Consolidated Annual Acount 2008

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5_Report on operation

6. Report on the unified management

of the annual and consolidated balance statements

65_Balance sheet 2008

66. Rectified balance sheet

72. Board of auditors report for the annual balance statement

74. Certification Report

75. Certification UNI EN ISO 9001:2000

77_Consolidated balance sheet 2008

78. Consolidated balance sheet

84. Gas - methane and gpl company balance statement

85. Energy company balance statement

86. Other controlled company balance statement

87. Foreign company balance statements

89. Board of auditors report for the consolidated annual balance statement


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Appreciate the workers, the real stars

of the “110 years of true work"

that CPL CONCORDIA celebrated in 2009:

this is the objective of the graphic project of these

Financial Statements, starting from the cover.

All this through a graphic

that mentions two important artistic movements

that marked and drove the story of the last century:

The futurism at the

start of the twentieth century, glorifying dynamism,

speed and industry as a place for creativity,

and Pop Art halfway through the century, which also

gave dignity to images tied to the industrial society.

It is a way of celebrating the professionalism

of each worker, the dignity of each individual,

work being interpreted as an important

form of expression by man.

5_Report on operation

6. Report on the unified management

of the annual and consolidated balance statements

65_Balance sheet 2008

66. Rectified balance sheet

72. Board of auditors report for the annual balance statement


75. Certification UNI EN ISO 9001:2000

77_Consolidated balance sheet 2008

78. Consolidated balance sheet

84. Gas - methane and gpl company balance statement

85. Energy company balance statement

86. Other controlled company balance statement

87. Foreign company balance statements

89. Board of auditors report for the consolidated annual balance statement


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_page 6 Report on the unified management of the annual and consolidated balance statementsclosed on 31 Dec 2008Report prepared in accordance with article 2428 of the Italian Civil Code integrated by article 1 comma 2 of legislative

decree 32/2007 and article 40 of legislative decree No, 127 dtd 9 April 1991

Dear Partners,The annual balance sheet closed at 31 Dec 2008 which is submitted for your approval presents a Profit net of the annual taxes and ordinary and ex-traordinary set aside funds equal to 6,838,059 Euro, a result which we can deem absolutely positive, above all in that it was obtained during a period in which the global and national economy is going through a serious financial crisis and recession. The production performed during the course of the year amounts to 225, 417, 564 Euro, showing an increase of 13.3% compared to the previous year. The total assets are equal to 316,564,843 Euro, the net equity amounts to 99,777,187, the Funds amount to 1,683,921 Euro, the Severance Indemnity amounts to 5,721,027 and the total debts and liability accruals and deferrals amounts to 209,427,708 Euro. As always, the ad-ministrators of the Co-operative performed, also in accordance with art. 2 of law 59/92, their duty with a willingness to help the Co-operative achieve the mutual association goals required by law and the Articles of Association consisting in the aim to ob-tain consistency in employment and the best pos-sible economic, social and professional conditions. For this reason the Co-operative has acted in the intent to maintain full employment of the partners and remunerating their work performances at the best possible work conditions, acknowledging that the progress of the market and the specific relevant sector in which it operates. The company has also operated, in order to improve the professional and cultural qualifications of the partners, investing to guarantee optimal conditions in the work place. For the purpose of the capitalisation process of the Co-operative, as well as to nurture and reward the contri-bution from the social base, the Board of Administra-Administra-tion proposes, in virtue of the good results achieved during the financial year, to attribute to each share-

holder collaborator, in accordance with art. 3 comma 2 letter b) of law 142 dtd 3 April 2001 and subsequent modification, as a refund, an amount determined in relation to the quantity and quality of the work performed during the course of the 2008 financial year. The amount which the Board of Administration proposes to the Assembly to be distributed among the partners based on the aforementioned criteria, is 1,200,000 Euro which is already accounted for in item B9 of the Income Statement among the per-sonnel costs such as integration of the retributions paid to shareholder collaborators over the course of 2008, 50% of which destined for gratuitous increase of the underwritten capital and the remaining 50% to be deposited as integration of the retributions due to the shareholder collaborators, the method of both set forth in article 62 of the Association Articles and pursuant to the effects in accordance with article 6 second comma of L.D. No. 63/02 converted in law No. 112/02. The Co-operative, as group leader of a series of companies operating in the same sector of activity or as integration and completion of the the line of the sector of construction and management of methane gas and GPL distribution networks, in-cluding the sale, construction and management of heating or air conditioning systems, remote heating networks and the construction and management of photovoltaic systems, public illumination and high output cogeneration, has prepared in accordance with legislative decree No. 127 dtd 9 Apr 1991, its Consolidated Balance Statement at 31 December 2008. The Consolidated Balance Statement closed at 31 December 2008 shows a consolidated produc-tion value of 261,608,155 with an increase compared to the previous financial year of 30,704 /000 Euro equal to 13.3%. The result of the Group which this production generated shows a pre-tax profit equal to 9,822,717 Euro which, net of current, deferred and

_page 7

advance taxes, determines a net profit of 5,463,119 Euro, to be considered at the same level as the result of the group leader, absolutely satisfactory. The total assets are equal to 360,658,503 Euro, the net equity of the Group amounts to 101,819,346, the Funds amount to 2,562,693 Euro, the Severance Indemnity amounts to 6,132,307 and the total debts and liabil-ity accruals and deferrals amounts to 250,144,157 Euro.

A] Company personnel, environment and and social relations

A.1 ] PersonnelWe have just analysed the macro numbers which emerge from the balance statement of the Group leader and the Consolidated Balance Statement closed at 31 Dec. 2008, emphasising that these re-sults were obtained thanks to the efforts and sac-rifices of our people, partners and non, employees of the group leader and group companies which by now share our principles. In this regards, it seems appropriate to emphasise the strong employment increase during 2008, both at the group leader and the group level. The inherent prospectus are ana-lysed as follows:

Leader Company Average Organisation

Number 2008 2007

Executives 16 17

Managers 32 30

Administration 388 335

Manual 538 465

TOTAL 974 847

The above prospectus shows the data inherent to the average organisation in 2008 compared to that of 2007 achieved by the Co-operative, from which an annual increase of 127 labour units is shown, al-most all of the employees in the national territory. At the Group level the situation is summarised in the following prospectus:

Group Average Organisation

Number 2008 2007

Executives 18 19

Managers 56 30

Administration 455 391

Manual 574 501

TOTAL 1,103 941

From the above prospectus, an average employ-ment increase took place of 162 units, for the main part occupied over the national territory while the remaining part operates in our Romanian controlled company. From both prospectus an occupational trend emerges which is in absolute contrast with a by now recognised market recession due, as we well know, to a serious financial crisis in the United States but which quickly involved the global system with negative effects on the national economy.With regard to the labour contracts applied in the Group, today there are five national contracts: Build-ing Co-operative Contract, Metal and Mechanical Co-operative, Gas Operator, Cleaning, besides the Co-operative Director contract.Analysing only the Group leader data and taking into consideration the effective bodies at 31 December 2008, the subdivision is as follows:

CCNL membership Building Metal and

Mech. Gas Op. Cleaning Co-op Dir. TOTALS

Manual 214 330 31 10 585

Administration 58 339 12 409

Executives 17 17

Managers 12 20 32

Total 284 689 43 10 17 1043

It is also emphasised that with regard to the National Contract of the Builders, this is integrated with the provincial contracts, while for all contracts the inte-grative company contract is foreseen.

A.2 ] Environment and SafetyDuring 2008 the Safety and Environment Service completed many projects begun during 2007 to up-date the headquarters and the satellite branches in accordance with the laws in force, in order to guar-antee an safe and dignified work environment for all. The Safety and Environment office performs a series of duties with are transversal to all company activi-ties and to those activities relevant to both the safety plan and the work site waste disposal management. This activity is performed for all of the companies in the group present on the national territory. In per-forming this activity the structure interfaces with the contract office, with the technical office and with the persons in charge who manage the various work sites. In order to better perform this task, the office has produced a document which must always be filled out upon request for operative safety plans or risk evaluation. This document is present on the in- on the in-on the in-tranet and is available to all operators who manage

_page 8 the work sites and allows for the coordinated collec-tion of data which the safety managers needs to fill out the risk evaluation documents. Furthermore, a part has been integrated which deals with the man-agement and disposal of waste in order to support the decisions of the persons in charge when seeking the best way to dispose of waste produced by the work sites.With regard to the interfacing with other offices, in particular with the contracting office, documents are being prepared which will be suitable during the pre-qualification or bidding phases. The main purpose of these documents is to allow the Group leader to gain the most points in the evaluation phase by the customer. In fact, they can not be used in any way in work sites if the group leader is awarded the job because they are incomplete documents which lack data inherent to the personnel which will work in that during the bidding phase it is not known which operators which physically operate on the work site.In order to achieve the work site safety objectives and the updates on environmental practices, spe-cific training courses will be held periodically.

The training hours for dedicated subjects during the 2008 financial year are listed below:- Basic courses held - 302- First aid courses - 47- Fire prevention personnel courses - 13- Asbestos waste disposal operator courses - 6- Electrical system labourer courses (pEs, pEI) - 5- Waste form courses - 46- III category DpI courses - 12- Telescopic forklift use courses - 4- Asbestos labourer update courses - 11- Gpl network operator courses - 3- 81/08 update courses for technicians - aspp - 16

- SGA company procedures and instruction course - 3

- ADR training course - 10- Course of job superintendents and work site technicians on legislative decree 81/08 - 36

For the doctor visits and material acquisitions for first aid, the following was spent: 9,526 Euro (first aid material) + 73,584 Euro (safety surveil-lance)

Tons of waste disposed of in the headquarters area in 2008 from the temporary depot:- Oils: 6,052 kg

- Aqueous washing solutions and mother waters (odorant recovery service): 19,410 kg- Paper-cartons: 11,150 kg- Electrical-electronics: 1,274 kg- Iron-steel: 57,717 kg- wood: 21,100 kg- Mixed packaging: 95240 kg

In the work sites:- Earth and rocks from digging in the headquar-ters area: 2,421,063 kg- Mixed waste from construction and demolition activities in the headquarters area: 9,798,850 kg- cement poles from abandoned electrical lines: 39,720 kg

With regard to the results obtained through the realisation of safety plans and the consequential monitoring of observance, it is useful to analyse the progress of injuries in the work place over time, eval-uate the severity index and explore the causes and effects, In the following prospectus the data which has emerged over the last decade is provided:

YEAR WORKPLACE INJURIES

CPL Group

1997 54

1998 50

1999 42

2000 30

2001 61

2002 49

2003 48

2004 71

2005 65

2006 41

2007 54

2008 61

general average 52,16

The 2008 data shows an increase of 7 workplace injuries compared to the previous financial year with an incidence above the company average. We should remember, with regard to this, that there was an average increase in employees over the course of the financial year of more than 160 units. The data relative to the severity of the injuries is shown be-low:

_page 9

YEAR FREQUENCY INDEX SEVERITY INDEX

Fa Sa

1997 81.04 1.44

1998 66.47 1.36

1999 52.14 0.84

2000 32.99 0.36

2001 53.27 1.69

2002 44.58 0.87

2003 38.18 0.94

2004 52.78 0.66

2005 49.06 1.01

2006 31.84 0.51

2007 37.56 0.70

2008 37.95 0.69

As can be seen by the above prospectus, for 2008 both the frequency index of 37.95 and the severity index are well below average. It is pointed out that the frequency and severity indexes are calculated with the following formulas:- Frequency index = No, of workplace injuries per 1,000,000 divided by the work hours in the year;- Severity index = No, of workplace accident days x 1,000 divided by the work hours in the year.

A.3 ] Company Social RelationsThere is no doubt that a large impulse for develop-ment comes from the Social Relations base, an ab-solute element of characterisation of the coopera-tive system which represents its vital lifeblood. The movement of the partners over the course of the 2008 financial year is summarised by the following prospectus: Labourers partners 01 Jan 2008 Admissions Withdrawals 31 Dec 2008

Manual 198 29 11 216

Adminis. 245 30 7 268

Executives 17 0 1 16

Total 284 59 19 500

Over the course of 2008 there was an increase in the net withdrawals of 40 partners equal to 8.7%, values which testify to an index of trust toward the Co-operative and the entire group certainly consoli-dated.Results, occupational increase and social trust build-ing, in this very difficult time in history, should be evaluated in an absolutely positive manner, above all in the year 2009 in which the Co-operative cel-ebrates 110 years of activity. One hundred ten years

for a company is an important milestone, especially for a co-operative which has crossed three centu-ries with many economic, social and political ups and downs. 100 years was already an exceptional goal, but in the last 10 years of the centennial we saw extraordinary growth with an occupational and equity development. In 1999 the Group leader had a capital of 23 billion Italin Lira between assets and share capital, equal to about 12 million Euro. At the end of 2009, on a consolidated level, an equity of 110 million Euro is anticipated. Almost 100 million Euro accumulated over 10 years. A hypothetical ten year balance shows personnel growth from 350 to 1250 people estimated at the end of 2009, above all young people. The Group has seen a strong genera-tional turnover, a generation of cooperative workers is no longer with us because 900 people certainly came on board, and therefore we can say that there are currently more than 100 people who did not ex-perience our first 100 year anniversary. We are completely different in the structure and in the organisation which today is distributed evenly over the entire national territory with 9 territorial areas which operate in ample autonomy although they are connected with the main headquarters. The grand opening of the new branch in Bologna shows that we are strengthening in a territory which sees our company becoming more and more at the cen-tre of the cooperative Emiliano Romagnolo Move-ment, and therefore national. Our consolidated turnover, anticipated to increase about 300 million Euro in 2009, will be quadrupled compared to the 150 billion lira in 1999. It is not easy to talk about development in an economic context like the one in which we live. A globalized economy has given rise to a globalized crisis which took all of the economic players by surprise - both economic and manufac-turing players. This crisis is different because there are no happy islands. Today we have already made a marked presence abroad which 10 years ago was absent and which, in 10 more years, we hope will represent 25-30% of our turnover, exactly to guaran-tee that development that a solely national context cannot guarantee us, at least with the growth rate of the last decade. For the remaining 70% we look to the national market made up of services, renewable energy sources, new development strategies of our network construction activities, more and more ac-companied by that estimated equity of 110 million Euro which aids the company’s economic activities. If our Group, with its annual turnover, did not have this equity handed down from the previous genera-tions - in other words, if the partners were to have simply distributed the wealth produced without set-

_page 10ting anything aside for us -. today we would have a company with less resources to face the market. Those people would have been better off individu-ally, but they would have left a weak Group, with-out strong opportunities to provide work for many. When we speak of a co-operative, we speak of a company which tends to improve the conditions of the present and future men and women in the com-pany. Of the present men and women, giving them a true job, remunerated, differentiated by quali-ties; also creating, however, the conditions so that those who come after us may find greater know-how, greater capital, greater intangible value derived from positive knowledge, from the references, the reputations which the market and the people have from our company. This is the value that the Group leader in its 110 years has built. In the co-operative, we must work to be remunerated, but part of the profit produced is set aside in favour of future gen-erations. In the words of Martino, the historic presi-dent of the Coop Construction of Bologna: “In a co-operative more than just what is divided up must be produced, and if there is no economic company validity then there is not even social relations”. If we in our economic income statement were to lose, we would effect part of that which we have set aside. This means not only that we, selfishly, have wanted to live beyond our means in the market, but above all that we have not contributed to the improvement of future generations. “Generate true work” in the present and the future, beginning with the work per-formed in the past.

total amount of added value

(data in thousands of euros)

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

71,5

96

62,4

95

55,6

85

2008 2007 2006

It is from here that the ability of CPL CONCORDIA to grow and develop together with the territory and the individuals with which it has relationships originates: the creation of wealth in the present is subjected to limits which bind the partners and the labourers of today to the partners and labourers of tomorrow. “Generate true work” to return work and well being to all of those having an interest in a socially respon-sible manner, listening to the needs of the people of today and tomorrow.

The Co-operative has shown that after 110 years of history it still desires to “act social” always placing people at the centre of its interests, seeking always evolution and integration within and without the organisation. The aforementioned principles and standards tied to the co-operative model define and regulate even the distribution methods of the Value Added among the various interested parties. From the analysis of the 2008 results, some reflections arise regarding the following subjects: personnel, external financiers, public administrations, company system, collectivity, co-operative movement, part-ners and shareholders.

CPL CONCORDIA economic progress

250,000

200,000

150,000

100,000

50,000

0Value of production

Year 2008 Year 2007

Costs ofproduction

Components and extraordinary accessory

Wealth distributed

_page 11

Determination prospectus of Value Added(expressed in Euro)

2008 2007 2006

Proceeds from sales and performances 205,215,858 91.04% 179,562,310 90.23% 172,845,785 93.88%

Change invent. fin. prod. semifin. and works in progr. 7,101,390 3.15% 2,658,347 1.34% (2,444,283) -1.33%

Other income and earnings 2,557,229 1.13% 4,172,220 2.10% 3,771,923 2.05%

Proceeds from Typical Production 214,874,477 95.32% 186,392,877 93.67% 174,173,424 94.60% Proceeds from atypical productions (increase in assets for internal works) 10,543,087 4.68% 12,604,307 6.33% 9,945,241 5.40%

A) VALUE OF PRODUCTION 225,417,564 100.00% 198,997,184 100.00% 184,118,665 100.00% Consumption of Raw materials and Consumables (67,855,618) -30.10% (63,848,770) -32.09% (53,925,418) -29.29%

Costs for services (72,204,952) -32.03% (62,556,747) -31.44% (63,688,996) -34.59%

Costs for use of third party property (10,273,462) -4.56% (7,677,374) -3.86% (9,169,583) -4.98%

Various management expenses (1,928,915) -0.86% (1,103,941) -0.55% (1,255,005) -0.68%

B) COST OF PRODUCTION (152,262,948) -67.55% (135,186,833) -67.93% (128,039,002) -69.54% GROSS VALUE ADDED 73,154,617 32.45% 63,810,351 32.07% 56,079,664 30.46% Proceeds from shares 1,100,344 0.49% 91,550 0.05% 550,195 0.30%

Financial activity rectifications (2,658,698) -1.18% (1,406,642) -0.71% (2,347,069) -1.27%

Balance Extraordinary Management 0 0.00% 0 0.00% 1,402,234 0.76%

C) ACCESSORY AND EXTRAORDINARY COMPONENTS (1,558,354) -0.69% (1,315,093) -0.66% (394,640) -0.21% GROSS OVERALL VALUE ADDED 71,596,262 31.76% 62,495,259 31.41% 55,685,024 30.24%

Distribution prospectus of Gross Value Added(expressed in Euro)

2008 2007 2006

Gross Remuneration 309,236 263,489 224,445

Refund 1,200,000 1,100,000 750,000

Revaluation of social quota 164,926 74,655 74,815

Profits distributed to the Shareholders by the Coop. 608,862 612,787 625,883

Social Utility Expenses 188,001 239,372 190,457

TOTAL PARTNERS AND SHAREHOLDERS 2,471,025 2,290,304 1,865,601

V.A. Incidence 3.45% 3.66% 3.35% Direct Remuneration 36,464,499 30,800,065 26,775,219

Salaries and Wages 30,729,255 25,900,306 22,444,016

SEVERANCE INDEMNITY 1,993,795 1,723,462 1,486,411

Expenses for personnel 3,741,450 3,176,297 2,844,793

Indirect Remuneration 9,925,126 8,373,756 7,096,185

Social Costs 9,925,126 8,373,756 7,096,185

PERSONNEL TOTAL 46,389,626 39,173,821 33,871,404

V.A. Incidence 64.79% 62.68% 60.83%

_page 12 2008 2007 2006

Direct Taxes 3,967,287 4,172,062 5,134,301

Indirect Taxes and other Taxes or Costs 1,396,041 1,214,608 1,034,795

PUBLIC ADMINISTRATIONS TOTAL 5,363,329 5,386,669 6,169,096

V.A. Incidence 7.49% 8.62% 11.08% Net Financial Burden 2,621,170 2,432,387 2,763,220

Bank Interests 3,357,191 3,278,902 3,453,363

Interests on Debenture loans 0 0 0

Interests on loans from Partners 215,508 150,029 108,723

Other 64,520 40,109 122,323

- Accruals Interests 1,016,049 1,036,653 921,189Expenses and Bank Commissions 744,832 711,738 640,541

TOTAL EXTERNAL FINANCIERS 3,366,002 3,144,125 3,403,761

V.A. Incidence 4.70% 5.03% 6.11% Mutualistic Funds 205,142 176,391 106,582

Associative Contributions to the Co-operative union 196,975 183,817 184,635

TOTAL CO-OPERATIVE MOVEMENTS 402,117 360,208 291,216

V.A. Incidence 0.56% 0.58% 0.52% Liberal allocations 346,685 149,971 166,194

TOTAL COLLECTIVITY 346,685 149,971 166,194

V.A. Incidence 0.48% 0.24% 0.30% Ammortisations and Provision Funds 7,707,586 7,237,795 7,396,758

Profits destined for Reserve 5,549,894 4,752,365 2,520,995

TOTAL COMPANY SYSTEM 13,257,480 11,990,160 9,917,753

V.A. Incidence 18.52% 19.19% 17.81% GROSS OVERALL VALUE ADDED 71,596,263 62,495,259 55,685,024

Its distribution can be summarised in the following graphic:

60 %

50 %

40 %

30 %

20 %

10 %

0 %

64.7

9 %

7.49

%

4.70

%

0.56

%

0.48

%

18.5

2 %

3.45

%

allocation of value added

Human Resources

Public Adm. External Fin Coop. Mov. Collectivity Partners and Shareholders

Impresa

_page 13

PersonnelThe dependent personnel is the interested party which obtains the most relevant quota from the Co-operative. The value destined for the workers is a tangible sign of how the co-operative remains faith-ful to its mission of “generating true work” in the ref-erence territory.The significant increase in personnel cost compared to previous years is, as in 2007, to be attributed to the new company organisation which, together with the acquisition of important contracts, even now generates human resource needs. The personnel cost is a fundamental and characterising element for a production and work co-operative. This cost should be compensated by the positive economic results deriving from the productive activity.The analysis of the production Value of the Group leader compared to the number of employees shows a drop in productivity (going from 241,309 Euro in 2006 to 234,944 Euro in 2007 and finally to 230,724 Euro in 2008). This data is justified by the de-cision to increase the company body in the face of investments which will bear results in the future. The good trend of the Co-operative is in any case dem-onstrated by a production Value equal to 225 million Euro, increased by 13.28% compared to 2007, and by a profit of 6.8 million Euro (+16.30% compared to 2007).

CollectivityA very important characteristic of Co-operative mu-tuality is that of also turning to “non partners”; Cpl reserves part of its produced income for initiatives of particularly social value in such a way so that the company manifests its “social citizenry”. The search for meaning and the motivation of acting “social” comes through a process in continuous evolution, synthesis and integration of various researchable elements both outside and inside the organisation.In 2008 the Co-operative distributed 48% of the wealth generated to the Collectivity (equal to 346 thousand Euro), compared to the 24% in 2007 (149 thousand Euro) and 30% in 2006 (166 thousand Euro). These contributions went toward financing associative agencies, non profit cultural and sports associations, cultural, sporting and folkloristic initia-tives and manifestations.CPL CONCORDIA is very sensitive to the activities of the Municipal Administrations - for the organisation of events and manifestations - and Sports Associa-tions, especially wit hregard to activities in the youth sectors.

List by Category of Contributions to the Collectivity 2008

CULTURAL ASSOCIATIONS 63,501

LOCAL SPORTS ASSOCIATIONS 177,317

AGENCIES AND MUNICIPALITIES 16,432

SCHOOLS 21,652

AGENCIES AND ENTREPRENEURIAL ASSOCIATIONS 67,783

TOTAL 346,685

dependent personnel productivity indicator

(amount in Euro)

350,000

300,000

250,000

200,000

150,000

100,000

25,000

0

230,

724

234,

944

241,

309

2008 2007 2006

jobs created excluding resignations

140

120

100

80

60

40

20

0

130

129

31

2008 2007 2006

_page 14 Co-operative movementCPL CONCORDIA supports, contributing to the dis-tribution of the model which it promotes, the Co-operative Movement, both through deposits of a quota of the Operating Profits in Mutualistic Funds for the promotion and development of the Co-oper-ation as well as through Associative Contributions. In accordance with the normative which regulates the co-operation (law 59/92), the funds amount to 3% of the operating profit.

Partners and ShareholdersCPL CONCORDIA has the partners and shareholders and its main contact points and it is precisely from them that the most significant responses came.Besides the gross remuneration of the partner capi-tal (equal to 6.00% gross of the Share Capital), the partners can benefit from the distribution of a re-fund equal to 1.2 million Euro in accordance with the directives set forth in the normative and the Co-op-erative Association. CPL CONCORDIA has destined 188 thousand Euro over the course of 2008 for ex-penses in social burdens. The value is the fruit of the following factors: contribution in kind, trips, social banquets and parties for the partners and children, conventions for periodical subscriptions, theatres and more. The Co-operative’s capital is also made up of the capital underwritten by the shareholders of co-operative stock (Banks and private individuals) equal to 6.6 million Euro, which have also obtained in 2008 a yield of its own capital equal to 8% gross. CPL CONCORDIA is made up of partners and their families. The Co-operative always operates with re-spect for these and in the effort to improve the qual-ity of their lives in the present and the future.

A.4 ] Operative BranchesThe Group leader and the entire group operates to-day, as previously mentioned, in 9 Areas, each at a group level with various branches, distributed over the national territory as well as other three foreign branches. The branches and their relative areas are listed below.

Bologna Area: Bologna Northwest Area: Melegnano Branch Northeast Area: Padua and Lavis (TN) Branch Fano Area (Marche, Umbria and Romagna):

Fano Branch St. Homer Area (Abruzzo - Molise and Puglia): St. Homer Branch Tuscany Area: Arezzo Branch Central Area (Lazio and Sardinia): Rome Branch South Area: Naples Branch Romania: Cluj Napoca Branch Greece: Athens Branch Algeria: Algeria Branch

net investments for employees

(amount in Euro)

14,000

12,000

10,000

8,000

6,000

4,000

2000

0

14,4

36

13,7

17

7,16

3

2008 2007 2006

Human Resources64.79%

Partners and Shareholders

3.45%

Public Adm.7.49%

External Fin4.70%

Coop. Mov.0.56%

Impresa18.52%Collectivity0.48%

_page 15

B] The GroupOver the last ten years there has been a development in the Group Leader and it controlled and connected companies. Today the Group has a structured which is articulate and made up of different companies, all, with the exception of real estate, operating in the complex energy division.

B.1 ] Group StructureUpdated on 31/12/2008

Ischia Gas S.r.l. (IT)

Erre Gas S.r.l. (IT)

CoopGas S.r.l. (IT)

Energia dellaConcordia S.p.A.

