dea capital bilancio_2011_completo_eng_final

Financial Statements to 31 December 2011

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FINANCIAL STATEMENTS TO 31 December 2011

______________________

2011

Board of Directors of DeA Capital S.p.A. Milan, 12 March 2012


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NOTICE OF SHAREHOLDERS' MEETING All eligible persons are invited to attend the Ordinary and Extraordinary Shareholders' Meeting to be held in Milan at Spazio Chiossetto - Via Chiossetto 20: - at 11 a.m. on Tuesday, 17 April 2012 on first call; - at 11 a.m. on Monday, 30 April 2012 on second call: to discuss and resolve on the following

AGENDA Ordinary part 1. Approval of the financial statements for the year ended 31 December 2011. Related and consequent resolutions. Presentation of the Consolidated Financial Statements of the Group headed by DeA Capital S.p.A. for the year ended 31 December 2011; 2. Authorisation to buy and dispose of treasury shares, subject to prior revocation of the previous authorisation. Related and consequent resolutions; 3. Approval of a performance share plan and stock option plan reserved for certain employees of DeA Capital S.p.A., its subsidiaries and parent company. Related and consequent resolutions; 4. Presentation of the DeA Capital S.p.A. Remuneration Report and advisory vote by the Meeting on the DeA Capital S.p.A. Remuneration Policy (Section I of the Remuneration Report), in accordance with Art. 123-ter of Legislative Decree no. 58 of 24 February 1998, as subsequently amended and supplemented; 5. Extension of the financial audit contract for the years 2012-2014 and determination of the fee pursuant to Legislative Decree 39/2010. Related and consequent resolutions; 6. Reduction in the number of members of the board of directors following the resignation of one director. Related and consequent resolutions. Extraordinary part 1. Share capital increase for payment, in divisible form, without option rights pursuant to Art. 2441, eighth paragraph, of the Italian Civil Code and Art. 134 of Legislative Decree no. 58 of 24 February 1998, as subsequently amended and supplemented, by a maximum amount of EUR 1,350,000, by issuing a maximum of 1,350,000 shares, reserved exclusively and irrevocably for subscription by beneficiaries of the 2012- 2014 Stock Option Plan. Consequent amendment of Art. 5 of the Articles of Association. Related and consequent resolutions; 2. Amendment of the Articles of Association (Art. 11 "Management Body" and 18 "Auditors"), with the inclusion of a new Article 27 "Transitional Clause" to comply with the rules governing gender distribution in the supervisory bodies of listed companies, as set out in Art. 147-ter, paragraph 1-ter, and Art. 148 paragraph 1-bis, of Legislative Decree no. 58 of 24 February 1998, as subsequently amended and supplemented. Related and consequent resolutions.

*** Shareholders who, individually or jointly, represent at least 2.5% of the share capital may ask for items to be added to the agenda for discussion in the Meeting. The request and a list of proposed items for discussion shall be submitted to the Registered Office by 26 March 2012, together with the notice certifying ownership of the above shareholding, issued by the intermediaries that hold the accounts on which the shares are registered. Items may not be added to the agenda if they are items on which, by law, the Meeting resolves on a proposal from the directors or on the basis of a draft or report prepared by them (other than those set out in Art. 125-ter, paragraph 1, of Legislative Decree no. 58 of 24 February 1998, as subsequently amended and supplemented, hereinafter "TUF").


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Shareholders may ask questions about items on the agenda before the Meeting but shall be required to do so by no later than the end of the second market day preceding the scheduled date of the Meeting, (i.e., by 13 April 2012), by sending a letter to the registered office or email to the following address: [email protected]. The persons concerned shall provide information identifying them and confirming their shareholder status. Questions received before the Meeting shall be answered during the Meeting itself at the latest and the Company shall be entitled to reply to all questions having the same content with a single answer. Persons shall be entitled to attend the Meeting if they are registered as holding voting rights at the end of the accounting day on the seventh market day prior to the scheduled date of the Meeting at first call (4 April 2012) and if the respective notice issued by the authorised intermediary has been received by the Company. Persons who become shareholders only after that date shall not be entitled to participate or vote in the Meeting. All persons entitled to take part in the Meeting may arrange to be represented by means of a written proxy pursuant to current laws, to which end they may use the proxy form available on the website www.deacapital.it. The proxy may be sent to the Company by post to the Company's registered office or by email to the following certified address: [email protected]. Any prior notice shall not release the proxy holder, at the time of confirming his eligibility to participate in the Meeting, from his obligation to certify conformity to the original. The Company has appointed Servizio Titoli S.p.A. as the body to which persons entitled to vote may grant a special proxy free of charge ("Appointed Proxy"). A proxy with voting instructions shall be granted using the form available on the website www.deacapital.it or from the registered office of Servizio Titoli S.p.A. or from the Company's registered office. The original proxy must in any case be sent to Servizio Titoli S.p.A. at Via Lorenzo Mascheroni 19 – 20145 Milan and, where appropriate, a copy may be sent in advance together with a declaration that it conforms to the original, either by fax to number 02.46776850 or as an attachment to an email to be sent to the following address [email protected], by 13 April 2012. A proxy thus granted shall be valid only for motions in relation to which voting instructions have been given. Proxies and voting instructions may be revoked by the same date indicated above.

***

Documentation relating to the agenda, as required by current legislation, including proposed resolutions, shall be made available to the public at the Company's registered office or from Borsa Italiana S.p.A. (www.borsaitaliana.it) in accordance with the law. The same documentation shall be available for consultation on the Company's website (www.deacapital.it). More specifically, at the time of publication of the notice of meeting, the following documents shall be made available: (i) the Directors' Report on item 3 of the ordinary part and the prospectus pursuant to Article 84-bis of the Issuer Regulations; (ii) the Directors' Report on item 5 and iii) the Directors' Report on item 6. On 27 March 2012, the financial report and the other documents referred to in Article 154-ter of the TUF, as well as the Directors' Reports on the remaining items on the agenda. All eligible persons have the right to read and, on request, obtain a copy thereof.

*** Milan, 16 March 2012 For the Board of Directors The Chairman of the Board of Directors (Lorenzo Pellicioli) “Notice published on daily newspaper MF on 16 March 2012”


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DeA Capital S.p.A.

Corporate information

DeA Capital S.p.A. is subject to the management and co-ordination of De Agostini S.p.A. Registered office: Via Borgonuovo, 24, 20121 Milan, Italy Share capital: EUR 306,612,100 (fully paid-up) comprising 306,612,100 shares with a nominal value of EUR 1 each (including 25,915,116 held in the portfolio at 31 December 2011). Tax code, VAT code and recorded in the Milan Register of Companies under no. 07918170015

Board of Directors (*)

Chairman Lorenzo Pellicioli Chief Executive Officer Paolo Ceretti Directors Lino Benassi (1)

Rosario Bifulco (1/4/5)

Marco Boroli Daniel Buaron

Claudio Costamagna (3/5) Alberto Dessy (2/5)

Marco Drago Roberto Drago Andrea Guerra (3/5)

Board of Statutory Auditors (*)

Chairman Angelo Gaviani Regular Auditors Gian Piero Balducci Cesare Andrea Grifoni Alternate Auditors Andrea Bonafè Maurizio Ferrero Giulio Gasloli Secretariat of the Board of Directors Manager responsible for preparing the company’s accounts Independent auditors

Diana Allegretti Manolo Santilli KPMG S.p.A.

(*) In office until the approval of the financial statements to 31 December 2012. (1) Member of the Internal Audit Committee. (2) Member and Chairman of the Internal Audit Committee - Lead Independent Director. (3) Member of the Remuneration Committee. (4) Member and Co-ordinator of the Remuneration Committee. (5) Independent director.


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Contents

Report on Operations

1. Profile of DeA Capital S.p.A. 2. Information for shareholders 3. The group’s key Balance Sheet and Income Statement figures

4. Significant events during the year 5. Results of the DeA Capital Group 6. Results of the parent company DeA Capital S.p.A. 7. Other information 8. DeA Capital S.p.A. - Proposal for approval of the financial statements for

the year ending 31 December 2011 and related and consequent resolutions.

Consolidated Financial Statements for the year ending 31 December 2011

Statement of responsibilities for consolidated financial statements pursuant to art. 154-bis of Legislative Decree 58/98 Information pursuant to art. 149-duodecies of the Consob Issuer Regulations - consolidated financial statements Annual Financial Statements for the year ending 31 December 2011 Statement of responsibilities for accounts pursuant to art. 154-bis of Legislative Decree 58/98

Information pursuant to art. 149-duodecies of the Consob Issuer Regulation - annual financial statements Summary of Subsidiaries’ Financial Statements to 31 December 2011 Independent Auditors’ Reports (Original report in Italian version only)

Report of the Board of Statutory Auditors (Original report in Italian version only)


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Report on Operations


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1. Profile of DeA Capital S.p.A.

With an investment portfolio of around EUR 780 million and assets under management of approximately EUR 11 billion, DeA Capital S.p.A. is currently one of Italy’s largest alternative investment operators. The company, which operates in both the Private Equity Investment and Alternative Asset Management businesses, is listed on the FTSE Italia STAR segment of the Milan stock exchange, and heads the De Agostini Group in the area of financial investments. DeA Capital has "permanent" capital, and therefore has the advantage – compared with traditional private equity funds, which are normally restricted to a pre-set duration – of greater flexibility in optimising the timing of entry to and exit from investments. In terms of investment policy, this flexibility allows it to adopt an approach based on value creation over the medium to long term. PRIVATE EQUITY INVESTMENT

ALTERNATIVE ASSET MANAGEMENT

Direct investments In the services sector, in Europe and Emerging Europe.

Indirect investments In private equity funds of funds, co-investments and sectors.

IDeA Capital Funds SGR, which operates in the management of private equity funds (co-investment funds, theme funds and funds of funds) Assets under management: EUR 1.2 billion

IDeA FIMIT SGR, which operates in

the management of real estate funds. Assets under management: EUR 9.5 billion

Soprarno SGR, which operates in the management of total return funds and other service companies (IDeA SIM and FARE/FAI)


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At the end of 2011, the corporate structure of the group headed by DeA Capital S.p.A. (DeA Capital Group, or the Group) was as summarised below:

DeA CapitalS.p.A.

100%

Shareholdingsand VC Funds

100%

DeA CapitalInvestments

(Luxembourg)

QuotaIDeAOF I

QuotaIDeA I

Fund of Funds

ShareholdingKenan

Investments

ShareholdingSanté

ShareholdingSigla

Luxembourg

ShareholdingMigros

ShareholdingStepstone

FARE Holding

FARE

FAI

70%

IDeACapital Funds

SGR

IDeAAlternative

Investments

100%

100%

SoprarnoSGR

65%

QuotaIDeAICF II

100%

Other MinorityStakes

65%

QuotaBlue Skye

ShareholdingSigla

ShareholdingGDS

Private Equity Investment

Alternative Asset Management

Holding Companies

IDeASIM

QuotaIDeAEESS

IFIM

58,31 %

20,98% 40,32%

IDeA FIMITSGR

QuotaAVA

In relation to the corporate structure shown above, the procedure for the partial non-proportional demerger of IDeA Alternative Investments (IDeA AI) was completed on 17 January 2011, with the result that Investitori Associati SGR and Wise SGR were removed from the basis of consolidation. In addition, on 1 February 2011, IDeA AI completed the sale of its stake in IDeA AI Sarl (holder of a portion of the investments in Stepstone/Blue Skye) and on 28 September 2011, FARE Holding completed the sale of its entire holding in FARE NPL (65%). Lastly, the merger of FARE SGR and FIMIT SGR was completed on 3 October 2011. This created IDeA FIMIT SGR, Italy’s largest real estate asset management company with around EUR 9.5 billion in assets under management and 24 funds (including five listed funds) at 31 December 2011. Following the series of planned operations, FARE Holding has a stake of 40.32% and IFIM S.r.l. (IFIM) a stake of 20.98% in IDeA FIMIT SGR. The latter company was acquired by DeA Capital S.p.A. at the time of the finalisation of the above merger (for a more complete description of the transaction, please see the section below on ”Significant events during the year").


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At 31 December 2011, the DeA Capital Group reported group shareholders’ equity of EUR 669.0 million, corresponding to a net asset value (NAV) of EUR 2.38 per share, with an investment portfolio of EUR 775.9 million. More specifically, the investment portfolio, which consists of equity investments of EUR 385.3 million, funds of EUR 154.3 million and net assets relating to the Alternative Asset Management business (i.e. the stake in IDeA Alternative Investments, FARE Holding and IFIM) of EUR 236.3 million, is detailed below. Investment portfolio 31.12.11 31.12.10 no. EUR/mln no. EUR/mln Equity investments 7 385.3 7 516.5 Funds 12 534.3 10 132.7 Private equity investment 19 539.6 17 649.2 Alternative asset management (*) 3 236.3 2 151.1 Investment portfolio 22 775.9 19 800.3

(*) Equity investments in subsidiaries and joint ventures relating to alternative asset management are valued using the equity method in this table.

PRIVATE EQUITY INVESTMENT

o Equity investments

strategic shareholding in Générale de Santé (GDS), France's leading private healthcare provider, whose shares are listed on the Eurolist market in Paris (with a free float of less than 5% and low trading volumes). The investment is held through the Luxembourg-registered company Santé S.A. (with a stake of 42.99%)

minority interest in Migros, Turkey's biggest food retail chain, whose shares are

listed on the Istanbul Stock Exchange. The investment is held through the Luxembourg-registered company Kenan Investments S.A., an investment recorded in the AFS portfolio of the DeA Capital Group (with a stake of 17.03%)

strategic shareholding in Sigla, which provides finance to all customer segments

("salary-backed loans" and personal loans) and services non-performing loans in Italy. The investment is held through the Luxembourg-registered company Sigla Luxembourg S.A., an associate of the DeA Capital Group (with a stake of 41.39%)


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o Funds

units in four funds managed by the subsidiary IDeA Capital Funds SGR i.e. in the

funds of funds IDeA I Fund of Funds (IDeA I FoF) and ICF II, in the co-investment fund IDeA Opportunity Fund I (IDeA OF I, formerly IDeA CoIF I) and in the theme fund IDeA Energy Efficiency and Sustainable Growth (IDeA EESS)

a unit in the real estate fund Atlantic Value Added (AVA) managed by IDeA FIMIT

SGR

other units in venture capital funds

ALTERNATIVE ASSET MANAGEMENT

controlling interest in IDeA Capital Funds SGR (100%), which operates in the management of private equity funds (funds of funds, co-investment funds and theme funds) with about EUR 1.2 billion in assets under management

controlling interest in IDeA FIMIT SGR (61.30%), Italy's largest real estate

asset management company with about EUR 9.5 billion in assets under management and 24 funds (including five listed funds)

controlling interest in Soprarno SGR (65%), which operates in the management

of total return funds, in FARE/FAI (100%), which operate in project, property and facility management, agency services and real estate brokerage, and in IDeA SIM (65%), which operates in the segment of property brokerage companies


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2. Information for shareholders

Shareholder structure - DeA Capital S.p.A. (#)

De Agostini SpA

58.3%

Treasury stock8.5%

Mediobanca4.8%

DEB Holding*

3.8%

Free float24.6%

(#) Figures to 31 December 2011. (*) Company linked to director Daniel Buaron.

Share performance (°)

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

DeA Capital FTSE All FTSE Star LPX 50

(°) Source: Bloomberg – 1 January to 31 December 2011


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Investor relations

DeA Capital S.p.A. maintains stable and structured relationships with institutional and individual investors. In 2011, the company continued its communications campaign, participating in meetings and holding conference calls with portfolio managers and financial analysts from Italy and abroad. Coverage of the DeA Capital stock is currently carried out by Equita SIM and Intermonte SIM, the two main intermediaries on the Italian market, with Intermonte SIM acting as a specialist. The research prepared by these intermediaries is available in the Investor Relations section of the website www.deacapital.it. In December 2008, the DeA Capital share joined the LPX50® and LPX Europe® indices. The LPX® indices measure the performance of the major listed companies operating in private equity (“Listed Private Equity” or LPE). Due to its high degree of diversification by region and type of LPE investment, the LPX50® index has become one of the most popular benchmarks for the LPE asset class. The method used to constitute the index is published in the LPX Equity Index Guide. For further information, please visit: www.lpx.ch. The website is the primary mode of contact for individual investors, who may choose to subscribe to a mailing list and send questions or requests for information and documents to the company's Investor Relations area, which is committed to answering queries promptly, as stated in the Investor Relations Policy published on the site. A quarterly newsletter is also published for individual investors with the aim of keeping them updated on key news, as well as providing clear and simple analysis of quarterly results and share performance. Performance of the DeA Capital share in 2011 In 2011, the DeA Capital share was up 16.9%, performing better than the FTSE Italia All-Share® index, the general index of the Italian market (-24.3%), the FTSE Star® index (-19.0%) and the LPX50® (-18.6%). The share’s liquidity was higher than in 2010, with average daily trading volumes of around 373,000 shares. Share prices for 2011 are shown below: (in Euro) 1 Jan - 31 Dec 2011Maximum price 1.60 Minimum price 1.13 Average price 1.43 Price at 31 December 2011 (EUR per share) 1.33 Capitalisation at 31 December 2011 (EUR million)

408


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3. The group’s key Balance Sheet and Income Statement figures

Key income statement and balance sheet figures to 31 December 2011 compared with the corresponding figures to 31 December 2010 are shown below.

(EUR million) 2011 2010

NAV/share (EUR) 2.38 2.60 Group NAV 669.0 764.0 Parent Company net profit/(loss) (32.1) 16.0 Group net profit/(loss) (43.6) (26.3) Comprehensive income (Group share) Statement of Performance – IAS 1 (70.2) (15.6) Investment portfolio 775.9 800.3 Net financial position – holding companies (*)

(113.5) (40.7) Net financial position - consolidated (102.5) (20.4)

(*) Holding companies are as defined in the corporate structure previously reported The table below shows the composition of NAV during 2011.

Change in Group NAV Total value (EUR m)

No. shares (millions)

Value per share (EUR)

Group NAV at 31.12.10 764.0 294.0 2.60

Purchase of own shares (26.4) (18.1) 1.46 (*) Transferral of own shares (acquisition of IDeA AI minorities) 5.8 4.8 1.21 (**)

Comprehensive income - Statement of Performance – IAS 1 (70.2)

Other changes in NAV (4.2)

Group NAV at 31.12.11 669.0 280.7 2.38

(*) Average price of purchases in 2011 (**) Consideration calculated as the average of official stock market prices in the three months prior to the transaction, weighted for volumes traded


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4. Significant events during the year Significant events that occurred in 2011 are described below.

IDeA I Fund of Funds (IDeA I FoF) - Paid calls and reimbursements On 4 January 2011, 1 April 2011, 1 July 2011 and 3 October 2011, DeA Capital Investments increased its investment in the IDeA I FoF fund with payments totalling EUR 17.3 million. On 1 April 2011 and 1 August 2011, DeA Capital Investments received reimbursements of EUR 11.5 million from the fund, which were used in full to reduce the carrying value of the units. In relation to the relevant portion, total payments made by DeA Capital Investments to IDeA FoF I from the beginning of the fund’s operations until 31 December 2011 were EUR 110.8 million, with a residual commitment of EUR 59.2 million. The carrying value of the fund in the consolidated financial statements is EUR 94.3 million.

IDeA Opportunity Fund I (IDeA OF I) - Paid calls and reimbursements On 4 January 2011, 1 April 2011 and 1 July 2011, DeA Capital Investments increased its investment in the IDeA OF I fund with payments totalling EUR 9.8 million. Then on 3 October 2011, DeA Capital Investments received reimbursements totalling EUR 0.5 million from the same fund (to be used in full to reduce the carrying value of the units) with a concurrent capital call of EUR 0.3 million. On 18 November 2011, the company made another payment of EUR 0.5 million thereby bringing the total investment in IDeA OF I at 31 December 2011 to EUR 52.1 million with a residual commitment of EUR 47.9 million and carrying value of EUR 36.2 million in the consolidated financial statements. At its meeting on 20 July 2011, the Board of Directors of IDeA Capital Funds SGR approved a number of regulatory changes. These included changing the name of the IDeA Co-Investment Fund I (IDeA CoIF I) to IDeA Opportunity Fund I (IDeA OF I) and extending investment opportunities to qualified minority interests, independently or via syndicates.

ICF II (Fund of Funds) - Paid calls On 4 January 2011, 1 April 2011, 1 July 2011 and 3 October 2011, DeA Capital Investments increased its investment in the ICF II fund with payments totalling EUR 2.6 million. In relation to the relevant portion, payments made by DeA Capital Investments to ICF II, from the beginning of the fund’s operations until 31 December 2011, totalled EUR 8.0 million, with a residual commitment of EUR 42.0 million. The carrying value of the fund in the consolidated financial statements is EUR 9.1 million.

Reorganisation of IDeA Alternative Investments With a view to simplifying the shareholder base, corporate governance and investment processes, at the start of 2011 the first step was taken to reorganise IDeA Alternative Investments (IDeA AI), achieved through a partial non-proportional demerger, with a reduction in the share capital of IDeA AI and allocation of Investitori Associati SGR and Wise SGR to the management of Investitori Associati


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SGR and Wise SGR respectively, in return for the cancellation of the stakes held by those companies in IDeA AI. Following approval by the Bank of Italy and the Italian Competition Authority, the deed of the demerger of IDeA AI, effective from 17 January 2011, was completed on 13 January 2011. DeA Capital S.p.A., which previously held 44.36% of the company’s capital, has therefore acquired control of 90.11% of IDeA AI and its assets. These primarily include 100% of IDeA Capital Funds SGR, 65% of Soprarno SGR and 65% of IDeA SIM. Subsequently, on 20 January 2011, in order to gain control of the entire share capital of IDeA AI, DeA Capital S.p.A. acquired the remaining 9.89% of the company’s stock held by private investors, including directors Lorenzo Pellicioli and Paolo Ceretti, in exchange for 4,806,921 DeA Capital shares, using existing own shares in the portfolio, equal to 1.57% of the capital. As part of the valuations performed for the various transactions mentioned above, the company employed the services of independent external consultants. On 26 July 2011, in order to continue the process of simplifying the shareholder base, corporate governance and investment processes, which began with the partial non-proportional demerger at the beginning of 2011, the Board of Directors of DeA Capital S.p.A. approved the merger by incorporation of the wholly-owned subsidiary IDeA Alternative Investments. The intention behind the operation, which entails the reorganisation of the DeA Capital Group’s corporate structure, is to centralise within the parent company the cash flows and the determination of strategic guidelines for the alternative asset management business. The Bank of Italy has already given its approval, and the operation took effect on 1 January 2012.

Sale of the stake in Stepstone by IDeA AI On 1 February 2011, IDeA AI sold the entire share capital of IDeA AI Sarl, which in turn owns a 4.9% stake in Stepstone, and also has a right to a portion of the management fees and carried interest of the Blue Skye fund. The total proceeds from the transaction were around EUR 2.6 million, in line with the carrying value recorded in the consolidated financial statements at 31 December 2010.

Dividends from Alternative Asset Management activities On 30 March 2011, the shareholders' meeting of FARE Holding approved the company's financial statements to 31 December 2010 and approved the distribution of dividends totalling EUR 9.0 million, including EUR 6.3 million to the parent company DeA Capital S.p.A. (paid out on 31 March 2011). On 19 April 2011, the shareholders' meeting of IDeA Alternative Investments approved the company's financial statements to 31 December 2010 and approved the distribution of dividends totalling EUR 6.7 million, to be paid entirely to the parent company DeA Capital S.p.A. (paid on 16 May 2011). Therefore, total dividends from Alternative Asset Management activities paid in 2011 to the parent company DeA Capital S.p.A. totalled EUR 13.0 million compared with EUR 9.4 million in 2010.


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Santé – partial cancellation of the equity plan granted to the senior management of GDS

On 31 March 2011, DeA Capital Investments acquired a portion of the Santé shares subscribed for during the second half of 2009 by the senior management of GDS as part of the equity plan arranged for this purpose. Specifically, the shares acquired related to the equity plan of the chairman of the GDS executive committee, whose mandate was terminated by mutual consent at the end of 2010. The transaction, which was completed with a net investment of around EUR 1.0 million, involved the cancellation of a portion of the loans earmarked to execute the above-mentioned equity plan and put options available for the seller of the shares. Following this transaction, the DeA Capital Group's shareholding in Santé increased from 42.61% to 42.89% (i.e. 42.87% to 42.99% in economic terms).

Share buy-back plan

In relation to the plan to buy and sell own shares approved by the shareholders’ meeting on 26 April 2010, on 14 February 2011 DeA Capital S.p.A. announced its intention to buy, depending on market conditions, shares up to a maximum of 50% of the average daily trading volume for the 20 trading days preceding the date of purchase. Subsequently, on 19 April 2011, the shareholders' meeting approved a new plan to buy and sell own shares that cancels and replaces the previous plan approved by the shareholders' meeting on 26 April 2010, with the same objectives as the previous plan, including the purchase of own shares to be used for extraordinary transactions and share incentive schemes, offering shareholders a means of monetising their investment, stabilising the share price and regulating trading within the limits of current legislation. The approved plan authorised the Board of Directors to buy and sell a maximum number of ordinary shares in the company representing a stake of up to 20% of share capital, on one or more occasions, on a rotating basis. The authorisation specifies that purchases may be carried out, for a maximum period of 18 months starting from 19 April 2011, in accordance with all procedures allowed by current regulations, including a public purchase or exchange offer, which was not permitted under the previous authorisation granted by the shareholders' meeting. The unit price for the purchase of the shares will be set on a case-by-case basis by the Board of Directors, but in any case must not be more than 20% above or below the share’s reference price on the trading day prior to each purchase. In contrast, the authorisation to sell own shares already held in the company’s portfolio and any shares to be bought in the future was granted for an unlimited period, to be implemented using the methods deemed most appropriate and at a price to be determined on a case-by-case basis by the Board of Directors, which must not, however, be more than 20% below the share's reference price on the trading day prior to each sale (apart from certain exceptions specified in the plan), although this limit may not apply in specific cases. Sale transactions may also be carried out for trading purposes. On the same date, the Board of Directors met after the shareholders' meeting and resolved to initiate the plan to buy and sell own shares authorised by the shareholders’ meeting, and to this end invested the Chairman of the Board of Directors and Chief Executive with all the necessary powers, to be exercised jointly or severally and with full power of delegation. In 2011, under the above-mentioned two plans, DeA Capital S.p.A. purchased around 18.1 million shares valued at about EUR 26.4 million (at an average price of EUR 1.46 per share).


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Taking into account purchases made in previous years for plans in place from time to time, and uses of own shares to service purchases of controlling interests in FARE Holding and IDeA AI, at 31 December 2011 the Company owned 25,915,116 own shares (equal to about 8.5% of share capital).

Stock option plan On 19 April 2011, the shareholders’ meeting approved the DeA Capital stock option plan for 2011–2016. To implement the resolution of the shareholders' meeting, the Board of Directors of DeA Capital S.p.A. allocated a total of 1,845,000 options to certain employees of the company and its subsidiaries, and employees of the parent company De Agostini S.p.A. who carry out important roles. In line with the criteria specified in the regulations governing the DeA Capital stock option plan for 2011–2016, the Board of Directors also set the exercise price for the options allocated at EUR 1.538, which is the arithmetic mean of the official price of ordinary DeA Capital shares on the Mercato Telematico Azionario, the Italian screen-based trading system organised and managed by Borsa Italiana S.p.A., on the trading days between 18 March 2011 and 18 April 2011. The terms and conditions of the DeA Capital stock option plan for 2011–2016 are set out in the Information Prospectus prepared in accordance with art. 84-bis of Consob Resolution 11971 of 14 May 1999, available to the public at the headquarters of DeA Capital S.p.A.


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Placement of Migros shares by Kenan Investments through accelerated book-building

and subsequent cash distribution

In April 2011, Kenan Investments, a company controlled by funds managed by BC Partners, in which the DeA Capital Group holds a stake of around 17%, completed the placement of 31 million Migros shares (representing 17.4% of the company's share capital) with institutional investors. The placement was carried out using an accelerated book-building procedure, at a price of TRY 25 per share, for a total value of around TRY 775 million (about EUR 346.5 million). Following the receipt of the proceeds from this share placement, on 5 May 2011 Kenan Investments distributed a total of EUR 296.5 million to shareholders; DeA Capital’s share amounted to EUR 50.5 million, generating a capital gain of around EUR 26.6 million. Subsequently, on 18 October 2011 Kenan Investments completed the distribution of the remainder totalling about EUR 50 million; DeA Capital's share amounts to EUR 8.5 million, generating a capital gain of about EUR 1.2 million. The above distributions, with capital gains totalling EUR 27.8 million, combined with the amount collected in 2010, bring total proceeds to date from Kenan Investments to EUR 79.8 million (with capital gains of EUR 30.1 million) for an initial investment of EUR 175 million (with the investment valued at acquisition cost of EUR 125.3 million and a carrying value in the consolidated accounts to 31 December 2011 of EUR 127.1 million). Following this placement, the indirect stake of the DeA Capital Group in Migros was 13.7% resulting from the above-mentioned direct 17% interest in Kenan Investments and the 80.5% stake held by the latter in Migros.

Sale of Şok by Migros On 7 June 2011, Migros signed an agreement to sell Şok (the discount arm of the Migros Group) to Yildiz Holding Group, a leading Turkish food producer, for around TRY 600 million. Following approval from the Turkish anti-trust authority on 17 August 2011, the deal was closed on 24 August 2011 and the transaction was settled in cash. The business sold consists of some 1,200 supermarkets, with revenues in 2010 of around TRY 1.2 billion (or 19% of Migros Group revenues). Générale de Santé – adoption of a new corporate governance system

With the aim of streamlining and achieving greater efficiency in the company's governance and operations, on 30 June 2011 the shareholders' meeting of Générale de Santé, which is controlled by the investee company Santé S.A., changed the company's governance structure by replacing the previous dual system (of a supervisory board and an executive committee) with a traditional system of just a board of directors. This change had essentially no impact on the shareholders' agreements signed by DeA Capital and the other Santé shareholders in 2007. The Board of Directors therefore appointed Pascal Roché as the new Directeur Général of the company, with management responsibilities similar to those of a CEO.


19

First and second closing of the Idea Energy Efficiency and Sustainable Growth Fund

On 1 August 2011, DeA Capital Investments participated in the first closing of the IDeA Energy Efficiency and Sustainable Growth (IDeA EESS) fund by subscribing to 250 “A” units and 1 “B” unit (the latter confers the right to 5% of any carried interest), representing a maximum commitment of up to around EUR 12.6 million. DeA Capital Investments paid approximately EUR 0.2 million into the fund on the same date.

IDeA Alternative Investments subscribed to a further five “B” units of the fund (conferring the right to a total of 25% of any carried interest).

On 15 December 2011, the fund undertook a second closing for a total of EUR 2.5 million, which brought the total commitment to EUR 53.5 million. Following the addition of the new shareholders, DeA Capital Investments held a 23.5% stake. Finalisation of merger between FARE SGR and FIMIT SGR

In 2011, the merger by incorporation of First Atlantic Real Estate SGR S.p.A. (FARE SGR) into FIMIT SGR S.p.A. (FIMIT SGR), which had begun with a series of non-binding agreements in 2010, was completed. Specifically, on 3 October 2011, in executing the merger deed concluded between FARE SGR and FIMIT SGR on 26 September 2011 (as approved by the respective shareholders' meetings after obtaining the favourable opinion of the Italian Competition Authority and the approval of the Bank of Italy), the merger of FARE SGR into FIMIT SGR was completed. At the same time, the latter changed its name to IDeA FIMIT SGR S.p.A. The exchange ratio, i.e. the ratio between the economic values of FIMIT SGR and FARE SGR was 1.48, which was supported by leading investment banks and judged suitable in the report by the independent expert appointed pursuant to art. 2501-sexies of the Italian Civil Code by the Court of Rome on 15 February 2011, which was filed at the registered offices of the former FARE SGR and the former FIMIT SGR on 1 April 2011. Note that determination of the exchange ratio did not include the economic rights to the performance fees of the two asset management companies' existing funds at the time of the merger, which, as agreed, continued to belong to the previous shareholders through the allocation of financial equity instruments (strumenti finanziari partecipativi, or SFP) issued before the execution of the merger deed (on 5 September 2011 by FARE SGR and on 13 September 2011 by FIMIT SGR). These SFPs were issued on a proportional basis, and more precisely, at a ratio of one financial equity instrument for every share held with no specific contribution to be made by shareholders. The SFPs grant holders specific ownership rights; they do not confer the right to participate or vote at shareholders' meetings, but only the right to vote at the special shareholders' meeting for holders of SFPs pursuant to art. 2376 of the Italian Civil Code. SFPs may be freely transferred with or without the shares. In addition, they confer the right to receive, on a proportional basis, distributions calculated as the difference between the overall amount of performance fees collected each financial year by IDeA FIMIT and directly allocable costs. These ownership rights are granted to holders of SFPs only if the shareholders' meeting of IDeA FIMIT SGR approves the distribution of profits for the period and/or reserves, up to the limits of such profits and/or reserves. In this regard, holders of SFPs have priority over shareholders in the division of profits and reserves. If the shareholders' meeting does not approve any distribution, or the amounts for which the shareholders' meeting approves a distribution are lower than the ownership rights attaching to the SFPs, these rights shall accrue, with no time limitation, with those that materialise in future periods. Any ownership rights not exercised at the dissolution date of IDeA FIMIT SGR will be granted to holders of such instruments through the division of the remaining settlement proceeds, with priority over any distribution to ordinary shareholders. The SFPs confer no rights of reimbursement or withdrawal.


20

At the same time as the merger, the other actions to acquire control of IDeA FIMIT SGR by DeA Capital S.p.A. came into effect, namely:

the acquisition by DeA Capital of a 58.31% stake in IFIM S.r.l. (IFIM) from Feidos S.p.A. (Feidos), a company owned by Massimo Caputi

the acquisition by IFIM of the stake held by the LBREP III Fimit S.a.r.l. fund (LBREP) in FIMIT SGR, equal to 18% (pre-merger) of the company's share capital

Following the series of planned operations, FARE Holding has a stake of 40.32% and IFIM a stake of 20.98% in the new IDeA FIMIT SGR. Both these companies are controlled by DeA Capital S.p.A. In financial terms, the operation required an outlay for DeA Capital S.p.A. of EUR 59.4 million, of which EUR 37.3 million related to shareholder loans to IFIM (to cover the company’s entire debt at the time of the operation, and the partial financing of the acquisition of LBREP's stake in FIMIT SGR.

Inpdap EnasarcoEnpals Inarcassa Otherpartners

IDeA Fimit

Fare Holding

40.32% 18.33 % 11.34 % 5.97 % 2.98% 0.08%

IFIM

20.98%

DeA Capital DanielBuaron DeA Capital Feidos

MassimoCaputi

70% 30% 58.31% 30.03% 11.66%

61.30%

De Agostini

58.31%

Pursuant to the provisions of art. 21 of Decree Law 201 of 6 December 2011, which was converted with revisions by Law 214 of 22 December 2011, INPDAP and ENPALS were abolished and the relevant functions transferred to INPS (National Social Security Institute), which takes over all the assets and liabilities of the abolished entities from 1 January 2012. The shareholders' meeting of IDeA FIMIT SGR, held after completion of the merger, appointed the Board of Directors, comprising 13 members, of whom the majority (seven) were appointed directly or indirectly by DeA Capital S.p.A. It also appointed Massimo Brunelli as Chief Executive of IDeA FIMIT SGR and the Executive Committee comprising seven members, (of whom three were appointed by DeA Capital S.p.A.). Two of these seven members are independent. The operation described forms part of the development process that DeA Capital S.p.A. has undertaken in recent years to create an independent platform for alternative asset management. The union of FARE SGR and FIMIT SGR will make it possible to continue the growth process and consolidate the company’s leading position in the domestic market, as well as lay the foundations for strong growth in the international market as well. IDeA FIMIT will oversee the entire range of products and will be seen as the leading integrated management centre for real estate funds. It will have substantial business advantages, such as significant economies of scale and improved capacity to create and place new managed products, making it a leader in its reference market. In addition, the presence of institutional partners (such as the DeA Capital Group and leading Italian social security organisations) among shareholders will provide significant support for the development of the company and new products, allowing IDeA FIMIT SGR to position itself as the preferred partner


21

among Italian and international institutional investors in the promotion, creation and management of real estate mutual funds. At 31 December 2011, the company had assets under management of around EUR 9.5 billion through 24 real estate funds, of which five are listed on the MIV segment of Borsa Italiana. Over 80 institutional entities and 80,000 retail investors have invested in the funds. First closing of the Atlantic Value Added (AVA) fund

The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" commenced operations on 23 December 2011 with a primary focus on real estate investments in the office and residential markets with the potential for growth in value. The duration of the fund is eight years. The fund, which is managed by the subsidiary IDeA FIMIT SGR, completed the first closing with a commitment of around EUR 55 million compared with a target commitment of EUR 150 million. DeA Capital Investments subscribed to a total commitment of EUR 5 million in the fund (corresponding to 9.1% of the overall commitment), and at 31 December 2011 had made the first payment of EUR 2.5 million (five units).

Investment in Harvip Investimenti S.p.A. (Harvip) On 28 December 2011, DeA Capital S.p.A. purchased 25% of the share capital of Harvip Investimenti (Harvip) from the subsidiary IDeA FIMIT SGR for consideration equal to EUR 1 million. The company manages funds and investment vehicles used to purchase distressed real estate and other investments.


22

5. Results of the DeA Capital Group

The results reported by the group for the period relate to the businesses below:

Private Equity Investment, which includes the reporting units that carry out private equity

investment, broken down into equity investments (Direct Investments) and investments in funds (Indirect Investments)

Alternative Asset Management, which includes reporting units involved in asset management

activities and related services, with a focus on the management of private equity and real estate funds

Private equity The complex economic and financial situation that arose in 2008-2009 had an obvious impact on the general economy in 2010, while in 2011 there was a more widespread recovery in the first half, which was more pronounced in emerging economies. During the second half of 2011, however, on the basis of International Monetary Fund (IMF) projections, global economic growth prospects worsened. In the second half, the global financial markets experienced significant volatility mainly due to uncertainties surrounding the future of the single European currency. In 2012, a minor recession in mature European economies is projected due to the sovereign debt crisis, the impact of bank deleveraging on the real economy and the impact of further tax consolidation policies announced by governments. The most significant risks are mainly linked to the possibility that the negative effects of the sovereign debt and banking crisis in the Eurozone will get worse. This would lead to a further contraction of loans to businesses and households, and lower expectations of economic growth as a result. The first signs provided by financial markets at the beginning of 2012 seem to dismiss the most catastrophic scenarios that were taking shape in the fourth quarter of last year. Although the problems with European sovereign debt, and in particular, Greek debt, have not been resolved, the efforts of governments and commitment of the International Monetary Fund are gathering the support of investors as demonstrated by the recovery of major stock indices and the reduction in the yield spread between German government bonds and those of peripheral countries. The uncertain economic situation and the resulting volatility in financial markets have also had a major impact on the global private equity market. Investment activity has suffered from the greater unwillingness of European banks to provide loans for buy-out transactions, which is only partially offset by investors' additional use of bond financing. Furthermore, the prospect of a zero-growth scenario in Europe affected the ability of European private equity funds to raise capital, with a gradual increase in allocations toward funds focused on emerging countries. There were no trend reversals in funds raised, which totalled USD 277 billion in 2011, in line with 2010 (USD 307 billion in 2009). Instead, there was a sharp increase in the value of the amount raised in listings of companies owned by private equity and venture capital funds. The volumes of IPOs by companies financed by private equity funds in 2011 totalled USD 24 billion (USD 17 billion in 2010), exceeding even the 2007 levels. Investment activity was higher than in 2010 with buyout investment volume reaching a level of USD 258 billion compared with around USD 218 billion in 2010. Despite widespread uncertainty, investment activities rose by 18% on an annual basis. However, the aggregate figure conceals a significant reduction in investments in the second half of the year (-16%). The first three quarters of 2011 generated distributions of USD 55 billion, which was a sharp reduction from the USD 111 billion in 2010, which included USD 65 billion in the first half alone.


23

Private equity in Europe The European private equity market amounts to just over 20% of the total. Fund raising declined markedly in 2009, while there was a gradual recovery in the following two years. Fund raising rose from EUR 55 billion in 2010 to EUR 61 billion in 2011. To be specific, with regard to the main businesses in which DeA Capital invests, in 2010 transactions were carried out at multiples, which, on average were higher than the book value multiples of Générale de Santé. In the food retail sector, acquisitions were primarily made by groups active in the sector with the aim of expanding in emerging countries, at multiples in line with the book value multiples of Migros.

Total investments in buy-outs (EUR billion)

0

100

200

300

400

500

600

700

2006 2007 2008 2009 2010 2011

Investments in buy-outs in Europe (EUR billion)

0

10

20

30

40

50

60

1S 2008

2S 2008

1S 2009

2S 2009

1S 2010

2S 2010

1S 2011

2S 2011

Source: Preqin

Total PE fund raising (EUR billion)

0

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010 2011

PE fund raising in Europe (EUR billion)

0

20

40

60

80

100

120

140

160

180

2006 2007 2008 2009 2010 2011

Source: Preqin Private equity in Italy Statistics prepared by AIFI (the Italian Private Equity and Venture Capital Association) and currently updated to the first half of 2011 show a 19% decline in fund raising compared with the same period in 2010, even though the first signs of the European sovereign debt crisis occurred in the second half of the year. Conversely, investment operations improved significantly and are still focused on small transactions – traditionally a feature of the Italian market – which proved to be more stable than large transactions requiring significant financial leverage.


24

The number of new investments rose from 129 to 159, with a total value of EUR 1,524 million (up by 176% compared with the same period in 2010). Despite the difficult environment, there are positive signs from the buy-out sector, where investments in the first half of 2011 more than tripled from EUR 329 million to EUR 1,160 million, with 27 transactions. There were also good results from the expansion segment relating to minority investments intended to support the growth programmes of existing businesses, which doubled in the first half of 2011 with 74 transactions ranging from EUR 145 million to EUR 280 million. Outlook for private equity in 2012 It is reasonable to expect that the recovery in private equity investment activities may continue in future years if the macro-economic situation allows banks to avoid solvency problems and to provide cash to the credit market. The strengthening of fund raising at lower levels, together with the natural selection process of managers, will result in less competition in the area of investments, and as a result, stability in purchase prices. It will finally be possible to work out several current investment issues related to today’s environment of volatility and uncertainty. Distressed funds will benefit from new opportunities provided by the European sovereign debt crisis following the process of reducing non-core assets by European banks. Certain emerging economies such as China, Brazil, Turkey and Indonesia, offer opportunities that are mainly linked to clear economic growth and healthy government finances. In these economies, PE also benefits from a low level of penetration in total M&A transactions with a lower level of competition. Lastly, a rise in conversions linked to expectations of an increase in the value of portfolios is also likely.


25

Real estate market in Europe The main European performance indices in the non-residential sector, such as the DTZ Fair Value Index1, again declined in the third quarter of 2011 after posting an initial uptick over 2010 levels at the beginning of the year. Jones Lang La Salle2 also reported positive real estate performance in Europe for the first two quarters, with an overall increase in take-up of 10%, while the negative results in the third and fourth quarter, which were also tied to the decline in business confidence, will reduce overall volumes to 2010 levels leaving the average vacancy rate stable at 10.2% This trend is a reflection of the pessimistic market environment and reduced opportunities due in part to investors' increased aversion to risk. In fact, as is the case in the bond market, there is a clear preference for instruments deemed to be "safe," such as US and German government bonds, and in the real estate market products with a low risk profile are also favoured, while markets deemed to be less liquid are penalised. In core markets, i.e. those with a lower "country risk" profile and a correspondingly lower yield on government bonds (Germany, Great Britain and the Scandinavian countries), the spread between yields in the real estate market and yields on government bonds, historically considered a benchmark of the attractiveness of the real estate market, is reaching record levels. Conversely, in peripheral markets, such as Italy, the increase in yields on government bonds reduces this spread to zero or a negative figure. However, this situation is not likely to continue since, in the Italian and other markets, an increase in required yields is also projected in response to greater systemic risk. The impact of the slowdown in the overall economic environment is instead common to all European markets as many observers are reporting a slowdown, including going forward, in the growth in lease payments, which will negatively affect potential returns and various real estate sectors since businesses will postpone their expansion plans. DTZ Research3 is projecting average global growth in lease payments for the entire real estate sector of 2.1% per annum for the four-year period 2012-2016, which is lower than the projections made in mid-2011, but still higher than the 1.7% projected in the Eurozone and US.

1 European Fair Value Q3 2011 – DTZ Foresight 2 EMEA Corporate Occupier Condition Q4 2011 – Jones Land LaSalle 3 Italy ViewPoint Nov. 2011 - CBRE


26

Real estate funds in Italy In 2011 (Scenari Immobiliari estimates), assets managed by real estate funds rose by 4.8% over the previous year despite a gloomy economic environment. At the end of 2011 the 310 existing funds directly controlled real estate assets of around EUR 46 billion. AUM of the eight largest real estate asset managers (EUR billion)

0

1

2

3

4

5

6

7

8

9

10

IDeA F

imit*

Prelio

s

Genera

li Im

mobi

liare

Inve

stire

Imm

obi

liare

BN

P Pa

ribas

REIM

Fabrica

Im

mobi

liare

Sorg

ente

Torr

e

*Pro-forma calculated as the sum of assets managed by FARE SGR and FIMIT SGR at 30 June 2011

Source: Assogestioni. Around 62% of investment is concentrated in the office market and 20% in the commercial market, the sector with the highest number of transactions in 2011. At the same time, only 1% is concentrated in the residential market. However, the trend towards a more uniform breakdown of real estate investments has still not made it possible to get close to the average overall distribution seen in Europe.

Based on the analysis of Scenari Immobiliari on the retail and reserved funds industry in Italy, the real estate fund market has demonstrated its countercyclical characteristics. The overall net asset value ("NAV") of funds rose from around EUR 34 billion to EUR 36 billion.

NAV of real estate funds in Italy (EUR billion)

0

5

10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011

Source: Scenari Immobiliari With regard to retail funds, the study by Scenari Immobiliari reports a decrease in direct real estate assets of around 4% to a level of around EUR 7.5 billion. The overall use of financial leverage dropped by 7% compared with 2010.


27

Total NAV at year-end 2011 was about EUR 6 billion, representing a reduction of around 3% on the same period in 2010.

Real estate assets of retail funds (EUR billion)

6

7

8

9

1H 2006 1H 2007 1H 2008 1H 2009 1H 2010 1H 2011

NAV of retail funds (EUR billion)

0

1

2

3

4

5

6

7

8

1H 2006 1H 2007 1H 2008 1H 2009 1H 2010 1H 2011

Source: Scenari Immobiliari

For listed funds, the average discount to NAV was around 33% in 2011, a decline of about 2 points from the previous year. Following the publication of Decree Law 78/2010, the regulatory uncertainty over the last two years has left operators with the perception that there is volatility in this area. Nonetheless, the number of operating funds has risen, although at a lower rate than expectations, and a modest increase is also projected for 2012. Positive expectations for NAV growth in 2012 are associated with the projected creation of one or more funds for public buildings as specified by the recently approved stability law. Italian real estate funds saw substantial stability in property prices, while the volume of purchase and transfer transactions rose slightly. During the last six months of 2011, real estate totalling EUR 1,101 million was purchased and transferred, representing an increase of around EUR 100 million over the same period in 2010 (Assogestioni data). Sales followed the same trend moving from EUR 1,153 million in the second half of 2010 to EUR 1,221 million in the first six months of 2011.


28

Purchases and Sales (EUR billion)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2009 2010 Jun-11

Acquisizioni

Dismissioni

Allocation of assets

Immobili; 88,4%

Partecipazioni; 1,8%

Valori mobiliari;

6,6%

Altro; 3,1%

Source: Assogestioni. The office market, which is historically the most significant non-residential real estate market, reported a 13% increase in investments over 2010, while yields remained largely unchanged. In 2011, institutional investors were particularly interested in the commercial market, thanks especially to the greater coverage of inflation risk and the stability of cash flows. This confirmed the positive trend that had begun in 2006, which led to a gradual increase in this component to the detriment of the office market. In the three-year period 2007-2010, the Italian residential real estate market saw a sharp reduction of around 30% in purchases and sales. In the first nine months of 2011, the number of house sales and purchases declined by a further 3.3% compared with the same period in the previous year. Prices continue to be more stable than in other countries, especially with respect to high-end commercial and management property in large cities, for which there is a considerable imbalance between demand (continually growing) and supply (largely stable since 2005). Lower recourse to financial leverage in Italy than in other countries is also considered a factor of relative stability. The use of leverage is equivalent to 55% of the value of the investments for retail funds and 65% for reserved funds.


29

The DeA Capital Group’s investment portfolio

Changes in the DeA Capital Group's investment portfolio in the Private Equity Investment and Alternative Asset Management business areas, as defined above, are summarised in the table below. Investment portfolio 31.12.11 31.12.10 no. EUR/mln no. EUR/mln Equity investments 7 385.3 7 516.5 Funds 12 154.3 10 132.7 Private equity investment 19 539.6 17 649.2 Alternative asset management (*) 3 236.3 2 151.1 Investment portfolio 22 775.9 19 800.3

(*) Equity investments in subsidiaries and joint ventures relating to alternative asset management are valued using the equity method in this table. Details of portfolio asset movements in 2011 are provided in the sections on private equity investment and alternative asset management below.


30


In terms of equity investments, at 31 December 2011, the DeA Capital Group was a shareholder of:

Santé, indirect parent company of Générale de Santé (valued at EUR 235.2 million) Kenan Investments, indirect parent company of Migros (valued at EUR 127.1 million) Sigla Luxembourg, the parent company of Sigla (valued at EUR 22.0 million)

The investment in Mobile Access Networks Inc. was sold in 2011 for a purchase price of EUR 1.2 million. This resulted in the recording of a capital gain of EUR 0.5 million. The DeA Group is also a shareholder in four companies (Elixir Pharmaceuticals Inc., Kovio Inc., Stepstone (holder of the units in the Blue Skye fund) and Harvip Investimenti) whose value at 31 December 2011 was EUR 1 million. With regard to funds, at 31 December 2011 the PEI business of the DeA Capital Group held units in:

IDeA I FoF (valued at EUR 94.3 million) IDeA OF I (valued at EUR 36.2 million) ICF II (valued at EUR 9.1 million) AVA (valued at EUR 2.5 million) IDeA EESS and seven other venture capital funds (with a total value of approximately EUR 12.2

million) Valuations of equity investments and funds in the portfolio reflect estimates made using the information available on the date this document was prepared. Please see the notes to the financial statements below for further details on valuations and related estimates.


31

Investments in associates

- Santé (parent company of GDS)

Headquarters: France Sector: Healthcare Website: www.generale-de-sante.fr Investment details: On 3 July 2007, DeA Capital S.p.A. finalised the purchase, through its wholly-owned subsidiary DeA Capital Investments S.A., of a 43.01% stake in Santé S.A., the parent company of Générale de Santé S.A. both directly and through Santé Dévéloppement Europe S.A.S. At 31 December 2011, the DeA Capital Group's stake was 42.99% (in economic terms).

Brief description: Founded in 1987 and listed on the Eurolist market in Paris since 2001, Générale de Santé is a leading player in the private healthcare sector in France with revenues of about EUR 2 billion at end-2011. France is the second largest country in Europe in terms of annual healthcare expenditure after Germany. Its healthcare system is one of the most advanced in the world, is still heavily fragmented and is marked by the presence of numerous independent hospitals. The company has around 21,500 employees and a total of about 110 clinics. In addition, it is the main independent association of doctors in France (5,500 doctors). Its activities include medicine, surgery, obstetrics, oncology and radiotherapy, mental health, subacute pathologies and rehabilitation. The company operates under the following names: Générale de Santé Cliniques (acute care), Médipsy (psychiatry), Dynamis (rehabilitation) and Généridis (radiotherapy). The investment in Santé, which is recorded under "Investments in Associates," is reported at a value of around EUR 235.2 million (EUR 282.9 million at 31 December 2010) in the consolidated financial statements at 31 December 2011; the change from 31 December 2010 was due to the loss of EUR 50.7 million and other increases of EUR 3.0 million (including the net investment linked to the partial termination of the Equity Plan granted to GDS senior management).


32

Générale de Santé (EUR million) 2011 2010

% chg. Revenues 1,955 1,926 +1.5 EBITDA 249 229 +8.6 Recurring operating profit 50 104 -51.6 Group net profit (29) 35 -181.4 Net financial debt (854) (871) -2.0 With regard to GDS’s operating performance, 2011 saw revenues growth of +1.5% compared with the previous year (+2.4% on a same-structure basis). This translated into an increase in the EBITDA margin, thanks in part to the increasing focus on improving operating efficiency by the company, which has completed the lion's share of the plan to restructure central staff functions in the first nine months of the year ("Plan Social"). EBIT and net profit were affected by extraordinary items totalling about EUR -75.1 million resulting from the impairment of goodwill (EUR -50.5 million at GDS level for certain regions where the Group operates), net capital gains related to the sale of clinics and properties (EUR +19.0 million) and other extraordinary costs (about EUR -43.6 million including EUR -29 million related to the Plan Social). Net debt improved from EUR -871 million at 31 December 2010 to EUR -854 million at 31 December 2011, taking account of the payment of a dividend totalling EUR 56 million. The results achieved by GDS in 2011, which were positive from an operating standpoint, were generated in the context of an economic crisis and a protracted freeze on tariff increases. As already noted, the company has intensified efforts to increase organisational flexibility and efficiency. The first step in this direction, which was already seen in the final results for 2011, was the creation of the Plan Social, which made it possible to significantly reduce the cost of central departments and regional coordination. In addition, GDS's management launched a new phase calling for the reorganisation of local activities with the creation of "centres" that coordinate the operations of several clinics by optimising the utilisation of facilities and enhancing the specialist expertise of each clinic. The aim of this reorganisation is to increase GDS's operating efficiency, while strengthening the Group's image as a symbol of excellence in the French healthcare market. Another significant project launched by the company was the reduction of purchasing costs. In 2012, the tariff structure was still restrictive (although better than in previous years): the average increase forecast for medical, surgical and obstetric services was 0.19%, and 0.29% for psychiatry (well below the projected inflation rate). In addition to the aforementioned reorganisation, GDS is completing a plan to group clinics together, which also involves another three initiatives. It has commenced construction of eight new facilities including five rehabilitation centres and three psychiatry centres.


33

- Sigla Luxembourg (parent company of Sigla)

Headquarters: Italy Sector: Consumer credit Website: www.siglacredit.itInvestment details: On 5 October 2007, DeA Capital Investments finalised the acquisition of a stake (currently 41.39%) in Sigla Luxembourg, the holding company that controls Sigla, which operates in Italy and provides finance to all customer segments. Brief description: Sigla, which is recorded in the special list pursuant to art. 107 of the T.U.B. (Italian consolidated banking law) with effect from 31 March 2011, specialises in the consumer credit sector in Italy by providing personal loans and "salary-backed loans". It is a benchmark operator in the provision of financial services to households, and operates throughout Italy chiefly through a network of agents. The company’s product range of salary-backed loans and personal loans was expanded in 2011 to include the servicing of portfolios of unsecured non-performing loans (personal loans and credit cards). The investment in Sigla Luxembourg, which is reported under “Investments in associates”, is valued at approximately EUR 22.0 million in the consolidated financial statements to 31 December 2011, in line with the figure reported at 31 December 2010 (as the company broadly broke even for the period).

Sigla (EUR million) 2011 2010

% chg.

Loans to customers* 83.9 93.5 -10.3 Revenues from loans to customers 4.9 8.3 -40.4 CQS granted 136.2 128.8 +5.7 Revenues from CQS 7.3 7.8 -6.0 Group net profit (0.1) 0.1 n.a. (*) Net receivables exclude salary-backed loans (CQS) In terms of Sigla's operating performance, the group's results in 2011 should be seen in the context of the turbulence affecting the macroeconomic situation and financial markets. In 2011 there was a 5.7% increase in salary-backed loans in a market that continued to show the signs of weakness seen in 2010 (-9.0% to December 2011). As regards profitability, the company continued to minimise the impact on net profit of the reduction in revenues from personal loans (caused by the company's gradual shift towards salary-backed loans, which are typically less capital-intensive), thanks to the effects of measures to improve operational efficiency (operating costs were down by 28%).


