Financial Statements as of March 31 st, 2007 have been prepared in accordance with the provisions of Consob resolution No, 14990 of 14 April, 2005, and in compliance with the provisions set forth in appendix 3D of the Consob Regulation no, 11971/1999 and subsequent modifications and in consideration of Consob Communications no, DEM/6064293 and DEM/6064313 (July 28 th, 2006), Therefore, the international accounting standard (IAS 34 Interim reports ) which addresses the preparation of interim financial information has not been adopted, Starting from the Consolidated Financial Statements as of December 31, 2005, the EEMS Group has prepared its Consolidated Interim Financial Statements in accordance with International Financial Reporting Standards ( IFRSs ), as adopted by the European Union, The transition date to IFRSs is January 1, 2004, The Consolidated quarterly financial statements as of March 31 st, 2007 have not been audited and have been prepared based on accounting policies consistent with those adopted in the Consolidated Financial Statements for the year ended December 31 st, 2006, The financial information of the prior period presented for comparison purpose has also been prepared in accordance with the aforementioned accounting policies, The current/non-current classification has been adopted for the balance sheet, which is generally applied by industrial and commercial enterprises, while the classification of expenses by nature has been chosen for the income statement, The Cash Flows has been prepared using the indirect method, The Consolidated Financial Statements are presented in Euros and all the values are rounded to thousands of Euros unless otherwise indicated, 12
EXPLANATORY NOTES Economic, asset and financial management Analysis of the Group s economic management Revenues (in thousands of Euro) 1 Q 2007 1 Q 2006 Net sales 39,109 32,734 Other income 532 276 Total revenues and other income 39,641 33,010 Revenue relates mainly to the assembly and test activities for DRAM and Logic. The 19.5% increase in the revenue in the first quarter 2007, in respect of the same period of 2006, is mainly attributable to the sales generated by the Asian companies. The quarter here analysed has been characterised by an increase in the volumes produced (around 43%), partially offset by a lower unit selling prices negotiated with customers as compared with the corresponding period of the previous year. The results of this quarter have been also negatively influenced by the strengthening of Euro against US Dollar that is the currency in which the Group income is represented. As matter of fact, the average rate of exchange USD/Eur in the first quarter of 2007 has been about 1.31 against 1.20 in the same period of the previous year. Sales of the Asian companies in the first quarter of 2007 have been Euro 23,817 thousand, with an increase of about 7.8% Costs (in thousands of Euro) 1 Q 2007 1 Q 2006 Total revenues and other income 39,641 33,010 Raw materials and other 12,612 8,705 Services 4,983 3,462 Labor 7,827 8,783 Other operating expenses 715 429 Depreciation and amortization 10,601 9,267 Impairments 229 58 Total costs 36,967 30,704 Operating income 2,674 2,306 The increase in total costs, which were 30,704 thousand Euros in the first quarter of 2006 and became 36,967 thousand Euros in the first quarter of 2007, is mainly attributable to the Asian companies operations. In particular, the increase of the items raw materials and other and services is due to the increase in volumes of production units which also results from the increase in assembly and test activities at the Suzhou plant and to the already mentioned change in the product mix in favour of DDRII. The decrease in labor cost is mainly due to the completion, in the first half of 2006, of the severance procedure started in 2005. The increase in depreciation is mainly attributable to depreciation of the Asian companies machinery and equipment. 13
EXPLANATORY NOTES Financial income and expense The financial income of the first quarter is Euro 268 thousand, increased in respect to Euro 191 thousand of the same period of 2006; the increase depends on higher financial availabilities. Financial expenses passed from Euro 769 thousand in the first quarter of 2006 to Euro 958 thousand in the first quarter of 2007 because of the increase of interest expenses related to the draw-down of the Syndicated Loan Facility made by the Subsidiary Companies. Income taxes The main components of income taxes are as follows (in thousands of Euro) 1 Q 2007 1 Q 2006 Deferred taxes (1,273) 1,383 Current taxes 260 529 Total income taxes (1,013) 1,912 The positive impact, during the first quarter, is mostly due to the release of deferred tax liabilities for anticipated depreciation, to minor taxes noted by the parent company, and to EEMS Test Singapore recognition of deferred tax assets following the Investment allowance determined considering the investments in plant and equipment made during the exercises 2004 and 2005 Profit (loss) per share The amount of the profit per share in the first quarter of 2007 is 0.07 Euro, where the numerator and the denominator are respectively Euro 2,997 thousand and 42,296,201 shares. Listed in table there are the values used for to calculate the weighted average of the ordinary shares: N. of shares N. Days Number of shares as at January1 st, 2007 42,133,300 41 Increase of the period 302,045 48 Total number of shares 42,435,345 - Weighted average number of shares 42,296,201 - As of March31 st 2007, 1,215,840 warrants are exercisable, representing approximately 2.8% of the total share capital. The warrants were granted to company s employees and consultants. No analysis is reported on the dilutive effect resulting from the exercise of warrants due but not yet exercised, as they are not significant. 14