Serio Energia S.r.l. (IT)

Nuoro Servizi S.r.l. (IT)

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

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

CPL DistribuzioneS.r.l. (IT)

Pegognaga Servizi S.r.l. (IT)

Fontenergia S.p.A. (IT)

Sarda Finanziaria S.r.l. (IT)

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

Teclab S.r.l. (IT)

Coimmgest S.p.A. (IT)

Compagri S.p.A. (IT)

X Datanet S.r.l. (IT)

Crist Gas S.r.l. (IT)

Agrienergia Soc. Cons. a r.l. (IT)

100%

50%

70%

100%

100%

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)

Progas Metano S.r.l. (IT)

Tradenergy S.r.l. (IT)

Enerfin S.r.l.in liquidation

60%

50%

35%

20%

20%

30%

50%

45%

49%

100%

40%

100%

100%

100%

100%

44%

100%

51%

73%100%

Group Leader

Directly controlled Company

Indirectly controlled Company

Directly connected Company

Indirectly connected Company

_page 16 B.2 ] Description and progress of the Group companies

B.2.1 ] Controlled companiesCOOPGAS S.r.l.: this is the Group sales company in accordance with Legislative Decree 164/2000.Over the course of the financial year the company has served more than thirty two thousand users, selling more than 25.5 million cubic metres of gas. The economic result of this manage has determined and represented a net profit of 360,975 Euro, a result which should be considered absolutely satisfactory compared to the expectations. The net equity of the company reached 4.6 million Euro against a regis-tered share value of 2.5 million Euro.

ENERGIA DELLA CONCORDIA S.p.A: this com-pany whose entire share packet is held by Co-opgas S.r.l. has two construction, sales and management contracts for the use of biogas, the first with a small agricultural company in the country and the second of about 4 million Euro having to do with the Fran-cavilla Fontana landfill in Puglia. Over the course of 2008 a contract for the realisation and manage-ment of a photovoltaic system in the Municipality of Torano (TE) was also acquired. The activity per-formed during the financial year served to complete the Francavilla Fontana system which began provid-ing electrical energy at the end of the year even if the commissioning took place at the beginning of 2009. As an result of the proceeds gained from the Francavilla Fontana project the company was able to draw a positive balance in 2008 equal to 13,476 Euro.

IMMOBILIARE DELLA CONCORDIA S.r.l.: this company, over the course of the 2008 financial year, substantially managed two initiatives. The first has to do with the construction and sales of land and apartments in the lot called Borgoverde located in the Municipality of Carpi (MO). The second is the management of the hotel located in the Municipality of San Possidonio. As for the first initiative, this has continued according to plan, generating a substan-tial balance. The second has determined a loss over the financial year which amounts to 346,688 Euro.With regard to the hotel management activity, it should be pointed out that, as foreseen in the com-

pany restructuring plan, over the course of 2008 all of the strategies which the administrators had put into place as financial year goals were implemented. In particular the leasing contract was acquired for the property used as a hotel and immediately re-deemed, with a contextual increase in share capital and levelling of the back losses. As a result of this operation the share capital was brought to 8 million Euro. Under the economic profile, this operation led to the replacement of the rent, with the amortisa-tions, without the burden of financial expense, in the the financing dispensed from the controlling com-pany is non-interest-bearing.This new set up allowed for review of the three year development plan which foresees a 2009 still under stress, a balance in 2010 and the first profits in 2011. Finally, considering the implicit value of the property, together with the income considerations, the administrators of the group leader deemed the 2008 loss recoverable through the future profits, therefore not deeming it opportune to devalue the registered value of the shares in the Co-operative’s balance statement.

CRISTOFORETTI SERVIZI ENERGIA S.r.l.: this company, established in April 1996, operates in the heat management sector in the Trentino Alto Adige region, represents a notable strong point on the group’s strategic chess board. Over the years the company has expanded its range of actions, acquir-ing contracts in Veneto and in Friuli Venice Giulia. The company is also operating in Gpl distribution in the Municipalities of Ferrara di Monte Baldo (VR) and Vigo di Ton (TN).The company, whose profit during the financial year amounts to 223,965 Euro, has always produced good income results considers that the value paid fully represents it future potential. During the 2008 finan-cial year the share capital was increase by another 500 thousand Euro divided up pro quota among the partners with the purpose of further increasing the equity of the company by injecting necessary liquidity in order to face the continuous typical in-vestments, moreover, of the companies which are involved in heat management, which must face large initial investments in the face of long term jobs and always drawn out collection times. It is deemed that, in consideration of the company income and and the

_page 17

future prospectus, over a short period the existing difference can be recovered between the share cost and the reference net equity.

ERRE.GAS S.r.l.: this company, the purpose of which is the distribution of liquid propane Gas in the Municipalities of Sapri and Camerota (SA), closed its balance with an operational loss of 264,119 Euro. The annual loss is generated, as in all of the pre-vious financial years, by the start up period of the company, therefore an effective imbalance between the investments made and the users connected, which have been an average of around 1,560 units for the 2008 financial year, which is an increase from the previous year of about 250 connected users. Thanks to the customer loyalty building campaign, the users are continuously increasing and this gives us hope for the future. With regard to this, the com-pany prospectives are mainly tied to the process of reconverting systems from Gpl to methane through construction, managed by Snam Rete Gas, of hook up points to the national network in an area nearby Sapri. The systems realised by Erre.Gas S.r.l. were designed to be converted from Gpl distribution to methane gas distribution without significant trans-formation costs. The forecasts for the construction of the hook up point are continuously postponed and now it is hypothesised that the work will be completed at the end of 2010. This will allow the conversion of the systems to methane and contex-tually will allow the company to acces the financing in c/capital foreseen by law 784/80. With the long awaited arrival of the contributions together with the physiological increase of the connected users, the company will reach the goal of halving the am-ortisaion and financial burden costs which, with the increase in proceeds, are the funamental factors to lead the company to producing income. The conver-sion of the distribution network from Gpl to methane gas is foreseen for the 2011 financial year with an in-vestment forecast of 600,000 Euro for upgrade work and construction of the decompression stations.Based on these presuppositions, the company three year plan was dawn up which forecasts another loss in 2009, but profits beginning in 2010. With the awaited conversion of the system from Gpl to meth-ane gas and the consequential dispensation of the contributions, the company, besides resetting its indebtedness and havling the value of the invest-ments, will be able to produce significant profits.At the end of 2008, the group leader destined a quote of the interest bearing loan of1 million Euro to future increase of share capital, with consequen-tial increase in company equity and contextual de-

crease in the financial load.For these reasons the administrators of the Co-operative considered the loss non-lasting and the difference between the registered share value and the corresponding fraction of net equity will be re-covered through future profits.

MARIGLIANO GAS S.r.l.: this company, established in 2002, is the classic aimed company, created for the construction and subsequent management of the gas distribution in the Municipality of Marigliano. The company was controlled at 99.5% by the Co-operative at 31 December 2008 and at 0.5% by E. on Rete Mediterranea S.r.l. With regard to this, it is pointed out that on 27 January, 2009, the group lead-er aquired the remaining 0.05% of the shares from E. on Rete Mediterranea S.r.l. at a nominal value of 6,000 Euro, thereby becoming sole shareholder.During the financial year the company expanded the gas distribution network of the Municipality of Marigliano, providing for the delivery of methane gas to the sales company Coopgas S.r.l.The economic result of the financial year, due to the constant increase of users, improved steadily. The year profits achieved in 2008 amount to 85,153, a result which is to be considered absolutely positive and in line with the expectations. We also remind you that during the 2006 financial year the company had stipulated a Financing contract with the Banca Popolare dell’Emilia Romagna for 5,000,000 Euro the clauses of which anticipated deposits by the partners of sums for “Reserve for future Increase in Share Capital”. At the closing date of this balance statement the group leader deposited 2.3 million Euro received by the company in an item of the net equity. With regard to the financing dispensed by Banca Popolare dell’Emilia Romagna, a lien was established on the company shares in favour of the credit institution as a contract guarantee for a maximum amount of 5 million Euro. Due to the 2008 results and future forecasts, it was deemed oppor-tune to revaluate the share value through the use of a fund prudently set aside in previous financial years, equal to 160,741 Euro, having considered it to be excessive compared to the effective difference between the net equity and the share value.

SI.GAS S.r.l.: this company, the shares of which were purchased in July 2006, takes care of manag-ing the gas distribution network in the Calabria Basin 30, a basin which includes about ten Municipalities located in the province of Reggio Calabria where the most significant is Villa San Giovanni, as well as another five Municipalities located in the same

_page 18provice, but outside of the Calabria Basin 30 which are Melicucco, San Giorgo a Morgeto, Rosarno and Cinquefrondi.As a result of this latest acquisition, the company has reached almost 9,200 users, performing distri-bution service of 8.4 million cubic metres of gas.The company produced an annual profit of 83,320 Euro, a result which should be considered perfectly in line with the forecasts and expectations.

NUORO SERVIZI in liquidation S.r.l.: At the end of the 2006 financial year this company had conceded its activity to the Consortium for the area of Industrial Development in Central Sardinia. In the first months of 2007, with planned lay-offs of the 10 remaining units, the company activity closed definitively and in the 2008 balance statement there is only credit with the Consortium and the debts toward the Social Se-curity Institutions and a residue with the employees, besides the financing obtained to advance consider-able sums to the employees which were not trans-ferred with the Company Branch, but who adhered to the worker mobility procedures.The closing of the liquidation is obviously tied to the collection of the price of concession to the Compa-ny Branch which for the moment has not yet been collected in that it is tied up by the dispensation of a contribution from the Ministry of Economic Devel-opment with the approval of the Sardinia Region for a total of 10,000,000 Euro. Part of this contribution would clearly serve Consorzio ASI to pay the price of concession to the company branch to Nuoro Servizi.In the current state, it is pointed out that a Govern-ment initiative bill is currently in the Senate (No. 1441 - Dispositions for the development and internation-alisation of companies as well as in the energy field), already approved by the Chamber of Deputies on 4 Nov 2008 where in art. 2 comma 10 the implemena-tion of the programme agreement “underwritten 26 July 2006 between the Ministry of Economic Devel-opment, the Region of Sardinia, the ASI consortium of Ottana and Nuoro Servizi S.r.l. for the reorder of the infrastructure and services in the crisis areas of Ottana in the amount of 7 million Euro...” is fore-seen.Based on the available news and information, we will not need to wait long for the definitive approval and consequential, long awaited dispensation of the

contribution to the ASI Consortium. Only payment by the Asi Consortium of the price of concession of the company branch to Nuoro Servizi will, in fact, provide the necessary resources to close the liqui-dation providing for the payment of all debts in the balance statement, firstly what is due the laid-off employees and the relative contributions.In the meantime the company has drawn a loss of 224,409 Euro, essentially due to the general man-agement expenses of the liquidation and the finan-cial burdens connected with the financing obtained from the Banco di Sardegna to advance sums to the employees whilst awaiting the balance of the con-cession of the Company Branch from the Consorti-um for the area of Industrial Development of Central Sardinia. The Group leader has perceived this loss in its balance statement providing for an adjustment of the share value to the corresponding fraction of the company Net equity.

CPL HELLAS A.B.E. & T.E.: this Greek company brought all of its contracts to a close during the 2008 financial year. Considering the poor economic results obtained in the Greek territory, at the begin-ning of 2008 it was decided to end our experience on the Hellenic territory. In fact, the 2008 financial year was meager and unstable, particularly with re-gard to invoice collection for the works performed on which relevant litigation exists with the contract-ing stations.The annual result of the company suffers mainly from the lack of recognition for the works per-formed or the consensual resolution of works which the company administrators decided not to perform in order to speed up the process of closing the com-pany. The company has therefore closed the 2008 balance statement with an annual loss of 2,455,022 Euro. The administrators’ decision to pay every pre-text or collectability risk known to date during the 2008 financial year contributes to this loss, as well as the willingness not to have any further losses in future financial years. For this reason, as in previous years, sums relative to price revisions and claims already documented to customers were not consid-ered in the balance statement which amount to a total of 1,867,000 Euro.In the meantime all of the employees were laid off and liquidated and relationships with technicians, subcontractors and consultants were terminated.

_page 19

Only the contracts with the attorneys which will fol-low up on the credit recovery and price revisions as well as the company which follows the account-ing remain. Considering this situation, the Ordinary Shareholders Assembly on 12 December 2008 de-cided to destine a consistent part of the debts to-ward the Greek branch, specifically in the amount of 2,536,678 Euro, to cover the back losses. Due to this situation the group leader devalued the shares adjusting them to the corresponding fraction of net equity. The administrators, finally deeming to have paid every further risk of future burdens or losses in the 2008 financial year, did not recognise the neces-sity to perform any further setting aside for future losses, also with regard to the possibility of collect-ing all or part of the price revisions and claims which have not be recorded to date.

CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l.: this company which manages distribution and sales of methane gas in about thirty Municipalities located in the region of Transylvania in Romani, today has more than 11,500 users with more than 19,600 and six hundred cubic metres of gas sold.The company drew a balance in Romania in accord-ance with the application of the Romanian Account-ing principles, an annual profit of 43,381 Euro which, due to the application of the accounting principles prepared by the Italian Accounting Body (OIC) with regard to the use of the reserves of positive and negative components not transferred to the eco-nomic account for the latter, the result is rectified in negative to 110,429 Euro and to positive due to the reconstruction of the oscillation change reserve at the increase of share capital of 151,931 Euro, giving origin to a profit of 84,842 Euro, a result which, in any case, suffered greatly from the exchange rate trend consequential to the serious international crisis which struck the financial markets. In fact, the company, having relationships both with credit institutions and with the home office, in Euro, reg-istered losses on the exchange rate in 2008 equal to 280,002. It is evident that, without this effect, the ordinary management would have produced a profit close to 365 thousand Euro.In consideration of the persisting fluidity situation in the financial markets and with the intention of avoiding further counterblows deriving from losses in the exchange rate, the Group leader has decided to transform the existing interest bearing financing at the end of the 2008 financial year into an increase in share capital. On 17 December 2008 the Cluj Chamber of Commerce therefore recognised the increase in share capital for 2,540,000 Euro, bringing

it to 8,804,556 Euro with deed homologation of 22 December 2008.

CONCORDIA SERVICE MAGHREB S.a r.l.: this Tunisian company was established in Tunisia on 18 December 2007 with the purpose of becoming a point of observation for future activities to be devel-oped in the Maghreb area, which includes Morocco, Tunisia and Algeria. The company was registered in 2008. During the 2008 financial year the company did not perform any significant activities. In fact, the annual movements are exclusively related to typical administrative activites of a company in the start up phase. The annual Balance statement shows a loss of 5,544 Euro which is deemed recoverable when activity begins. Finally, it is pointed out that the Co-operative holds 90% of the company shares and that the share capital amounts to 18,000 Tunisian Dinar.

SERIO ENERGIA S.r.l.: this company, established on 27 February 2003, came about for the manage-ment of the heating systems in the Bolognini di Se-riate (BG) hospital. The Co-operative holds 40% of the company shares, but has actual control of the same as provided by the activities which it should perform relative to the project which determined its establishment. The period results show a profit of 340,341 Euro.

ISCHIA GAS S.r.l.: this company was formed on 01 April 2005 with an act by Notary Silvio Vezzi of Modena with item 111359 assembly 16678, for the construction and subsequent management of methane gas distribution services in the territory of the Municipality of Ischia (NA). During the year only the construction of the network and the first hook ups were performed. The result, which obviously suffers from this situation, shows a loss of 96,381 Euro. It is pointed out that a Financing contract ex-ists with the Banca Popolare dell’Emilia Romagna for 6,000,000.00 the clauses of which provide for the deposit of certain sum by the Partners to be des-tined toward a Net equity reserve called “Reserve for future Share Capital Increase”, deposits which the Co-operative has made at the date of 31 Decem-ber 2008 in the amount of 2,550,000.With regard to the financing dispensed by Banca Popolare dell’Emilia Romagna, a lien was established on the company shares in favour of the credit institu-tion as a contract guarantee for a maximum amount of 6 million Euro. Considering the vast investments made, even beyond anticipations, and the meager number of users, the three year plan shows an initial phase of economic financial difficulty.

_page 20 For this reason the administrators of the Co-oper-ative decided to adjust the share value to the cor-responding fraction of net equity, performing a de-valuation of 152,600 Euro, also providing for further setting aside to cover future losses estimated by the administrators in the amount of 400,000 Euro.

PROGAS METANO S.r.l.: this company was estab-lished on 23 April 2007 before Notary Silvio Vezzi of Modena who registered the act with item No. 114585 assembly 17714. With an act registered with the Naples Internal Revenue Office on 23 Septem-ber 2008 at No. 20263, the Co-operative conceded 30% of the company shares to Naturgas S.r.l. at a price of 66,000. The company was started in order to “methanise” the Isle of Procida, of which only the preliminary activities have been performed at the moment. The annual result, which was determined exclusively by the sustaining of general administra-tive expenses, drew a loss of 4,803 Euro.The future developments of the company are not yet in evaluation phase.

AI POWER S.p.A.: this company was established in Algeria on 7 April 2008 and registered on 12 April 2008 for the purpose of managing typical activities of the Co-operative on Algerian territory. The Co-op-erative holds 54% of the share packet, 1.1% is held by another Italian partner and the remaining 45% is held by Algerian partners.During the 2008 financial year the company began to acquire contracts, developing a production value of about 400 thousand Euro, aiming to define its op-erative structure. The result of this first year of ac-tivity shows a profit of 5,270 Euro. Considering the great opportunities present in the Algerian market, a very interesting future development is expected.

FONTENERGIA19 S.r.l.: this company was estab-lished on 23 December 2008 before Notary Antonio Garau who registered the act with item No. 17583 assembly 5157. The Co-operative holds 51% of the shares of Share Capital which amounts to 10,000 Euro. The company was established for the con-struction and subsequent management of the gas distribution and sales system in the Sardinia 19 basin which includes the Municipalities of Terralba, Marru-biu, Mogoro, Palmas Arborea, San Nicolò d’Arcidano,

Santa Giusta and Uras. The company was registered in January 2009, therefore the 1st balance was not closed, which will take place in 2009.

CPL DISTRIBUZIONE S.r.l.: this company was es-tablished on 28 November 2008 with an act stipu-lated before Notary Silvio Vezzi of Moden who reg-istered it with Item 117045, assembly 18486. The shares of the company are held entirely by the Co-operative. The company was established with the purpose of acquiring the concessions present in Cpl and in Sigas during 2009 in order to become the sole container which takes care of the distribution activi-ties as provided for by article 14 of legislative decree 164/2000.The company was registered in January 2009, there-fore the 1st balance was not closed, which will take place in 2009.

TRADENERGY S.r.l.: this company’s sole asset is the share of 60% of Enerfin S.r.l. in liquidation, the holding which holds 99% of the shares of HOlding Intergas S.A., an Argentinian company which pos-sesses the shares of the gas distribution company in the Municipalities of San Francisco and paranà, Emprigas S.A. and Redengas S.A. The entire group, which is subject to profound corporate restructur-ing, was clissified in the current assets, while the value of the Tradenergy shares was completely de-valued.

B.2.2 ] Connected companiesFONTENERGIA S.p.A.: this company, which takes care of construction and management of gas distri-bution networks in basin 22 or the Ogliastra basin, was the object of some variations in the corporate structure during the 2008 financial year and the first months of 2009.The first variation deals with the old majority part-ners who decided to leave the distribution market in Sardinia in order to diversify their business. Interest-ed in investing in energy assets, they showed them-selves to be financial partners, which are Cooperare & Sviluppo and Sofinco S.p.A., financing companies in the co-operative movement.The acquisition operation was perfected in two moves. On 22 December 2008, the Sofinco con-trolled company, Coimmgest S.p.A. (of which the

_page 21

Co-operative holds the minority share packet) ac-quired 51% of Fontenergia S.p.A. shares at a price of 4,780,000 Euro. On 24 April 2009, the 51% was conceded, in 3% to Sofinco S.p.A. and 48% to Co-operare & Sviluppo S.p.A., at the same total value. In the agreements and negotiations, the technical administrative management will be entrusted to Cpl, while Sofinco and Cooperare & Sviluppo will jointly control the governing of the company. Not having a dominating influence over the company, and con-sidering that Coimmgest S.p.A. registered the shares of Fontenergia S.p.A. in its current assets in that it is destined for sale, the Co-operative continued to consider the company among those connected, ac-tually maintaining 49% control without having actual control.It is also pointed out that, also on 24 April 2009, there was an increase in company share capital which raised it to 7 million Euro.As for the ordinary management of the company, it is pointed out that with regard to the amount of contributions in the systems account, allocated in the 2007 balance statement, the company invoiced the Municipality of Lanusei the sum of 9,577,997.43 Euro against a total allocation of 13,244,080.50 Euro from the region. The Municipality of Lanusei liquidat-ed the sum of 9,262,397.94, therefore there is a re-sidual credit in the company’s favour of 315,599.49 Euro on the invoice already issued and 3,666,083.07 Euro for allocated contributions yet to be invoiced to the Municipality of Lanusei. This amount was classi-fied by the company among the short term credits in that the residual sums can be invoiced during the 2009 financial year. The annual result drawn by the company shows a profit of 285,389 Euro while from the valuation with the method of net equity, a share value of 274,008 Euro emerges.

PEGOGNAGA SERVIZI S.r.l.: this company was es-tablished on 15 April 2007 before Dr. Silvio Vezzi, No-tary from Modena who registered the act with item No. 111410 assembly 16693. It was formed for the management of cemeterial services in the Munici-pality of Pegognaga (MN). The Co-operative holds 50% of the shares while the remaining 50% is held by Mazzola & Bignardi Servizi S.r.l.The annual result drawn by the company shows a profit of 48,313 Euro while from the valuation with the method of net equity, a share value of 89,512 Euro emerges.

TECLAB S.r.l.: this company, of which the Co-opera-tive holds 35%, was acquired on 22 April 2004 with an act registered with the Registry of Businesses of La

Spezia at Prot. No. 4365. The company, which takes care of design and realisation of software for remote control operation, was acquired as an ideal partner for our ex Systems Division and for the ICT sector. Following the restructuring which it underwent in the previous financial year, the company produced a result which can be considered satisfactory, above all in relation to the current stagnation of the ref-erence market in which it shows a profit of 29,137 Euro while from the valuation with the method of net equity, a share value of 50,424 Euro emerges.

COIMMGEST S.p.A.: this company was established on 14 May 2007 before Notary Silvio Vezzi of Mode-na who registered the act with item No. 114655 as-sembly 17735. The majority packet of 55% is held by Sofinco S.p.A. while the Co-operative holds the remaining 45%. The company was founded to man-age real estate assets in the Co-operative world and at present has acquired leasing contracts inherent to the properties in the Concordia sulla Secchia headquarters, Melegnano, Milano, Bologna, Fano, Padua and the new property on Via Grandi, 43-45. The company then stipulated for each of these properties rental contracts with the Co-operative. In the preparation of its annual balance statement the company utilised international accounting prin-ciples, specifically in the valuation of the Io IAS 17 leasing contracts.It is further pointed out that there is an option deal in the company shares which the Co-operative can take advantage of, for the acquisition of the remain-ing 55% held by the majority company, to be exer-cised no earlier than two years from the date of es-tablishment and by 31 December 2017.The annual result drawn by the company shows a profit of 40,133 Euro while from the valuation with the method of net equity, a share value of 78,193 Euro emerges.

AGRIENERGIA SOC. CONS.: On 9 April 2008 the Co-operative acquired 20% of the company paying the nominal value of 2,000 Euro. This is a consor-tium company which currently needs to level costs connected with management of the common costs sustained by consortiums for the realisation and management of technological and organisational systems and procedures aimed at taking advantage of vegetable biomasses for the production of elec-tricity.The annual result drawn by the company shows a loss of 4,710 Euro while from the valuation with the method of net equity, a share value of 642 Euro emerges.

_page 22 COMPAGRI S.p.A.: On 9 April the Co-operative ac-quired 20% of the company as is shown by the act stipulated with Dr.Umerto Tosi, Notary. The purpose of the company is the management of a compost waste system and the relative production and sale of electricity. With an act stipulated by Notary Um-berto Tosi of Bologna registered with the Internal Revenue Bologna office 1 on 14 January 2009 and stipulated on 28 December 2008, the Co-operative acquired another 2.22%. The quota held today by the Co-operative is 22.22%. The Co-operative de-cided to invest in this company in order to enter into a sector which can offer interesting business oppor-tunities. The annual result drawn by the company suffers from the reduced activity, showing, in fact, a loss of 236,928 Euro while from the valuation with the method of net equity, a share value of 331,065 Euro emerges.

X DATANET S.r.l.: On 13 May 2008 the Co-operative acquired 30% of the company shares as is shown by an act stipulated by Notary Silvio Vezzi of Modena which he registered with item No. 116205, assembly 18215. The value paid for the 30% of the X DATANET S.r.l. shares is equal to 195 thou-sand Euro. The company deals with the develop-ment and maintenance of software, integrating itself with the Co-operative’s sector called Information & Communications Technology. The company closed the 2008 financial year with a profit of 46,169 Euro, while from the valuation with the net equity method a share value of 191,159 emerges.

SARDA FINANZIARIA S.r.l.: at 31 December 2008 Sarda Finanziaria S.r.l. (SAFIN) was 51% controlled by Fontenergia S.p.A. We remind you that the com-pany is currently the sole shareholder in Sarda Reti Costruzioni S.r.l. The shares of Safin were classified by the connected Fontenergia among the shares which do not constitute fixed assets in that they are destined to be acquired directly by Cpl. In fact, 51% of the shares possessed by Fontenergia were con-ceded to the Co-operative on 16 March 2009 at the price of 604,000 Euro.On 30 April 2009, CPL CONCORDIA subsequently conceded 21% of the share at nominal value to Sin-ergas S.r.l., bringing its percentage of ownership to 30%, while the remaining 70% of the shares are held

by Sinergas S.r.l. In this Consolidated Balance State-ment, the company was consolidated for 24.99%, a percentage resulting from the 51% ratio of Fonten-ergia on 49% of the same possessed by the Group leader. As for the company results, Sarda Reti not having dispensed dividends, and the latter being the sole asset of the company, Safin drew a loss of 20,758 Euro.

SARDA RETI COSTRUZIONI S.r.l.: At the closing date of this Consolidated Balance Statement, the company was controlled by Sarda Finanziaria S.p.A. for a percentage of 73%, consequentially it was val-ued in the consolidated balance with a control per-centage of 18.24%.Subsequently, due to the acts stipulated on 30 April 2009, the company shares were entirely held by Sarda Finanziaria S.r.l. During the month of Decem-ber 2008, following the commissioning of the Gpl depot. the direct sale of residential Gpl tanks finally went into operation. Up to that moment, the com-pany was involved exclusively in the requalification and refilling of gas bottles. This activity alone did not guarantee coverage of the considerable invest-ments made and the reimbursement of the finan-cial burdens. In fact, the company drew a loss of 332,981 Euro. 2009 began on an extremely positive note and one for development of the sales activity which promises good results, even if it is in a phase of complete company re-organisation necessary to face the positive beginning of activity.CRIST GAS S.r.l.: this company, established in 2002, and of which the Co-operative holds 50% of the shares, arose as a sales company of Cristoforetti Servizi Energia S.r.l. pursuant to legislative decree No. 164/2000. The company is still inactive to date.Completion of the concession with partner Cristo-foretti is underway at a nominal value of the residual 50% still held by CPL CONCORDIA.