34

Investments in other companies

- Kenan Investments (indirect parent company of Migros)

Headquarters: Turkey Sector: Food retail Website: www.migros.com.tr Investment details: In 2008, the DeA Capital Group acquired about 17% of the capital of Kenan Investments, the company heading the structure to acquire the controlling interest in Migros. Brief description: Migros was established in 1954, and is the leading company in the food retail sector in Turkey with a share of about 34% in the organised retail market. Growth in the food retail sector in Turkey is a relatively recent phenomenon, brought about by the transition from traditional systems such as bakkals (small stores typically run by families) to an increasingly widespread organised distribution model driven by expansion and the modernisation process under way in Turkey. The company has a total of 731 outlets (at 30 September 2011) with a total net sales area of approximately 782,000 square metres. Migros is present in all seven regions of Turkey, and has a marginal presence abroad in Kazakhstan, Kyrgyzstan and Macedonia. The company operates under the following names: Migros, Tansas and Macrocenter (supermarkets), 5M (hypermarkets), Ramstore (supermarkets abroad) and Kangurum (online store). On 17 February 2011 Migros finalised the sale to third parties of stores located in Azerbaijan for a total of about TRY 22 million. On 24 August 2011, Migros also completed the sale of Şok (the discount arm of the group) to Yildiz Holding Group, a leading Turkish food producer, for around TRY 600 million. The business sold consisted of some 1,200 supermarkets, with revenues in 2010 of TRY 1.2 billion (or around 19% of Migros’s consolidated revenues). The stake in Kenan Investments was recorded in the consolidated financial statements to 31 December 2011 at a value of EUR 127.1 million (compared with EUR 195.0 million at 31 December 2010), including the capital reimbursement of EUR -31.2 million (part of the distribution of EUR 59 million received in 2011) and the net decrease in fair value of EUR 36.7 million. This decrease in the fair value is mostly due to the negative performance of the EUR/TRY exchange rate (2.44 at 31 December 2011 versus 2.05 at end-2010), and to a lesser extent to the decrease in the value of Migros shares (TRY 12.6 per share at 31 December 2011 versus around TRY 14 per share implied in the valuation at 31 December 2010).


35

Moreover, using the EUR/TRY exchange rate (2.33) and reference price for Migros shares (TRY 16.35/share) on the same date, the valuation of the equity investment in Kenan Investments at 29 February 2012 would be EUR 164.1 million.

Migros (TRY million)

First nine months 2011 *

First nine months

2010

% chg. Revenues 4,253 3,848 +10.5 EBITDA 287 252 +14.1 EBIT 175 166 +5.5 Group net profit (236) 103 n.m. Net financial debt (1,593) (1,583) -1 (*) Figures for the nine months of 2010 are provided, pending the publication of data to 31 December 2010 In terms of Migros' operating performance (with specific reference to the area of activities that excludes the discount division sold) compared with the corresponding period in 2010, results at the end of the third quarter of 2011 showed that revenues grew by 10.5% (mainly due to the opening of new supermarkets), accompanied by similar growth in operating profit. Net profit was down due to the impact the devaluation of the Turkish lira (around -22% to September 2011) had on the debt component in euros. The Turkish economy continued to grow at a fast pace (+8.2%) in 2011 although international macroeconomic tensions affected the trend. The food retail sector in Turkey performed particularly well. Revenues in the sector rose by over 17% due in part to continued growth of 13.5% in commercial space (source: Migros). The retail food market continued to show the highest growth rate in the discount segment (> 20%). However, the supermarket business continues to dominate representing 62% of the food retail sector. Migros solidified its leading position in this segment in terms of both market share and profitability. The sale of Şok at a price of TRY 600 million was motivated by the desire to focus on the business in which Migros is a leader by reducing financial leverage and operating losses resulting from the development of the discount network. The focus on the Migros brand was further strengthened with the decision to convert around 100 points of sale that were previously under the Tansas brand to the main brand. This strategy also helped the company to improve efficiency in the supply chain. For 2012 and the medium term, Migros announced its intention to expand the network by opening about 100 new points of sale per year. The new openings will mainly be in the form of small supermarkets of between 150 and 2,500 square metres. Specifically, the 150-350 square metre size will be used in high-traffic residential areas with a special emphasis on fresh products and a much broader assortment than in discount stores.


36

- Other investments

Other investments were valued at about EUR 1 million in the consolidated financial statements to 31 December 2011, a decrease of EUR 15.5 million on 31 December 2010, which was mainly due to the full write-down of investments in Stepstone and Kovio (totalling around EUR 15.2 million), the sale of the stake in Mobile Access Networks (EUR 1.3 million) and the investment in Harvip (EUR 1 million).

Company Registered office Business sector % holding

Elixir Pharmaceuticals Inc. US Biotech 1.30 Harvip Investimenti S.p.A. Italy Distressed real estate and other investments 25.00 Kovio Inc. US Printed circuitry 0.42 Stepstone Acquisition Sàrl Luxembourg Special opportunities 36.72

Funds At 31 December 2011, the DeA Capital Group’s PEI business included investments (other than the investment in the IDeA OF I fund and the AVA real estate fund, which are classified under “Investments in associates”, based on the units held) in two funds of funds (IDeA I FoF and ICF II), one theme fund (IDeA EESS) and seven venture capital funds worth a total of approximately EUR 154.3 million (corresponding to the estimated fair value calculated using the information available on the date this document was prepared) in the consolidated financial statements to 31 December 2011. Residual commitments associated with all the funds in the portfolio were approximately EUR 166.3 million (in their respective original currencies of denomination: EUR 164.0 million and GBP 2.0 million).


37

- IDeA OF I

IDeA Opportunity Fund I Headquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: At its meeting on 20 July 2011, the Board of Directors of IDeA Capital Funds SGR approved a number of regulatory changes. These included changing the name of the IDeA Co-Investment Fund I to IDeA Opportunity Fund I (IDeA OF I) and extending investment opportunities to qualified minority interests, independently or via syndicates. IDeA OF I is a closed-end fund for qualified investors, which began activity on 9 May 2008 and is managed by IDeA Capital Funds SGR. The DeA Capital Investments has subscribed for a total commitment of up to EUR 100 million in the fund. Brief description: IDeA OF I has total assets of approximately EUR 217 million. Its objective is to invest – via syndicates with a lead investor, independently, or by purchasing qualified minority interests – in medium-sized and large transactions. At 31 December 2011, IDeA OF I had called up approximately 52.1% of the total commitment after making five investments:

- on 8 October 2008, it acquired a 5% stake in Giochi Preziosi S.p.A., a company active in the production, marketing and sale of children’s games with a product line covering childhood to early adolescence

- on 22 December 2008, it acquired a 4% stake in Manutencoop Facility Management

S.p.A. through subscription to a reserved capital increase. This company is Italy’s leading integrated facility management company, providing and managing a wide range of property management services and other services for individuals and government agencies

- on 31 March 2009, it acquired a 17.43% stake in Grandi Navi Veloci S.p.A., an Italian shipping company that transports passengers and goods on various routes around the Mediterranean Sea. On 2 May 2011, with the finalisation of Marinvest's entry into the shareholder structure of Grandi Navi Veloci S.p.A. through the subscription of a reserved capital increase, the stake held by IDeA OF I was diluted to 9.21%

- on 10 February 2011, it invested in a bond that is convertible into shares of Euticals

S.p.A., Italian leader in the production of active ingredients for pharmaceutical companies that operate in the generics sector

- on 25 February 2011, it purchased a 9.29% stake in Telit Communications PLC, the

third-largest producer of machine-to-machine communications systems in the world The stake held by OF I was subsequently diluted to 9.13% due to the exercise by the company's management of stock options.


38

The units in IDeA OF I are valued at approximately EUR 36.2 million in the consolidated financial statements to 31 December 2011 (EUR 34.1 million at 31 December 2010) due to net investments of EUR 10.2 million, a decrease in fair value of EUR 3.2 million and the pro-rata share of the net loss for the period of EUR 4.9 million. The table below shows the key figures for IDeA OF I at 31 December 2011.

IDeA OF I Registered office Year of commitment

Fund size Subscribed commitment

% DeA capital in fund

EUR (€) IDeA Opportunity Fund I Italy 2008 216,550,000 100,000,000 46.18

Residual Commitments Total residual commitment in: EUR 47,870,000


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- IDeA I FoF

IDeA I Fund of Funds Headquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: IDeA I FoF is a closed-end fund for qualified investors, which began activity on 30 January 2007 and is managed by IDeA Capital Funds SGR. DeA Capital Investments has subscribed for a total commitment of up to EUR 170 million in the fund. Brief description: IDeA I FoF, which has total assets of approximately EUR 681 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries. It optimises the risk-return profile through careful diversification of assets among managers with a proven track record of returns and solidity, different investment approaches, geographical areas and maturities. At the date of the latest report available, the IDeA I FOF portfolio was invested in 42 funds with different investment strategies; these funds in turn hold around 421 positions in companies with various degrees of maturity that are active in geographical regions with different growth rates. The funds are diversified in the buy-out (control) and expansion (minorities) categories, with an overweighting in medium-sized and small transactions and special situations (distressed debt, and equities and turnarounds). At 31 December 2011, IDeA I FoF had called up 65.2% of its total commitment and had made distributions totalling around 14.5% of that commitment.


40

Other important information: Below is an analysis of the portfolio, updated to the date of the latest report available, broken down by year of investment, geographical area, type and sector.

Notes

1. % of the FMV of the investment at 31 December 2011 2. % of fund size. Based on paid-in exposure (capital invested + residual commitments) at 31 December 2011

Units in IDeA I FoF were shown at approximately EUR 94.3 million in the consolidated financial statements to 31 December 2011 (EUR 79.9 million at end-2010); the change in the carrying value compared with the end-2010 figure was due to contributions made for capital calls totalling EUR +17.3 million, capital reimbursements received of EUR -11.5 million and a net increase in fair value of around EUR +8.6 million. The table below shows the key figures for IDeA I FoF at 31 December 2011.

IDeA I FoF Registered office Year of

commitment


% DeA capital in

fund

EUR (€) Idea I Fund of Funds Italy 2007 681,050,000 17,000,000 24.96


Breakdown by Industry (1)Breakdown by type of fund (2)

Breakdown by vintage (1) Breakdown by geographical area (2)

20%

Not committed2%Global

RoW 14%

US

20%

Europe44%

9%

6%

Not committed2% Special Situations

18%

Expansion

VC 5%

Asset Based PE

Small Buyout

14%

Mid Buyout 31%

Large Buyout

15%9%

6%13%

Raw materials

Energy 15%

Transport

Industrial8%

RE

3%

Luxury 4% IT

Media 4%

Financial 4% Pharmaceutical2% Healthcare6%

Consumer staples5%

Consumer discretionary

13%9%

Distressed assets

23%

2011

8%

2010

2009

20%

2008

18%

2007 17%

20068%

2005

4%

2000- 2004

3%


41

- ICF II

ICF II Headquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: ICF II is a closed-end fund for qualified investors, which began activity on 24 February 2009 and is managed by IDeA Capital Funds SGR. DeA Capital Investments has subscribed for a total commitment of up to EUR 50 million in the fund. Brief description: ICF II, which had total assets of EUR 281 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries. It optimises the risk-return profile through careful diversification of assets among managers with proven historical returns and solidity, different investment approaches, geographical areas and maturities. The fund started building its portfolio by focusing on funds in the area of mid-market buy-outs, distressed and special situations, loans, turnarounds and funds with a specific sector slant, targeting in particular opportunities offered in the secondary market. At the date of the latest report available, the ICF II portfolio was invested in 18 funds with different investment strategies; these funds in turn hold around 64 positions in companies with various degrees of maturity that are active in geographical regions with different growth rates. At 31 December 2011, IDeA ICF II had called up about 16% of the total commitment. Other important information: Below is an analysis of the portfolio, updated to the date of the latest report available, broken down by year of investment, geographical area, type and sector.


42

Notes 1. % of the FMV of the investment at 30 September 2011 2. % of the commitment. Based on paid-in exposure (capital invested + residual commitments) at 30 September

2011 Units in ICF II are valued at approximately EUR 9.1 million in the consolidated financial statements to 31 December 2011 (EUR 5.8 million at 31 December 2011), due to contributions made in the form of capital calls of EUR +2.6 million and an increase in fair value making up the difference. The table below shows the key figures for ICF II at 31 December 2011.

IDeA II Registered office Year of

commitment


% DeA capital in

fund

EUR (€) ICF II Italy 2009 281,000,000 50,000,000 17.79


Breakdown by sector (1)Breakdown by type of fund (2)

Breakdown by vintage (1) Breakdown by geographical area (2)

15%

Global

RoW 18%

US

30%

Europe37%

16%

Special Situations 21%

Expansion

VC 9% Small/Mid Buyout

38%

Large Buyout 16%

11%

2011

8%

2010 34%

200944%

20082%

20072004-20062%

8%

6%

Distressed assets36%

Other

0%

Energy

4%

Raw Materials

2%

Industrial Luxury 0% IT

16%Media

4% Financial

Healthcare2%

Consumer staples11%

Consumer discretionary

11%


43

- IDeA EESS

Idea Energy Efficiency and Sustainable Growth FundHeadquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: On 1 August 2011, DeA Capital Investments participated in the first closing of the IDeA Energy Efficiency and Sustainable Growth (IDeA EESS) Fund by subscribing to 250 “A” units and one “B” unit (the latter confers the right to 5% of any carried interest), representing a maximum commitment of around EUR 12.6 million. On 15 December 2011, the fund undertook a second closing for a total of EUR 2.5 million which brought the total commitment to EUR 53.5 million. Following the entry of the new shareholders, DeA Capital Investments held a 23.5% stake. IDeA AI subscribed to a further five “B” units of the fund (conferring the right to a total of 25% of any carried interest).

Brief description: IDeA EESS is a closed-end mutual fund under Italian law for qualified investors, managed by IDeA Capital Funds SGR, which seeks to acquire minority and controlling holdings in unlisted companies in Italy and abroad (particularly Germany, Switzerland and Israel), by investing jointly with local partners. The fund is dedicated to investing in small and medium-sized manufacturing and service companies operating in the field of energy savings and the efficient use of natural resources. It focuses on the development of faster and cheaper solutions in the use of renewable energy sources without compromising effectiveness in reducing CO2 emissions, against a backdrop of sustained growth in global energy demand.

In accordance with the objective of an overall size of EUR 100 million for the fund, IDeA Capital Funds SGR is continuing its fund raising activities in both Italy and other countries, where contacts with a number of leading institutional investors have already been made. The units subscribed in IDeA EESS in 2011 are valued at approximately EUR 18 thousand in the consolidated financial statements to 31 December 2011. The table below shows the key figures for IDeA EESS at 31 December 2011.

IDeA EESS Registered officeYear of

commitmentFund size Subscribed

commitment

% DeA capital in

fund

EUR (€)

Idea Energy Efficiency and Sustainable Growth Fund Italy 2011 53,450,000 12,550,000 23.48

Residual Commitments

Total residual commitment in: EUR 12,331,794


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- AVA

Atlantic Value Added Headquarters: Italy Sector: Private equity Website: www.ideafimit.it Investment details: The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" is a mixed-contribution fund for qualified investors that began its operations on 23 December 2011. DeA Capital Investments subscribed to a total commitment in the fund of up to EUR 5 million (corresponding to 9.1% of the overall commitment), and at 31 December 2011 had made the first payment of EUR 2.5 million (five class A units). Brief description: The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" commenced operations on 23 December 2011 with a primary focus on real estate investments in the office and residential markets with a potential for growth in value. The duration of the fund is eight years. The fund, which is managed by the subsidiary IDeA FIMIT SGR, completed the first closing with a commitment of around EUR 55 million compared with a target commitment of EUR 150 million. On 29 December 2011, the fund made its first investment totalling EUR 41.5 million through the purchase/subscription of 83 units in the Venere Fund, a closed-end speculative reserved real estate fund managed by IDeA FIMIT SGR. The Venere Fund's real estate portfolio consists of 15 properties primarily for residential purposes located in northern Italy. The table below shows the key figures for AVA at 31 December 2011.

AVA Registered office

Year of commitment

Fund size

Subscribed commitment

% DeA capital in

fund

EUR (€) Atlantic Value Added Italy 2011 55,000,000 5,000,000 9.09



45

- Units in venture capital funds

Units in venture capital funds are all concentrated in the parent company DeA Capital S.p.A., and are valued at approximately EUR 12.2 million in the financial statements to 31 December 2011 (EUR 13.0 million at end-2010). The table below shows the key figures for venture capital funds in the portfolio at 31 December 2011.

Venture capital fund Registered office

Year of commitme

nt Fund size

Subscribed commitme

nt

% DeA capital in fund

Dollars (USD) Doughty Hanson & Co Technology UK EU 2004 271,534,000 1,925,000 0.71

GIZA GE Venture Fund III Delaware U.S.A. 2003 211,680,000 10,000,000 4.72

Israel Seed IV Cayman Islands 2003 200,000,000 5,000,000 2.50

Pitango Venture Capital II Delaware U.S.A. 2003 125,000,000 5,000,000 4.00

Pitango Venture Capital III Delaware U.S.A. 2003 389,172,000 5,000,000 1.29

Total dollars 26,925,000

EUR (€) Nexit Infocom 2000 Guernsey 2000 66,325,790 3,819,167 5.76

Sterling (GBP) Amadeus Capital II UK EU 2000 235,000,000 13,500,000 5.74



46


At 31 December 2011, DeA Capital S.p.A. was the owner of:

100% of IDeA Capital Funds SGR (through IDeA AI, which merged into DeA Capital S.p.A. effective 1 January 2012)

61.30% of IDeA FIMIT SGR (including 40.32% held through FARE Holding and 20.98% through IFIM)

100% of FARE/FAI (which operates in project, property and facility management, agency services and real estate brokerage), 65% of Soprano SGR (which operates in asset management through the management of total return funds) and 65% of IDeA SIM (which operates in the business of property brokerage companies with no temporary or permanent holdings of liquid assets or clients’ financial instruments, and with no assumption of risk)

- IDeA Capital Funds SGR

Headquarters: Italy Sector: Alternative Asset Management - Private EquityWebsite: www.ideasgr.it Investment details: IDeA Capital Funds SGR is the leading independent Italian asset management company operating in the management of direct funds and funds of domestic and global private equity funds. The asset management company manages four closed-end private equity funds including two funds of funds (IDeA I FoF and ICF II), a "direct" co-investment fund (IDeA OF I) and a sector fund dedicated to energy efficiency (IDeA EESS). Although managed through separate investment programmes, the business areas are part of the same strategy to create value. The investment programmes of IDeA Capital Funds SGR, which are regulated by the Bank of Italy and Consob, leverage the management team's and sponsors' wealth of experience in the sector. The investment strategies of funds of funds focus on building a diversified portfolio in private equity funds in the top quartile or that are next-generation leaders with balanced asset allocation through diversification by:

Industry Investment strategy and stage (buy-outs, venture capital, special situations, etc.) Geographical region (Europe, US and the rest of the world) Year (commitments with diluted investment periods over time)

The investment strategies of the "direct" co-investment fund focus on minority interests in medium to large-sized LBOs together with leading qualified investors with businesses that primarily concentrate on Europe, and diversification as a function of the appeal of individual sectors by limiting investments during the early stage and excluding purely real estate investments. The investment philosophy of sector funds such as EESS is focused on growth capital and buyout private equity to support the growth of small and medium-sized enterprises with


47

excellent products or services in the energy efficiency and sustainable growth arena. Investments in infrastructure for the generation of energy from renewable sources or early stage investments can be made in compliance with regulatory restrictions. The main geographical focus of these funds is Italy.

The table below summarises the value of assets under management for IDeA Capital Funds SGR at 31 December 2011.

(EUR million) Assets under

management at 31.12.11

Management fees at 31.12.11

IDeA Capital Funds SGR ICF II 281 2,8IDeA EESS 53 0.8IDeA I FoF 681 6,8IDeA OF I 217 2,4Total IDeA Capital Funds SGR 1,232 12,8 In 2011 the company's operating performance was largely in line with performance in the previous year.

IDeA Capital Funds SGR (EUR million) 2011 2010 % change

AUM 1.232 1.179 4,5%

Management fees 12,8 12,9 -0,6%

EBT 7,6 7,7 -2,1%

Net profit 4,9 5,1 -4,1%


48

- IDeA FIMIT SGR

Headquarters: Italy Sector: Alternative Asset Management - Real EstateWebsite: www.firstatlantic.itInvestment details: On 3 October 2011, in executing the merger deed concluded between FARE SGR and FIMIT SGR on 26 September 2011, as approved by their respective shareholders' meetings after obtaining the favourable opinion of the Italian Competition Authority and the approval of the Bank of Italy, the merger of FARE SGR and FIMIT SGR was completed. At the same time, the latter changed its name to IDeA FIMIT SGR. At the same time as the merger, the other steps for the acquisition of control of IDeA FIMIT SGR by DeA Capital S.p.A. came into effect, namely:

the purchase by DeA Capital S.p.A. from Feidos S.p.A. (a company owned by Massimo Caputi) of a 58.31% stake in IFIM S.r.l. (IFIM), which in turn holds a 17.15% (pre-merger) stake in FIMIT SGR

the acquisition by IFIM from LBREP III Fimit S.a.r.l. of the stake held by the latter in FIMIT SGR, equal to 18% (pre-merger) of the share capital of FIMIT SGR

Following the series of planned operations, FARE Holding has a stake of 40.32% and IFIM a stake of 20.98% in the new IDeA FIMIT SGR. Both these companies are controlled by DeA Capital S.p.A. IDeA FIMIT SGR is the largest real estate asset management company in Italy, with around EUR 9.5 billion in assets under management and 24 managed funds (including five listed funds). This puts it among the major partners of Italian and international institutional investors in promoting, creating and managing closed-end mutual investment real estate funds. IDeA FIMIT SGR undertakes three main lines of business:

the development of real estate mutual investment funds dedicated to institutional clients and private investors

the promotion of innovative real estate financial instruments to satisfy investors’ increasing demands

the professional management (technical, administrative and financial) of real estate funds with the assistance of in-house experts as well as the best independent technical, legal and tax advisors on the market

The company has concentrated its investment in transactions with low risk, a stable return, low volatility, simple financial structure and, most importantly, an emphasis on real estate value.

In particular, the asset management company specialises in "core" and "core plus" properties, but its major investments also include important "value added" transactions.

Due in part to successful transactions concluded in recent years, the asset management company is able to rely on a panel of prominent unit-holders consisting of Italian and


49

international investors with a high standing such as pension funds, bank and insurance groups, capital companies and sovereign funds. The table below summarises the value of assets under management for IDeA FIMIT SGR at 31 December 2011.

Certain key financials relating to the listed funds (Atlantic 1, Atlantic 2 Alpha, Beta and Delta) in the asset management portfolio are also reported together with an analysis of the real estate portfolio at the date of the latest report available, broken down by geographical area and by intended use.

(EUR millions) Assets under management at 31.12.11

Breakdown of funds

Atlantic 1 680 Atlantic 2 Berenice 536 Alpha 493 Delta 359 Beta 210 Listed funds

2.278

Reserved funds 7.198

Total 9.476


50

Atlantic 1: Diversification by geographical area Atlantic 1: Diversification by intended use

Atlantic 2: Diversification by geographical area Atlantic 2: Diversification by intended use

Atlantic 1 31/12/2011

Market value of property 655.070.000

Historical cost and capitalised charges 618.075.337Loan

359.662.249Net Asset Value ("NAV") 269.803.263NAV/unit (EUR) 569,112

Market price/unit (EUR) 316,90Dividend yield of placement* 5,49%

Ratio between income per unit and average annual nominal value per unit

Atlantic 2 - Berenice 31/12/2011

Market value of property 518.370.000

Historical cost and capitalised charges

482.652.918Financing 281.797.742Net Asset Value ("NAV") 242.369.608

NAV/unit (EUR)

403,947Market price/unit (EUR)

299,00Dividend yield of placement* 11,82%Ratio between income per unit and average annual nominal value per unit

Lombardia66%

Lazio15%

Campania13%

Piemonte6%

Offices82%

Commercial 18%

Lombardia44%

Lazio 40%

Piemonte14%

Other 2%

Offices 69%

Industrial 31%


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Alpha: Diversification by geographical area Alpha: Diversification by intended use

Beta: Diversification by geographical area Beta: Diversification by intended use

Alpha 31/12/2011

Market value of property 421.988.195Historical cost and capitalised charges 321.489.509Financing

84.484.777Net Asset Value ("NAV") 394.550.636NAV / Quota (Euro) 3.798,321NAV/unit (EUR) 1.515Dividend yield of placement* 6,97%Ratio between income per unit and average annual nominal value per unit

Beta 31/12/2011

Market value of property 166.542.243Historical cost and capitalised charges

163.271.910Loan 32.657.518

Net Asset Value ("NAV") 147.384.355NAV/unit (EUR) 548,971Market price/unit (EUR) 474Dividend yield of placement* 10,10%Ratio between income per unit and average annual nominal value per unit

Lombardia12% Lazio

83% Emilia 5% Offices60%

Other40%

Umbria26% Sardegna

39%

Lazio 35%

Offices41%

Hotels39%

Specific Use19%

Commercial1%


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Delta: Diversification by geographical area Delta: Diversification by intended use

In terms of the operating performance of IDeA FIMIT SGR, the comparison between the income statement figures in the financial statements to 31 December 2011 and the income statement for the year ending 31 December 2010 is not very meaningful due to changes in the basis of consolidation that occurred in 2011. Thus, a pro-forma income statement was prepared for 2011 which simulates the effects of the merger as if it had occurred on 1 January 2011.

Delta 31/12/2011

Market value of property 342.443.333 Historical cost and capitalised charges

373.440.569 Loan 145.721.800 Net Asset Value ("NAV") 209.739.751 NAV/unit (EUR)

99,624 Market price/unit (EUR)

44,73 Dividend yield of placement* n.a.No distributions arising from the investment

IDeA FIMIT SGR (mln €) 2011 2011 Pro-rata

2010 Pro-rata

AUM 9.476 9.476 8.342

Management fees

30,8 58,6 56,6

EBT 11,4 23,6 29,2

Net profit 7,1 14,8 18,8

Hotels 62%

Other34%

Offices4%

Lombardia4%

Sardegna41%

Veneto14%

Calabria 11%

Emilia 10%

Abruzzo10%

Campania 4%

Piemonte 3%

Toscana 3%


53

Financial Review - Income statement

The group made a net loss of about EUR 43.6 million in 2011 compared with a loss of EUR 26.3 million in 2010. Revenues and other income at 31 December 2011 break down as follows:

- alternative asset management fees totalling EUR 47.8 million - a contribution from investments valued at equity of EUR -55.5 million (EUR -15.5 million in

2010), mainly due to the investment in Santé (around EUR -50.7 million) and the investment in IDeA OF I (EUR -4.9 million)

- other investment income/expenses totalling EUR +13.5 million compared with EUR -3.4 million in 2010, due primarily to the EUR 27.8 million capital gain realised on the distributions received from Kenan Investments in relation to the placement of Migros shares and the full write-down of the investment in Stepstone/Blue Skye of EUR 15.1 million (due to problems with the repayment of an overdue loan in December 2011 by Stepstone)

- other revenues and income totalling EUR 10.7 million due largely to the Alternative Asset Management business (EUR 10.5 million in 2010)

Operating costs totalled EUR 51.4 million (EUR 36.8 million in 2010), of which EUR 42.1 million was attributable to Alternative Asset Management, EUR 0.8 million to the Private Equity Investment business and EUR 8.5 million to holding company activities. Financial income and charges, which totalled EUR -2.8 million at 31 December 2011 (EUR -4.6 million in 2010), mainly related to income generated from cash and cash equivalents, financial charges and income/charges on derivative contracts used to hedge the interest rate risk connected with variable-rate lines of credit utilised and the exchange rate risk connected with investments denominated in currencies other than the euro. The tax impact of EUR -3.8 million in 2011 (EUR -3.4 million in 2010) was the result of taxes related to the Alternative Asset Management business which were partially offset by proceeds paid to DeA Capital S.p.A. under the national tax consolidation scheme of the B&D Holding Group (i.e. the group headed by B&D Holding di Marco Drago e C. S.a.p.a.). Of the total consolidated net loss of EUR -41.5 million, about EUR -42.4 million was attributable to the Private Equity Investment business, and around EUR +8.4 million to Alternative Asset Management. The consolidated net profit of EUR +8.4 million generated during the period by the Alternative Asset Management business includes the after-tax impact of amortising intangible assets recorded during the allocation of a portion of the purchase price of the investments in IDeA AI, FARE Holding, IFIM and IDeA FIMIT totalling EUR 4.2 million; excluding this impact, the Alternative Asset Management business would have made a net profit of EUR 12.6 million, and there would have been a consolidated net loss of EUR 37.3 million (versus the actual loss of EUR 41.5 million). For details concerning individual items, please see the comments in the notes to the consolidated financial statements for the year ending 31 December 2011 indicated below.


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Summary Group Income Statement

(EUR thousand) 2011 2010 Alternative asset management fees 47,762 27,844Profit/(loss) from equity investments valued at equity (55,503) (15,507)Other investment income/expenses 13,500 (3,405)Service revenues 10,359 10,112Other revenues and income 322 412Other costs and charges (51,360) (36,800)Financial income and charges (37,677) (21,985)PROFIT/(LOSS) BEFORE TAXES (37,677) (21,985) Income tax (3,814) (3,424)PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS (41,491) (25,409) Profit/(loss) from assets held-for-sale/sold 0 0NET PROFIT/(LOSS) FOR THE YEAR (41,491) (25,409) - Net profit/(loss) attributable to the Group (43,577) (26,348) - Net profit/(loss) attributable to minorities 2,086 939 Earnings (loss) per share, base (0.147) (0.091) Earnings (loss) per share, diluted (0.147) (0.091) Summary group income statement - performance by business in 2011

(EUR thousand) Private equity investmentAlternative asset

management

DeA Capital SpA(*) and

eliminations Consolidated

Alternative asset management fees 0 47,762 0 47,762Profit/(loss) from equity investments valued at equity (55,503) 0 0 (55,503)Other investment income/expenses 13,773 (273) 0 13,500

Other revenues and income 40 10,332 309 10,681

Other costs and charges (825) (42,051) (8,484) (51,360)

Financial income and charges (26) (215) (2,516) (2,757)

PROFIT/(LOSS) BEFORE TAXES (42,541) 15,555 (10,691) (37,677)

Income tax 98 (7,160) 3,248 (3,814)PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS (42,443) 8,395 (7,443) (41,49)

Profit/(loss) from assets held-for-sale/sold 0 0 0 0

NET PROFIT/(LOSS) FOR THE YEAR (42,443) 8,395 (7,443) (41,491)

- Net profit/(loss) attributable to the Group (42,443) 6,309 7,443 (43,577)

- Net profit/(loss) attributable to minorities 0 2,086 0 2,086

(*) The column includes Parent Company figures that are not directly attributable to the various business sectors


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Summary group income statement - performance by business in 2010

(EUR thousand) Private equity investmentAlternative asset

management

DeA Capital SpA(*) and

eliminations Consolidated

Alternative asset management fees 0

27,844 0 27,844Profit/(loss) from equity investments valued at equity (15,637) 130 0 (15,507)Other investment income/expenses (3,490) 85 0 (3,405)

Other revenues and income 39 10,053 432 10,524

Other costs and charges (1,665) (28,869) (6,266) (36,800)

Financial income and charges 196 106 (4,943) (4,641)

PROFIT/(LOSS) BEFORE TAXES (20,557) 9,349 (10,777) (21,985)

Income tax (1,793) (3,627) 1,996 (3,424)PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS (22,350) 5,722 (8,781) (25,409)

Profit/(loss) from assets held-for-sale/sold 0 0 0 0

NET PROFIT/(LOSS) FOR THE YEAR(22,350) 5,722

(8,781) (25,409)

- Net profit/(loss) attributable to the Group (22,350) 4,783 (8,781) (26,348)

- Net profit/(loss) attributable to minorities 0 939 0 939



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Financial Review - Statement of Performance - IAS 1

Comprehensive income or the Statement of Performance (IAS 1), in which performance for the year is reported inclusive of results posted directly to shareholders' equity, reflects the group's portion of a net negative balance of approximately EUR 70.2 million compared with a net negative balance of around EUR 15.6 million in 2010. Results posted directly to shareholders' equity were mainly connected with changes in fair value of Kenan/Migros. Please see the notes to the financial statements for additional details on the valuation process.

(Euro thousands) Year 2011 Year 2010 Profit/(loss) for the period (A) (41,491) (25,409)

Gains/(Losses) on fair value of available-for-sale financial assets (27,158) 5,785 Share of other comprehensive income of associates 547 4,961 Other comprehensive income, net of tax (B) (26,611) 10,746

Total comprehensive income for the period (A)+(B) (68,102) (14,663)

Total comprehensive income attributable to: - Group share (70,188) (15,602) - Non Controlling Interests 2,086 939


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Financial Review – Balance Sheet

Below is the group’s balance sheet at 31 December 2011 compared with 31 December 2010. Consolidated statement of financial position

(EUR thousand) 31.12.2011 31.12.2010 CONSOLIDATED ASSETS Non-current assets Intangible and tangible assets Goodwill 210,134 71.756 Intangible assets 119,648 2,120 Tangible assets 1,269 382Total intangible and tangible assets 331,051 74,258Investments

Investments in associates 302,141 339,022 Available-for-sale investments 127,380 211,511 Available-for-sale funds 159,673 98,622 Other available-for-sale financial assets 936 304

Total investments 590,130 649,459 Other non-current assets Deferred tax assets 4,077 243 Loans and receivables 1,632 996 Other non-current assets 25,729 -Total other non-current assets 31,438 1,239 Total non-current assets 952,619 724,956 Current assets Trade receivables 6,070 2,658 Available-for-sale financial assets 13,075 15,038

Financial receivables 1 1,682 Tax receivables from Parent Companies 5,929 4,065 Other tax receivables 2,677 1,832 Other receivables 6,128 557

Cash and cash equivalents 46,764 86,517Total current assets 80,644 112,349 Total current assets 80,644 112,349Assets relating to joint ventures - 63,842Held-for-sale assets - -TOTAL CONSOLIDATED ASSETS 1,033,263 901,147 CONSOLIDATED SHAREHOLDERS' EQUITY AND LIABILITIESCONSOLIDATED SHAREHOLDERS' EQUITY Group shareholders' equity 669,045 763,955 Minority capital and reserves 134,324 552

Consolidated shareholders' equity (Group and minorities) 803,369 764,507

CONSOLIDATED LIABILITIES Non-current liabilities Deferred tax liabilities 40,506 649 Provisions for employee termination benefits 2,127 858 Financial liabilities 160,020 119,839Total non-current liabilities 202,653 121,346Current liabilities Trade payables 10,322 3,165 Payables to staff and social security organisations 7,497 2,027 Current tax payables 903 575 Other tax payables 3,585 2,113 Other payables 1,023 256 Short-term financial payables 3,911 4,821Total current liabilities 27,241 12,957Liabilities relating to joint ventures - 2,337Held-for-sale liabilities - -TOTAL CONSOLIDATED LIABILITIES AND SHAREHOLDERS’ EQUITY 1,033,263 901,147

At 31 December 2011, group shareholders’ equity was approximately EUR 669.0 million, compared with EUR 764.0 million at 31 December 2010. The decrease (of about EUR 95 million) in group shareholders' equity in 2011 was chiefly due to the reasons already discussed in the Statement of Performance - IAS 1 (EUR 70.2 million) and to the effects of the plan to purchase own shares (EUR 26.4 million).


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For details concerning individual items, please see the comments in the notes to the consolidated financial statements for the year ending 31 December 2011 indicated below.

Financial Review – Net debt

At 31 December 2011, consolidated net debt was approximately EUR 102.5 million, as shown in the table below, which provides a breakdown of assets and liabilities and a comparison with the same figures at 31 December 2010: Net financial position

31.12.11 31.12.10 Variazione

(EUR million)

Cash and cash equivalents 46,8 86,5 (39,7) Available-for-sale financial assets 13,0 15,0 (2,0) Financial receivables 1,6 2,7 (1,1) Non-current financial liabilities (160,0) (119,8) (40,2) Current financial liabilities (3,9) (4,8) 0,9 TOTAL (102,5) (20,4) (82,1) The change in consolidated net debt in 2011 was due to the combined effect of the following factors:

net cash position associated with the first-time consolidation of IDeA AI (following the acquisition of control in January 2011) of EUR 14.3 million

cash outlay for the acquisition of a controlling interest in FIMIT SGR of EUR 59.4 million net cash position associated with the first-time consolidation of FIMIT SGR (following the

merger with FARE SGR on 3 October 2011) of EUR 11.5 million cash outlay of EUR 26.4 million for the share buy-back plan operating cash flow (mainly in the form of fees and revenues for services net of current

expenses and investments and the result of financial and tax management) and other changes totalling EUR 0.9 million

The following points relate to the individual items that make up the consolidated net cash position:

"Cash and cash equivalents" refer to cash and bank deposits, including interest accrued during the period, held in the name of group companies

"Available-for-sale financial assets" include investments to be regarded as a temporary use of cash

"Non-current financial liabilities" mainly include:

o EUR 80.0 million for the use of the credit line signed with Mediobanca - Banca di Credito

Finanziario (out of a total credit line of up to EUR 120 million) o EUR 13.4 million for the use of the credit line signed by the subsidiary IDeA FIMIT SGR

with Banca Intermobiliare di Investimenti e Gestioni S.p.A. o EUR 52.1 million related to the fair value estimate of payables for put options on

minority interests in subsidiaries o EUR 11.7 million, as part of the acquisition of FARE Holding, in relation to the payment

of the deferred purchase price and the earn-out that DeA Capital S.p.A. anticipates paying to the seller, and in relation to units of the Atlantic 1 and Atlantic 2 funds

Please see the notes to the accounts and the consolidated cash flow statement for a detailed breakdown of changes in these items.


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Consolidated net debt at 31 December 2010 did not include the cash position of the IDeA AI Group since it is a joint venture; this group reported a net cash position of approximately EUR 6.3 million (the DeA Capital portion) at 31 December 2010. The company believes that the cash and cash equivalents and the other financial resources available are sufficient to meet the requirement relating to payment commitments already subscribed in funds, also taking into account the amounts expected to be called up/distributed by these funds. With regard to these residual commitments, totalling EUR 174.4 million at 31 December 2011 (of which EUR 166.3 million relates to the Private Equity Investment business and EUR 8.1 million to the Alternative Asset Management business), the company believes that the funds and credit lines currently available, as well as those that will be generated by its operational and financing activities, will enable the DeA Capital Group to meet the financing required for its investment activity and to manage working capital and repay debts when they become due.


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6. Results of the parent company DeA Capital S.p.A.

The parent company DeA Capital S.p.A. operates as a holding company that carries out activities of coordination, development and strategic management of its subsidiaries, and also acts as an entity that makes financial investments directly. A summary of the income statement and balance sheet of DeA Capital S.p.A. for the financial year ending 31 December 2011 is shown below.

Analysis of the results of the parent company – income statement

(in EUR) 2011 2010

Investment income/expense (24,663.655) 24,694.430 Service revenues 295,014 516,647 Capital gains from disposals 0 0 Other revenues and income 177,155 121,913 Personnel costs (5,083.899) (3,268.826) Service costs (3,090.294) (3,038.525) Depreciation, amortisation and write-downs (84,693) (154,436) Other charges (387,664) (10,244) Financial income 1,844.889 1,384.249 Financial charges (4,341.057) (6,251.938)

PROFIT/(LOSS) BEFORE TAXES (35,334.204) 13,993.270

Current income tax 2,839.218 1,759.281 Deferred income tax 409,240 236,607

PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS (32,085.746) 15,989.158

Profit/(loss) from assets held-for-sale/sold 0 0

NET PROFIT/(LOSS) FOR THE YEAR (32,085.746) 15,989.158

The parent company reported net loss of approximately EUR 32.1 million in 2011 compared with a profit of around EUR 16.0 million in 2010. For details concerning operating performance items, please see the comments in the notes below.


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Analysis of the results of the parent company - balance sheet Below is the parent company's balance sheet at 31 December 2011 compared with 31 December 2010. (Euro thousand) 31.12.2011 31.12.2010

ASSETS

Non-current assets

Intangible and tangible assets

Intangible assets 7,656 5,629

Tangible assets 86,848 158,969

Total intangible and tangible assets 94,504 164,598

Investments

Subsidiaries and joint ventures 717,130,237 765,199,369

Associates 1,000,000

Available-for-sale investments 1 1,431,230

Available-for-sale funds 12,234,007 12,977,513

Loans to subsidiaries 37,307,101 0

Total Investments 767,671,346 779,608,112

Other non-current assets

Deferred tax assets 0 0

Other non-current assets 0 0

Total other non-current assets 0 0

Total non-current assets 767,765,850 779,772,710

Current assets

Trade receivables 217,392 150,541

Available-for-sale financial assets 5,296,954 15,037,722

Financial receivables 2,879,872 0

Financial receivables (pass throught arrangement) 0 634,750

Tax receivables from Parent companies 5,928,777 4,064,725

Other tax receivables 1,810,310 1,759,463

Other receivables 97,133 116,109

Cash and cash equivalents 29,056,753 54,234,322

Total current assets 45,287,191 75,997,632

Total current assets 45,287,191 75,997,632

Held-for-sale assets 0 0

TOTAL ASSETS 813,053,041 855,770,342

SHAREHOLDERS' EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY

Shareholders' equity 714,038,989 759,070,235

LIABILITIES

Non-current liabilities

Deferred tax liabilities 0 0

Provisions for employee termination benefits 192,487 193,076

Long term financial loans 93,008,005 90,621,354

Total non-current liabilities 93,200,492 90,814,430

Current liabilities

Trade payables 768,680 986,394

Payables to staff and social security organisations 956,225 1,007,040

Current tax payables 5,826 4,911

Other tax payables 158,820 175,930

Other payables 13,407 31,547

Short term financial loans 3,910,602 3,679,855

Total current liabilities 5,813,560 5,885,677

Held-for-sale liabilities 0 0

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 813,053,041 855,770,342


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At 31 December 2011, the parent company's shareholders' equity totalled about EUR 714.0 million compared with EUR 759.1 million at 31 December 2010, a decrease of about EUR 45.1 million (due largely to the net loss for the period). For details concerning individual items, please see the comments in the notes to the annual financial statements at 31 December 2011 indicated below. Pursuant to the Consob Communication of 28 July 2006, a reconciliation between the loss and shareholders' equity at 31 December 2011 reported by the parent company DeA Capital S.p.A. is shown below together with the corresponding consolidated figures.

(EUR thousand)

Shareholders’ equity at 31.12.11

Net profit/(loss) -

2011

Shareholders’ equity at 31.12.10

Net profit/(loss)

- 2010Shareholders' equity and profit/(loss) for the year, as reported in the financial statements of the Parent Company

714.039 (32.086) 759.070 15.989

Derecognition of the carrying value of the consolidated equity investments: - Excess in shareholders' equity in the annual financial statements in relation to the carrying values of equity investments in consolidated companies (44.994) 0 4.925 0 - Pro-rata profit/(loss) recorded by investee companies 0 22.971 0 (1.377) - Pro-rata profit/(loss) recorded by associates valued at equity 0 (55.503) 0 (15.637) - Derecognition of revaluations and write-downs of consolidated equity investments carried out by DeA Capital S.p.A. 0 88.604 0 4.006 - Derecognition of dividends received by the investee companies of DeA Capital S.p.A. 0 (67.563) 0 (29.329) Shareholders' equity and profit/(loss) for the year attributable to the Group 669.045 (43.577) 763.995 (26.348) Shareholders' equity and profit/(loss) for the year attributable to minorities 134.324 2.086 552 939 Shareholders' equity and profit/(loss) for the year as reported in the consolidated financial statements

803.369 (41.491) 764.547 (25.409)


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7. Other information Own shares and parent company shares

On 19 April 2011, the shareholders' meeting of DeA Capital S.p.A. approved the proposal made by the company's Board of Directors to implement a new plan to purchase and dispose of own shares (the Plan), which authorises the Board of Directors to purchase and dispose of a maximum number of shares representing a stake of up to 20% of share capital, on one or more occasions and on a rotating basis, in accordance with the law. At the same time, this resolution revoked the authorisation granted by the shareholders' meeting on 26 April 2010 for the previous plan to purchase own shares. Among other things, the authorisation specifies that purchases may be carried out in accordance with all procedures allowed by current regulations, with the sole exception of a public purchase or exchange offer, and that the unit price for the purchase must not be more than 20% above or below the share's reference price on the trading day prior to the purchase. The objective of the Plan is to allow the company to take action, in accordance with current regulations, to limit any unusual price movements and to normalise trading and pricing fluctuations resulting from distortions related to excess volatility or poor trading liquidity, as well as to purchase own shares to be used, as necessary, for share incentive schemes. These transactions will also allow the company to purchase own shares to be used, in accordance with its strategy, for capital-related transactions or other transactions in relation to which it may be appropriate to exchange or sell parcels of shares by means of an exchange, transfer or other method of disposal. The authorisation to carry out such purchases has a maximum duration of 18 months from the date the authorisation is granted by the shareholders’ meeting (until October 2012). The Board of Directors is also authorised to dispose of own shares purchased without time restrictions in accordance with procedures it considers the most appropriate, at a price to be determined, from time to time, but which may not be (other than in certain specific exceptions) more than 20% below the share's reference price on the trading day prior to each disposal. The Board of Directors, which met immediately after the shareholders' meeting, passed the resolutions necessary to execute the plan, and granted the chairman and chief executive officer all the necessary powers. In 2011, under the above two plans, DeA Capital S.p.A. purchased around 18.1 million shares valued at about EUR 26.4 million (at an average price of EUR 1.46 per share). Taking into account purchases also made in previous years for plans in place from time to time, and uses of own shares to service purchases of controlling interests in FARE Holding and IDeA AI, at 31 December 2011 the Company owned 25,915,116 own shares (equal to about 8.5% of share capital). As of the date of this document, taking into account purchases of 1,338,758 shares made after the end of 2011, the company had a total of 27,253,874 own shares corresponding to about 8.9% of share capital. During 2011, the company did not hold, purchase or sell, on its own account or through a trust company, any shares in parent company De Agostini S.p.A.


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Stock option plans With regard to company incentive plans (stock option plans), on 19 April 2011 the shareholders' meeting approved the DeA Capital stock option plan for 2011-2016 under which a maximum of 2,200,000 options may be allocated. To implement the resolution of the shareholders' meeting, the DeA Capital S.p.A. Board of Directors allocated a total of 1,845,000 options to certain employees of the company and its subsidiaries, and employees of the parent company De Agostini S.p.A. who carry out important roles. In line with the criteria specified in the regulations governing the DeA Capital stock option plan for 2011-2016, the Board of Directors also set the exercise price for the options allocated at EUR 1.538, which is the arithmetic mean of the official price of the company’s shares on the Mercato Telematico Azionario, the Italian screen-based trading system organised and managed by Borsa Italiana S.p.A., on the trading days between 18 March 2011 and 18 April 2011. The options can be allocated to the beneficiaries, in one or more tranches, up to 30 June 2012 and exercised by the latter, in one or more tranches, but in any case for an amount per tranche of not less than 25% of the options assigned to each, with effect from the fifth calendar day following the date that the adjusted NAV figure at 31 December 2013 is announced, until 31 December 2016. The adjusted NAV means the value of the assets, net of liabilities, calculated on the basis of the company’s balance sheet at 31 December 2013 and restated, where necessary, to take account of the measurement at fair value of all investments, as assessed by an independent third party.

With regard to the previous year, on 26 April 2010 the shareholders' meeting approved the 2010-2016 stock option plan on the basis of which 2,235,000 shares were allocated which are still not exercisable. For further information on the terms and conditions of the plans and their beneficiaries, please see the respective Information Prospectuses prepared in accordance with art. 84-bis, para. 1 of Consob Regulation 11971/1999 and table 7 of Appendix 3A of Consob Regulation 11971/1999, and the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quarter of Consob Regulation 11971/1999. The above documentation is available to the public at the headquarters of DeA Capital S.p.A. and on the company's website www.deacapital.it.

DeA Capital 2009-2012 warrants On 3 March 2009, the shareholders' meeting of DeA Capital S.p.A. approved an investment plan entailing the offer of warrants for subscription by the management. Under the plan regulations, the DeA Capital 2009-2012 warrants allow holders to purchase, under specific conditions, one new DeA Capital share with a nominal value of EUR 1 for each warrant held, at an exercise price of EUR 1.92. The warrants may be exercised between 1 April 2012 and 30 September 2012. In order to implement the plan, the extraordinary shareholders' meeting of DeA Capital S.p.A. also voted to issue up to 1,500,000 DeA Capital 2009-2012 warrants and to increase the share capital, pursuant to the combined provisions of art. 2441, para. 8 of the Italian Civil Code and art. 134, para. 2 of Legislative Decree 58 of 24 February 1998 by a nominal amount of up to EUR 1,500,000 in separate issues pursuant to art. 2439, para. 2 of the Italian Civil Code, to be carried out through the issue of up to 1,500,000 ordinary shares with a nominal value of EUR 1, to be used solely and irrevocably for the exercise of these warrants. The subscription price for the warrants was EUR 0.211, based on the fair value estimated by the Board of Directors and supported by independent valuations. The warrants, available for subscription by beneficiaries from the date on which the resolution of the extraordinary shareholders' meeting on the issue of the warrants was recorded in the companies register until 31 July 2009, were fully subscribed.


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Beneficiaries are individuals who were classified as employees of the company and/or its subsidiaries and/or the parent company De Agostini S.p.A. at the time of the warrant subscription offer and at the time of the subscription itself, as identified by the Board of Directors’ meeting of 13 January 2009. For further information on the terms and conditions of the plans and their beneficiaries, please see the respective Information Prospectuses prepared in accordance with art. 84-bis, para. 1 of Consob Regulation 11971/1999 and table 7 of Appendix 3A of Consob Regulation 11971/1999, and the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation 11971/1999. The above documentation is available to the public at the headquarters of DeA Capital S.p.A. and on the company's website www.deacapital.it.

Transactions with parent companies, subsidiaries and related parties

Transactions with related parties Transactions with related parties, including those with other group companies, were carried out in accordance with the Procedure for Related Party Transactions adopted by the company with effect from 1 January 2011 in accordance with the provisions of the Regulation pursuant to art. 2391-bis of the Italian Civil Code as specified by Consob in Resolution 17221 of 12 March 2010 as subsequently amended. During the year, the company did not carry out any any atypical or unusual transactions with related parties but only those that are part of the normal business activities of group companies. It also did not carry out any "significant transactions" as defined in the aforementioned procedure. In addition to the above, on 22 March 2007, the company signed a service agreement, which was renewed on 31 March 2011, with the controlling shareholder De Agostini S.p.A. for the latter to provide operating services in the administration, finance, control, legal, corporate, tax, investor relations and public relations areas. The agreement, which is renewable annually, is priced at market rates, and is intended to allow the company to maintain a streamlined organisational structure in keeping with its development policy, and to obtain adequate operational support at the same time. Information on related party transactions is presented in the sections “Intercompany relationships with the parent company and its group” in the annual and consolidated financial statements. Remuneration and stock options to directors, auditors, general managers and managers with strategic responsibilities The information on compensation and stock options allocated to directors, auditors, general managers and managers with strategic responsibilities is provided in the related sections of the annual and consolidated financial statements and in the Remuneration Report pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation no. 11971/1999 which is available to the public at the headquarters of DeA Capital S.p.A. and on the company's website www.deacapital.it.

Shareholdings held by directors, auditors, general managers and managers with strategic responsibilities

Information regarding the shareholdings held by directors, auditors, general managers and managers with strategic responsibilities is reported in the relevant sections of the annual and consolidated financial statements.


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Management and coordination Since 30 January 2007, the company has been controlled by De Agostini S.p.A., which, in accordance with art. 2497-sexies of the Italian Civil Code, carries out management and coordination activities for the company. Please see the notes to the financial statements for key figures from the latest approved financial statements of De Agostini S.p.A.

Research and development activities Note that pursuant to art. 2428, para. 3 of the Italian Civil Code, the company did not carry out any research and development activity in 2011.

Atypical or unusual transactions and non-recurring significant events and transactions Pursuant to Consob Communication 6064293 of 28 July 2006, in 2011 neither the company nor the group carried out any atypical and/or unusual transactions or significant transactions that are not a part of its customary operations.

Corporate Governance Please see the document entitled "Report on Corporate Governance and Ownership Structure" (found in the Corporate Governance section of the company's website) for information on the corporate governance structure of DeA Capital S.p.A.,adopted to bring the company in line with the principles of the Code of Conduct prepared by the "Committee for the Corporate Governance of Listed Companies". Below is a summary of the main information governing DeA Capital S.p.A.'s corporate governance. Issuer profile The Issuer's corporate governance structure is based on the traditional administration and control model, and hinges on the central role played by the Board of Directors, the proper disclosure of management decisions, an effective internal control system, the appropriate regulation of potential conflicts of interest, and on rigorous standards of conduct for carrying out transactions with related parties. Extent of application of the Code of Conduct For 2011, the Board of Directors again implemented the Board's self-assessment process. Directors showed a high degree of participation in the Board's self-assessment process, and a review of the results of the board performance evaluation resulted in an overall positive opinion on the functioning of the Board. Corporate bodies

The Board of Directors consists of eleven members, nine of whom are non-executive directors, and four of whom are independent directors. It plays a key role in the corporate governance system of DeA Capital S.p.A. In particular, it has the power and the duty to manage the operations of the Issuer with the ultimate and main goal of creating value for shareholders.

Pursuant to the articles of association, the Board manages the company's business, and is invested with all the administrative powers needed for this purpose, with the exception of those powers reserved for the shareholders' meeting, pursuant to legislation and the articles of association. In 2011, the Board of Directors met six times, with an average meeting length of about an hour and a half. For 2011, the calendar of scheduled meetings has been published in both Italian and English (also available at www.deacapital.it).


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The Board of Auditors comprises six members, consisting of the chairman, two permanent

auditors and three deputy auditors. It monitors compliance with the law and the company’s articles of association, observance of the principles of proper management, and the suitability and smooth functioning of the organisational, administrative and accounting structure. In 2011, the Board of Auditors met eight times.

The Remuneration Committee comprises three independent directors. The Committee submits proposals to the Board of Directors concerning the remuneration of the chief executive, and assesses the chief executive’s recommendations regarding the remuneration of managers with strategic responsibility. In 2011, the Remuneration Committee met twice.

The Internal Audit Committee comprises three non-executive directors, of whom two are independent. The Committee has a consultative role and makes proposals to the Board of Directors. In 2011, the Internal Audit Committee met seven times.


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Corporate Governance Chart as at 31 December 2011:

Main risks and uncertainties to which the parent company and consolidated group companies are exposed

As described in this Report on Operations, the DeA Capital Group operates through, and is structured as, two business areas: Private Equity Investment and Alternative Asset Management. The risks set out below consider the characteristics of the market and the operations of parent company DeA Capital S.p.A. and the companies included in the group’s consolidated financial statements, and the main findings of a risk assessment carried out in 2011, as well as the periodic monitoring conducted partly through the regulatory policies adopted by the group. There could, however, be risks that are currently unidentified or not considered significant that could have an impact on the group's operations. The Group has adopted a modern corporate governance system that provides effective management of the complexities of its operations, and enables both individual companies and the group to achieve their strategic objectives. Furthermore, the assessments conducted by the organisational units and the directors confirm both the non-critical nature of these risks and uncertainties and the financial solidity of the DeA Capital Group. With reference to specific risks relating to the main Private Equity investments, i.e. Générale de Santé and Migros, please see the respective annual reports, and more specifically Générale de Santé’s Document de référence and Migros’ Annual Report (available on their websites). In particular, the latest Document de référence (sections 4.1 - RISQUES LIES AUX ACTIVITES DU GROUPE and 4.2 - GESTION DES RISQUES) available as of the date of this report, indicates the following as the main risk factors for Générale de Santé:

External Auditors:KPMG

Statutory Auditors:Chairman : Angelo GavianiPerm. Auditors: Cesare Andrea Grifoni,Gian Piero BalducciDep. Auditors : Giulio Gasloli, Andrea Bonafé, Maurizio Ferrero

Board of DirectorsExecutive: : Lorenzo Pellicioli (Chair.), Paolo Ceretti (CEO)Non executive: Lino Benassi, Daniel Buaron, Marco Drago, Roberto Drago, Marco BoroliIndependent:Rosario Bifulco, Claudio Costamagna,

Alberto Dessy, Andrea Guerra

Remuneration Committee: Coordinator : Rosario Bifulco (Indep.)Members: Claudio Costamagna (Indep.),

Andrea Guerra (Indep.)

Manager responsiblefor the company

Accounting statements:Manolo Santilli (CFO)

Responsible for Internal Control and

Internal Audit:Davide Bossi

Internal Audit Board:

Chairman : Gian Piero Balducci (St: Auditor),Members: Alberto Dessy (Indep.), Davide Bossi (Resp. for Internal Control and Internal Audit)

Lead Independent Director : Alberto Dessy (Indep.)