EXPLANATORY NOTES Analysis of the Group s asset structure Goodwill The Goodwill showed in the balance sheet reflects the excess of the purchased price over the acquisition of EEMS Test during 2005 and the one related to the buyout of EEMS Asia in 2006. This goodwill is not amortised but it is subject to annual impairment test to verify possible reductions of value in accordance with Ias 36. Property, plant and equipment The following table shows the net balances of property, plants and machinery: (in thousands of Euro) 31.03.2007 31.06.2006 Land 326 326 Building 3,572 3,575 Plant and machinery 137,473 121,525 Industrial and commercial equipment 24 27 Other fixed assets 2,393 2,137 Assets under construction and advance paid 16,227 31,165 Total 160,015 158,755 EEMS Test Singapore has secured the Loan obtained by United Overseas Bank with some equipment for a value equivalent to Euro 7,220 thousand. In the course of first quarter 2007 the Group has made investments for Euro 12,403 thousand mainly in the Asian plants. On March 31 st, 2007 the Group had commitments to purchase machinery amounting to around Euro 8.765 thousand. Current assets (in thousands of Euro) 31.03.2007 31.12.2006 Inventories 6,570 6,625 Trade receivables 23,774 20,331 Tax receivables 934 1,715 Cash and cash equivalents 21,600 36,540 Other current assets 1,596 651 TOTAL 54,474 65,862 The decrease in cash and cash equivalents in mainly due to the repayment of the Syndicate Loan by EEMS Italia, for an amount of Euro 11,500 thousand, and to the payment of investments in equipment by the Asian subsidiaries. The increase in other current assets is mainly attributable to the increase in insurance and rental costs of the Asian companies, advance to suppliers given by the Asian companies and other costs related to the annual renewal of production software. 15
EXPLANATORY NOTES Shareholders Equity As March 31 st, 2007 EEMS share capital is made up of 42,435,345 shares with a nominal value of 0,50 Euro each. The Company does not hold any of its own shares. According to the Warrant plan, between February 1st and February 10th 2007, employees and consultants of the Company have exercised 302,045 warrants and this has implied an increase in capital for Euro1,227 thousand, Euro 151 thousand as increase of share capital and Euro 732 thousand as paid in capital reserve. Stock Options On January 17, 2006 at an extraordinary meeting, the shareholders authorized the Board of Directors to increase the authorized share capital by a further euro 500,000, or 1,000,000 shares, waiving pre-emption rights with a nominal value of 0,50 (cents) to cover one or more Stock Option Plan(s) to be granted to the Company s employees and certain technical consultants at a price determined as the average trading price of the Company s shares on the Mercato Telematico Azionario in the month before granting the option to the employees and consultants. The Board of Directors was also authorised to give effect to this Stock Option Plan, including the identification of the beneficiaries and their entitlements. On March 21, 2006 the Board of Directors resolved to issue a maximum of 9,500,000 of shares for the purpose of the Italian public offering to the retail market and to professional Italian and foreign institutional investors. On January 17, 2006 the Board of Directors approved the rules pertaining to the Stock Option Plan reserved for executive directors and other managers of the company, The Plan was created with the aim of enabling part of the remuneration to Company's executive directors' and other managers to pre-determined personal objectives correlated to certain economic results achieved by the Company. As a consequence of the aforementioned plan, the Board of Directors on February 22, 2006 resolved to increase the share capital by a maximum of 200,000 shares at the pair value of 0.5 Euros to be dedicated to the plan. Moreover on September 15, 2006, the Boards of Directors of EEMS has resolved to increase the Share Capital by 800,000 shares of pair value of Euro 0.50 per share in consequence of the Stock option plan. On November 13 th 2006, the Board approved the list of Stock Option beneficiaries and specified the targets according to the Regulation of the Stock Option Plan 2006 so as to proceed with the attribution of the relative stock options. The number of options per beneficiary is going to be set by the Board after the approval of year 2006 Financial Statements and in consequence of the targets. The price is determined on the arithmetic average of the official prices on Mercato Telematico Azionario in the month before the offer. As at March 31st 2007 neither the number of options nor the assignation price have been determined, As a consequence, the evaluation of fair value will not be done until the approval of the Financial Statements as of December 31 st, 2006. For further information on shareholders equity see note 20 of the consolidated financials statement for the year ended December 31 st, 2006. 16