_page 23

B.3 ] Relationships with the Group companiesThe business and financial relationships with the Group companies are analysed below:

Credits/Debts toward Controlled Companies

COMPANIES TRADING SECURITIES CREDITS

CURRENT ASSET CREDITS

SHORT TERM DEBTS

FINANCIAL DEBTS

AI POWER S.p.A. 0 202,187 260,091 0

COOPGAS S.r.l. 2,500,000 1,251,561 8,559 0

CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l. 0 351,406 14,833 0

CPL HELLAS A.B.E. & T.E. 101,000 148,933 460,100 0

CONCORDIA SERVICE MAGHREB S. a r.l. 0 0 0 0

CRISTOFORETTI SERVIZI ENERGIA S.r.l. 0 211,054 67,738 0

ENERGIA DELLA CONCONCORDIA S.p.A. 2,110,000 1,174,952 476,609 0

ERRE.GAS S.r.l. 1,440,000 99,189 69,734 0

SI.GAS S.r.l. 4,145,000 266,227 41,950 0

TRADENERGY S.r.l. 40,000 893,712 0 0

IMMOBILIARE DELLA CONCORDIA S.r.l. 1,040,000 6,700 195,077 0

ISCHIA GAS S.r.l. 1,230,000 13,005 906,542 0

MARIGLIANO GAS S.r.l. 350,000 633,034 0 0

NUORO SERVIZI in liquidation S.r.l. 0 203,352 0 0

PROGAS METANO S.r.l. 0 83,099 0 0

SERIO ENERGIA S.r.l. 0 12,424 0 0

TOTALS 12,956,000 5,550,837 2,501,232 0

CPL Receivables/Payables to Associated companies

COMPANIES TRADING SECURITIES CREDITS

CURRENT ASSET CREDITS

SHORT TERM DEBTS

LONG TERM DEBTS

FONTENERGIA S.p.A. 6,004,000 408,036 0 0.00

SAFIN S.r.l. 0 18,000 0 0.00

SARDA RETI COSTRUZIONI S.r.l. 0 52,236 3,549 0.00

COMPAGRI S.p.A. 40,000 180,260 0 0.00

AGRIENERGIA SOC. CONS. a r.l. 15,000 0 0 0.00

COIMMGEST S.p.A. 4,780,000 0 0 0.00

ENERFIN S.r.l. 0 112,320 0 0.00

TECLAB S.r.l. 35,000 2,545 131,025 0.00

PEGOGNAGA SERVIZI S.r.l. 0 36,121 0 0.00

TOTALS 10,874,000 809,517 134,574 0.00

_page 24 It is pointed out that all of the business and financial relationships are marked according to the principles of transparency and normal market conditions are applied to all transactions. The comment of the main business transactions is present in the Explanatory Note for the Annual Balance Statement. In the following prospectus the economic relationships are summarised.

CPL Proceeds

COMPANY RATINGS SUPPLY INTERESTS TOTAL

AI POWER S.p.A. 199,209 489 0 199,697

COOPGAS S.r.l. 4,894,438 35 31,070 4,925,543

CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l. 158,976 1,040 105,360 265,376

CPL HELLAS A.B.E. & T.E. 0 0 0 0


CRISTOFORETTI SERVIZI ENERGIA S.r.l. 119,915 12,898 0 132,812

ENERGIA DELLA CONCONCORDIA S.p.A. 1,276,004 69,257 73,231 1,418,492

ERRE.GAS S.r.l. 212,708 154 134,844 347,706

SI.GAS S.r.l. 574,245 10,342 216,528 801,115

TRADENERGY S.r.l. 295,246 0 0 295,246

IMMOBILIARE DELLA CONCORDIA S.r.l. 264,919 231,441 0 496,360

ISCHIA GAS S.r.l. 5,414,205 0 7,841 5,422,046

MARIGLIANO GAS S.r.l. 892,305 693 63,991 956,990

NUORO SERVIZI in liquidation S.r.l. 43,460 0 0 43,460

PROGAS METANO S.r.l. 17,099 0 0 17,099

SERIO ENERGIA S.r.l. 47,931 0 0 47,931 Total controlled Companies 14,410,661 326,347 632,865 15,369,874

FONTENERGIA S.p.A. 272,871 5,286 10,450 288,607

SAFIN S.r.l. 5,000 0 0 5,000

SARDA RETI COSTRUZIONI S.r.l. 15,000 0 0 15,000

COMPAGRI S.p.A. 180,260 0 0 180,260

AGRIENERGIA SOC. CONS. a r.l. 0 0 0 0

COIMMGEST S.p.A. 0 0 0 0

ENERFIN S.r.l. 0 0 0 0

TECLAB S.r.l. 1,791 330 0 2,121

PEGOGNAGA SERVIZI S.r.l. 61,744 0 659 62,403 Total Connected Companies 536,665 5,616 11,109 553,390

TOTALS 14,947,326 331,964 643,974 15,923,264

_page 25

CPL costs

COMPANY RATINGS SUPPLY INTERESTS TOTAL

AI POWER S.p.A. 310,051 43,074 0 353,124

COOPGAS S.r.l. 18,035 66,205 10,034 94,274

CPL CONCORDIA FILIALA CLUJ ROMANIA S.r.l. 4,777 0 0 4,777

CPL HELLAS A.B.E. & T.E. (663,516) 0 0 (663,516)


CRISTOFORETTI SERVIZI ENERGIA S.r.l. 53,300 0 0 53,300

ENERGIA DELLA CONCONCORDIA S.p.A. 3,032 0 3,886 6,919

ERRE.GAS S.r.l. 0 0 0 0

SI.GAS S.r.l. 0 0 0 0

TRADENERGY S.r.l. 0 0 0 0

IMMOBILIARE DELLA CONCORDIA S.r.l. 462,824 0 0 462,824

ISCHIA GAS S.r.l. 39,551 0 0 39,551

MARIGLIANO GAS S.r.l. 0 0 0 0

NUORO SERVIZI in liquidation S.r.l. 0 0 0 0

PROGAS METANO S.r.l. 0 0 0 0

SERIO ENERGIA S.r.l. 0 0 0 0 Total controlled Companies 228,053 109,279 13,921 351,253

FONTENERGIA S.p.A. 0 0 0 0

SAFIN S.r.l. 0 0 0 0

SARDA RETI COSTRUZIONI S.r.l. 0 0 0 0

COMPAGRI S.p.A. 0 0 0 0

AGRIENERGIA SOC. CONS. a r.l. 0 0 0 0

COIMMGEST S.p.A. 2,173,669 0 0 2,173,669

ENERFIN S.r.l. 0 0 0 0

TECLAB S.r.l. 72,990 124,110 0 197,099

PEGOGNAGA SERVIZI S.r.l. 0 0 0 0 Total Connected Companies 2,246,659 124,110 0 2,370,769

TOTALS 2,474,712 233,388 13,921 2,722,021

_page 26 C] Management progressIn this chapter the economic situation of the group leader and the entire group will be analysed through the exposition of the reclassified earnings reports with the criteria of value added compared with the 4 previous financial years. A management result analysis will also be performed by business area and finally the more relevant economic indexes will be provided.

C.1 ] Reclassified earnings statementCPL CONCORDIA Soc. Coop. a r.l.: Earnings statements reclassified with the Value Added method (expressed in Euro)

Rectified Data

31 Dec 2008 31 Dec 2007 % 31 Dec 2006 % 31 Dec 2005 % 31 Dec 2004 %

Proceeds from sales and performances 205,215,858 91.04% 179,562,310 90.23% 172,845,785 93.88% 165,438,299 91.44% 163,812,968 92.83%

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

Changes works in progress 7,101,390 3.15% 2,658,347 1.34% (892,233) -0.48% (3,494,561) -1.93% (15,099,987) -8.56%

Works in economy 10,543,087 4.68% 12,604,307 6.33% 9,945,241 5.40% 10,475,074 5.79% 14,111,186 8.00%

Other proceeds 2,557,229 1.13% 4,172,220 2.10% 3,771,923 2.05% 8,510,074 4.70% 13,639,837 7.73%

VALUE OF PRODUCTION 225,417,564 100.00% 198,997,184 100.00% 184,118,665 100.00% 180,928,886 100.00% 176,464,004 100.00% Costs for purchases (68,603,208) -30.43% (63,885,797) -32.10% (54,226,507) -29.45% (52,715,594) -29.14% (49,754,348) -28.20%

Variation in inventory of prime materials 713,640 0.32% 9,455 0.00% 274,277 0.15% (346,772) -0.19% (482,830) -0.27%

Misc costs for services (76,946,495) -34.14% (66,632,270) -33.48% (67,308,739) -36.56% (71,767,063) -39.67% (73,695,523) -41.76%

Expenses for use of third party property (11,168,159) -4.95% (8,445,660) -4.24% (9,881,067) -5.37% (10,826,715) -5.98% (8,310,388) -4.71%

Various management expenses (2,872,710) -1.27% (1,908,365) -0.96% (1,958,381) -1.06% (2,164,174) -1.20% (2,242,431) -1.27%

VALUE ADDED 66,540,633 29.52% 58,134,548 29.21% 51,018,249 27.71% 43,108,568 23.83% 41,978,484 23.79% Cost of labour and relative expenses (42,648,176) -18.92% (35,997,524) -18.09% (31,026,611) -16.85% (30,693,673) -16.96% (30,686,348) -17.39%

MOL 23,892,457 10.60% 22,137,024 11.12% 19,991,638 10.86% 12,414,895 6.86% 11,292,136 6.40%

Amortisations material fixed assets (2,375,049) -1.05% (1,967,731) -0.99% (1,673,715) -0.91% (1,863,046) -1.03% (2,581,728) -1.46%

Amortisations material intangible assets (4,214,726) -1.87% (4,170,443) -2.10% (4,178,341) -2.27% (4,021,661) -2.22% (2,884,484) -1.63%

Funds and devaluations (1,117,812) -0.50% (1,099,621) -0.55% (1,544,703) -0.84% (1,023,965) -0.57% (643,054) -0.36%Amortisation, depreciation and allocations (7,707,586) -3.42% (7,237,795) -3.64% (7,396,758) -4.02% (6,908,672) -3.82% (6,109,266) -3.46%

EBIT 16,184,870 7.18% 14,899,229 7.49% 12,594,880 6.84% 5,506,223 3.04% 5,182,870 2.94% Interests and the other financial burden (3,637,127) -1.61% (3,469,020) -1.74% (3,668,045) -1.99% (4,066,967) -2.25% (3,913,559) -2.22%

Other financial proceeds 1,015,957 0.45% 1,036,632 0.52% 904,825 0.49% 579,726 0.32% 317,057 0.18%

TOTAL FINANCIAL MANAGEMENT (2,621,170) -1.16% (2,432,387) -1.22% (2,763,220) -1.50% (3,487,241) -1.93% (3,596,502) -2.04%

CURRENT RESULT 13,563,700 6.02% 12,466,841 6.26% 9,831,661 5.34% 2,018,981 1.12% 1,586,367 0.90% Proceeds from shares 1,100,344 0.49% 91,550 0.05% 550,195 0.30% 4,527,721 2.50% 2,336,675 1.32%

Financial activity rectifications (2,658,698) -1.18% (1,406,642) -0.71% (2,347,069) -1.27% (2,162,320) -1.20% (5,131,523) -2.91%

Refunds to partners (1,200,000) -0.53% (1,100,000) -0.55% (750,000) -0.41% (500,000) -0.28% 0 0.00%

Extraordinary management 11,902 0.01% (34,308) -0.02% 1,402,234 0.76% 1,889,160 1.04% 1,449,751 0.82%

PRE-TAX RESULT 10,817,248 4.80% 10,017,441 5.03% 8,687,021 4.72% 5,773,543 3.19% 241,271 0.14%

Taxes on the financial year income (3,979,189) -1.77% (4,137,754) -2.08% (5,134,301) -2.79% (2,665,977) -1.47% (3,107,770) -1.76%

NET RESULT 6,838,059 3.03% 5,879,687 2.95% 3,552,720 1.93% 3,107,566 1.72% (2,866,499) -1.62%

_page 27

The first consideration which comes to mind at the exposition of the earnings statements of the five year period has to do with the net profit of the commented financial year which is the best one in the period in question.The gross operative margin is also positive, equal to 23.9 million Euro, even if it is bends slightly on a percentage base, as the incidence of the financial management improves, which will in any case be commented on in the chapter dedicated to it.The reclassified earnings report of the Consolidated Balance Statement is analysed below.

“CPL CONCORDIA” Group: Earnings statements reclassified with the Value Added method(expressed in Euro)

Rectified Data

31 Dec 2008 % 31 Dec 2007 % 31 Dec 2006 % 31 Dec 2005 % 31 Dec 2004 %


Change invent. fin. prod. semifin. 576,641 0.22% 1,078,802 0.47% (2,569,631) -1.18% (10,187,122) -4.21% 5,204,351 2.02%

Changes works in progress 2,641,285 1.01% 1,360,421 0.59% (2,135,696) -0.98% 847,557 0.35% (14,750,459) -5.74%

Works in economy 22,465,251 8.59% 19,862,333 8.60% 17,294,210 7.95% 15,934,003 6.59% 23,075,550 8.98%

Other proceeds 2,460,153 0.94% 4,229,435 1.83% 3,728,427 1.71% 9,178,587 3.80% 15,986,119 6.22%


Variation in inventory of prime materials (673,653) -0.26% (939,634) -0.41% (5,695,328) -2.62% 1,080,564 0.45% 4,640,637 1.81%




VALUE ADDED 71,400,469 27.29% 63,623,934 27.55% 57,462,984 26.40% 53,711,334 22.21% 52,513,470 20.43% Cost of labour and relative expenses (45,503,326) -17.39% (38,792,077) -16.80% (36,456,477) -16.75% (37,507,271) -15.51% -39,574,568) -15.40%

MOL 25,897,143 9.90% 24,831,857 10.75% 21,006,507 9.65% 16,204,064 6.70% 12,938,903 5.03%



Funds and devaluations (1,604,081) -0.61% (1,206,669) -0.52% (1,907,161) -0.88% (1,858,729) -0.77% (3,571,721) -1.39%Amortisation, depreciation and allocations (10,941,672) -4.18% (10,210,865) -4.42% (10,151,642) -4.66% (10,637,792) -4.40% (12,807,665) -4.98%

EBIT 14,955,472 5.72% 14,620,993 6.33% 10,854,865 4.99% 5,566,272 2.30% 131,238 0.05% Interests and the other financial burden (5,359,997) -2.05% (4,844,780) -2.10% (4,198,165) -1.93% (5,543,328) -2.29% (5,983,193) -2.33%

Other financial proceeds 555,815 0.21% 655,073 0.28% 503,898 0.23% 362,905 0.15% 312,889 0.12%


CURRENT RESULT 10,151,290 3.88% 10,431,286 4.52% 7,160,598 3.29% 385,848 0.16% (5,539,067) -2.15% Proceeds from shares 61,928 0.02% 51,637 0.02% 550,224 0.25% 7,717,593 3.19% 2,203,675 0.86%

Financial activity rectifications 583,754 0.22% (431,123) -0.19% (664,559) -0.31% (1,410,864) -0.58% (528,335) -0.21%

Refunds to partners (1,200,000) -0.46% (1,100,000) -0.48% (750,000) -0.34% (500,000) -0.21% 0 0.00%

Extraordinary management 225,746 0.09% 2,118,327 0.92% 2,507,949 1.15% 3,139,422 1.30% 791,174 0.31%

PRE-TAX RESULT 9,822,717 3.75% 11,070,127 4.79% 8,804,212 4.05% 9,331,999 3.86% (3,072,553) -1.20%


NET RESULT 5,542,237 2.12% 6,665,574 2.89% 3,218,325 1.48% 5,691,042 2.35% (5,042,219) -1.96%

THIRD PARTY PROFIT (LOSS) (79,118) 136,800 19,810 (47,293) 691,168

GROUP PROFIT (LOSS) 5,463,119 6,802,374 3,238,135 5,643,749 (4,351,051)

_page 28 The results of the Consolidated Balance Statement can also be considered positive. There is no evidence of a worsening at a final profit level compared to the Group leader balance statement, a difference to be attributed mainly to the elision of the intergroup margines arising in relation to construction contracts of gas distribution networks or technological plants.In order to better understand the annual consolidated balance statement movements, a connecting prospec-tus is provided between the two balance statements:

Reconciliation prospectus of the Civil Net Equity of the Group Leader to the Consolidate Net EquityEuro/000

Net Equity at 31 Dec 2008

Financial Year Result at 31 Dec 2008

Net equity and result of the Group leader 99,777 6,838

Net equity and result of the consolidated controlled companies 42,107 (2,312)

Financial leasing operations effect (501) 203

Elimination of dividends distributed by controlled companies 0 (1,040)

Intragroup profit elisions on depreciable source concession (5,316) (1,534)

Fiscal effect on margins realised in the concession of depreciable sources 882 169

Valuation adjustment of the shares in connected companies with the net equity method (1,857) 708

Load value of the consolidated shares (32,632) 2,578

Other consolidation rectifications (642) (68) Net equity and result of the consolidated balance statement 101,819 5,542 Net equity and result of third parties (1,195) (79) Net equity and result of group financial year 100,625 5,463

production value trend

(data in thousands of euros)

184,

118

198,

997

225,

418

176,

464

180,

929

2004 2005 2006 2007 2008

280,000

240,000

200,000

160,000

120,000

80,000

40,000

0

From the above prospectus it can be noticed that the economic effect of the consolidated companies’ net Equity is counterbalanced by the positive effect of the charge value of the shares themselves. The el-ements which reduce the result of the group leader compared to the Consolidated end result are to be attributed, as previously mentioned, to the intra-group margin elisions (1,534/000 Euro) and to the elision of the collected dividends to the elision of the intra-group margins. These refer mainly to the construction of the Ischia gas distribution network, the expansions to the Marigliano gas distribution network and to the construction of the Francavilla Fontana plant for use of biogas managed by the controlled company Energia della Concordia S.p.A. The suppressed dividends refer to those distributed in 2008 by Coopgas and Serio Energia.

_page 29

AREA 1: Concordia head offices-Emilia AREA 2: Rome -Sardinia-TyrrhenianAREA 3: Milan-North-WestAREA 4: Sant’Omero-AdriaticAREA 5: Fano-UmbriaAREA 6: Campania-Calabria-SicilyAREA 7: Padova –North-EastAREA 8: TuscanyAREA E1: GreeceSECTOR N1: Odourants & ServicesSECTOR N2: Technological Assets ConstructionSECTOR N3: DistributionSECTOR N4: Information & Tech. Comm.SECTOR N5: Intra-group ServicesSECTOR N6: Investments in company head officesSECTOR N7: ConstructionTechnical Department Closing divisionsServices

11.40%15.63%11.21% 7.28%8.42%4.23%5.81%3.79%0.25%5.60%7.76%5.20%1.98%1.40%0.84%0.17%0.47%0.02%0.72%

contribution from the areas/sectors to forming the production value

C.2 ] Make up of the CostsThe make up of the main cost items in the annual balance statement and the Consolidated balance statement are provided below. As for the make up of the proceeds, please refer to the next chapter C.3) which is dedicated to the description of the activi-ties and the make up of the production value.

C.2.1 ] Annual Balance personnel costs 42,648/000 Euro refund cost 1,200/000 Euro cost of raw materials, subsidies,

etc. 67,890/000 Euro costs for services and use

of third party property 88,115/000 Euro amortisations and devaluations 7,290/000 Euro various management expenses 2,873/000 Euro interests and financial burdens 3,637/000 Euro share devaluation 2,703/000 Euro

C.2.2 ] Consolidated Balance Statement

personnel and refund costs 46,703/000 Euro cost of raw materials, subsidies,

etc. 90,086/000 Euro costs for services and use of

third party property 96,908/000 Euro amortisations and devaluations 10,121/000 Euro various management expenses 3,214/000 Euro interests and financial burdens 5,063/000 Euro

C.3 ] Sectors of Activity, management results and make up of the proceedsThe main peculiarity of the CPL CONCORDIA Group is that is possesses both on a Group leader level and through the integration in a group environment, the entire line of the gas and renewable energy sources sector with the sole exception of extracting and storage activities.It goes back, in fact, to the historic activity of con-struction and maintenance of the gas distribution networks, water and sewer, construction of techno-logical plants such as reduction stations, to distribu-tion, to sales and to gas odorisation, up to the con-struction and management of heat management systems, to the most complex Global Services, to public lighting systems, to cogeneration to remote or district heating and to photovoltaic systems. From this point of view, we believe that we are a unique subject in the national panorama. It is for this reason that numerous private partners prefer us to other specialised competitors in some of these sec-tors of activity.Before looking at the single business areas, in the following prospectus the make up of the production value by business area with reference to the Con-solidated Balance Statement is shown below, which we remind you amounts to a total of 261,608/000 Euro:

Network construction and maintenance area 47,980/000 Euro

Technological and odorant plants area 29,997/000 Euro

Gas Distribution and Sales Area 35,414/000 Euro Energy and Renewable Energy

Sources Area 135,675/000 Euro Information & Communications

Technology Area 4,465/000 Euro Misc minor 8,077/000 Euro

_page 30 Now we will analyse the management progress which is performed by business area, both at a Group leader and a group level with comparison to the previous financial year. The percentage values represent the produc-tivity index intended as the ratio between the profit made by the business area and the operative result.

C.3.1 ] Construction and maintenance of gas distribution networks, water and sewer, construction of remote or district heating systemsFor many years this was the main source of income for the Co-operative. This can be called the historic activity, the activity which allowed the group to grow and face new and diverse markets, as was the case during the seventies and eighties for the methanisation of the mainland and the beginning of existing plant management. Due to the ever growing presence of small entrepreneurs and the minor presence of localities which needed to be methanised, this sector steadily decreased in importance within the group, although it remained an inalien-able strong point of group know-how. The progress of the last two years is analysed below:

ANNUAL BALANCE STATEMENT YEAR 2008 YEAR 2007

SECTOR OF ACTIVITY AMOUNT % AMOUNT %

NETWORK CONSTRUCTION AND MAINTENANCE

CONSTR. GAS WATER ELECTRIC NETWORKS 14,771,065 0.75 14,871,817 0.67

NETWORK MAINTENANCE 34,093,747 0.82 28,806,687 1.54

TOTAL NETWORK CONSTRUCTION AND MAINTENANCE 48,864,813 1.58 43,678,504 2.22

CONSOLIDATED BALANCE STATEMENT YEAR 2008 YEAR 2007


NETWORK CONSTRUCTION AND MAINTENANCE

CONSTR. GAS WATER ELECTRIC NETWORKS 13,886,000 -0.62 13,617,498 0.03

NETWORK MAINTENANCE 34,093,747 0.71 28,806,687 1.34

TOTAL NETWORK CONSTRUCTION AND MAINTENANCE 47,979,747 0.09 42,424,186 1.38

The business area realised a 2008 production value at a consolidated level of 48 million Euro with a 13.1% increase compared to the previous financial year. The decrease in marginality of the Consolidated Bal-ance compared to the Group leader balance derives from the poor progress of the activity in Greece. In fact, during the course of 2008 it was decided, after years of negative results, to abandon the activities in that country. This caused an sharp resizing of the proceeds and inevitable tensions with the contract-ing stations. At today in the Hellenic territory there are no more productive activities, only legal activi-ties aimed at payment for the works performed. As for the main works performed, among others is the methanisation of the isle of Ischia, the maintenance and emergency assistance in the Municipality of Bologna, the maintenance on the gas networks in the Bassano area, the maintenance and

emergency assistance in the Municipality of Padua,

the Municipality of Milan and management of the

Apulian aqueduct.

C.3.2 ] Plant Construction technologies and odorizationThis is another of the Group leader’s and Group’s

historical sector which in recent years has seen

large growth, also due to the fact that on the nation-

al territory there are very few competitors. As for the

supply of odorant, the group represents one of the

absolute leaders in the national market. The large

development in this business area was realised

thanks to the synergy offered by the group’s other

business areas which has been able to offer a com-

plete range of supplies and services. The progress of

_page 31

the last two years is analysed below:



TECHNOLOGICAL AND ODORANT PLANTS

ODORANT AND SERVICES 12,628,202 1.92 10,881,397 1.85

CONSTRUCTION TECHNOLOGICAL PLANTS 17,525,219 1.21 15,924,259 1.67

TOT. TECHNOLOGICAL AND ODOR. PLANTS 30,153,421 3.13 26,805,657 3.52



TECHNOLOGICAL AND ODORANT PLANTS

ODORANT AND SERVICES 12,628,202 1.66 10,881,397 1.61

CONSTRUCTION TECHNOLOGICAL PLANTS 17,368,566 1.05 15,471,216 1.44

TOT. TECHNOLOGICAL AND ODOR. PLANTS 29,996,768 2.71 26,352,613 3.06

Unlike other business areas, the one in question is made up of a multidude of customers who commis-sion our products. The increase in 2008 compared to 2007, respectively at 16% for the odorant and 12.3% for the technological plants and tied to the efficient commerical policies performed on the odorant area and the opening toward new markets with regard to the technological plants area. In fact, in 2008, for this business area the group had begun to export and produce in Algeria, both through direct supply to local public customers such as Sonelgaz (the Al-gerian ENI) and through the establishment of a com-pany which we hope will soon become a reference point to acuire new important jobs in an absolutely strategic country for our activity. Important jobs for supplying stations in Spain and France, jobs which will be completed during 2009, were also acquired during 2008. In a national market which tends to-ward saturation, the exportation of the technology inherent in these products, makes a fundamental contribution to development and wealth.

C.3.3 ] Distribution and sale of methane gas and GPLThis business area holds the extensions of the concessions possessed, the distribution and sales of methane gas in accordance with the principles sanctioned by Legislative Decree 164/2000, also known as “letta Decree”. The Group also possesses concessions which are not methane gas powered, but Gpl powered, which at the moment are not subject to the principles of the letta Decree, but are regulated by their tariff system. In the group, this business area, even though it does not reach par-

ticularly relevant values, in any case represents a fundamental area under the strategic and financial profile. Even under the incidence profile on the na-tional level, the concessions managed by the group are not very relevant as we will see in the analysis of the production value, consumption and the user basin. We remind you, in line with this premise, that we are talking about an activity which operates in regulated markets, therefore the regulatory frame-work must be summarised.