Internal Control Committee:

Chairman : Alberto Dessy (Indep.)Members: : Rosario Bifulco (Indep.),

Lino Benassi (non executive)

Shareholders’ Meeting


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Risks related to company debt (Risques liés à l’endettement de Générale de Santé) Liquidity risks (Risques de liquidité) Interest rate risks (Risques de taux d’intérêt) Risks relating to obtaining financing (Risques liés à l’obtention de financements) Risks relating to commitments contained in leases signed by the group (Risques liés aux

engagements contenus dans les baux commerciaux souscrits par le Groupe) Risks relating to the clinic restructuring and construction programme (Risques liés aux

programmes de restructuration ou de construction majeures de cliniques) Risks relating to the external growth strategy (Risques liés à la stratégie de croissance

externe) Risks relating to changes in prices (Risques liés à l’évolution de la tarification) Risks relating to competition (Risques liés à la compétitivité) Risks relating to the recruitment and retention of staff and practitioners (Risques liés au

recrutement et à la fidélisation du personnel et des praticiens) Risks relating to applicable legislation (Risques liés à la réglementation applicable) Risks of a deterioration in the reputation of Générale de Santé in the event of legal proceedings

being brought against a group facility or practitioner (Risques liés à la dégradation de la réputation de Générale de Santé en cas de mise en jeu de la responsabilité d’un établissement ou d’un praticien du Groupe)

Risks relating to environmental protection legislation (Risques liés à la réglementation relative à la protection de l’environnement)

Risks relating to the adequacy, costs and availability of insurance cover (Risques liés à l’adéquation, aux coûts et à la disponibilité de couverture d’assurance)

Exceptional events and disputes (Faits exceptionnels et litiges) Risks relating to IT suppliers (Risques liés au fournisseur en matière informatique). A. Contextual risks

A.1. Risks relating to general economic conditions The operating performance and financial position of the DeA Capital Group are affected by the various factors that make up the macro-economic environment, including increases or decreases in GDP, investor and consumer confidence, interest rates, inflation, the costs of raw materials and unemployment. The ability to meet medium- to long-term objectives could be affected by general economic performance, which could slow the development of sectors the group has invested in, and at the same time, the business of the investee companies.

A.2. Socio-political events In line with its strategic growth guidelines, one of the DeA Capital Group’s activities is private equity investment in companies and funds in different jurisdictions and countries around the world, which, in turn, invest in a number of countries and geographical areas. The DeA Capital Group may have invested in foreign countries whose social, political and economic conditions put the achievement of its investment objectives at risk.

A.3. Regulatory changes Many group companies conduct their operations in regulated sectors and markets. Any changes to or developments in the legislative or regulatory framework that affect the costs and revenues structure of investee companies or the tax regime applied, could have negative effects on the group’s financial results, and necessitate changes in the group’s strategy. To combat this risk, the group has established procedures to constantly monitor sector regulation and any changes thereto, in order to seize business opportunities and respond to any changes in the prevailing legislation and regulations in good time.

A.4. Performance of the financial markets The company’s ability to meet its strategic and management objectives could depend on the performance of financial markets. A negative trend on financial markets could have an effect on the private equity sector in general, making investment and divestment transactions more complex, and


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on the group’s capacity to increase the NAV of investments in particular. The value of investments held directly or indirectly through funds in which the company has invested could be affected by factors such as comparable transactions concluded on the market, sector multiples and market volatility. These factors that cannot be directly controlled by the group are constantly monitored in order to identify appropriate response strategies that involve both the provision of guidance for the management of group companies, and the investment and value enhancement strategy for the assets held.

A.5. Exchange rates Holding investments in currencies other than the euro exposes the group to changes in exchange rates between currencies. The investment in Kenan Investments is managed as a special case, since although it was made in euro, the underlying asset is expressed in Turkish lira. Taking into account the medium-/long-term time horizon of the investment, it is believed that the expected return on the investment is able to absorb any devaluation of the underlying currency, in line with the outlook for the currency.

A.6. Interest rates Ongoing financing operations that are subject to variable interest rates could expose the group to an increase in related financial charges, in the event that the reference interest rates rise significantly. DeA Capital S.p.A. has established appropriate strategies to hedge against the risk of fluctuations in interest rates. Given the partial hedge of the underlying, the company classifies these securities as speculative instruments, even though they are put in place for hedging purposes. B. Strategic risks

B.1. Concentration of the Private Equity investment portfolio The private equity investment strategy adopted by the group includes:

- direct investments - indirect investments (in funds)

Within this strategy, the group’s overall profitability could be adversely affected by an unfavourable trend in one or a few investments, if there were insufficient risk diversification, resulting from the excessive concentration of investment in a small number of assets, sectors, countries, currencies or of indirect investments in funds with limited investment targets/types of investment. To combat these risk scenarios, the group pursues an asset allocation strategy intended to create a balanced portfolio with a moderate risk profile, investing in attractive sectors and in companies with an appealing current and future risk/return ratio. Furthermore, the combination of direct and indirect investments, which, by their nature, guarantee a high level of diversification, helps reduce the level of asset concentration.

B.2. Concentration of Alternative Asset Management activities In Alternative Asset Management, in which the group is active through the companies IDeA Alternative Investments (effective 1 January 2012 when it merged into DeA Capital S.p.A.), First Atlantic Real Estate Holding and IFIM, events could arise as a result of excessive concentration that would hinder the achievement of the level of expected returns. These events could be due to: Private equity/absolute return funds

o concentration of the management activities of asset management companies across a limited number of funds, in the event that one or more funds decides to cancel its asset management mandate

o concentration of the financial resources of the funds managed in a limited number of sectors and/or geographical areas, in the event of currency, systemic or sector crises

o for closed funds, concentration of the commitment across just a few subscribers, in the event of a counterparty experiencing financial difficulties

Real estate funds


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o concentration of real estate present in the portfolio of managed funds in a few cities and/or in limited types of property (management/commercial), in the event of a crisis on the property market concerned

o concentration in respect of certain important tenants, in the event that these withdraw from the rental contracts, which could lead to a vacancy rate that has a negative impact on the funds' financial results and the valuation of the property managed

o concentration of the maturities of numerous real estate funds within a narrow timeframe, with related high availability of property on the market, leading to a decrease in property values and an increase in selling times

For each of the risk scenarios outlined above, the group has defined and implemented appropriate strategies that include strategic, operational and management aspects, as well as a system monitoring the level of diversification of Alternative Asset Management activities.

B.3. Key resources (governance/organisation) The success of the DeA Capital Group depends to a large extent on its executive directors and key management figures, their ability to efficiently manage the business and the normal activities of the group, as well as knowledge of the market and the professional relationships established. The departure of one or more of these key resources, without a suitable replacement being found, as well as an inability to attract and retain new and qualified resources, could impact growth targets and have a negative effect on the group’s activities and financial results. To mitigate this risk, the group has put in place HR management policies that correspond closely to the needs of the business, and incentive policies that are periodically reviewed, in light of, among other things, the general economic climate and the results achieved by the group.


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C. Operating risks

C.1. Investment operations Investment operations conducted by the group are subject to the risks typical of private equity activities, such as the accurate valuation of the target company and the nature of the transactions carried out. The group has implemented a structured process of due diligence on target companies, involving the different levels of group management concerned and the careful definition of shareholders’ agreements in order to conclude agreements in line with the investment strategy and the risk profile chosen by the group.

C.2. Compliance with covenants Some investment operations were concluded using financial leverage to invest in the target companies. For financing contracts signed by investee companies, specific covenants generally backed by collateral are in place; failure to comply with these could necessitate recapitalisation operations for investee companies and lead to an increase in financial charges relating to debt refinancing. Failure to comply with covenants attached to loans could have negative effects on both the financial situation and operations of investee companies, and on the value of the investment. The group constantly monitors the significant reference parameters for the financial obligations taken on by investee companies, in order to identify any unexpected variance in good time.

C.3. Divestment operations In terms of private equity activities, the group generally invests over a medium-/long-term time horizon, normally three to six years for investments made through the acquisition of direct shareholdings in companies or up to ten years for investments made through funds. Over the investment management period, external situations could arise that might have a significant impact on the operating results of the investee companies, and consequently on the value of the investment itself. Furthermore, in the case of co-investment, guiding the management of an investee company could prove problematic or unfeasible, and it may ultimately prove impossible to dispose of the stakes held owing to lock-up clauses. The divestment strategy could therefore be negatively affected by various factors, some of which cannot be foreseen at the time the investments are made. There is therefore no guarantee that expected earnings will be realised given the risks resulting from the investments made. To combat these risk situations, the group has defined a process to monitor the performance of its investee companies, facilitated by its representation on the management bodies of significant investee companies, with a view to identifying any critical situations in good time.

C.4. Funding risk The income flows expected from the Alternative Asset Management business depend on the capacity of the group’s asset management companies to stabilise/grow their assets under management. In this environment, fund raising activity could be harmed by both external factors, such as the continuation of the global economic crisis or the trend in interest rates, and internal factors, such as bad timing in respect of fund raising activities by the asset management companies or the departure of key managers from the companies. The group has established appropriate risk management strategies in relation to fund raising, with a view to both involving new investors and retaining current investors.


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Other information

At 31 December 2011 the group had 167 employees including 153 in Alternative Asset Management and 14 in Private Equity Investment/the holding company. These staff levels do not include personnel on secondment from the parent company De Agostini S.p.A. The company signed a service agreement with the controlling shareholder for the latter to provide operating services in the administration, finance, control, legal, corporate and tax areas. This agreement, which is renewable annually, is priced at market rates, and is intended to allow the company to maintain a streamlined organisational structure in keeping with its development policy, and at the same time to obtain adequate operational support. DeA Capital S.p.A. has adopted the national tax consolidation scheme of the B&D Holding Group (the group headed by B&D Holding di Marco Drago e C. S.a.p.a.). This option was exercised jointly by each company and the parent company B&D Holding di Marco Drago e C. S.a.p.a. by signing the "Regulation for participation in the national tax consolidation scheme for companies in the De Agostini Group" and providing notification of this option to the tax authorities pursuant to the procedures and terms and conditions set out by law. The option, which was renewed in 2011, is irrevocable for the three-year period of 2011-2013 unless the requirements for applying the scheme are not met. With regard to the regulatory requirements set out in art. 36 of the Market Regulation on conditions for the listing of parent companies of companies formed or regulated by laws of non-EU countries and of significant importance in the consolidated financial statements, it is hereby noted that no group company falls within the scope of the above-mentioned provision. Furthermore, conditions prohibiting listing pursuant to art. 37 of the Market Regulation relating to companies subject to the management and coordination of other parties do not apply.


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Significant events after the end of 2011 and outlook

Significant events after the end of 2011

Private equity funds – paid calls and distributions After the end of 2011, DeA Capital Investments increased its investment in the IDeA I FoF, IDeA ICF II, IDeA OF I and IDeA EESS funds following total payments of EUR 3.0 million (EUR 0.7 million, EUR 1.9 million, EUR 0.3 million and EUR 0.1 million respectively). Merger of IDeA AI into the parent company DeA Capital

On 26 July 2011, in order to continue the process of simplifying the shareholder base, corporate governance and investment processes, which began with the partial non-proportional demerger at the beginning of 2011, the Boards of Directors of IDeA AI and DeA Capital S.p.A. approved the merger by incorporation of the subsidiary IDeA AI into DeA Capital S.p.A. The intention behind the operation, which entails the reorganisation of the DeA Capital Group’s corporate structure, is to centralise within the parent company the cash flows from and the determination of strategic guidelines for the alternative asset management business. The Bank of Italy had already given its approval, and the operation took effect on 1 January 2012. Outlook The outlook continues to focus on the strategic development guidelines followed last year, with an emphasis on increasing the value of assets in the Private Equity Investment area and on developing the Alternative Asset Management platform. Specifically, as regards Direct Private Equity Investment, the group is expected to improve on the results recorded in 2011, both for GDS and for Migros, mainly thanks to major efficiency initiatives in the businesses in question; in terms of Indirect Private Equity Investment (i.e. the funds in which the group has subscribed to capital commitments), it expects a further improvement in capital distributions, which should largely offset capital calls, thereby reducing net cash requirements. In Alternative Asset Management (the management of own and third-party funds), significant growth is expected with the launch of new products and the full integration of FARE SGR and FIMIT SGR. Obviously, the economic climate – for which it is still difficult to make forecasts – will influence the operating and financial performance of the group’s assets, as well as the prospects of generating a return on the investments made. The group believes, however, that it has built a portfolio well able to withstand any shocks and one that at the same time is able to benefit from improvements in conditions, particularly in terms of the financial markets, which more than anything else drive expectations regarding growth in the value of investments and the raising of new funds. At the same time, in support of the strategic guidelines set out above, the company will continue to maintain a solid asset and financial structure, implementing any initiative with rigour and discipline.


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8. DeA Capital S.p.A. - Proposal for approval of the financial statements for the year ending 31 December 2011 and related and consequent resolutions.

Dear shareholders, In submitting the annual financial statements for the period ending 31 December 2011 for your approval, the Board of Directors proposes that you pass the resolution below: The DeA Capital S.p.A. ordinary shareholders’ meeting, - after reviewing the draft annual financial statements for the year ending 31 December 2011, which show a loss of EUR 32,085,746 (versus profit of EUR 15,989,158 in 2010) - in acknowledgement of the reports from the Board of Auditors and the external auditors, KPMG S.p.A. - after reviewing the consolidated financial statements for the year ending 31 December 2011 and reviewing and approving the financial statements for the year ending 31 December 2011 of IDeA Alternative Investments S.p.A. (previously a wholly-owned subsidiary of DeA Capital S.p.A. merged into the latter effective 1 January 2012) as prepared by the Board of Directors of DeA Capital S.p.A. with the respective reports on operating performance and related annexes

votes

1. to approve the report of the Board of Directors on the group's position and on operating performance 2. to approve the balance sheet, income statement and notes to the financial statements for the year ending 31 December 2011 and the related annexes 3. to carry forward the loss of EUR 32,085,746 reported in the financial statements for the year ending 31 December 2011 4. to grant Chairman Lorenzo Pellicioli and Chief Executive Officer Paolo Ceretti broad powers to execute this resolution, jointly or severally through their agents and in compliance with the deadlines and procedures established by law

*** Milan, 12 March 2012 For the Board of Directors

The Chairman Lorenzo Pellicioli


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Consolidated Financial Statements for the year ending 31 December 2011


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Consolidated Financial Statements to 31 December 2011

Consolidated Balance Sheet Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Cash Flow Statement Statement of Changes in Consolidated Shareholders’ Equity Notes to the accounts


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Consolidated Balance Sheet (EUR thousand) Note 31.12.2011 31.12.2010

CONSOLIDATED ASSETS

Non-current assets

Intangible and tangible assets

Goodwill 1a 210,134 71,756

Intangible assets 1b 119,648 2,120

Tangible assets 1 c 1,269 382

Total intangible and tangible assets 331,051 74,258

Investments

Investments in associates 2a 302,141 339,022

Available-for-sale investments 2b 127,380 211,511

Available-for-sale funds 2c 159,673 98,622

Other available-for-sale financial assets 2d 936 304

Total investments 590,130 649,459

Other non-current assets

Deferred tax assets 3a 4,077 243

Loans and receivables 3b 1,632 996

Other non-current assets 3c 25,729 -

Total other non-current assets 31,438 1,239

Total non-current assets 952,619 724,956

Current assets

Trade receivables 4a 6,070 2,658

Available-for-sale financial assets 4b 13,075 15,038

Financial receivables 1 1,682

Tax receivables from Parent Companies 4c 5,929 4,065

Other tax receivables 4d 2,677 1,832

Other receivables 4e 6,128 557

Cash and cash equivalents 4f 46,764 86,517

Total current assets 80,644 112,349

Total current assets 80,644 112,349

Assets relating to joint ventures - 63,842

Held-for-sale assets - -

TOTAL CONSOLIDATED ASSETS 1,033,263 901,147

CONSOLIDATED SHAREHOLDERS' EQUITY AND LIABILITIES

CONSOLIDATED SHAREHOLDERS' EQUITY

Share capital 5a 280,697 294,013

Share premium reserve 5b 388,362 395,614

Legal reserve 5c 61,.322 61,322

Fair value reserve 5d 3,132 29,723

Other reserves 5e (10,042) (5,868)

Retained earnings (losses) 5f (10,849) 15,499

Profit/(loss) for the year 5g (43,577) (26,348)

Group shareholders' equity 669,045 763,955

Minority capital and reserves 5h 134,324 552

Consolidated shareholders' equity (Group and minorities) 803,369 764,507

CONSOLIDATED LIABILITIES

Non-current liabilities

Deferred tax liabilities 3a 40,506 649

Provisions for employee termination benefits 6a 2,127 858

Financial liabilities 6b 160,020 119,839

Total non-current liabilities 202,653 121,346

Current liabilities

Trade payables 7a 10,322 3,165

Payables to staff and social security organisations 7b 7,497 2,027

Current tax payables 7c 903 575

Other tax payables 7d 3,585 2,113 Other payables 7e 1,023 256

Short-term financial payables 7f 3,911 4,821

Total current liabilities 27,241 12,957

Liabilities relating to joint ventures - 2,337

Held-for-sale liabilities - - TOTAL CONSOLIDATED LIABILITIES AND SHAREHOLDERS’ EQUITY 1,033,263 901,147


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Pursuant to Consob Resolution 15519 of 27 July 2006, the impact of dealings with related parties on the balance sheet, income statement and cash flow statement is explained in the notes to the financial statements.


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Consolidated Income Statement


(EUR thousand) Note 2011 2010

Alternative asset management fees 8 47,762 19,424

Alternative asset management fees - joint ventures 0 8,420

Profit/(loss) from equity investments valued at equity 9 (55,503) (15,637)

Profit/(loss) from investments valued at equity - joint ventures 0 130

Other investment income/expenses 10 13,500 (3,405)

Service revenues 11 10,359 10,112

Other revenues and income 12 322 208

Other revenues and income - joint ventures 0 204

Personnel costs 13a (25,031) (11,677)

Service costs 13b (17,113) (10,849)

Depreciation, amortisation and write-downs 13c (7,080) (7,230)

Costs and charges relating to joint ventures (excluding tax) 0 (5,900)

Other charges 13d (2,136) (1,144)

Financial income 14a 1,863 1,709

Financial charges 14b (4,620) (6,350)

PROFIT BEFORE TAXES (37,677) (21,985)

Income tax 15 (3,814) (2,445)

Income tax – joint ventures 0 (979)

PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS (41,491) (25,409)


PROFIT/(LOSS) FOR THE YEAR (41,491) (25,409)

- Profit/(loss) attributable to the Group (43,577) (26,348)

- Profit/(loss) attributable to minorities 2,086 939

Earnings (loss) per share, base 16 (0,151) (0,091)

Earnings (loss) per share, diluted 16 (0,151) (0,091)


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Statement of Comprehensive Income (Statement of Performance - IAS 1) Comprehensive income or the Statement of Performance (IAS 1), in which performance for the year is reported including results posted directly to shareholders' equity, reflects the group's portion of a net negative balance of approximately EUR 70.2 million compared with a net negative balance of around EUR 15.6 million in 2010. Results posted directly to shareholders' equity were mainly due to the changes in fair value of Kenan/Migros. Please see the notes to the financial statements for additional details on the valuation process.

(Euro thousands) Year 2011 Year 2010

Profit/(loss) for the period (A) (41,491) (25,409)

Gains/(Losses) on fair value of available-for-sale financial assets (27,158) 5,785

Share of other comprehensive income of associates 547 4,961

Other comprehensive income, net of tax (B) (26,611) 10,746

Total comprehensive income for the period (A)+(B) (68,102) (14,663)

Total comprehensive income attributable to:

- Group share (70,188) (15,602)

- Non Controlling Interests 2,086 939


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Consolidated Cash Flow Statement (direct method) (Euro thousands) 2011 2010 CASH FLOW from operating activities

Investments in companies and funds (108,902) (19,899) Acquistions of subsidiaries net of cash acquired 0 (4,236)

Capital reimbursements from funds 13,842 7,922

Proceeds from the sale of investments 3,607 0 Interest received 1,207 728

Interest paid (3,036) (3,672)

Cash distribution from investments 64,452 21,775

Realised gains (losses) on exchange rate derivatives (803) (1,041)

Taxes paid (14,289) (2,997)

Taxes refunded 925 0 Dividends received 287 5,632

Management and performance fees received 40,480 19,512

Revenues for services 15,861 9,223 Operating expenses (37,037) (20,658)

Net cash flow from operations (23,406) 12,289

CASH FLOW from investments

Acquisition of property, plant and equipment (271) (156)

Sale of property, plant and equipment 1 0 Purchase of licenses (576) (63)

Net cash flow from financial assets (846) (219)

CASH FLOW from financial assets

Acquisition of financial assets (13,892) 0

Sale of financial assets 16,610 196 Share capital issued 0 0

Share capital issued: Stock Option Plan 0 0

Own shares purchased (26,411) (1,093) Own shares sold 0 0

Interest from financial assets 0 0

Dividends paid (2,700) (2,880) Warrants 0 0

Managers Loan 1,683 0

Bank loan 0 (20,650)

Net cash flow from financial assets (24,710) (24,427)

CHANGE IN CASH AND CASH EQUIVALENTS (48,962) (12,357)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 86,517 98,874

Cash and cash equivalents relating to held-for-sale assets 0 0

Cash and cash equivalents at beginning of period 86,517 98,874

EFFECT OF CHANGE IN BASIS OF CONSOLIDATION: CASH AND CASH EQUIVALENTS 9,209 0

CASH AND CASH EQUIVALENTS AT END OF PERIOD 46,764 86,517

Held-for-sale assets and minority interests 0 0




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Statement of Changes in Consolidated Shareholders’ Equity

(EUR thousand)

Share capital

Share premium reserve

Legal Reserve

Fair value reserve

Reserves relating to joint ventures

Other reserves

Translation reserve

Profit/(loss) carried forward

Profit (loss) for the Group

Total Group

Minority interests

Total consolidated shareholders' equity

Total at 31.12.09 289,021 395,881 61,322 18,391 586 1,293 0 43,078 (29,377) 780,195 692 780,887

Allocation of 2009 net profit 0 (1,798) 0 0 0 0 0 (27,579) 29,377 0 0 0

Cost of stock options 0 0 0 0 0 564 0 0 0 564 0 564

Reversal of Stock Option Plan 2007-2013

0 0 0 0 0 (1,379) 0 0 0 (1,379) 0 (1,379)

Purchase of own shares (944) (149) 0 0 0 0 0 0 0 (1,093) 0 (1,093)

Shares transferred for FARE acquisition 5,936 1,680 0 0 0 (7,386) 0 0 0 230 0 230

Pro-rata bonus shares of Santè 0 0 0 0 0 1,198 0 0 0 1,198 0 1,198

Effect of diluting Santè in GDS 0 0 0 0 0 (182) 0 0 0 (182) 0 (182)

Other changes 0 0 0 0 0 24 0 0 0 24 192 216

Put option on 30% of FARE Holding 0 0 0 0 0 0 0 0 0 0 (1,271) (1,271)

Total comprehensive profit/(loss) 0 0 0 11,352 (606) 0 0 0 (26,348) (15,602

)939 (14,663)

Total at 31.12.10 294,013 395,614 61,322 29,743 (20) (5,868) 0 15,499 (26,348) 763,955 552 764,507

(EUR thousand)

Share capital

Share premium reserve

Legal Reserve

Fair value reserve

Reserves relating to joint ventures

Other reserves

Translation reserve

Profit/(loss) carried forward

Profit (loss) for the Group

Total Group

Minority interests

Total consolidated shareholders' equity

Total at 31.12.10 294,013 395,614 61,322 29,743 (20) (5,868) 0 15,499 (26,348) 763,955 552 764,507

Allocation of 2010 net profit 0 0 0 0 0 0 (26,348) 26,348 0 0 0

Cost of stock options 0 0 0 0 0 683 0 0 0 683 0 683

Purchase of own shares (18,123) (8,288) 0 0 0 0 0 0 0 (26,411) 0 (26,411)

Shares transferred for IDeA acquisition 4,807 1,036 0 0 0 0 0 0 0 5,843 0 5,843

Pro-rata bonus shares of Santè 0 0 0 0 0 392 0 0 0 392 0 392

Effect of diluting Santè in GDS 0 0 0 0 0 (2,162) 0 0 0 (2,162) 0 (2,162)

FARE-FIMIT merger operation 0 0 0 0 0 3,984 0 0 0 3,984 133,799 137,783

Other changes 0 0 0 0 20 448 0 0 0 468 (336) 132

Put option 0 0 0 0 0 (7,519) 0 0 0 (7,519) (1,777) (9,296)

Total comprehensive profit/(loss) 0 0 0 (26,611) 0 0 0 0 (43,577) (70,188) 2,086 (68,102)

Total at 31.12.11 280,697 388,362 61,322 3,132 0 (10,042) 0 (10,849) (43,577) 669,045 134,324 803,369



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Notes to the accounts Consolidated Financial Statements for the year ending 31 December 2011


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Notes to the Consolidated Financial Statements for the year ending 31 December 2011 A. Structure and content of the consolidated financial statements The consolidated financial statements for the year ending 31 December 2011 include the parent company DeA Capital S.p.A. and all subsidiaries (the Group), and were prepared using the separate financial statements of the companies included in the basis of consolidation corresponding to the relevant individual statements, restated as necessary, to adapt them to the accounting standards listed below as dictated by Italian law. The consolidated financial statements were prepared in accordance with the general principles of IAS 1, specifically: - accruals principle: the effect of events and transactions is recorded when they occur, and not when payment is made or received - going concern principle: the financial statements are prepared under the assumption that business operations will continue in the near future. In this regard, the directors have evaluated this assumption with particular scrutiny in light of the current economic and financial crisis. As indicated in the section “Uncertainties and the management of financial risks” in the Report on Operations, the directors believe that the risks and uncertainties described therein are not critical in nature, confirming the financial solidity of the DeA Capital S.p.A. Group - materiality: when reporting operating events in accounting entries, preference is given to the principle of economic substance over form - comparative information: the consolidated financial statements must show comparative information for the previous period The consolidated financial statements consist of the balance sheet, the income statement, the statement of changes in shareholders’ equity, the cash flow statement, the statement of comprehensive income (Statement of Performance – IAS 1) and these notes to the consolidated financial statements. The consolidated financial statements are also accompanied by the Report on Operations and a Statement of Responsibilities for the Accounts pursuant to art. 154-bis of Legislative Decree 58/98. The balance sheet provides a breakdown of current and non-current assets and liabilities with separate reporting for those resulting from discontinued or held-for-sale operations. In the income statement, the group has adopted the nature of expense method, whereby costs and revenues are classified according to type. The cash flow statement is prepared using the "direct method". Companies over which the group exercises joint control are consolidated proportionally in the consolidated financial statements, as stipulated by IAS 31 (Interests in joint ventures). Specifically, the group’s portions of the assets, liabilities, costs and revenues are classified as follows: • assets and liabilities are included under “Assets relating to joint ventures" and “Liabilities relating to joint ventures” respectively • revenues, costs and taxes are included in the applicable items relating to "joint ventures" Unless otherwise indicated, all tables and figures included in these notes to the financial statements are reported in EUR thousand.

In addition to the figures at 31 December 2011, the financial statement formats used also provide comparable figures for 31 December 2010. The publication of consolidated financial statements for the period ending 31 December 2011 was authorised by resolution of the Board of Directors dated 12 March 2012.


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Statement of compliance with accounting standards The consolidated financial statements for the year ending 31 December 2011 (2011 consolidated financial statements) have been prepared in accordance with the International Accounting Standards adopted by the European Union and approved by the date the financial statements were prepared (International Accounting Standards, or individually IAS/IFRS, or collectively IFRS (International Financial Reporting Standards)). "IFRS" also means all interpretations of the International Financial Reporting Interpretations Committee (IFRIC), including those previously issued by the Standing Interpretations Committee (SIC), and approved by the European Union. The consolidated financial statements were prepared with a focus on clarity, and provide a true and fair view of the balance sheet, financial situation, income statement and cash flows for the period. Accounting standards, amendments and interpretations applied for the first time

The IASB-approved international accounting standards and interpretations authorised for adoption in Europe that were applied for the first time from 1 January 2011 are detailed below. None had any significant impact on the consolidated financial statements for the year ending 31 December 2011. The group did not apply any IFRS in advance. Accounting standards, amendments and interpretations applied as of 1 January 2011 The group applied the accounting standards, amendments and interpretations below for the first time from 1 January 2011:

Amendments to IAS 24 (Related-party disclosures)

On 4 November 2009, the IASB published a revised version of IAS 24 (Related parties), which replaced the current version of IAS 24. The document simplifies disclosure requirements on related parties for companies in which a government entity is a controlling shareholder or exercises significant influence or joint control, and removes certain application-related difficulties resulting from the previous definition of related parties. Furthermore, the revised definition of related parties contained in the amended version of IAS 24:

makes the application of disclosure requirements in the financial statements of related parties symmetrical (i.e. if A is related to B for the purposes of the financial statements of B, then B must also be considered a related party of A in the financial statements of A)

clarifies that related party disclosures also apply to transactions entered into with the subsidiaries of associates and joint ventures, and not just the associate or joint venture

equates the position of individuals to that of companies for the purposes of identifying the relationship

also requires disclosure on commitments received and granted to related parties

The adoption of this amendment had no effect on the valuation of items in the financial statements and had a limited impact on the disclosure of related-party transactions. Improvements to International Financial Reporting Standards

On 6 May 2010, the IASB issued the latest series of documents detailing the minor changes to be made to existing accounting standards (Improvements to IFRS). The document contains a series of improvements to seven International Accounting Standards and Interpretations (IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS 34 and IFRIC 13). They have not yet been ratified by the European Union.

The changes that could potentially have a significant impact relate to:


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IFRS 3 (Business combinations): currently, in application of the new IFRS 3, there is the option to value all the components of the minority interests at their fair value or in proportion to the minority stake in the identifiable net assets of the acquisition. This option has now been restricted to include only those components representative of instruments that currently confer on minority shareholders rights equivalent to those pertaining to ordinary shares, particularly as regards obtaining a pro-rata portion of net assets in the event of liquidation. All other components relating to minority interests (such as privileged shares or warrants issued by the acquired company to minorities) must be stated at fair value, unless the IFRS specify a different valuation criterion. In addition, the document clarifies that in the case of stock option plans acquired or voluntarily replaced following business combinations, such plans must be (re)calculated at the date of acquisition in accordance with IFRS 2. It also specifies that the current requirement of IFRS 2, namely that the value of the stock option plan acquired following a business combination must be allocated partly to "purchase costs" and partly to "services to be provided in the future", applies to all allocations regardless of whether or not they have been voluntarily replaced as a result of the business combination. IFRS 7 (Financial instruments): Disclosures: the amendment emphasises the interaction between the qualitative and quantitative supplementary information required by the standard on the nature and extent of the risks inherent in financial instruments. This should help users of the financial statements to link the information presented and should constitute a general description of the nature and scale of the risks deriving from financial instruments. IAS 1 (Presentation of financial statements): the amendment requires that a reconciliation of changes to any component of shareholders' equity must be presented either in the notes to the financial statements or in the financial statements themselves. IAS 34 (Interim financial reporting): the information relating to significant events and transactions to be reported in the interim financial statements must represent an update on the information provided in the annual financial statements. It also specifies the circumstances in which it is mandatory to disclose information relating to financial instruments and their fair value in the interim financial statements.

The adoption of the standards and interpretations noted above had no material impact on the valuation of the group's assets, liabilities, costs and revenues.

Accounting standards, amendments and interpretations applied from 1 January 2011 that were not relevant to the group's consolidated financial statements The following accounting principles, amendments and interpretations, applicable with effect from 1 January 2011, did not apply to the group, but could have accounting effects on future transactions or agreements. For additional details on these, please see the notes to the consolidated financial statements to 31 December 2010.

Amendments to IFRIC 14 (IAS 19 - Limit on a defined benefit asset, minimum funding requirements and their interaction)

IFRIC 19 (Extinguishing financial liabilities with equity instruments)

Amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards)


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Future accounting standards, amendments and interpretations

Accounting standards, amendments and interpretations not yet approved for adoption in the European Union as of 29 February 2012 The International Accounting Standards, interpretations and changes to existing IASB-approved accounting standards and interpretations that had not been ratified for adoption in the European Union as of 29 February 2012 are as follows: IFRS 9 (Financial instruments)

On 12 November 2009, the IASB issued the first part of IFRS 9, which only amends the requirements for classifying and valuing the financial assets that are currently specified in IAS 39; once completed, it will fully replace IAS 39. Financial liabilities do not fall within the scope of IFRS 9, since the IASB intends to go into greater detail on aspects related to the inclusion of own credit risk in the fair value measurement of financial liabilities. Thus, financial liabilities continue to fall within the scope of IAS 39. The endorsement process for IFRS 9 is currently on hold, and this standard is not applicable in the EU, ahead of the European Commission's full assessment of the plan to completely replace IAS 39.

Changes to IFRS 7 (Financial instruments) Disclosures

On 7 October 2010, the IASB published the amendment to IFRS 7 (Disclosures – transfers of financial assets), which requires further information on transfers of financial assets. The changes to IFRS 7 aim to promote greater transparency in relation to the risks associated with transactions where, when a financial asset is transferred, the transferring company continues to be exposed, within certain limits, to risks associated with the derecognised financial asset (known as "continuing involvement"). Additional information is also required on significant transfers of financial assets at particular times (e.g. at the end of an accounting period). The amendments to IFRS 7 must be applied in the financial statements for periods starting from 1 July 2011 onwards. Amendments to IAS 12 (Income taxes)

On 20 December 2010, the IASB published a number of changes to IAS 12 (Income taxes), which now stipulates that the entity should assess whether it expects to recover the deferred tax through the use or sale of the asset. This assessment can be difficult and subjective, e.g. if investment property is recorded at fair value, as permitted by IAS 40 (Investment property). To provide a simplified approach, the amendments introduce the presumption, when calculating deferred taxes, that the carrying amount of the underlying asset will be recovered entirely by sale, unless there is clear evidence that it can be recovered through use. The presumption applies not only to investment property but also to assets such as plant and machinery or intangible assets recorded or revalued at fair value. As a result of these changes, SIC 21 (Income Taxes - recovery of revalued, non-depreciable assets) was withdrawn at the same time. The entire content of this document is now covered in IAS 12. The amendments to IAS 12, which are awaiting ratification by the European Commission, must be applied from 1 January 2012. Amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards): Severe hyperinflation and removal of fixed dates for first-time adopters On 20 December 2010, the IASB published two amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards). The first amendment introduced the option for entities that are transitioning to IFRS to use the same simplified rules as those permitted to entities that made the transition to international accounting standards in 2005. The second amendment grants an exemption from the retrospective application of IFRS at first-time adoption to entities that are presenting financial statements in accordance with IFRS for the first time, after having been unable to present them due to hyperinflation, allowing such entities to use fair value as a replacement for cost for all assets and liabilities presented.


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The amendments to IFRS 1, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2011 onwards.

IFRS 10 (Consolidated financial statements)

On 12 May 2011, the IASB published the accounting standard IFRS 10 (Consolidated financial statements), which is intended to replace IAS 27 (Consolidated and separate financial statements) and SIC 12 (Consolidation – special purpose entities). The new standard sets out a single model of consolidation that identifies control as the basis for the consolidation of all types of entities.

The new standard defines the concept of control on the basis of the concurrence of three essential elements:

power over the investee company exposure to or the right to variable returns from its involvement with the investee company the ability to use that power over the investee to affect the amount of the investor's returns

The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU. IFRS 11 Joint Arrangements

On 12 May 2011, the IASB published the accounting standard IFRS 11 (Joint arrangements), which is intended to replace IAS 31 (Interests in joint ventures) and SIC 13 (Jointly controlled entities – non-monetary contributions by venturers). The new standard governs the principles for reporting all joint arrangements. These are divided into two categories, according to the economic substance of the arrangements between the parties:

joint operations, whereby the parties to the arrangement acquire rights to certain assets and

assume obligations for certain liabilities

joint ventures, whereby the parties have rights to the net value of a set of jointly controlled assets and liabilities

In the first case, the investor recognises the assets and liabilities acquired (along with the associated income and expense) according to the IAS/IFRS standards governing the individual elements; in the second, the pro-rata interest in the joint venture is recognised using the equity method. The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU. IFRS 12 (Disclosure of interests in other entities)

On 12 May 2011, the IASB published the accounting standard IFRS 12 (Disclosure of interests in other entities) regarding the information to be provided in the financial statements on interests in other entities, including subsidiaries, associates and joint ventures. This information must enable users of the financial statements to understand the nature of the risks associated with the investments in strategic shareholdings that will form part of the company's assets over the long term. The information must also indicate the effects of these investments on financial position, financial performance and cash flows. The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU.


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IFRS 13 (Fair value measurement)

On 12 May 2011, the IASB published the accounting standard IFRS 13 (Fair value measurement), which provides a single definition of the concept of fair value and a framework for how it should be applied when another IFRS permits or requires its use.

More specifically, IFRS 13 sets out a clear definition of fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (or exit price). This definition highlights that fair value is a measure that must be based on the market and not the valuing entity. In other terms, the measurement process must take into account the assumptions that market participants would use when pricing the asset or liability in current conditions, including assumptions on risk. As a consequence, the intention to hold an asset or cancel or fail to meet a liability is of no relevance in measuring fair value. The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU.

IAS 1 - Presentation of items of other comprehensive income (presentation of financial statements)

On 16 June 2011, the IASB issued the “Amendments to IAS 1 – presentation of items of other comprehensive income”, which govern the grouping and components of the statement of comprehensive income according to whether or not they can be reclassified to the income statement.

The amendments to IAS 1, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2012 onwards.

Amendments to IAS 19 (Employee benefits)

On 16 June 2011, the IASB issued the “Amendments to IAS 19 (Employee benefits)” that introduce the obligation to recognise actuarial gains and losses in the statement of comprehensive income, removing the option of using the "corridor" method and requiring the recognition of actuarial gains and losses resulting from the revaluation of liabilities and assets in the statement of comprehensive income. The amendments to IAS 19, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2012 onwards. We do not anticipate that the potential adoption of the standards and interpretations noted above will have a material impact on the valuation of the DeA Capital Group's assets, liabilities, costs and revenues.

Basis of consolidation As a result of the events described in the Report on Operations, the basis of consolidation had changed at 31 December 2010 compared with 31 December 2011. This were due to: the partial non-proportional demerger of IDeA Alternative Investments, as a result of which

Investitori Associati SGR and Wise SGR were removed from the basis of consolidation on 17 January 2011. DeA Capital S.p.A. subsequently increased its investment in IDeA Alternative Investments to 100%

the sale of the stake held in IDeA AI Sarl (on 1 February 2011)

the sale of the stake held in FARE NPL (on 28 September 2011)

the liquidation of FARE GmbH, which was completed at the end of December 2011, following the full distribution of shareholders' equity


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In addition, the merger of FARE SGR and FIMIT SGR was completed on 3 October 2011. This created IDeA FIMIT SGR, Italy’s largest real estate asset management company. Following the series of operations completed, FARE Holding has a stake of 40.32% and IFIM a stake of 20.98% in the new IDeA FIMIT SGR. Both these companies are controlled by DeA Capital S.p.A. (for a more complete description of the transaction, please see the section below on ”Significant events in 2011”).

The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" commenced operations on 23 December 2011 with a primary focus on real estate investments in the office and residential markets with a potential for growth in value. The duration of the fund is eight years. The fund, which is managed by the subsidiary IDeA FIMIT SGR, completed the first closing with a commitment of around EUR 55 million compared with a target commitment of EUR 150 million. DeA Capital Investments and IDeA FIMIT SGR subscribed to a total commitment in the fund of EUR 15 million (corresponding to 9.1% of the overall commitment), and at 31 December 2011 had made the first payment of EUR 7.5 million.

Lastly, on 28 December 2011, DeA Capital S.p.A. purchased 25% of the share capital of Harvip Investimenti S.p.A. (Harvip) from the subsidiary IDeA FIMIT SGR for a consideration of EUR 1 million. As a result, at 31 December 2011, the following companies formed part of the DeA Capital Group's basis of consolidation:

Company Registered office Currency Share capital % holding Consolidation method

DeA Capital S.p.A. Milan, Italy EUR 306,612,100 Holding

DeA Capital Investments S.A. Luxembourg EUR 515,992,516 100% Full consolidation (IAS 27)

Santè SA Luxembourg EUR 99,922,400 42,89% Equity accounted (IAS 28)

Sigla Luxembourg S.A. Luxembourg EUR 482,684 41,39% Equity accounted (IAS 28)

IDeA Alternative Investments S.p.A.

Milan, Italy EUR 2,461,500 100,00% Full consolidation (IAS 27)

IDeA Capital Funds SGR S.p.A. Milan, Italy EUR 1,200,000 100,00% Full consolidation (IAS 27)

Soprarno SGR S.p.A. Florence, Italy EUR 2,000,000 65,00% Full consolidation (IAS 27)

IDeA SIM S.p.A. Milan, Italy EUR 2 65,00% Full consolidation (IAS 27)

IDeA OF I Milan, Italy EUR - 46,18% Equity accounted (IAS 28)

Atlantic Value Added Milan, Italy EUR - 27,27% Equity accounted (IAS 28)

FARE Holding S.p.A. Milan, Italy EUR 600,000 70,00% Full consolidation (IAS 27)

FARE S.p.A. Milan, Italy EUR 500,000 70,00% Full consolidation (IAS 27)

IDeA FIMIT SGR S.p.A. Rome, Italy EUR 16,757,574 40,46% Full consolidation (IAS 27)

FAI S.r.l. Milan, Italy EUR 105,000 70,00% Full consolidation (IAS 27)

IFIM S.r.l. Milan, Italy EUR 10,000 58,31% Full consolidation (IAS 27)

Harvip Investimenti S.p.A. Milan, Italy EUR 3,150,000 25,00% Equity accounted (IAS 28)

The shares held in Santé are subject to a lien in favour of the entities providing credit lines available for companies forming part of the control structure of Générale de Santé (i.e. Santé S.A. and Santé Développement Europe S.A.S.). The above list meets the requirements of Consob Resolution 11971 of 14 May 1999 and subsequent amendments (art. 126 of the Regulation).


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Consolidation method Subsidiaries are consolidated on a line-by-line basis from their date of acquisition, i.e. on the date the group acquires a controlling interest, and they cease to be consolidated when control is transferred outside the group. Subsidiaries are those companies in which the parent company, directly or indirectly through subsidiaries, holds a majority of the capital subscribed and/or voting rights, or over which the parent company exercises de facto control allowing it to direct the financial and operating policies of the subsidiary pursuant to the articles of association or by agreement. The financial statements of subsidiaries are prepared for each period using the same accounting standards used by the parent company. The main criteria adopted to apply this method are indicated below:

- the financial statements of the parent company and subsidiaries are incorporated on a "line-by-line" basis

- the carrying value of the investment is offset against the corresponding net equity figure When a company is included in the basis of consolidation for the first time, the difference between the acquisition cost and the net equity of the investee companies is posted, if the conditions are right, to the assets or liabilities included in the consolidation, pursuant to the provisions of IFRS 3. Any residual portion is taken to the income statement if negative, or recorded as a specific item, “goodwill”, under assets if positive. The latter is subject to an annual impairment test. Alternatively, when a company is included in the basis of consolidation for the first time, the entire amount may be recorded as goodwill including the portion relating to the minority interests (full goodwill approach)

- significant transactions between consolidated companies are eliminated as are payables and receivables and unrealised profits resulting from transactions between group companies net of any tax impact

- the portions of shareholders' equity pertaining to minority shareholders are reported, along with the respective share of net profit for the period, in appropriate shareholders' equity items

In the case of joint control, the integration is carried out, pursuant to IAS 31, in proportion to the share held by the parent company. B. Valuation criteria adopted The valuation criteria adopted on the basis of International Accounting Standards and reported below are consistent with the going concern principle and have not changed from those used in the preparation of the consolidated financial statements at 31 December 2010 and the summary consolidated half-year financial statements at 30 June 2011 except as a result of the application of new IAS/IFRS accounting standards as described above. Current and non-current assets and liabilities An asset is considered current if it meets at least one of the following conditions: it is expected to be converted during the company's normal operating cycle. The "company's

operating cycle" means the period from the acquisition of an asset to its conversion to cash and cash equivalents. When the company's operating cycle cannot be clearly identified, its duration is assumed to be twelve months

it is held mainly for trading purposes its conversion is expected to occur within twelve months following the end of the financial year it consists of cash and cash equivalents which have no restrictions that would limit its use in the

twelve months following the end of the financial year. All other assets are carefully analysed to separate the "current" portion from the "non-current" portion. Furthermore, deferred tax assets are recorded under non-current components.


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A liability is considered current if it meets at least one of the following conditions: it is expected to be settled during the company's normal operating cycle it is held mainly for trading purposes its settlement is expected to occur within twelve months following the end of the financial year the company does not have an unconditional right to defer payment of the liability for at least

twelve months following the end of the financial year All other liabilities are carefully analysed to separate the "current" portion from the "non-current" portion. Furthermore, deferred tax liabilities are recorded under non-current components. Intangible assets Intangible assets are those assets with no physical form that can be identified and produce future economic benefits. They are recorded under assets when it is likely that their use will generate future economic benefits and when their cost can be determined reliably. The above assets are recorded at purchase cost, or at production cost if they are generated internally. The purchase cost is represented by the fair value of the price paid to acquire the asset and by all other direct costs incurred to prepare the asset for use. The carrying value of intangible assets is maintained in the financial statements to the extent that there is evidence that this value can be recovered through use or if it is likely that these assets will generate future economic benefits. The useful life of intangible assets is assessed as finite or indefinite. Intangible assets with an indefinite useful life are tested to check that their value is still appropriate at any time when there are indications of possible impairment as required by IAS 36 (Impairment of assets). Intangible assets with an indefinite life are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to check that the underlying conditions for the classification continue to apply. For additional details, please see the section "Impairment." Except for intangible assets involving rights connected with final variable commissions, intangible assets with a finite useful life are amortised on a straight-line basis over their useful life. The amortisation method used for rights connected with final variable commissions reflects changes in future economic benefits associated with the recognition of the related revenues. The useful life of these intangible assets is tested to check that their value is still appropriate whenever there are indications of possible impairment. Tangible assets Tangible assets are recorded at purchase price or production cost adjusted for accumulated depreciation and any impairment. Their cost includes ancillary costs and direct and indirect costs incurred at the time of purchase necessary to make the asset usable. The purchase cost is represented by the fair value of the price paid to acquire the asset and by all other direct costs incurred to prepare the asset for use. Tangible assets are depreciated on a straight-line basis over their remaining useful life, using the depreciation rates indicated in the notes on the item relating to similar groups of assets. If factors are discovered that lead the company to believe that it may be difficult to recover the net carrying value, an impairment test is performed. If the reasons for the impairment cease to exist, the carrying value of the asset is increased to its recoverable amount. Financial assets Based on the classification of financial assets required by IAS 39, the group classified its financial assets at the time of the transition to International Accounting Standards, and subsequently when individual financial assets were acquired.


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Minority interests and investments in funds, which constitute the main, predominant area of the group's operations, are classified under available-for-sale assets, which are recorded at fair value with a balancing item in shareholders' equity. Fair value is the payment for which an asset could be exchanged in a free transaction between knowledgeable and independent parties. In the case of securities traded in active regulated markets, fair value is determined based on the bid price recorded on the last trading day of the related accounting period. In the case of assets not listed in active markets, such as the group's direct investments in companies, investments in venture capital funds and funds of funds, the fair value reported in financial statements is determined by the directors based on their best judgment and estimation, using the knowledge and evidence available when the financial statements are prepared. In these cases, the company acts in accordance with the provisions of the IAS. In particular, IAS 39 specifies that:

if there are recent transactions related to the same financial instrument, these may be used to determine fair value after verifying that there have been no significant changes in the economic environment between the date of the transactions being considered and the valuation date

if there are transactions involving similar financial instruments, these may be used to determine fair value after verifying the similarity (as a function of the type of business, size, geographic market, etc.) between the instrument for which transactions have been found and the instrument to be valued

if no prices can be found in active markets, fair value must be determined using valuation models that account for all factors that market participants would consider in setting a price

However, due to objective difficulties in making assessments and the absence of a liquid market, the values assigned to such assets could differ, and in some cases significantly, from those that could be obtained when the assets are sold. Direct investments in companies that are not subsidiaries or associates and in funds are classified as available-for-sale financial assets, which are initially reported at fair value on the date of the original posting. These assets are measured at fair value when all interim and full-year financial statements are prepared. Gains and losses from fair value measurement are posted to a special shareholders' equity reserve called the "fair value reserve" until the investment is sold or otherwise disposed of, or until impairment occurs, in which cases the gain or loss previously recorded in the fair value reserve is posted to the income statement for the period. On the date of the annual or interim financial statements (IAS 34), a test is performed as to the existence of objective evidence of impairment following one or more events that have occurred after the initial recording of the asset, and this event (or events) has an impact on the estimated cash flow from the financial asset. For equity instruments, a significant or prolonged reduction in fair value below their cost is considered to be objective evidence of impairment. Although International Accounting Standards introduced an important reference to quantitative parameters that must be adhered to, they do not govern quantitative limits to determine when a loss is significant or prolonged. Thus, the DeA Capital Group has an accounting policy that defines these parameters. In particular, "significant" means there has been an objective reduction in value when fair value is more than 35% below its historical cost. In this case, impairment is recorded in the income statement without further analysis. The duration of the reduction in value is deemed to be prolonged when the reduction of fair value below historical cost continues for a period of over 24 months. After exceeding 24 months, impairment is recorded in the income statement without further analysis.


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Associates These are companies in which the group holds at least 20% of the voting rights or exercises significant influence, but not full or joint control over their financial and operating policies. The consolidated financial statements include the group’s share of its associates' results, which are reported using the equity method, starting on the date on which significant influence began until the significant influence ceases to exist. If the group's share of an associate's losses exceeds the carrying value of the equity investment reported in the financial statements, the carrying value of the equity investment is eliminated, and the share in further losses is not reported unless, and to the extent that, the group is legally liable for such losses. When the equity investment is acquired, any difference between its cost and the parent company's stake in the net fair value of the associate's identifiable assets, liabilities and contingent liabilities is recorded as required by IFRS 3, i.e. any goodwill is included in the carrying value of the equity investment. As governed by IAS 28.33, since the goodwill included in the carrying value of an equity investment in an associate is not recorded separately, it is not subject to a separate impairment test pursuant to IAS 36 (Impairment of assets). Instead, the entire carrying value of the equity investment is subject to an impairment test pursuant to IAS 36 by comparing its recoverable value (the greater of its value in use and the fair value adjusted for sales costs) and carrying value whenever there is evidence indicating the possible impairment of the equity investment as set out in IAS 28.31. Derivatives Derivatives are recorded in the balance sheet at fair value calculated in accordance with the criteria already stated in the Financial assets section. Fair value changes are reported differently depending on their designation (hedging or speculative) and the nature of the risk hedged (fair value hedge or cash flow hedge). For contracts designated for hedging purposes, the group documents this relationship when the hedge is established. The documentation incorporates the identification of the hedging instrument, the item or transaction hedged, the nature of the risk hedged, the criteria used to ascertain the effectiveness of the hedging instrument as well as the risk. The hedge is considered effective when the projected change in fair value or in the cash flows of the hedged instrument is offset by the change in fair value or in the cash flows of the hedging instrument, and the net results fall within the range of 80% to 125%. If the instruments are not, or cannot be, designated as hedging instruments, they must be considered "speculative"; in this case, fair value changes are posted directly to the income statement. In the case of fair value hedges, changes in the fair value of the hedging instrument and the hedged instrument are posted to the income statement regardless of the valuation criterion used for the hedged instrument. In the case of cash flow hedges, the portion of the fair value change in the hedging instrument that is recognised as an effective hedge is posted to shareholders' equity, while the portion that is not effective is posted to the income statement. Put options on minority shareholdings For put options that do not grant actual access to the economic benefits associated with owning the minority shareholdings, the shares or shareholdings covered by the options are reported on the date control is acquired as “minority interests”; the portion of profits and losses (and other changes in shareholders' equity) of the entity acquired is allocated to the minority shareholding after the business combination. The minority shareholding is reversed on each reporting date and reclassified as a financial liability at its fair value (equal to the present value of the option's exercise price) as if the acquisition had occurred on that date. The difference between the fair value of the financial liability and the minority interest reversed on the reporting date is recorded as an acquisition of minority shareholdings and reported under the group's shareholders' equity. The impact of the discounting is not recorded separately. Any dividends paid to minority shareholders are posted to shareholders' equity.


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If the option is not exercised, the minority interest is recognised in the amount that would have been reported if the option had not been recorded; the difference between the minority interest recognised and the cancelled liability is reported under the group's shareholders' equity. Impairment - IAS 36 Impairment always occurs when the carrying value of an asset is greater than its recoverable value. On each reporting date, the company determines whether there are any indications that an asset may be impaired. If such indications exist, the recoverable value of the asset is estimated (impairment test) and any write-down is recorded. The recoverable value of an asset is the higher of its fair value less costs to sell the asset and its value in use. IAS 36 provides instructions on determining fair value less costs to sell an asset, as follows:

if there is a binding sales agreement, the asset's fair value is the negotiated price if there is no agreement, but the asset is marketed in an active market, the fair value is the

current bid price (thus, the exact price on the value date and not the average price) if no prices can be found in active markets, fair value must be determined based on valuation

methods that incorporate the best information available including any recent transactions involving the same asset, after verifying that there were no significant changes in the economic environment between the date of the transactions under consideration and the valuation date

IAS 36 defines value in use as the present value of future cash flows that an asset is projected to generate. The estimate of the value in use must include the items listed below:

an estimate of future cash flows that the company expects to derive from the asset expectations of potential changes in value and the timing of such cash flows the time value of money other factors such as the volatility of the asset's value and the absence of a liquid market for it

For more information on determining value in use, please see Appendix A of IAS 36. However, the main elements for accurately estimating the value in use are an appropriate calculation of projected cash flows (for which, the investee company's business plan is essential) and their timing, as well as the application of the right discount rate that accounts for both the present value of money and the specific risk factors for the asset to be valued. In all cases, when calculating the value it is important to:

base cash flow projections on reasonable and sustainable assumptions that provide the best estimate of the economic conditions that are likely to exist over the remaining useful life of the asset

base cash flow projections on the most recent budget/plan approved by the investee company, which, however, must exclude any future inflows or outflows of cash that are expected to come from the future restructuring, improvement or optimisation of operating performance. Projections based on these budgets/plans must cover a maximum period of five years unless a longer period of time can be justified

estimate higher cash flow projections for the period covered by the most recent budgets/plans by extrapolating projections based on the budgets/plans taken into consideration, and using a stable or declining growth rate for subsequent years unless a rising rate can be justified. This growth rate must not exceed the average long-term growth rate for production in the country or countries in which the investee company operates or for markets in which the asset used is placed unless a higher rate can be justified

The assumptions used to determine cash flow projections must be reasonable, and based partly on an analysis of the factors that generated differences between projections of past and current cash flows. In addition, the assumptions used to determine current cash flow projections must be checked to ensure that they are consistent with actual past results, unless in the meantime changes have occurred in the investee company's business model or in the economic environment in which it operates that justify changes vis-a-vis the past. Receivables and payables A receivable is first reported at fair value on the date it is agreed. After initial reporting, receivables are valued at amortised cost. Payables that fall due within normal contractual terms are initially posted at fair value and later valued at amortised cost.


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Trade receivables If there is objective evidence that a trade receivable has suffered impairment, it must be adjusted down and the loss posted to the income statement; the write-down is allocated to the item, “impairment provisions”, as a direct contra item to the asset item. The amount of the write-down must take into account recoverable cash flows, the related collection dates, future recovery charges and expenses and the discount rate to be applied. Held-for-sale assets A non-current asset or disposal group is classified as held for sale if the carrying value will mainly be recovered from its sale or disposal instead of its ongoing use. In order for this to occur, the asset or disposal group must be available for immediate sale in its current condition, and the sale must be highly likely. Assets meeting the criteria to be classified as held-for-sale assets are valued at the lower of carrying value and sales value adjusted for any related costs. Own shares Own shares are not considered financial assets of the company that issued the shares. The purchase and sales value of own shares is recorded as a change to shareholders' equity. No gain or loss is reported in the income statement for the sale, purchase, issue or cancellation of own shares. Cash and cash equivalents Cash and cash equivalents include cash at hand, demand deposits and short-term, highly liquid financial investments that are readily convertible to cash and subject to a negligible risk of price variation. Their value is reported at fair value. Provisions for risks and future liabilities As necessary, the group records provisions for risks and future liabilities when: it has a legal or implicit obligation to third parties resulting from a past event it is likely that group resources will be used to fulfil the obligation a reliable estimate can be made of the amount of the obligation Provisions are recorded based on the projected value and discounted as necessary to present value if the time value is considerable. Changes in estimates are recognised in the income statement of the period in which the change occurs. Income tax Current income taxes are determined and reported on the basis of a reasonable forecast of tax charges resulting from applying the tax rates in effect in the various countries where group companies operate to taxable income, and taking into account any exemptions and tax credits to which such companies are entitled. Deferred tax liabilities are allocated for all temporary differences between the carrying value of the assets and liabilities and the corresponding amount for tax purposes. Deferred tax assets are recorded for all deductible temporary differences and for tax assets and liabilities carried forward to the extent that it is likely there will be sufficient future taxable profit against which the deductible temporary differences and the tax assets and liabilities carried forward can be used. Deferred taxes are classified under non-current assets and liabilities and are determined using tax rates expected to be applicable under the laws in the countries where the group operates in the years when the temporary differences will be realised or will expire. The carrying values of deferred tax assets are analysed periodically and reduced if it is not likely that sufficient taxable income will be generated against which the benefits resulting from such deferred assets can be used.