EXPLANATORY NOTES Non-current liabilities (in thousands of Euro) 31.03.2007 31.12.2006 Non-current financial liabilities 27,706 26,330 Employee severance indemnities (TFR) and other employeerelated accruals 7,881 7,927 Deferred taxes 8,871 10,115 Provision for future risk and charges 359 226 TOTAL 44,817 44,598 The increase in Non-current financial liabilities during the first quarter of 2007 is mainly attributable to EEMS Test that in the limit of the availability with United Overseas Bank s as at 31st December 2006, has made two draw-downs, on 16th February 2007 and on 19th March 2007 for a total of USD 5,301 thousand (Euro 3,981 thousand). These loans have a duration o 4 years and are going to be reimbursed in 48 monthly installments starting the month following the utilization with variable interest rate currently at 7,1%. This further loan is guaranteed by 7 production machines. The decrease in deferred taxes is due, as already said, to the release of deferred tax liabilities by EEMS Italia and to further deferred tax assets taken in by EEMS Test following the investment allowance recognized for investments in equipment during the years 2004 and 2005. Current liabilities (in thousands of Euro) 31.03.2007 31.12.2006 Current financial liabilities 11,749 25,020 Trade payables 25,815 26,627 Taxes payables 849 867 Other current liabilities 5,772 5,855 TOTAL 44,185 58,369 The decrease in current financial liabilities is due, as said, by the repayment by EEMS Italia of the Syndicate Loan on February 12th 2007 for an amount of Euro 11,500 thousand, and by the repayment by EEMS Suzhou of a credit line available at Agricultural Bank of China on 21st March 2007 for an amount of USD 2,956 thousand. 17
EXPLANATORY NOTES Net financial debt (in thousands of Euro) 31.03.2007 31.12.2006 Cash and cash equivalents Short-term debt owed to banks Short-term lease obligations Total short-term net debt (21,600) (36,540) 6,147 18,685 5,467 5,893 (9,986) (11,962) Long-term debt owed to banks 22,992 20,452 Long-term lease obligations 4,714 5,878 Total long-term net debt Total net debt 27,706 26,330 17,720 14,368 The total net debt as of March 31th 2006, is Euro 17,720 thousand, and has an increase of Euro 3.352 thousand compared to December 31 st, 2006. This increase is mostly due to the disbursement related to investments in equipment. Cash flows Cash flow provided by operating activities The cash flow generated by operating activities in the first quarter 2007 is Euro 9,858 thousand, compared to Euro 11,877 thousand for the same period of year 2006. The decrease of 2,019 thousand Euros is the result of the fact that the working capital of first quarter 2006 was positively impacted by the effective date of payment for the purchase of 16% shares owned by Ellipsiz. Ltd in EEMS Asia, that has been executed on May 3 rd, 2007. Cash flow used in investing activities The cash flow used in investing activities in the first quarter 2007 is Euro 13,400 thousand, compared to Euro 32,887 thousand for the same period of year 2006. The quarter closed as at 31 st March 2006 was influenced by higher disbursements related to investments made during the year 2005 and the first quarter 2006 at Suzhou plant. Moreover it includes the investment for the acquisition by EEMS Italy of 16% of EEMS Asia s share capital. Cash flow used in financing activities The cash flow used in investing activities for the first quarter 2007 is Euro 11,131 thousand and, as already said, is influenced by the repayment of the Syndicate loan by EEMS Italia and short-term credit line by EEMS Suzhou. 18
EXPLANATORY NOTES Subsequent events On April, 13th 2007, Abn Amro Bank N.V. committed to a Multicurrency Credit Facility up to Euro 110 million. The total facility of Euro 110 million is divided in 2 tranches of Euro 50 and Euro 60 million, to be used respectively to finance working capital and general corporate purposes of semiconductor memories business and to finance EEMSolar S.p.A. for the production of photovoltaic solar cells and modules to start at the Rieti facilities in 2008. The availability period ends on December 31st, 2008 and the outstanding amount as at that date will be repaid by way of six equal semi annual installments, the first installment of which shall be payable on 30 June 2009 up to 2011. Future management developments.the Company deems that this year's trend can bring an overall growth in revenue and profit in comparison with last year, also made possible by the contribution of the production plants located in Asia, List of Shareholdings Below is a list of subsidiary companies as of March 31 st 2007 Company Name Location Share Capital Functional Currency Interest % Shareholders EEMS Asia Pte Ltd Singapore 102.804.100 Usd USD 100% EEMS China Pte. Ltd. Singapore 2 Usd USD 100% EEMS Italia S.p.A. EEMS Asia Pte Ltd EEMS Suzhou Technology Co. Ltd Cina 3.000.000 Usd USD 100% EEMS China Pte. Ltd. EEMS Suzhou Co. Ltd. Cina 66.700.000 Usd USD 100% EEMS China Pte. Ltd. EEMS Test Singapore Pte. Ltd. Singapore 27.200.000 Usd USD 100% EEMS Asia Pte Ltd EEMSolar SpA Italia 2.000.000 Euro EURO 100% EEMS Italia S.p.A. EEMS Singapore Pte Ltd Singapore 11.138.000 Sgd Singapore Dollar 100% EEMS Italia S.p.A. Cittaducale, May 10 th, 2007 For the Board of Directors, The President Giovanni Battista Nunziante 19