C.3.3.1 ] Reference regulatory frameworkThe gas natural sector is the object of relevant regu-lation on a national and European community level. In particular, the regulation process was launched on a European level by the Gas Directive which de-fined the common norms for transport, distribution, supply and storage of natural gas. This Gas Directive was acknowledge in Italy in May 2000 with Legisla-tive Decree No. 164 dtd 23 May 2000 (letta Decree), which imposed the separation (unbundling) of the “monopolistic” components of the pipeline and those subject to competition. In particular the letta Decree identifies and defines the segments which make up the gas market (importation, production, exportation, transport, dispatching, storage, LNG re-gasification, (distribution and sale) and establishes the regulation principles in terms of liberalisation, company separation, access to the network and transparency.DistributionDistribution is the activity of natural gas transporta-tion through the local gas pipeline network at medi-

_page 32 um and low pressure. The high costs of reproduction of the network on a local level give this part of the process conditions of natural monopoly. The distri-bution companies continue to operate under a 12 year concession system. The activity is remunerated through the distribution tariffs, as established by the AEEG in deliberation ARG/GAS 159/08 (and subse-quent integrations), and is performed in respect of the “grid code”, the whole of the rules established by the Authority for the correct use of the infra-structure, approved with deliberation 108/06. Said document contains the standardised procedures for access to the network and for the registration of all information regarding the redelivery served. The quality and safety of the distribution servie, on the other hand, are regulated by the Consolidated Act approved with deliberation ARG/GAS 120/08.SaleThe last phase of the process is made up of the sale of natural gas to the final customers, an activ-ity performed by companies which operated, based on ministerial authorisation, in a free competition system. Decree 164/2000 guarantees the use by all sales companies (under the same conditions) of the networks, including those which are property of the distributors which do not belong to the same group. The consequence of this decree was that from 1 January 2003, all of the final customers - including residential - can choose their natural gas provider freely.The sales company invoices the consumption to the final customer, then depositing the component regarding the gas distribution service on the local network with the distributor.The normative further specifies that, by 2010, no operator may sell to the final customer more than 50% of the national consumption of natural gas on an annual basis.

C.3.3.2 ] Economic data of the gas and gpl distribution and sales areaThe Group, through its own acquisitions division, has procured about 25.8 million cubic metres of natural gas on the national market for a total cost of 8.6 mil-lion Euro. Compared to the previous financial year, the cost of raw material has increased on average. In the foreign market, particularly in Romania, the company has purchased 3.6 million Euro of gas. At integration of the main supply of about 14.2 million cubic metres dispensed by Medoil Gas ex Inter-gas più S.r.l., the Group, in its national quota, has made other secondary supply contracts: with Bp Italia S.p.A. for about 6 million cubic metres, with Hera trading S.p.A. for about 2.5 million cubic metres and Spigas for about 100 cubic metres.Contextually, through its own sales division, in the 11 national basins the Group resold about 25.5 million cubic metres of gas, generated proceeds of about 15.7 million Euro, according to the following details:

BASINM3

SOLD2006

M3 SOLD 2007

M3 SOLD 2008

CALABRIA 20 1,878,199 2,239,502 2,355,559

CALABRIA 30 24,884 365,267 634,355

CAMPANIA 25 6,039,207 6,726,192 6,503,464

CAMPANIA 30 5,266,912 4,994,609 5,406,613

CITTANOVA 4,568 14,554 13,437

MARIGLIANO 2,155,177 2,585,948 2,841,969

MORFASSO 243,947 135,372 0

PALMA AND CAMASTRA 775,132 762,278 769,441

ST.GIUSEPPE VESUVIANO 9,931 395,848 1,138,205

SICILY 12 151,167 460,696 528,953

SICILY17 1,363,715 2,324,077 2,574,862

Province of ALESSANDRIA 0 0 2,770,767

Comprehensive Total 17,912,839 21,004,343 25,537,625

As for the cubic metres of gas sold in Romania dur-ing the financial year, it was equal to 16,341,702 besides another 3,283,747 distributed but sold by other companies.319,257 cubic metres of gpl were sold by the group in 2009.

_page 33

As for the users served by the Group during the fi-nancial year, see the following prospectus:

BASIN TOTAL 2008

CALABRIA 20 5,082

CALABRIA 30 1,437

PALMA E CAMASTRA 1,409

CAMPANIA 25 8,035

CAMPANIA 30 7,960

MARIGLIANO 6,265

CITTANOVA 1

ST. GIUSEPPE VESUVIANO 2,035

SICILY 12 1,100

SICILY17 3,943

SAPRI AND CAMEROTA 1,562

ROMANIA BASIN 11,544

Comprehensive Total 50,373

The users included in the above prospectus refer to the basins present in the controlled companies. The us-ers of the connected company Fontenergia S.p.A., which, at 31 Decembe 2008, were 7,572, are added to this number. The total number of users served by the group at 31 December 2008 was therefore 57,945. In the following prospectus, the data having to do with the economic effects of this business area in the civil area of the Co-operative and the Group are provided:



DISTRIBUTION NETWORK MANAGEMENT

CONCESSIONS MANAGEMENT 8,063,459 1.62 6,484,151 1.42

CAPITALISATIONS 6,082,813 0.00 5,395,966 0.00

TOTAL DISTRIBUTION 14,146,272 1.62 11,880,117 1.42



GAS TRADING SALES DISTRIBUTION NETWORK MANAGEMENT

CONCESSIONS MANAGEMENT 17,504,561 2.37 17,206,540 1.94

CAPITALISATIONS 9,713,581 0.00 7,279,141 0.00

TRADING 8,195,372 0.14 8,105,981 0.15

TOTAL DISTRIBUTION 35,413,514 2.51 32,591,662 2.09

The difference between the annual balance statement and the consolidated one is made by the sales margin (Coop-gas) and by the balances of CPL CONCORDIA Cluj Romania and Erre.Gas branches.

_page 34 C.3.4 ] Heating Plant Management, Global Service, Public Lighting, Cogeneration and Renewable Energy SourcesThis business area has more than 15 years of activity in the area of heating plant management and global service. In full development phase, the activity having to do with renewable energy sources saw the group committed to an important initiative some years ago with the construction of one of the largest photovoltaic fields in the country, located in the Municipality of Carano in Trentino. Through the combination of the various specialisations, today the “energy” area has become the most relevant from an economic impact point of view as well as the most important from a strategic profile point of view. In the following prospectus, the effects on the civil and consolidated balance statements can be analysed:



ENERGY

CONSTR. ENERGY HEATING PLANTS 12,882,034 0.52 16,516,265 0.70

HEAT MANAGEMENT AND GLOBAL SERVICE 96,395,586 11.14 76,712,122 8.88

PUBLIC LIGHTING 4,457,866 0.25 3,809,532 0.24

COGENERATION AND RENEWABLE ENERGY SOURCES 9,285,766 0.79 9,446,698 0.98

TOTAL ENERGY 123,021,252 12.70 106,484,616 10.79



ENERGY

CONSTR. ENERGY HEATING PLANTS 12,882,034 0.45 16,516,265 0.61

HEAT MANAGEMENT AND GLOBAL SERVICE 110,560,445 10.55 84,922,673 8.01

PUBLIC LIGHTING 4,457,866 0.22 3,809,532 0.21

COGENERATION AND RENEWABLE ENERGY SOURCES 7,774,466 0.58 9,645,802 0.85

TOTAL ENERGY 135,674,811 11.80 114,894,272 9.67

The homogenous specialisations which we com-monly define as “Energy Area” represent 52% of the activity performed by the Group. The incidence on the operative result of this activity is 11.80%, almost entirely determined by the tried and true activities of heat management and global service, activities which require notable know-how and great mana-gerial capabilities. The portfolio of orders includes several tens of jobs, some directly acquired and some acquired in Temporary Joint Ventures with other companies who operate in the sector. Among the more significant jobs, Global Service in the prov-ince of Vicenza is pointed out as well as the heat management in the province of Pesaro, heat man-agement of the people’s buildings in the Rome Aer, heat management in the Municipality of Roma and Global Service in the Province of Rome.

C.3.5 ] Information & Communications Technology - ICTThis is one of the Group’s newest business areas, es-tablished only a few years ago. which is now respon-sible for the computerisation needs of the Group in the area of direct billing invoice management and collection management both for the controlled and connected companies and for companies outside of the Group. The impact on the Consolidated Balance is as follows:

_page 35



INFORMATION & COMUNICATION TECNOLOGY

INFORMATION TECNOLOGY 4,464,697 0.21 2,779,864 0.12

TOTAL I.T. 4,464,697 0.21 2,779,864 0.12

As can be deduced from the above prospectus, the total effects on the Consolidated Balance, both in absolute terms and in terms of percentages, are to say the least, of little significance, even if this business area has notable potential for external expansion and internally covers an important role to complete the process of the group’s service products.

C.3.6 ] Other minor activitiesWhen we talk about minor activities, we refer mainly to the building activities, both for third parties and relative to extraordinary maintenance of the group properties and the production of jobs in close out phase managed outside of the business areas.

C.4] Economic ratiosThe main economic ratios which emerge from the annual consolidated balance statement closed at 31 De-cember 2008 are analysed below, compared with the previous four financial years.

C.4.1 ] Annual Balance

CPL CONCORDIA Soc. Coop. Coop.: Main financial statement ratios

ECONOMIC ANALYSIS Rectified Data

at 31 Dec 2008 at 31 Dec 2007 at 31 Dec 2006 at 31 Dec 2005 at 31 Dec 2004

R.O.E. (Return on Equity) 7.36% 6.66% 4.18% 3.76% -3.33%

R.O.I. (Return on Investment) 5.11% 5.61% 4.82% 2.17% 2.00%

MOI Ratio/Value of production 10.60% 11.12% 10.86% 6.86% 6.40%Burdens incidence and extra management proceeds 57.75% 60.54% 71.79% 43.56% 155.31%

Net Financial Burden Incidence on P.V. 1.16% 1.22% 1.50% 1.93% 2.04%

Net Financial Burden Incidence on R.O. 16.20% 16.33% 21.94% 63.33% 69.39%

R.O.E.

(Operating Income/Equity capital) in percentage

7.36

%

2004 2005 2006 2007 2008

10.00 %

7.50 %

5.00 %

2.50 %

0.00%

-2.50 %

-5.00 %

4.18

% 6.66

%

-3.3

3%

3.76

%

R.O.I.

(Operating Income/Net Capital Employed) in percentage

5.11

%

2004 2005 2006 2007 2008

6.00 %

5.00 %

4.00 %

3.00 %

2.00 %

1.00 %

0.00 %

4.82

%

5.61

%

2.00

%

2.17

%

_page 36 The return on equity indicates the capacity to remunerate the capital invested by the shareholders which in the Co-operative also includes the profits brought to indivisible reserve, which in 2008 is equal to 7.36%, improved performance in the last 5 years. The Return on investment is the capacity to remunerate the invested capital, represented by the ratio between the operative result and the total profits, therefore the fixed profits plus the current assets. The 5.11% annual index referred to 2008 is less only the previous financial year which, in reality, received a positive effect of income and temporary assets. Therefore, this result is in any case to be considered positive. The ratio between the gross Operative Margin and the value of production, equal to 10.60%, follows in those comments already made with regard to the dynamic of the Return on investment. The most recent indexes tend to analyse the impacts of the extraordinary management on the ordinary management and the incidence of the financial management through their economic manifestation of the balance between the burdens and the financial income.Under this profile it is interesting to find that the percentage of financial burdens incidence on the value of production is the lowest in the five year period. Further comments on the dynamic of the financial burdens are contained in the chapter which deals with the financial situation and management.

C.4.2 ] Consolidated Balance Statement

CPL CONCORDIA Group: Main financial statement ratios

ECONOMIC ANALYSIS Rectified Data


R.O.E. (Return on Equity) 5.74% 7.52% 3.68% 7.56% -5.47%


MOI Ratio/Value of production 9.90% 10.75% 9.65% 6.70% 5.03%

Burdens incidence and extra management proceeds 63.47% 53.48% 70.17% -1.39% 3415.40%

Net Financial Burden Incidence on P.V. 1.84% 1.81% 1.70% 2.14% 2.21%

Net Financial Burden Incidence on R.O. 32.12% 28.66% 34.03% 93.07% 4320.63%

The index of capacity to remunerate the own capital, Return on equity equal to 5.74% at a consolidated level is worse compared to the previous financial years due to the elision of the product profits with controlled companies realised in the face of the construction of gas distribution networks (methani-sation of the isle of Ischia), in the network expan-sion phase (Municipalities of Marigliano and Basin Calabria 30) and in the construction of the waste recylcing plant for the realisation of biogas located in the Municipality of Francavilla Fontana. As already mentioned in another part of this report, the impact of these elisions amounts to 1.5 million Euro.The index which measures the remuneration of the invested capital (Return on investment which is equal to 4.15%) is shown at a decrease compared to the previous financial year, nevertheless remaining among the highest of the five year period. For the

characteristics of the group activity, the gross opera-tive margin is considered one of the most important indexes. This index, which at a consolidated level in 2008 was 9.90%, indicates the return on the work performed in the various business areas which we have already analysed.It has been the goal for some time to attest to a percentage value which oscillates between 9.5 and 10%. The index which measures the incidence of the extra management indicates the financial and extraordinary management, and the taxes which erode from the management characteristic of the Group. The index in question should be read in the sense that the 63.47% of the characteristic activity is eroded from the financial and extraordinary man-agement and from the taxation. As for the incidence of the financial burdens, a dynamic which is in any

_page 37

case positive can be noted even at a consolidated level for 2008 compared to the previous financial years, extremely qualifying considering the particu-lar historic moment. Any further in depth study on the subject will be analysed in the following chap-ters.

D] Financial SituationAs for the financial management of the Co-operative and the Group, first of all a brief analysis of the refer-ence macro-economic context is provided and then the progress of the main elements characteristic of the management during 2008 will be analysed.

D.1 ] The economic and co-operative contextOver the course of 2008 the slow down of the eco-nomic trend which had already been profiled at the end of 2007 was accentuated in global macro-eco-nomics. The economic financial imbalances were manifest in their entirety and diffusion particularly over the course of the last quarter when the finan-cial crisis was transmitted to the economic activity through numerous channels. The price of crude, just as many other raw materials including agricultural materials, after reaching record quotations at the beginning of the second semester of the year (147 USD/barrel) began a rapid descent in relation to the souring of the economic trend which brought the end of year quotation to 40 USD/barrel. In the United States in the last quarter of 2008 the GDP suffered an abrupt drop-off, -6.2% compared to the three previous months, to which the private con-sumption decline, dropping by 4.3%, contributed. In spite of this, thanks to the positive trend of the last two quarters, an overall increase in the GDP in 2008 of 1.1% was registered. In any case, this data reflects the marked slow down of private consump-tion (+0.2% in 2008 compared to +2.8% in 2007), the exportation slow down (+6.2% in 2008 com-pared to +8.4% in 2007) and the strong reduction in residential building investments (-20.7% in 2008 which is added to -17.9% already encountered in 2007). The situation had important effects on the labour market in which, during the year, more than 2.5 million jobs were lost. The marked economic slow down and the drastic drop in prices of energy products is clear even from the inflation data: +0.1% compared to the previous financial year. The United States government approved various actions aimed at sustaining the economy. In particular, thanks to

the American Recovery and Reinvestment plan, it destined more than 700 billion USD to economic ac-tions, most of these dispensed through tax breaks aimed at giving back support to the economy thanks to the increased consumption which should result. Therefore, the United States decided to intervene in support of consumption, continuing to place itself as the main planetary market (consumer). Emerging countries, for the first time since the post-war peri-od, suffered a crisis imported from advanced coun-tries and economies which historically have always represented an external development motor, and they saw a reduction in the GDP growth (+6.3%). The Chinese GDP in 2008 grew 9.7% compared with the previous year. The Chinese government, in Novem-ber 2008, launched an important plan to support the economy. Of the more than 700 billion USD, more than half were destined to infrastructures and public construction. Thanks to these actions, the 2009 GDP is expected to grow 6.4%, showing just how hard the crisis struck even this important player in the global economy. From the analysis of the composi-tion of Chinese public action, it can be seen how China, thanks to the strengthening of their own in-frastructures, will continue to be among the main global manufacturers of consumer goods.The the Euro Area (euro 15) beginning from the second quarter of the year, the GDP, in real terms, registered negative trends, sanctioning (for the first time since the adoption of the single currency) the beginning of a recessive economic phase. In any case, the real GDP grew by 0.7% on an annual basis in the Euro 15 Area and 0.9% in the vast Euro 27 Area. The weak trend during the year spread to all of the main European economies and to all of their main sectors with a particularly pronounced drop in the value added in industry and construction. The factors which slowed growth were the stagnation of exportations and private consumptions, respec-tively increased by 2.0% and 1.3% compared to 2007 in Euro 27 Area (the previous year growth had been 5.0% and 2.1%). The consumer price index in the period increased by 3.3% (compared to +2.1% in 2007). The actions of the European Governments in response to the economic crisis were much more contained compared to those of the USA and China and favoured, depending on the country, construc-tion of public infrastructures (mainly), automotive industries and, in some cases, subsidies for com-panies. In Italy, the GDP decreased by 1.0% on an annual basis while in 2007 it had grown by 1.5%. For three consecutive quarters the product trend de-creased, setting up a scenario of technical recession. Among the quarterly findings, the poor fourth quar-

_page 38 ter stands out: -1.9% compared to the previous one and -2.9% in terms of tendency (2008 fourth quarter compared to 2007 fourth quarter). The rapid deterio-ration reflected above all on the definite worsening of the international macroeconomics and the con- macroeconomics and the con-macroeconomics and the con-sequential drop in foreign demand, in the face of the persistent weakness of the internal situation. Expor-tations decreased significantly (-10.7% was the last quarter tendency data) compared to an increase which was close to 5% in 2007. Gross fixed invest-ments suffered from this, dropping by 9.3% in terms of tendencies in the fourth quarter and, in particu-lar within the aggregates, company investments in machinery and equipment, decreased in the same period by 9.3% on a tendency base, household ex-penses continued to stagnate (-1.5% in the fourth quarter compared to the same period of the previ-ous year). The unemployment rate rose from 6.2% in 2007 to 6.%% in 2008. The INPS further indicates an increase in the hours authorised for resorting to the ordinary earnings equalization fund. Inflation rose from 1.8% in 2007 to 3.3% in 2008. Over the course of the year, the rate showed growth until the summer, surpassing the 4% on a tendency base and then significantly dropping (2.2% in December) fol-lowing the reduction in prices of raw materials due to the low demand consequential of the spread of economic crisis. Italy undoubtedly possesses some critical factors which give it an advantage over other countries in the Union. Among these, above all, is the lower flexibility in fiscal policy due to the high public debt. Nonetheless, it should be pointed out that the Italian economic scenario also presents some positive structural elements compared to the rest of Europe. In particular, the real estate market appears less exposed compared to a vertical drop in prices and household indebtedness remains at extremely contained levels.

D.1.1 ] The currency and financial markets situationDuring the course of the year, as a reflection of the worsening of the financial crisis, the conditions of the interbank markets have remained tense, reflect-ing the persistence among the operators of liquid and counterparts risks. The real estate market, even if in a different measure among the various coun-tries, has continued to show great weakness as

an effect of the “subprime” mortgage crisis begun in August 2007. The crisis worsened in September 2008 with the bankruptcy of the “Lehman Brothers” business bank, having repercussions on some im-portant American and European financial institutions, gener-ating an extreme crunch on the credit and interbank markets and the fall of stock quotations on a global level. The chain of events provoked the immediate and definite intervention of the currency authorities and American economic policy which, through sig-nificant actions (such as the Troubled Assets Relief program and the American Recovery and Reinvest-ment plan) avoided the expansion of the bankruptcy to other numerous financial institutions (AIG, Citi-group, Merrill Lynch, ...). The ample action to combat the financial crisis developed along the guidelines traced by the ministries of finance and the directors of the central banks in the G8 Group countries on 10 Oct 2008. With the re-entry of inflation tensions, mainly following the drop in raw material prices, and in context of deterioration of the real economy, the central banks also enacted a definite slow down of currency restrictions and considerable actions in support of liquidity in the currency markets. At the beginning of October the first trend currency policy intervention on an international level in his-tory was implemented, being concluded on 8 Oct 2008 with the simultaneous rate drop by BCE, Fed, Bank of Canada, National Swiss Bank, Central Bank of Sweden and Bank of China. Distinguishing itself for its greater activism was Fed which, after hav-ing dropped the official rate seven times over the course of the year, bringing it to 4.25% at an interval between zero and 0.25%, began some manoeuvres among which the opportunity to purchase the com-mercial cards issued by the main North American companies should be pointed out. The BCE was the most cautious. In fact, in July, pressed by the grow-ing tendential inflation due to the increase in price of the energy and food products, increased the official rate by 25 basis points. The sudden variation of cur-rency policy occurred only in the last quarter of the year, with the change in official rate from 4.25% to 2.5%. The Italian government adopted some meas-ures in the form of law decrees, aimed at sustaining the economy, in particular providing the banks with the necessary resources (through i.c.d. “Tremonti

_page 39

Bonds”) in order to return within the capitalisation parameters set up by the Bank of Italy (Core Tier One) and to allow them to resume credit dispensation. It should, nevertheless, be pointed out that the Ital- be pointed out that the Ital-ian credit system appeared more solid than that of other countries and that apparent “backwardness” that the domestic institutes disclosed in past years, compared with their international competitors in the use of sophisticated financial tools (securitiza-tions, derivatives, etc.) were found to be a competi-tive advantage. To date no cases of bankrupty have been registered and the Government has not had to intervene in any credit Institution as the American government has had to do as well as the majority of the Euro Area countries. The Tremonti Bonds seem sufficient to guarantee the solidity even of the banks which show the worst asset situations. The positive element has nonetheless not avoided a strong con-centration of dispensed credit on the domestic mar-ket both to businesses and households. The credit demand has, in fact, remained very sustained while the bank credit has reduced drastically in the last part of the year. The quality of bank credit has also worsened, as could have been expected, with an increase in outstanding credit of 1.5% in 2008, the immediate consequence of which was a significant reduction in the initial credit lines. Considering the higher risk of the economic activities in the current trend, the national bank system acted on the levers of the spreads, which beginning from the second half of 2008 were strongly increasing, above all on mid/long term operations. The financial crisis had significant repercussions on all of the global stock markets. At the end of the year, the American “Stan-dard and Poor’s 500” index lost 38.5% of the twelve months, the European index “Eurosto-xx 50” lost 44.4%, the Japanese “Nikkei 225” lost 42.1% and the Chinese “Hang Seng” lost 48.3%.

D.1.2 ] ForecastsAccording to the forecasts prepared by IMF, World Economic Outlook (January 2009), over the course of the current 2009 year all of the global economies will show strong GDP reductions and only in 2010 will a growth scenario be seen. At a global leve, the GDP growth showed negative, at -1% in 2009, while a pick up of +1.5% is expected in 2010. The Ameri-can GDP should drop by 1.6% in 2009 to then grow over the course of 2010 (+1.6%). In the Euro Area, the decrease in the current year should be more marked (-2.0%) and the pick up slower (+2.0%) in 2010. The emerging economies will see the growth contract to 3.3% in 2009 compared to a pick up on

2010 of the GDP to +5% (in any case less than the +6.3% in 2008). In any case, it is impossible not to point out that the revisionsof these forecasts, tradi-of these forecasts, tradi-tionally formulated no more than a couple of times per year, have become quite frequent, as a demon-stration of the severity of the unpredictability of the consequences due to the current economic crisis. The trend data of the 2009 first quarter referring to the Italian GDP are quite alarming. The steady de-crease between January and March of this year is equal to 2.4 percent, while that over the last twelve months (April 2008 - March 2009) was 5.9%.The bearish currency policies of the main central banks continued over the course of the first months of 2009. To date the official rate of the Euro Area is equal to 1%. However, particular evidence regarding a pick up in credit dispensation has still not been found. The effects of the currency policies emerge, however, in the registration of the Euribor rate drop which, after reaching the maximum in the month of October 2008 (when both the 3 and 6 months quot-ed around 5.5%), beginning in December it began a rapid descent. At the end of April the 3 month quo-tations and 6 month quotations were respectively 1.4% and 1.6%.The financial markets, after having reached a mini-mum at the beginning of March (registering decreas-es of about 30% compared to the end of 2008) seem to realign with the values of last December. Never-theless, to date the high volatility of stock trends is maintained. After last April’s G20, it was thought that the acute phase and that the generalised risk of a crash of the global financial system had passed, which does not mean that the real economic crisis has passed, from which recovery would have re-quired many more months. The summit was crucial because it reaffirmed the commitment of the larger countries to sustain employment and demand with strongly expansive currency and balance policies, to heavily strike the tax havens and to ensure the pick up of credit with issuance of further liquidity, recapitalisations of financial institutions and meas-ures intended to resolve the problem of toxic assets, the volume of which remains uncertain but which is considered to surpass the incredible amount of 12 times the global GDP.Further interventions were adopted in order to carry out a radical reform of the International Monetary Fund and of the Word Bank; and financial assistance was triplicated to emerging countries whose popu-lation is living really devastating consequences due to the crisis.Moreover the Financial Stability Forum was en-forced and institutionalized in order to monitor the

_page 40 financial markets and identify new regulation poli-cies, assist countries in implementing new and en-forced regulating standards, assess the suitability of work carried out by subjects who must prearrange the new international standards of conduct, set guide lines for the subjects in charge of controlling the cross-border finance companies, and elaborate emergency plans for any possible crisis of interna-tional financial subjects with systemic risk . With reference to bankers fees it was also set that they must be consistent with long term objectives and cautious in assuming risks. Further to these deter-minations the European parliament has already adopted some measures concerning the regulation of audit company activities and of the hedge funds and new capitalization requirements of insurance companies. Also the revision of banks capitalisation requirements is forecasted as soon as the financial markets will allow it.The financiarization of the system, unhooked from any reference of the real economy, has conducted on the verge of the global catastrophe and in 2009 presents a world where income inequalities among people are even greater than in 1929. The financial system that would have had to manage the risks, instead created them, instead of financing enter-prises, it preferred using capitals for subprime mort-gages or other predator loans in a view of maximiz-ing the short term results and careless of the conse-quences medium long terms. To go out of the crisis it is necessary to go back considering finance as a mean to allow production investments, to sustain work and people’s ideas.