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Revenues and income Service revenues are recognised at the time the services are rendered based on the progress of the activity on the reporting date. Income from equity investments for dividends or for their full or partial sale is reported when the right to receive payment is determined, with a balancing item (receivable) at the time of the sale or decision to distribute dividends by the entity or appropriate body. Interest is reported using the effective interest rate method. Employee benefits Short-term employee benefits, whether in cash or in kind (meal vouchers) are reported in the income statement in the period when work is performed. Employee benefits related to participation in a defined benefit plan are determined by an independent actuary using the projected unit credit method. Actuarial gains and losses are posted to the income statement in the period in which they occur using the corridor method to record the gains or losses unless these exceed a certain percentage of the obligation. Employee benefits in respect of participation in a defined contribution plan only relate to those plans under mandatory government administration. The payment of contributions fulfils the group's obligation to its employees. Thus, contributions are costs in the period in which they are payable. In the group, benefits were provided in the form of stock options or share-based payments. This applies to all employees eligible for stock option plans. The cost of these transactions is determined with reference to the fair value of the options on the date allocation is made and is reported over the period from such date until the expiry date with a balancing entry in shareholders' equity. The cost of stock options for the group's directors and contributors is determined in the same way. Fair value reserve The fair value reserve incorporates fair value changes to entries measured at fair value with a balancing entry in shareholders' equity. Warrants Warrants issued by the group, which do not meet the requirements either for being classified as share-based payments to employees pursuant to IFRS 2 or as financial liabilities, are treated as the group's equity instruments. Earnings per share In accordance with IAS 33, basic earnings per share is determined as the ratio of net profit for the period attributable to shareholders owning parent company shares to the weighted average number of shares outstanding during the period. Own shares in the portfolio are, of course, not included in this calculation. Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding for all potential ordinary shares resulting from the potential exercise of assigned stock options, which may therefore result in a diluting effect. C. Changes in accounting principles and the treatment of errors Accounting principles are changed from one year to another only if the change is dictated by an accounting standard or if it helps provide more reliable information or more complete reporting of the impact of transactions on the group's balance sheet, income statement and cash flow. Changes in accounting standards are applied retroactively with the impact reflected in shareholders' equity in the first of the periods presented. Comparative reporting is adapted accordingly. The prospective approach is used only when it is not practical to restate comparative reporting. The application of a new or amended accounting standard is recorded as required by the standard itself. If


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the standard does not specify transition methods, the change is reflected retrospectively, or if impractical, prospectively. If there are significant errors, the same treatment dictated for changes in accounting principles is used. If there are minor errors, corrections are posted to the income statement in the period when the error is discovered. D. Use of estimates and assumptions in preparing the financial statements The company's management must make assessments, estimates and assumptions that affect the application of accounting standards and the amounts of assets, liabilities, costs and revenues recorded in the financial statements. Estimates and related assumptions are based on past experience and other factors deemed reasonable in the case concerned; these have been used to estimate the carrying value of assets and liabilities that cannot be easily obtained from other sources.

These estimates and assumptions are reviewed regularly. Any changes resulting from revisions to accounting estimates are recorded in the period when the revision is made if such revisions only affect that period. If the revision affects current and future periods, the change is recorded in the period in which the revision is made and in related future periods.

Financial statement balances are reported and valued using the valuation criteria described above. At times the application of these criteria involves the use of estimates that may have a significant impact on amounts reported in the financial statements. Estimates and related assumptions are based on past experience and factors deemed reasonable in the case concerned; these are used to estimate the carrying value of assets and liabilities that cannot be easily obtained from other sources. However, since these are estimates, the results obtained should not necessarily be considered definitive. With the understanding that the use of reasonable estimates is an essential part of preparing financial statements, the items where the use of estimates is most prevalent are stated below:

valuation of financial assets not listed in active markets valuation of financial assets listed in active markets but considered illiquid on the reference

market valuation of equity investments

The process described above is made particularly complicated by the unusual levels of volatility in the current macroeconomic and market environment, which affect financial indicators that have a bearing on the above valuations.

An estimate may be adjusted as a result of changes in the circumstances on which it was based, or as a result of new information. Any change in the estimate is applied prospectively and has an impact on the income statement in the period in which the change occurred and potentially on income statements in future periods. As highlighted earlier, a significant proportion of the assets shown in the DeA Capital Group’s consolidated financial statements is represented by unlisted financial investments. These investments are valued at their fair value, calculated by directors based on their best estimate and judgement using the knowledge and evidence available at the time the Report is prepared. However, due to objective difficulties in making assessments and the lack of a liquid market, the values assigned to such assets could differ, and in some cases significantly, from those that could be obtained when the assets are sold.


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BUSINESS COMBINATIONS

Reorganisation of IDeA Alternative Investments With a view to simplifying the shareholder base, corporate governance and investment processes, at the start of 2011 the first step was taken in the reorganisation of IDeA Alternative Investments (IDeA AI), achieved through a partial non-proportional demerger, with a reduction in the share capital of IDeA AI and allocation of the interests in Investitori Associati SGR and Wise SGR to the management of Investitori Associati SGR and Wise SGR respectively, in return for the cancellation of the stakes held by those companies in IDeA AI. Following approval by the Bank of Italy and the Italian Competition Authority, the deed of the demerger of IDeA AI, effective from 17 January 2011, was completed on 13 January 2011. DeA Capital S.p.A., which previously held 44.36% of the company’s capital, has therefore acquired control of 90.11% of IDeA AI and its assets. These primarily include 100% of IDeA Capital Funds SGR, 65% of Soprarno SGR and 65% of IDeA SIM. Moreover, on 20 January 2011, in order to gain control of the entire share capital of IDEA AI, DeA Capital S.p.A. acquired the remaining 9.89% of the company’s stock held by private investors, including directors Lorenzo Pellicioli and Paolo Ceretti, in exchange for 4,806,921 DeA Capital shares, using existing own shares in the portfolio, equal to 1.57% of the capital. As part of the valuations performed for the various transactions mentioned above, the company employed the services of independent external consultants. On 26 July 2011, in order to continue the process of simplifying the shareholder base, corporate governance and investment processes, which began with the partial non-proportional demerger at the beginning of 2011, the Board of Directors of DeA Capital S.p.A. approved the merger by incorporation of the wholly-owned subsidiary IDeA Alternative Investments. The intention behind the operation, which entails the reorganisation of the DeA Capital Group’s corporate structure, is to centralise within the parent company the cash flows from and the determination of strategic guidelines for the alternative asset management business. The Bank of Italy had already given its approval, and the operation took effect on 1 January 2012. Finalisation of merger between First Atlantic RE SGR and FIMIT SGR

In 2011, the merger by incorporation of First Atlantic Real Estate SGR S.p.A. (FARE SGR) into FIMIT SGR S.p.A. (FIMIT SGR), which began with a series of non-binding agreements in 2010, was completed. In particular, on 3 October 2011, in executing the merger deed concluded between FARE SGR and FIMIT SGR on 26 September 2011 (as approved by their respective shareholders' meetings after obtaining the favourable opinion of the Italian Competition Authority and the approval of the Bank of Italy), the merger of FARE SGR into FIMIT SGR was completed. At the same time, the latter changed its name to IDeA FIMIT SGR S.p.A. The exchange ratio, i.e. the ratio between the economic values of FIMIT SGR and FARE SGR was 1.48, which was supported by leading investment banks and judged suitable in the report by the independent expert appointed pursuant to art. 2501-sexies of the Italian Civil Code by the Court of Rome on 15 February 2011, which was filed at the registered offices of the former FARE SGR and the former FIMIT SGR on 1 April 2011. Note that determination of the exchange ratio did not include the economic rights to the performance fees of the two asset management companies' existing funds at the time of the merger, which, as agreed, continued to belong to the previous shareholders through the allocation of financial equity


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instruments (strumenti finanziari partecipativi, or SFP) issued before the execution of the merger deed (specifically on 5 September 2011 by FARE SGR and 13 September 2011 by FIMIT SGR). These SFPs were issued on a proportional basis, and more specifically, at the ratio of one financial equity instrument for every share held with no specific contribution to be made by shareholders. The SFPs confer specific ownership rights on holders; they do not grant holders the right to participate or vote at shareholders' meetings, but only the right to vote at the special shareholders' meeting for holders of SFPs pursuant to art. 2376 of the Italian Civil Code. SFPs may be freely transferred with or without the shares. In addition, they confer the right to receive, on a proportional basis, distributions calculated as the difference between the overall amount of performance fees collected each financial year by IDeA FIMIT and directly allocable costs. The value of SFPs for each financial year is ascertained by a specific resolution, at the time the financial statements are approved, which covers specific accounting tables related to the operations of each of the funds concerned. Ownership rights are granted to holders of SFPs only if the shareholders' meeting of IDeA FIMIT SGR approves the distribution of profits for the period and/or reserves, up to the limits of such profits and/or reserves. In this regard, holders of SFPs have priority over shareholders in the allocation of profits and reserves. If the shareholders' meeting does not approve any distribution, or the amounts for which the shareholders' meeting approves a distribution are lower than the ownership rights attaching to the SFPs, these rights shall accrue, with no time limitation, with those that materialise in future periods. Any ownership rights not exercised at the date of dissolution of IDeA FIMIT SGR will be given to holders of SFPs through the division of the remaining settlement proceeds with priority over any distribution to ordinary shareholders. SFPs confer no reimbursement or withdrawal rights. The variable commissions linked to SFPs issued by FIMIT SGR were measured at fair value in order to allocate the acquisition cost for FIMIT SGR as dictated by IFRS 3. Since the merger and related transactions are structured as a single transaction, the amount of variable commissions associated with the SFPs issued to FIMIT SGR shareholders were recorded in the financial statements of the subsidiary IDeA FIMIT SGR. These instruments were measured and recorded at fair value based on the provisions of IFRS 3.19, which, among other things, specifies that all components of "non-controlling interests of the acquiree," which provide rights other than those related to proportional interests in the net assets of the acquiree in the event of liquidation, must be measured at fair value. These must be expressed as "contingent consideration" (pursuant to IFRS 3.39 and 3.40) and classified as equity based on the requirements of IAS 32. At the same time as the merger, the other steps for the acquisition of control of IDeA FIMIT SGR by DeA Capital S.p.A. came into effect, namely:

the acquisition by DeA Capital of a 58.31% stake in IFIM S.r.l. (IFIM) from Feidos S.p.A. (Feidos), a company owned by Massimo Caputi

the acquisition by IFIM of the stake held by the LBREP III Fimit S.a.r.l. fund (LBREP) in FIMIT SGR, equal to 18% (pre-merger) of the company's share capital

Following the series of planned operations, FARE Holding has a stake of 40.32% and IFIM a stake of 20.98% in the new IDeA FIMIT SGR. Both these companies are controlled by DeA Capital S.p.A. In economic terms, the operation required an outlay for DeA Capital S.p.A. of EUR 59.4 million, of which EUR 37.3 million related to shareholder loans to IFIM (to cover the company’s entire debt at the time of the operation, and the partial financing of the acquisition of LBREP's stake in FIMIT SGR.


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Inpdap EnasarcoEnpals Inarcassa Otherpartners

IDeA Fimit

Fare Holding

40.32% 18.33 % 11.34 % 5.97 % 2.98% 0.08%

IFIM

20.98%

DeA Capital DanielBuaron DeA Capital Feidos

MassimoCaputi

70% 30% 58.31% 30.03% 11.66%

61.30%

De Agostini

58.31%

Pursuant to the provisions of art. 21 of Decree Law 201 of 6 December 2011, which was converted with revisions by Law 214 of 22 December 2011, were abolished and the relevant functions transferred to INPS (National Social Security Institute), which takes over all the assets and liabilities of the abolished entities with effect from on 1 January 2012. The shareholders' meeting of IDeA FIMIT SGR, held after completion of the merger, appointed the Board of Directors, comprising 13 members, of whom the majority (seven) were appointed directly or indirectly by DeA Capital S.p.A. It also appointed Massimo Brunelli as Chief Executive of IDeA FIMIT SGR and the Executive Committee comprising seven members, (of whom three were appointed by DeA Capital S.p.A.). Two of these seven members are independent. The operation described forms part of the development process that DeA Capital S.p.A. has undertaken in recent years to create an independent platform for alternative asset management. The union of FARE SGR and FIMIT SGR will make it possible to continue the growth process in order to consolidate the company’s leading position in the domestic market and lay the foundations for strong growth in the international market as well. IDeA FIMIT will oversee the entire range of products and will be seen as the leading integrated management centre for real estate funds with substantial business advantages such as significant economies of scale and improved capacity to create and place new managed products making it a leader in its reference market. In addition, the presence of institutional partners (such as the DeA Capital Group and leading Italian social security organisations) among shareholders will provide significant support for the development of the company and new products allowing IDeA FIMIT SGR to position itself as the preferred partner among Italian and international institutional investors in the promotion, creation and management of real estate mutual funds. At 31 December 2011 the company had assets under management of around EUR 9.5 billion through 24 real estate funds, of which five are listed on the MIV segment of Borsa Italiana. Over 80 institutional entities and 80,000 retail investors have invested in the funds. Allocation of the acquisition cost of FIMIT SGR IDeA FIMIT used the consulting services of external professionals to identify and value the assets acquired in the merger between FARE SGR and FIMIT SGR. The process involved the following phases: identification of the assets and liabilities acquired determination of their fair value determination of the acquisition cost comparison between the acquisition cost and the fair value of assets acquired, with the difference identified as goodwill


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This analysis led to the identification of two categories of intangible assets: customer relationships related to the fixed commissions of the 12 real estate funds managed by FIMIT SGR on the effective date of the merger intangible assets related to the variable commissions of the real estate funds managed by FIMIT SGR on the effective date of the merger The customer relationships were valued at EUR 38.6 million. This value is based on the present value of projected cash flows, net of costs, determined on the basis of the most recent business plans of the funds being managed. The discount rate used represents the cost of capital on the merger date. These assets with a finite life will be amortised in the income statement of the asset management company starting 3 October 2011 until financial year 2019 (when the last of the funds in place at 3 October 2011 is to be liquidated). The intangible assets from variable commissions totalled EUR 68.7 million (excluding the final variable commission to the Beta Fund which was already recorded in the financial statements of FIMIT SGR at fair value as a receivable). They were estimated on the basis of the most recent business plans of the funds being managed, which call for this incentive to be paid to the asset management company. This category of assets is considered to have a finite life, and amortisation is calculated based on the future economic benefits estimated to flow to the company by financial year 2019. The acquisition cost was calculated on the average prices paid by DeA Capital S.p.A. to acquire a controlling interest in IFIM S.r.l. and for the acquisition of units in LBREP III. The comparison between the acquisition cost as determined above (EUR 212.5 million) and the fair value of the net equity of FIMIT SGR at 3 October 2011 (EUR 115.9 million) resulted in goodwill of EUR 96.6 million. Given the complex issues relating to IDeA FIMIT SGR, the business combination was initially recorded on a provisional basis. In the following page is the balance sheet of FIMIT SGR on the merger date with an indication of the fair value of assets and liabilities acquired and the calculation of goodwill.


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(in euro)

STATEMENT OF FINANCIAL POSITIONFIMIT SGR AT

3/10/2011ADJUSTMENT TO FAIR

VALUEFAIR VALUE

Assets

10 Cash and cash equivalents 2,324 2,324

20 Held-for-trading financial assets - -

30 Financial assets measured at fair value - -

40 Available-for-sale financial assets 32,014,695 32,014,695

50 Held-to-maturity financial assets - -

60 Receivables 29,147,782 29,147,782

a) for property management 26,467,955 26,467,955

b) others 2,679,827 2,679,827

70 Hedging derivatives - -

80 Adjustment of value of financial assets covered by general hedges (+/-) - -

90 Equity investments 245,958 245,958

100 Tangible assets 557,787 557,787

110 Intangible assets 1,638,377 107,261,400 108,899,777

120 Tax assets 1,730,306 1,730,306

a) current 444,773 444,773

b) deferred 1,285,533 1,285,533

130 Non-current assets and groups of assets held for sale - -

140 Other assets 5,762,782 5,762,782

Total assets 71,100,011 107,261,400 178,361,411

(in euro)

STATEMENT OF FINANCIAL POSITION

Liabilities and shareholders' equity

10 Payables 13,404,025 13,404,025

20 Securities in issue - -

30 Trading financial liabilities - -

40 Financial liabilities measured at fair value - -

50 Hedging derivatives 571,400 571,400

60 Adjustment of value of financial liabilities covered by general hedges (+/-) - -

70 Tax liabilities 3,731,957 35,471,322 39,203,279

a) current 1,732,941 1,732,941

b) deferred 1,999,016 35,471,322 37,470,338

80 Liabilities related to assets held for sale - -

90 Other liabilities 7,523,315 7,523,315

100 Employee end-of-service payment fund 591,224 591,224

110 Provisions for risks and charges 1,200,000 1,200,000

a) retirement and similar obligations -

b) other funds 1,200,000 1,200,000

120 Share capital 10,000,488 10,000,488

130 Own shares (-) - -

140 Equity instruments - -

150 Share issue premium 181,485 181,485

160 Reserves 21,197,010 71,790,078 92,987,088

170 Revaluation reserves 4,915,772 4,915,772

180 Profit (loss) for the period 7,783,335 7,783,335

Total liabilities and shareholders' equity 71,100,011 107,261,400 178,361,411

Shareholders' equity at fair value 115,868,168

Acquisition cost 212,467,068

Goodwill 96,598,900

The contribution made by IDeA FIMIT SGR to net profit for 2011 was around EUR 7,051 thousand (including EUR 6,009 thousand of FARE SGR at 30 September 2011). If the combination had taken place at the beginning of the year, the contribution to consolidated net profit would have been approximately EUR 14,835 thousand, with revenues of around EUR 58,621 thousand.


105

Preliminary remarks With regard to the financial situation at 31 December 2011 and the operating performance of the DeA Capital Group in 2011, note that the 2010 figures reflected a different basis of consolidation and a different shareholding in IDeA AI, with the group's stake rising from 44.36% to 100%; specifically, as regards 2010, the figures on the income statement and balance sheet were consolidated proportionally to the stake held and reported under specific headings for assets in joint ventures (as IDeA Alternative Investments was deemed to be until DeA Capital S.p.A. acquired full control). In addition, note that the impact of the merger between FARE SGR and FIMIT SGR on 3 October 2011 is reflected in income statement items only in the third quarter of the year. Thus, a comparison between the two periods is significantly affected by the above considerations. BALANCE SHEET Non-current assets 1 – Intangible and tangible assets 1a - Goodwill Changes in goodwill are shown in the table below:

The balance totalled EUR 210,134 thousand at 31 December 2011 (EUR 71,756 thousand at 31 December 2010). The opening balance related to goodwill recorded for:

the acquisition of a 70% controlling stake in FARE Holding in 2008 the acquisition of a 65% controlling stake in FARE NPL in 2009 the recognition of options relating to the residual minority interest (30%) in FARE Holding

The increase in this item in 2011 was a combination of: EUR 42,339 thousand for the acquisition up to 100% of IDeA AI carried out through a partial

non-proportional demerger, with a reduction in the share capital of IDeA AI and the allocation of Investitori Associati SGR and Wise SGR to the management of Investitori Associati SGR and Wise SGR respectively, in return for the cancellation of the stakes held by those companies in IDeA AI. Following approval by the Bank of Italy and the Italian Competition Authority, the deed of the demerger of IDeA AI, effective from 17 January 2011, was completed on 13 January 2011. As a result of the demerger, DeA Capital S.p.A., which previously held 44.36% of the company’s capital, acquired control of 90.11% of IDeA AI and its assets. These primarily include 100% of IDeA Capital Funds SGR, 65% of Soprarno SGR and 65% of IDeA SIM. Moreover, on 20 January 2011, in order to gain control of the entire share capital of IDEA AI, DeA Capital S.p.A. acquired the remaining 9.89% of the company’s stock held by private investors, including directors Lorenzo Pellicioli and Paolo Ceretti, in exchange for 4,806,921 DeA Capital shares, using existing own shares in the portfolio, equal to 1.57% of the capital.

(EUR thousand) Balance at

1.1.2011 Change in

the basis of consolidation

Acquisitions Decreases ImpairmentBalance at

31.12.2011

Goodwill 71.756 42.339 96.599 (320) (240) 210.134


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EUR 96,599 thousand for the allocation of the residual value of FIMIT SGR on the merger date after recognising the intangible assets identified as customer relationships and intangible assets linked to variable commissions.

The decrease of EUR 560 thousand in this item in 2011 was a combination of:

EUR 320 thousand for the adjustment of the earn-out component equal to 50% of the portion of any performance fees accrued on the funds managed by FARE SGR as a part of the acquisition of FARE Holding.

EUR 240 thousand for the full impairment of the goodwill of FARE NPL. The full goodwill method was used to record the minority interests of the companies acquired (FIMIT SGR and IFIM). This requires minority interests to be recorded at fair value. Impairment tests on goodwill Pursuant to IAS 36, goodwill is not subject to amortisation, and is tested for impairment at least annually. The main assumptions used in the impairment test calculations, together with the results, are set out below. In order to carry out impairment testing on the goodwill of its cash generating units (CGUs), the DeA Capital group allocates the goodwill to the relevant CGUs, identified as IDeA FIMIT SGR (real estate fund management) and the IDeA Alternative Investments Group (private equity fund management), which represents the minimum level of monitoring that the DeA Capital Group undertakes for management control purposes consistent with DeA Capital’s strategic vision. In the case of CGUs that are not wholly controlled, goodwill is reported on a notional basis, which also includes the portion of goodwill that relates to minorities, using the grossing up method. The carrying value of the CGU is calculated using the same criterion as that used to determine the recoverable value of the CGU. Impairment testing consists of comparing the recoverable amount of each CGU with the carrying amount of goodwill and the other assets attributed to each CGU. The restructuring of the FARE Holding CGU, which was carried out by excluding FARE SGR from its basis of consolidation (the latter became a part of the new IDeA FIMIT SGR CGU following the merger with FIMIT SGR), and limiting the basis of consolidation concerned to FARE Holding FARE SpA and FAI, brought the carrying value of the FARE Holding CGU in line with the carrying value of the shareholders' equity of the three constituent companies. The recoverable value of the goodwill resulting from the merger of FARE SGR and FIMIT SGR, was determined based on the valuation of IDeA FIMIT SGR implied in the transaction completed at the end of the year (3 October 2011), which was supported by the fairness opinion of a leading investment bank. At 31 December 2011, the conditions used for this valuation were tested but no signs of impairment were detected. The value of the goodwill relating to the IDeA FIMIT SGR CGU is the sum of the goodwill resulting from the acquisition of the controlling interest in IFIM (EUR 96.7 million) with the goodwill previously allocated to the FARE Holding CGU (EUR 71.2 million). The impairment test on the IDeA Alternative Investments CGU was carried out using the sum of the parts model, which determined value in use as the sum of (i) the present value of dividend flows (the dividend discount model or DDM) projected for the period 2012-2014 by IDeA Capital Funds SGR, (ii) the present value of carried interest flows (the discounted cash flow method, or DCF) projected by funds managed by the same company together with (iii) the book value of the other smaller equity investments in the portfolio (Soprarno SGR, IDeA SIM and Alkimis SGR). A number of assumptions were used in determining these flows, including estimates of future increases in revenues, based on expected trends in managed assets, EBITDA and net income, or in the case of


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carried interest, on the basis of return projections made by the company for the various funds under management. The valuation was based on a weighted average cost of capital of +12.7% plus a terminal value based on growth assumptions of 2.0%. Note that the recoverable amount relating to this CGU exceeds its carrying amount. Sensitivity analysis performed on the discount rate and growth rate used leads to a potential change in the carrying value of EUR -2.3/+2.5 million (for a change of +0.5%/-0.5% respectively in the discount rate) and of EUR -1.3/+1.5 million (for a change of -0.5% and +0.5% respectively in the growth rate). 1b - Intangible assets Changes in intangible assets are shown in the tables below:

(EUR thousand) Historical cost

at 01.01.11

Cum. amort. & write-downs at

01.01.11

Net carrying value at 01.01.11

Historical cost at 31.12.11

Cum. amort. & write-downs at 31.12.11


Concessions, licences and trademarks 319 (311) 8 3,337 (1,132)

2,205

Software expenses 72 (28) 44 137 (24)113

Development expenses 0 0 0 229 (160)69

Other intangible assets 19,820 (17,752) 2,068 141,241 (23,980)117,261

Total 20,211 (18,091) 2,120 144,944 (25,296) 119,648

(EUR thousand) Balance at 01.01.11

Acquisitions Amort. Change in the basis of

consolidation Balance at 31.12.11

Concessions, licences and trademarks 8 944 (212) 1,465 2,205

Software expenses 44 10 (40) 99 113

Development expenses 0 0 (5) 74 69

Other intangible assets 2,068 0 (6,223) 121,416 117,261

Total 20,211 954 (6,480) 123,054 119,648

Increases in the items “concessions, licences and trademarks” and “software costs” relate to purchases of software usage licences and the related development costs. Other initial intangible assets mainly relate to customer contracts, which arise from the allocation of the merger cost for the acquisition of FARE Holding and were recorded separately from goodwill. A portion of the increase for the year was due to the allocation of the residual value of FIMIT SGR on the date of the (inverse) merger into FARE SGR with the recognition of intangible assets identified as customer relationships and intangible assets related to variable commissions that were valued at EUR 38,573 thousand and EUR 68,688 thousand respectively. This value is based on the discounting of fixed management fees (for customer relationships) and variable fees calculated net of directly applicable costs on the basis of the most recent business plans of the funds under management. The discount rate used represents the cost of capital on the merger date. A portion of the increase for the year (EUR 14,153 thousand) relates to IDeA AI and represents the discounted value of commission flows generated by funds under management, net of management costs, based on the business plans of the funds under management, updated to the date of the partial non-proportional demerger of IDeA AI. 1c - Tangible assets Changes in tangible assets are shown in the tables below:


108

(EUR thousand) Historical cost

at 01.01.11

Cum. amort. & write-downs at

01.01.11


Historical cost at 31.12.11

Cum. amort. & write-downs at 31.12.11


Plant 213 (201) 12 312 (264)48

Furniture and fixtures 683 (462) 221 1,408 (906)502

Computer and office equipment 458 (343) 115 1,333 (983)

350

Company vehicles 53 (28) 25 451 (193)258

Other assets 50 (41) 9 372 (261)111

Total 1,457 (1,075) 382 3,876 (2,607) 1,269


Acquisitions Amort.

Decreases Change in the basis of

consolidation Balance at 31.12.11

Plant 12 5 (19)0

50 48

Furniture and fixtures 221 63 (137)(32)

387 502Computer and office equipment 115 83 (101)

(2)255 350

Company vehicles 25 210 (78)(22)

123 258

Other assets 9 4 (23)0

121 111

Total 382 365 (358)(56)

936 1,269

Depreciation is calculated on a straight-line basis, based on the estimated useful life of the asset. The depreciation rates used in the financial year were 20% for specific plant assets, 12% for furniture and furnishings, 20% for electronic office machines and 20% for company vehicles. 2 – Financial investments Financial investments in companies and funds are the group's typical assets. These investments fell from EUR 649,459 thousand at 31 December 2010 to EUR 590,130 thousand at end-2011. 2a - Investments in associates This item, totalling EUR 302,141 thousand at 31 December 2011 (EUR 339,022 thousand at end-2010), relates to the following assets:

- The investment in Santé is reported in the consolidated financial statements to 31 December 2011 at approximately EUR 235,221 thousand (EUR 282,907 thousand at end-2010). The change compared with the figure reported at end-2010 is attributable to the combined effect of the adverse pro-rata impact of the net loss of EUR 50,667 thousand, the increase in the fair value of the interest rate swaps taken out to hedge interest rate risk on debt exposure of EUR +2,665 thousand, the distribution of dividends of EUR 3,270 thousand, additional net investment of around EUR +4,282 thousand (partly connected with the partial cancellation of the equity plan granted to senior managers of GDS) and other decreases totalling EUR 696 thousand.

- the investment in Sigla Luxembourg (parent company of the Sigla Group), which was

recorded at end-2010 at EUR 22,055 thousand, and reported at EUR 22,040 thousand in the consolidated financial statements to 31 December 2011. The change was not significant since the company broadly broke even for the period

- units in the IDeA Opportunity Fund I (formerly IDeA Co-Investment Fund I) were valued in

the consolidated financial statements to 31 December 2011 at EUR 36,137 thousand (EUR


109

34,060 thousand at 31 December 2010). This carrying value represents the NAV advised by the management company in its annual report to 31 December 2011, drafted in accordance with the Bank of Italy’s regulation of 14 April 2005 on collective asset management.

The change from the end-2010 figure was due to net investments of EUR 10,230 thousand, the net decrease in fair value of EUR 3,207 thousand and the pro-rata portion of the net loss for the period of EUR 4,947 thousand

Summary financial information on these holdings is shown in the table below:

First closing of the Atlantic Value Added ("AVA") fund

The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" commenced operations on 23 December 2011 with a primary focus on real estate investments in the office and residential markets with a potential for growth in value. The duration of the fund is eight years. The fund, which is managed by the subsidiary IDeA FIMIT SGR, completed the first closing with a commitment of around EUR 55 million compared with a target commitment of EUR 150 million. The DeA Capital Group subscribed to a total commitment in the fund of EUR 15 million (corresponding to 27.3% of the overall commitment), and at 31 December 2011 had made the first payment of EUR 7.5 million. Investment in Harvip Investimenti S.p.A. (Harvip) On 28 December 2011, DeA Capital S.p.A. purchased 25% of the share capital of Harvip Investimenti S.p.A. (Harvip) from the subsidiary IDeA FIMIT SGR for a consideration of EUR 1 million. The company manages funds and investment vehicles used primarily to purchase distressed real estate and other investments. When the equity investment is acquired, any difference between its cost and the parent company's stake in the net fair value of the associate's identifiable assets, liabilities and contingent liabilities is recorded as required by IFRS 3. Any goodwill relating to an associate is therefore included in the carrying value of the equity investment. The DeA Capital Group performed impairment testing on the above-mentioned holdings in associates by determining the value of the said holdings using the methodology summarised below: For Santé, the discounted cash flow (DCF) method was applied for the period 2012-2015, using

a number of assumptions, including estimates of future increases in revenues, EBITDAR, investments and working capital. Discounted cash flow here is based on a weighted average cost of capital of 6.75%, which is in turn based on a cost of capital of 10.7%, combined with a debt component – including the capitalisation of rental liabilities (see below) – that accounts for

Santé Group Sigla Group OF I

(EUR million) 31.12.2011 31.12.2011 31.12.201

Total assets/liabilities 2.224 89,2 78,3

Revenues 1.955 27,4 0,0

Net profit/(loss) (122,0 (0,1) (17,7)

Net profit/(loss) attributable to minorities (4,1) 0,0 0,0

Net profit/(loss) attributable to the Group (117,9 (0,1) (17,7)


110

78% of the capital structure in question. In addition to the discounted cash flows, the enterprise value obtained is also based on a terminal value established from the perpetual yield, which in turn was determined from the cash flow up to 2015 minus non-recurring components and capitalised based on an expected growth rate of +1.25%. Following the impairment test, the holding was revalued from its carrying value to its fair value. It is important to note that, although we continued to use the DCF approach, analysis was focused on gross cash flows (including the effect of rental costs), with the amount of debt deducted from the enterprise value adjusted by a “theoretical” value for the debt arising from the capitalisation of these rental costs. This makes the valuation more sensitive to changes to the input parameters. Sensitivity analysis performed on the discount rate and growth rate used leads to a potential change in the carrying value of EUR -128/+155 million (for a change of +0.5%/-0.5% respectively in the discount rate) and of EUR -46/+50 million (for a change of 0.2%/+0.2% respectively in the growth rate)

For Sigla, the market multiple method was used (considered more appropriate than discounted

cash flow as the company is still in the start-up phase, and given that its forecasts are heavily dependent on the ongoing turbulence under way since 2007 in the credit markets). The method was applied in different ways to the Personal Loans and Salary-Backed Loans businesses. The Personal Loans business was valued by applying a multiple to the carrying value of the loans to identify the premium generally paid, while a capital and interest multiple was applied to the Salary-Backed Loans business. Applying the ranges of market multiples to the Sigla portfolio (-27.6%/+42.4% for the premium on the carrying value of personal loans and +10%/+28% for the capital and interest multiple for the salary-backed loans) leads to a range of valuations for the stake held by DeA Capital of between EUR 11 million and EUR 42 million, which is consistent with the carrying value recorded at 31 December 2011. Sensitivity analysis performed on the multiples leads to fluctuations in the carrying value of the holding of between EUR -1.3 million and EUR +1.3 million for variations of -5%/+5% respectively for the multiple relating to the premium on the carrying value of the loans, and of EUR -3.3 million to EUR +3.3 million for variations of -5%/+5% for the multiple relating to the salary-back loan amount

The table below provides details of the investments held in associates at 31 December 2011 by sector of activity: (EUR million)

ate 2b - Investments in other companies – available for sale At 31 December 2011 the DeA Capital Group was a minority shareholder of Kenan Investments (the indirect parent company of Migros), Stepstone, Alkimis SGR, two US companies operating in the biotech and printed electronics sectors, TLcom Capital LLP (management company under English law) and TLcom II Founder Partner SLP (limited partnership under English law). Al 31 December 2011, the item totalled EUR 127,380 thousand compared with EUR 211,511 thousand at 31 December 2010. The stake in Kenan Investments (the indirect parent company of Migros) was recorded in the consolidated financial statements to 31 December 2011 at a value of EUR 127,090 thousand (compared with EUR 195,000 thousand at 31 December 2010), including the capital reimbursement of EUR 31,230 thousand and the net decrease in fair value of EUR 36,680 thousand. The latter decrease is due to the negative performance of the EUR/TRY exchange rate (2.44 at 31 December 2011 versus

(EUR million)



Total

Santè 235,2 0,0 235,2Sigla 22,0 0,0 22,0IDeA OF I 36,2 0,0 36,2Fondo AVA 2,6 5,1 7,7Harvip Investimenti S.p.A. 1,0 0,0 1,0Total 297,0 5,1 302,1


111

2.05 at end-2010), and to the decrease in the value of Migros shares (TRY 12.6 per share at 31 December 2011 versus around TRY 14 per share implied in the valuation at 31 December 2010). The investment in Stepstone is recorded in the consolidated financial statements to 31 December 2011 at a value close to zero (EUR 15,080 thousand at end-2010). The change was due to the full impairment of the equity investment. The table below provides details of the investments held in other companies at 31 December 2011 by sector of activity:

The value of Alternative Asset Management (EUR 287 thousand) relates to:

a minority interest (10% of capital) in Alkimis SGR totalling EUR 286 thousand the investment in TLcom Capital LLP (management company under English law) and TLcom II

Founder Partner SLP (limited partnership under English law) for a total of EUR 1 thousand The table below shows changes made to the US holdings during 2011.

The total value of the other equity investments is now close to zero representing a decrease of EUR 1,431 thousand from 31 December 2010 due mainly to:

- the sale of the stake held in Mobile Access Networks in May 2011 with a positive impact of EUR 539 thousand on the income statement

- impairment (and the related exchange rate effects) of the investment in Kovio Inc. totalling EUR

51 thousand 2c - Available-for-sale funds This item relates to investments in units of two funds of funds (IDeA I FoF and IDeA ICF II), one theme fund (IDeA EESS), ten real estate funds and seven venture capital funds, totalling approximately EUR 159,673 thousand in the financial statements at the end of 2011, compared with EUR 98,622 thousand at end-2010. The table below shows changes to the funds during 2011.

(EUR million) Private Equity Investment


Total

Kenan Investments 127,1 0,0 127,1Stepstone 0,0 0,0 0,0Minor investments 0,0 0,3 0,3Total 127,1 0,3 127,4

(EUR thousand)

Total shares% Holding(Fully Diluted)

Balance 1.1.2011

Capital increase

Impairment and relative

exch. effectsin income statement

Fair Value

adjustments Disposals

Translation

effect

Balance at 31.12.2011

Elixir Pharmaceuticals Inc. 1.602.603 1,30 0 0 0 0 0 0 0

Kovio Inc. 151.909 0,42 114 0 (51) (63) 0 0 0

Mobile Access Networks Inc. 1.962.402 36,72 1.317 0 0 0 (1.317) 0 0

Total 1.431 0 (51) (63) (1.317) 0 0


112


Increase (capital call)

Decrease (capital

distribution)

Change in the basis of

consolidation Impairment

Fair value adjustment

Translation effect

Balance at 31.12.10

Venture capital funds 12,977 0 (1,246) 0 (818) 1,054 267 12,234

IDeA I FoF 79,887 17,628 (11,712) 1,645 0 8,786 0 96,234

IDeA ICF II 5,758 2,697 0 204 0 663 0 9,322

IDeA EESS 0 223 0 0 0 (204) 0 19

Atlantic 1 Fund 0 0 0 3,244 0 (641) 0 2,603

Atlantic 2 Fund 0 0 0 2,809 0 (118) 0 2,691

Alpha Immobiliare Fund 0 0 0 2,849 0 (490) 0 2,359

Gamma Immobiliare Fund 0 0 0 1,076 0 (17) 0 1,059

Beta Immobiliare Fund 0 0 0 2,205 0 (55) 0 2,150

Delta Immobiliare Fund 0 0 0 1,674 0 32 0 1,706

Omicron Plus Immobiliare Fund 0 0 0 21,909 0 (1,210) 0 20,699

Senior Fund 0 0 0 2,080 0 27 0 2,107

Conero Fund 0 5,000 0 0 0 1,268 0 6,268

Theta Immobiliare Fund 0 0 0 222 (818) 0 0 222

Total funds 98,622 25,548 (12,958) 39,917 9,095 267 159,673

Units in venture capital funds are valued at around EUR 12,234 thousand in the consolidated financial statements to 31 December 2011 (EUR 12,977 thousand at end-2010).

The overall change in the investments is mainly attributable to an increase in fair value (and related exchange rate effects) of EUR 1,321 thousand, and the impairment (and related exchange rate effects) of certain funds totalling EUR 818 thousand. The fair value measurement of investments in venture capital funds at 31 December 2011, carried out based on the information and documents received from the funds, as well as other available information, meant that the amount had to be written down by EUR 818 thousand; the significant reduction to below cost was considered clear evidence of impairment. During the year, the company received capital distributions of EUR 1,246 thousand, which had a positive impact on the income statement of EUR 1,349 thousand. Units in IdeA I FoF are valued at around EUR 96,234 thousand in the consolidated financial statements to 31 December 2011 (EUR 79,887 thousand at end-2010). The change in the carrying value compared with 31 December 2010 was due to contributions made for capital calls totalling EUR 17,628 thousand, capital reimbursements of EUR 11,712 thousand, a change in the basis of consolidation of about EUR 1,645 thousand and a net increase in fair value of around EUR 8,786 thousand. Units in ICF II are valued at around EUR 9,322 thousand in the consolidated financial statements to 31 December 2011 (EUR 5,758 thousand at 31 December 2010). The change versus end-2010 was attributable to payments made in response to capital calls of EUR 2,697 thousand, a change in the basis of consolidation of about EUR 204 thousand and an increase in fair value of EUR 663 thousand. The units in IDeA EESS, which were subscribed to in 2011, are valued at around EUR 19 thousand in the consolidated financial statements to 31 December 2011 due to contributions made for capital calls and the decrease in fair value due to the fact that the fund is still in start-up phase. The financial assets related to units of funds managed by IDeA FIMIT are considered long-term investments. This item includes: mandatory investments (as stipulated by the Bank of Italy Regulation of 14 April 2005) in managed

funds that are not reserved for qualified investors. The latter are to be held in the portfolio until the


113

funds' maturity date. However, they were not classified as "held-to-maturity assets" since they are variable rate financial instruments. It was therefore decided to record them in this "residual" category in accordance with IAS 39, which specifies that they should be measured at fair value with a balancing entry in an appropriate unavailable reserve pursuant to Legislative Decree 38/2005

optional investments in managed funds that may or may not be reserved for qualified investors

Below are the units in the related real estate funds of IDeA FIMIT SGR at 31 December 2011:

1,557 units in the Alpha Immobiliare fund (a listed fund already reported in the financial statements of FIMIT SGR at the merger date), of which 520 units are a mandatory investment. The total initial amount is EUR 3,823 thousand (1,040 units subscribed on 4 July 2002 as a part of the institutional placement at a unit price of EUR 2.60, and 517 units subscribed from 27 November 2002 until 28 January 2003 at an average price of EUR 2,165.65). The unit fair value at 31 December 2011 of EUR 1,515.00 was the market price on the last day in the year that markets were open. The adjustment of the units to fair value at 31 December 2011 resulted in total impairment from the reported value of EUR 490 thousand at 3 October 2011. The amount recorded in these financial statements was EUR 2,359 thousand 8,215 units in the Atlantic 1 fund (a listed fund) with a nominal value of EUR 500 each, which were subscribed in 2006 for a total of EUR 4,107 thousand. The unit fair value at 31 December 2011 of EUR 316.90 was the market price on the last day in the year that markets were open. The fair value adjustment resulted in total impairment of EUR 638 thousand. On 17 March 2011, EUR 22.81 per unit was reimbursed for a total of EUR 187 thousand. The carrying value is EUR 2,603 thousand

9,000 units in Atlantic 2 - Berenice fund (a listed fund) acquired in the market for a total of EUR 7,133 thousand on 1 July 2008 at the same time that FARE SGR took over management of the fund (the fund had been established by Pirelli RE SGR S.p.A.). The fund units exhibited objective evidence of impairment at 31 December 2009; the pro-rata NAV was less than carrying value. IAS 39 specifies that if a financial instrument has been impaired, all subsequent write-downs must pass through the income statement. The unit fair value at 31 December 2011 of EUR 299.00 was the market price on the last day in the year that markets were open. The fair value adjustment resulted in total impairment with a balancing entry of EUR 118 thousand in the income statement. On 17 March 2011 and 22 August 2011, EUR 6.53 and EUR 3.96 per unit were reimbursed respectively for a total of EUR 94 thousand. At 31 December 2011 the carrying value was EUR 2,691 thousand 4,532 units in the Beta Immobiliare fund (a listed fund already reported in the financial statements of FIMIT SGR at the merger date) of which 1,343 units are a mandatory investment. The total initial amount is EUR 4,917 thousand (2,686 units subscribed on 24 October 2005 as a part of the institutional placement at a unit price of EUR 1,100, and 1,846 units subscribed from 24 October 2005 until 30 May 2006 at an average price of EUR 1,063.22). The unit fair value at 31 December 2011 of EUR 474.40 was the market price on the last day in the year that markets were open. The adjustment of the units to fair value at 31 December 2011 resulted in total impairment from the reported value of EUR 55 thousand at 3 October 2011. The amount recorded in these financial statements was EUR 2,150 thousand 50 units in the Conero fund (a fund intended for qualified investors), which were subscribed on 4 August 2011 at a unit value of EUR 100,000 for a total of EUR 5,000 thousand. The adjustment to fair value, equal to the pro-rata NAV at 31 December 2011, resulted in a total revaluation of EUR 1,268 thousand. At 31 December the carrying value was EUR 6,268 thousand 38,133 units in the Delta Immobiliare fund (a listed fund already reported in the financial statements of FIMIT SGR at the merger date), of which 36,054 units are a mandatory investment. The overall initial amount is EUR 3,704 thousand (36,054 units subscribed on 22 December 2006 as a part of the institutional placement at a unit price of EUR 100, and 2,079 units subscribed from 16 March 2009 until 22 June 2009 at an average price of EUR 47.41). The unit fair value at 31 December 2011 of EUR 44.73 was the market price on the last day in the year that markets were open. The adjustment of the units to fair value at 31 December resulted in a total revaluation of EUR 32 thousand


114

over the value reported on 3 October 2011. The amount recorded in these financial statements was EUR 1,706 thousand 39 units in the Gamma Immobiliare fund (a reserved fund already reported in the financial statements of FIMIT SGR at the merger date), including five units subscribed on 10 June 2005, 14 on 20 September 2005 and 20 on 29 November 2005. The purchase price was equal to the nominal value of EUR 25,000 for the first tranche and EUR 25,010 for the second and third tranches. The total investment was EUR 975 thousand. The adjustment of the units to fair value (equal to the pro-rata NAV at 31 December 2011), resulted in total impairment of EUR 17 thousand from the value at 3 October 2011. The amount reported in these financial statements was EUR 1,059 thousand 600 units in the Omicron Plus Immobiliare fund (a reserved fund already reported in the financial statements of FIMIT SGR at the merger date) in a total initial amount of EUR 15,000 thousand, subscribed at EUR 25,000 each in December 2008. Following reimbursements, the value of the investment was EUR 13,451 thousand at 31 December. The adjustment of the units to fair value at 31 December 2011 resulted in total impairment of EUR 1,210 thousand from the value at 3 October 2011. The amount reported in these financial statements was EUR 20,699 thousand Eight units in the Senior fund (a reserved fund already reported in the financial statements of FIMIT SGR at the merger date) in a total initial amount of EUR 2,000 thousand, subscribed at EUR 250,000 each on 25 January 2010. The adjustment of the units to fair value (equal to the pro-rata NAV at 31 December 2011), resulted in a total revaluation of EUR 27 thousand over the value at 3 October 2011. The amount reported in these financial statements was EUR 2,107 thousand one unit in the Theta Immobiliare fund (a reserved fund already reported in the financial statements of FIMIT SGR on the merger date) in a total initial amount of EUR 250 thousand, subscribed on 19 December 2006. The adjustment of the unit to fair value (equal to the pro-rata NAV at 31 December 2011), resulted in impairment of EUR 670 thousand from the value at 3 October 2011. The amount reported in these financial statements was EUR 222 thousand

The item "Increases" comprised the investment made on 4 August 2011 in 50 units of Conero fund for a total of EUR 5,000 thousand. The item "Change in basis of consolidation" consisted of the recovery in the UCITS balances held by FIMIT SGR on the effective date of the merger (3 October 2011). At 3 October the balance for FIMIT SGR consisted of:

1,557 units in the Alpha Immobiliare fund at a fair value of EUR 2,849 thousand 4,532 units in the Beta Immobiliare fund at a fair value of EUR 2,205 thousand 38,133 units in the Delta Immobiliare fund at a fair value of EUR 1,674 thousand 39 units in the Gamma Immobiliare fund at a fair value of EUR 1,076 thousand 600 units in the Omicron Plus Immobiliare fund at a fair value of EUR 21,909 thousand eight units in the Senior fund at a fair value of EUR 2,080 thousand one unit in the Theta Immobiliare fund at a fair value of EUR 222 thousand

To secure the loan made by Banca Intermobiliare, the asset management company established a lien in favour of this bank consisting of 600 units in the Omicron Plus fund.

The table below provides details of the funds in the portfolio at 31 December 2011 by area of activity:

(EUR million) Private Equity Investment


Total

Venture Capital funds 12,2 0,0 12,2IDeA I FoF 94,3 1,9 96,2IDeA ICF II 9,1 0,2 9,3IDeA EESS 0,1 0,0 0,1IDeA FIMIT SGR funds 0,0 41,9 41,9Total Funds 115,7 44,0 159,7


115

2d - Other available-for-sale financial assets The item totalled EUR 936 thousand (EUR 304 thousand at 31 December 2011) and relates to the stakes held by FARE SpA in Beni Immobili Gestiti S.p.A. (0.25%) and in AEDES BPM Real Estate SGR S.p.A. (5.0%), and the stake held by IDeA AI in units of closed-end mutual funds. 3 – Other non-current assets 3a - Deferred tax assets The balance on the item “deferred tax assets” totalled EUR 4,077 thousand and comprises the value of deferred tax assets minus deferred tax liabilities, where they may be offset. Deferred tax assets relating to the parent company of EUR 1,230 thousand were fully offset against deferred tax liabilities. The changes to deferred tax assets and liabilities during the year, broken down by type, are analysed below.

Deferred tax liabilities relate to intangible assets and include EUR 12,756 thousand resulting from the tax impact for the allocation of a portion of the acquisition cost of FIMIT SGR (currently IDeA FIMIT SGR) to intangible assets (Customer contracts), and EUR 22,715 thousand due to the tax impact of recording intangible assets from variable commissions related to the allocation of a portion of the acquisition cost of FIMIT SGR (currently IDeA FIMIT SGR). As required by IFRS 3 (Business Combinations), the company recorded a deferred tax liability for the assets identified at the date of acquisition. No further deferred tax assets were allocated for the significant tax losses of DeA Capital S.p.A. (around EUR 108,074 thousand, to be reported without limitation) and of DeA Capital Investments S.A. (around EUR 170,155 thousand). This was because there was insufficient information for the group to believe that sufficient taxable income would be generated in future periods against which such tax losses could be recovered. Deferred taxes were calculated using the liability method based on the temporary differences at the reporting date between the tax amounts used as a reference for the assets and liabilities and the amounts reported in the financial statements.

(Dati in migliaia di Euro)At 31 December

2010

Recognised in the Income statement

Recognised

in equity

the basis of

consolidation

Compensation

At 31 December

2011

Deferred tax assets for:

-personnel costs 0 651 0 444 0 1.095

-other (61) 523 95 670 294 1.521

Total deferred tax assets (61) 1.174 95 1.114 294 2.616

Deferred tax liabilities for:-available-for-sale financial assets – Parent Company

(39) 0 363 (782) (458)

-available-for-sale financial assets (5.342) (926) 396 (5.125) 5.342 (5.655)

-TFR discounting IAS 0 (19) 0 0 (19)

-intangible assets (429) 1.288 (35.471) (220) (34.832)

Total deferred tax liabilities (5.810) 343 (34.712) (5.125) 4.340 (40.964)

Losses carried forward available for offsetagainst future taxable profits 5.464 496 0 604 (4.644) 1.920

Total deferred tax assets 243 4.077

Total deferred tax liabilities (649) (40.506)

Change in


116

3b –Non-current loans and receivables This item totalled EUR 1,632 thousand at 31 December 2011 compared with EUR 996 thousand at 31 December 2010 and mainly relates to loans (EUR 1,025 thousand) made by the original shareholders of Santé to the senior management of GDS for the capital increase at Santé, which was partly subscribed by the original shareholders and partly by the senior management of GDS. 3c – Other non-current assets At 31 December 2011 this item totalled EUR 25,729 thousand and mainly relates to the receivable from Beta Immobiliare fund concerning the final variable commission. The calculation was done pursuant to the provisions of the operating regulations of the Beta Immobiliare fund, taking into account the NAV indicated in the management report at 31 December 2011. This receivable corresponds to the portion of the overperformance commission accrued since the beginning of the fund's operations that the asset management fund will receive when liquidated only if certain conditions are met. 4 - Current assets 4a - Trade receivables Receivables amounted to EUR 6,070 thousand and mainly included receivables from customers (EUR 6,040 thousand) of IDeA FIMIT SGR (EUR 3,163 thousand) and FARE SpA (EUR 2,009 thousand). These are broken down by maturity in the table below:

The item “Transactions with Related Parties” includes EUR 23 thousand from De Agostini S.p.A. for the agreement to sublet rented premises and the reimbursement of costs associated with said agreement 4b – Available-for-sale financial assets At 31 December this item totalled EUR 13,075 thousand compared with EUR 15,038 thousand at 31 December 2010. This amount comprises:

- 1,006,392.58 units in the Soprarno Pronti Termine fund held by DeA Capital S.p.A., subscribed at an average value of EUR 5.149. The market price of the units at 30 December 2011, the last day in the year that the markets were open, was EUR 5.238, giving a total value of EUR 5,272 thousand. This is to be regarded as a temporary investment of excess cash

- 244,091,428 units in the Soprarno Pronti Termine fund held by Soprarno SGR. The market price of the units at 30 December 2011, the last day in the year that the markets were open, was EUR 5.238, giving a total value of EUR 1,278 thousand. This is to be regarded as a temporary investment of excess cash

- 12,531,328 Ultrashape Ltd. shares received from the distribution of the ISLP IV venture capital

fund, allocated at a value of USD 0.003270. The market price of the shares at 30 December

SCADENZIARIO CLIENTI AL 31/12/2011

(EUR thousand)Not yet expired

Expired -30 days 30-60

days 60-90days

90-120 days

Over 120 days

TotalProvision for doubtful receivables

Net Value

Total 4.907 677 395 51 0 10 6.040 -3 6.037


117

2011, the last day in the year that the markets were open, was USD 0.00263, giving a total value of EUR 25 thousand. The shares were liquidated in the first month of the following year

- 219,854,781 units in the open-ended Soprarno Inflazione + 1.5% money market fund. The market price of the units at 30 December 2011, the last day in the year that the markets were open, was EUR 5.777, giving a total value of EUR 1,270 thousand. This is to be regarded as a temporary investment of excess cash

- a portfolio of government securities and corporate bonds held by IDeA Capital Funds SGR

totalling EUR 5,230 thousand

4c – Tax receivables relating to the tax consolidation scheme entered into by the parent companies This item totalled EUR 5,929 thousand at 31 December 2011 (EUR 4,065 thousand at 31 December 2010) and relates to the receivable from the parent company B&D Holding S.a.p.A. for joining the tax consolidation scheme. The option for DeA Capital S.p.A. to join the Italian tax consolidation scheme to which the B&D Group (the group headed by B&D Holding di Marco Drago e C. S.a.p.a) belongs was exercised jointly by each company and the parent company B&D Holding di Marco Drago e C. S.a.p.a. by signing the "Regulation for participation in the national tax consolidation scheme for companies in the De Agostini Group" and notifying the tax authorities of this option pursuant to the procedures and terms and conditions set out by law. The option is irrevocable for the three-year period 2011-2013 unless the requirements for applying the scheme are not met. 4d – Other tax receivables At 31 December 2011, this item totalled EUR 2,677 thousand, compared with EUR 1,832 thousand at 31 December 2010. It includes:

advance IRES (corporate income tax) payments totalling EUR 567 thousand made by IDeA FIMIT SGR

advance payments on IRAP (regional tax on manufacturing operations) of EUR 442 thousand tax deductions in the form of advance payments on interest totalling EUR 236 thousand corporate income tax (IRES) credits to be reported arising from the tax return for the previous

year of EUR 154 thousand receivable of EUR 461 thousand due to the change in the percentage of VAT against which VAT

could be offset by the parent company, relating to 2010 receivable of EUR 503 thousand due to the change in the percentage against which VAT may be

offset by the parent company from 92% to 99% 4e – Other receivables This item, which totalled EUR 6,128 thousand at 31 December 2011 (EUR 557 thousand at 31 December 2010), includes receivables for guarantee deposits, advances to suppliers and prepaid expenses of the parent company, and prepaid expenses of EUR 581 thousand relating to IDeA FIMIT SGR. These advance payments are for costs that relate to the following year for insurance policies (EUR 47 thousand) and for costs that relate to goods and services (office rentals and other services) totalling EUR 533 thousand. Lastly, this item includes EUR 3,977 thousand for invoices to be issued to ENEL Servizi S.p.A. for costs incurred by FIMIT SGR in 2009, 2010 and 2011 for project to establish a new real estate fund. The costs concerned had been held among development assets to be determined, and in December 2011 the customer decided not to move forward with the project. Under the agreements with ENEL Servizi S.p.A., all costs incurred by the company in relation to external suppliers must be fully reimbursed.