D.1.3 ] Trend of the financial management of CPL CONCORDIA Group in year 2008The macroeconomic scenario just described char-acterised the financial management results of many companies in a negative way. Instead it is a great satisfaction to state that the same negative effects are not found in the financial statement of the Group Leader, and substantially in the whole Group, that in the contrary presents, in a so difficult year, the best results of the last six financial management years.It must be pointed out that the Cooperative within its function of Group Leader determines also the finan-

cial policy of the whole Group, except for the sub-sidiary Cristoforetti that in fact is established with the proportional method. Differently than other subjects treated in this report it is opportune, in this chapter, to dwell on the financial policies of the Group Leader related to the Group that in fact is subjected to its strategies.From the reclassification of the profit and loss ac-count of the Group Leader this statement seems ev-ident: the incidence of the net financial management related to the production value was of 1,16% in 2008, of 1,22% in 2007, of 1,50% in 2006, of 1,93% in 2005, of 2,04% in 2004 and of 1,46% in 2003. The gradual increase of rates registered in year 2006 that contin-ued throughout 2007 and finished in October 2008 had a limited impact on the overall financial charges of CPL CONCORDIA.The above data clearly point out how, to the pro-gressive increase of rates registered in the markets in the last three years followed, from year to year, a constant reduction of the financial charges inci-dence of the Cooperative. Therefore it is a complete-ly anti-cyclic trend, due both to the re-organization of medium long term payables already carried out in year 2005 and to the effective strategy of the Com-pany in containing the current assets. Most of the loans that the Group Leader will make use of include payment of interests and capital with half-yearly instalments: Therefore the reference rate was updated twice, partially contributing in contain-ing the negative effect created by the increasing rates (vice versa, in times of decreasing rates like at the present, the half-yearly updating is an unfa-vourable element). At the date of 31 Dec. 2008 the Group Leader did not make use of any short-term overdrafting. The containment of assets instead was achieved thanks to better appropriate actions, turned to achieve the greatest deferment of pay-ment by suppliers and to set great attention on respecting the cash conditions of receivables from customers. In this respect it is pointed out that at 31 Dec. 2008 the Group Leader has noticed the low-est (absolute) value of overdue receivables of the last eight years (but in the same period the produc-tion value increased of fifty million Euro). Also this is a data absolutely in countertrend related to the reference context. In must also be specified that in 2008 the further improvement of the main bal-

_page 41

ance sheet indicators, that follows the interrupted improvements achieved from year 2005 and then on, allowed containing the spread paid by the Co-operative on the two main lines allocated by the banking system, thanks to covenants provided by the contracts. The pool headed by “Unicredit Banca d’Impresa” of 4 Aug. 2005 and that headed by “Banco Popolare di Verona e Novara” of 21 March 2003. Also the loan of 4,0 million Euro granted in date 24 Dec. 2008 by “Banca Popolare di San Felice” provides a variable spread to be updated yearly in relation with the same covenants.During the financial year 2008 the Company raised four new medium long term credit accounts and saddled the payment of a fifth line granted in the course of year 2007 by “Banca Popolare di Verona – bsgsp” to the Subsidiary “Immobiliare della Concordia S.r.l.” (2,5 million Euro, expiry 31 Dec.2012).The aforementioned loans were granted by: “Cari-parma” (3,0 million Euro, duration 60 months), “In-terbanca” (10,0 million Euro , duration 36 months), “Coopfond” (3,0 million Euro , expiry 31 Dec. 2015), “Banca popolare di San Felice” (4,0 million Euro , du-ration 11years).The market value of the five operations was 22,5 million Euro. Three of the four new lines obtained by the Group Leader corresponding to 17,0 million Euro were agreed in the course of the last quarter of the year, therefore totally in the financial crisis and of the credit crunch, confirming that also in the most difficult moment of the market the Company was trusted by the credit system. These three new lines were raised for precaution reasons related to a credit contraction that seemed unrestrainable and not for real cash needs. This is demonstrated by the liquid assets at 31 Dec. 2008 of 23,8 million Euro, 14 million more than the previous financial year. The li-quidity that the Group Leader benefitted of during the whole year was used in short term bank de-posits or loaned to Subsidiaries is case of need (the infra-group loans balance increased of more than four million Euro during the financial year), in this way it avoided to run into debit with the credit sys-tem that had greater rates related to rates that Cpl would have received in case of use. In this way the Group financial management was optimised as also the financial management results and the consoli-dated balance statement. The bank deposits used for liquidity often referred to finance companies of the local cooperative system (Finpro and CCFS). In the first months of year 2009 the Group Leader con-tinued its strategy of procuring medium long term sources by raising other two credit accounts. the first (of 3,0 million Euro, duration 36 months) granted

by “Deutsche Bank”, the second (of 4,0 million Euro, duration 60 months) by “Cassa di Risparmio di Fer-rara”. In the same period the Group Leader exposure grew for the credit system of about eight million Euro, while for the Group it was of 9,5. The wors-ening of the net financial position was caused both by the worsening of the collection trend and by the turnover increase in course, that initially creates an increase of current assets. At the 20 April 2009 the amount of overdue receivables increased of about twelve million Euro related to the end of the year and only partially the Company was successful in moving the greater need of current assets to the suppliers. At the end of April the turnover increased of 3 million related to the same value of 2008. The worsening of the net financial position is absolutely in line with the cyclicity that the trend encounters, from year to year, during the first months of the year. Furthermore it is similar to what can occur to other competitors as a consequence of the very hard financial and economic crisis in course; in fact the financial supply that many companies are expe-riencing force them to postpone payments to their suppliers (contributing consequently to worsen the financial cycle of collections by companies that ben-efit of postponed payments).The reclassification made on economic accounts of the consolidated balance statement shows a slight increase of the net financial management incidence on the production value in year 2008 (1,84%), abso-lutely less that the increase that rates had during the last twelve months. From 2006, year in which the interest rates started increasing, the net financial management incidence of the Group increased from 1,70% to 1,8%. Therefore the increase was minimum related to what was occurring in the market. There-fore it is believed that the result of the consolidated account confirms the positive trend of the financial statement and is absolutely satisfying.Only one additional relationship was activated within the Group, related to those already mentioned and started by the Group Leader, it deals about a loan stipulated with Cassa di Risparmio of Trento 2 for an amount of 250 thousand Euro with 5 year duration and with Euribor at 3 months with a 1,25%Spread.At the moment the Group is searching for financial sources in order to support the investments plan provided by the three-year plan 2009-2011: about half of these must derive from the transfer of as-sets while the remaining part was appointed to an advisor in order to check the missing sources in the market.

_page 42 D.2] Balance Sheets and indicatorsHere following are supplied the balance sheets and indicators of the financial statements and Consoli-dated balance Statement compared with the four previous financial years.

D.2.1 ] Financial statement

CPL CONCORDIA Cooperative Company: Balance sheets reclassified with the entries liquidity method(expressed in Euro)

Balance Data

ASSETS at 31 Dec 2008 at 31 Dec 2007 at 31 Dec 2007 at 31 Dec 2005 at 31 Dec 2004

Short-term assets

Liquid assets 23,873,723 9,820,928 11,127,629 5,046,492 12,719,079

Trade investments other than fixed assets 0 115,797 0 0 0

Receivables from customers and others 124,864,129 113,401,341 114,793,337 109,284,631 100,511,093

Inventories 29,810,535 21,612,224 19,608,968 21,519,647 24,311,527

Due from shareholders for outstanding payments 1,244,475 1,258,137 1,210,554 1,246,406 1,265,512

Accrued income and prepaid expenses 6,059,085 4,951,759 4,968,267 4,909,661 4,930,132

Total short-term assets 185,851,947 151,160,185 151,708,755 142,006,836 143,737,343 Fixed assets

Intangible assets 13,493,300 13,498,336 11,408,796 12,243,148 11,929,375

Tangible assets 51,850,543 47,827,824 42,099,293 36,715,963 44,255,988

Financial assets 65,369,052 53,307,242 55,983,102 62,679,434 58,742,296

Total fixed assets 130,712,895 114,633,402 109,491,190 111,638,544 114,927,659 TOTAL ASSETS 316,564,842 265,793,587 261,199,946 253,645,380 258,665,001 MEMORANDUM ACCOUNTS 180,665,326 171,468,227 177,431,671 184,742,912 167,041,130

LIABILITIES at 31 Dec 2008 at 31 Dec 2007 at 31 Dec 2007 at 31 Dec 2005 at 31 Dec 2004

Short-term liabilities

Payables to banks 2,120,239 1,880,749 49,577 2,180,734 35,096,630

Current quota Passive loans 12,415,721 8,925,450 10,652,228 7,464,650 5,201,729

Payables to other lenders 4,258,627 3,224,800 2,545,157 2,331,665 2,427,745

Financial payables to subsidiaries and associated companies 0 246,000 10,914,000 10,650,000 1,700,000

Advances 10,232,521 14,177,189 12,389,313 12,218,806 9,540,411

Payables to suppliers 111,333,871 84,072,192 63,749,194 55,066,894 52,715,486

leverage

(Invested Capital/Equity Capital)

3.07

3.01

3.41

3.00

3.07

2004 2005 2006 2007 2008

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00

_page 43


Payables represented by securities 0 0 0 0 0

Payables to subsidiaries 2,501,232 2,568,636 4,306,318 4,927,300 5,784,269

Payables to associated companies 134,574 99,023 90,904 503,126 167,236

Tax payables 5,428,011 3,868,897 6,817,606 3,474,793 4,058,863

Payables to welfare and social security institutes 2,725,195 2,235,968 1,425,301 1,321,314 1,376,026

Other short-term payables 9,657,060 4,381,088 3,965,238 6,213,651 4,528,828

Accrued liabilities and deferred earnings 405,533 291,387 340,704 507,784 576,489

Total short-term liabilities 161,212,583 125,971,378 117,245,540 106,860,718 123,173,712 Medium-long term liabilities

Bonds 0 0 0 0 0

Payables to banks 46,168,351 36,348,586 45,273,309 50,097,220 39,361,654

Payables to other lenders 0 0 0 0 0



Employees’ severance indemnity fund 5,721,027 6,101,664 6,507,062 5,832,038 5,461,142

Fund for pensions and similar obligations 21,526 21,526 21,526 21,526 21,633

Other funds 1,617,395 1,335,537 1,839,090 2,836,404 4,494,620

Total medium-long term liabilities 55,575,072 45,608,627 55,342,121 61,042,784 52,223,982 Shareholders’ Equity

Share Capital 13,558,953 13,706,084 12,952,749 12,702,218 13,335,213

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

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

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

Exchange Rate Fluctuation Fund 0 0 0 0 0

Merger surplus 235,597 235,597 235,597 235,597 3,102,096

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 6,838,059 5,879,687 3,552,720 3,107,566 (2,866,499)

Total Shareholder’s Equity 99,777,187 94,213,582 88,612,285 85,741,878 83,267,307

Total LIABILITIES 316,564,842 265,793,587 261,199,946 253,645,380 258,665,001 MEMORANDUM ACCOUNTS 180,665,326 171,468,227 177,431,671 184,742,912 167,041,130

The main elements that result from the balance sheet reclassification with the method of liquidity entries con-cern the great increase both of the entries included in the current assets, and of the fixed assets. Concerning the increase of fixed assets + accruals and deferrals of 34,6 million Euro, this is due to the increase of liquid assets for 14 million Euro resulting from the allocation of two loans (Interbanca for 10 ml. Euro and Banca S. Felice for 4 ml Euro), from the increase of receivables from customers and inventories of works in progress for 19,6 million Euro due to the general increase of value of production and to the increase of other receivables for 1 million Euro.fixed assets register a total increase of 16,1 million Euro due in part for investments of the gas distribution networks entered among the tangible assets and in part due to the increase of equity interest and loans to-wards associated and subsidiary companies. About liabilities, shareholders equity reaches 99,8 million Euro, the allocations and long-term payables will increase of 10 million Euro due to the re-organization of payables, as well-explained in the financial management report, while the increase of short-term payables of 35,2 million Euro is particularly considerable. This increase is due almost completely (27, 2 million Euro) to the increase of

_page 44 payables to suppliers caused in part by the general increase of value of production and in part by the delayed billing of methane gas by suppliers at the take-over of new contracts.about the Balance sheet indicators, a general continuity of positive values in time and financial indicators are pointed out that, notwithstanding the continuous investments and the increase of current assets they remain constantly in balance.Under this profile it is pointed out that the liquidity ratio is always greater than 1 with a constant leverage effect with values always around 3. The interest-paying debt ratio is in constant improvement, it means that the ratio between the medium and long term financial payables, related to equity capital, that for effect of the constant capitalization of the Cooperative is constantly improving.

D.2.2 ] Consolidated balance Statements

(expressed in Euro)

Balance

ASSETS at 31 Dec 2008 at 31 Dec 2007 at 31 Dec 2007 at 31 Dec 2005 at 31 Dec 2004

Short-term assets

Liquid assets 25,450,671 11,766,914 13,617,415 7,534,571 14,670,321

Trade investments other than fixed assets 84 115,881 84 0 0

Receivables from customers and others 148,416,906 130,329,690 130,870,797 127,978,596 132,019,289

Inventories 32,925,820 28,788,701 26,140,017 36,745,161 38,367,698

Due from shareholders for outstanding payments 1,307,851 1,261,737 1,250,904 1,250,006 1,269,712

Accrued income and prepaid expenses 6,328,906 6,475,179 6,635,666 8,517,982 5,235,733

Total short-term assets 214,430,237 178,738,102 178,514,883 182,026,316 191,562,752 Fixed assets

Intangible assets 16,518,794 16,340,101 13,351,631 14,084,073 15,659,671

Tangible assets 110,904,449 93,061,164 80,844,348 62,550,349 117,368,410


Total fixed assets 146,228,266 127,283,008 111,370,210 94,973,703 147,078,119 TOTAL ASSETS 360,658,502 306,021,110 289,885,093 277,000,018 338,640,871


Short-term liabilities


Payables to shareholders and other lenders 8,626,554 6,154,891 4,950,419 4,264,103 8,516,870

Advances 10,542,116 14,881,644 12,878,459 15,426,293 11,742,131



Payables to subsidiaries 0 0 0 0 2,205

Payables to associated companies 134,574 332,760 303,761 885,376 167,236

Tax payables 7,273,227 4,579,699 7,935,892 4,244,144 5,622,354

Payables to welfare and social security institutes 4,166,163 3,653,343 3,033,287 1,707,985 1,801,444

_page 45

Balance


Other short-term payables 11,375,041 5,809,331 7,500,789 7,303,347 5,906,281

Accrued liabilities and Deferred earnings 477,122 479,934 942,023 1,286,141 3,591,600

Total short-term liabilities 187,836,383 146,278,891 126,762,884 125,974,310 178,813,309 Medium-long term liabilities

Bonds 0 0 0 0 0


Payables to shareholders and other lenders 0 0 0 0 0

Advances 0 0 0 0 0



Tax payables 0 0 0 0 0

Other payables beyond the fiscal year 208,297 516,139 270,843 278,499 263,307

Employees’ severance indemnity fund 6,132,307 6,450,792 6,955,065 7,431,485 7,115,472

Fund for pensions and similar obligations 21,526 21,526 21,526 21,526 36,426

Tax fund 233,177 180,518 150,012 70,873 97,876

Other funds 2,307,990 2,455,799 2,942,883 3,111,398 5,010,409

Total medium-long term liabilities 71,002,772 61,416,508 70,530,483 68,733,514 82,122,684 Shareholders’ Equity

Share Capital 13,558,953 13,706,084 12,952,749 12,702,218 13,335,213


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

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

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

Consolidation reserves 3,096,761 2,256,942 2,565,595 (7,874,424) (6,624,127)

Merger surplus 235,597 235,597 235,597 235,597 3,102,096

Exchange rate fluctuation fund (874,376) (79,039) 483,057 (79,316) (35,563)

Profit / loss carried forward 0 0 0 0 0

Profit /loss for year 5,463,119 6,802,374 3,238,135 5,643,749 (4,351,051)

Total Shareholders’ Equity of the Group 100,624,633 97,314,172 91,346,351 80,324,322 75,123,065 Minority Interests 1,194,714 1,011,540 1,245,375 1,967,873 2,581,813

Total LIABILITIES 360,658,502 306,021,110 289,885,093 277,000,018 338,640,871

_page 46 FINANCIAL AND NET WORTH ANALYSIS Balance


Liquidity ratio 1,14 1,22 1,41 1,44 1,07

leverage (leverage effect) 3,79 3,38 3,29 3,71 4,26

Interest-paying Debt Ratio 0,70 0,68 0,74 0,96 1,63

Elasticity ratio 1,47 1,40 1,60 1,92 1,30

EBITDA/DEBT 39,04 40,14 32,36 22,50 9,98

DEBTI/EBITDA 2,56 2,49 3,09 4,44 10,02

DEBT 66,334,059 61,870,736 64,914,861 72,002,220 129,601,267

EBITDA 25,897,143 24,831,857 21,006,507 16,204,064 12,938,903

The dynamics of the group follows slavishly the Group Leader dynamics. Assets increased in total of 54,6 million Euro. This increase is mainly due to current assets for 35,7 mil-lion Euro and to fixed assets for 18,9 million Euro, almost totally used for tangible assets, gas distribu-tion networks and buildings, through the purchase of the hotel building. The current assets increase are generated by liquid assets for 13,6 million Euro, re-ceivables and inventories for 22,2 million Euro. This latter increase is mainly attributed to the general in-crease of production, in addition to a slow down in payments, mainly from public institutions.In the Liabilities it is signalled that the Group reaches a consolidated Shareholders’ equity of more than 100 million Euro. Funds totalled 8,7 million Euro, short-term payables 187,8 million Euro with an in-crease related to the previous financial year of 41,5 million Euro. This increase is due for 29.2 million euro to suppliers, instead the remaining part to oth-er debits, therefore almost completely extinguished at the beginning of 2009. The increase of payables to banks in the short term equal to 5,6 million Euro is totally covered by liquid assets, Concerning the con-solidated balance statement indexes it is necessary to point out that they essentially reflects the Group Leader’s one. The liquidity index (1,14%) is substan-tially similar and in continuity with the previous year, as for the leverage effect that signals a slight worsening related to 2007. Among all the indexes of financial type, the index which is mainly checked by the outside world and by the Group is the DEBT and EBITDA ratio, which is between non-interest li-abilities and gross operating margin. This index rep-resents the capacity supplied by the characteristic

management to repay the debit. Conventionally and in covenants of the bank system, this index is con-sidered optimal when it is around a value of 3. The Group since 2006 up to today has constantly main-tained this value around the recommended ratio. This index measures the economical financial health status of the group and helps achieving very inter-esting conditions concerning the cost of money.Concerning the Financial Reporting of the financial year refer to the appropriate prospect included in the Accompanying notes of the Consolidated bal-ance statements and the financial statement of the Group Leader.

_page 47

E ] Report of the A.P. C. Common Representative

Audit of the new long-term investment program results 01/01/2004 - 31/12/2008Staring from financial year 2004 the analysis of the investments program implementation is carried out basing on the data of the new long-term plan approved by the Shareholders’ Meeting of 04/12/2004. The five-yearly plan of Cpl’s investment plan is included in a proper attachment, in the version approved by the Meeting of 04!12/2004 and the analysis of the deviations between the budgetary data and the final results with reference to the financial years 2004-2008.

Financial Year 2008The expenditures for investments of the Coopera-tive company during financial year 2008 is about 22,7 million Euro (net of alienations). This data is different than the forecast expressed for the net investment of the financial year for an amount of about 11,9 million Euro. Below are the details of these movements:

1. Intangible AssetsThe net investments of intangible assets in financial year 2008 amount to 4,2 million Euro, therefore infe-rior to the expectations of the investment plan, that forecasted expenditures for 5,8 million Euro. The most consistent movement was registered for what concerns:

the item “Fixed assets under construction”, that signalled investments for almost 1,6 million Euro for extraordinary maintenance costs related to the renewal of two buildings (not proprietary) that are the two branch offices of Bologna and Con-cordia;

the item “Other fixed assets” which signalled net investments for about 2,4 million Euro related to: investments in software, maintenance of social buildings rented out, costs held for the acquisi-tion of a multi-technological contract work for Lazio Region, investments in heat management systems and public lighting that at the end of the contract will remain be the purchaser’s proper-ty.

2.Tangible assetsThe net investments of tangible assets in financial year 2008 totals 6,4 million Euro, where the invest-ment plan forecasted expenditures for 4,5 million Euro. the variation is mainly due to the greater in-vestments in Equipment and Machinery, in particu-lar for the realization of gas networks in the basins in which the company operates in concession (Cam-pania basins 25 and 30, Calabria 20, Sicily 12 and 17 and those related to the municipalities of Cittanova in Calabria, Palma di Montechiaro and Camastra in Sicily

and San Giuseppe Vesuviano in Campania).

3. Financial Assetsthis items increases of about 12,1 million Euro against a 500.000 Euro forecasted increase. The con-siderable difference is due to a greater commitment of the Cooperative in the financial support activity of the companies of the Group, and in particular:

the increase net of reclassifications, alienations and depreciations, participations to companies for 8,5 million Euro (the most important 3,8 mil-lion Euro of Immobiliare della Concordia S.r.l. for buyout of the building in leasing, 1 million Euro of Erregas S.r.l. for transformation of the interest-bearing loan, 2,5 million Euro of Cpl Romania for transformation of the interest-bearing loan.

The net increase of financial receivables of 3,6 mil-lion Euro (in particular the most considerable were realized for the companies Coop Gas, Cpl Romania, Energia della Concordia, Erregas, Si.Gas, Ischia Gas, Immobiliare della Concordia and Marigliano Gas). The greatest difference is registered among the financial assets, where the investments realized exceed the amount forecasted in the 2004-08 plan of 34,5 million Euro.

2004 2005 2006 2007 2008

12,974 13,615

9,395

10,891

cash flow

(shown in thousands of Euro)

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

17,106

_page 48 This was counterbalanced by minor investments carried out among the tangible and intangible as-sets; the explanation can be identified in the choice of the Cooperative to entrust the greater part of the operating investment to the subsidiary companies, which in any case are constantly financed by the Group Leader.

Amounts in thousands of euros

Plan total 2004/2008

Final total 2004/2008 Difference

Intangible Assets 28,429 23,740 (4,689)

Tangible Assets 27,021 14,046 (12,975)

Financial Assets (27,500) 7,010 34,510

Total 27,950 44,796 16,846

Financial coverage for investmentsIn consequence of what exposed above, during the year just ended the Cooperative expenditures for in-vestments, net of incomes deriving from disinvest-ments, totalled about 22,7 million Euro. The financial coverage of these investments was fully ensured by the resources (cash flow) produced by the charac-teristic company management. The net variation of the share capital represented by A.p.C and resulted being negative for about 1,531 thousand Euro due to the reimbursement of subscribed shares. With reference to the final balance of 2008, the net investments held by the Cooperative were self-fi-nanced without applying to third parties; in fact the net financial position at 31 Dec. 2008 was equal to 41 million Euro, with a slight increase of 200.000 Euro re-lated to the previous financial year. In detail, it is point-ed out how Cpl, also from a prudential point of view, wanted to safeguard itself by signing medium term financial contracts in order to have a company’s li-quidity that turns to be an insufficient resource in consideration of the particular market situation (this without having impact on the net financial position).

F ] Research & developmentIn the year 2008 CPL CONCORDIA has continued its Research and Development activities, with the ob-jective to:a) improve the automatic remote data recording

and management systems;b) increase the Software and computer services at

disposal of Cpl group and own customers.In total the 9 projects indicate below were brought forward:a) for the operating range concerning the data

survey and management systems with remote-control equipment of the production processes the main projects were:

Project n. 01 STUDY AND DESIGN FOR THE OPTIMISA-TION AND EXTENSION OF THE ELECTRONIC REMOTE-READING SYSTEMS APPLICATION FIELD: EDOR, EMET, EFOR Implementing activities were carried out in order to improve the existing functionalities of Cpl equipment and in some cases by implementing new functionalities.

Project n. 02 STUDY AND EXPERIMENTATION OF AC-CURATE ENERGY SAVING SYSTEMS TO BE APPLIED IN PUBLIC LIGHTING SYSTEMSthe necessity to reduce energy consumption, in or-der to reduce public lighting systems management costs, lead CPL CONCORDIA coop. company to search new and innovative energy saving systems in the market, identifying the product with the best quality/price ratio to be used in the experimentation activity related to project 6.

Project n. 03 STUDY, DESIGN AND EXPERIMENTATION FOR THE DEVELOPMENT OF A NEW SOFTWARE SYS-TEM TO EXCHANGE DATA BETWEEN THE DISTRIBUTION COMPANY AND SALE COMPANY OF METHANE GAS.CPL CONCORDIA coop. company adopted the Mi-crosoft Dynamics NAV platform to realize two differ-ent vertical Softwares called “Energy & Environment Distribution” to manage the distribution activities “Energy & Environment Sales” to manage the activi-ties of methane gas sale. The necessity to optimise the management activities for the two applications lead to realize an automatic software system for data

_page 49

exchange (new pDR, users handling, technical data, etc..) between the sales application and the distribution ap-plication and vice versa.

Project n. 04 STUDY, DESIGN AND EXPERIMENTATION FOR THE DEVELOPMENT OF A NEW SOFTWARE SYSTEM FOR ELECTRICAL ENERGY BILLING.Considering that many gas selling companies have also acquired customers supplying them with Electrical Power, a specific vertical Billing and Metering application was implemented for Electrical Power users manage-ment by using the Microsoft Dynamics NAV platform, in order to make other functionalities available, reducing the modifications related to the softwares already used. The vertical application that was realized allows managing Electric Power sale billing keeping in consideration new needs and trade offers required by the free market.

Project n. 05 STUDY, DESIGN AND EXPERIMENTATION FOR THE DEVELOPMENT OF A PROTOCOL AND A SYSTEM FOR THE NORMALIZATION OF DATA ACQUISITION OF ELECTRONIC VOLUME CONVERTERS. the national and European law evolution in the field of data transmission protocols for natural gas electronic volume converters required the necessity to start a study and renovation project for communication protocols. The choice initially for technical and trade reasons, to continue in this direction was additionally confirmed after the publication of the resolu-tion 155/08 dated 22 Oct. 2008 “Instructions for the obligatory commissioning of gas metering units meeting minimum functional requirements and having remote reading and remote management functions, for all rede-livery points on natural gas distribution networks”.

Project n. 06 STUDY AND EXPERIMENTATION OF ENERGY SAVING SYSTEMS TO BE APPLIED IN PUBLIC LIGHT-ING SYSTEMSThis project completes the project of item 2 and concerns the experimentation in field of technologies aimed to energy saving for public lighting systems.

Project n. 07 ANALYSIS, DESIGN AND REALIZATION OF A NEW WEB-BASED GIS SOFTWARE FOR THE PUBLICATION OF GRAPHICAL ELEMENTS AND CONSTANT ALIGNING WITH THE MANAGING SYSTEMAt the end of 2008 CPL CONCORDIA Coop. Company purchased the development and realization of the Infor-mation System for management of real property and equipment management of ASI Liguria. Starting from the implementation of programming parts directly on Autocad 2009, and aiming to arrive to the complete publica-tion on web of the graphical printouts properly checked and validated by the system up to the complete and constant alignment between graphical and alphanumerical data. Engineering offices will have the possibility to download the drawing of a hospital, to carry out architectural and systems modifications and reload the file in the system that after the appropriate checks will align all the alphanumerical data keeping the Information System always updated.

Project n. 08 STUDY, DESIGN AND DEVELOPMENT OF A MONITORING SYSTEM FOR THE FUEL TANKS LEVEL MONITORING WITH POSSIBILITY TO BE USED IN SERVICE MODE THROUGH CPL CONCORDIA’S WEB PORTALexperience gained by CPL CONCORDIA Coop. Company in monitoring systems distributed in geographical areas and the will to approach markets that are not part of the company’s historical “core business” lead to the realization of a feasibility study for a monitoring system of tank levels installed at fuel distribution service stations. Technical economic offers resulting from this study generated the interest of potential customers.

Project n. 09 STUDY, DESIGN AND DEVELOPMENT OF A WEB SUPERVISION SYSTEM FOR ACQUISITION ANA MANAGEMENT OF PROCESS SYSTEMS, WITH POSSIBILITY TO BE USED IN SERVICE MODE THROUGH CPL CON-CORDIA’S WEB PORTALfor the ODOGAS service of CPL CONCORDIA Coop. Company (complete management of the odorisation of meth-ane gas distribution networks) was developed the ODOWEB service, by means of which it is possible to acquire the necessary data for the correct management of the systems and publish them on the WEB portal of CPL CON-CORDIA coop. comp. This system allows improving the quality and management costs minimizing the visits of technicians on the field, and to offer a tool to customers in order to check daily the correct odorisation man-agement of their own Gas Distribution networks.

_page 50 G ] Own actionsThe Parent, on 31.st of December 2008, does notown any own actions.

H ] Information according to the Article 2428 paragraph 2, point 6 bisThe Group Cpl Concord has an organizational struc-ture, business processes, human resources and skills are required to ensure identification, monitoring, control and management of various risks that char-acterizethe business. Theprocess of management, control and covering any risks is being developped across ddifferent levels ofinternal organisation.The following are the types of risk, which the Group is ubmitted in the normal course ofbusiness.Interest rate risk: it consists in the possibility that the cooperative and the group suffer highercosts due to changes in interest rates charged by the market. All lines of credit, with very few unimportant ex-ceptions, are, in fact, providing the recognition for financiers on variable tax. On 31.12.2008, the Group had outstanding contracts to cover this risk (actually on the date: 31.10.2008 was terminated the con-tract for coverageof known taxation of 20,0 millions that has begun on 29.10.2003 with “Unicredit Banca d’Impresa”). Risk management is done through the constant monitoring of the market developments and with the constant comparison with average rates estimated by the budget financiers: Thepoten-tialactivation of new coveragewould be executable only if the registered increases and expectations on the movements will encounter rate higher than the ones used in a drawing of three-year plan, causing signifi-cant risk of drawbakc to the achievementof objec-tives. For this taksto monitorthe movements of taxa-tion, the Group also uses the expertise of qualified professionals from the outside.

Currency exchange risk: are very limited import-sof raw materials and sales in currencies other than Euro and, given their low value, no coverage of cur-rency risks is active. Only at some supplies com-ingfrom abroad, the Company has purchasedforeign exchange under circumstances, which coincide

with moments when they had to make payments. In the future, it is deemed to continue to operate in this way, considering onlyif necessary, the coverage, un-less the imports of raw materials will achieve a sig-nificant importance in their acquisition, compared to total purchases. a subsidiary in Rome “CPL CONCORDIA Filiala Cluj S.r.l.” has two financing contracts in euro, and should it come to the devaluation of the RON againsteuro, it would immediately result in the losses on foreign ex-change. Theamount of the two lines of debt to total liabilities is in absolute possesion and the company is abudantly capitalized. However, you are analyzing-some solutions to try to limit the risk or transfer it to third parties.

Credit risk: is the risk arising from any defaults or delays by customers of the Group infulfilling their ob-ligations. Management of creditsis done directly by the Group’s companies, with athe help of internal resources and expertise and with limited use of ex-ternal professionals. Such managementis leading to a precise choice: since most of the clientelle is is be-tween a public or publicly owned companies(both directly and through contracts acquired through consortia),the acceptance of claims requires, in addition to constant monitoringby financing struc-ture authorities, the collaboration of all stakehold-ers inside and have relationships with customers: commercial structure that captures the order to the technique which runs it, and, in some cases,the le-gal office that evaluates possible recovery actions. It considers outsourcing not suited to handle these types of receivables owed by customers. The Company carrying out the evaluations of the monthly credit, divided by areas ofbusiness attribut-able to business executives who have, among oth-ers, the task of containing the impact of the decline within predetermined limits. The measurements are then made for covering the aging. The internal pro-cedure provides some steps for the management of the end, going in thenotice / written warning untilany legal action against the debtor (sinceformal notice).At year end of 2008, the Parent Company’sbalance sheet showed, the current assets against the cus-tomers for a total of 118 million euros compared to 105.2 millionsofthe previous year, although in-creased in absolute terms, their impact in relation to

_page 51

totalassets declined from 39.57% to 37.27%. On the same datethe total amount of past due loans was 26.1 million euros, up better than the last eight years. Among these, 21.9% had delays of less than 30 days,11, 01% delays of between 30 and 60 days, 9.53% delays between 60 and 90 days, 57.56% de-lay than 90 days. In general, the credits, admitted in principle for public entities,are not guaranteed. These however, are required by the Company in the drafting of major supply contracts with private cus-tomers, or whenever the deemappropriate. These totals amounted at year-end 2008, to 1.7 million. Al-soconfirms the consolidate data on the data of the Company: on 31/12/2008 customer receivables as current assetswere increased in absoluteterms (as a consequence ofincrease of the production value), but declined in relativevalue (from 39.13% in 2007 fell to 38.06 % in 2008).The strong garrison on the loans made, the perfect knowledge of individual situations and DSO allow the Group to carry out accurately, when needed, the provi-sioning for future loan losses.

Liquidity risk: is a possible condition of instabili-tyarising from any thing of negative imbalancebe-tween incoming and outgoing cash, if not adequately covered by cash reserves. This risk is managed throughthe planning of cash advances, despite the-significant presence of public customers hinders-significant presence of public customers hinders To all customers of teh Parent company has been as-signed a rating, based onD.S.O. internal, indicanting thepunctuality of the repayment of their debts. Much easier are instead the estimates of expenditure. Ac-cordingly planning the cash advance canbe made for increasing levels of customer ratings and various steps of sensitivity. In this way, it is always possible to cross-check the availabilityof FDI to address any cash imbalance.

Market risk: is the possibility that that the Group is affected by lower revenues than expected according to the planning, impairment ofbalance sheet items or economic losses for work performed but not yet in-voicedat the end ofyear. This risk is regularly monitored through a precise system of Control Management.

Operational risk: is the possibility that acompany has to suffer losses resulting frominadequate or in-correct operation of company procedures, mistakes or failures of human resources and internal systems or from external events. Among the main sources of operational riskthere can be: linstability od opera-tional processes, the lack of IT security, the increased

use ofautomation, the’“outsourcing” of corporate functions , theuse of a limited number of suppliers, a change ofstrategy, fraud, errors, recruitment, training and retention of staff and finally, the social and en-vironmental impacts. Itsis not possible to identify a stable source of risk prevalent, which are inevitably inherent in all businessprocess activities. This feature causes the Group to implement actions to mitigate the risk, either through the government’s close cor-porate functions (during the current financial year 2009 was carried out a complete remapping of the-risks imposed onproduction)and the continuous im-provement of processes through the transfer tothird parties by means of insurance.

Commercial risk: isthe risk of lower revenues and/or lower margins following the renewal of the opera-tional portfolio. Through constant monitoringof the acquired portfolio and business processes that deter-mine the method of number of bid submissions to pre-determine the economic andfinancial reference, the Group seeks to limit that risk.

Strategic risk: is defined as the likelihood ofcon-fession of profits or capital arising from changesin the competitive environment or based on the wrong strategic business decisions, from inadequate im-plementation of strategic decisions, with low or no responsivenessto changes in the competitive environment. Theconstant monitoringofthe move-ments of managementof the companies with high-est importance and and all other relevant variables, be they internal orexternal to the Group, equips en-terprise organizationswith strategic responsibility to minimize that risk, allowing timely adjustment and / or correction also to amend competitive elements of the market.

Reputational risk: is the risk of fession of earnings or capital arising from negative perceptionofthe im-age of the Companyby customers, counterparties,-investors and, more generally, stakeholders, dueto the expression of critical events related,for example, to the certain areas of operations, products or proc-esses.The Group, always particularly sensitive to their image and to the consolidation of its reputation, implements a policy of one-time prevention: 1) the protection of stakeholders, providingthem with adequate informa-tion onbusiness ; 2) a careful and effective monitorin-gactivities, not only formal consistency of operating-procedures and conduct business withexternal rules, regulations and principles adoptedinternally.

_page 52 Environmental risk: fromtheOffice for Safety and Environmenthave been issued in the year 2008 some 150documents for risk assessment (POS and art. 26 ofLegislative Decree no. 81/08). This number includes only thosedocuments prepared for the work awarded and executed,but should be added to all documents prepared for thecompetitions, in which the Office is participating. So the total number of documents comes to 250. The documents prepared for the won tenders that should be thereforesent on site are al-ways edited in 4 copies in order to enable the Office to receiveacopy back signed by the CSE or by the de-veloper and to be able to verifythe successful trans-mission of the documents themselves. Theoffice is responsible, therefore, to constantly monitorthe situ-ation by acting as a liaison between thecompany and the customer.

* Members of the Steering Committee

Analyses and Calibrations Lab

Quality

Environment Service

Area Managers

Department Managers

Specialisation Managers

Production Department

Technical Department

IT Systems

Administration

Management Control

Finance

General Secretariat

Tenders

Sales Area Manager

Domestic Sales

Selection and Training

Payroll

Board of Directors

Security Service Communication

Legal Staff Chairmanship

Shareholds and CSR

Vice-President President*

Financial Admin Accounts and SI Management*

Sales Management*

General Operations Manager*

Human Resourcs Management*

I ] Organization Model legislative number 231/01 Code of EthicsOn 17 December 2007 the Parent Company ap-provedthe organizational model which is equipped to meet the principles set forth by Legislative De-cree 231 of 2001.

I.1 ] OrganizationThe choice of the Board of Directors of Cpl to have a model of organization and management fitting into the widergroup’s political awareness to the transpar-ent and fair disclosureof the Company,, in accordance with local regulationsand the fundamental principles of business ethics inpursuit object.

_page 53

I.2 ] Principles of organizational models andsupervisory body (ODV)Through theadoption of the Model, the Board ofDirec-tors of Parent intends to pursuethe followingaims:

give the means of exercising the powers anar-rangement formalized by expressing clearlythat the subjects have decision making powers as well as management powers,a right to authorize the expenditure, for such types ofactivities, with such limits;

avoid excessive concentrations of power, particu-larly operations at risk of crime or tort, in the head offices of theindividual or individuals,implementing in practice the principle of segregation functional / conflict ofinterests;

avoid the convergence of spending powers and the powers to monitor and distinguish between the same powers of authorization and powers of organization and management;

provide for the formalizationalsooutside the powers of representation;

guarantee that the allocation of duties are of-ficial, clear and organic, using them for formal procedures, avoiding both the powervacuums as the duplication of responsibilities;

ensure the verifiability,, documentability, coherence and consistency of all business opera-tions;

guarantee the effective match between the models of representation of the organizational structure and practices implemented;

give priority to, theimplementation of decisions which may exposetheinstitution to liability fo radministrative offenses by crime, transparen-cyin the creating the subsequent decisions and during the subsequent activities , with constant optionsfor checks .

Withtheapproval and introduction into the parent company of the founding principles of the Legisla-tive Decree 231/2001took officeì, andcalls the su-pervisory body (ODV), whichhas played steadily ex-panded its control activities and check the status of implementation of the model and its principles, Thesupervisory body has since last 5th ofMay 2008, continued in carrying out the functions assigned, ac-cording to mandate, in particular,it has gathered in collegial meetings, duly convened and minuted the following dates:

20th of May 2008; 24th of June 2008; 10th of November 2008; 28th of November 2008; 26th of January 2009;

2nd of March 2009; 4th of May 2009;

Theactivities of theOrganisationhave been principal-ly carried out on one hand to find theeffective applica-tionof procedures of organization and management in place and,secondly, to identify areasof improve-ment of the model. Here we mention the checks:1] were carried out checks on the procedure COM-

PLIANCE with“IST 0000.02” concerningtheissu-ance of invitations to tender forcontract. TheOr-ganisation has found application’s defficiencies-and considers the appropriate procedure in place;

2] investigations were carried out on the imple-mentation of the communication plan, address-ing both inside and ’outside thecompany, on the applicationof themanagerial model. In this sense therehas been an effectivedissemination of in-formationto recipients;

3] COMPLIANCE checks were made concerningth-eexistence of an investment program fnalizzato to ensure the proper enforcement of health and safety at work. In this sense,theOrganisation foundthethe existence of a specifc cost center, in order coded by “WBS 06600015”, likely to plan for investments in individual protective devices in health surveillance activities andformation . The planned purchases were implemented and the allocation of assets and activities verifiedfor stakeholders;

4] training courses, relatingtoto Legislative Decree 231/2001, were carried out, aimed at contract-managers and engineers; it is proposed to cover this at certain times of the recipients of these courses: Administrators, managers,Leaders Area / Field Service;

5] more recently, theSupervising organisation sug-gestedimplementing the following protocols corporate decision-making: Managing open / close order, subscription of stocks andvariations; contract management expenses; data processing system; Management intercompany contracts; Office Cash – reimbursement of costs; Sponsor-shipand free gifts; Transport of toxic substances management practices required for preparing and pos art.26 d.lgs.81 Office; human resources – recruiting new staff; Office Human Resources – training, acknowledging that theimplementa-tion has been properly prepared by the Board ofDirectors in the session of 9/4/2009;

6] following theentry into forceof Article. 7 of theLaw of 18 March 2008 No 48 “Ratification and implementationof the Council of Europe Conven-

_page 54 tionon Cybercrime, signed in Budapest on 23 November2001, and rules for the adaptation of theinternal order”, published in the Official Jour-nal Officers 80, April 4, 2008 - supplementNo 79, theOdV, while considering the relativelybasso il rischio di commissione dei reati ivi pre visti, te-nuto conto della struttura e delle attività della Cooperativa, sta eseguendo un’analisi dei ow risk of committing the crimetherein, taking into account the structure and activities of the coop-erative is performing a risk analysis aims at iden-tifying potential weaknesses in the procedures and controls Cpl, reserving the right to propose as soon as possible Board à approved additions to the MOG.

Up to date, theODV ndid not find reprehensible acts or breachesof the requirements of MOG and has not received reportsof a breach of the organizational model.

I.3 ] Code of EthicsAspartof theintroduction of the organizational mod-el was likewise approvedthe code of ethics. Starting from the basic principlesofInternational Cooperative Alliance (ICA) and the Charter of values legacoop, the Parent Company has developed its ethical principle-sof interest: mutuality, relationship betweengenera-tions, democratic participation, open door, impartial-ity, , independence, honesty, simplicity, trasparency, confidentiality, prevention of corruption.

I.3.1 ] MutualityCpl Concordia search its own development in the market and considers its fne to improve, through work at, the material conditions, moral and civil rights. Cpl Concordia is basing the relationship with its members on the principle of reciprocityand eq-uity, in the exchange of social and economic value product.The wealth created by the cooperative enablestheof benefits for members and contributes tothe growth of wealth between generations of the cooperative.

I.3.2 ] Relations between the generationsThe main asset of the cooperativeis rappresen-

represented by individuals who are part of and which passes through its history.On the basis of a principle intergenerational Cpl Concordia implement its mission on behalf of the members present, having constantly in mind all members of future generations and in continuity with its partners in the past. It happens so that coop-eration is consideredby the members of this heritage entrepreneurial legacy receivedby members of the past, theseassets should be consolidated and made fruitful,and then be handed in turn to new legacyfu-ture generations of members, thus ensuringthecon-tinuity oftheenterprise through the generations. It is a heritage material (contained in Principle of theind-visibilityof assets) and intangible (determined by the cooperative culture, education, thetransmissionca-pacity of the business).

I.3.3 ] Democratic participationCpl CONCORDIA promotes democratic participation of members onexercise of social àownership and control over social and economic activitiesofthe-company. The power of decisionis given free and equal vote (one person, one vote) to shareholders, either directly or by proxy, at meetings and in elected bodies, on the basis set out in the Statute.

I.3.4 ] Open doorCpl CONCORDIA poses no barriersto entryaccept-ing every applicant for ’ammission to to membership, while respecting the Constitution and without making any discrimination as to race, religion, nationality,, gen-der, sexual orientation, philosophical, political.

I.3.5 ] ImpartialityIn carrying out its activities Cpl Concor dia refrain from creating arbitrary advantages or disadvantages with respect to shareholders, employees, partners, suppliers, institutions, customers. A parity of condi-tions Cpl Concordia favors cooperative relations withworld.

I.3.6 ] AutonomyCpl Concordia protect its independence by taking decisions based on the overall interest of sharehold-

_page 55

ers and collectivity and expressing ideas and proposals for an independent and consistent with its values and itsmission.In relationships it has with other forces eco nomic, political and social, Cooperative rispects their nature, opin-ion, culture and acts according to own originality, autonomy, capacity of proposal. Cooperative , given the right and the risk of doing business as manifestations of freedom.

I.3.7 ] HonestyThe shareholders, employees, employees of Cpl Concordia, whatever the role or position, operating on the basis ofthe sense of responsibility, honesty, fairness. Refrain from pursuingpersonal profit or corporate profit at the expense of compliance with applicable laws and as required by applicable statutes and this Code of Ethics.

I.3.8 ] SobrietyCpl Concordia siscommitted to a sober use of all natural resources, tangible and intangible. resource use choicesaremade based on the principles of sustainability,, to avoid waste and inefficiencies. In theinterest of theentire community, of members present and future and those moregenerally cooperate in achieving the mis-sion.

I.3.9 ] TrasparencyIn connection with the various stakeholders (stakeholders)and the reporting ofeconomicand social development of its business, Cpl Con cordia provides information as transparent as possible, complete and understandable, and this also toallow everyone to take autonomous and aware, and to enable to check the consistency between the stated objectives and achievements.The Parent Cpl therefore agrees:

to recognize the fundamental value of correct information to the members, organs and functions relevantwith regard to significant facts concerning the corporate governance

ensures compliance with the principles of truthfulness and fairness in the drafting of any legal document, which are highlighted in relevant economic, capital and financial markets.

I.3.10 ] PrivacyCpl Concordia ensures the confidentiality of the information in its possession regarding partners, employees, partners, suppliers and customers. Any information could be provided solely and strictly observe the law and / or basedon specifc agreements between the parties. At same way the members / employees / staff shall respect the confidentiality of information that is part of the assets of the Cooperative.

I.3.11 ] Prevention of CorruptionCpl Concordia iscommitted to implementing the necessary measures to prevent and avoid corruption and other conduct likely to incorporate the risk of commission of the crimes referred to in legislative decree no. 231/2001. In that regard Cpl Concordia does not allow to pay or accept money or gifts for and / or third party in order to provide direct or indirect benefit to the Company. Instead may accept or offer gifts that are within the usual use of hospitality and courtesy.

_page 56 L ] Administrative bodies of the parentThesovereign body of the Cooperative Assembly of members. TheAssembly

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

BENETTI ENRICO Working member Director

BONETTINI CLAUDIO Working member Director

CAPELLI PIERLUIGI Working member Director

GALEOTTI ELENA Working member Director

LOSCHI ROBERTO Working member Director

MALAVASI EMANUELE Working member Director

MARCHINI EMANUELLA Working member Director

PORTA CARLO Working member Director

CDA members are not present in external cooperation.The audit pursuant toArticle 2409 tere entrusted to the auditing firm PricewaterhouseCoopers S.p.A.. The checks made for the proper administration underArticle 2403 shall be made bythe Board of Auditors.Thecurrent composition of the Board of Auditors of the Parentis the following:

COMPONENTS OF THE BOARD OF AUDITORS

Components Qualification

PELLICIARDI CARLO ALBERTO Auditor President

ASCARI FAUSTO Auditor

CASARI MAURO Auditor

CLÒ CRISTINA Additional auditor

PELLICIARI GIOSUE’ Additional auditor

M ] Evolution outlook base on the management

M.1 ] StrategiesIn determining the 2009 Budget estimate, which analyzed here, and three-year plan, the cooperative and the group took account of themedium-term strategies, established for some time. The key elements can be sum-marized inthe following paragraphs:

Core Business Focus in a

Methanisation of the Alternative

Energies in Sardinia and

Glovbalization of the Group

_page 57

1) Focus on our core businessFrom 2005 to date, the Group has progressively abandoned those activities on which they had in-vested at the beginning of this decade but whichled to significant losses. When closing theexperience in Greece, and when closing the business with New Services, today the groupis well focusedon its char-acteristic activities. To better addressthecurrent cri-sis in the international economy and thus national level,the parent company andthe entire groupwas firstly organized territorially, by area, then has cre-ated new business organization. Despitethe com-mercial risk and market risk are well monitored, there isno doubt that this crisis hasreduced investment by public authorities and Municipal causing a slow-downin acquisitions. Despite this,the backlogof the Group for 2009is is to ensure good expectations of profitability.

2) Methane on SardiniaAmong the most significant acquisitions, reported over teh past year noteworthy are won bids for the gasification often basins of the Sardinia region. Apart-from some in the award stage to the parent company, inlate 2008 and early 2009 have actually made some final assignmentsthat have already à led to the estab-lishment of 6 special purpose vehicles designed to monitor the management of many basins . These are the basins 11, 15, 19, 26, 28 and 37. The construction of distribution networks will be entrustedto the Parent.Work will begin towards theautumn of 2009 and will have the contract term of 24 months, but that presumably will be realized in 3 - 4 years. In-vestments, important for gasification of Sardinia amounted to approximately 140 million euros, 50% of which are capital grants, pledging the Cooperative under the Financial Profile, in an important way.

3) Alternative energiesII Group began to approach the co-generation systems,biogas and so long beforeone startedtalk-ing about alternative energy sources soassiduous ly heard of. Today the Group, thanks to some major con-tracts, such as the construction of a photovoltaic field in Carano inTrentino isamong the leaders nationally.In the field the Group is continuing to invest in an im-portant way by acquiring significant works. Andthe case ofthephotovoltaic system of the municipality ofTorano (TE) and photovoltaic fields of three sites in the towns ofTuri and Putigliano in province of Bari. Acti-Acti-ve for overa decadeof Cogeneration assets.

4) Globalisation As mentioned in a previous chapter one of the objec-tives of the Group in the near futureis to perform a production of at least 30% of total productionabroad. In 2008, the Groupgrew mainly in Algeria, while in Ro-mania has beenactive since 2002. The marketarea north of Africa, especially in Algeria, is an outlet for our industry considering the massive presence of natural gas. The year 2008is considered a year of start-up but we think there is every chanceto de-velop our services and our know-how.For years, the group is following with interest the developments of the South American market. The events that we have witnessedplayers in particular in Argentina that have helped to create a good work-ing knowledge of a market that could soon open new horizons of development in a very needy area of technology andmanagerial skills.

M.2 ] ResourcesConsidering the commitmentsalready made in terms of resources for investment in Sardinia and photo-voltaic fields already purchased, the Group has de-signed a series of operations to the collection of fund-ing sources, important for carrying out the works mentioned. In addition to traditional operations of credit,isbeing developed, extraordinary transactionsthat will seethe-sale of natural gas distribution networks owned by the Group to thirdfinancing parties, asis envisaged in Article160 bis of Legislative Decree 163/2006. The third party lenders give profit to the Group in these networks up to the period preceding the natural ex-piration of the concession period. Thistransaction should close by the fne of 2009.

M.3 ] Consolidated Budget EstimateBased on the considerations made in the previous chapters, we have developed the budget estimates 2009. The followingchart shows the Consolidated Fi-nancial Forecasts 2009, compared with the previous fouryears.

_page 58 Balance Sheet Forecast(expressed in Euro)

Quotes Sheet

HERITAGE ASSETS 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006 31 Dec 2005

Mid- term activities

Available cash 3,735,779 25,450,671 11,766,914 13,617,415 7,534,571

Financial assets that are not immune 0 84 115,881 84 0

Claims vs / clients and other 162,265,005 148,416,906 130,329,690 130,870,797 127,978,596

Inventories 34,507,722 32,925,820 28,788,701 26,140,017 36,745,161

Receivables from shareholders for capital contributions 153,600 1,307,851 1,261,737 1,250,904 1,250,006

Prepaid expenses 9,674,885 6,328,906 6,475,179 6,635,666 8,517,982

All short- term activities 210,336,991 214,430,237 178,738,102 178,514,883 182,026,316 Fixed assets

Intangibles 26,124,759 16,518,794 16,340,101 13,351,631 14,084,073

Assets (tangible assets) 64,680,502 110,904,449 93,061,164 80,844,348 62,550,349


Overall fixed assets 119,145,967 146,228,266 127,283,008 111,370,210 94,973,703 Total ASSETS 329,482,958 360,658,502 306,021,110 289,885,093 277,000,018

LIABLE ASSETS 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006 31 Dec 2005

Short- term liabilities

Deposits from banks 13,317,949 23,111,934 17,492,340 15,092,838 19,708,552

Debts from shareholders and other lenders 5,468,246 8,626,554 6,154,891 4,950,419 4,264,103

Advances 10,295,309 10,542,116 14,881,644 12,878,459 15,426,293

Trade payables 103,747,030 122,129,652 92,894,949 74,125,417 71,148,370

Debts evidenced by certificates of credit 0 0 0 0 0

Due to subsidiary companies 0 0 0 0 0

Due to associated companies 8,483,956 134,574 332,760 303,761 885,376

Taxes payable 5,095,742 7,273,227 4,579,699 7,935,892 4,244,144

Other short-term debts 2,548,694 4,166,163 3,653,343 3,033,287 1,707,985

Prepaid expenses 4,074,810 11,375,041 5,809,331 7,500,789 7,303,347

Deposits from outlook institutes and social security 407,612 477,122 479,934 942,023 1,286,141

All short- term liabilities 153,439,347 187,836,383 146,278,891 126,762,884 125,974,310 Mid- or long- term liabilities

Bonds 0 0 0 0 0

Deposits from banks 53,665,351 60,046,242 49,990,419 58,489,020 55,564,136

Debts from shareholders and other lenders 0 0 0 0 0

Advances 0 0 0 0 0

Trade payables 1,501,337 2,053,233 1,801,315 1,701,134 2,255,596

Debts evidenced by certificates of credit 0 0 0 0 0

_page 59

Quotes Sheet

LIABLE ASSETS 31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006 31 Dec 2005

Taxes payable 0 0 0 0 0

Other debts after oneyear 538,064 208,297 516,139 270,843 278,499

T.F.R. Fund 6,547,335 6,132,307 6,450,792 6,955,065 7,431,485

Fund for treatment of quiesce and similar 21,526 21,526 21,526 21,526 21,526

Fund tax 191,890 233,177 180,518 150,012 70,873

Other funds 3,974,911 2,307,990 2,455,799 2,942,883 3,111,398

Overall mid- or long- term liabilities 66,440,414 71,002,772 61,416,508 70,530,483 68,733,514 Assets Netto

Capital 17,604,070 13,558,953 13,706,084 12,952,749 12,702,218


Legal reserve 82,232,813 77,140,319 72,387,954 69,866,959 67,692,238

Statury reserve 78,184 78,184 78,184 78,184 78,184

Reserve contributions c / capital lex 784/80 1,269,396 1,269,396 1,269,396 1,269,396 1,269,396

Consolidation reserve (5,717,465) 3,096,761 2,256,942 2,565,595 (7,874,424)

Surplus fusion 235,597 235,597 235,597 235,597 235,597

Reserve for exchange rate fluctuations (151,605) (874,376) (79,039) 483,057 (79,316)

Profits / losses brought forward 0 0 0 0 0

Profits / losses ofthe year 12,097,015 5,463,119 6,802,374 3,238,135 5,643,749

All assets net of teh Group 108,304,686 100,624,633 97,314,172 91,346,351 80,324,322 Net capital of thrid parties 1,298,512 1,194,714 1,011,540 1,245,375 1,967,873 Total ASSET LIABILITIES 329,482,958 360,658,502 306,021,110 289,885,093 277,000,018

The characteristic features that emerge fromtheanalysis of the balance sheet estimate of 2009 in its handling compared to 2008, primarily relate to the operation of supply networks. This action results in a decrease in tan-gible assets and a simultaneous reduction ofdebt. Also decrease in current assets as cashaused for financing new investments and to service providers.