118

4f – Cash and cash equivalents This item, which totalled EUR 46,764 thousand at 31 December 2011 (EUR 86,517 thousand at the end of the previous year) comprises bank deposits and cash, including interest accrued to 31 December 2010. Please see the consolidated cash flow statement for further information on changes to this item. The item “cash and cash equivalents” relates to cash balances and bank deposits in the name of group companies. Cash deposited at banks accrues interest at floating rates, based on the prevailing overnight, 1-2-week and 1-3-month interest rates. 5 – Shareholders' equity At 31 December 2011, group shareholders’ equity was approximately EUR 669,045 thousand, compared with EUR 763,955 thousand at 31 December 2010. The decrease of about EUR 94,910 thousand in group shareholders' equity in 2011 was mainly due to the reasons already discussed in the Statement of Performance - IAS 1 (EUR 70,188 thousand) and to the impact of the plan to purchase own shares (EUR 26,411 thousand). The main changes in shareholders’ equity are described in more detail in the relevant table of changes included in the Consolidated Financial Statements. 5a – Share capital The share capital (fully subscribed and paid up) totalled EUR 306,612,100, represented by 306,612,100 shares (of which 25,915,116 own shares) with a nominal value of EUR 1 each. Given that the nominal value of the 25,915,116 own shares held at 31 December 2011 is deducted from total share capital, share capital of EUR 280,696,984 was reported in the financial statements. Changes in share capital are shown in the table below:

The table below shows a reconciliation of the shares outstanding:

(EUR thousand) no. of shares amount no. of shares amount

Capitale SocialeShare capital 306.612.100 306.612 306.612.100 306.612

of which: Own shares

(25.915.116) (25.915) (12.598.698) (12.599)

Share capital (excluding own shares)

280.696.984 280.697 294.013.402 294.013

31.12.2011 31.12.2010


119

5b – Share premium reserve This item decreased by EUR 7,252 thousand (from EUR 395,613 thousand at 31 December 2010 to EUR 388,362 thousand at 31 December 2011) following the posting to this reserve of:

- the purchase of own shares in the amount of EUR 8,288 thousand - the sale of own shares totalling EUR 1,036 thousand in the partial non-proportional demerger of

IDeA Alternative Investments S.p.A.

5c – Legal reserve This reserve, which was unchanged compared with the end of 2010, totalled EUR 61,322 thousand at 31 December 2011. 5d – Fair value reserve The fair value reserve at 31 December 2011 was positive at EUR 3,132 thousand (positive at EUR 29,723 thousand at 31 December 2010) and comprises the items below:

5e – Other reserves Other reserves totalled EUR-10,042 thousand (EUR -5,868 thousand at 31 December 2010) and are made up of:

- a reserve for stock option costs totalling EUR 996 thousand - a reserve for the sale of option rights, totalling EUR 413 thousand. This originated in the

previous year from the sale of the remaining option rights to subscribe to a capital increase that had not been exercised by the shareholders, which were sold by the company

- other reserves that are negative at EUR 9,247 thousand relating to the associate of Santé, chiefly for the pro-rata reclassification of the minority interests in Santé connected with the 2008-2009 extraordinary dividend distribution by Générale de Santé, and changes in 2010 and 2011

- other reserves of EUR -2,204 thousand The change in the latter was due to:

the change in cross put/call options on the remaining 30% of the capital of FARE Holding to be exercised by DeA Capital and the seller respectively

Shares Issued

Own shares in

portfolioShares in Issue

Shares at 31 December 2010 306.612.100 (12.598.698) 294.013.402Share capital increase 0 0 0Own shares purchased 0 (18.123.338) (18.123.338)Own shares sold 0 0 0Own shares disposed for IDeA AI acquisition 0 4.806.920 4.806.920Used for Stock Option Plan 0 0 0Shares issued through exercise of stock options 0 0 0Shares at 31 December 2011 306.612.100 (25.915.116) 280.696.984

(EUR thousand)Balance at1.1.2010

Use of fair value reserve for Impairment

Fair Value

adjustments Tax

effect Balance at

31.12.2010

Direct investments/equity investments 30.354 0 (37.067) 2.612 (4.101)Venture Capital and other funds (259) 0 10.083 (2.233) 7.591Reserve for IFRS first-time adoption and other reserves (352) 0 (6) 0 (358)Fair value reserves relating to joint ventures (20) 0 20 0 0

Totale 29.723 0 (26.970) 379 3.132


120

contractually determined cross put/call options on the remaining 41.69% of IFIM's capital. In particular, the first put option granted to the seller will be exercisable within 30 days of the approval of the Half-Year Report to 30 June 2012 of IDeA FIMIT SGR

In accordance with the valuation criteria adopted by DeA Capital, the minority interest in the shareholders’ equity was reversed and reclassified as a financial liability at its fair value. The difference between the fair value of the financial liability and the minority interest reversed on the reporting date is recorded as an acquisition of minority shareholdings and reported under the group's shareholders' equity. Financial liabilities include the portion of minorities’ profits at 31 December 2011. 5f – Retained earnings (losses) carried forward This item stood at EUR -10,849 thousand at 31 December 2011 compared with EUR 15,499 thousand at 31 December 2010. The total decrease of EUR 26,348 thousand was due to the allocation of profits for 2010. 5g – Profit (loss) for the year The loss reported for the year of EUR 43,577 thousand relates to the consolidated loss in 2011 attributable to the Group (EUR 26,348 thousand at 31 December 2010). 5h – Minority interests This item, which totalled EUR 134,324 thousand at 31 December 2011 (EUR 552 thousand at 31 December 2010) refers to the minority interest in shareholders' equity resulting from the line-by-line consolidation of the 65% stake in IDeA SIM S.p.A., the 95% stake in Soprarno SGR S.p.A. (a 65% stake held through IDeA AI and 30% stake subject to a put option granted to a minority shareholder by DeA Capital) and the 61.30% stake in IDeA FIMIT SGR. Minority interests relating to the latter company totalled EUR 134,302 thousand including EUR 403 thousand as the profit pertaining to the period between the merger date of FARE SGR and FIMIT SGR (3 October 2011) and 31 December 2011.


121

6 – Non-current liabilities 6a - End-of-service payment fund The end-of-service payment fund (TFR) is a defined benefit plan, and as such was measured using actuarial methodology. This resulted in a liability calculated in demographic and financial terms on amounts owed to workers according to the number of years worked. The total present value of the liability is proportioned to the period of employment already completed at the calculation date, taking account of future salary increases and the employee's projected length of service. Future TFR flows were discounted to the reporting date based on the projected unit credit method. Changes in TFR in 2011 are shown in the table below:

The amounts recognised in the item were calculated as follows:

6b - Non-current financial liabilities This item totalled EUR 160,020 thousand (EUR 119,839 thousand at 31 December 2010) and relates to:

an amount of EUR 80,000 thousand for the use of the credit line provided by Mediobanca for the same amount (maturing on 16 December 2015 and subject to a variable rate of 3-month Euribor + spread). On 31 December 2011, the covenant tests for this credit line were successfully passed (i.e. debt and debt to equity)

the liability due to the decrease in the fair value of the interest rate swap contracts taken out to partially hedge interest rate risk on the debt exposure with Mediobanca, totalling EUR 1,315 thousand (maturing on 30 July 2013)

an amount of EUR 13,365 thousand relating to the medium-term loan taken out by IDeA FIMIT SGR with Banca Intermobiliare di Investimenti e Gestioni S.p.A. in 2009 (maturing on 31 March 2014 with a floating rate of 3-month Euribor + a spread) for the purchase of units in the Omicron Plus fund

the liability due to the decrease in the fair value of the interest rate swap contracts taken out to partially hedge interest rate risk on the debt exposure with Banca Intermobiliare di Investimenti e Gestioni S.p.A., totalling EUR 595 thousand (maturing on 31 March 2014)

the estimated future cost for DeA Capital of exercising its pro-rata share of the put options on Santé shares held by the senior management of GDS, totalling EUR 915 thousand

EUR 1,602 million for the fair value of the strike price of the option on the 30% stake in Soprarno

EUR 17,795 million for the fair value of the strike price of the option on the remaining 41.69% stake in IFIM

EUR 44,433 thousand relating to the acquisition of the FARE Group

(EUR thousand)Balance at 1.1.2011 Portion accrued Payments

Change in the Basis of

consolidation

Balance at31.12.2011

Change in provision 858 883 (544) 930 2.127

(EUR thousand) 31.12.2011 31.12.2010

Nominal value of provision

2.321 873Discounting effect (194) (15)Current value of provision

2.127 858


122

This amount mainly comprises:

- payment of the deferred purchase price (“deferred portion”, with an annual maturity until 31 December 2013) of EUR 3,450 thousand plus interest (variable 6-month Euribor rate) accrued from the closing date (12 December 2008) to 31 December 2011, equal to EUR 175 thousand

- the earn-out payment (maturing in 2014) of EUR 1,865 thousand, inclusive of interest calculated at present value accrued from the closing date (12 December 2008) to 31 December 2011, equal to EUR 160 thousand. This earn-out, which DeA has agreed to pay to the seller, is equal to 50% of the portion of any performance fees accrued on the funds of the former FARE SGR that are currently managed by IDeA SGR

- the amount that DeA Capital has agreed to pay to the seller for 70% of the units of the Atlantic 1 and Atlantic 2 funds totalling EUR 6,203 thousand

- the fair value of the strike price of the put option (subscribed by the seller) on the remaining 30% of FARE Holding's capital equal to EUR 31,805 thousand (EUR 26,965 thousand at 31 December 2010) plus EUR 935 thousand for the portions of restricted cash (Atlantic 1 and Atlantic 2 funds). In accordance with the valuation criteria adopted by DeA Capital, the minority interest in the shareholders’ equity was reversed and reclassified as a financial liability at its fair value. The difference between the fair value of the financial liability and the minority interest reversed at the reporting date is recorded as an acquisition of minority shareholdings and reported under the group's shareholders' equity.

7 – Current liabilities Total liabilities amounted to EUR 27,241 thousand (EUR 12,957 thousand at 31 December 2010) and are all due within the following year. These payables are not secured by any company assets. 7a – Trade payables Trade payables were EUR 10,322 thousand versus EUR 3,165 thousand at 31 December 2010. This item includes the following transactions with related parties: - payables to the parent company, De Agostini S.p.A., of EUR 41 thousand - payables to affiliate De Agostini Editore S.p.A. of approximately EUR 10 thousand - payables to affiliate Lottomatica Group S.p.A. of approximately EUR 23 thousand - payables to affiliate De Agostini Libri S.p.A. of approximately EUR 2 thousand - payables to affiliate De Agostini Invest SA of approximately EUR 25 thousand Trade payables do not accrue interest and are settled, on average, within 30 to 60 days. 7b – Payables in respect of staff and social security organisations This item totalled EUR 7,497 thousand (EUR 2,027 thousand at end-2010) and is largely due to:

- payables to social security organisations of EUR 1,428 thousand, paid after the close of the financial year 2011, with the exception of payables for social security liabilities calculated on bonuses being accrued

- payables to employees for holidays not taken and bonuses being accrued of EUR 5,933 thousand

- other payables to employees totalling EUR 135 thousand 7c – Current tax payables This item was EUR 903 thousand (EUR 575 thousand at end-2010) and is largely due to the payable to the tax authorities calculated as the difference between advance payments and the tax due for the year.


123

7d – Other tax payables This item, of EUR 3,585 thousand at 31 December 2011 (EUR 2,113 thousand at end-2010), relates to the payable to the tax authorities in respect of taxes deducted from the income of employees and self-employed staff totalling EUR 1,682 thousand, the VAT payable of EUR 111 thousand, and miscellaneous tax payables totalling EUR 1,792 thousand stemming from the Luxembourg wealth tax. 7e – Other payables This item was EUR 1,023 thousand at 31 December 2011 (EUR 256 thousand at end-2010) and mainly relates to accrued expenses, payables to credit card issuers and directors’ emoluments. 7f – Short-term financial payables This item relates to the short-term payable of EUR 3,911 thousand (EUR 4,821 thousand at end-2010) in respect of the acquisition of the FARE Group. This amount mainly comprises:

the short-term portion of the deferred purchase price ("deferred portion") totalling around EUR 3,450 thousand and accrued interest payable from the closing date (12 December 2008) to 31 December 2010 totalling EUR 175 thousand

an accrued expense in respect of the line of credit provided by Mediobanca totalling EUR 286 thousand


124

INCOME STATEMENT Alternative asset management fees Alternative asset management fees in 2011 were EUR 47,762 thousand versus EUR 27,844 thousand in 2010. These were mainly management fees paid to IDeA FIMIT SGR (First Atlantic RE SGR before the merger with FIMIT SGR) in relation to funds it manages for a total of EUR 30,846 thousand. Specifically, these revenues are mainly attributable to the activity carried out for the funds Ippocrate, Atlantic 1, Atlantic 2 - Berenice and Omicron Plus. 9 - Income from investments valued at equity This item includes income from companies valued at equity for the period. The loss of EUR 55,503 thousand in 2011 compared with a loss of EUR 15,507 thousand in 2010 was mainly due to the loss reported for the stake in Santé of about EUR 50,667 thousand and the loss related to the stake in IDeA OF I of EUR 4,947 thousand.

10 - Other investment income and expenses The net income realised on investments in shareholdings and funds totalled around EUR 13,500 thousand in 2011, compared with a loss of EUR 3,405 thousand in 2010. Details are shown below:

Investment income Income from available-for-sale funds was EUR 1,480 thousand and came from capital gains from distributions of venture capital funds. Capital gains from disposals included EUR 544 thousand for capital gains from the sale of minor equity investments and EUR 82 thousand for capital gains from the disposal of the Soprarno Bond Fund. Income from distributions, which totalled around EUR 27,778 thousand, was due to the capital gain realised on the distribution received from Kenan Investments in relation to the placement of Migros shares. Impairment

(EUR thousand) 2011 2010Other income from disposals of equity investments in subsidiaries

4 -

Income from available-for-sale equity investments - 2.326 Income from Kenan distributions

27.778 -

Income from Venture Capital fund distributions 1.480 554 Capital gains on disposals 626 - Dividends from minor available-for-sale equity investments 95 85 Investment income

29.983 2.965 Losses on disposals of equity investments in subsidiaries 144 - Impairment venture capital funds

846 1.131 Impairment funds of funds - 5.188 Impairment Elixir and Kovio

43 51

Impairment Stepstone 15.080 - Other charges

370 -

Investment charges

16.483 6.370

Total 13.500 (3.405)


125

At 31 December 2011, the fair value measurement of investments in funds and equity investments, which was carried out on the basis of information and documents received from the funds and investee companies, and other available information, made it necessary to apply impairment of EUR 846 thousand for venture capital funds, EUR 43 thousand for the US investee Kovio Inc. and EUR 15,080 thousand for the investment in Stepstone, which essentially resulted in the latter investment being valued at close to zero. There was also impairment of EUR 142 thousand in relation to shares received from distributions of the ISLP IV venture capital fund. These were stated at an amount lower than their historical cost. For these venture capital funds and the minority interest in Kovio, the significant reduction below cost was considered clear evidence of impairment. 11 - Service revenues In 2011, these revenues totalled EUR 10,359 thousand, compared with EUR 10,112 thousand in 2010, and chiefly relate to services provided by the FARE group in consulting, management and the sale of real estate held in the portfolios of real estate funds. 12 – Other revenues and income Other revenues and income, totalling EUR 322 thousand in 2011 (compared with EUR 412 thousand in 2010), relates mainly to directors' fees from Santé S.A. of EUR 173 thousand. 13 - Operating costs Operating costs in 2011 were EUR 51,360 thousand, compared with EUR 36,800 thousand in the previous year. 13a – Personnel costs Total personnel costs were EUR 25,031 thousand in 2011, compared with EUR 11,677 thousand in 2010. The item breaks down as follows:

At 31 December 2011, the group had a total of 167 employees (60 at 31 December 2010). The table below shows the changes and average number of group employees during 2011.

(EUR thousand) 2011 2010 Salaries and wages 10.575 6.314 Social charges on wages 3.834 2.040 Board of Directors' fees 6.797 3.318 Stock options figurative cost 683 565 Stock option reversal

0 (1.379)Employee severance indemnity 950 407 Other personnel costs 2.192 412 Total 25.031 11.677


126

Share-based payments Employees of DeA Capital S.p.A. are beneficiaries of stock option plans based on the shares of DeA Capital S.p.A. Unexercised but valid call options on the company’s shares at 31 December 2011 totalled 4,643,200 (2,298,200 at 31 December 2010). Stock option plans were valued using the numerical binomial tree procedure (the original Cox, Ross and Rubinstein method). Numerical analysis using binomial trees generates simulations of various possible developments in the share price in future periods. With regard to stock option plans, on 19 April 2011 the shareholders' meeting approved the DeA Capital stock option plan for 2011-2016 under which a maximum of 2,200,000 options may be allocated. To implement the resolution of the shareholders' meeting, the DeA Capital S.p.A. Board of Directors allocated a total of 1,845,000 options to certain employees of the company and its subsidiaries, and employees of the parent company De Agostini S.p.A. who carry out important roles. In line with the criteria specified in the regulations governing the DeA Capital stock option plan for 2011-2016, the Board of Directors also set the exercise price for the options allocated at EUR 1.538, which is the arithmetic mean of the official price of DeA Capital shares on the Mercato Telematico Azionario, the Italian screen-based trading system organised and managed by Borsa Italiana S.p.A., on the trading days between 18 March 2011 and 18 April 2011. The options can be allocated to the beneficiaries, in one or more tranches, up to 30 June 2012 and exercised by the latter, in one or more tranches, but in any case for an amount per tranche of not less than 25% of the options assigned to each, with effect from the fifth calendar day following the date that the adjusted NAV figure at 31 December 2013 is announced, until 31 December 2016. The adjusted NAV means the value of the assets, net of liabilities, calculated on the basis of the company’s balance sheet at 31 December 2013 and restated, where necessary, to take account of the measurement at fair value of all investments, as assessed by an independent third party. The table below summarises the assumptions regarding the calculation of the fair value of the stock option plans:

No loans and/or guarantees in favour of directors and/or auditors of the parent company and its subsidiaries were issued.

Employees

1.1.2011 Recruits

Change in

the basis of

consolidation

Departures

31.12.2011

Average

Senior managers 13 4 20 (4) 33 15

Junior managers 15 6 23 (2) 42 26

Staff 32 6 56 (2) 92 58

Total 60 16 99 (8) 167 99

2004 plan 2005 plan 2010 plan

March 2011allocation on 2010 plan 2011 plan

No. of options allocated 160.000 180.000 2.235.000 500.000 1.845.000Average market price at allocation date 2,445 2,703 1,2964 1,3606 1,55Value at allocation date 391.200 486.540 2.897.454 680.300 2.859.750Average exercise price 2,026 2,459 1,318 1,413 1,538Expected volatility 31,15% 29,40% 35,49% 33,54% 33,43%Option expiry date

31/08/2015 30/04/2016 31/12/2015 31/12/2015 31/12/2016Risk free yield 4,25125% 3,59508% 1,88445% 2,95194% 3,44%


127

13b – Service costs Service costs were EUR 17,113 thousand in 2011 versus EUR 10,849 thousand in 2010. A breakdown of these costs is shown in the table below:

13c – Depreciation, amortisation and impairment losses Please see the table on changes in intangible and tangible assets for details on this item. 13d – Other costs This item totalled EUR 2,136 thousand (EUR 1,144 thousand in 2010) and mainly consisted of the Luxembourg wealth tax of EUR 630 thousand and the cost of EUR 566 thousand incurred by IDeA FIMIT SGR given that it was unable to deduct the VAT paid on purchase transactions on the basis of the pro-rata amount specified by art. 19 of Presidential Decree 633/1972. 14 – Financial income and charges 14a – Financial income Financial income in 2011 totalled EUR 1,863 thousand (EUR 1,709 thousand in 2010) and chiefly includes interest income of EUR 1,464 thousand. More specifically, interest income consisted mainly of bank interest of EUR 1,380 thousand.

(EUR thousand) 2011 2010 Management, tax, legal consultancy and other fees 8.788 6.793Fees to corporate bodies

788 521Maintenance

206 148Travel expenses 788 366Utilities and general expenses 1.421 572Third-party rental, royalties and leasing

2.376 1.110Bank charges 69 30Books, office supplies and conferences

490 273Commission expense 660 0Other charges 1.527 1.036Total 17.113 10.849

(EUR thousand) 2011 2010

Interest income 1.464 958 Income from financial instruments at fair value through profit and loss

195 4

Income on derivatives 0 210

Exchange gains 204 537

Total 1.863 1.709


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14b- Financial charges Financial charges were EUR 4,620 thousand during the year (EUR 6,350 thousand in 2010), due mainly to interest payable, losses realised on hedging derivatives, and realised and converted exchange rate losses. Specifically, financial charges mainly break down as follows: - charges relating to interest rate swaps of EUR 853 thousand - exchange rate losses of EUR 17 thousand - realised exchange rate losses on financial instruments of EUR 175 thousand - interest payable for the acquisition of the FARE Group accrued during 2011 totalling EUR 199 thousand - interest payable on the Mediobanca credit line, of EUR 2,813 thousand fees of EUR 284 thousand

15 – Income tax for the period, deferred tax assets and deferred tax liabilities This item, totalling EUR 3,814 thousand for 2011, includes current income tax for the year of EUR 7,362 thousand and deferred tax assets of EUR 3,548 thousand. The table below shows the taxes determined on the basis of the rates and the group’s taxable income. The latter was calculated in light of applicable legislation.

The table below shows a reconciliation of the tax charges recorded in the consolidated financial statements and the theoretical tax charge for 2011 calculated using the corporate income tax (IRES) rate applicable in Italy.

(EUR thousand) 2011 2010Interest expense 3.525 4.101 Charges on derivatives 903 1.786 Exchange losses 192 463 Total 4.620 6.350

(EUR thousand) 2011 2010Current taxes:- Income from tax consolidation scheme

2.839 0- IRES (7.454) (3.813)- IRAP (2.747) (987)- Other tax 0 1.759Total current taxes (7.362) (3.041)Deferred taxes for the period:- Charges for deferred/prepaid taxes (541) (2.518)- Income from deferred/prepaid taxes 2.621 629- Use of deferred tax liabilities 1.468 2.872- Use of deferred tax assets

0 (387)Total deferred taxes 3.548 596

Total income tax (3.814) (2.445)


129

16 – Basic earnings (loss) per share Basic earnings per share are calculated by dividing net profit for the period attributable to the group's shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per share are calculated by dividing net profit for the period attributable to the group's shareholders by the weighted average number of shares outstanding during the period including any diluting effects of stock option plans and existing warrants, where the allocated options are "in the money." The table below shows the income and the share information used to calculate basic and diluted earnings per share.

Options and warrants have a dilutive effect only when the average market price of the share for the period exceeds the strike price of the options or warrants (i.e. when they are "in the money").

(EUR thousand) Amount Rate Amount RateProfit before tax

(37.677) (21.985)Tax on theoretical income (10.361) 27,5% (6.046) 27,5%

Participation in participation exemption scheme

(537) 1,4% 32 -0,1%

Tax on inter-company dividends

1.071 -2,8% 1.363 -6,2%

Amortisation of customer relationships 779 -2,1% 0 0,0%Write-downs of equity investments and loans

110 -0,3% 0 0,0%Effect of companies with different taxation from that of Italy

0 0,0% 384 -1,7%

Use of tax losses not previously recognised (580) 1,5% 1.556 -7,1%Net profit/(loss) from subsidiaries not subject to taxation

0 0,0% 0 0,0%

Net profit/(loss) from associates not subject to taxation

15.263 -40,5% 4.300 -19,6%

Non-deductible interest

497 -1,3% 909 -4,1%Income from tax consolidation scheme

(1.259) 3,3% 434 -2,0%Other net differences (336) 0,9% (599) 2,7%Net effect of prepaid/deferred taxes

(3.547) 9,4% 0 0,0%

IRAP and other taxes on foreign income

2.714 -7,2% 1.091 -5,0%

Income tax reported in the income statement 3.814 -10,1% 3.424 -15,6%

Income tax

3.814 2.445 Income tax – joint ventures 0 979 Income tax reported in the income statement

3.814 3.424

2011 2010

2011 2010Consolidated profit/(loss) excluding minorities (A) (43.577.335) (26.348.307)Weighted average number of ordinary shares outstanding (B) 288.942.756 289.233.469 Basic earnings/loss per share (EUR per share) (C=A/B) (0,1508) (0,0911)

Adjustment for dilutive effect - - Consolidated net profit/(loss) adjusted for dilutive effect (D) (43.577.335) (26.348.307)Weighted average number of shares to be issued for theexercise of stock options (E) 174.632 - Total number of shares outstanding and to be issued (F)

288.942.756 289.233.469 Diluted earnings/loss per share (EUR per share) (G=D/F) (0,1508) (0,0911)


130

Primary and secondary reporting formats The information on businesses reflects the group's internal reporting structure. These businesses are:

- Private Equity Investment, which includes the reporting units involved in investment activities and breaks down into equity investments ("direct investments") and investments in funds ("indirect investments")

- Alternative Asset Management, which includes reporting units involved in asset management activities and related services, with a current focus on the management of private equity and real estate funds



The consolidated net profit of EUR 8.4 million generated during the period by the Alternative Asset Management business includes the after-tax impact of amortising intangible assets recorded during the allocation of a portion of the purchase price of the investments in IDeA AI, FARE Holding, IFIM and IDeA FIMIT totalling EUR 4.2 million; excluding this impact, the net profit of the Alternative Asset Management business would have been EUR 12.6 million, and the consolidated net loss would have been EUR 37.3 million (versus the actual figure of EUR 41.5 million).

(EUR thousand)Private Equity

Investment

Alternative Asset

Management

Consolidated

Alternative asset management fees 0 47.762 0 47.762Profit/(loss) from equity investments valued at equity (55.503) 0 0 (55.503)Other investment income/charges 13.773 (273) 0 13.500Other revenues and income

40 10.332 309 10.681Other costs and charges

(825) (42.051) (8.484) (51.360)

Financial income and charges

(26) (215) (2.516) (2.757)

PROFIT/(LOSS) BEFORE TAXES

(42.541) 15.555 (10.691) (37.677)

Income tax

98 (7.160) 3.248 (3.814)

PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS

(42.443) 8.395 (7.443) (41.491)

Profit/(loss) from assets held-for-sale/sold

0 0 0 0

NET PROFIT/(LOSS) FOR THE YEAR

(42.443) 8.395 (7.443) (41.491) - Net profit/(loss) attributable to the Group

(42.443) 6.309 (7.443) (43.577)

- Net profit/(loss) attributable to minorities

0 2.086 0 2.086


and eliminations

(EUR thousand)Private Equity

Investment

Alternative Asset

Management

DeA Capital SpA(*)

and eliminations Consolidated

Alternative asset management fees

0 27.844 0 27.844Profit/(loss) from equity investments valued at equity

(15.637) 130 0 (15.507)

Other investment income/charges

(3.490) 85 0 (3.405)

Other revenues and income

39 10.053 432 10.524Other costs and charges

(1.665) (28.869) (6.266) (36.800)

Financial income and charges

196 106 (4.943) (4.641)

PROFIT/(LOSS) BEFORE TAXES

(20.557) 9.349 (10.777) (21.985)

Income tax

(1.793) (3.627) 1.996 (3.424)

PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS

(22.350) 5.722 (8.781) (25.409)

Profit/(loss) from assets held-for-sale/sold

0 0 0 0

NET PROFIT/(LOSS) FOR THE YEAR

(22.350) 5.722 (8.781) (25.409) - Net profit/(loss) attributable to the Group

(22.350) 4.783 (8.781) (26.348)

- Net profit/(loss) attributable to minorities

0 939 0 939


DeA Capital SpA *)


131

Notes to the cash flow statement Given the type of activity carried out by the Group, cash flow from investment in companies and funds (one of the Group’s typical activities) is included in cash flow from operating activities. In 2011, the operating activities, as defined above, absorbed cash and cash equivalents of EUR 23,406 thousand (while EUR 12,289 thousand was generated in 2010), mainly due to the acquisition of FIMIT SGR net of the cash distribution by Kenan. In 2011 financing activities absorbed EUR 24,710 thousand (and EUR 24,427 thousand in 2010) mainly in relation to plan to purchase own shares (EUR 26,411 thousand). Changes in the basis of consolidation totalled EUR 9,209 thousand. Cash and cash equivalents totalled EUR 46,764 thousand at end-2011 (EUR 86,517 thousand at the end of the previous year). Changes to the cash flow statement have been reported using the direct method.


132

Other information Commitments

At 31 December 2011, residual commitments for payments to funds totalled EUR 174.4 million, compared with EUR 180.7 million at end-2010. The change in commitments is shown in the table below.

With regard to these overcommitments, the management believes that the funds and credit lines currently available, as well as funds that will be generated by its operating and financing activities, will enable the DeA Capital Group to meet the financing required for its investment activity, manage working capital and repay debts when they become due.

Own shares and parent company shares

On 19 April 2011, the shareholders' meeting of DeA Capital S.p.A. approved the proposal made by the company's Board of Directors to implement a new plan to purchase and dispose of own shares (the Plan), which authorises the Board of Directors to purchase and dispose of a maximum number of shares representing a stake of up to 20% of share capital in accordance with the law, on one or more occasions, on a rotating basis. At the same time, this resolution revoked the authorisation issued by the shareholders' meeting on 26 April 2010 for the previous plan to purchase own shares. Among other things, the authorisation specifies that purchases may be carried out in accordance with all procedures allowed by current regulations, with the sole exception of a public purchase or exchange offer, and that the unit price for the purchase must not be more than 20% above or below the share's reference price on the trading day prior to the purchase. The objective of the Plan is to allow the company to take action, in accordance with current regulations, to limit any unusual price movements and to normalise trading and pricing fluctuations resulting from distortions related to excess volatility or poor trading liquidity, as well as to purchase own shares to be used, as necessary, for share incentive schemes. These transactions will also allow the company to purchase own shares to be used, in accordance with its strategy, for capital-related transactions or other transactions in relation to which it may be appropriate to exchange or sell parcels of shares by means of an exchange, transfer or other method of disposal. The authorisation to carry out such purchases has a maximum duration of 18 months from the date the authorisation is granted by the shareholders’ meeting (until October 2012). The Board of Directors is also authorised to dispose of own shares purchased without time limitations in accordance with procedures it deems appropriate, at a price to be determined, from time to time, but which may not be (other than in certain specific exceptions) more than 20% below the share's reference price on the trading day prior to each disposal.

(EUR million)Residual Commitments vs. Funds - 31.12.2010 180,7Change in Commitments of VC funds 1,5New Commitments 26,3Capital Calls (34,0)

Residual Commitments vs. Funds - 31.12.2011 174,4Net financial position at 31.12.11

(102,5)PFN vs. residual commitments - 31.12.2011 (overcommitment) (276,9)


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The Board of Directors, which met immediately following the shareholders' meeting, passed the resolutions necessary to execute the plan, and granted the chairman and chief executive officer all the necessary powers. In 2011, as a part of the above two plans, DeA Capital S.p.A. purchased around 18.1 million shares valued at about EUR 26.4 million (at an average price of EUR 1.46 per share). Taking into account purchases made in previous years for plans in place from time to time, and own shares used to service purchases of controlling interests in FARE Holding and IDeA AI, at 31 December 2011 the company owned 25,915,116 own shares (equal to about 8.5% of share capital). As of the date of this document, taking account of the 1,338,758 shares purchased after the end of 2011, the company had a total of 27,253,874 own shares corresponding to about 8.9% of share capital. During 2011, the company did not hold, purchase or sell, on its own account or through a trust company, any shares in parent company De Agostini S.p.A.

Stock option plans On 19 April 2011, the shareholders' meeting approved the DeA Capital stock option plan for 2011-2016, under which a maximum of 2,200,000 options may be allocated. To implement the resolution of the shareholders' meeting, the DeA Capital S.p.A. Board of Directors allocated a total of 1,845,000 options to certain employees of the company and its subsidiaries, and employees of the parent company De Agostini S.p.A. who carry out important roles. In line with the criteria specified in the regulations governing the DeA Capital stock option plan for 2011-2016, the Board of Directors also set the exercise price for the options allocated at EUR 1.538, which is the arithmetic mean of the official price of DeA Capital shares on the Mercato Telematico Azionario, the Italian screen-based trading system organised and managed by Borsa Italiana S.p.A., on the trading days between 18 March 2011 and 18 April 2011. The options can be allocated to the beneficiaries, in one or more tranches, up to 30 June 2012 and exercised by the latter, in one or more tranches, but in any case for an amount per tranche of not less than 25% of the options assigned to each, with effect from the fifth calendar day following the date that the adjusted NAV figure at 31 December 2013 is announced, until 31 December 2016. The adjusted NAV means the value of the assets, net of liabilities, calculated on the basis of the company’s balance sheet at 31 December 2013 and restated, where necessary, to take account of the measurement at fair value of all investments, as assessed by an independent third party.

With regard to the previous year, on 26 April 2010 the shareholders' meeting approved the 2010-2016 stock option plan on the basis of which 2,235,000 shares were allocated which are still not exercisable. For further information on the terms and conditions of the plans and their beneficiaries, please see the respective Information Prospectuses prepared in accordance with art. 84-bis, para. 1 of Consob Regulation 11971/1999 and table 7 of Appendix 3A of Consob Regulation 11971/1999, and the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation 11971/1999. The above documentation is available to the public at the headquarters of DeA Capital S.p.A. and on the company's website www.deacapital.it. The table below summarises the assumptions regarding the calculation of the fair value of the stock option plans:


134

DeA Capital 2009-2012 warrants

On 3 March 2009, the shareholders' meeting of DeA Capital S.p.A. approved an investment plan entailing the offer of warrants for subscription by the management. Under the plan regulations, the DeA Capital 2009-2012 warrants allow holders to purchase, under specific conditions, one new DeA Capital share with a nominal value of EUR 1 for each warrant held, at an exercise price of EUR 1.92. The warrants may be exercised between 1 April 2012 and 30 September 2012. In order to implement the plan, the extraordinary shareholders' meeting of DeA Capital S.p.A. also voted to issue up to 1,500,000 DeA Capital 2009-2012 warrants and to increase the share capital, pursuant to the combined provisions of art. 2441, para. 8 of the Italian Civil Code and art. 134, para. 2 of Legislative Decree 58 of 24 February 1998 by a nominal amount of up to EUR 1,500,000 in separate issues pursuant to art. 2439, para. 2 of the Italian Civil Code, to be carried out through the issue of up to 1,500,000 ordinary shares with a nominal value of EUR 1, to be used solely and irrevocably for the exercise of these warrants. The subscription price for the warrants was EUR 0.211, based on the fair value estimated by the Board of Directors and supported by independent valuations. The warrants, available for subscription by beneficiaries from the date on which the resolution of the extraordinary shareholders' meeting on the issue of the warrants was recorded in the companies register until 31 July 2009, were fully subscribed. Beneficiaries are individuals who were classified as employees of the company and/or its subsidiaries and/or the parent company De Agostini S.p.A. at the time of the warrant subscription offer and at the time of the subscription itself, as identified by the Board of Directors’ meeting of 13 January 2009. For further information on the terms and conditions of the plans and their beneficiaries, please see the respective Information Prospectuses prepared in accordance with art. 84-bis, para. 1 of Consob Regulation 11971/1999 and table 7 of Appendix 3A of Consob Regulation 11971/1999, and the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation 11971/1999. The above documentation is available to the public at the headquarters of DeA Capital S.p.A. and on the company's website www.deacapital.it.

Transactions with parent companies, subsidiaries and related parties

Intercompany relationships with the parent company and its group In 2011, the company carried out transactions at normal market conditions with the parent company De Agostini S.p.A. and its subsidiaries.


March 2011 allocation on

2010 plan

2011 planNo. of options allocated

160.000 180.000 2.235.000 500.000 1.845.000

Average market price at allocation date

2,445 2,703 1,2964 1,3606 1,55

Value at allocation date

391.200 486.540 2.897.454 680.300 2.859.750

Average exercise price

2,026 2,459 1,318 1,413 1,538

Expected volatility

31,15% 29,40% 35,49% 33,54% 33,43%

Option expiry date

31/08/2015 30/04/2016 31/12/2015 31/12/2015 31/12/2016

Risk free yield

4,25125% 3,59508% 1,88445% 2,95194% 3,44%


135

In particular, on 22 March 2007 the company signed a Service Agreement with the controlling shareholder, De Agostini S.p.A. (which was renewed on 31 March 2011), for the latter to provide operating services in the administration, finance, control, legal, corporate, tax, investor relations and external communications areas for a total payment of EUR 480,000 per year. The agreement, which is renewable annually, is priced at market rates, and is intended to allow the company to maintain a streamlined organisational structure in keeping with its development policy, and to obtain adequate operational support at the same time. Finally, in 2011 the company did not hold, purchase or dispose of shares of related-party companies. The table below summarises the amounts of trade-related transactions with related parties.

Remuneration: directors of the board, auditors, general managers and managers with strategic responsibilities

In 2011, remuneration payable to the directors and auditors of DeA Capital S.p.A. for the performance of their duties totalled EUR 330 thousand and EUR 175 thousand respectively. Remuneration paid to directors and auditors is shown in the table below:

(EUR thousand) Trade receivables Tax receivables

Tax payables

Trade payables

Revenues for services

Tax income

Personnel costs

Service costs

B&D Holding di Marco Drago e C. S.a.p.a. 0 5.928 5 0 0 2.839 0 0

De Agostini S.p.A. 33 0 0 41 131 0 265 527

De Agostini Editore S.p.A. 0 0 0 10 1 0 0 30

De Agostini Libri S.p.A. 0 0 0 2 0 0 0 2

Lottomatica S.p.A. 0 0 0 23 0 0 0 19

De Agostini Publishing S.p.A. 0 0 0 0 0 0 0 1

Nova Immobiliare S.p.A. 0 0 0 0 10 0 0 0

De Agostini Invest SA 0 0 0 25 0 0 0 25

Total related parties

33 5.928 6 101 142 2.839 265 604

Total financial statement line item

6.070 5.928 903 10.322 10.359 2.839 25.031 17.113

as % of financial statement line item 0,5% 100,0% 0,7% 1,0% 1,4% 100,0% 1,1% 3,5%

31/12/2011 Esercizio 2011

Director Position

Periodposition

held

Positionexpires

Fees for positionheld at companypreparing the

financial Statements, in

EUR thousand

Non-cash

benefits

Bonus e altri

incentivi

Statutory auditors'

fees forpositions

held at subsidiaries

Other remuneeration EUR/000

Lorenzo Pellicioli Chairman 2011 Approval of financial

statements 201230 0 0 0 3

Paolo Ceretti Chief Executive Officer

2011 Approval of financial

statements 201230 0 0 0 18

Daniel Buaron Director 2011 Approval of financial

statements 201230 0 0 0 555

Lino Benassi Director 2011 Approval of financial

statements 201230 0 0 0 236

Rosario Bifulco Director 2011 Approval of financial

statements 201230 0 0 0 20

Claudio Costamagna Director 2011 Approval of financial


Alberto Dessy Director 2011 Approval of financial

statements 201230 0 0 0 25

Roberto Drago Director 2011 Approval of financial

statements 201230 0 0 0 15

Marco Drago Director 2011 Approval of financial


Andrea Guerra Director 2011 Approval of financial


Boroli Marco Director 2011 Approval of financial


Angelo Gaviani Chairman of the

Board of2011 Approval of financial

statements 201275 0 0 42 0

Cesare Andrea Grifoni

Statutory Auditors

Permanent Auditor2011 Approval of financial

statements 201250 0 0 31 0

Gian Piero Balducci Permanent Auditor

2011 Approval of financial

statements 201250 0 0 0 38


136

Unlike the data contained in the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation 11971/1999, the emoluments and remuneration shown above do not include any applicable social security contributions. The item "Other remuneration" for director Daniel Buaron relates to remuneration received from FARE SGR/IDeA FIMIT SGR totalling EUR 415 thousand and EUR 140 thousand from FARE Holding. The item "Other remuneration" for director Lino Benassi relates chiefly to remuneration of EUR 45 thousand received from FARE SGR, EUR 31 thousand from IDeA FIMIT SGR, EUR 150 thousand from IDeA Alternative Investments S.p.A. and EUR 10 thousand for the Internal Audit Committee of DeA Capital S.p.A. In 2011, annual salaries and bonuses paid to managers with strategic responsibilities in the parent company totalled about EUR 537 thousand.


Details of stakes held in DeA Capital S.p.A. and its subsidiaries by members of the boards of directors and auditors and by managers with strategic responsibilities are provided in aggregate format in the table below. No shareholdings were reported for general managers, since to date, this position does not exist. All those who held positions on the boards of directors or auditors, or as managers with strategic responsibilities, for the whole or part of the year in question, are included.

In order to gain entire control of IDeA AI, on 20 January 2011, DeA Capital acquired stock from Paolo Ceretti and Lorenzo Pellicioli in exchange for 2,566,323 and 987,047 DeA Capital shares respectively. On 3 February 2011, Paolo Ceretti purchased a further 12,953 ordinary shares of the company. Other than the shares indicated above, no DeA Capital shares are held by other directors or auditors currently in office; furthermore, no shares are held in companies controlled by DeA Capital.

The directors Lorenzo Pellicioli, Lino Benassi, Marco Drago and Roberto Drago own shares of B&D Holding di Marco Drago e C. S.a.p.a., the parent company of De Agostini S.p.A. (which is in turn the parent company of DeA Capital S.p.A.), and are parties to a shareholder agreement covering these shares.

Stock options allocated to members of the boards of directors and auditors, general managers and managers with strategic responsibilities

Details of stock options held by members of the boards of directors and auditors and by managers with strategic responsibilities in DeA Capital S.p.A. and its subsidiaries are provided in aggregate format in the table below.

Lorenzo Pellicioli DeA Capital S.p.A. 0 2.566.323 0 2.566.323Paolo Ceretti DeA Capital S.p.A. 0 1.000.000 0 1.000.000Rosario Bifulco DeA Capital S.p.A. 1.536.081 0 0 1.536.081Lino Benassi DeA Capital S.p.A. 23.500 0 0 23.500Daniel Buaron * DeA Capital S.p.A. 11.689.552 0 0 11.689.552Daniel Buaron FARE Holding S.p.A. 180.000 0 0 180.000Senior managers with strategic responsibilitiesDeA Capital S.p.A. 50.000 0 0 50.000Total 13.479.133 3.566.323 0 17.045.456* via DEB Holding S.r.l.

Name and surnameInvestee company

No. of shares held at

1.1.2011Number of shares

purchased

Number of shares sold

No. of shares

held at 31.12.2011


137

Options held at beginning of 2010

Options allocated during 2010

Options expiring in 2010

Options held at end of 2010

Beneficiary Position No. options

Average

exercise price

Average expiry

No. options

Average

exercise price

Average

expiry

No. options

No. options

Average exercise

price

Average expiry

Paolo Ceretti CEO 750,000 1.318 5 0 0 0 0 750,000 1.318 5

Paolo Ceretti CEO 0 0 0 750,000 1.538 5 0 750,000 1.538 5 Senior managers with strategic responsibilities 985,000 1.318 5 0 0 0 0 985,000 1.318 5 Senior managers with strategic responsibilities 0 0 0 500,000 1.413 1.413 0 500,000 1.413 5 Senior managers with strategic responsibilities 0 0 0 485,000 1.538 1.538 0 485,000 1.538 5

Lastly, note that Chief Executive Officer Paolo Ceretti and managers with strategic responsibilities have subscribed to 575,000 and 315,000 warrants respectively. Under the Investment Plan regulations, the DeA Capital 2009-2012 warrants allow holders to purchase, under certain conditions, one new DeA Capital share with a nominal value of EUR 1 for each warrant held, at an exercise price of EUR 1.92. The warrants may be exercised between 1 April 2012 and 30 September 2012.

National tax consolidation scheme: De Agostini Group

DeA Capital S.p.A. has adopted the national tax consolidation scheme of the B&D Group (the group headed by B&D Holding di Marco Drago e C. S.a.p.a.). This option was exercised jointly by each company and the parent company B&D Holding di Marco Drago e C. S.a.p.a. by signing the "Regulation for participation in the national tax consolidation scheme for companies in the De Agostini Group" and providing notification of this option to the tax authorities pursuant to the procedures and terms and conditions set out by law. The option is irrevocable for the three-year period of 2011-2013 unless the requirements for applying the scheme are not met. Information on financial assets and liabilities Financial assets and liabilities, broken down according to the categories set out by IAS 39, are summarised in the table below:

The carrying value of financial instruments such as trade receivables and payables is a good approximation of their fair value.

(EUR thousand)Loans and

receivables Availablefor sale

Amortised

Cost

31.12.2011

Loans and

receivables

Available

for saleAmortised

Cost 31.12.2010CONSOLIDATED ASSETS

Available-for-sale equity investments

-

127.380

127.380

-

211.511 211.511

Available-for-sale funds

-

159.673

159.673

-

98.622 98.622

Other available-for-sale financial assets – non-current portion - 936

936

-

304

304 Loans and receivables 1.632

1.632

996 Other non-current assets 25.729

-

25.729

-

- -

Trade receivables

6.070

-

6.070

2.658

- 2.658

Available-for-sale financial assets – current portion - 13.075

13.075

-

15.038

15.038 Financial receivables 1

-

1

1.682

- 1.682

CONSOLIDATED LIABILITIES

Non-current financial liabilities 160.020

160.020

119.839 119.839

Trade payables 10.322

10.322

3.165 3.165

Payables to staff and social security organisations 7.497

7.497

2.027 2.027

Short-term financial payables 3.911

3.911

4.821 4.821


138

Information on the “Fair value hierarchy” IFRS 7 stipulates that financial instruments reported at fair value should be classified based on a hierarchy that reflects the importance and quality of the inputs used in calculating fair value. Three levels have been determined: • Level 1: the fair value of instruments classified at this level is calculated based on the (unadjusted) quoted prices recorded on an active market for the assets or liabilities being valued • Level 2: the fair value of instruments classified at this level is calculated using valuation techniques that use directly or indirectly observable market parameters other than the quoted price of the financial instruments as inputs • Level 3: the fair value of instruments classified at this level is calculated using valuation techniques that do not use observable market parameters as inputs

The table below shows assets valued at fair value by hierarchical level at 31 December 2011:

For level 3, a reconciliation of the opening and closing balances is shown in the table below. Income and expenses posted to the income statement or shareholders’ equity, and purchases and sales made during 2011 are identified separately.

Please see the analysis of the sensitivity of the key financial instruments’ fair values to changes in the significant input parameters that cannot be observed on the market, which is shown in the relevant sections of this document.

(EUR thousand) Level 1 Level 2 Level 3 Total

Available-for-sale equity investments 127.090 290 127.380

Available-for-sale funds

10.862 148.811 159.673

Other available-for-sale financial assets – non-current portion

936 936

Available-for-sale financial assets – current portion

13.075 13.075

Total assets

23.937 275.901 1.226 301.064

(Dati in migliaia di Euro)Balance

1.1.2011Trasfer to

Livel 2

Increase (capital

call)

Decreases (Capital

Distribution)

Change inthe basis of

consolidation

Impairment

and related exchange

effect

Fair Value adjustment

Fair Value to

the incomestatement

TranslationEffect

Balance at 30.12.201

Kenan Investments S.A. (Migros) 195.000 (195.000) 0 0 0 0 0 0 0 0

Stepstone Acquisition S.à r.l. 15.080 0 0 0 0 (15.080) 0 0 0

Elixir Pharmaceuticals Inc. 0 0 0 0 0 0 0 0 0 0

Kovio Inc. 114 0 0 0 0 (51) (54) 0 (9) 0

Mobile Access Networks Inc. 1.317 0 0 0 0 0 0 (1.317) 0 0

Other companies 0 0 0 0 290 0 0 0 0 290

Available-for-sale equity investments 211.511 (195.000) 0 0 290 (15.131) (54) (1.317) (9) 290Other available-for-sale financial assets – non-current portion

304 179 0 596 (143) 0 0 0 936


139

Main risks and uncertainties to which the parent company and consolidated group companies are exposed As described in the Report on Operations, the DeA Capital Group operates through, and is structured as, two business areas, Private Equity Investment and Alternative Asset Management. The risks set out below consider the characteristics of the market and the operations of parent company DeA Capital S.p.A. and the companies included in the group’s consolidated financial statements, and the main findings of a risk assessment, carried out in 2010, as well as the periodic monitoring conducted partly through the regulatory policies adopted by the group. There could, however, be risks that are currently unidentified or not considered significant that could have an impact on the group's operations. The Group has adopted a modern corporate governance system that provides effective management of the complexities of its operations, and enables both individual companies and the group to achieve their strategic objectives. Furthermore, the assessments conducted by the organisational units and the directors confirm both the non-critical nature of these risks and uncertainties and the financial solidity of the DeA Capital Group. With reference to the specific risks relating to the main Private Equity investments, i.e. Générale de Santé and Migros, please see the respective annual reports, and more specifically Générale de Santé’s Document de référence and Migros’ Annual Report (available on their websites). In particular, the latest Document de référence (sections 4.1 - RISQUES LIES AUX ACTIVITES DU GROUPE and 4.2 - GESTION DES RISQUES) available as of the date of this report, indicates the following as the main risk factors for Générale de Santé: Risks related to company debt (Risques liés à l’endettement de Générale de Santé) Liquidity risks (Risques de liquidité) Interest rate risks (Risques de taux d’intérêt) Risks relating to obtaining financing (Risques liés à l’obtention de financements) Risks relating to commitments contained in leases signed by the group (Risques liés aux

engagements contenus dans les baux commerciaux souscrits par le Groupe) Risks relating to the clinic restructuring and construction programme (Risques liés aux

programmes de restructuration ou de construction majeures de cliniques) Risks relating to the external growth strategy (Risques liés à la stratégie de croissance

externe) Risks relating to changes in prices (Risques liés à l’évolution de la tarification) Risks relating to competition (Risques liés à la compétitivité) Risks relating to the recruitment and retention of staff and practitioners (Risques liés au

recrutement et à la fidélisation du personnel et des praticiens) Risks relating to applicable legislation (Risques liés à la réglementation applicable) Risks of a deterioration in the reputation of Générale de Santé in the event of legal proceedings

being brought against a group facility or practitioner (Risques liés à la dégradation de la réputation de Générale de Santé en cas de mise en jeu de la responsabilité d’un établissement ou d’un praticien du Groupe)

Risks relating to environmental protection legislation (Risques liés à la réglementation relative à la protection de l’environnement)

Risks relating to the adequacy, costs and availability of insurance cover (Risques liés à l’adéquation, aux coûts et à la disponibilité de couverture d’assurance)

Exceptional events and disputes (Faits exceptionnels et litiges) Risks relating to IT suppliers (Risques liés au fournisseur en matière informatique).


140

D. Contextual risks

D.1. Risks relating to general economic conditions The operating performance and financial position of the DeA Capital Group are affected by the various factors that make up the macro-economic environment, including increases or decreases in GDP, investor and consumer confidence, interest rates, inflation, the costs of raw materials and unemployment. The ability to meet medium- to long-term objectives could be affected by general economic performance, which could slow the development of sectors the group has invested in, and at the same time, the business of the investee companies.

D.2. Socio-political events In line with its own strategic growth guidelines, one of the DeA Capital Group’s activities is private equity investment in companies and funds in different jurisdictions and countries around the world, which, in turn, invest in a number of countries and geographical areas. The DeA Capital Group may have invested in foreign countries whose social, political and economic conditions put the achievement of its investment objectives at risk.

D.3. Regulatory changes Many group companies conduct their operations in regulated sectors and markets. Any changes to or developments in the legislative or regulatory framework that affect the costs and revenues structure of investee companies or the tax regime applied, could have negative effects on the group’s financial results, and necessitate changes in the group’s strategy. To combat this risk, the group has established procedures to constantly monitor sector regulation and any changes thereto, in order to seize business opportunities and respond to any changes in the prevailing legislation and regulations in good time.

D.4. Performance of the financial markets The company’s ability to meet its strategic and management objectives could depend on the performance of financial markets. A negative trend on financial markets could have an effect on the private equity sector in general, making investment and divestment transactions more complex, and on the group’s capacity to increase the NAV of investments in particular. The value of investments held directly or indirectly through funds in which the company has invested could be affected by factors such as comparable transactions concluded on the market, sector multiples and market volatility. These factors that cannot be directly controlled by the group are constantly monitored in order to identify appropriate response strategies that involve both the provision of guidance for the management of group companies, and the investment and value enhancement strategy for the assets held.

D.5. Exchange rates Holding investments in currencies other than the euro exposes the group to changes in exchange rates between currencies. The investment in Kenan Investments is managed as a special case, since although it was made in euro, the underlying asset is expressed in Turkish lira. Taking into account the medium-/long-term time horizon of the investment, it is believed that the expected return on the investment is able to absorb any devaluation of the underlying currency, in line with the outlook for the currency.

D.6. Interest rates Ongoing financing operations that are subject to variable interest rates could expose the group to an increase in related financial charges, in the event that the reference interest rates rise significantly. DeA Capital S.p.A. has established appropriate strategies to hedge against the risk of fluctuations in interest rates. Given the partial hedge of the underlying, the company classifies these securities as speculative instruments, even though they are put in place for hedging purposes. E. Strategic risks

E.1. Concentration of the Private Equity investment portfolio The private equity investment strategy adopted by the group includes:


141

- direct investments - indirect investments (in funds)

Within this strategy, the group’s overall profitability could be adversely affected by an unfavourable trend in one or a few investments, if there were insufficient risk diversification, resulting from the excessive concentration of investment in a small number of assets, sectors, countries, currencies or of indirect investments in funds with limited investment targets/types of investment. To combat these risk scenarios, the group pursues an asset allocation strategy intended to create a balanced portfolio with a moderate risk profile, investing in attractive sectors and in companies with an appealing current and future risk/return ratio. Furthermore, the combination of direct and indirect investments, which, by their nature, guarantee a high level of diversification, helps reduce the level of asset concentration.

E.2. Concentration of Alternative Asset Management activities In Alternative Asset Management, in which the group is active through the companies IDeA Alternative Investments (from 1 January 2012 when it was merged into DeA Capital S.p.A.), First Atlantic Real Estate Holding and IFIM, events could arise as a result of excessive concentration that would hinder the achievement of the level of expected returns. These events could be due to: Private equity/absolute return funds




Real estate funds




For each of the risk scenarios outlined above, the group has defined and implemented appropriate strategies that include strategic, operational and management aspects, as well as a system monitoring the level of diversification of Alternative Asset Management activities.

E.3. Key resources (governance/organisation) The success of the DeA Capital Group depends to a large extent on its executive directors and certain key management figures, their ability to efficiently manage the business and the normal activities of the group, as well as knowledge of the market and the professional relationships established. The departure of one or more of these key resources, without a suitable replacement being found, as well as an inability to attract and retain new and qualified resources, could impact growth targets and have a negative effect on the group’s activities and financial results. To mitigate this risk, the group has put in place HR management policies that correspond closely to the needs of the business, and incentive policies that are periodically reviewed, in light of, among other things, the general economic climate and the results achieved by the group.


142

F. Operating risks

F.1. Investment operations Investment operations conducted by the group are subject to the risks typical of private equity activities, such as the accurate valuation of the target company and the nature of the transactions carried out. The group has implemented a structured process of due diligence on target companies, involving the different levels of group management concerned and the careful definition of shareholders’ agreements in order to conclude agreements in line with the investment strategy and the risk profile chosen by the group.

F.2. Compliance with covenants Some investment operations were concluded using financial leverage to invest in target companies. For financing contracts signed by investee companies, specific covenants generally backed by collateral are in place; failure to comply with these could necessitate recapitalisation operations for investee companies and lead to an increase in financial charges relating to debt refinancing. Failure to comply with covenants attached to loans could have negative effects on both the financial situation and operations of investee companies, and on the value of the investment. The group constantly monitors the significant reference parameters for the financial obligations taken on by investee companies, in order to identify any unexpected variance in good time.

F.3. Divestment operations In terms of private equity activities, the group generally invests over a medium-/long-term time horizon, normally three to six years for investments made through the acquisition of direct shareholdings in companies or up to ten years for investments made through funds. Over the investment management period, external situations could arise that might have a significant impact on the operating results of the investee companies, and consequently on the value of the investment itself. Furthermore, in the case of co-investment, guiding the management of an investee company could prove problematic or unfeasible, and it may ultimately prove impossible to dispose of the stakes held owing to lock-up clauses. The divestment strategy could therefore be negatively affected by various factors, some of which cannot be foreseen at the time the investments are made. There is therefore no guarantee that expected earnings will be realised given the risks resulting from the investments made. To combat these risk situations, the group has defined a process to monitor the performance of its investee companies, facilitated by its representation on the management bodies of significant investee companies, with a view to identifying any critical situations in good time.

F.4. Funding risk The income flows expected from the Alternative Asset Management business depend on the capacity of the group’s asset management companies to stabilise/grow their assets under management. In this environment, fund raising activity could be harmed by both external factors, such as the continuation of the global economic crisis or the trend in interest rates, and internal factors, such as bad timing in respect of fund raising activities by the asset management companies or the departure of key managers from the companies. The group has established appropriate risk management strategies in relation to fund raising, with a view to both involving new investors and retaining current investors.


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Significant events after the year-end

Private equity funds – paid calls and distributions

After the end of the year, DeA Capital Investments increased its investment in the IDeA I FoF, IDeA ICF II, IDeA OF I and IDeA EESS funds after making total payments of EUR 4.6 million (EUR 3.7 million, EUR 0.5 million, EUR 0.3 million and EUR 0.1 million respectively). At the same time, it received reimbursements of EUR 0.5 million from IDeA OF I to be used in full to reduce the carrying value of the units. Merger of IDeA AI into the parent company DeA Capital

On 26 July 2011, in order to continue the process of simplifying the shareholder base, corporate governance and investment processes, which began with the partial non-proportional demerger at the beginning of 2011, the Boards of Directors of IDeA AI and DeA Capital S.p.A. approved the merger by incorporation of the subsidiary IDeA AI into DeA Capital S.p.A. The intention behind the operation, which entails the reorganisation of the DeA Capital Group’s corporate structure, is to centralise within the parent company the cash flows from and the determination of strategic guidelines for the alternative asset management business. The Bank of Italy had already given its approval, and the operation took effect on 1 January 2012.