_page 60 The increase in other assetsis related toincreasing production value, we explore in thefollowing table:

Income(expressed in Euro)

Quotes Sheet

31 Dec 2009 % 31 Dec 2008 % 31 Dec 2007 % 31 Dec 2006 % 31 Dec 2005 %


Change invent. fin. prod. semifin. 480,920 0.16% 576,641 0.22% 1,078,802 0.47% (2,569,631) -1.18% (10,187,122) -4.21%

Changes works in progress 3,494,161 1.16% 2,641,285 1.01% 1,360,421 0.59% (2,135,696) -0.98% 847,557 0.35%

works in economy 17,451,802 5.79% 22,465,251 8.59% 19,862,333 8.60% 17,294,210 7.95% 15,934,003 6.59%

other proceeds 592,977 0.20% 2,460,153 0.94% 4,229,435 1.83% 3,728,427 1.71% 9,178,587 3.80%


Variation in inventory of prime materials (329,043) -0.11% (673,653) -0.26% (939,634) -0.41% (5,695,328) -2.62% 1,080,564 0.45%




VALUE ADDED 69,690,432 23.14% 71,400,469 27.29% 63,623,934 27.55% 57,462,984 26.40% 53,711,334 22.21% Cost of labour and relative expenses (47,513,937) -15.78% (45,503,326) -17.39% (38,792,077) -16.80% (36,456,477) -16.75% (37,507,271) -15.51%

MOL 22,176,495 7.36% 25,897,143 9.90% 24,831,857 10.75% 21,006,507 9.65% 16,204,064 6.70%



Funds and devaluations (2,135,000) -0.71% (1,604,081) -0.61% (1,206,669) -0.52% (1,907,161) -0.88% (1,858,729) -0.77%

Depreciation and devaluation (11,757,061) -3.90% (10,941,672) -4.18% (10,210,865) -4.42% (10,151,642) -4.66% (10,637,792) -4.40%

EBIT 10,419,433 3.46% 14,955,472 5.72% 14,620,993 6.33% 10,854,865 4.99% 5,566,272 2.30% Interests and the other financial burden (3,365,697) -1.12% (5,359,997) -2.05% (4,844,780) -2.10% (4,198,165) -1.93% (5,543,328) -2.29%

Other financial proceeds 52,500 0.02% 555,815 0.21% 655,073 0.28% 503,898 0.23% 362,905 0.15%


CURRENT RESULT 7,106,236 2.36% 10,151,290 3.88% 10,431,286 4.52% 7,160,598 3.29% 385,848 0.16% Proceeds from shares 7,600,000 2.52% 61,928 0.02% 51,637 0.02% 550,224 0.25% 7,717,593 3.19%

Financial activity rectifications 820,566 0.27% 583,754 0.22% (431,123) -0.19% (664,559) -0.31% (1,410,864) -0.58%

Refunds to partners 0 0.00% (1,200,000) -0.46% (1,100,000) -0.48% (750,000) -0.34% (500,000) -0.21%

Extraordinary management (414,999) -0.14% 225,746 0.09% 2,118,327 0.92% 2,507,949 1.15% 3,139,422 1.30%

PRE-TAX RESULT 15,111,803 5.02% 9,822,717 3.75% 11,070,127 4.79% 8,804,212 4.05% 9,331,999 3.86%


NET RESULT 12,420,296 4.12% 5,542,237 2.12% 6,665,574 2.89% 3,218,325 1.48% 5,691,042 2.35% THIRD PARTY PROFIT (LOSS) (323,281) (79,118) 136,800 19,810 (47,293) PROFIT (LOSS) 12,097,015 5,463,119 6,802,374 3,238,135 5,643,749

_page 61

Consolidated income statement shows a profit of 12 million euros compared with a production value of over 300 million. This resultis significantly influenced by theoperation of supply networks that determine the liquida-tion of Si.Gas. Income from investments, in fact, welcome the economic impact of lifting theconsolidation turned against Si.Gas thatwith the liquidation of the company passing preciselyto the income statement. The deterioration in of the operational gross margine is due to the replacement of the depreciation of the net-works with the same fees afftto including of course the financial component. Similarly, there is a reduction infinancial charges due to the decrease in thesale listing the collectionof networks that compensates the effects of new investments in addition to the expected reduction in interest rates.

Indications

ECONOMICAL ANALYSIS Quotes Rectified Data

31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006 31 Dec 2005

R.O.E. (Return on Equity) 12.57% 5.74% 7.52% 3.68% 7.56%


Mol Value / Value of production 7.36% 9.90% 10.75% 9.65% 6.70%

Impact Fees and extra income management -16.10% 63.47% 53.48% 70.17% -1.39%

Impact on net financial expense Vp 1.10% 1.84% 1.81% 1.70% 2.14%

Impact of net financial expense on R.O. 31.80% 32.12% 28.66% 34.03% 93.07%

The indices of economic interest are undoubtedly the most Roi, a decrease due to the reduction of operating and what concerns the the impact of financial charges. In both cases, see as described in section on the income statement.

FINANCIAL AND BALANCE SHEET ANALYSIS Quotes Rectified Data

31 Dec 2009 31 Dec 2008 31 Dec 2007 31 Dec 2006 31 Dec 2005

Liquidity index 1.37 1.14 1.22 1.41 1.44

Leverage 3.42 3.79 3.38 3.29 3.71

Report unduly onerous 0.71 0.70 0.68 0.74 0.96

Elasticity index 1.77 1.47 1.40 1.60 1.92

EBITDA/DEBT 32.27 39.04 40.14 32.36 22.50

DEBTI/EBITDA 3.10 2.56 2.49 3.09 4.44

DEBT 68.715.767 66.334.059 61.870.736 64.914.861 72.002.220

EBITDA 22.176.495 25.897.143 24.831.857 21.006.507 16.204.064

The type of equity indexes all show a slight worsening of the financial situation, especially if compared with the fixed assets and profitability. As always, the attention is focused on therelationship between DEBT and EBITA or operational gross margine, which for 2009 is expected around 3.10%, thusworsening compared to 2008. It is observed, however that this index is extremely positive showing asubstantial equilibrium between ECONOMICS from operations and borrowing.

N ] Significant events occurring after the close On 27th of January 2009 was set up the company Vignola Energy Ltd., which is owned 99% by the Parent

Company and1% from the Consorzio Cooperative Costruzioni in Bologna. Company is costituted as a project company underArticle 156 of Legislative Decree 12/04/2006 No. 163, has a share capital ofEuro 500.000 and was incurred for the construction and subsequent management of a district heating plant of Municipality of Vignola MO);

On March 16, 2009, the Parent Company Fontenergia SpA acquired a 51% stake in Financial Sarda Srl (SAFIN) at a price of Euro 604,000;

_page 62 On 16 March 2009 wasset up the company Fonten-ergia 11 Srl, which is owned by the parent compa-ny to 70% and 30% by the company PEA Energy and Environment Project Srl . The companyis con-stitutedas a project company underlArticle 156 of Legislative Decree 12/04/2006 No. 163, has a share capital ofEuro 500.000 and was incurred for the construction and subsequent management of gas distribution networks in the municipalities of Posada, San Teodoro, Budoni, thanksto, Siniscola, Torpè, belonging to the basin 11 Sardinia;

On 16 March 2009 wasset up the company Fon-tenergia 15 Srl, which is owned by the parent company to 70% and 30% by the company PEA Energy and Environment Project Srl . The com-panyis constitutedas a project company under-lArticle 156 of Legislative Decree 12/04/2006 No. 163, has a share capital ofEuro 350.000 and was incurred for the construction and subsequent management of gas distribution networks in the municipalities of Dorgali, Galtelli, Irgoli, loculi, Oni-fai e Orosei, belonging to the basin 15 Sardinia;

On 16 March 2009 wasset up the company Fonten-ergia 26 Srl, which is owned by the parent compa-ny to 70% and 30% by the company PEA Energy and Environment Project Srl . The companyis con-stitutedas a project company underlArticle 156 of Legislative Decree 12/04/2006 No. 163, has a share capital ofEuro 850.000 and was incurred for the construction and subsequent management of gas distribution networks in the municipalities of Barrali, Gesico, Goni, Guamaggiore, pimentel, San Basilio, Selegas, Senorbi e Suelli, belonging to the basin 26 Sardinia;

On 16 March 2009 wasset up the company Fonten-ergia 28 Srl, which is owned by the parent compa-ny to 70% and 30% by the company PEA Energy and Environment Project Srl . The companyis con-stitutedas a project company underlArticle 156 of Legislative Decree 12/04/2006 No. 163, has a share capital ofEuro 450.000 and was incurred for the construction and subsequent management of gas distribution networks in the municipalities 80 of Armungia, Ballao, Dolianova, San Nicolò Ger-rei, Sant’Andrea Frius, Silius, Soleminis e Villasal-to, be-longing to the basin 28 Sardinia;

On March 16, 2009was found the company Fon-tenergia 37 S.r.l., whose shares are held by the

parent company to 70% and 30% by the company PEA Energy and Environment Project Srl com-pany, constituted as a project companyunder theArticle 156 of Legislative Decree 12/04/2006 No.163, has a share capital of Euro 500.000 and wasincurred for the construction and subse-quent management of gas distribution networks in the municipalities Monastir, Nuraminis, San Sperate, Ussana and Sestu, belonging to the basin 37 Sardinia;

On 24 April 2009, the share of 51% of Fontenergia SpA Held Coimmgest SpA were sold for 48% to the company Coope ration & Development S.p.A. in Bologna and the remaining3% to the company Sofinco S.p.A. in Modena;

On 30 April 2009, the Parent Company sold 21% of the shares held by Sarda Srl Sinergas Finanziaria S.r.l. to Sinergas S.r.l. at the price of Euro 248.700;

On April 30, 2009 2009 Sarda Finanziaria S.r.l. has acquired the remaining shares Networks Sarda CostruzioniS.r.l. respectively 26% from partner Carlo Andrea for the price of Euro 249.000 and 1% by partnerAndrea Pisano for the price of Euro 1.000.

O ] Other informationPlease be informed also that the cooperative has done so within the time allowed by special decree,updating the security policy document, in ac-cordance withAnnex B of the Legislative Decree no. 196/03, cd. “Consolidation Act on privacy”, contain-ing provisions on technical procedures to be taken in case of processing of sensitive data by electronic means. It states that underArticle 2497 of the De-cree, the Cooperativeisnot subject to directional ac-tivities and coordination. Moreover, the cooperative exercises the activity of direction and coordination activities in the followingsubsidiaries:

Coopgas S.r.l.

Energia della Concordia S.p.A.

Immobiliare della Concordia S.r.l.

Progas Metano S.r.l.

Erre.Gas S.r.l.

Marigliano Gas S.r.l.

Ischia Gas S.r.l.

_page 63

Si.Gas S.r.l.

Nuoro Servizi S.r.l.

Serio Energia S.r.l.

Cpl Concordia Filiala Cluj Romania S.r.l.

Cpl Hellas A.B.E. & T.E.

AI Power S.p.A.

Concordia Service Maghreb S.a r.l.

TargetprofitThe Board of Directors on the basis of the results, having received a reasoned opinion of the Special Shareholders holding cooperative, proposesto teh As-sembly of to the shareholderslapproval of teh state of implementation of the multiannual investment for financialyear 2008 and thatnetincomefor theyear of Euro 6.838.059= is allocated as follows:

Euro 357.427,29= to Shareholders holding Coop-erative (underwriters) as a dividend (theperiod 01/01/2008 – 31/12/2008) extent of 8.00% gross per share par value of Euro 51.64 to 31/12/2008, payable from 1st of July 2009;

Euro 11.435,29= to Shareholders holding Coop-erative (Stock Option) as a dividend (theperiod 01/01/2008 – 31/12/2008) extent of 8.00% gross per share par value of Euro 51.64 to 31/12/2008, payable from 1st of July 2009;

Euro 240.000,29= to Shareholders holding Coop-erative (underwriters) as a dividend (theperiod 01/01/2008 – 31/12/2008) extent of 8.00% gross per share par value of Euro 500.00 to 31/12/2008, payable from 1st of July 2009;

2004 2005 2006 2007 2008

6,838

net profit trend

(shown in thousands of Euro)

30,000

25,000

20,000

15,000

10,000

5,000

0

-5,000 -2,866

3,108 3,5535,880

general annual traget for 2008

Revaluation of Shareholders share capital 2.41%

PCA Dividends (underwritten)8.74%

Ordinary Reserve81.16%

PCA Dividends (Stock Option)0.17%

Shareholders divivdends4.52%

National insurance Funds3.00%

Euro 309.235,62= a dividend to shareholders and member co-investors in the amount, to be equal to 6,00% gross, be equal to the share capital ef-fectively paid, payable from 1st of July 2009;

Euro 164.925,65= equal to 3.20% with increased free (under Law 59/92) of the capital actually paid, capitalized;

Euro 205.141,77= equal to 3.00% (three percent) to mutual funds for the promotion and develop-ment of cooperation underArticle 11 of Law 59 of 31/01/1992;

Euro 531.892,00= Fund Reserve for own shares for theacquisitionof number 10.300 actions requested a refund within the time allowed by special regu-lation for the price of Euro 51.64 each, as required by the statute and in accordance withArticle 2529 of the Civil Code;

Euro 2.051.417,70= 30% to the reserve fund le-gal indivisible, as required by the Constitutionand same way underArticle. 12 of l. 16/12/77 No 904.

Euro 2.966.583,81= Ordinary Reserve Fund undi-vided between the partners both during the life of the Cooperative that this upon its dissolution, as required by the Constitution and in accordance withArticle 12 of the Law 16/12/77 No. 904.

Thank you for your confidence and we urge you to ap-prove the financial statements as it was presentedon 31st of December, 2008.Concordia s/S lì 04/05/2009

for the Board of DirectorsThe president

(Casari Roberto)

0820sheetbal ce

_page 66

rectified balance sheetclosed on 31 Dec 2008

Balance sheet_AssetsASSETS 31 December 2008

Amount in Euro31 December 2007

Amount in Euro

A) CREDITS TOWARD SHAREHOLDERS FOR DEPOSITS STILL DUE 1,244,475 1,258,137

of which already mentioned 1,244,475 1,258,137

B) FIXED ASSETS

I INTANGIBLE FIXED ASSETS:

1) Systems and expansions costs 4,093 0

2) Research, development and advertising costs 8,895 81,186

3) Industrial patent rights and use of original works 0 0

4) Concessions, licences, brands and similar rights 172,536 41,279

5) Start up 0 0

6) Assets in course and accounts 1,641,753 471,401

7) Others 11,666,023 12,904,470

Total 13,493,300 13,498,336

II MATERIAL FIXED ASSETS:

1) Land and buildings 2,874,798 3,080,083

2) Systems and machinery 45,953,633 41,819,395

3) Industrial and commercial apparatus 326,913 319,005

4) Other goods 1,929,593 1,786,316

5) Assets in course and accounts 765,606 823,025

Total 51,850,543 47,827,824

III FINANCIAL FIXED ASSETS:

1) partnerships in:

a) controlled companies 32,106,534 24,453,945

b) connected companies 2,877,034 2,349,412

c) controlling companies 0 0

d) other companies 3,797,050 3,457,447

2) Credits: (beyond 12 months) (beyond 12 months)

a) towards controlled companies: 12,956,000 12,956,000 9,180,000 9,180,000

b) towards connected companies: 0 10,874,000 10,779,000 10,779,000

c) towards controlling companies: 0 0

d) toward others: 581,282 1,267,470 1,025,130 1,530,536

_page 67

ASSETS 31 December 2008Amount in Euro

31 December 2007Amount in Euro

3) Other stock 0 0

4) Own shares 0 0

Total 63,878,088 51,750,340

TOTAL FIXED ASSETS 129,221,931 113,076,500

C) CURRENT ASSETS

I STOCKS:

1) Raw materials, subsidies, and consumables 3,405,740 2,806,748

2) works and semi-works in progress 4,957,187 5,366,048

3) works in progress by order 19,935,307 11,928,182

4) finished products and goods 235,984 121,336

5) Advances 1,276,317 1,389,909

Total 29,810,535 21,612,223

II CREDITS: (beyond 12 months) (beyond 12 months)

1) Towards customers: 1,490,965 117,997,971 1,556,902 105,177,878

2) Towards controlled companies: 5,550,837 6,594,872

3) Towards connected companies: 0 809,517 0 652,125

4) Towards controlling companies: 0 0

4 bis) Excise Credits 836,218 1,450,347

4 ter) Advance taxes 644,992 656,478

5) Towards others: 515,559 426,543

Total 126,355,094 114,958,243

III FINANCIAL ACTIVITIES WHICH DO NOT CONSTITUTE ASSETS:

1) shares in controlled companies 0 115,797

2) shares in connected companies 0 0

3) Other partnerships 0 0

4) Own shares 0 0

5) Other stock 0 0

Total 0 115,797

IV LIQUID ASSETS

1) Bank and post deposits 23,774,582 9,795,803

2) Cheques 70,217 1,207

3) Monies and values in cash 28,924 23,918

Total 23,873,723 9,820,928

TOTAL CURRENT ASSETS 180,039,352 146,507,191

D) ACCRUALS AND DEFFERALS: 6,059,085 4,951,759

TOTAL ASSETS 316,564,843 265,793,587

_page 68

rectified balance sheetclosed on 31 Dec 2008

Balance sheet_LiabilitiesLIABILITIES 31 December 2008


Amount in Euro

A) NET EQUITY

I CAPITAL 13,558,953 13,706,084

II RESERVE FROM SHARE PREMIUM 0 0

III RESERVE FROM REVALUATION 656,679 656,679

IV LEGAL RESERVE 77,140,319 72,387,954

V STATUTORY RESERVE 78,184 78,184

VI RESERVE FOR OWN SHARES IN PORTFOLIO 0 0

VII OTHER RESERVES:

FUSION ADVANCE 235,597 235,597

EXCHANGE RATE OSCILLATION RESERVE 0 0

CONTRIB. C/CAPITAL 1. 784/80 1,269,396 1,269,396

VIII PROFIT (LOSSES) BROUGHT FORWARD 0 0

IX ANNUAL PROFIT (LOSS) 6,838,059 5,879,687

TOTAL 99,777,187 94,213,581

B) RISKS AND EXPENSES FUNDS:

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

2) for taxes 0 0

3) Others 1,617,395 1,335,537

TOTAL 1,638,921 1,357,063

C) RESERVE FOR SEVERANCE INDEMNITIES 5,721,027 6,101,664

D) DEBTS: (beyond 12 months) (beyond 12 months)

1) Obligations: 0 0 0 0

2) Convertible obligations: 0 0 0 0

3) Debts toward partners for financing 0 4,258,627 0 3,224,800

4) Bank debts: 46,168,351 60,704,311 36,348,586 47,154,785

5) Debts with other backers: 0 0 0 0

6) Advances: 0 10,232,521 0 14,177,189

7) Debts towards suppliers: 2,046,773 113,380,644 1,801,315 85,873,507

8) Debts represented by credit notes: 0 0 0 0

9) Debts towards controlled companies: 0 2,501,232 0 2,814,636

_page 69

LIABILITIES 31 December 2008Amount in Euro


10) Debts towards connected companies: 0 134,574 0 99,023

11) Debts towards controlling companies: 0 0 0 0

12) Tax debts: 0 5,428,011 0 3,868,897

13) Debts towards social security and welfare institutions: 0 2,725,195 0 2,235,968

14) Other debts: 0 9,657,060 0 4,381,087

TOTAL 209,022,175 163,829,892

E) ACCRUALS AND DEFERRALS: 405,533 291,387

TOTAL LIABILITIES 316,564,843 265,793,587

ORDER STATEMENTS:

I) Guarantees given

- Fidejussions 111,208,856 106,099,073

- Real Guarantees 60,794,000 60,794,000

Total 172,002,856 166,893,073

II) Other order statements

- Effects subject to collection 25,650 7,000

- Others 8,636,820 4,568,154

Total 8,662,470 4,575,154

TOTAL ORDER COUNTS 180,665,326 171,468,227

_page 70Income statement

INCOME STATEMENT 31 December 2008Amount in Euro


A) VALUE OF PRODUCTION:

1) Proceeds from sales and performances 205,215,858 179,562,310

2) Change in inventories of working progress semifinished

and finished products 0 0

3) Change in work in progress under order 7,101,390 2,658,347

4) Increase of fixed assets for internal works 10,543,087 12,604,307

5) Other incomes and earnings:

- misc 2,533,471 4,167,018

- contributions for operating expenses 23,758 2,557,229 5,203 4,172,221

Total 225,417,564 198,997,185

B) COST OF PRODUCTION:

6) For raw materials, subsidies, and goods consumed 68,603,208 63,885,797

7) For services 76,946,495 66,632,270

8) For use of third party property 11,168,159 8,445,660

9) Personnel costs:

a) Salaries and wages 31,929,255 27,000,306

b) Social costs 9,925,126 8,373,756

C) Severance indemnity 1,993,795 1,723,462

d) Pensions and similar 0 0

e) other costs 0 43,848,176 0 37,097,524

10) Allowances and devaluations

a) amortizations of material intangible assets 4,214,726 4,170,443

b) amortizations of material fixed assets 2,375,049 1,967,731

c) other devaluations of fixed assets 0 0

d) devaluations of credits included in current assets and liquid assets 700,000 7,289,775 370,000 6,508,174

11) Variations in inventory of prime materials subsidies (713,640) (9,455)

12) Provision for risks 0 0

13) Other provisions 417,812 729,621

14) Various management 2,872,710 1,908,365

Total 210,432,695 185,197,956

DIFFERENCE BETWEEN VALUE AND COSTS OF PRODUCTION (A-B) 14,984,869 13,799,229

C) FINANCIAL PROCEEDS AND BURDEN:

15) proceeds from shares:

- from controlled companies 1,040,000 40,000

- from connected companies 0 0

- from other companies 60,344 1,100,344 51,550 91,550

16) Other financial proceeds:

a) from credits registered in the financial assets:

- from controlled companies 0 0

_page 71

INCOME STATEMENT 31 December 2008Amount in Euro



- from controlling companies 0 0

- from other companies 0 0 0 0

b) from stock registered in the assets which do not constitute sharesc) from stock registered in the current assets which do not constitute shares

d) proceeds different from the above:

- from controlled companies 632,865 548,187

- from connected companies 11,109 2,072


- from other companies 371,984 1,015,958 486,373 1,036,632

17) Interest and the other financial burden;

- from controlled companies 13,921 13,557



- from other companies 3,605,477 3,619,398 3,450,427 3,463,984

17 bis) PROFIT AND LOSSES ON FOREIGN EXCHANGE RATES

- Profit and losses on foreign exchange rates 17,729 17,729 5,036 5,036

Total ( 15 + 16 - 17 - 17 bis ) (1,520,825) (2,340,838)

D) FINANCIAL ACTIVITY VALUE RECTIFICATIONS:

18) Revaluations:

a) of share bonds 160,741 0

b) of financial assets which do not constitute shares

c) of stock registered in the current assets which do not constitute share bonds 160,741 0

19) Depreciations:

a) of share bonds 2,703,101 1,406,642

b) of financial assets which do not constitute shares 0 0

c) of stock registered in the current assets which do not constitute share bonds 116,338 2,819,439 1,406,642

Total rectifications ( 18 - 19 ) (2,658,698) (1,406,642)

E) EXTRAORDINARY INCOME AND BURDEN

20) income:

a) capital gains from sales whose proceeds cannot be registered at No. 5) 0 0

b) Contrib. in c/capital 0 0

c) Others 39,288 39,288 0 0

21) Burdens:

a) capital loss from sales whose accounting effects cannot be registered at No. 14) 0 0

b) taxes relative to previous financial years 0 34,308

c) others 27,386 27,386 0 34,308

Total extraordinary items ( 20 - 21 ) 11,902 (34,308)

PRE-TAX RESULT ( A - B ± C ± D ± E ) 10,817,248 10,017,441

22) Taxes on the financial year income (3,979,189) (4,137,754)

22 a) of which for taxes on the financial year (3,967,703) (3,606,635)

22 b) of which for advance/(deferred) taxes (11,486) (531,119)

26) ANNUAL PROFIT (LOSS) 6,838,059 5,879,687

_page 72

Board of auditors report for the annual balance statementat 31 Dec 2008

Dear Shareholders,During the course of the financial year ending on 31 Dec 2008 we conducted monitoring activities assigned to us by the shareholders’ meeting, performing the audits required by the behaviour standards of the board of auditors recommended by the Association of Chartered Accountants. By obtaining information from the vari-ous functional managers, by examining the requested documentation and examining the auditing statement we acquired monitoring awareness and, within the scope of our competency, on the suitability of the company organisational structure, the internal auditing system, the administrative-accounting system and its reliability to correctly convey the management facts represented by the balance sheet items which has been submitted for approval.

For the performance of our activities during the course of the 2008 financial year, we attended the Assemblies and the meetings of the Board of Administrators and, in observance of the statutory norms, we were periodi-cally informed on the progress of the social management and its foreseeable evolution as well as on the more important operations, by size and characteristics, performed by the Cooperative.

As in past years, also in 2008, in its own auditing activities the Board paid maximum attention to the typical company risk areas. In particular the Board supervised whether the actions taken were in accordance with the law and the Articles of Association, that they were not manifestly imprudent, high-risk, in potential conflict of interest or contrary to deliberations made, that is, such as to compromise the integrity of the company as-sets.

The Board, in performing its monitoring activities, kept in close contact with the auditing company Price Wa-terhouse Coopers S.p.A., charged with the accounts auditing; the Board also actively participated in the Board of Administration meetings as well as meetings with the administrative and financial managers of the Coop-erative, when the Board was asked to express its opinion on problems of a legal nature and consequential behaviour.

Meetings with various sector managers were held also last year in order to better monitor the efficiency status, from an administrative point of view, of the various operative units which make up the Cooperative company.In these meetings the Board was able to note the continuous updating of the sector managers to the needs, always new and in evolution, which the Cooperative is required to face in order to maintain high levels of qual-ity and consequent appreciation in the markets in which it operates.We noted, through the results obtained in these meetings, that the company is capable, with appropriate flex-ibility, of facing the serious economic crisis and the consequent recession in which our country’s economy has fallen. Proof of this, even in a year characterised by the problems of which we are all aware, can be found in the financial, asset and economic indexes relative to the balance statement which has been submitted for approval.

The Board wishes to thank the administrative body and the General Management for the ample coopera-tion provided to the Board of Auditors during the 2008 financial year in the performance of its institutional

_page 73

monitoring and auditing activities. As in the past, the Board expresses heartfelt thanks to the Administra-tive Director of the Cooperative, Accountant Mas-simo Continati, for his active cooperation and the greatest willingness toward the Board, which ena-bled them to perform their duties, obtaining all of the necessary information on the more significant management actions which characterised the ac-tivities of the Cooperative month by month. In our monitoring activities we were able to not that the administrative and accounting system of the com-pany is trustworthy and capable of fully performing its activities in harmony with the dynamic develop-ment of the management of the Cooperative. During the course of our monitoring activities, as described above, no further significant facts arose such as to require express mention in this report.

with regard to our tasks, we examined the annual balance statement closed at 31 Dec 2008; the ana-lytical audit of the content of the balance sheet not having been assigned to us, we monitored the gen-eral make up of the same, the general conformance with the law with regard to its make up and struc-ture and, in this regard, we have no particular obser-vations to report. To the best of our knowledge, the Administrators, in preparing the balance statement, did not derogate to the legal norms pursuant to art. 2423, comma four, C.C.

We verified the correspondence of the annual bal-ance sheet with the facts and the information of which we are aware following the fulfilment of our duties and we have no observations in this regard. W note that the Management Report was amply ex-posed and acknowledges all of the information re-quired by the revised article 2428 of the Italian civil code. The content of the report is clear, easily un-derstandable not only for the shareholders but also for interested third parties. The Report was prepared jointly with regard to the management of the Group leader and with regard to the consolidated Group balance statement in that the consolidated balance statement is more in keeping with the progress of the Cpl Group in the various sectors in which the Cooperative operates through its controlled and connected companies.

We express the same observations with regard to the content of the Explanatory Note. In accordance with Article 2426 C.C. we expressed our consent to the registration of the earnings in the equity status of the residual amount of the costs of research, de-velopment and advertising. In accordance with Arti-

cle 2 of law 59/92, the Board of Auditors notes that the administrators, during the course of the financial year, in performing their duties, acted and managed the company in accordance with the social objec-tives according to the mutual principles of the co-operative.

Dear Shareholders,The Board of Auditors expresses its favourable opin-ion for the approval of the annual balance state-ment closed at 31 Dec 2008, and the proposals of the Board of Administration relative tot he destina-tion of the company profits.

Concordia sulla Secchia, 29 May 2009

Board of AuditorsPresident Dr. Pelliciardi Carlo AlbertoEffective auditor Dr. Casari MauroEffective auditor Dr. Ascari Fausto

_page 74

Certification report

_page 75

Certification UNI EN ISO 9001:2000

olidatedcons

sheetbal ce0820

_page 78 consolidated balance sheetclosed on 31 Dec 2008

Balance sheet_Assets



A) CREDITS TOWARD SHAREHOLDERS FOR DEPOSITS STILL DUE 1,307,851 1,261,737

of which already mentioned 1,307,851 1,261,737

B) FIXED ASSETS

I INTANGIBLE FIXED ASSETS:

1) Systems and expansions costs 237,197 314,329

2) Research, development and advertising costs 8,895 81,188

3) Rights for industrial patents and

use of original works 0 0

4) Concessions, licences, brands and similar rights 313,871 41,279

5) Start up 6,009 7,652

5b) Consolidation difference 0 0

6) Assets in course and accounts 2,334,536 1,020,410

7) Others 13,618,286 14,875,243

Total 16,518,794 16,340,101

II MATERIAL FIXED ASSETS:

1) Land and buildings 10,226,966 4,231,488

2) Systems and machinery 84,139,976 78,756,106

3) Industrial and commercial apparatus 458,590 480,626

4) Other goods 5,366,293 3,492,606

5) Assets in course and accounts 10,712,624 6,100,337

Total 110,904,449 93,061,163

III FINANCIAL FIXED ASSETS:

1) partnerships in:

a) controlled companies 0 0

b) connected companies 1,020,002 179,685

c) controlling companies 0 0

d) other companies 3,868,345 3,500,653

2) Credits: (beyond 12 months) (beyond 12 months)

a) towards controlled companies: 0 40,000

b) towards connected companies: 0 10,874,000 10,779,000 10,779,000

c) verso controllanti: 0 0

_page 79



d) toward others: 824,490 1,510,678 1,234,065 1,864,471

3) Other stock 0 1,033 0 1,033

4) Own shares 0 0 0 0

Total 17,314,058 16,324,842

TOTAL FIXED ASSETS 144,737,301 125,726,106

C) CURRENT ASSETS

I STOCKS:

1) Raw materials, subsidies, and consumables 3,888,795 3,177,592

2) works and semi-works in progress 4,957,187 5,366,048

3) works in progress by order 16,505,746 12,066,586

4) finished products and goods 5,855,338 6,613,629

5) Advances 1,718,754 1,564,846

Total 32,925,820 28,788,701

II CREDITS: (beyond 12 months) (beyond 12 months)

1) Towards customers: 1,490,965 137,325,409 1,556,902 119,739,229

2) Towards controlled companies: 0 893,712 0 664,502

3) Towards connected companies: 0 809,517 0 652,125

4) Towards controlling companies: 0 0 0 0

4 bis) Excise Credits 3,511,385 3,878,380

4 ter) Advance Taxes 30,480 1,825,632 1,724,397

5) Towards others: 0 5,542,215 0 5,227,959

Total 149,907,870 131,886,592

III FINANCIAL ACTIVITIES WHICH DO NOT CONSTITUTE ASSETS:

1) shares in controlled companies 0 115,797

2) shares in connected companies 0 0

3) Other partnerships 0 0

4) Own shares 0 0

5) Other stock 84 84

Total 84 115,881

IV LIQUID ASSETS

1) Bank and post deposits 25,337,124 11,688,157

2) Cheques 70,217 1,207

3) Monies and values in cash 43,330 77,550

Total 25,450,671 11,766,914

TOTAL LIQUID ASSETS 208,284,445 172,558,088

D) ACCRUALS AND DEFERRALS: 6,328,906 6,475,179

TOTAL ASSETS 360,658,503 306,021,110

_page 80 consolidated balance sheetclosed on 31 Dec 2008

Balance sheet_Liabilities

LIABILITIES: 31 December 2008Amount in Euro


A) NET EQUITY

I CAPITAL 13,558,953 13,706,084

II RESERVE FROM SHARE PREMIUM 0 0

III RESERVE FROM REVALUATION 656,679 656,679

IV LEGAL RESERVE 77,140,319 72,387,954

V STATUTORY RESERVE 78,184 78,184

VI RESERVE FOR OWN SHARES IN PORTFOLIO 0 0

VII OTHER RESERVES:

a) CONTRIB. C/CAPITAL 1. 784/80 1,269,396 1,269,396

b) CONSOLIDATION RESERVE 3,096,761 2,256,942

c) FUSION ADVANCE 235,597 235,597

d) RESERVE FROM TRANSLATION DIFFERENCE (874,376) (79,039)

VIII PROFIT (LOSSES) BROUGHT FORWARD 0 0

IX ANNUAL PROFIT (LOSS) 5,463,119 6,802,374

TOTAL GROUP NET EQUITY 100,624,632 97,314,171

THIRD PARTY CAPITAL AND RESERVES 1,115,596 1,148,340

THIRD PARTY PROFIT (LOSS) 79,118 (136,800)

THIRD PARTY NET CAPITAL 1,194,714 1,011,540

TOTAL 101,819,346 98,325,711

B) RISKS AND EXPENSES FUNDS:

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

2) for taxes 233,177 180,518

3) Others 2,307,990 2,455,799

TOTAL 2,562,693 2,657,843

C) RESERVE FOR SEVERANCE INDEMNITIES 6,132,307 6,450,792

D) DEBTS: (beyond 12 months) (beyond 12 months)

1) Obligations: 0 0 0 0

2) Convertible obligations: 0 0 0 0

3) Debts toward partners for financing 0 4,258,627 0 3,224,800

4) Bank debts: 60,046,242 83,158,176 49,990,419 67,482,759

_page 81

LIABILITIES: 31 December 2008Amount in Euro


5) Debts with other backers: 0 4,367,927 0 2,930,091

6) Advances: 0 10,542,116 0 14,881,644

7) Debts towards suppliers: 2,053,233 124,182,885 1,801,315 94,696,264

8) Debts represented by credit notes: 0 0 0 0

9) Debts towards controlled companies: 0 0 0 0

10) Debts towards connected companies: 0 134,574 0 332,760

11) Debts towards controlling companies: 0 0 0 0

12) Tax debts: 0 7,273,227 0 4,579,699

13) Debts towards social security and welfare institutions: 0 4,166,163 0 3,653,343

14) Other debts: 208,297 11,583,340 516,139 6,325,470

E) ACCRUALS AND DEFERRALS: 477,122 479,934


ORDER STATEMENTS:

I) Guarantees given

- Fidejussions 130,417,683 125,316,000

- Real Guarantees 60,794,000 60,794,000

Total 191,211,683 186,110,000

II) Other order statements

- Effects subject to collection 25,650 7,000

- Others 8,746,820 4,021,830

Total 8,772,470 4,028,830

ORDER STATEMENTS 199,984,153 190,138,830

_page 82 Income statementINCOME STATEMENT: 31 December 2008


Amount in Euro

A) VALUE OF PRODUCTION:

1) Proceeds from sales and performances 233,464,825 204,373,523

2) Change in inventories of work in progress, semifinished and finished products 576,641 1,078,802

3) Change in works in progress under order 2,641,285 1,360,421

4) Increase of fixed assets for internal works 22,465,251 19,862,333

5) Other income and earnings:

- misc 2,436,395 4,224,233

- contributions for operating expenses 23,758 2,460,153 5,203 4,229,436

Total 261,608,155 230,904,515

B) COST OF PRODUCTION:

6) for raw materials, subsidies, and goods consumed 89,412,039 82,776,468

7) for services 86,395,614 72,815,190

8) for use of third party property 10,512,305 8,257,076

9) for personnel:

a) payments and salaries 34,047,694 29,061,736

b) social costs 10,561,451 9,005,220

c) severance indemnity 2,094,181 1,825,121

d) pensions and similar 0 0

46,703,326 39,892,077

10) Allowances and devaluations:

a) amortisation of material intangible assets 4,798,687 4,665,535

b) amortisation of material fixed assets 4,538,904 4,338,661

c) other devaluations of fixed assets 0 0

d) devaluations of credits included in current assets and liquid assets 783,269 10,120,860 453,531 9,457,727

11) Variation in inventory of prime materials, subsidies, consumables, goods 673,653 939,634

12) Provisions for risks 0 0

13) Other provisions 820,812 753,138

14) Various management expenses 3,214,075 2,492,212

Total 247,852,684 217,383,522

DIFFERENCE BETWEEN VALUE AND COSTS OF PRODUCTION (A - B) 13,755,471 13,520,993

C) FINANCIAL PROCEEDS AND BURDEN:

15) Proceeds from shares:



- from other companies 61,928 61,928 51,637 51,637

16) Other financial proceeds:

a) from credits registered in the financial assets:



_page 83

INCOME STATEMENT: 31 December 2008Amount in Euro



- from other companies 0 0 0 0

b) from stock registered in the assets which do not constitute sharesc) from stock registered in the current assets which do not constitute shares

d) proceeds different from the above:


- from connected companies 11,109 2,072


- from other companies 544,706 555,815 653,001 655,073

17) Interest and the other financial burden;

- from controlled companies

- from connected companies

- from controlling companies

- from other companies 5,062,822 5,062,822 4,627,182 4,627,182

17 bis) PROFIT AND LOSSES ON FOREIGN EXCHANGE RATES

Profit on foreign exchange rates 297,175 217,598

297,175 217,598

Total ( 15 + 16 - 17 - 17 bis) (4,742,254) (4,138,070)

D) FINANCIAL ACTIVITY VALUE RECTIFICATIONS:

18) Revaluations:

a) of share bonds 714,740 350,665


c) of stock registered in the current assets which do not constitute share bonds 0 714,740 0 350,665

19) Depreciations:

a) of share bonds 14,647 781,788


c) of stock registered in the current assets which do not constitute share bonds 115,797 130,985 0 781,788

Total rectifications ( 18 - 19 ) 583,755 (431,123)

E) EXTRAORDINARY INCOME AND BURDEN

20) Income:

a) capital gains from sales whose proceeds cannot be registered at No. 5) 0 1,465,542

b) Contrib. in c/capital 0 0

c) Others 474,498 474,498 737,914 2,203,456

21) Burdens:

a) capital loss from sales whose accounting effects cannot be registered at No. 14) 0 16,346

b) taxes relative to previous financial years 169,765 60,308

c) others 78,988 248,753 8,475 85,129

Total extraordinary items (20 - 21) 225,745 2,118,327

PRE-TAX RESULT ( A - B ± C ± D ± E ) 9,822,717 11,070,127

22) Taxes on the financial year income, current, deferred and advance (4,280,480) (4,404,553)

26) ANNUAL PROFIT (LOSS) 5,542,237 6,665,574

THIRD PARTY PROFIT (LOSS) (79,118) 136,800

GROUP PROFIT (LOSS) 5,463,119 6,802,374

_page 84 gas - methane and gpl company balance statementat 31 December 2008

BALANCE SHEET MARIGLIANO GAS S.r.l.

COOP GAS S.r.l.

ISCHIA GAS S.r.l.

PROGAS METANO S.r.l.

SI.GAS S.r.l.

ERREGAS S.r.l.

PERCENTAGE OF POSSESSION 99.5% 100% 100% 70% 100% 100%

ACTIVITYTotal credits towards Shareholders for deposits due 3,600 - - - - -

Total intangible fixed assets 1,920 2 4,387 1 27,703 1,728 147,246 152,025

Total tangible fixed assets 8,823,758 4 68 7 ,332,780 160,155 13,944,848 6,156,467

Total Financial fixed assets 16,164 6 64,343 2 2,186 - 4,163 8,321

Total fixed assets 8,841,843 6 89,198 7 ,482,669 161,883 14,123,437 6,316,813

Total stocks - 3 ,839,224 - - - 77,844

Total credits 674,451 7 ,276,891 3 ,666,891 13,572 805,879 695,767

Total non fixed assets - - - - - -

Total liquid assets 211,568 8 1,852 3 55 123,655 39,102 35,066

Total current assets 886,019 1 1,197,967 3 ,667,246 137,226 844,982 808,677

Total Accruals and deferrals 38,941 1 1,343 8 9,299 563 80,385 20,958

TOTAL ASSETS 9,770,402 11,898,507 11,239,214 299,672 15,048,804 7,146,448

LIABILITIES

Total net equity 3,437,541 4 ,599,608 2 ,403,424 214,389 9,114,760 1,334,817

Total Risks and expenses funds - 1 81,720 - - 509,839 -

Severance indemnity - 5 8,045 - - 111,000 4,902

Financial Debts 5,350,094 2 ,575,786 2 ,211,020 - 4,145,000 5,440,000

Business Debts 966,117 4 ,469,083 6 ,621,773 85,283 1,165,262 364,306

Total liability accruals and deferrals 16,650 1 4,266 2 ,997 - 2,943 2,424

TOTAL LIABILITIES 9,770,402 11,898,507 11,239,214 299,672 15,048,804 7,146,448

INCOME STATEMENT

Total production value 792,093 1 6,556,749 4 0,376 - 2,987,638 1,433,104

Total production costs (390,830) (1 6,178,107) (1 72,503) (9,514) (2,660,178) (1,318,222)

Total income and financial burden (297,561) 6 1,953 (1 70) 4,711 (216,044) (370,890)

Total financial proceeds value rectifications - - - - , -

Extraordinary income and burdens - - - - , -

Pre-tax result 103,701 4 40,595 (1 32,297) (4,803) 111,416 (256,009)

Taxes on the financial year income (18,548) (7 9,620) 3 5,916 - (28,096) (8,110)

Financial year result 85,153 360,975 (96,381) (4,803) 83,320 (264,119)

_page 85

BALANCE SHEET CRISTOFORETTI S.E.R. S.r.l.

ENERGIA DELLA CONCORDIA S.r.l.

SERIO ENERGIA S.r.l.

PERCENTAGE OF POSSESSION 50% 100% 40%

ACTIVITY

Total credits towards Shareholders for deposits due - - -

Total intangible fixed assets 3,884,908 0 11,014

Total tangible fixed assets 1,449,435 3,559,332 2,600,384

Total Financial fixed assets 97,226 596 4,008

Total fixed assets 5,481,568 3,559,928 2,615,405

Total stocks 6,495,282 - -

Total credits 14,639,848 566,741 494,170

Total non fixed assets 168 - -

Total liquid assets 1,083,591 10,746 201,957

Total current assets 22,218,889 577,486 696,127

Total Accruals and deferrals 5,612 3,501 -

TOTAL ASSETS 27,706,068 4,140,915 3,311,532

LIABILITIES

Total net equity 2,409,621 533,998 1,437,089

Total Risks and expenses funds - 33,000 -

Severance indemnity 400,230 - -

Financial Debts 11,530,782 2,110,000 1,458,443

Business Debts 13,323,205 1,463,917 415,598

Total liability accruals and deferrals 42,229 - 402

TOTAL LIABILITIES 27,706,068 4,140,915 3,311,532

INCOME STATEMENT

Total production value 23,425,193 105,808 2,217,438

Total production costs (22,330,404) (99,282) (1,620,323)

Total income and financial burden (634,760) 7,342 (97,153)

Total financial proceeds value rectifications - - -

Extraordinary income and burdens - - -

Pre-tax result 460,030 13,868 499,959

Taxes on the financial year income (236,065) (392) (159,618)

Financial year result 223,965 13,476 340,341

energy company balance statementat 31 December 2008

_page 86

BALANCE SHEET IMMOBILIARE DELLA CONCORDIA S.r.l.

NUORO SERVIZIS.r.l.

PERCENTAGE OF POSSESSION 100% 44%

ACTIVITY

Total credits towards Shareholders for deposits due - -

Total intangible fixed assets 33,873 -

Total tangible fixed assets 7,221,942 -

Total Financial fixed assets 24,958 -

Total fixed assets 7,208,773 13,176

Total stocks 2,293,345 -

Total credits 495,063 5,409,303

Total non fixed assets - -

Total liquid assets 35,511 39

Total current assets 2,823,920 5,409,342

Total Accruals and deferrals 6,857 -

TOTAL ASSETS 10,111,550 5,422,518

LIABILITIES

Total net equity 7,767,794 287,107

Total Risks and expenses funds 16,219 19,037

Severance indemnity 37,219 -

Financial Debts 1,226,135 2,674,244

Business Debts 1,053,391 2,442,130

Total liability accruals and deferrals 10,792 -


INCOME STATEMENT

Total production value 3,216,160 -

Total production costs (3,532,082) (62,203)

Total income and financial burden (16,983) (154,177)

Total financial proceeds value rectifications - (8,000)

Extraordinary income and burdens - -

Pre-tax result (332,906) 224,380

Taxes on the financial year income (13,783) (29)

Financial year result (346,688) (244,409)

other controlled company balance statementat 31 December 2008

_page 87

foreign company balance statementsat 31 December 2008

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

CPL MAGHREB SERVICE S.r.l.

CPL CONCORDIA FILIALA CLUJ S.r.l.

AI POWERS.r.l.

PERCENTAGE OF POSSESSION 100% 90% 100% 54%

ACTIVITYTotal credits towards Shareholders for deposits due - - - 121,958

Total intangible fixed assets 18,887 - 526,699 10,379

Total tangible fixed assets 20,892 - 10,372,028 11,646

Total Financial fixed assets 18,178 - 6,428 2,581

Total fixed assets 57,958 - 10,905,156 24,606

Total stocks 1,100 - 360,161 267,652

Total credits 908,881 - 1,392,799 66,018

Total non fixed assets - - - -

Total liquid assets 11,997 4,372 141,306 9,090

Total current assets 921,979 4,372 1,894,266 342,760

Total Accruals and deferrals 6,357 - - 8,812

TOTAL ASSETS 986,293 4,372 12,799,422 498,136

LIABILITIES

Total net equity 434,978 4,372 9,014,519 208,347

Total Risks and expenses funds - - 163,958 -

Severance indemnity - - - -

Financial Debts 101,000 - 2,312,752 -

Business Debts 450,315 - 1,308,192 289,789

Total liability accruals and deferrals - - - -

TOTAL LIABILITIES 986,293 4,372 12,799,422 498,136

INCOME STATEMENT

Total production value (630,012) - 7,324,167 398,659

Total production costs (1,754,767) (6,746) (6,541,025) (391,759)

Total income and financial burden 1,455 1,202 (521,736) (54)

Total financial proceeds value rectifications - - - -

Extraordinary income and burdens (71,698) - (110,429) -

Pre-tax result (2,455,022) (5,544) 150,976 6,846

Taxes on the financial year income - - (66,134) (1,576)

Financial year result (2,455,022) (5,544) 84,842 5,270

_page 88 SUMMARY OTHER CONNECTED COMPANIESESSENTIAL DATA FOR THE ANNUAL BALANCE STATEMENT AT 31 December 2008

COMPANY NET EQUITY PERIOD RESULT CPL QUOTA

FONTENERGIA S.p.A. 5,234,662 285,389 49%

SAFIN S.r.l. 413,552 -20,758 51%

SARDA RETI COSTRUZIONI S.r.l. 524,612 -332,981 37%

TECLAB S.r.l. 144,068 29,137 35%

COMPAGRI 831,968 -236,928 22%

AGRIENERGIA SOC. CONS. 3,209 -4,710 20%

X DATANET S.r.l. 106,478 46,169 30%

PEGOGNAGA SERVIZI S.r.l. 179,024 48,313 50%

COIMMGEST S.p.A. 173,762 40,450 45%

_page 89

Board of auditors report for the consolidated annual balance statementat 31 Dec 2008

Dear Shareholders,Following the tasks assigned us pursuant to art. 41 of legislative decree No. 127 dated 9 April 1991, we have checked the consolidated balance statement of the CPL Group, together with the management report relative to the 2008 financial year. The CPL Group Balance Statement at 31 Dec 2008, in summary, presents the follow-ing data in Euro:

ActivityCredits toward shareholders for deposits still due. 1,307,851

Fixed assets 144,737,301

Current assets 208,284,445

Income accruals and deferrals 6,328,906

Total assets 360,658,503

LiabilitiesGroup net equity 100,624,632

Third party capital and reserves 1,194,714

Total equity 101,819,346

Risks and expenses fund 2,562,693

Severance indemnity 6,132,307

Debts 249,667,035

Liability accruals and deferrals 477,122

Total liabilities 360,658,503

The order statements equal 199,984,153 Euro.

Consolidated income statement for the 2008 financial yearValue of production 261,608,155

Cost of production (247,852,684)

Difference between value and cost of production 13,755,471

Proceeds and financial burden (4,742,254)

Financial activity value rectifications 583,755

Extraordinary proceeds and burden 225,745

Pre-tax result 9,822,717

Taxes on the financial year income (current - deferred - advance taxes) (4,280,480)

Annual profit 5,542,237

Third party equity profit (79,118)

Group profit 5,463,119

_page 90 The Balance Statement was prepared in accordance with the provisions of legislative decree No. 127 dtd 9 April 1991, integrated by the accounting principles prepared by the National Association of Chartered Accountants and, where unavailable, those of the International Accounting Standards Board (I.A.S. principles, now I.F.R.S.) The balance statements of the companies inserted into the consolidated balan-ce statement were checked by the respective Board of Auditors and/or, in the absence of the same in that it was not compulsory by law, by the auditing company Price Waterhouse Coopers SpA.Based on their checks, the Board of Auditors ascer-tained the following:

the companies included in the field of consolida-tion are correctly identified and respond to the requirements of controlled company as set forth by the aforementioned normative;

the information transmitted by the companies included in the field of consolidation to the con-solidating company is in conformance with the evaluation criteria, the structure and the content defined by the consolidating company itself, as confirmed by the administrative bodies of each consolidated company;

the information received was correctly utilised by the consolidating company for the formation of the consolidated Balance Statement together with those resulting from their own accounting registers;

the evaluation criteria and the principles of consolidation adopted are in accordance with the reference normatives, as are the method and criteria of consolidation:

from the balance statements of the compa-nies included in the area of consolidation, opportunely reclassified, the elements of profit and liability are integrally reported as well as costs and proceeds, according to the criteria of the integral consolidation method;

all significant operations within the group,

both due to value and consequence occur-ring between the companies included in the area of consolidation - in particular credits/debts, costs/proceeds and capital gains - were deleted;

therefore, the Board adopted the integral consolidation method in cases of real control and in share management.

for the other companies, the Board proceed-ed with the method of net equity;

we gave our consent to the registration in the balance statement of costs of systems and expansion as well as costs of research, development and advertising, respectively for 237,197 Euro and 8,895 Euro;

the explanatory note contains the informa-tion required by the reference normative;

the data and information contained in the Management report respect the content re-quired by art. 40 of legislative decree 127/91 and contextually acknowledge thos of the civil consolidated balance statement.

In our opinion this consolidated balance statement correctly expresses the financial equity situation and the economic result of the group which is head of the cooperative company CPL CONCORDIA for the financial year ending at 31 Dec 2008 in accord-ance with the norms which govern preparation of the consolidated balance.

Concordia sulla Secchia, 29 May 2009

Board of AuditorsPresident Dr. Pelliciardi Carlo AlbertoEffective auditor Dr. Casari MauroEffective auditor Dr. Ascari Fausto

_page 91

Certification report

CPL CONCORDIA Soc. Coop.

Via A. Grandi 39 - 41033 Concordia s/S. (MO) Italy

tel. +39.535.616.111 - fax +39.535.616.300

[email protected] - www.cpl.it

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Consolidated Annual Acount 2008

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