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Further information

Publication of the 2011 financial statements In accordance with the provisions of IAS 10, the parent company authorised the publication of these financial statements within the terms authorised by existing legislation.

Atypical or unusual transactions In 2011 there were no atypical or unusual transactions as defined by Consob Communication 6064293 of 28 July 2006.

Significant non-recurring events and transactions

In 2011, the DeA Group did not undertake any significant non-recurring transactions as defined by the above-mentioned Consob Communication.


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Statement of responsibilities for the consolidated financial statements pursuant to article 154-bis of Legislative Decree 58/98 The undersigned, Paolo Ceretti, as Chief Executive Officer, and Manolo Santilli, as the manager responsible for preparing the accounting statements of DeA Capital S.p.A., hereby certify, pursuant to art. 154-bis, paragraphs 3 and 4 of Legislative Decree 58 of 24 February 1998, that based on the characteristics of the company, the administrative and accounting procedures for preparing the consolidated financial statements of the DeA Capital Group in 2011 were suitable and effectively applied. The assessment as to the suitability of the administrative and accounting procedures for preparing the consolidated financial statements for the year ending 31 December 2011 was based on a process established by DeA Capital S.p.A. in keeping with the Internal Control - Integrated Framework model issued by the Committee of Sponsoring Organisations of the Treadway Commission, which is the generally accepted reference framework at the international level. Note in this regard, that as described in the notes to the annual financial statements, a significant portion of the assets are investments stated at fair value. Fair values were determined by directors based on their best estimate and judgment using the knowledge and evidence available at the time the financial statements were prepared. However, due to objective difficulties in making assessments and the absence of a liquid market, the values assigned to such assets could differ, and in some cases significantly, from those that could be obtained when the assets are sold. The undersigned further certify that the consolidated financial statements to 31 December 2011: - correspond to the companies' accounting records - have been prepared in compliance with the International Financial Reporting Standards adopted by the European Union, and the measures issued to implement art. 9 of Legislative Decree 38/2005 - to the best of their knowledge, provide a true and fair view of the operating performance and financial position of the issuer and the group of companies included in the basis of consolidation The report on operations contains a reliable analysis of operating performance and results and of the position of the issuer and all companies included in the basis of consolidation, together with a description of the main risks and uncertainties to which they are exposed. 12 March 2012 Paolo Ceretti Chief Executive Officer Manolo Santilli Manager responsible for preparing the company’s accounts


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Information pursuant to art. 149-duodecies of the Consob Issuer Regulations The table below was prepared in accordance with art. 149-duodecies of the Consob Issuer Regulations and reports the fees for 2011 for auditing and other services provided by the independent auditors and entities belonging to the independent auditors’ network. The fees reported below do not include VAT and out-of-pocket expenses.

(EUR thousand) Company providing the service Beneficiary

Compensationfor 2011

Audit

KPMG S.p.A. DeA Capital S.p.A. 92KPMG Audit S.à.r.l. DeA Capital Investments SA 36KPMG S.p.A. FARE Holding S.p.A. 36KPMG S.p.A. FARE S.p.A. 22KPMG S.p.A. FAI S.r.l. 10KPMG S.p.A. FARE NPL S.p.A. 8KPMG S.p.A. IDeA Alternative Investments SpA 130KPMG S.p.A. IDeA Capital Funds SGR 14KPMG S.p.A. IDeA SIM 13

Attestation

(1) KPMG S.p.A. DeA Capital S.p.A. 7

KPMG S.p.A. FARE Holding S.p.A. 2KPMG S.p.A. FARE S.p.A. 2KPMG S.p.A. FAI S.r.l. 1KPMG S.p.A. IDeA Alternative Investments SpA 2KPMG S.p.A. IDeA Capital Funds SGR 2KPMG S.p.A. IDeA SIM 2

Other services

KPMG S.p.A. DeA Capital S.p.A. 0KPMG S.p.A. FARE S.p.A. 1

Total 380

1) 1) Single model subscription/770


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Annual Financial Statements for the year ending 31 December 2011


148

Annual financial statements for DeA Capital S.p.A. for the period 1 January to 31 December 2011

Balance Sheet Income Statement Statement of Comprehensive Income Cash Flow Statement Statement of Changes in Shareholders’ Equity Notes to the accounts


149

(in Euro) Note 31.12.2011 31.12.2010 ASSETS Non-current assets Intangible and tangible assets Intangible assets 1a 7,656 5,629 Tangible assets 1b 86,848 158,969 Total intangible and tangible assets 94,504 164,598 Investments

Subsidiaries and joint ventures 2a 717,130,237 765,199,369 Associates 2b 1,000,000 Available-for-sale investments 2c 1 1,431,230 Available-for-sale funds 2d 12,234,007 12,977,513

Loans to subsidiaries 2e 37,307,101 0

Total Investments 767,671,346 779,608,112 Other non-current assets Deferred tax assets 3a 0 0 Other non-current assets 3b 0 0 Total other non-current assets 0 0 Total non-current assets 767,765,850 779,772,710 Current assets Trade receivables 4a 217,392 150,541 Available-for-sale financial assets 4b 5,296,954 15,037,722

Financial receivables 4c 2,879,872 0

Financial receivables (pass throught arrangement) 0 634,750 Tax receivables from Parent companies 4d 5,928,777 4,064,725

Other tax receivables 4e 1,810,310 1,759,463

Other receivables 4f 97,133 116,109 Cash and cash equivalents 4g 29,056,753 54,234,322 Total current assets 45,287,191 75,997,632 Total current assets 45,287,191 75,997,632 Held-for-sale assets 0 0 TOTAL ASSETS 813,053,041 855,770,342 SHAREHOLDERS' EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Share capital 5a 280,696,984 294,013,402 Share premium reserve 5b 388,361,873 395,613,265 Legal reserve 5c 61,322,420 61,322,420 Fair Value reserve 5d -1,654,899 -8,594,317 Other reserves 5e 1,409,199 726,307 Retained earnings (losses) 5f 15,989,158 0 Profit/(loss) for the year 5g -32,085,746 15,989,158 Shareholders' equity 714,038,989 759,070,235 LIABILITIES Non-current liabilities Deferred tax liabilities 3a 0 0 Provisions for employee termination benefits 6a 192,487 193,076 Long term financial loans 6b 93,008,005 90,621,354 Total non-current liabilities 93,200,492 90,814,430 Current liabilities Trade payables 7a 768,680 986,394 Payables to staff and social security organisations 7b 956,225 1,007,040 Current tax payables 5,826 4,911 Other tax payables 7c 158,820 175,930 Other payables 13,407 31,547 Short term financial loans 7d 3,910,602 3,679,855 Total current liabilities 5,813,560 5,885,677 Held-for-sale liabilities 0 0 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 813,053,041 855,770,342



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Income statement - Parent Company

(in EUR) Notes 2011 2010

Capital gains from subsidiaries 0 0

Dividends from subsidiaries and joint ventures and other income 8a 67,562,703 29,328,800

Losses on disposals of available-for-sale funds 8a (142,397) 0

Capital gains from available-for-sale funds and from disposals 8a 2,106,325 553,574

Impairment of equity investments in subsidiaries and joint ventures 8a (93,301,094) (4,006,280)

Impairment of equity investments in other companies – available for sale 8a (42,841) (50,659)

Impairment of available-for-sale funds 8a (846,351) (1,131,005)

Service revenues 8b 295,014 516,647

Other revenues and income 8c 177,155 121,913

Personnel costs 9a (5,083,899) (3,268,826)

Service costs 9b (3,090,294) (3,038,525)

Depreciation, amortisation and write-downs 9c (84,693) (154,436)

Other charges 9d (387,664) (10,244)

Financial income 10a 1,844,889 1,384,249

Financial charges 10b (4,341,057) (6, 251,938)

PROFIT/(LOSS) BEFORE TAXES (35,085,746) 15,989,158

Current income tax 11a 2,839,218 1,759,281

Deferred income tax 11b 409,240 236,607

PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS (32,085,746) 15,989,158


NET PROFIT/(LOSS) FOR THE YEAR (32,085,746) 15,989,158

Earnings (loss) per share, base 12 (0.11) 0.06

Earnings (loss) per share, diluted 12 (0.11) 0.06



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Statement of Comprehensive Income (Statement of Performance – IAS 1) Comprehensive income or the Statement of Performance (IAS 1), in which performance for the year is reported including results posted directly to shareholders' equity, reflects a net negative balance of approximately EUR 25,146 thousand compared with a net negative balance of around EUR 13,161 thousand in 2010. This statement provides an overview of the performance of the company and shows the actual result of the company’s activities, as explained in the Report on Operations and the notes to the financial statements.

Statement of Comprehensive Income -

(in EUR) Note 31.12.2011 31.12.2010

Profit/(loss) for the year (A)

(32.085.746) 15.989.158

Gains/(losses) from recalculation of available-for-sale financial assets 5d 6.939.417 (29.150.226)Total other profit/(loss), net of tax effect (B) (B) 5d 6.939.417 (29.150.226)Total comprehensive profit/(loss) for the year (A)+(B) (25.146.329) (13.161.068)


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Cash flow statement - Parent Company - Direct method

(EUR thousand) 2011 2010

CASH FLOW from operations

Investments in companies and funds (27,216) (4,934)

Proceeds from the sale of investments 1,257 0

Capital reimbursements by funds 1,067 360

Interest received 861 504

Interest received - intercompany 138 0

Interest paid (2,919) (3,653)

Interest paid - intercompany 0 0

Cash distribution from investments 1,480 345

Realised gains (losses) on exchange rate derivatives (792) (1,041)

Exchange gains (losses) (11) 0

Taxes paid (237) 0

Taxes refunded 1,162 1,095

Dividends received 63,500 30,182

Revenues for services 0 0

Revenues for services - intercompany 488 80

Operating expenses - intercompany 0 0

Operating expenses – cash movements 0 0

Operating expenses (7,727) (5,641)

Net cash flow from operations 31,051 17,297

CASH FLOW from investments

Acquisition of property, plant and equipment (3) (132)

Sale of property, plant and equipment 1 0

Acquisition of intangible assets (9) (8)

Net cash flow from investments (11) (140)

CASH FLOW from financial assets

Purchase of financial assets 0 0

Sale of financial assets 10,000 (388)

Share capital issued 0 0

Share capital issued – Stock Option Plan 0 0

Own shares purchased (26,411) (1,093)

Own shares sold 0 0

Warrants 0 0

Bank loan repayments 0 20,000

Bank loans 0 0

Short-term loans - intercompany (2,500) 0

Medium-to-long-term loans - intercompany (37,307) 0

Increases in equity investments 0 0

Net cash flow from financial assets (56,218) (21,481)

CHANGE IN CASH AND CASH EQUIVALENTS (25,178) (4,342)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 54,236 58,560

Initial cash and cash equivalents of companies merged in the period 0 0

Initial cash and cash equivalents of assets existing at beginning of period 54,236 58,560

EXCHANGE EFFECT OF CASH AND CASH EQUIVALENTS IN FOREIGN CURRENCY 0 0


Held-for-sale assets 0 0



153

Statement of Changes in the Shareholders' Equity of the Parent Company, DeA Capital S.p.A.

EUR thousand Share

capital

Share Premium

reserve

Legal reserve

Fair Value reserve

Stock option

reserve

reserve for sale

of option rights

Other reserves

Profit/Loss Carried forward

Profit/ (Loss)

Result from held-for-sale assets

Total

Total at 31.12.2009 289.021 395.881 61.322 20.556 1.128 413 7.386 0 (1.798) 0 773.909Allocation of net profit 0 (1.798) 0 0 0 0 0 0 1.798 0 0 Cost of stock options 0 0 0 0 564 0 0 0 0 0 564Purchase of own shares

(944) (149) 0 0 0 0 0 0 0 0 (1.093)

Shares transferred for FARE Holding acquisition

5.936 1.680 0 0 0 0 (7.386) 0 0 0 230

Stock Option Plan2007-2013: reversal 0 0 0 0 (1.379) 0 0 0 0 0 (1.379)Total comprehensive profit/(loss) for 2010

0 0 0 (29.150) 0 0 0 0 15.989 0 (13.161)

Total at 31.12.2010 294.013 395.614 61.322 (8.594) 313 413 0 0 15.989 0 759.070Allocation of net profit

0 0 0 0 0 0 15.989 (15.989) 0 0

Cost of stock options 0 0 0 0 683 0 0 0 0 0 683Purchase of own shares

(18.123) (8.288) 0 0 0 0 0 0 0 0 (26.411)

Shares transferred for IDeA AI acquisition

4.807 1.036 0 0 0 0 0 0 0 0 5.843

Total comprehensive profit/(loss) for 2011

0 0 0 6.939 0 0 0 0 (32.086) 0 (25.147)

Total at 31.12.2011 280.697 388.362 61.322 (1.655) 996 413 0 15.989 (32.086) 0 714.038


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Notes to the accounts Annual Financial Statements for the Year Ending 31 December 2011


155

A. Structure and content of the financial statements

DeA Capital S.p.A. (the company or the parent company or DeA Capital) is a stock company with its registered office in Via Borgonuovo 24, Milan. The financial statements were prepared in accordance with the general principles of IAS 1, specifically: - accruals principle: the effect of events and transactions is recorded when they occur, and not when payment is made or received - going concern principle: the financial statements are prepared under the assumption that business operations will continue in the near future. In this regard, the directors have evaluated this assumption with particular scrutiny in light of the current economic and financial crisis. As indicated in the section "Uncertainties and the management of financial risks" in the Report on Operations, the directors believe that the risks and uncertainties described therein are not critical in nature, confirming the financial solidity of the parent company, DeA Capital S.p.A. - materiality: when reporting operating events in accounting entries, preference is given to the principle of economic substance over form - comparative information: the financial statements must show comparative information for the previous period The DeA Capital financial statements consist of the balance sheet, the income statement, the statement of comprehensive income (Statement of Performance - IAS 1), the cash flow statement, the statement of changes in shareholders’ equity and the notes to the financial statements. The balance sheet provides a breakdown of current and non-current assets and liabilities with separate reporting for those resulting from discontinued or held-for-sale operations. In the income statement, the company has adopted the nature of expense method, whereby costs and revenues are classified according to type. The cash flow statement is prepared using the "direct method". Unless otherwise indicated, all tables and figures included in these notes to the financial statements are reported in EUR thousand.

As the parent company, DeA Capital S.p.A. has also prepared the consolidated financial statements for the DeA Capital Group to 31 December 2011.

In addition to the figures at 31 December 2011, the financial statement formats used also provide comparable figures for 31 December 2010. The publication of the draft financial statements for the period ending 31 December 2011 was authorised by resolution of the Board of Directors dated 12 March 2012.

Statement of compliance with accounting standards

The financial statements for the year ending 31 December 2011 (2011 financial statements) have been prepared in accordance with the International Accounting Standards adopted by the European Union and approved by the date the financial statements were prepared (International Accounting Standards, or individually IAS/IFRS, or collectively IFRS (International Financial Reporting Standards)). "IFRS" also means all interpretations of the International Financial Reporting Interpretations Committee (IFRIC), including those previously issued by the Standing Interpretations Committee (SIC), and approved by the European Union.


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The financial statements were prepared with a focus on clarity, and provide a true and fair view of the balance sheet, financial situation, income statement and cash flows for the period. Accounting standards, amendments and interpretations applied for the first time

The IASB-approved international accounting standards and interpretations authorised for adoption in Europe that were applied for the first time from 1 January 2011 are detailed below. None had any significant impact on the annual financial statements for the year ending 31 December 2011. The group did not apply any IFRS in advance. Accounting standards, amendments and interpretations applied as of 1 January 2011 The company applied the accounting standards, amendments and interpretations below for the first time from 1 January 2011:

Amendments to IAS 24 (Related-party disclosures)

On 4 November 2009, the IASB published a revised version of IAS 24 (Related parties), which replaced the current version of IAS 24. The document simplifies disclosure requirements on related parties for companies in which a government entity is a controlling shareholder or exercises significant influence or joint control, and removes certain application-related difficulties resulting from the previous definition of related parties. Furthermore, the revised definition of related parties contained in the amended version of IAS 24:

makes the application of disclosure requirements in the financial statements of related parties symmetrical (i.e. if A is related to B for the purposes of the financial statements of B, then B must also be considered a related party of A in the financial statements of A)

clarifies that related party disclosures also apply to transactions entered into with the subsidiaries of associates and joint ventures, and not just the associate or joint venture

equates the position of individuals to that of companies for the purposes of identifying the relationship

also requires disclosure on commitments received and granted to related parties

The adoption of this amendment had no effect on the valuation of items in the financial statements and had a limited impact on the disclosure of related-party transactions. Improvements to International Financial Reporting Standards On 6 May 2010, the IASB issued the latest series of documents detailing the minor changes to be made to existing accounting standards (Improvements to IFRS). The document contains a series of improvements to seven International Accounting Standards and Interpretations (IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS 34 and IFRIC 13). They have not yet been ratified by the European Union.

The changes that could potentially have a significant impact relate to:

IFRS 3 (Business combinations): currently, in application of the new IFRS 3, there is the option to value all the components of the minority interests at their fair value or in proportion to the minority stake in the identifiable net assets


157

of the acquisition. This option has now been restricted to include only those components representative of instruments that currently confer on minority shareholders rights equivalent to those pertaining to ordinary shares, particularly as regards obtaining a pro-rata portion of net assets in the event of liquidation. All other components relating to minority interests (such as privileged shares or warrants issued by the acquired company to minorities) must be stated at fair value, unless the IFRS specify a different valuation criterion. In addition, the document clarifies that in the case of stock option plans acquired or voluntarily replaced following business combinations, such plans must be (re)calculated at the date of acquisition in accordance with IFRS 2. It also specifies that the current requirement of IFRS 2, namely that the value of the stock option plan acquired following a business combination must be allocated partly to "purchase costs" and partly to "services to be provided in the future", applies to all allocations regardless of whether or not they have been voluntarily replaced as a result of the business combination. IFRS 7 (Financial instruments): Disclosures: the amendment emphasises the interaction between the qualitative and quantitative supplementary information required by the standard on the nature and extent of the risks inherent in financial instruments. This should help users of the financial statements to link the information presented and should constitute a general description of the nature and scale of the risks deriving from financial instruments. IAS 1 (Presentation of financial statements): the amendment requires that a reconciliation of changes to any component of shareholders' equity must be presented either in the notes to the financial statements or in the financial statements themselves. IAS 34 (Interim financial reporting): the information relating to significant events and transactions to be reported in the interim financial statements must represent an update on the information provided in the annual financial statements. It also specifies the circumstances in which it is mandatory to disclose information relating to financial instruments and their fair value in the interim financial statements.

The adoption of the standards and interpretations noted above had no material impact on the valuation of the company's assets, liabilities, costs and revenues.

Accounting standards, amendments and interpretations applied from 1 January 2011 that were not relevant to the company’s financial statements The following accounting principles, amendments and interpretations, applicable with effect from 1 January 2011, did not apply to the company, but could have accounting effects on future transactions or agreements. For additional details on these, see the notes to the financial statements to 31 December 2010.

Amendments to IFRIC 14 (IAS 19 - Limit on a defined benefit asset, minimum funding requirements and their interaction)

IFRIC 19 (Extinguishing financial liabilities with equity instruments)

Amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards)


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Future accounting standards, amendments and interpretations

Accounting standards, amendments and interpretations not yet approved for adoption in the European Union as of 29 February 2012 The International Accounting Standards, interpretations and changes to existing IASB-approved accounting standards and interpretations that had not been ratified for adoption in the European Union as of 29 February 2012 are as follows: IFRS 9 (Financial instruments)

On 12 November 2009, the IASB issued the first part of IFRS 9, which only amends the requirements for classifying and valuing the financial assets that are currently specified in IAS 39; once completed, it will fully replace IAS 39. Financial liabilities do not fall within the scope of IFRS 9, since the IASB intends to go into greater detail on aspects related to the inclusion of own credit risk in the fair value measurement of financial liabilities. Thus, financial liabilities continue to fall within the scope of IAS 39. The endorsement process for IFRS 9 is currently on hold, and this standard is not applicable in the EU, ahead of the European Commission's full assessment of the plan to completely replace IAS 39.

Changes to IFRS 7 (Financial instruments) Disclosures

On 7 October 2010, the IASB published the amendment to IFRS 7 (Disclosures – transfers of financial assets), which requires further information on transfers of financial assets. The changes to IFRS 7 aim to promote greater transparency in relation to the risks associated with transactions where, when a financial asset is transferred, the transferring company continues to be exposed, within certain limits, to risks associated with the derecognised financial asset (known as "continuing involvement"). Additional information is also required on significant transfers of financial assets at particular times (e.g. at the end of an accounting period). The amendments to IFRS 7 must be applied in the financial statements for periods starting from 1 July 2011 onwards. Amendments to IAS 12 (Income taxes)

On 20 December 2010, the IASB published a number of changes to IAS 12 (Income taxes), which now stipulates that the entity should assess whether it expects to recover the deferred tax through the use or sale of the asset. This assessment can be difficult and subjective, e.g. if investment property is recorded at fair value, as permitted by IAS 40 (Investment property). To provide a simplified approach, the amendments introduce the presumption, when calculating deferred taxes, that the carrying amount of the underlying asset will be recovered entirely by sale, unless there is clear evidence that it can be recovered through use. The presumption applies not only to investment property but also to assets such as plant and machinery or intangible assets recorded or revalued at fair value. As a result of these changes, the document SIC 21 (Income Taxes - recovery of revalued, non-depreciable assets) was withdrawn at the same time. The entire content of this document is now covered in IAS 12. The amendments to IAS 12, which are awaiting ratification by the European Commission, must be applied from 1 January 2012. Amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards): Severe hyperinflation and removal of fixed assets for first-time adopters


159

On 20 December 2010, the IASB published two amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards). The first amendment introduced the option for entities that are transitioning to IFRS to use the same simplified rules as those permitted to entities that made the transition to international accounting standards in 2005. The second amendment grants an exemption from the retrospective application of IFRS at first-time adoption to entities that are presenting financial statements in accordance with IFRS for the first time, after having been unable to present them due to hyperinflation, allowing such entities to use fair value as a replacement for cost for all assets and liabilities presented. The amendments to IFRS 1, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2011 onwards.




power over the investee company exposure to or the right to variable returns from its involvement with the investee

company the ability to use that power over the investee to affect the amount of the investor's

returns The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU. IFRS 11 (Joint arrangements)


joint operations, whereby the parties to the arrangement acquire rights to certain

assets and assume obligations for certain liabilities

joint ventures, whereby the parties have rights to the net value of a set of jointly controlled assets and liabilities

In the first case, the investor recognises the assets and liabilities acquired (along with the associated income and expense) according to the IAS/IFRS standards governing the individual elements; in the second, the pro-rata interest in the joint venture is recognised using the equity method. The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU.


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IFRS 12 (Disclosure of interests in other entities)

On 12 May 2011, the IASB published the accounting standard IFRS 12 (Disclosure of interests in other entities) regarding the information to be provided in the financial statements on interests in other entities, including subsidiaries, associates and joint ventures. This information must enable users of the financial statements to understand the nature of the risks associated with the investments in strategic shareholdings that will form part of the company's assets over the long term. The information must also indicate the effects of these investments on financial position, financial performance and cash flows. The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU. IFRS 13 (Fair value measurement)

On 12 May 2011, the IASB published the accounting standard IFRS 13 (Fair value measurement), which provides a single definition of the concept of fair value and a framework for how it should be applied when another IFRS permits or requires its use. More specifically, IFRS 13 sets out a clear definition of fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (or exit price). This definition highlights that fair value is a measure that must be based on the market and not the valuing entity. In other terms, the measurement process must take into account the assumptions that market participants would use when pricing the asset or liability in current conditions, including assumptions on risk. As a consequence, the intention to hold an asset or cancel or fail to meet a liability is of no relevance in measuring fair value. The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU.

IAS 1 - Presentation of items of other comprehensive income

On 16 June 2011, the IASB issued amendments to IAS 1 - Presentation of items of other comprehensive income,, which determine the grouping and components of the statement of comprehensive income according to whether or not they can be reclassified to the income statement.

The amendments to IAS 1, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2012 onwards.


On 16 June 2011, the IASB issued amendments to IAS 19 (Employee benefits) that introduce the obligation to recognise actuarial gains and losses in the statement of comprehensive income, removing the option of using the "corridor" method and requiring the recognition of actuarial gains and losses resulting from the revaluation of liabilities and assets in the statement of comprehensive income. The amendments to IAS 19, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2012 onwards.


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We do not anticipate that any adoption of the standards and interpretations noted above will have a material impact on the valuation of the company's assets, liabilities, costs and revenues.

B. Most important accounting principles and valuation criteria

The accounting principles and valuation criteria adopted for the 2011 annual financial statements of DeA Capital are the same as those used in drawing up the consolidated financial statements, with the exception of specific principles and criteria relating to the consolidated financial statements and methods for valuing subsidiaries and joint ventures, as specified below.

Investments in subsidiaries and joint ventures are classified as available-for-sale assets and are measured at fair value with appropriate reserves of shareholders’ equity as a balancing entry.

Current and non-current assets and liabilities

An asset is considered current if it meets at least one of the following conditions:

it is expected to be converted during the company's normal operating cycle. The "company's operating cycle" means the period from the acquisition of an asset to its conversion to cash and cash equivalents. When the company's operating cycle cannot be clearly identified, its duration is assumed to be twelve months

it is held mainly for trading purposes its conversion is expected to occur within twelve months following the end of the

financial year it consists of cash and cash equivalents which have no restrictions that would

limit its use in the twelve months following the end of the financial year All other assets are carefully analysed to separate the "current" portion from the "non-current" portion. Furthermore, deferred tax assets are recorded under non-current components. A liability is considered current if it meets at least one of the following conditions:

it is expected to be settled during the company's normal operating cycle it is held mainly for trading purposes its settlement is expected to occur within twelve months following the end of the

financial year the company does not have an unconditional right to defer payment of the

liability for at least twelve months following the end of the financial year All other liabilities are carefully analysed to separate the "current" portion from the "non-current" portion. Furthermore, deferred tax liabilities are recorded under non-current components.

Intangible assets

Intangible assets are those assets with no identifiable physical form that are controlled by the company and produce future economic benefits. They are recorded under assets when it is likely that their use will generate future economic benefits and when their cost can be determined reliably. The above assets are recorded at purchase cost, or at production cost if they are generated internally.


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The purchase cost is represented by the fair value of the price paid to acquire the asset and by all other direct costs incurred to prepare the asset for use.

The carrying value of intangible assets is maintained in the financial statements to the extent that there is evidence that this value can be recovered through use or if it is likely that these assets will generate future economic benefits.

The useful life of intangible assets is assessed as finite or indefinite. Intangible assets with an indefinite useful life are tested to check that their value is still appropriate whenever there are indications of possible impairment, as required by IAS 36 (Impairment of assets). Intangible assets with an indefinite life are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to check that the underlying conditions for the classification continue to apply.

Intangible assets with a finite useful life are amortised on a straight-line basis over their expected useful life. The useful life of these intangible assets is tested to check that their value is still appropriate whenever there are indications of possible impairment.

Tangible assets

Tangible assets are recorded at purchase price or production cost adjusted for accumulated depreciation and any impairment.

Their cost includes ancillary costs and direct and indirect costs incurred at the time of purchase necessary to make the asset usable. The purchase cost is represented by the fair value of the price paid to acquire the asset and by all other direct costs incurred to prepare the asset for use. Tangible assets are depreciated on a straight-line basis over their remaining useful life, using the depreciation rates indicated in the notes on the item relating to similar groups of assets. If factors are discovered that lead the company to believe that it may be difficult to recover the net carrying value, an impairment test is performed. If the reasons for the impairment cease to exist, the carrying value of the asset is increased to its recoverable amount.

Impairment Impairment always occurs when the carrying value of an asset is greater than its recoverable value. On each reporting date, the company determines whether there are any indications that an asset may be impaired. If such indications exist, the recoverable value of the asset is estimated (impairment test) and any write-down is recorded. The recoverable value of an asset is the higher of its fair value less costs to sell the asset and its value in use. IAS 36 provides instructions on determining fair value less costs to sell an asset, as follows:

if there is a binding sales agreement, the asset's fair value is the negotiated price if there is no agreement, but the asset is marketed in an active market, the fair value is

the current bid price (thus, the exact price on the value date and not the average price) if no prices can be found in active markets, fair value must be determined based on

valuation methods that incorporate the best information available including any recent transactions involving the same asset, after verifying that there were no significant changes in the economic environment between the date of the transactions under consideration and the valuation date

IAS 36 defines value in use as the present value of future cash flows that an asset is projected to produce. The estimate of the value in use must include the items listed below:

an estimate of future cash flows that the company expects to derive from the asset


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expectations of potential changes in value and the timing of such cash flows the time value of money other factors such as the volatility of the asset's value and the lack of a liquid market

for it For more information on determining value in use, please see Appendix A of IAS 36. However, the main elements for accurately estimating the value in use are an appropriate calculation of projected cash flows (for which, the investee company's business plan is essential) and their timing, as well as the application of the right discount rate that accounts for both the present value of money and the specific risk factors for the asset to be valued. In all cases, when calculating the value it is important to:

base cash flow projections on reasonable and sustainable assumptions that provide the best estimate of the economic conditions that are likely to exist over the remaining useful life of the asset

base cash flow projections on the most recent budget/plan approved by the investee company, which, however, must exclude any future inflows or outflows of cash that are expected to come from the future restructuring, improvement or optimisation of operating performance. Projections based on these budgets/plans must cover a maximum period of five years unless a longer period of time can be justified

estimate higher cash flow projections for the period covered by the most recent budgets/plans by extrapolating projections based on the budgets/plans taken into consideration, and using a stable or declining growth rate for subsequent years unless a rising rate can be justified. This growth rate must not exceed the average long-term growth rate for production in the country or countries in which the investee company operates or for markets in which the asset used is placed unless a higher rate can be justified

The assumptions used to determine cash flow projections must be reasonable, and based partly on an analysis of the factors that generated differences between projections of past and current cash flows. In addition, the assumptions used to determine current cash flow projections must be checked to ensure that they are consistent with actual past results, unless in the meantime changes have occurred in the investee company's business model or in the economic environment in which it operates that justify changes vis-a-vis the past.

Financial assets

Based on the classification of financial assets required by IAS 39, the company classified its financial assets at the time of the transition to International Accounting Standards, and subsequently when individual financial assets were acquired. Minority interests and investments in funds, which constitute the main, predominant area of the parent company's operations, are classified under available-for-sale assets, which are recorded at fair value with a balancing item in shareholders' equity. Fair value is the payment for which an asset could be exchanged in a free transaction between knowledgeable and independent parties. In the case of securities traded in active regulated markets, fair value is determined based on the bid price recorded on the last trading day of the related accounting period. In the case of assets not listed on active markets, such as the company’s direct investments in companies and its investments in venture capital funds, the fair value reported in the financial statements is determined by the directors based on their best estimate and judgment, using the knowledge and evidence available when the financial statements are prepared.

In these cases, the company acts in accordance with the provisions of the IAS. In particular, IAS 39 specifies that:


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if there are recent transactions related to the same financial instrument, these may be used to determine fair value after verifying that there have been no significant changes in the economic environment between the date of the transactions being considered and the valuation date

if there are transactions involving similar financial instruments, these may be used to determine fair value after verifying the similarity (as a function of the type of business, size, geographic market, etc.) between the instrument for which transactions have been found and the instrument to be valued

if no prices can be found in active markets, fair value must be determined using valuation models that account for all factors that market participants would consider in setting a price

However, due to objective difficulties in making assessments and the lack of a liquid market, the values assigned to such assets could differ, and in some cases significantly, from those that could be obtained when the assets are sold.

Direct investments in companies that are neither subsidiaries nor associates and in venture capital funds are classified as available-for-sale financial assets, which are initially reported at fair value on the date of the original posting. These assets are measured at fair value when all interim and full-year financial statements are prepared.

Gains and losses from fair value measurement are posted to a special shareholders' equity reserve called the "fair value reserve" until the investment is sold or otherwise disposed of, or until impairment occurs, in which cases the gain or loss previously recorded in the fair value reserve is posted to the income statement for the period.

At each reporting date, a test is performed as to the existence of objective evidence of impairment following one or more events that have occurred after the initial recording of the asset, and that this event (or events) has an impact on the estimated cash flow from the financial asset. For equity instruments, a significant or prolonged reduction in fair value below their cost is considered to be objective evidence of impairment. Although International Accounting Standards introduced an important reference to quantitative parameters that must be adhered to, they do not govern quantitative limits to determine when a loss is significant or prolonged. DeA Capital S.p.A. has adopted an accounting policy that defines these parameters. In particular, "significant" means there has been an objective reduction in value when fair value is more than 35% below its historical cost. In this case, impairment is recorded in the income statement without further analysis. The duration of the reduction in value is deemed to be prolonged when the reduction of fair value below historical cost continues for a period of over 24 months. After exceeding 24 months, impairment is recorded in the income statement without further analysis. Derivatives

Derivatives contracts are recorded in the balance sheet at fair value. Fair value changes are reported differently depending on their designation (hedging or speculative) and the nature of the risk hedged (fair value hedge or cash flow hedge).

For contracts designated for hedging purposes, the company documents this relationship when the hedge is established. The documentation incorporates the identification of the hedging instrument, the item or transaction hedged, the nature of the risk hedged, the criteria used to


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ascertain the effectiveness of the hedging instrument as well as the risk. The hedge is considered effective when the projected change in fair value or in the cash flows of the hedged instrument is offset by the change in fair value or in the cash flows of the hedging instrument, and the net results fall within the range of 80% to 125%.

If the instruments are not, or cannot be, designated as hedging instruments, they must be considered "speculative"; in this case, fair value changes are posted directly to the income statement.

In the case of fair value hedges, changes in the fair value of the hedging instrument and the hedged instrument are posted to the income statement regardless of the valuation criterion used for the hedged instrument. In the case of cash flow hedges, the portion of the fair value change in the hedging instrument that is recognised as an effective hedge is posted to shareholders' equity, while the portion that is not effective is posted to the income statement.

Receivables and payables

A receivable is first reported at fair value on the date it is agreed. After initial reporting, receivables are valued at amortised cost. Payables that fall due within normal contractual terms are initially posted at fair value and later valued at amortised cost. Held-for-sale assets A non-current asset or disposal group is classified as held for sale if the carrying value will mainly be recovered from its sale or disposal instead of its ongoing use. In order for this to occur, the asset or disposal group must be available for immediate sale in its current condition, and the sale must be highly likely. Assets meeting the criteria to be classified as held-for-sale assets are valued at the lower of carrying value and sales value adjusted for any related costs. Own shares Own shares are not considered financial assets of the company that issued the shares. The purchase and sales value of own shares is recorded as a change to shareholders' equity. No gain or loss is reported in the income statement for the sale, purchase, issue or cancellation of own shares. Fair value reserve

The fair value reserve incorporates fair value changes to entries measured at fair value with a balancing entry in shareholders' equity.

Cash and cash equivalents Cash and cash equivalents include cash at hand, demand deposits and short-term, highly liquid financial investments that are readily convertible to cash and subject to a negligible risk of price variation. Their value is reported at fair value. Provisions for risks and future liabilities If necessary, the company records provisions for risks and future provisions when:

it has a legal or implicit obligation to third parties resulting from a past event it is likely that it will be necessary to use company resources to fulfil the

obligation a reliable estimate can be made of the amount of the obligation


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Provisions are recorded based on the projected value and discounted as necessary to present value if the time value is considerable. Changes in estimates are recognised in the income statement of the period in which the change occurs. Income tax Current income taxes are determined and reported on the basis of a reasonable forecast of tax liability by applying the tax rates in force to taxable income, taking into account any exemptions and tax credits to which the company may be entitled. Deferred tax liabilities are allocated for all temporary differences between the carrying value of the assets and liabilities and the corresponding amount for tax purposes. Deferred tax assets are recorded for all deductible temporary differences and for tax assets and liabilities carried forward to the extent that it is likely there will be sufficient future taxable profit against which the deductible temporary differences and the tax assets and liabilities carried forward can be used. Deferred taxes are classified under non-current assets and liabilities and are determined using tax rates expected to be applicable in the years when the temporary differences will be realised or will expire. The carrying values of deferred tax assets are analysed periodically and reduced if it is not likely that sufficient taxable income will be generated against which the benefits resulting from such deferred assets can be used. Revenues and income Service revenues are recognised at the time the services are rendered based on the progress of the activity on the reporting date. Income from equity investments for dividends or for their full or partial sale is reported when the right to receive payment is determined, with a balancing item (receivable) at the time of the sale or decision to distribute dividends by the entity or appropriate body. Interest is reported using the effective interest rate method. Employee benefits Short-term employee benefits, whether in cash or in kind (meal vouchers) are reported in the income statement in the period when the work is performed. Employee benefits related to participation in a defined benefit plan are determined by an independent actuary using the projected unit credit method. Actuarial gains and losses are posted to the income statement in the period in which they occur using the corridor method to record the gains or losses unless these exceed a certain percentage of the obligation. Employee benefits in respect of participation in a defined contribution plan only relate to those plans under mandatory government administration. The payment of contributions fulfils the company's obligation to its employees. Thus, contributions are costs in the period in which they are payable.

Benefits have been provided in the form of stock options and share-based payments. This applies to all employees eligible for stock option plans. The cost of these transactions is determined with reference to the fair value of the options on the date allocation is made and is


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reported over the period from such date until the expiry date with a balancing entry in shareholders' equity.

The cost of stock options for the company's directors and contributors is determined in the same way.

Warrants Warrants issued by the company, which do not meet the requirements either for being classified as share-based payments to employees pursuant to IFRS 2 or as financial liabilities, are treated as company equity instruments. Earnings per share

In accordance with IAS 33, basic earnings per share is determined as the ratio of net profit for the period attributable to holders of parent company shares to the weighted average number of shares outstanding during the period. Own shares in the portfolio are, of course, not included in this calculation.

Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding for all potential ordinary shares resulting from the potential exercise of assigned stock options, which may therefore result in a diluting effect.

C. Changes in accounting principles and the treatment of errors

Accounting principles are changed from one year to another only if the change is dictated by an accounting standard or if it contributes to providing more reliable information or more complete reporting of the impact of transactions on the company's balance sheet, income statement and cash flow.

Changes in accounting principles are applied retroactively with the impact reflected in shareholders' equity in the first of the periods presented. Comparative reporting is adapted accordingly. The prospective approach is used only when it is not practical to restate comparative reporting. The application of a new or amended accounting standard is recorded as required by the standard itself. If the standard does not specify transition methods, the change is reflected retroactively, or if impractical, prospectively.

If there are significant errors, the same treatment dictated for changes in accounting principles is used. If there are minor errors, corrections are posted to the income statement in the period when the error is discovered.

D. Use of estimates and assumptions in preparing the financial statements

The company's management must make assessments, estimates and assumptions that affect the application of accounting standards and the amounts of assets, liabilities, costs and revenues recorded in the financial statements. Estimates and related assumptions are based on past experience and other factors deemed reasonable in the case concerned; these have been used to estimate the carrying value of assets and liabilities that cannot be easily obtained from other sources.

These estimates and assumptions are reviewed regularly. Any changes resulting from revisions to accounting estimates are recorded in the period when the revision is made if such revisions only affect that period. If the revision affects current and future periods, the change is recorded in the period in which the revision is made and in related future periods.


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Financial statement balances are reported and valued using the valuation criteria described above. At times the application of these criteria involves the use of estimates that may have a significant impact on amounts reported in the financial statements. Estimates and related assumptions are based on past experience and factors deemed reasonable in the case concerned; these are used to estimate the carrying value of assets and liabilities that cannot be easily obtained from other sources. However, since these are estimates, the results obtained should not necessarily be considered definitive. With the understanding that the use of reasonable estimates is an essential part of preparing financial statements, the items where the use of estimates is most prevalent are stated below:

valuation of financial assets not listed in active markets valuation of financial assets listed in active markets but considered illiquid on the

reference market valuation of equity investments

The process described above is made particularly complicated by the unusual levels of volatility in the current macroeconomic and market environment, which affect financial indicators that have a bearing on the above valuations.

An estimate may be adjusted as a result of changes in the circumstances on which it was based, or as a result of new information. Any change in the estimate is applied prospectively and has an impact on the income statement in the period in which the change occurred and potentially on income statements in future periods. As highlighted earlier, a significant proportion of the assets shown in the annual financial statements of DeA Capital S.p.A. is represented by unlisted financial investments. These investments are valued at their fair value, calculated by directors based on their best estimate and judgement using the knowledge and evidence available at the time the financial statements are prepared. However, due to objective difficulties in making assessments and the lack of a liquid market, the values assigned to such assets could differ, and in some cases significantly, from those that could be obtained when the assets are sold.


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Notes to the balance sheet NON-CURRENT ASSETS 1 – Intangible and tangible assets 1a – Intangible assets Changes in intangible assets are shown in the tables below:

(EUR thousand) Historical

cost at 01.01.11

Cum. amort. & write-

downs at 01.01.11

Net carrying value at

01.01.11

Historical cost at

31.12.11

Cum. amort. & write-

downs at 31.12.11


31.12.11Concessions, licences and trademarks 292 (286) 6 300 (292) 8 Total 292 (286) 6 300 (292) 8


01.01.11 Acquisitions Amort.

Balance at 31.12.11

Concessions, licences and trademarks 6 8 6 (8) Total 6 8 6 (8)

The increase in "Concessions, licences and trademarks" relates to the acquisition of new software licences, the cost of which will be amortised over three years. 1b – Tangible assets Changes in tangible assets are shown in the tables below:

(EUR thousand) Historical cost at

01.01.11

Cum. amort. &

write-downs at 01.01.11


01.01.11

Historical cost at

31.12.11

Cum. amort. &

write-downs at 31.12.11


31.12.11

Plant 213 (202) 11 198 (188) 10 Furniture and fixtures 470 (388) 82 470 (442) 28 Computer and office equipment 258 (220) 38 228 (207) 21 Non-depreciable tangible assets 28 0 28 28 0 28 Total 969 (810) 159 924 (837) 87

(EUR thousand) Balance

at 01.01.11

Acquisitions

Disposals (at cost)

Disposals (provision

) Amort.

Balance at 31.12.11

Plant 11 3 (18) 18 (4) 10 Furniture and fixtures 82 0 0 0 (54) 28 Computer and office equipment 38 3 (33) 33 (20) 21 Non-depreciable tangible assets 28 0 0 0 0 28 Total 159 6 (51) 51 (78) 87

Depreciation is calculated on a straight-line basis, based on the estimated useful life of the asset. The depreciation rates used in the financial statements are 20% for specific plant assets, 12% for furniture and furnishings, and 20% for electronic office equipment.


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2 – Financial investments 2a – Investments in subsidiaries and joint ventures Investments in subsidiaries are measured at fair value in accordance with the provisions of IAS 39, whereas investments in joint ventures are valued at cost. For the method of determining fair value, please refer to the relevant paragraphs in the section "Key accounting principles and valuation criteria adopted". Details of the existing investments at 31 December 2011 are shown in the table below:

(EUR thousand) %

shareholding at 31.12.11

Value at 31.12.11

% shareholding

at 31.12.10

Value at 31.12.10

DeA Capital Investments S.A. 100.00% 552,491 100.00% 645,792 FARE Holding S.p.A. 70.00% 80,123 70.00% 62,917 IDeA Alternative Investments S.p.A. 100.00% 62,385 44.36% 56,490 I.F.IM. S.r.l. 58.31% 22,131 0 0 Total 717,130 765,199

I.F.IM. S.r.l. The merger of FARE SGR and FIMIT SGR was completed on 3 October 2011. This created IDeA FIMIT SGR, Italy’s largest real estate asset management company. At the same time as the merger, the other steps for the acquisition of indirect control of IDeA FIMIT SGR by DeA Capital S.p.A. came into effect, namely:

the purchase by DeA Capital S.p.A. from Feidos S.p.A. (Feidos) of a 58.31% stake in IFIM S.r.l. (IFIM), the company that exclusively holds a 17.15% stake, pre-merger, in FIMIT SGR

the acquisition by IFIM of the stake held by the LBREP III Fimit S.a.r.l. fund (LBREP) in FIMIT SGR, equal to 18% (pre-merger) of the company's share capital.

IDeA Alternative Investments S.p.A. With a view to simplifying the shareholder base, corporate governance and investment processes, at the start of 2011 the first step was taken in the reorganisation of IDeA Alternative Investments (IDeA AI), achieved through a partial non-proportional demerger, with a reduction in the share capital of IDeA AI and allocation of Investitori Associati SGR and Wise SGR to the management of Investitori Associati SGR and Wise SGR respectively, in return for the cancellation of the stakes held by those companies in IDeA AI. Following approval by the Bank of Italy and the Italian Competition Authority, the demerger of IDeA AI, effective from 17 January 2011, was completed on 13 January 2011. DeA Capital S.p.A., which previously held 44.36% of the company’s capital, has therefore acquired control of 90.11% of IDeA AI and its assets. These primarily include 100% of IDeA Capital Funds SGR, 65% of Soprarno SGR and 65% of IDeA SIM. Moreover, on 20 January 2011, in order to gain control of the entire share capital of IDEA AI, DeA Capital S.p.A. acquired the remaining 9.89% of the company’s stock held by private


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investors, including directors Lorenzo Pellicioli and Paolo Ceretti, in exchange for 4,806,921 DeA Capital shares, using existing own shares in the portfolio, equal to 1.57% of the capital. As part of the valuations performed for the various transactions mentioned above, the company employed the services of independent external consultants. On 26 July 2011, in order to continue the process of simplifying the shareholder base, corporate governance and investment processes, which began with the partial non-proportional demerger at the beginning of 2011, the Board of Directors of DeA Capital S.p.A. approved the merger by incorporation of the wholly-owned subsidiary IDeA Alternative Investments. The intention behind the operation, which entails the reorganisation of the DeA Capital Group’s corporate structure, is to centralise within the parent company the cash flows from and the determination of strategic guidelines for the alternative asset management business. The Bank of Italy has already given its approval, and the operation took effect on 1 January 2012. Following the above transactions, the changes to the item concerned compared with 31 December 2010 are outlined below: - The value of the stake in FARE Holding was adjusted by EUR 6,017 thousand, mainly as a result of:

the reduction of EUR 206 thousand in the portion of the price consisting of an earn-out payment linked to the expected future performance of the funds managed over the next few years

the increase of EUR 6,223 thousand for the purchase of 70% of the units of the Atlantic 1 and Atlantic 2 funds, which were previously covered by a pass-through arrangement, taking into account the determination of the exchange as a part of the merger between FARE SGR and FIMIT SGR

- the purchase of IFIM's equity investment totalling EUR 22,131 thousand - the increase of the investment in IDeA Alternative Investments of EUR 10,541 thousand including EUR 4,698 thousand from the fair value measurement of IDeA Alternative Investments S.p.A. due to the non-proportional spin-off completed on 13 January 2011 and EUR 5,843 thousand for the purchase of the remaining 9.89% of units held by private shareholders including directors Lorenzo Pellicioli and Paolo Ceretti - the fair value measurement of subsidiaries resulted in a decrease of EUR 4,646 thousand in fair value reserves for IDeA AI and an increase of EUR 11,189 thousand for FARE Holding S.p.A.; impairment of EUR 93,301 thousand was applied for DeA Capital Investments S.A. A list of the investments with the information required under art. 2427 of the Italian Civil Code is shown in the table below:

LIST OF INVESTMENTS IN SUBSIDIARIES AND JOINT VENTURES AT 31.12.11

Company Registered office Currency Share

capital

Consolidated

shareholders’ equity

Consolidated net

profit/(loss) for the year

%

holding

Share of shareholders

' equity (EUR)

Carrying value (EUR)

DeA Capital Investments S.A.

Luxembourg, Luxembourg EUR

515,992,516

522,805,99

2

(43,537,812)

100.00%

522,805,992

552,490,657

First Atlantic Real Estate Holding S.p.A. Milan, Italy EUR 600,000

24,197,758

7,584,231

70.00%

16,938,431

80,123,230 IDeA Alternative Investments S.p.A. Milan, Italy EUR 2,461,500

13,744,000

3,590,305

100.00%

13,744,000

62,385,156

I.F.IM. S.r.l. Milan, Italy EUR 10,000

11,80,529

1,599,560

58.31%

6,519,366

22,131,194

Total

(30,763,716)

560,007,789 717,130,237


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2b - Investments in associates On 28 December 2011, DeA Capital S.p.A. purchased 25% of the share capital of Harvip Investimenti S.p.A. (Harvip) from the subsidiary IDeA FIMIT SGR for a consideration of EUR 1 million. The company manages funds and investment vehicles used to purchase distressed real estate and other investments. Harvip's shareholder structure includes a minority interest of 32.5% in Feidos (a minority shareholder of IFIM) and a 42.5% stake in Harvip Investment Partners BV. 2c – Investments in other companies Investments in other companies consist of direct minority investments in two foreign companies. Changes that took place during the course of the year are shown in the table below:

(EUR thousand) Total

shares

% holding

(fully diluted)

Balance at

01.01.11

Capital increase


Impairment and relative

exch. effects in

income statement

Disposals Translation effect

Balance at 31.12.11

Elixir Pharmaceuticals Inc. 1,602,603 1.30 0

0

0

0

0

0

0

Kovio Inc. 151,909 0.42 114

0

(63)

(51)

0

0

0 Mobile Access Networks Inc. 0 0.00 1,317

0

0

0

(1,317)

0

0

Total 1,431

0

(63)

(51)

(1,317)

0

0

The total value of other equity investments has now been reduced by EUR 1,431 thousand, compared with 31 December 2010, to nearly zero, due mainly to:

- the sale of the stake held in Mobile Access Networks in May 2011 with a positive impact of EUR 539 thousand on the income statement

- impairment (and the related exchange rate effects) of the investment in Kovio Inc.

totalling EUR 51 thousand 2d - Available-for-sale funds This item relates to investments in seven venture capital funds totalling EUR 12,234 thousand compared with EUR 12,977 thousand at the end of 2010, as shown in the table below.


at 01.01.11

Increase (capital

call)

Decrease (capital

distribution)

Impairment and related

exchange effect


Translation effect

Balance at 31.12.11

Total venture capital funds 12,977 0 (1,246)

(818)

1,054

267

12,234

Total funds 12,977 0 (1,246)

(818)

1,054

267

12,234

During the year, the company received capital distributions of EUR 1,246 thousand, which had a positive impact on the income statement of EUR 1,480 thousand.


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The fair value measurement of investments in venture capital funds at 31 December 2011, carried out based on the information and documents received from the funds, as well as other available information, meant that the amount had to be written down along with the related exchange effect by EUR 818 thousand; the significant reduction to below cost was considered clear evidence of impairment. The other changes were for the increase in fair value (and related exchange effect) of EUR 1,321 thousand. 2e - Loans to subsidiaries This item (EUR 37,307 thousand) was for a line of credit granted to the subsidiary I.F.IM. S.r.l. maturing 3 October 2017 (6-month variable Euribor rate + a spread) to fully cover the latter’s debt on the date of the merger between FARE SGR and FIMIT SGR and to support the acquisition of the equity investment held by LBREP III Fimit S.a.r.l. (LBREP) equal to 18% (pre-merger) of the capital of FIMIT SGR. 3 – Other non-current assets 3a – Deferred tax assets Deferred tax assets of EUR 1,230 thousand were fully offset against deferred tax liabilities. The changes in deferred tax assets and deferred tax liabilities are shown in the table below:

(EUR thousand) At 31.12.09 Recognised

in income

Recognised in

equity At 31.12.10

Total deferred tax assets

0

0

0

0

Deferred tax liabilities for:

- available-for-sale financial assets (821) 0 (409) (1,230)

Total deferred tax liabilities (821) 0 (409) (1,230) Losses carried forward available for offset against future taxable profits 821 409 0 1,230 Total deferred tax assets, net of deferred tax liabilities 0 409 (409) 0

No deferred tax assets were allocated against the significant tax losses of DeA Capital S.p.A. (around EUR 108,074 thousand to be reported without limitation). This was because there was insufficient evidence to indicate that sufficient taxable income would be generated in future, against which such tax losses could be recovered. Deferred taxes were calculated using the liability method based on the temporary differences at the reporting date between the tax amounts used as a reference for the assets and liabilities and the amounts reported in the financial statements. 4 – Current assets At 31 December 2011, current assets were approximately EUR 45,287 thousand compared with EUR 75,998 thousand at 31 December 2010. 4a – Trade receivables Trade receivables came in at EUR 217 thousand (EUR 151 thousand at 31 December 2010), comprising:


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- EUR 23 thousand from De Agostini S.p.A. for the agreement to sublet rented premises and the reimbursement of costs associated with said agreement - EUR 32 thousand from FARE group, EUR 3 thousand from Soprarno Sgr S.p.A. and EUR 8 thousand from I.F.IM. S.r.l. for intercompany consulting agreements entered into with the subsidiaries - EUR 151 thousand from Santé S.A. for remuneration due as part of the subsidiary’s "director fee" agreement These receivables break down by region as follows:

- 69.46% from Luxembourg associates - 10.59% from Italian parent companies - 19.95% from Italian subsidiaries

4b – Available-for-sale financial assets


at 01.01.11

Acquisitions * Increase (capital

call)

Decrease (capital

distribution)

Disposals Fair value adjustment

Translation effect

Balance at

31.12.11

Ultrashape Ltd shares 0 49 0

0

(23)

(1)

0

25

Soprarno Bond Fund 15,038 0 0

0

(9,932)

166

0

5,272

Total funds 15,038 49 0 0

(9,955)

165

0

5,297

At 31 December this item totaled EUR 5,297 thousand compared with EUR 15,038 thousand at end-2010 for:

- 1,006,392.58 units in Soprarno Pronti Termine fund subscribed to at an average of EUR 5.149. The market price of the units at 30 December 2011, the last day in the year that the markets were open, was EUR 5.238, giving a total value of EUR 5,272 thousand. This is to be regarded as a temporary investment of excess cash

- 12,531,328 shares of Ultrashape Ltd. received from the distribution of the ISLP IV venture capital fund, allocated at a value of USD 0.003270. The market price of the shares at 30 December 2011, the last day in the year that the markets were open, was USD 0.00263, giving a total value of EUR 25 thousand. The shares were liquidated in the first month of the following year

4c - Financial receivables These totalled EUR 2,880 thousand including: - EUR 2,500 thousand for the revolving line of credit of EUR 40 million signed on 18 March

2011 with the subsidiary DeA Capital Investments S.A. (maturing on 15 March 2014 with a variable rate of 3-month Euribor + a spread)

- EUR 2 thousand for interest accrued on this line of credit but not yet paid by DeA Capital Investments S.A.

- EUR 378 thousand for interest accrued during the current year on the line of credit provided to the subsidiary I.F.IM. S.r.l. (maturing on 3 October 2017 with a variable rate of 6-month Euribor + a spread); this interest was paid in 2012


175

4d – Tax receivables from parent companies relating to the tax consolidation scheme These receivables totalling EUR 5,929 thousand (EUR 4,065 thousand at 31 December 2010) relate to the receivable from the parent company B&D Holding di Marco Drago e C. S.a.p.A. for participation in the tax consolidation scheme. 4e – Other tax receivables Tax receivables were EUR 1,810 thousand (EUR 1,759 thousand at 31 December 2010) and related to: - advance payments on IRAP of EUR 442 thousand - tax withholdings in the form of advance payments on interest of EUR 236 thousand - tax withholdings in the form of advance payments on the partial sale of the Soprarno Pronti

Termini bond fund in the amount of EUR 14 thousand - IRES credits to be reported resulting from the tax return for the previous year of EUR 154

thousand - receivable of EUR 461 thousand for the change in the percentage against which VAT may

be deducted, relating to 2010 - receivable of EUR 503 thousand due to the change in the percentage against which VAT

may be offset from 92% to 99% 4f – Other receivables These receivables totalling EUR 97 thousand (EUR 116 thousand at 31 December 2010) relate mainly to receivables for guarantee deposits, advances to suppliers and prepaid expenses. These receivables fall due within the next year. 4g – Cash and cash equivalents This item consists of bank deposits and cash (EUR 4 thousand), including interest accrued at 31 December 2011. At the end of 2011, this came in at EUR 29,057 thousand, compared with the figure of EUR 54,234 thousand recorded at the end of 2010. This decrease is primarily due to the combined effect of the following factors: - receipt of dividends of EUR 6,700 thousand from IDeA Alternative Investments S.p.A.,

dividends of EUR 6,300 thousand from FARE Holding S.p.A. and dividends of EUR 50,500 thousand from DeA Capital Investments S.A.

- receipt of EUR 10,000 thousand for the partial liquidation of the Soprarno Pronti Termine fund

- outlay of EUR 3,570 thousand for payment of the third tranche of the deferred price in the FARE transaction

- interest, commission and bank fees of EUR 2,919 thousand in relation to the credit facilities taken out with Mediobanca

- services costs of EUR 7,727 thousand - share buyback plan for DeA Capital S.p.A. totalling EUR 26,411 thousand - outlay of EUR 22,131 thousand for the purchase of the stake in I.F.IM. S.r.l. and EUR 1,000

thousand for the acquisition of Harvip Investimenti S.p.A. - outlay of EUR 37,307 thousand for the line of credit granted to the investee company

I.FI.M. S.r.l. and EUR 2,500 thousand for the investee company Dea Capital Investments S.A.

Please see the company’s cash flow statement for further information on changes to this item.


176

Cash deposited at banks accrues interest at floating rates, based on the prevailing overnight, 1-2-week and 1-3-month interest rates. 5 – Shareholders' equity At 31 December 2011, shareholders’ equity totalled approximately EUR 714,038 thousand, compared with EUR 759,070 thousand at 31 December 2010. The decrease of around EUR 45,032 thousand in shareholders’ equity in 2011 was mainly due to:

- an increase of EUR 6,939 thousand in the fair value reserve - an outlay of EUR 26,411 thousand for the share buyback plan for DeA Capital S.p.A. - the sale of own shares totalling EUR 5,843 thousand as part of the IDeA Alternative

Investments S.p.A. transaction - provisions made in relation to employee stock option plans of EUR 683 thousand - the loss of EUR 32,086 thousand for the period

Please see the statement of changes in shareholders’ equity for more information on the main changes in this item. 5a – Share capital Share capital (fully subscribed and paid up) totalled EUR 306,612,100, represented by 306,612,100 shares (of which 25,915,116 own shares) with a nominal value of EUR 1 each. Given that the nominal value of the 25,915,116 own shares held at 31 December 2011 is deducted from total share capital, share capital of EUR 280,696,984 was reported in the financial statements. Changes in share capital are shown in the table below:

31.12.2011 31.12.2010

(EUR thousand) no. of shares amount no. of shares amount

Share capital 306,612,100 306,612 306,612,100 306,612

of which: Own shares (25,915,116) (25,915) (12,598,698) (12,599)

Share capital (excluding own shares) 280,696,984 280,697 294,013,402 294,013

The following table shows a reconciliation of the shares outstanding:


177

Shares issued Own shares in

portfolioShares in issue

Shares at 31.12.10 306,612,100 (12,598,698) 294,013,402

Changes in 2011 Share capital increase 0 0 0 Own shares purchased 0 (18,123,338) (18,123,338) Own shares sold 0 0 0 Own shares disposed for IDeA AI acquisition 0 4,806,920 4,806,920

Used for Stock Option Plan 0 0 0 Shares issued through exercise of stock options

0

0

0

Shares at 31.12.11 306,612,100 (25,915,116) 280,696,984

5b – Share premium reserve (net of share issue costs reserve) This item decreased by EUR 7,252 thousand (from EUR 395,613 thousand at 31 December 2010 to EUR 388,362 thousand at 31 December 2011) following the posting to this reserve of:

- the purchase of own shares in the amount of EUR 8,288 thousand - the sale of own shares totalling EUR 1,036 thousand as part of the partial non-

proportional demerger of IDeA Alternative Investments S.p.A. 5c – Legal reserve This reserve totalled EUR 61,322 thousand, which was unchanged from the figure at 31 December 2010. 5d – Fair value reserve The fair value reserve is negative to the tune of EUR 1,655 thousand (compared with a negative balance of EUR 8,594 thousand at 31 December 2010) and comprises: - the reserve for first-time adoption of IAS/IFRS, which has a negative balance of EUR 337 thousand (unchanged from 31 December 2010) - the negative fair value reserve totalling EUR 1,318 thousand compared with a negative balance of EUR 8,257 thousand at 31 December 2010. The table below shows a summary of the changes in this item during the year:


01.01.11

Use of fair value reserve

for impairment


Tax effect Balance at

31.12.11

Direct investments/equity investments (7,702) 0 5,862 (772) (2,612)

Venture capital (474) 0 1,321 363 1,210

Available-for-sale financial assets (81) 0 166 (1) 84

Reserve for IFRS first-time adoption to other reserves (337) 0 0 0 (337)

Total (8,594) 0 7,349 (410) (1,655)


178

5e – Other reserves This item consists of:

- a reserve for stock option costs totalling EUR 996 thousand - a reserve for the sale of option rights, unchanged from last year, totalling EUR 413

thousand. This originated from the sale of the remaining option rights to subscribe to a capital increase that had not been exercised by the shareholders, and were sold by the company

5f – Retained earnings (losses) carried forward This item totalled EUR 15,989 and includes the profit from the previous period, which was carried forward. 5g – Profit (loss) for the year This item contains the loss for 2011 of EUR 32,086 thousand, compared with a profit of EUR 15,989 thousand in 2010. This was due mainly to the receipt of dividends of EUR 6,700 thousand from IDeA Alternative Investments S.p.A., dividends of EUR 5,665 thousand from FARE Holding S.p.A., dividends of EUR 50,500 thousand from DeA Capital Investments S.A., the receipt of distributions from venture capital funds of EUR 1,480 thousand and the capital gain from the sale of minor equity investments of EUR 544 thousand. These figures were offset by net financial charges of EUR 2,496 thousand, structure costs of EUR 8,174 thousand, impairment of EUR 93,301 thousand. The total also reflected income of EUR 4,698 thousand from the fair value measurement of IDeA Alternative Investments S.p.A. due to the non-proportional demerger which was completed in January 2011. Art. 2427, para. 1 no. 7-bis of the Italian Civil Code: breakdown of shareholders' equity The table below shows a breakdown of shareholders’ equity at 31 December 2011, with details of their origin, how they can be used and paid out, and use in previous years:

to 31.12.11

Description (in EUR) Amount Potential

use Amount available

Summary of use in the three previous years

to cover losses for other reasons

Share capital 280,696,984 = Share capital reserve: Share buyback reserve 0 A,B,C Share premium reserve 396,190,045 A,B,C 396,190,045 6,304,717 28,946,835

Profit reserves: Legal reserve 61,322,420 B

Reserve for share issue costs (7,828,172) = Stock option reserve 996,401 = = Reserve for sale of option rights 412,798 = =

Reserve for shares to be transferred 0 = = Fair value reserve (1,654,899) = = Profit/(loss) carried forward 15,989,158 A,B,C = 76,808,340 11,946,945 Net profit/(loss) for the year (32,085,746) = = TOTAL 714,038,989 396,190,045

Key: A for capital increase, B to cover loss, C for distribution to shareholders


179

6 – Non-current liabilities 6a – End-of-service payment fund The end-of-service payment fund is a defined benefit plan, and has therefore been valued using actuarial assessments. The assumptions used in calculating the fund were: a discount rate of 4.60%; an annual rate of inflation of 2.0%; annual salary growth of 3.0%; and an annual fund growth rate of 3.0%. Changes in the end-of-service payment fund were as follows:


01.01.11 Portion accrued Payments Advances

Balance at 31.12.11

Change in provision for end-of-service payment fund (TFR) 193 117 (118) 0 192

The amounts concerned were calculated as follows: (EUR thousand) 31.12.2011 31.12.2010

Nominal value of the end-of-service payment fund (TFR) 237 237 Discounting effect (45) (44) Current value of end-of-service payment fund (TFR) 192 193

6b – Financial liabilities This item totalled EUR 93,008 thousand (EUR 90,621 thousand at 31 December 2010) and relates to: - the remaining payable for the deferred purchase price ("deferred portion", with annual

maturity until 12 December 2013) of EUR 3,450 thousand plus interest payable (variable 6-month Euribor rate) accrued from the closing date (12 December 2008) to 31 December 2011, equal to EUR 175 thousand

- an earn-out payment (maturing in 2014) of EUR 1,865 thousand, inclusive of interest calculated at present value accrued from the closing date (12 December 2008) to 31 December 2011, equal to EUR 160 thousand. This earn-out, which DeA is required to pay to the seller, is equal to 50% of the portion of any performance fees accrued on certain of the funds managed by IDeA FIMIT (formerly FARE)

- the amount that DeA Capital is required to pay to the seller for 70% of the units of the Atlantic 1 and Atlantic 2 funds totalling EUR 6,203 thousand

- an amount of EUR 80,000 thousand for the use of the credit line provided by Mediobanca for the same amount (maturing on 16 December 2015 and subject to a variable rate of 3-month Euribor + spread). On 31 December 2011, the covenant tests for this credit line were successfully passed (i.e. debt and debt to equity)

- a liability of EUR 1,315 thousand due to the decrease in the fair value of the interest rate swap contracts to partially hedge interest rate risk on the debt exposure with Mediobanca (maturing on 30 July 2013)


180

7 – Current liabilities Total current liabilities amounted to EUR 5,814 thousand (EUR 5,886 thousand at 31 December 2010) and are all due within the following year. These payables are not secured by any company assets. These liabilities are made up of the items detailed below. 7a – Trade payables This item totalled EUR 769 thousand, compared with EUR 986 thousand in 2008, and resulted from ordinary operations. With regard to transactions with related parties, this item includes: - payables to the parent company, De Agostini S.p.A., of EUR 25 thousand - payables to affiliate De Agostini Editore S.p.A. of approximately EUR 9 thousand - payables to affiliate Lottomatica Group S.p.A. of approximately EUR 23 thousand - payables to affiliate De Agostini Libri S.p.A. of approximately EUR 2 thousand A breakdown of these payables by region is set out below: - 91.02% due to suppliers in Italy - 3.31% due to suppliers in respect of parent companies in Italy - 4.37% due to suppliers in respect of affiliates in Italy - 1.30% due to suppliers in the UK Trade payables do not accrue interest and are settled, on average, within 30 to 60 days. 7b – Payables in respect of staff and social security organisations This item amounted to EUR 956 thousand (EUR 1,007 thousand at 31 December 2010) and breaks down as follows: - EUR 303 thousand for payables to social security organisations, paid after the end of financial year 2011 - EUR 653 thousand for payables to staff for holidays not taken, and accrued bonuses 7c – Other tax payables This item amounted to EUR 159 thousand (EUR 176 thousand at 31 December 2010) and consists of payables to the tax authorities in respect of taxes deducted from the income of employees and self-employed staff. 7d – Short-term financial payables These financial payables totalling EUR 3,911 thousand (EUR 3,680 thousand at 31 December 2010) are mostly attributable to the acquisition of the FARE Group. They consist of: - the short-term portion of the deferred purchase price ("deferred price") of EUR 3,450

thousand - interest accrued from the closing date (12 December 2008) to 31 December 2011, totalling

EUR 175 thousand - an accrued expense in respect of interest on the line of credit provided by Mediobanca

totalling EUR 286 thousand


181

Notes to the income statement 8 – Revenues and income 8a – Investment income and expenses Net expenses arising from investments totalled EUR 24,663 (net income of EUR 24,695 thousand was realised in 2010). Details of this item are shown below: (EUR thousand) 2011 2010

Dividends from subsidiaries and joint ventures and other income 67,563 29,329

Income from available-for-sale funds 1,480 554

Capital gains on disposals 626 0

Investment income 69,669 29,883

Impairment Dea Capital Investments S.A. 93,301 4,006

Loss on shares distributed 142 0

Impairment Elixir 0 51

Impairment Kovio 43 0

Impairment venture capital funds 846 1,131

Investment charges 94,332 5,188

Total (24,663) 24,695

Dividends from subsidiaries and joint ventures and other income This item consists of dividends distributed by IDeA Alternative Investments S.p.A. totalling EUR 6,700 thousand, dividends distributed by the FARE Group of EUR 5,665 thousand, dividends distributed by DeA Capital Investments S.A. of EUR 50,500 thousand and income of EUR 4,698 thousand from the fair value measurement of IDeA Alternative Investments S.p.A. due to the non-proportional demerger completed in January 2011. Income from available-for-sale funds Income from available-for-sale funds was EUR 1,480 thousand (EUR 554 thousand in 2010) and came from capital gains from distributions of venture capital funds. Capital gains on disposals This item, which totalled EUR 626 thousand, included capital gains of EUR 544 thousand from the sale of minor equity investments and a capital gain of EUR 82 thousand from the disposal of the Soprarno bond fund. Impairment of funds and available-for-sale funds The fair value measurement of investments in venture capital funds and minority shareholdings at 31 December 2011, carried out based on the documents received and the information available, made it necessary to record impairment of EUR 846 thousand for the venture capital funds, EUR 43 thousand for US investee company Kovio Inc. and EUR 93,301 thousand for investee company DeA Capital Investments S.A. There was also a loss of value of EUR 142 thousand in relation to shares received from distributions of the ISLP IV venture capital fund. These were stated at an amount lower than their historical cost. The significant reduction below cost of the subsidiary DeA Capital Investments S.A., the venture capital funds and the minority interest in Kovio Inc., was considered clear evidence of impairment.


182

8b – Service revenues Income of EUR 295 thousand was reported in 2011 (EUR 517 thousand in 2009), consisting of:

- EUR 30 thousand for consulting services provided to IDeA Alternative Investments S.p.A.

- EUR 131 thousand from the reimbursement of the costs of subletting offices to De Agostini S.p.A.

- EUR 3 thousand from Soprarno SGR S.p.A. - EUR 1 thousand from IDeA Capital Funds SGR S.p.A. - EUR 30 thousand from IDeA FIMIT S.p.A. - EUR 16 thousand from I.F.IM. S.r.l. - EUR 84 thousand from the FARE Group

8c – Other revenues and income Other revenues and income, totalling EUR 177 thousand (compared with EUR 122 thousand in 2010), related mainly to directors' fees from Santé S.A. of EUR 173 thousand. 9 – Operating costs 9a – Personnel costs Personnel costs totalled EUR 5,084 thousand, compared with EUR 3,269 thousand in 2010. The item breaks down as follows: (EUR thousand) 2011 2010

Salaries and wages 2,152 2,470

Social charges on wages 752 912

Board of Directors' fees 332 332

Stock options figurative cost 683 564

Stock option reversal 0 (1,379)

End-of-service payment fund 139 120

Other personnel costs 1,026 250

Total 5,084 3,269

The parent company has 14 employees (15 at 31 December 2010). The table below shows changes and the average number of group employees during the year.

Employees 01.01.2011 RecruitsInternal

movements Departures 31.12.2011 Average

Senior managers 7 1 0 (2) 6 6

Junior managers 3 0 0 0 3 3

Staff 5 0 0 0 5 5

Total 15 1 0 (2) 14 14


183

Share-based payments Employees of DeA Capital S.p.A. are beneficiaries of stock option plans based on the shares of DeA Capital S.p.A. Unexercised but valid call options on the company’s shares at 31 December 2011 totalled 4,643,200 (2,298,200 at 31 December 2010). Stock option plans were valued using the numerical binomial tree procedure (the original Cox, Ross and Rubinstein method). Numerical analysis using binomial trees generates simulations of various possible developments in the share price in future periods. With regard to stock option plans, on 19 April 2011 the shareholders' meeting approved the DeA Capital stock option plan for 2011-2016 under which a maximum of 2,200,000 options may be allocated. To implement the resolution of the shareholders' meeting, the DeA Capital S.p.A. Board of Directors allocated a total of 1,845,000 options to certain employees of the company and its subsidiaries, and employees of the parent company De Agostini S.p.A. who carry out important roles. In line with the criteria specified in the regulations governing the DeA Capital stock option plan for 2011-2016, the Board of Directors also set the exercise price for the options allocated at EUR 1.538, which is the arithmetic mean of the official price of DeA Capital shares on the Mercato Telematico Azionario, the Italian screen-based trading system organised and managed by Borsa Italiana S.p.A., on the trading days between 18 March 2011 and 18 April 2011. The options can be allocated to the beneficiaries, in one or more tranches, up to 30 June 2012 and exercised by the latter, in one or more tranches, but in any case for an amount per tranche of not less than 25% of the options assigned to each, with effect from the fifth calendar day following the date that the adjusted NAV figure at 31 December 2013 is announced, until 31 December 2016. The adjusted NAV means the value of the assets, net of liabilities, calculated on the basis of the company’s balance sheet at 31 December 2013 and restated, where necessary, to take account of the measurement at fair value of all investments, as assessed by an independent third party. 9b – Service costs The table below shows a breakdown of service costs, which came in at EUR 3,090 thousand (EUR 3,039 thousand in 2010): (EUR thousand) 2011 2010

Management, tax, legal consultancy and other fees 1,799 1,601

Fees to corporate bodies 263 270

Maintenance 83 119

Travel expenses 137 135

Utilities and general expenses 615 680

Bank charges 13 5

Advertising, conferences, online subscriptions, office supplies 149 201

Other costs 31 28

Total 3,090 3,039


184

9c – Depreciation and amortisation Please see the table on changes in intangible and tangible assets for details on this item. 9d – Other costs This item totalled EUR 388 thousand (EUR 10 thousand in 2010) and mainly consisted of the impairment on the receivable for the pass-through arrangement with the shareholder/seller of FARE Holding. 10 – Financial income and charges 10a – Financial income Financial income totalled EUR 1,845 thousand (EUR 1,384 thousand in 2010) and included interest income of EUR 1,446 thousand, income from financial instruments at fair value with changes recognised through profit or loss totalling EUR 134 thousand, income of EUR 61 thousand from the redemption of options on currencies to hedge the EUR/TRY exchange rate risk, and exchange rate gains of EUR 204 thousand. A breakdown of interest income shows that EUR 928 thousand was earned on bank current accounts and EUR 518 thousand on loans to subsidiaries. (EUR thousand) 2011 2010

Interest income 1,446 691

Income from financial instruments at fair value through profit or loss 195 156

Exchange gains 204 537

Total 1,845 1,384

10b – Financial charges Financial charges totalled EUR 4,341 thousand, compared with EUR 6,252 thousand in 2010. These mainly included interest payable on loans, and losses on hedging derivatives and exchange rates. Specifically, financial charges break down as follows:

- charges of EUR 853 thousand relating to interest rate swaps - exchange rate losses of EUR 17 thousand - realised exchange rate losses on financial instruments of EUR 175 thousand - interest payable for the acquisition of the FARE Group accrued during 2011 totalling

EUR 199 thousand - interest payable on the Mediobanca credit line of EUR 2,813 thousand and fees of

EUR 284 thousand (EUR thousand) 2011 2010

Interest expense 3,296 4,003

Charges relating to financial instruments at fair value through profit or loss 0 65

Charges on derivatives 853 1,721

Perdite su cambi 192 463

Total 4,341 6,252


185

11 - Tax 11a – Income tax for the period At 31 December 2011, no IRAP taxes were recorded because of the negative tax base. Current tax income, amounting to EUR 2,839 thousand relates to DeA Capital S.p.A.’s decision to join (on 13 June 2008) the national tax consolidation scheme of the B&D Group (the group headed by B&D Holding di Marco Drago e C. S.a.p.a.). 11b – Deferred tax assets and liabilities This item came in at EUR 409 thousand and consists entirely of provisions for deferred tax assets during the year. The table below shows a reconciliation of the tax charges recorded in the financial statements and the theoretical tax charge calculated using the IRES rate applicable in Italy:

2011 2010

(EUR thousand) Amount Rate Amount Rate

Profit before tax (35,334) 13,993

Tax on theoretical income (9,717) -27.5% 3,848 27.5%

Tax effect of permanent differences

- Write-downs on equity investments 25,632 72.5% 1,132 8.1%

- Capital gains pex (1,227) -3.5%

- Dividends (16,424) -46/5% (7,662) -54.8%

- Non-deductible interest 497 1.4% 909 6.5%

- Other changes (134) -0.4% (428) -3.1%

Use of deferred tax assets 0 0.0% 0 0.0%

Use of deferred tax assets derecognised in equity in the year 0 0.0% 0 0.0%

Use of tax losses not previously recognised (409) -1.2% (237) -1.7% Deferred tax assets for available losses 0 0.0% 0 0.0%

Income from tax consolidation scheme (1,259) -3.6% 434 3.1%

Other net differences (208) -0.6% 7 0.1%

IRAP and other taxes on foreign income 0 0.0% 0 0.0%

Income tax reported in the income statement (3,248) -9.2% (1,997) -14.3%


186

12 – Basic earnings (loss) per share Basic earnings per share are calculated by dividing net profit or loss for the period attributable to the parent company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share are calculated by dividing net profit for the period attributable to shareholders by the weighted average number of ordinary shares outstanding during the period, including any dilutive effects of stock options. The table below shows the share information used to calculate basic and diluted earnings per share:

2011 2010

Parent Company profit/(loss)(A) (32,085,746) 15,989,158

Weighted average number of ordinary shares outstanding (B) 288,942,756 289,233,469

Basic earnings/loss per share (EUR per share) (C=A/B) (0.1110) 0.0553

Adjustment for dilutive effect - -

Net profit/(loss) adjusted for diluted effect (D) (32,085,746) 15,989,158

Weighted average number of shares to be issued for the

exercise of stock options (E) 174,632 -

Total number of shares outstanding and to be issued (F) 289,117,388 289,233,469

Diluted earnings/loss per share (EUR per share) (G=D/F) (0.1110) 0.0553

Options and warrants have a dilutive effect only when the average market price of the share for the period exceeds the strike price of the options or warrants (i.e. when they are "in the money").


187

Other information

Commitments At 31 December 2011, residual commitments to make paid calls to venture capital funds totalled EUR 2.4 million, compared with EUR 0.9 million in 2010. Changes in commitments are shown in the table below. (EUR million) Residual commitments to funds – 31.12.2010 0.9

Capital calls in respect of VC fund commitments 0.0

Reclaimable distributions 1.2

Exchange differences 0.3

Residual commitments to funds – 31.12.11 2.4

Own shares and parent company shares

On 19 April 2011, the shareholders' meeting of DeA Capital S.p.A. approved, following the proposal made by the company's Board of Directors, the implementation of a new plan to purchase and dispose of own shares (the Plan), which authorises the Board of Directors to purchase and dispose of a maximum number of shares representing a stake of up to 20% of share capital in accordance with the law, on one or more occasions, on a rotating basis. At the same time, this resolution revoked the authorisation issued by the shareholders' meeting on 26 April 2010 for the previous plan to purchase own shares. Among other things, the authorisation specifies that purchases may be carried out in accordance with all procedures allowed by current regulations, with the sole exception of a public purchase or exchange offer, and that the unit price for the purchase must not be more than 20% above or below the share's reference price on the trading day prior to the purchase. The objective of the Plan is to allow the company to take action, in accordance with current regulations, to limit any unusual price movements and to normalise trading and pricing fluctuations resulting from distortions related to excess volatility or poor trading liquidity, as well as to purchase own shares to be used, as necessary, for share incentive schemes. These transactions will also allow the company to purchase own shares to be used, in accordance with its strategy, for capital-related transactions or other transactions in relation to which it may be appropriate to exchange or sell parcels of shares by means of an exchange, transfer or other method of disposal. The authorisation to carry out such purchases has a maximum duration of 18 months from the date the authorisation is granted by the shareholders’ meeting (until October 2012). The Board of Directors is also authorised to dispose of own shares purchased without time limitations in accordance with procedures it deems appropriate, at a price to be determined, from time to time, but which may not be (other than in certain specific exceptions) more than 20% below the share's reference price on the trading day prior to each disposal. The Board of Directors, which met immediately following the shareholders' meeting, passed the resolutions necessary to execute the plan, and granted the chairman and chief executive officer all the necessary powers. In 2011, as a part of the above two plans, DeA Capital S.p.A. purchased around 18.1 million shares valued at about EUR 26.4 million (at an average price of EUR 1.46 per share).


188

Taking into account purchases made in previous years for plans in place from time to time, and uses of own shares to service purchases of controlling interests in FARE Holding and IDeA AI, at 31 December 2011 the company owned 25,915,116 own shares (equal to about 8.5% of share capital). As of the date of this document, based on purchases of 1,338,758 shares made after the end of 2011, the company had a total of 27,253,874 own shares corresponding to about 8.9% of share capital. During 2011, the company did not hold, purchase or sell, on its own account or through a trust company, any shares in parent company De Agostini S.p.A.

Stock option plans With regard to stock option plans, on 19 April 2011 the shareholders' meeting approved the DeA Capital stock option plan for 2011-2016 under which a maximum of 2,200,000 options may be allocated. To implement the resolution of the shareholders' meeting, the DeA Capital S.p.A. Board of Directors allocated a total of 1,845,000 options to certain employees of the company and its subsidiaries, and employees of the parent company De Agostini S.p.A. who carry out important roles. In line with the criteria specified in the regulations governing the DeA Capital stock option plan for 2011-2016, the Board of Directors also set the exercise price for the options allocated at EUR 1.538, which is the arithmetic mean of the official price of DeA Capital shares on the Mercato Telematico Azionario, the Italian screen-based trading system organised and managed by Borsa Italiana S.p.A., on the trading days between 18 March 2011 and 18 April 2011. The options can be allocated to the beneficiaries, in one or more tranches, up to 30 June 2012 and exercised by the latter, in one or more tranches, but in any case for an amount per tranche of not less than 25% of the options assigned to each, with effect from the fifth calendar day following the date that the adjusted NAV figure at 31 December 2013 is announced, until 31 December 2016. The adjusted NAV means the value of the assets, net of liabilities, calculated on the basis of the company’s balance sheet at 31 December 2013 and restated, where necessary, to take account of the measurement at fair value of all investments, as assessed by an independent third party.

With regard to the previous year, on 26 April 2010 the shareholders' meeting approved the 2010-2016 stock option plan on the basis of which 2,235,000 shares were allocated. These shares are not yet exercisable. For further information on the terms and conditions of the plans and their beneficiaries, please see the respective Information Prospectuses prepared in accordance with art. 84-bis, para. 1 of Consob Regulation 11971/1999 and table 7 of Appendix 3A of Consob Regulation 11971/1999, and the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation 11971/1999. The above documentation is available to the public at the headquarters of DeA Capital S.p.A. and on the company's website www.deacapital.it. The table below summarises the assumptions made in calculating the fair value of the stock option plans:


189


March 2011 allocation on

2010 plan 2011 plan

No. of options allocated 160,000 180,000 2,235,000 500,000 1,845,000

Average market price at allocation date 2.445 2.703 1.2964 1.3606 1.55

Value at allocation date 391,200 486,540 2,897,454 680,300 2,859,750

Average exercise price 2,026 2.459 1.318 1.413 1.538

Expected volatility 31.15% 29.40% 35.49% 33.54% 33.43%

Option expiry date 31/08/2015 30/04/2016 31/12/2015 31/12/2015 31/12/2016

Risk free yield 4.25125% 3.59508% 1.88445% 2.95194% 3.44%

DeA Capital 2009-2012 warrants On 3 March 2009, the shareholders' meeting of DeA Capital S.p.A. approved an investment plan entailing the offer of warrants for subscription by the management. Under the plan regulations, the DeA Capital 2009-2012 warrants allow holders to purchase, under specific conditions, one new DeA Capital share with a nominal value of EUR 1 for each warrant held, at an exercise price of EUR 1.92. The warrants may be exercised between 1 April 2012 and 30 September 2012. In order to implement the plan, the extraordinary shareholders' meeting of DeA Capital S.p.A. also voted to issue up to 1,500,000 DeA Capital 2009-2012 warrants and to increase the share capital, pursuant to the combined provisions of art. 2441, para. 8 of the Italian Civil Code and art. 134, para. 2 of Legislative Decree 58 of 24 February 1998 by a nominal amount of up to EUR 1,500,000 in separate issues pursuant to art. 2439, para. 2 of the Italian Civil Code, to be carried out through the issue of up to 1,500,000 ordinary shares with a nominal value of EUR 1, to be used solely and irrevocably for the exercise of these warrants. The subscription price for the warrants was EUR 0.211, based on the fair value estimated by the Board of Directors and supported by independent valuations. The warrants, available for subscription by beneficiaries from the date on which the resolution of the extraordinary shareholders' meeting on the issue of the warrants was recorded in the companies register until 31 July 2009, were fully subscribed. Beneficiaries are individuals who were classified as employees of the company and/or its subsidiaries and/or the parent company De Agostini S.p.A. at the time of the warrant subscription offer and at the time of the subscription itself, as identified by the Board of Directors’ meeting of 13 January 2009. For further information on the terms and conditions of the plans and their beneficiaries, please see the respective Information Prospectuses prepared in accordance with art. 84-bis, para. 1 of Consob Regulation 11971/1999 and table 7 of Appendix 3A of Consob Regulation 11971/1999, and the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation 11971/1999. The above documentation is available to the public at the headquarters of DeA Capital S.p.A. and on the company's website www.deacapital.it.


190

Transactions with parent companies, subsidiaries and related parties - Intercompany relationships with the parent company and its group On 22 March 2007, the company signed a Service Agreement with the controlling shareholder, De Agostini S.p.A. (which was renewed on 31 March 2011), for the latter to provide operating services in administration, finance, control, legal, corporate, tax, investor relations and public relations areas for a total payment of EUR 480,000 per year. The agreement, which is renewable annually, is priced at market rates, and is intended to allow the company to maintain a streamlined organisational structure in keeping with its development policy, and to obtain adequate operational support at the same time. The company also carried out transactions with its subsidiaries, particularly with regard to the provision of management support services. These transactions were carried out under normal market conditions. Lastly, the Company did not hold, purchase or dispose of the shares of any related parties in 2011. The table below shows the balances arising from transactions with related parties.

31/12/2011 2011

(EUR thousand)

Trade receivab

les Financial

receivables Tax

receivablesTax

payablesTrade

payables

Revenues for

services

Revenues from

personnel

secondment

Financial income

Tax income

Personnel costs

Service costs

IDeA Alternative Investments S.p.A. - - - - -

30.0 206.2 - - - -

IDeA Capital Funds SGR. S.p.A. - - - - -

0.6 - - - - -

IDeA Fimit SGR S.p.A. - - - - - 29.6 - - - - -

I.FI.M. S.r.l. 8.2 377.9 - - - 15.5 - 377.9 - - -

Soprarno SGR S.p.A. 3.4 - - - - 3.4 - - - - -

FARE Holding S.p.A. 4.7 - - - - 6.0 - - - - -

FARE SGR S.p.A. - - - - - 30.0 - - - - -

FARE Real Estate S.p.A. 23.8 - - - - 40.4 12.5 - - - -

FAI S.r.l. - - - - - 7.4 - - - - -

De Agostini S.p.A. - - - - 25.5 131.1 - - - 239.4 480.0

Utet S.p.A. - - - - 0.3 - - - - - 0.3

B&D Holding di Marco Drago e C. S.a.p.A. - - 5,928.8 5.8 -

- - - 2,839.0 - -

Lottomatica Group S.p.A. - - - - 22.7 - - - - - 18.7

De Agostini Libri S.p.A. - - - - 1.6 - - - - - 2.1

DeA Capital Investments S.A. - 2,502.0 - - - - - 140.1 - - -

De Agostini Publishing S.p.A. - - - - - - - - - - 0.7

De Agostini Publishing Italia S.p.A. - - - - -

- - - - 0.1

De Agostini Editore S.p.A. - - - 9.1 1.0 - - - - 30.4

Total related parties 66.2 2,879.9 5,928.8 5.8 59.2% 295.0 218.7 518.0 2,839.0 239.4 532.3

Total financial statement line item 217.4 2,879.9 5,928.8 5.8 768.7

295.0

218.7

518.0

2,839.0

5,083.9

3,090.3

as % of financial statement line item 30.5% 100.00% 100.00%

100.00% 7.7%

100.00%

100.00%

100.00%

100.00%

4.7%

17.2%


191

- Remuneration of directors, auditors, general managers and managers with strategic responsibilities

In 2011, remuneration payable to the directors and auditors of DeA Capital S.p.A. for the performance of their duties totalled EUR 330 thousand and EUR 175 thousand respectively. Remuneration paid to directors and auditors is shown in the table below:

Director Position Period

position held

Position expires

Fees for position at company

preparing the financial

statements in EUR thousand

Non-cash

benefits

Bonuses and

other incentive

s

Statutory auditors' fees for

positions held at

subsidiaries

Other remunera

tion EUR/000

Lorenzo Pellicioli Chairman 2011 Approval fin. statements

201230 0 0 0 3

Paolo Ceretti Chief

Executive Officer

2011 Approval fin. statements

201230 0 0 0 18

Daniel Buaron Director 2011 Approval fin. statements

201230 0 0 0 555

Lino Benassi Director 2011 Approval fin. statements

201230 0 0 0 236

Rosario Bifulco Director 2011 Approval fin. statements

201230 0 0 0 20

Claudio Costamagna

Director 2011 Approval fin. statements

201230 0 0 0 5

Alberto Dessy Director 2011 Approval fin. statements

201230 0 0 0 25

Roberto Drago Director 2011 Approval fin. statements

201230 0 0 0 15

Marco Drago Director 2011 Approval fin. statements

201230 0 0 0 0

Andrea Guerra Director 2011 Approval fin. statements

201230 0 0 0 5

Marco Boroli Director 2011 Approval fin. statements

201230 0 0 0 0

Angelo Gaviani

Chairman of the Board of

Statutory Auditors


2012 75 0 0 42 0

Cesare Andrea Grifoni

Permanent Auditor


201250 0 0 31 0

Gian Piero Balducci Permanent

Auditor 2011

Approval fin. statements

201250 0 0 0 38

In contrast to the data contained in the Remuneration Report prepared pursuant to art. 123-ter of the TUF in accordance with art. 84-quater of Consob Regulation 11971/1999, the emoluments and compensation indicated above does not include social security contributions where applicable. The item "Other remuneration" for director Daniel Buaron relates to remuneration received from FARE SGR/IDeA FIMIT SGR totalling EUR 415 thousand and EUR 140 thousand from FARE Holding. The item "Other remuneration" for director Lino Benassi relates chiefly to remuneration of EUR 45 thousand received from FARE SGR, EUR 31 thousand from IDeA FIMIT SGR, EUR 150 thousand from IDeA Alternative Investments S.p.A. and EUR 10 thousand for the Internal Audit Committee of DeA Capital S.p.A.


192

In 2011, annual salaries and bonuses paid to managers with strategic responsibilities in the parent company totalled about EUR 537 thousand.


Details of stakes held in DeA Capital S.p.A. and its subsidiaries by members of the boards of directors and auditors and by managers with strategic responsibilities are provided in aggregate format in the table below. No shareholdings were reported for general managers, since to date, this position does not exist. All those who held positions on the boards of directors or auditors, or as managers with strategic responsibilities, for the whole or part of the year in question, are included.

Name and surname Investee companyNo. of shares

held at 01.01.11

Number of shares

purchasedNumber of

shares sold No. of shares

held at 31.12.11

Lorenzo Pellicioli DeA Capital S.p.A. 0 2,566,323 0 2,566,323

Paolo Ceretti DeA Capital S.p.A. 0 1,000,000 0 1,000,000

Rosario Bifulco DeA Capital S.p.A. 1,536,081 0 0 1,536,081

Lino Benassi DeA Capital S.p.A. 23,500 0 0 23,500

Daniel Buaron * DeA Capital S.p.A. 11,689,552 0 0 11,689,552

Daniel Buaron FARE Holding S.p.A. 180,000 0 0 180,000 Senior managers with strategic responsibilities DeA Capital S.p.A. 50,000 0 0 50,000

Total 13,479,133 3,566,323 0 17,045,456

*via DEB Holding S.r.l. To gain control of the entire share capital of IDeA AI, on 20 January 2011, DeA Capital S.p.A. acquired the stock held by Paolo Ceretti and Lorenzo Pellicioli in exchange for 2,566,323 and 987,047 DeA Capital shares respectively. On 3 February 2011, Paolo Ceretti purchased a further 12,953 ordinary shares of the company. Other than the shares indicated above, no DeA Capital shares are held by other directors or auditors who are currently in office; furthermore, no shares are held in companies controlled by DeA Capital .

The directors Lorenzo Pellicioli, Lino Benassi, Marco Drago and Roberto Drago own shares of B&D Holding di Marco Drago e C. S.a.p.a., the parent company of De Agostini S.p.A. (which is in turn the parent company of the DeA Capital S.p.A.), and are parties to a shareholder agreement covering these shares.

Stock options allocated to members of the boards of directors and auditors, general managers and managers with strategic responsibilities

Details of stock options held by members of the boards of directors and auditors and by managers with strategic responsibilities in DeA Capital S.p.A. and its subsidiaries are provided in aggregate format in the table below.


193

Options held at beginning of 2011 Options allocated during 2011 Options expiring in 2011

Options held at end of 2011

Beneficiary Position No. options

Average exercise

price

Average expiry

No. options

Average exercise

price

Average expiry

No. options

No. options

Average exercise

price

Average expiry

Paolo Ceretti CEO 750,000 1,318 5 0

0

0

0

750,000

1,318

5

Paolo Ceretti CEO 0 0 0

750,000

1,538 5

0

750,000

1,538

5

Senior managers with strategic responsibilities

985,000 1,318 5

0

0

0

0

985,000

1,318

5


0 0 0

500,000

1,413

5

0

500,000

1,413

5


0 0 0

485,000

1,538

5

0

485,000

1,538

5

Lastly, note that the Chief Executive Officer Paolo Ceretti and managers with strategic responsibilities have subscribed to 575,000 and 315,000 warrants respectively. Under the Investment Plan regulations, DeA Capital 2009-2012 warrants allow holders to purchase, under certain conditions, one new DeA Capital share with a nominal value of EUR 1 for each warrant held, at an exercise price of EUR 1.92. The warrants may be exercised between 1 April 2012 and 30 September 2012.


194

Management and coordination The parent company is subject to the management and coordination of De Agostini S.p.A. Key figures from the latest approved financial statements of De Agostini S.p.A. are shown below.

INCOME STATEMENT 2010 2009

Revenues 3,054,546 2,885,519

Production costs (26,968,755) (28,571,451)

Financial income and charges 32,890,135 (11,725,284)

Impairment of financial assets (346,068,081) (272,270,649)

Extraordinary income and charges (1,240,563) (5,501,517)

Taxes for the year 7,497,238 11,367,766

Net profit (330,835,480) (303,815,616)

STATEMENT OF FINANCIAL POSITION 2010 2009

Unpaid subscribed capital 0 0

Fixed assets 3,375,891,032 3,680,814,949

Current assets 485,446,867 586,589.163

Accruals and deferrals 3,533,259 2,843,701

Shareholders’ equity (2,590,286,628) (2,921,122,108)

Provisions for risks and future liabilities (72,499,799) (71,535,975)

End-of-service payment fund (823,755) (1,583,338)

Payables (1,196,428,115) (1,271,068,400)

Accruals and deferrals (4,832,861) (4,937,992)


195

Risks As described earlier in the Report on Operations, the company operates through, and is structured as, two business areas, Private Equity Investment and Alternative Asset Management.

The risks set out below stem from a consideration of the characteristics of the market and the company’s operations, and the main findings of a risk assessment conducted in 2011, and from periodic monitoring, including that carried out through the regulatory policies adopted by the group. There could, however, be risks that are currently unidentified or not considered significant that could have an impact on the company's operations.

The company has adopted a modern corporate governance system that provides effective management of the complexities of its operations and enables its strategic objectives to be achieved. Furthermore, the assessments conducted by the organisational units and the directors confirm both the non-critical nature of these risks and uncertainties and the financial solidity of the company.

A. Contextual risks

A.1. Risks relating to general economic conditions

The operating performance and financial position of the company are affected by the various factors that make up the macro-economic environment, including increases or decreases in GDP, investor and consumer confidence, interest rates, inflation, the costs of raw materials and unemployment.

The ability to meet medium- to long-term objectives could be affected by general economic performance, which could slow the development of sectors the group has invested in, and at the same time, the business of the investee companies.

A.2. Socio-political events

In line with its strategic growth guidelines, one of the company's activities is private equity investment in companies and funds in different jurisdictions and countries around the world, which, in turn, invest in a number of countries and geographical areas. The company may have invested directly and indirectly in foreign countries whose social, political and economic conditions put the achievement of its investment objectives at risk.

A.3. Regulatory changes

Many of the company's investee companies conduct their operations in highly regulated sectors and markets. Any changes to or developments in the legislative or regulatory framework that affect the costs and revenues structure of investee companies or the tax regime applied, could have negative effects on the company's financial results, and necessitate changes in the company's strategy.

To combat this risk, the company has established procedures to constantly monitor sector regulation and any changes thereto, in order to seize business opportunities and respond to any changes in the prevailing legislation and regulations in good time.


196

A.4. Performance of the financial markets

The company’s ability to meet its strategic and management objectives could depend on the performance of public markets. A negative trend on the public markets could have an effect on the private equity sector in general, making investment and divestment transactions more complex, and on the company’s capacity to increase the NAV of investments in particular.

The value of investments held directly or indirectly through funds in which the company has invested could be affected by factors such as comparable transactions concluded on the market, sector multiples and market volatility.

These factors that cannot be directly controlled by the company are constantly monitored in order to identify appropriate response strategies that involve both the provision of guidance for the management of investee companies, and the investment and value enhancement strategy for the assets held.

A.5. Exchange rates

Holding investments in currencies other than the euro exposes the company to changes in exchange rates between currencies.

A.6. Interest rates

Ongoing financing operations that are subject to variable interest rates could expose the company to an increase in related financial charges, in the event that the reference interest rates rise significantly.

The company has established appropriate strategies to hedge against the risk of fluctuations in interest rates. Given the partial hedge of the underlying, the company classifies these securities as speculative instruments, even though they are put in place for hedging purposes.

B. Strategic risks

B.1. Concentration of the Private Equity investment portfolio

The private equity investment strategy adopted by the company includes:

- direct investments

- indirect investments

Within this strategy, the company's overall profitability could be adversely affected by an unfavourable trend in one or a few investments, if there were insufficient risk diversification, resulting from the excessive concentration of investment in a small number of assets, sectors, countries, currencies or of indirect investments in funds with limited investment targets/types of investment.

To combat these risk scenarios, the company pursues an asset allocation strategy intended to create a balanced portfolio with a moderate risk profile, investing in attractive sectors and in companies with an appealing current and future risk/return ratio.

Furthermore, the combination of direct and indirect investments, which, by their nature, guarantee a high level of diversification, helps reduce the level of asset concentration.


197

B.2. Concentration of Alternative Asset Management activities

In Alternative Asset Management, in which the company is active through the companies IDeA Alternative Investments and First Atlantic Real Estate Holding, events could arise as a result of excessive concentration that would hinder the achievement of the level of expected returns. These events could be due to:

Private equity/absolute return funds




Real estate funds




For each of the risk scenarios outlined above, the group has defined and implemented appropriate strategies that include strategic, operational and management aspects, as well as a system monitoring the level of diversification of Alternative Asset Management assets.

B.3. Key resources (governance/organisation)

The success of the company depends to a large extent on its executive directors and key management figures, their ability to efficiently manage the business and the normal activities of individual group companies, as well as knowledge of the market and the professional relationships established.

The departure of one or more of these key resources, without a suitable replacement being found, as well as an inability to attract and retain new and qualified resources, could impact growth targets and have a negative effect on the group’s activities and financial results.

To mitigate this risk, the group has put in place HR management policies that correspond closely to the needs of the business, and incentive policies that are periodically reviewed, in light of, among other things, the general economic climate and the results achieved by the group.


198

C. Operating risks

C.1. Investment operations

Investment operations conducted by the company are subject to the risks typical of private equity activities, such as an accurate valuation of the target company and the nature of the transactions carried out, which require the acquisition of strategic shareholdings, but not controlling interests, governed by appropriate shareholders’ agreements.

The company implements a structured process of due diligence on target companies, which requires the involvement of the different levels of group management involved and the careful definition of shareholders’ pacts in order to conclude agreements in line with the investment strategy and the risk profile defined by the company.

C.2. Compliance with covenants

Some investment operations were concluded using financial leverage to invest in the target companies. For financing contracts signed by investee companies, specific covenants backed by real guarantees are in place; failure to comply with these could necessitate recapitalisation operations for investee companies and lead to an increase in financial charges relating to debt refinancing. Failure to comply with covenants attached to loans could have negative effects on both the financial situation and operations of investee companies, and on the value of the investment.

The company constantly monitors the significant reference parameters for the financial obligations taken on by investee companies, in order to identify any unexpected variance in good time.

C.3. Divestment operations

The company invests over a medium-/long-term time horizon, normally three to six years for investments made through the acquisition of direct shareholdings in companies or up to ten years for investments made through funds.

Over the investment management period, external situations could arise that might have a significant impact on the operating results of the investee companies, and consequently on the value of the investment itself. Furthermore, in the case of co-investment, guiding the management of an investee company could prove problematic or unfeasible, and it may ultimately prove impossible to dispose of the stakes held owing to lock-up clauses.

The divestment strategy could therefore be negatively affected by various factors, some of which cannot be foreseen at the time the investments are made. There is therefore no guarantee that expected earnings will be realised given the risks resulting from the investments made.

To combat these risk situations, the company has defined a process to monitor the performance of its investee companies, facilitated by its representation on the management bodies of significant investee companies, with a view to identifying any critical situations in good time.

C.4. Funding risk

The income flows expected from the Alternative Asset Management business depend on the capacity of the asset management companies in which the company invests to stabilise/grow their assets under management.


199

In this environment, fund raising activity could be harmed by both external factors, such as the continuation of the global economic crisis or the trend in interest rates, and internal factors, such as bad timing in respect of fund raising activities by the asset management companies or the departure of key managers from the companies.

The company has established appropriate risk management strategies in relation to fund raising, with a view to both involving new investors and retaining current investors.


200

Significant events after the end of 2011 Merger of IDeA AI into the parent company DeA Capital

On 26 July 2011, in order to continue the process of simplifying the shareholder base, corporate governance and investment processes, which began with the partial non-proportional demerger at the beginning of 2011, the Boards of Directors of IDeA AI and DeA Capital S.p.A. approved the merger by incorporation of the subsidiary IDeA AI into DeA Capital S.p.A. The intention behind the operation, which entails the reorganisation of the DeA Capital Group’s corporate structure, is to centralise within the parent company the cash flows from and the determination of strategic guidelines for the alternative asset management business. The Bank of Italy had already given its approval, and the operation took effect on 1 January 2012. Further information In accordance with the provisions of IAS 10, the company authorised the publication of these financial statements within the terms authorised by existing legislation. Atypical or unusual transactions In 2011, there were no atypical or unusual transactions as defined by Consob Communication 6064293 of 28 July 2006. Significant non-recurring events and transactions In 2011, the company did not undertake any significant non-recurring transactions as defined by the above-mentioned Consob Communication.


201

Statement of responsibilities for the annual financial statements pursuant to article 154-bis of Legislative Decree 58/98 The undersigned, Paolo Ceretti, as Chief Executive Officer, and Manolo Santilli, as the manager responsible for preparing the accounting statements of DeA Capital S.p.A., hereby certify, pursuant to art. 154-bis, paragraphs 3 and 4 of Legislative Decree 58 of 24 February 1998, that based on the characteristics of the company, the administrative and accounting procedures for preparing the annual financial statements of DeA Capital S.p.A. during the year were suitable and effectively applied. The assessment as to the suitability of the administrative and accounting procedures for preparing the annual financial statements for the year ending 31 December 2011 was based on a process established by DeA Capital S.p.A. in keeping with the Internal Control - Integrated Framework model issued by the Committee of Sponsoring Organisations of the Treadway Commission, which is the generally accepted reference framework at the international level. Note in this regard, that as described in the notes to the annual financial statements, a significant portion of the assets are investments stated at fair value. Fair values were determined by directors based on their best estimate and judgment using the knowledge and evidence available at the time the financial statements were prepared. However, due to objective difficulties in making assessments and the absence of a liquid market, the values assigned to such assets could differ, and in some cases significantly, from those that could be obtained when the assets are sold. The undersigned further certify that the annual financial statements to 31 December 2011: - correspond to the company’s accounting records - have been prepared in compliance with the International Financial Reporting Standards adopted by the European Union, and the measures issued to implement art. 9 of Legislative Decree 38/2005 - to the best of their knowledge, provide a true and fair view of the operating performance and financial position of the issuer The report on operations contains a reliable analysis of operating performance and results and of the position of the issuer and all companies included in the basis of consolidation, together with a description of the main risks and uncertainties to which they are exposed. 12 March 2012 Paolo Ceretti Chief Executive Officer Manolo Santilli Manager responsible for preparing the company’s accounts


202

Information pursuant to art. 149-duodecies of the Consob Issuer Regulations The table below was prepared in accordance with art. 149-duodecies of the Consob Issuer Regulations and reports the fees for 2011 for auditing and other services provided by the independent auditors and entities belonging to the independent auditors’ network. The fees reported below do not include VAT and out-of-pocket expenses.

(EUR thousand)

Company providing the

service BeneficiaryCompensation paid

for 2011 FY Audit KPMG S.p.A. DeA Capital S.p.A. 92 Certification services (1) KPMG S.p.A. DeA Capital S.p.A. 7

Total 99 1) Single model subscription/770


203

Summary of Subsidiaries’ Financial Statements to 31 December 2011


204

(EUR thousand)

Dea Capital Investments

S.A. Group I.F.IM. S.r.l.

Gruppo Fare Holding S.p.A.

*

IDeA Alternative

Investments S.p.A. Group

Non-current assets 527,530 48,431 7,721 58,772

Current assets 508 614 8,177 12,644

Assets relating to joint ventures 0 0 0 0

Available-for-sale financial assets - non-current portion 0 0 0 0

Consolidated assets 528,038 49,045 15,898 71,416

Shareholders’ equity 522,806 11,180 12,813 62,507

Non-current liabilities 915 37,307 389 5,977

Current liabilities 4,316 558 2,696 2,932

Liabilities relating to joint ventures 0 0 0 0

Consolidated liabilities 528,037 49,045 15,898 71,416

Alternative asset management fees 0 0 12,437 16,917

Service revenues 0 0 10,601 0

Other investment income/charges (42,806) 1,000 7,110 (116)

Other income 40 0 107 (31)

Personnel costs 0 0 7,630) (7,085)

External service costs (194) (129) (6,433) (3,522)

Depreciation and amortisation 0 (1) (1,570) (2,416)

Costs and charges relating to joint ventures (excluding tax) 0 0 0 0

Other charges (630) (1) (555) (8)

Financial income 94 1,614 138 191

Financial charges (140) (845) (71) (17)

Taxes 98 (39) (3,291) -1,725

Profit/(loss) for the period from held-for-sale operations 0 0 0

Net profit/(loss) (43,538) 1,599 10,843 2,817

* with the equity investment in IDeA FIMIT SGR valued at cost


205

Independent Auditors’ Reports (Original report in Italian version only)


206

Report of the Board of Statutory Auditors (Original report in Italian version only)

1

FINANCIAL STATEMENTS FOR THE YEAR ENDING 31 DECEMBER 2011

of IDeA Alternative Investments S.p.A.

______________________________________________________________

2

IDEA ALTERNATIVE INVESTMENTS S.P.A. The data below relate to the year ending 31 December 2011. Following the merger by incorporation of the Company into DeA Capital, all corporate roles and the independent auditing firm’s mandate have lapsed. SHARE CAPITAL EUR 2,461,500.00 (FULLY PAID-UP) REGISTERED OFFICE VIA DELL'ANNUNCIATA, 23, MILAN TAX CODE AND MILAN REGISTER OF COMPANIES NO. 04457190967 Board of Directors Lino Benassi Chairman Paolo Ceretti Director Renzo Pellicioli Director Board of Statutory Auditors Gian Piero Balducci Chairman Cesare Andrea Grifoni Permanent Auditor Roberto Spada Permanent Auditor Davide Iozzia Deputy Auditor Cristiano Proserpio Deputy Auditor Independent auditors

KPMG S.p.A.

3

TABLE OF CONTENTS

REPORT OF THE BOARD OF DIRECTORS ON OPERATING PERFORMANCE .................................... 4

FINANCIAL STATEMENTS AT 31 DECEMBER 2011 ......................................................................... 19

BALANCE SHEET .............................................................................................................................. 20

INCOME STATEMENT ...................................................................................................................... 21

STATEMENT OF COMPREHENSIVE INCOME ................................................................................ 22

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ............................................................. 23

CASH FLOW STATEMENT (DIRECT METHOD) ............................................................................... 25

NOTES TO THE FINANCIAL STATEMENTS ........................................................................................ 27

PART A: ACCOUNTING PRINCIPLES AND POLICIES ................................................................... 29

PART B: NOTES TO THE BALANCE SHEET ...................................................................................... 47

PART C: NOTES TO THE INCOME STATEMENT .............................................................................. 59

PART D: OTHER INFORMATION ..................................................................................................... 67

INDEPENDENT AUDITORS’ REPORT................................................................................................. 75

BOARD OF STATUTORY AUDITORS’ REPORT ................................................................................. .78

4

REPORT OF THE BOARD OF DIRECTORS ON OPERATING PERFORMANCE Dear shareholders, The financial statements to 31 December 2011 of IDeA Alternative Investments S.p.A. (IDeA Alternative, or simply IDeA AI) report a net profit of EUR 5,242,118 compared with a profit of EUR 7,656,299 at 31 December 2010. IDeA AI heads a group of companies that manage various types of funds, all of which have full operating autonomy (IDeA does not exercise management and coordination). Initially these included private equity funds, funds of private equity funds and co-investment funds, and subsequently, other high-return financial products. Specifically, at 31 December 2011 IDeA AI owned: a 100% stake in IDeA Capital Funds SGR, a company that manages funds of funds such

as IDeA I Fund of Funds and ICF II, and direct investment funds IDeA Opportunity Fund I and IDeA Energy Efficiency and Sustainable Growth Fund. The latter is a "theme" fund operating in the renewable energy sector. Although managed through separate investment programmes, the business areas are part of the same strategy to create value. The investment strategies of funds of funds focus on building a diversified, rational portfolio of investments in private equity funds in the top quartile or that are next- generation leaders with balanced asset allocation through diversification by industrial sector, investment strategy and stage, geographical area and maturity. The investment strategies of direct funds emphasize minority interests in medium to large LBOs together with leading qualified investors with businesses focused primarily on Europe (with a particular focus on Italy, Spain, France and Greece), and diversification as a function of the appeal of individual sectors by limiting investments during the early stage and excluding purely real estate investments. In particular, the theme fund EESS is focused on growth capital and buyout private equity to support the growth of small and medium-sized businesses with excellent products or services for energy efficiency and sustainable development. Investments will be made in infrastructure for generating energy using renewable sources, or early stage infrastructure with a focus on Italy (potential opportunities in Germany, Switzerland and Israel will be explored only in conjunction with reliable local co-investors)

a 65% stake in Soprarno SGR, an asset management company active in the asset

management market in Italy with seven open-ended real-estate mutual investment funds broken down into:

Passive funds: the return replicates that of a benchmark index

Absolute return funds: investment aimed at obtaining a certain return regardless

of market performance

Soprarno strategy funds: management techniques used by hedge funds to seek the best opportunities in global markets

5

Esse Funds with discretional management: discretional management techniques

enable the best opportunities in global markets to be exploited a 65% stake in IDeA SIM, a securities brokerage company, active in the area of

investment advisory services with no assets under administration and no related risks. IDeA SIM's strategy aims to satisfy the needs of private customers in the high net worth individuals and ultra-high net worth individuals segment, offering both structured global consulting services and typical family office services

a 10% stake in Alkimis SGR, an Italian asset management company that focuses on

alternative products for high-profile private and institutional investors. Alkimis SGR manages two investment vehicles: Alkimis Capital and Alkimis Capital UCITS

IDeA AI corporate structure at 31 December 2011

MACROECONOMIC SITUATION The complex economic and financial situation that arose during 2008-2009 had an obvious impact on the general economy in 2010, while in 2011 there was an increasingly global recovery in the first half, which was more pronounced in emerging economies. During the second half of 2011, however, as indicated by International Monetary Fund (IMF) projections, global economic growth prospects worsened. Global financial markets experienced significant volatility in the second half of the year, due mainly to the uncertainties surrounding the future of the single European currency. A minor recession is expected to materialise in mature European economies in 2012 due to the sovereign debt crisis, the impact of bank deleveraging on the real economy and the impact of additional tax consolidation policies announced by governments.

100 %

100 % 65 % 65 % 10 %

ID e AI Fund of Funds ICF II

IDeAOpportunity

Fund

Energy Efficiency and SustainableGrowth

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The most significant risks are mainly linked to the possibility that the negative effects of the sovereign debt and banking crisis in the Eurozone could get worse. This would lead to a further contraction of loans to businesses and households, and lower expectations of economic growth as a result. The first signs provided by financial markets at the beginning of 2012 seem to dismiss the most catastrophic scenarios that were taking shape in the fourth quarter of last year. Although the problems with European sovereign debt, and in particular, Greek debt, have not been resolved, the efforts of governments and commitment of the International Monetary Fund are gathering the support of investors as demonstrated by the recovery of major stock indices and the reduction in the yield spread between German government bonds and those of peripheral countries. The uncertain economic situation and the resulting volatility in financial markets have also had a major impact on the global private equity market. Investment activity has suffered from the greater unwillingness of European banks to provide loans for buy-out transactions, which is only partially offset by investors' additional use of bond financing. Furthermore, the prospect of a zero-growth scenario in Europe affected the ability of European private equity funds to raise capital, with a gradual increase in allocations toward funds focused on emerging countries. There were no trend reversals in funds raised, which totalled USD 277 billion in 2011, in line with 2010 (USD 307 billion in 2009). Instead, there was a sharp increase in the value of the amount raised in listings of companies owned by private equity and venture capital fund. The volumes of IPOs by companies financed by private equity funds in 2011 totalled USD 24 billion (USD 17 billion in 2010), which was even higher than 2007 levels. Investment activity is up compared with 2010, with the volume of buy-out investments reaching USD 258 billion, versus around USD 218 billion in 2010 (source: Preqin). Despite widespread uncertainty, investment activity rose by 18% on an annual basis. However, the aggregate figure hides a significant reduction in investments in the second half of the year (-16%). The first three quarters of 2011 generated distributions of USD 55 billion, a sharp reduction from the USD 111 billion in 2010, which included USD 65 billion in the first half alone. Private equity in Europe The European market accounts for just over 20% of the global market. Fund raising declined markedly in 2009, while there was a gradual recovery in the following two years. Fund raising rose from EUR 55 billion in 2010 to EUR 61 billion in 2011. Private equity in Italy Statistics prepared by AIFI (the Italian Private Equity and Venture Capital Association) and currently updated to the first half of 2011 show a 19% decline in fund raising compared with

7

the same period in 2010, even though the first signs of the European sovereign debt crisis occurred in the second half of the year. Conversely, investment operations improved significantly and are still focused on small transactions – traditionally a feature of the Italian market – which proved to be more stable than large transactions requiring significant financial leverage.

The number of new investments rose from 129 to 159, with a total value of EUR 1,524 million (up by 176% compared with the same period in 2010).

Despite the difficult environment, there are positive signs from the buy-out sector, where investments in the first half of 2011 more than tripled from EUR 329 million to EUR 1,160 million, with 27 transactions. There were also good results from the expansion segment relating to minority investments intended to support the growth programmes of existing businesses, which doubled in the first half of 2011 with 74 transactions ranging from EUR 145 million to EUR 280 million.

Outlook for private equity in 2012 It is reasonable to expect that the recovery in private equity investment activities may continue in future years if the macro-economic situation allows banks to avoid solvency problems and to provide cash to the credit market.

The strengthening of fund raising at lower levels, together with the natural selection process of managers, will result in less competition in the area of investments, and as a result, stability in purchase prices.

It will finally be possible to work out several current investment issues related to today’s environment of volatility and uncertainty.

Distressed funds will benefit from new opportunities provided by the European sovereign debt crisis following the process of reducing non-core assets by European banks. Certain emerging economies such as China, Brazil, Turkey and Indonesia, offer opportunities that are mainly linked to clear economic growth and healthy government finances.

In these economies, private equity also benefits from a low level of penetration in total M&A transactions with a lower level of competition.

Lastly, a rise in conversions linked to expectations of an increase in the value of portfolios is also likely.

The mutual fund market After an encouraging start to the new year, the asset management industry suffered from the deterioration experienced in the macro-economic and financial environment. In the second half of the year, redemptions in the collective asset management market gained the upper hand with outflows during the 12 month period of nearly EUR 31 billion, of which EUR 17 billion occurred in the last quarter.

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The debt crisis is having a severe effect on market prospects, while brokers are unconvincingly attempting to stem the outflow of assets from the managed product market. The outlook for the industry should be seen in this context. Growth strategies will still need to consider the possibility of external growth in a market in which other players will choose how and when to exit the direct management sector. SIGNIFICANT EVENTS DURING THE YEAR Corporate reorganisation of IDeA Alternative Investments S.p.A. Partial non-proportional demerger The demerger was structured as a partial non-proportional demerger with a reduction in the share capital of IDeA AI and an allocation of the equity investments and rights of usufruct in Investitori Associati SGR and Wise SGR to the management of Investitori Associati SGR and the management of Wise SGR respectively. Following approval by the Bank of Italy, the demerger of IDeA AI, effective from 17 January 2011, was completed on 13 January 2011. DeA Capital S.p.A., which previously held 44.36% of the company’s capital, has therefore acquired control of 90.11% of IDeA AI and its assets. These primarily include 100% of IDeA Capital Funds SGR, 65% of Soprarno SGR and 65% of IDeA SIM.

Moreover, on 20 January 2011, in order to gain control of the entire share capital of IDeA AI, DeA Capital S.p.A. acquired the remaining 9.89% of the company’s stock held by private investors.

Merger of IDeA AI into the parent company DeA Capital

On 26 July 2011, in order to continue the process of simplifying the shareholder base, corporate governance and investment processes, which began with the partial non-proportional demerger at the beginning of 2011, the Boards of Directors of IDeA AI and DeA Capital S.p.A. approved the merger by incorporation of the subsidiary IDeA AI into DeA Capital S.p.A.

The intention behind the operation, which entails the reorganisation of the DeA Capital Group’s corporate structure, is to centralise within the parent company the cash flows from and the determination of strategic guidelines for the alternative asset management business.

The Bank of Italy had already given its approval, and the operation took effect on 1 January 2012.

9

Sale of stake in IDeA AI S.à.r.l. On 1 February 2011 the sale of IDeA AI S.à.r.l. (100% owned) by IDeA Alternative to Omega Skye Partners L.P. was completed. The sale of the equity investment generated proceeds of EUR 2.3 million as the base component of the sale price, which was in line with the net equity of the company sold. Prior to the sale, IDeA AI S.à.r.l. distributed a dividend of EUR 0.3 million to IDeA Alternative. INVESTMENT PORTFOLIO IDeA Capital Funds SGR On 18 April 2011, the shareholders' meeting of IDeA Capital Funds approved the 2010 financial statements and the distribution of dividends totalling EUR 5 million. The company reported a net profit of EUR 4.9 million in 2011. At 31 December 2011 shareholders' equity totalled EUR 6.6 million. The company's net cash position was EUR 7.8 million. Below is a summary of the results of IDeA Capital Funds SGR at 31 December 2011. (EUR million)

2011 2010 Change: 2011 vs. 2010

AUM 1,232 1,179 53

Management fees 12.8 12.9 (0.1)

EBT 7.6 7.7 (0.1)

Net profit 4.9 5.1 (0.2)

In 2011, management fees were broadly unchanged from the previous year even with the contribution of the Energy Efficiency and Sustainable Growth fund (EUR +0.8 million) and the increase in management fees of the IDeA Opportunity Fund (EUR +0.3 million). Lower management fees of the ICF II fund in 2011 versus 2010 were due to the impact of the set-up and adjustment fees of later investors vis-a-vis previous investors reported in 2010 (EUR 1.2 million). Funds managed by IDeA Capital Funds SGR IDeA Opportunity Fund I This fund has total assets of approximately EUR 217 million. Its objective is to invest – via syndicates with a lead investor, independently, or by purchasing qualified minority interests – in medium-sized and large transactions.

At 31 December 2011, IDeA OF I had called up approximately 52.1% of the total commitment after making five investments:

on 8 October 2008, it acquired a 5% stake in Giochi Preziosi S.p.A., a company active in

10

the production, marketing and sale of children’s games with a product line covering childhood to early adolescence

on 22 December 2008, it acquired a 4% stake in Manutencoop Facility Management

S.p.A. through subscription to a reserved capital increase. Manutencoop is Italy’s leading integrated facility management company, providing and managing a wide range of property management services and other services for individuals and government agencies

on 31 March 2009, it acquired a 17.43% stake in Grandi Navi Veloci S.p.A., an Italian

shipping company that transports passengers and goods on various routes around the Mediterranean Sea. On 2 May 2011, with the finalisation of Marinvest's entry into the company's shareholder structure via the subscription of a reserved capital increase, the stake held by IDeA OF I was diluted to 9.21%. At end-2011, based on information reported during the last quarter and the outlook for future years, the Board of Directors of IDeA Capital Funds SGR believed that there had been a permanent loss in value, and thus recorded a write-down of about EUR 11.4 million for the investment. At 31 December 2011, the cumulative overall net impairment of the equity investment was approximately EUR 23.8 million

on 10 February 2011, it invested in a bond that is convertible into shares of Euticals

S.p.A., Italian leader in the production of active ingredients for pharmaceutical companies that operate in the generics sector

on 25 February 2011, it purchased a 9.29% stake in Telit Communications PLC, the third-

largest producer of machine-to-machine communications systems in the world. The stake held by OF I was subsequently diluted to 9.13% due to the exercise by the company's management of a packet of stock options. At 31 December 2011, as a result of a drop in the price of the security, the investment was written down by about EUR 3.7 million.

IDeA I Fund of Funds IDeA I FoF, which has total assets of approximately EUR 681 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries, and optimises the risk-return profile. At the date of the latest report available, the IDeA ICF II portfolio was invested in 42 funds with different investment strategies; these funds in turn hold around 421 positions in companies with various degrees of maturity that are active in geographical regions with different growth rates. The funds are diversified in the buy-out (control) and expansion (minorities) categories, with an overweighting in medium-sized and small transactions and special situations (distressed debt, and equities and turnarounds). At 31 December 2011, IDeA I FoF had called up 65.6% of its total commitment and had made distributions totalling around 14.5% of that commitment. ICF II ICF II, which had total assets of EUR 281 million at 31 December 2011, invests its assets in units

11

of unlisted closed-end funds that are mainly active in the local private equity sector of various countries, and optimises the risk-return profile. The fund started building its portfolio by focusing on funds in the area of mid-market buy-outs, distressed and special situations, loans, turnarounds and funds with a specific sector slant, targeting in particular opportunities offered in the secondary market. At the date of the latest report available, the ICF II portfolio was invested in 18 funds with different investment strategies; these funds in turn hold around 64 positions in companies with various degrees of maturity that are active in geographical regions with different growth rates. At 31 December 2011, ICF II had called up about 16% of the total commitment. IDeA Energy Efficiency and Sustainable Growth Fund On 1 August 2011, the first closing of the IDeA Energy Efficiency and Sustainable Growth Fund (IDeA EESS) took place, obtaining subscription commitments of EUR 51 million. On 15 December 2011 the fund completed the second closing totalling EUR 2.5 million bringing the total commitment to EUR 53.5 million. The fund seeks to acquire minority and controlling interests in unlisted companies in Italy and abroad (particularly Germany, Switzerland and Israel) by investing jointly with local partners. The fund is dedicated to investing in small and medium-sized manufacturing and service companies operating in the field of energy savings and the efficient use of natural resources. It focuses on the development of faster and cheaper solutions in the use of renewable energy sources without compromising effectiveness in reducing CO2 emissions, against a backdrop of sustained growth in global energy demand. In accordance with the objective of an overall size of EUR 100 million for the fund, IDeA Capital Funds SGR is continuing its fund raising activities in both Italy and other countries, where contacts with a number of leading institutional investors have already been made. Soprarno SGR On 29 March 2011, the shareholders' meeting of Soprarno SGR approved the financial statements to 31 December 2010 and at the same time voted to carry forward the loss of EUR 0.2 million. The profit for the year ending 31 December 2011 was EUR 0.5 million (100%). The company's shareholders' equity was EUR 2.4 million, with a cash position of EUR 2.5 million. The slower-than-expected growth in assets was more than offset by a favourable asset mix and cost containment measures. At the beginning of 2011, assets under management totalled EUR 269 million compared with EUR 270 million at 31 December 2011. In 2011 the growth of assets under management benefited from net fund raising of EUR 5 million, which, however, was offset by the adverse effect of the market performance to the tune of EUR 4 million. In 2011, four of the seven funds managed reported positive performance.

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The corporate reorganisation of IDeA AI, which was completed in January 2011, brought the company's listing project to a close with the resulting activation of the put option for 30% of Soprarno SGR currently held by Banca Ifigest (art. 9.3 of the shareholders' agreement entered into by IDeA AI and Banca Ifigest). IDeA SIM This company's operations, which commenced in July 2010, grew in 2011 to a total of 14 customers with assets under advisory. Assets under advisory, which totalled around EUR 25 million at the end of 2010, rose to EUR 129 million at end-2011. The advisory fees for these assets were not sufficient to offset the company's current costs, and on 30 June 2011 it became necessary to make a payment of EUR 0.2 million into a reserve for the future increase of share capital. A loss of EUR 0.2 million was reported in 2011. Adjusted for the payment into the future capital increase account, at 31 December 2011 the company's shareholders' equity was EUR 0.01 million making it necessary to write down the value of the investment held by IDeA Alternative to its current net equity value. The company's net cash position was EUR 0.2 million at end-2011. Alkimis SGR On 27 April 2011, the shareholders' meeting of Alkimis SGR S.p.A. approved the company's financial statements for the year ending 31 December 2010 and the distribution of dividends totalling EUR 0.2 million. On 27 May 2011, dividends equal to 10% of the total distributed (EUR 0.02 million) were paid to IDeA Alternative. The company established and currently manages two open-ended funds with assets at end-2011 totalling EUR 76.5 million for the Alkimis Capital fund and EUR 13.2 million for the Alkimis Capital UCITS fund. In the second half of 2011, the company also started providing services as the designated manager of the Duemme Alkimis portfolio on behalf of Duemme, a SICAV (open-ended investment company) under Luxembourg law, in the Banca Esperia Group. The NAV of assets under management was about EUR 7 million at the end of the year. Fee income in 2011 for the two funds and for delegated management services totalled EUR 1.5 million.

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KEY INCOME STATEMENT AND BALANCE SHEET FIGURES Key income statement and balance sheet figures for the company are provided below. (EUR million)

2011 2010 Change: 2011 vs. 2010

Personnel costs (1.1) (1.1) 0.0

Other net income/(costs) (0.6) (1.0) 0.4

Impact of demerged/sold assets 2.6 4.9 (2.3)

Dividends 5.0 4.5 0.5

Other financial income/(charges) (1.0) 0.0 (1.0)

EBT 4.9 7.3 (2.4)

Taxes 0.4 0.4 0.0

Net profit/(loss) 5.2 7.7 (2.4)

The improvement in other net income/(costs) from the previous year was due mainly to the reduction in professional service and advisory fees due to the corporate reorganisation of IDeA Alternative. The increase in dividends in 2011 compared with 2010 was due to the distribution of a dividend by IDeA Capital Funds SGR in 2011 that was EUR 0.5 million higher than the dividend paid in 2010. Financial charges in 2011 were for the impairment of IDeA SIM (EUR 0.6 million) and the decrease in the fair value of the derivative recorded against the put option for 30% of Soprarno SGR granted to Banca Ifigest (EUR 0.4 million at 31 December 2011, and close to zero at the end of the previous year). At 31 December 2011, the company's net cash position was EUR 0.9 million which included EUR 1.3 million in cash and temporary investments of cash, and a liability of EUR 0.4 million for the derivative contract on the put option for 30% of Soprarno SGR. OTHER INFORMATION Own shares Pursuant to art. 2428, paragraph 2, nos. 3) and 4) of the Italian Civil Code, note that IDeA Alternative Investments S.p.A. does not own and did not dispose of any own shares in 2011, including through a trust company or intermediary. Research and development activities Note that pursuant to art. 2428 (2) (1) of the Italian Civil Code, IDeA Alternative Investments S.p.A. did not carry out any research and development activities in 2011.

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Corporate Governance The Board of Directors of IDeA Alternative Investments S.p.A. comprised three members including the chairman, up to the date of 31 December 2011, and played a key role in the company's corporate governance system throughout the year. The Board of Statutory Auditors comprised five members up to the date of 31 December 2011: the chairman, two permanent auditors and two deputy auditors. Throughout 2011, this body monitored compliance with the law and the articles of association, observance of the principles of proper management and the suitability and proper functioning of the organisational, administrative and accounting structure. Security planning document Art. 34 of Legislative Decree 196 of 30 June 2003 stipulates that in cases where personal data is handled electronically, certain security measures must be adopted, as set out in the Technical Regulations of Attachment B of the law. These include, under para. g), the maintenance of an up-to-date Security Planning Document. The Security Planning Document contains the technical and organisational security measures implemented in compliance with the law to ensure the protection of personal data with regard to its storage and handling. These measures are based on risk analysis and the distribution of duties and responsibilities within the structures set up to handle personal data. In accordance with the provisions of current regulations, IDeA Alternative updated the Security Planning Document in March 2011. Risk management IDeA Alternative operates in the alternative investment (Alternative Asset Management) sector, and investments held by the company are exposed to numerous risks and uncertainties. Systemic risks Systemic risks concern changes in macro-economic variables including GDP, interest rates, inflation, exchange rates, the unemployment rate and the state of the financial markets. These risks indirectly affect the company through the investments held. The ability to meet medium- to long-term objectives in the sectors in which investee companies invest may be affected by overall economic performance. It is the responsibility of the company and investee companies to ensure that the management of business areas implements an investment strategy aimed at sector and geographical diversification to enable a balanced portfolio of assets to be created with different geographical exposure.

15

Investment risks The income flows expected from the alternative asset management business depend on the ability of the company's investee companies to stabilise/grow their assets under management. In this general context, fund raising could be adversely affected by the continuation of the global economic crisis, interest rate fluctuations, bad timing in respect of fund raising or the departure of key managers. Investee companies must efficiently monitor this risk not only during the development of new initiatives, but also when consolidating existing ones. Investment concentration risks Events connected with excessive concentration, which could hinder the achievement of projected earnings, are due to the concentration of investee companies' managed assets in a limited number of funds, customers, sectors and/or geographical areas, and for closed-end funds, to the concentration of commitments in a small number of subscribers when counterparties are faced with financial difficulties. In general, the main categories of risk that could affect asset management companies that are part of IDeA Alternative’s investment portfolio are attributable to financial risks (market, counterparty, liquidity and credit risk) and operating risks (especially management processes and measurement methodologies) that involve investments of the assets and cash of these companies. Since these investments are held only in current accounts at banks, they do not involve particular financial risks. The above-mentioned risks and uncertainties are not critical in nature, and confirm the strong financial position of IDeA Alternative. Market risks Market risks associated with the investment activities of IDeA Alternative concern difficulties in identifying new investment opportunities and/or the difficulty of selling investments as a result of changes in general economic conditions. The governance system must promote the effective management and achievement of strategic objectives and the risks and uncertainties must be assessed and monitored periodically. The table below quantifies market risks inherent in available-for-sale investments (temporary investments of cash and in closed-end securities funds).

16

(EUR million)

Item/Remaining term

Up to

3 m

onth

s

3 to

6 m

onth

s

6 m

onth

s to

1 ye

ar

1 to

5 y

ears

5 to

10

yea

rs

Mor

e th

an

10 y

ears

Unsp

ecifi

ed te

rm

1. Assets 1.3 2.8 1.1 Debt securities 1.2 Receivables 1.3 Other assets 1.3 2.8

2. Liabilities 2.1 Payables 2.2 Debt securities 2.3 Other liabilities

3. Financial derivatives Options 3.1 Long positions 3.2 Short positions Other derivatives 3.3 Long positions 3.4 Short positions

Liquidity risks Liquidity risks are based on the eventuality that the company is not in a position to honour its payment obligations thereby compromising the company's day-to-day operations or its financial situation. IDeA AI’s objective is to fund its operations under the best rate conditions in normal operating conditions, and to continue to be able to honour its payment obligations in the event of a liquidity crisis. The company's rules for managing liquidity risk are based on two principles: 1 management of short-term liquidity, aimed at ensuring its ability to honour its payment

obligations by maintaining a sustainable ratio between cash inflows and outflows 2 management of structural liquidity, aimed at maintaining an appropriate ratio

between total liabilities and medium- and long-term assets Below is a breakdown of financial assets and liabilities by remaining contract term.

17

(EUR million)

Item/Time intervals On demand 1 - 7 days 7 - 15

days 15 days

to 1 month

1 - 3 months

3 - 6 months

6 months to 1 year

1 - 3 years

Over 3 years

Unsp

ecifi

ed

term

Balance sheet assets 1.3 2.8 A.1 Government securities

A.2 Other debt securities

A.3 Loans A.3 Other assets 1.3 2.8

Balance sheet liabilities (0.4) B.1 Payables to:

- Banks - Financial institutions - Customers

B.2 Debt securities B.3 Other liabilities (0.4)

Off-balance-sheet transactions C.1 Financial derivatives with

exchange of principal - long positions - short positions

C.2 Financial derivatives without

exchange of principal - Positive differences - Negative differences

C.3 Loans to be received - long positions - short positions

C.4 Irrevocable commitments to

disburse funds - long positions - short positions

C.5 Financial guarantees issued

Branch offices of the company Pursuant to art. 2428, last paragraph of the Italian Civil Code, IDeA Alternative advises that as at 31 December 2011 it had no branch offices. Significant events after the end of the year The merger by incorporation of IDeA Alternative into DeA Capital S.p.A. came into effect on 1 January 2012. See page 9 of this report on operations for further details on this transaction. Outlook The intention behind the merger by incorporation of IDeA Alternative into DeA Capital S.p.A. is to centralise cash flows within the parent company and to determine strategic guidelines for the alternative asset management business. See page 9 of this report on operations for further details on this transaction.

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*** In acknowledgement of the draft financial statements to 31 December 2011, which report a profit of EUR 5,242,118 (profit of EUR 7,656,299 in 2010), and the reports of the Board of Statutory Auditors and independent auditors, KPMG S.p.A., we invite the shareholders to approve the financial statements for the year ending 31 December 2011 and to carry forward the profit of EUR 5,242,118 reported in the financial statements to 31 December 2011. Milan, 12 March 2012

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FINANCIAL STATEMENTS FOR THE YEAR ENDING 31 DECEMBER 2011

20

BALANCE SHEET

(in EUR)

Assets 2011 2010

10. Cash and cash equivalents 351 1,916

40. Available-for-sale financial assets 4,311,840 40,196,034

60. Receivables 48,024 1,068,134

90. Equity investments 3,807,664 24,800,474

100. Tangible assets 82,718 103,010

110. Intangible assets 11,046 15,138

120. Tax assets 83,824 1,211

a) Current 83,824 1,211

140. Other assets 649,162 576,899

TOTAL ASSETS 8,994,629 66,762,816

(in EUR)

Liabilities and shareholders’ equity 2011 2010

30. Trading financial liabilities 403,749 0

70. Tax liabilities 151,703 161,382

a) Current 76,961 158,499

b) Deferred 74,742 2,883

90. Other liabilities 409,444 358,617

100. Post-employment benefits (TFR) 16,099 7,883

120. Share capital 2,461,500 5,000,000

150. Share issue premium 0 35,500,008

160. Reserves 130,575 3,039,904

170. Revaluation reserves 179,441 15,038,723

180. Profit/(loss) for the year 5,242,118 7,656,299

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 8,994,629 66,762,816

21

INCOME STATEMENT

(in EUR)

Item 2011 2010

10. Interest and similar income 4,231 5,686

20. Interest and similar expenses (14,468) (14,789)

NET INTEREST INCOME/(EXPENSES) (10,237) (9,103)

50. Dividends and similar income 5,294,338 9,845,624

60. Net profit/loss from trading activity (403,749) 0

90. Gains/(losses) on sale or repurchase of: 11,880 109

a) financial assets 11,880 109

TOTAL OPERATING INCOME 4,892,232 9,836,630

100. Net adjustments/reversals: (142,697) (235,024)

a) financial assets (142,697) (235,024)

110. Administrative expenses: (1,630,578) (2,355,875)

a) personnel costs (1,090,530) (1,147,511)

b) other administrative expenses (540,048) (1,208,364)

120. Net adjustments/reversals to tangible assets (24,184) (22,431)

130. Net adjustments/reversals to intangible assets (4,092) (4,092)

160. Other operating income/(expenses) 59,817 24,165

OPERATING PROFIT 3,150,498 7,243,373

170. Gains/(losses) on equity investments 1,715,809

PROFIT/(LOSS) FROM CONTINUING OPERATIONS BEFORE TAX 4,866,307 7,243,373

190. Income tax on profit from continuing operations 375,811 412,926

PROFIT/(LOSS) FROM CONTINUING OPERATIONS AFTER TAX 5,242,118 7,656,299

PROFIT/(LOSS) FOR THE YEAR 5,242,118 7,656,299

22

STATEMENT OF COMPREHENSIVE INCOME Comprehensive income or the Statement of Performance (IAS 1), in which performance for the year is reported including results posted directly to shareholders' equity, reflects a net positive balance of EUR 5,410 thousand compared with a net positive balance of EUR 8,017 thousand at 31 December 2010. This statement provides an overview of the performance of the company and shows the actual result of the company’s activities, as explained in the Report on Operations and the notes to the financial statements.

(in EUR)

Item 2011 2010

10. Profit/(loss) for the year 5,242,118 7,656,299

Other income net of tax

20. Available-for-sale financial assets: 167,644 360,526

110. Other income net of tax 167,644 360,526

120. Comprehensive income (item 10 + 110) 5,409,762 8,016,825

23

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(in EUR)

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Allocation of prior year profit Changes in the year

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1.12

.11

Changes in reserves

Equity transactions

Reserves Dividends and other

allocations Issue of new

shares Own share buy-back

Extraordinary distribution of

dividends Changes to

equity instruments

Other changes

Share capital 5,000,000 5,000,000 (2,538,500) 2,461,500

Share issue premium 35,500,008 35,500,008 (35,500,008) 0

Reserves:

a) retained profit 3,070,016 3,070,016 956,299 (3,865,628) 160,687

b) other (30,112) (30,112) (30,112)

Revaluation reserves 15,038,723 15,038,723 (15,026,926) 167,644 179,441

Equity instruments

Own shares

Profit/(loss) for the year 7,656,299 7,656,299 (956,299) (6,700,000) 5,242,118 5,242,118

Shareholders’ equity 66,234,934 0 66,234,934 0 (6,700,000) (56,931,062) 5,409,762 8,013,634

Other changes in shareholders' equity related to the partial non-proportional demerger, which, following approval by the Bank of Italy, came into effect on 17 January 2011. As a balancing entry for the assets involved in the demerger (the 49% stake in Investitori Associati and 29% stake in Wise, the right of usufruct to 51% of the shares of both companies and receivables for related rights, as well as a portion of the bank current account balance), 2,538,500 shares and the related share premium, the revaluation reserve related to usufruct rights and a portion of the extraordinary reserve were eliminated.

24

(in EUR)

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.09

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1.01

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Com

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0

Sha

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quity

at 3

1.12

.10

Changes in reserves

Equity transactions

Reserves Dividends and other

allocations Issue of new

shares Own share buy-back

Extraordinary distribution of

dividends Changes to

equity instruments

Other changes

Share capital 5,000,000 5,000,000 5,000,000

Share issue premium 35,500,008 35,500,008 35,500,008

Reserves:

a) retained profit 2,267,879 2,267,879 802,138 3,070,016

b) other (30,112) (30,112) (30,112)

Revaluation reserves 14,678,197 14,678,197 360,526 15,038,723

Equity instruments

Own shares

Profit/(loss) for the year 6,802,138 6,802,138 (802,138) (6,000,000) 7,656,299 7,656,299

Shareholders’ equity 64,218,110 64,218,110 (6,000,000) 8,016,825 66,234,934

25

CASH FLOW STATEMENT (direct method)

(in EUR)

A. OPERATING ACTIVITIES Amount

2011 2010

1. Management (1,365,010) (2,538,568)

- interest income received (+) 0 5,686

- interest expense paid (-) (5,713) (14,789)

- personnel costs (-) (340,089) (936,061)

- other expenses (-) (880,757) (1,339,037)

- other income (+) 27,001 0

- taxes and duties (-) (165,452) (254,366)

2. Cash generated/absorbed by financial assets 268,705 (734,070)

- available-for-sale financial assets 268,705 (2,965,214)

- receivables from customers 0 2,231,144

3. Cash generated/absorbed by financial liabilities 0 0

- payables to customers 0 0

Net cash generated/absorbed by operating activities (1,096,305) (922,638)

B. INVESTING ACTIVITIES

1. Cash generated by 7,620,000 12,252,727

- sale of equity investments 2,350,000 0

- dividends received relating to investments 5,270,000 12,252,727

2. Cash absorbed by (256,304) (746,568)

- purchase of investments (250,250) (689,575)

- purchase of tangible assets (6,054) (38,993)

- purchase of intangible assets 0 (18,000)

Net cash generated/absorbed by investing activities 7,363,696 9,156,159

C. FUNDING ACTIVITIES

- dividends paid and other uses (6,700,000) (6,000,000)

Net cash generated/absorbed by funding activities (6,700,000) (6,000,000)

NET CASH GENERATED/ABSORBED DURING THE YEAR (432,609) 2,233,521

26

RECONCILIATION

(in EUR)

Amount

2011 2010

Cash and cash equivalents at beginning of period 480,984 (1,752,537)

Net cash generated/absorbed during the period (432,609) 2,233,521

Cash and cash equivalents at end of period 48,375 480,984

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NOTES TO THE FINANCIAL STATEMENTS PART A – ACCOUNTING PRINCIPLES AND POLICIES A.1 General Section 1 Statement of compliance with international accounting standards Section 2 General reporting principles Section 3 Events after the reporting date Section 4 Other considerations A.2 Main financial statement balances A.3 Fair value disclosure PART B - NOTES TO THE BALANCE SHEET ASSETS Section 1 Cash and cash equivalents Section 4 Available-for-sale financial assets Section 6 Receivables Section 9 Equity investments Section 10 Tangible assets Section 11 Intangible assets Section 12 Tax assets Section 14 Other assets LIABILITIES Section 3 Trading financial liabilities Section 7 Tax liabilities Section 9 Other liabilities Section 10 Post-employment benefits (TFR) Section 12 Shareholders' equity PART C - NOTES TO THE INCOME STATEMENT Section 1 Interest Section 3 Dividends and similar income Section 4 Net profit/loss from trading activity Section 8 Net adjustments/reversals relating to impairment Section 9 Administrative expenses Section 10 Net adjustments to tangible assets Section 11 Net adjustments to intangible assets Section 14 Other operating income/(expenses) Section 15 Gains/(losses) on equity investments Section 17 Income tax on profit from continuing operations

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PART D - OTHER INFORMATION Section 1 Details on activities performed D Guarantees issued and commitments Section 3 Risks and related hedging policies Section 4 Shareholders' equity 4.1 Company shareholders' equity Section 5 Breakdown of Comprehensive Income Section 6 Transactions with related parties 6.1 Remuneration of senior managers with strategic

responsibilities 6.2 Loans and guarantees issued to directors and statutory

auditors 6.3 Transactions with related parties 6.4 Shareholdings held by directors, auditors and the General

Manager Section 7 Other information 7.1 Management and coordination 7.2 Independent auditors' fees

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PART A

ACCOUNTING PRINCIPLES AND POLICIES

A.1 General Section 1 – Statement of compliance with International Financial Reporting Standards The financial statements for the year ending 31 December 2011 have been prepared in accordance with the International Accounting Standards adopted by the European Union and approved by the date the financial statements were prepared (International Accounting Standards, or individually IAS/IFRS, or collectively IFRS (International Financial Reporting Standards)). "IFRS" also means all interpretations of the International Financial Reporting Interpretations Committee (IFRIC), including those previously issued by the Standing Interpretations Committee (SIC), and approved by the European Union. The financial statements were prepared with a focus on clarity, and provide a true and fair view of the balance sheet, financial situation, income statement and cash flows for the period. Section 2 – General reporting principles IDeA Alternative Investments S.p.A. (the Company or IDeA Alternative) is a stock company with its registered office at Via dell'Annunciata, 23, Milan. The balance sheet was prepared in accordance with the general principles of IAS 1, specifically: accruals principle: the effect of events and transactions is recorded when they occur,

and not when payment is made or received going concern principle: the financial statements are prepared under the assumption

that business operations will continue in the near future materiality: when reporting operating events in accounting entries, preference is given

to the principle of economic substance over form comparative information: the financial statements must show comparative information

for the previous period The Financial Statements to 31 December 2011 consist of the Balance Sheet, Income Statement, Cash Flow Statement, Statement of Comprehensive Income (Statement of Performance - IAS 1), Statement of Changes in Shareholders' Equity and the Notes to the Financial Statements. On 13 March 2012, the Bank of Italy issued "Instructions for the Preparation of Financial Statements and Reports of Financial Intermediaries pursuant to art. 107 of the TUB (Italian Consolidated Bank Act), of payment institutions, electronic currency institutions, asset management companies and securities brokerage companies, applicable to financial

30

statements starting from the year ending 31 December 2011." The financial statements, tables in the notes to financial statements and accompanying information already comply with these new instructions. The tables included in these notes to financial statements are rounded to the nearest whole euro, and unless otherwise indicated, comments are presented in thousands of euros. The formats used show both the figure in the accounts at 31 December 2011 as well as the comparative figure at 31 December 2010 (for the balance sheet, income statement, statement of changes in shareholders' equity and cash flow statement, with the latter prepared using the direct method). Where necessary, figures were restated to make the financial statements for 2010 and 2011 more comparable. Section 3 – Events after the reporting date Please see the report on operations for information on events that occurred after 31 December 2011. Section 4 - Other considerations Use of estimates and assumptions The balances in the financial statements are determined in accordance with the principles indicated in Part A.2 of Accounting Policies, Main financial statement balances. When it is not possible to accurately determine the value of certain elements, the application of these principles may at times inevitably entail the use of estimates and assumptions that may have a significant impact on amounts reported in the balance sheet and income statement. The areas in which the use of estimates and assumptions is most prevalent are shown below: valuation of receivables valuation of financial assets not listed in active markets valuation of intangible assets and equity investments quantification of allocations to the provisions for risks and future liabilities quantification of deferred taxes determination of the amount of depreciation/amortisation of tangible/intangible assets

with a finite useful life An adjustment of an estimate may occur as a result of changes in the circumstances on which it was based, or as a result of new information. Any change in the estimate is applied prospectively and has an impact on the income statement for the year in which the change occurred (in future periods if applicable).

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A.2 - Main financial statement balances The following aspects of the various key balances of the balance sheet and (where applicable) the income statement, are explained: recognition and initial measurement classification subsequent measurement derecognition reporting income components CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash at hand, demand deposits and short-term, highly liquid financial investments that are readily convertible to cash and subject to a negligible risk of price variation. Their value is reported at fair value. FINANCIAL ASSETS AND DERIVATIVES Based on the classification of financial assets required by IAS 39, the company classifies its financial assets when they are acquired. Fair value is the price for which an asset could be exchanged in a free transaction between knowledgeable and independent parties. In the case of securities traded in active regulated markets, fair value is determined based on the bid price recorded on the last trading day of the balance sheet reporting period. In the case of assets not listed on active markets, such as the company’s direct investments in companies that are neither subsidiaries or associates, the fair value reported in the financial statements is determined by the directors based on their best estimate and judgment, using the knowledge and evidence available when the financial statements are prepared. In these cases, the company acts in accordance with the provisions of the IAS. In particular, IAS 39 specifies that: if there are recent transactions relating to the same financial instrument, these may be

used to determine fair value after ascertaining that there have been no significant changes in the economic environment between the date of the transactions being considered and the valuation date

if there are transactions involving similar financial instruments, these may be used to

determine fair value after verifying the similarity (in terms of the type of business, size,

32

geographic market, etc.) between the instrument for which transactions have been found and the instrument to be valued

if no prices can be found in active markets, fair value must be determined using

valuation models that take into account all the factors that market participants would consider in setting a price

The test is performed as to the existence of objective evidence of impairment following one or more events that have occurred after the initial recording of the asset, and this event (or events) has an impact on the estimated cash flow from the financial asset. For equity instruments, a significant or prolonged reduction in fair value below their cost is considered to be objective evidence of impairment. Usufruct rights to shares fall under the category of financial instruments since they are structured as a contractual right to receive cash or another financial asset from another entity (IAS 32, para. 11), and the financial nature of the agreement makes these rights subject to IAS 39. Specifically, these rights are classified under “available-for-sale assets”, and the option is considered an implicit, inseparable derivative since the economic characteristics and risks of the primary agreement are closely correlated with this right. Since there is no active market for usufruct rights and options to such rights, fair value must be measured on the basis of an analysis of discounted cash flows. The test is performed as to the existence of objective evidence of impairment following one or more events that have occurred after the initial recording of the asset, and this event (or events) has an impact on the estimated cash flow from the financial asset. A significant or prolonged reduction in the fair value of the usufruct rights to shares below their cost is considered to be objective evidence of impairment. IAS 39 defines a derivative as a financial instrument or other contract that simultaneously meets the requirements below: its value changes in relation to the change in an underlying variable it does not require an initial net investment (i.e., it has a market value, or fair value, of

zero when it is subscribed) it is settled on a future date An option is a derivative contract entitling the purchaser to buy/sell a specific asset at a set price on a future date. Conversely, the seller of the option is required to sell/buy the asset at the set price (strike price). There are two types of options: call options put options

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Call options grant the purchaser the right to buy a certain asset at a future date for a set price. Thus, the seller of the option will be required to sell the asset if the option is exercised. Put options grant the purchaser the right to sell a certain asset at a future date for a set price. Thus, the seller of the option will be required to buy the asset if the option is exercised. IMPAIRMENT Impairment always occurs when the carrying value of an asset is greater than its recoverable value. If such indications exist, the recoverable value of the asset is estimated (impairment test) and any write-down is recorded. The recoverable value of an asset is the higher of its fair value less costs to sell the asset and its value in use. IAS 36 provides instructions on determining fair value less costs to sell an asset, as follows: if there is a binding sales agreement, the asset's fair value is the negotiated price if there is no agreement, but the asset is marketed in an active market, the fair value is

the current bid price (thus, the exact price on the value date and not the average price)

if no prices can be found in active markets, fair value must be determined based on

valuation methods that incorporate the best information available including any recent transactions involving the same asset, after verifying that there were no significant changes in the economic environment between the date of the transactions under consideration and the valuation date

IAS 36 defines value in use as the present value of future cash flows that an asset is projected to produce. The estimate of the value in use must include the items listed below: an estimate of future cash flows that the company expects to derive from the asset expectations of potential changes in value and the timing of such cash flows the time value of money other factors such as the volatility of the asset's value and the lack of a liquid market for

it For additional information on determining value in use, see Appendix A of IAS 36. However, the main elements for accurately estimating value in use are an appropriate calculation of projected cash flows and their timing, as well as the application of the right discount rate that takes into account both the present value of money and the specific risk factors for the asset to be valued.

34

In all cases, when calculating the value it is important to: base cash flow projections on reasonable and sustainable assumptions that provide the

best estimate of the economic conditions that are likely to exist over the remaining useful life of the asset

base cash flow projections on the most recent budget/plan approved by the investee

company, which, however, must exclude any future inflows or outflows of cash that are expected to come from the future restructuring, improvement or optimisation of operating performance

estimate higher cash flow projections for the period covered by the most recent

budgets/plans by extrapolating projections based on the budgets/plans taken into consideration, and using a stable or declining growth rate for subsequent years unless a rising rate can be justified.

This growth rate must not exceed the average long-term growth rate for production in the country or countries in which the investee company operates or for markets in which the asset used is placed unless a higher rate can be justified.

The assumptions used to determine cash flow projections must be reasonable, and based partly on an analysis of the factors that generated differences between projections of past and current cash flows. In addition, the assumptions used to determine current cash flow projections must be checked to ensure that they are consistent with actual past results, unless in the meantime changes have occurred in the investee company's business model or in the economic environment in which it operates that justify changes vis-a-vis the past. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES Subsidiaries These are companies in which the Company holds more than 50% of voting rights or exercises a dominant influence over financial and operating policies. The purchase cost plus related costs are reported in the balance sheet. If the Company's share of a subsidiary's losses exceeds the carrying value of the equity investment reported in the balance sheet, the carrying value of the equity investment is eliminated, and the share in further losses is not reported unless, and to the extent that, the group is legally liable for such losses. Associates These are companies in which the Company holds at least 20% of the voting rights or exercises significant influence, but not full or joint control over their financial and operating policies. The purchase cost plus related costs are reported in the balance sheet.

35

TANGIBLE ASSETS Tangible assets are recorded at purchase price or production cost adjusted for accumulated depreciation and any impairment. Their cost includes ancillary costs and direct and indirect costs incurred at the time of purchase necessary to make the asset usable. The purchase cost is represented by the fair value of the price paid to acquire the asset and by all other direct costs incurred to prepare the asset for use. Tangible assets are depreciated on a straight-line basis over their remaining useful life, using the depreciation rates indicated in the notes on the item relating to similar groups of assets. If factors are discovered that lead the company to believe that it may be difficult to recover the net carrying value, an impairment test is performed. If the reasons for the impairment cease to exist, the carrying value of the asset is increased to its recoverable amount. INTANGIBLE ASSETS Intangible assets are assets with no identifiable physical form that are controlled by the company and produce future economic benefits. They are recorded under assets when it is likely that their use will generate future economic benefits and when their cost can be determined reliably. The above assets are recorded at purchase cost, or at production cost if they are generated internally. The purchase cost is represented by the fair value of the price paid to acquire the asset and all other direct costs incurred to prepare the asset for use. The carrying value of intangible assets is maintained in the balance sheet to the extent that there is evidence that this value can be recovered through use or if it is likely that these assets will generate future economic benefits. The useful life of intangible assets is assessed as finite or indefinite. Intangible assets with an indefinite useful life are tested to check that their value is still appropriate whenever there are indications of possible impairment, as required by IAS 36 (Impairment of assets). Intangible assets with an indefinite life are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to check that the underlying conditions for the classification continue to apply. Intangible assets with a finite useful life are amortised on a straight-line basis over their expected useful life. The useful life of these intangible assets is tested to check that their value is still appropriate

36

whenever there are indications of possible impairment. RECEIVABLES AND PAYABLES A receivable or payable is first reported at fair value on the date it is agreed. After a receivable is first recorded, it is valued at amortised cost unless it is a short-term receivable, in which case the effect of discounting is negligible. As in the case of receivables, the effect of discounting is also negligible for payables with maturities within normal contractual terms. OTHER ASSETS AND LIABILITIES Other assets and liabilities include all amounts that cannot be classified in other balance sheet items. CURRENT AND DEFERRED TAX ASSETS AND LIABILITIES (INCOME TAX) Current income taxes are determined and reported on the basis of a reasonable forecast of tax liability by applying the tax rates in force to taxable income, taking into account any exemptions and tax credits to which the company may be entitled. Deferred tax liabilities are allocated for all temporary differences between the carrying value of the assets and liabilities and the corresponding amount for tax purposes. Deferred tax assets are recorded for all deductible temporary differences and for tax assets and liabilities carried forward to the extent that it is likely there will be sufficient future taxable profit against which the deductible temporary differences and the tax assets and liabilities carried forward can be used. Deferred tax liabilities are reported if their amount is greater than deferred tax assets. Deferred taxes are calculated using the tax rates that are expected to apply in the years in which temporary differences are realised or reversed. The carrying values of deferred tax assets are analysed periodically and reduced if it is not likely that sufficient taxable income will be generated against which the benefits resulting from such deferred assets can be used. PROVISIONS FOR RISKS AND FUTURE LIABILITIES If necessary, the company records provisions for risks and future liabilities when: it has a legal or implicit obligation to third parties resulting from a past event it is likely that company resources will be required to fulfil the obligation a reliable estimate can be made of the amount of the obligation

37

Provisions are recorded based on the projected value and discounted to present value if the time value is considerable. Changes in estimates are recognised in the income statement of the period in which the change occurs. REVALUATION (FAIR VALUE) RESERVES Revaluation (or fair value) reserves comprise the change in the value of "available-for-sale financial assets" after taxes. INTEREST, INCOME AND COSTS Interest is reported using the effective interest rate method. Income from equity investments for dividends is reported when the right to receive payment is determined. Income from the return on usufruct rights to shares is reported on an accruals basis as a balancing entry to receivables at the time profits are generated by the companies over which the right to profits has been established, given that an appropriate resolution has been passed by the relevant bodies of these companies to approve the profit for the period. Costs are recorded when they are incurred. EMPLOYEE BENEFITS Short-term employee benefits, whether in cash or in kind are reported in the income statement in the period when the work is performed. Employee benefits related to participation in a defined benefit plan are determined by an independent actuary using the projected unit credit method. Actuarial gains and losses are posted to the income statement in the period in which they occur using the corridor method to record the gains or losses unless these exceed a certain percentage of the obligation. Employee benefits in respect of participation in a defined contribution plan only relate to those plans under mandatory government administration. The payment of contributions fulfils the company's obligation to its employees. Thus, contributions are costs in the period in which they are payable. CHANGES IN ACCOUNTING PRINCIPLES AND THE TREATMENT OF ERRORS Accounting principles are changed from one year to another only if the change is dictated by an accounting standard or if it helps provide more reliable information or more complete reporting of the impact of transactions on the company's balance sheet, income statement and cash flow. Changes in accounting standards are applied retrospectively with the impact reflected in shareholders' equity in the first of the periods presented. Comparative reporting is adapted accordingly. The prospective approach is used only when it is not practical to restate comparative reporting.

38

The application of a new or amended accounting standard is recorded as required by the standard itself. If the standard does not specify transition methods, the change is recorded. If there are significant errors, the same treatment dictated for changes in accounting principles is used. If there are minor errors, corrections are posted to the income statement in the period when the error is discovered. ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS APPLIED FOR THE FIRST TIME The IASB-approved international accounting standards and interpretations authorised for adoption in Europe that were applied for the first time from 1 January 2010 are detailed below. None had any significant impact on the annual financial statements for the year ending 31 December 2011. The company did not apply any IFRS in advance. Accounting standards, amendments and interpretations applicable from 1 January 2011 The group applied the accounting standards, amendments and interpretations below for the first time from 1 January 2011: Amendments to IAS 24 (Related-party disclosures) On 4 November 2009, the IASB published a revised version of IAS 24 (Related parties), which replaced the current version of IAS 24. The document simplifies disclosure requirements on related parties for companies in which a government entity is a controlling shareholder or exercises significant influence or joint control, and removes certain application-related difficulties resulting from the previous definition of related parties. Furthermore, the revised definition of related parties contained in the amended version of IAS 24: makes the application of disclosure requirements in the financial statements of related

parties symmetrical (i.e. if A is related to B for the purposes of the financial statements of B, then B must also be considered a related party of A in the financial statements of A)

clarifies that related party disclosures also apply to transactions entered into with the

subsidiaries of associates and joint ventures, and not just the associate or joint venture equates the position of individuals to that of companies for the purposes of identifying

the relationship also requires disclosure on commitments received and granted to related parties The adoption of this amendment had no effect on the valuation of items in the financial statements and had a limited impact on the disclosure of related-party transactions. Accounting standards, amendments and interpretations applied from 1 January 2011 that were not relevant to the company’s financial statements

39

The following accounting principles, amendments and interpretations, applicable with effect from 1 January 2011, did not apply to the group, but could have accounting effects on future transactions or agreements. Amendments to IFRIC 14 (IAS 19 - The Limit on a defined benefit asset, minimum funding

requirements and their interaction) IFRIC 19 (Extinguishing financial liabilities with equity instruments) Amendments to IFRS 1 (First-time adoption of International Financial Reporting

Standards)

40

FUTURE ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS Accounting standards, amendments and interpretations that are not yet applicable and have not been adopted in advance by the company, but were approved for adoption in the European Union as of 29 February 2012 The International Accounting Standards, the interpretations and changes to existing IASB-approved accounting standards and interpretations that were ratified for adoption in the European Union on 29 February 2012, but which are not yet applicable, are as follows: Improvements to International Financial Reporting Standards On 6 May 2010, the IASB issued the latest series of documents detailing the minor changes to be made to existing accounting standards (Improvements to IFRS). The document contains a series of improvements to seven International Accounting Standards and Interpretations (IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS 34 and IFRIC 13). They have not yet been ratified by the European Union. The changes that could potentially have a significant impact relate to: IFRS 3 (Business combinations): currently, in application of the new IFRS 3, there is the

option to value all the components of the minority interests at their fair value or in proportion to the minority stake in the identifiable net assets of the acquisition. This option has now been restricted to include only those components representative of instruments that currently confer on minority shareholders rights equivalent to those pertaining to ordinary shares, particularly as regards obtaining a pro-rata portion of net assets in the event of liquidation. All other components relating to minority interests (such as privileged shares or warrants issued by the acquired company to minorities) must be stated at fair value, unless the IFRS specify a different valuation criterion. In addition, the document clarifies that in the case of stock option plans acquired or voluntarily replaced following business combinations, such plans must be (re)calculated at the date of acquisition in accordance with IFRS 2. It also specifies that the current requirement of IFRS 2, namely that the value of the stock option plan acquired following a business combination must be allocated partly to "purchase costs" and partly to "services to be provided in the future", applies to all allocations regardless of whether or not they have been voluntarily replaced as a result of the business combination.

IFRS 7 (Financial instruments): Disclosures: the amendment emphasises the interaction

between the qualitative and quantitative supplementary information required by the standard on the nature and extent of the risks inherent in financial instruments. This should help users of the financial statements to link the information presented and should constitute a general description of the nature and scale of the risks deriving from financial instruments.

IAS 1 (Presentation of financial statements): the amendment requires that a

reconciliation of changes to any component of shareholders' equity must be presented either in the notes to the financial statements or in the financial statements themselves.

IAS 34 (Interim financial reporting): the information relating to significant events and

transactions to be reported in the interim financial statements must represent an update on the information provided in the annual financial statements. It also specifies

41

the circumstances in which it is mandatory to disclose information relating to financial instruments and their fair value in the interim financial statements.

We do not anticipate that any adoption of the standards and interpretations noted above will have a material impact on the valuation of the company's assets, liabilities, costs and revenues. Accounting standards, amendments and interpretations not yet approved for adoption in the European Union as of 29 February 2012

The International Accounting Standards, interpretations and changes to existing IASB-approved accounting standards and interpretations that had not been ratified for adoption in the European Union as of 29 February 2012 are as follows:

IFRS 9 (Financial instruments) On 12 November 2009, the IASB issued the first part of IFRS 9, which only amends the requirements for classifying and valuing the financial assets that are currently specified in IAS 39; once completed, it will fully replace IAS 39. Financial liabilities do not fall within the scope of IFRS 9, since the IASB intends to go into greater detail on aspects related to the inclusion of own credit risk in the fair value measurement of financial liabilities. Thus, financial liabilities continue to fall within the scope of IAS 39.

The endorsement process for IFRS 9 is currently on hold, and this standard is not applicable in the EU, ahead of the European Commission's full assessment of the plan to completely replace IAS 39.

Amendments to IFRS 7 (Financial instruments: Disclosures) On 7 October 2010, the IASB published the amendment to IFRS 7 (Disclosures – transfers of financial assets), which requires further information on transfers of financial assets. The changes to IFRS 7 aim to promote greater transparency in relation to the risks associated with transactions where, when a financial asset is transferred, the transferring company continues to be exposed, within certain limits, to risks associated with the derecognised financial asset (known as "continuing involvement"). Additional information is also required on significant transfers of financial assets at particular times (e.g. at the end of an accounting period).


Amendments to IAS 12 (Income taxes) On 20 December 2010, the IASB published a number of changes to IAS 12 (Income taxes), which now stipulates that the entity should assess whether it expects to recover the deferred tax through the use or sale of the asset. This assessment can be difficult and subjective, e.g. if investment property is recorded at fair value, as permitted by IAS 40 (Investment property). To provide a simplified approach, the amendments introduce the presumption, when

42

calculating deferred taxes, that the carrying amount of the underlying asset will be recovered entirely by sale, unless there is clear evidence that it can be recovered through use. The presumption applies not only to investment property but also to assets such as plant and machinery or intangible assets recorded or revalued at fair value.

As a result of these changes, the document SIC 21 (Income Taxes - recovery of revalued, non-depreciable assets) was withdrawn at the same time. The entire contents of this document are now covered in IAS 12.

The amendments to IAS 12, which are awaiting ratification by the European Commission, must be applied from 1 January 2012.

Amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards): Severe hyperinflation and removal of fixed assets for first-time adopters On 20 December 2010, the IASB published two amendments to IFRS 1 (First-time adoption of International Financial Reporting Standards). The first amendment introduced the option for entities that are transitioning to IFRS to use the same simplified rules as those permitted to entities that made the transition to international accounting standards in 2005. The second amendment grants an exemption from the retrospective application of IFRS at first-time adoption to entities that are presenting financial statements in accordance with IFRS for the first time, after having been unable to present them due to hyperinflation, allowing such entities to use fair value as a replacement for cost for all assets and liabilities presented.





power over the investee company exposure to or the right to variable returns from its involvement with the investee

company the ability to use that power over the investee to affect the amount of the investor's

returns

43

The standard will come into force from 1 January 2013, but can be applied in advance. However, the standard is not yet applicable in the European Union because it has not yet been approved by the EU.

IFRS 11 (Joint arrangements)


joint operations, whereby the parties to the arrangement acquire rights to certain assets

and assume obligations for certain liabilities joint ventures, whereby the parties have rights to the net value of a set of jointly

controlled assets and liabilities In the first case, the investor recognises the assets and liabilities acquired (along with the associated income and expense) according to the IAS/IFRS standards governing the individual elements; in the second, the pro-rata interest in the joint venture is recognised using the equity method.


IFRS 12 (Disclosure of interests in other entities)

On 12 May 2011, the IASB published the accounting standard IFRS 12 (Disclosure of interests in other entities) regarding the information to be provided in the financial statements on interests in other entities, including subsidiaries, associates and joint ventures. This information must enable users of the financial statements to understand the nature of the risks associated with the investments in strategic shareholdings that will form part of the company's assets over the long term. The information must also indicate the effects of these investments on financial position, financial performance and cash flows.


IFRS 13 (Fair value measurement)

44

On 12 May 2011, the IASB published the accounting standard IFRS 13 (Fair value measurement), which provides a single definition of the concept of fair value and a framework for how it should be applied when another IFRS permits or requires its use.

More specifically, IFRS 13 sets out a clear definition of fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (or exit price). This definition highlights that fair value is a measure that must be based on the market and not the valuing entity. In other terms, the measurement process must take into account the assumptions that market participants would use when pricing the asset or liability in current conditions, including assumptions on risk. As a consequence, the intention to hold an asset or cancel or fail to meet a liability is of no relevance in measuring fair value.


IAS 1 - Presentation of items of other comprehensive income

On 16 June 2011, the IASB issued amendments to IAS 1 - Presentation of items of other comprehensive income,, which determine the grouping and components of the statement of comprehensive income according to whether or not they can be reclassified to the income statement. The amendments to IAS 1, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2012 onwards.


On 16 June 2011, the IASB issued amendments to IAS 19 (Employee benefits) that introduce the obligation to recognise actuarial gains and losses in the statement of comprehensive income, removing the option of using the "corridor" method and requiring the recognition of actuarial gains and losses resulting from the revaluation of liabilities and assets in the statement of comprehensive income. The amendments to IAS 19, which are awaiting ratification by the European Commission, must be applied in the financial statements of periods starting from 1 July 2012 onwards.

We do not anticipate that any adoption of the standards and interpretations noted above will have a material impact on the valuation of the company's assets, liabilities, costs and revenues. A.3 - FAIR VALUE DISCLOSURE A.3.2 - FAIR VALUE HIERARCHY

45

In the absence of an active market, an entity must determine fair value using the valuation techniques (IAS 39, para. 74 and 75) normally used in financial markets in order to calculate the fair value of a financial asset. A financial instrument is considered to be listed in an active market if price quotes reflecting normal market transactions are readily and regularly available through exchanges, mediators, intermediaries, sector companies, pricing services or authorised entities, and these prices reflect current, actual, valid market transactions. The aim of using a valuation technique is to determine which price would be used for a transaction occurring on the valuation date in an independent transaction based on normal market considerations. Thus, the value of the financial asset or liability is estimated on the basis of the results of a valuation technique which makes the greatest use of market inputs (interest rates, volatility, market or country risk, etc.). Valuations at fair value must be classified based on a hierarchy that reflects the importance of the inputs used in valuations. Three levels have been determined: Level 1: unadjusted quoted prices recorded in an active market (based on the

definition in IAS 39) for the assets and liabilities being valued Level 2: inputs other than the quoted prices noted above, that can be observed

directly (prices) or indirectly (derived from prices) in the market Level 3: inputs that are not based on observable market data A.3.2.1 – ACCOUNTING PORTFOLIOS: BREAKDOWN BY FAIR VALUE LEVEL

(in EUR) Assets/Liabilities measured at fair value Level 1 Level 2 Level 3 Total

1. Held-for-trading financial assets 2. Financial assets at fair value 3. Available-for-sale financial assets 1,270,101 2,755,122 286,617 4,311,840

4. Hedging derivatives Total 1,270,101 2,755,122 286,617 4,311,840

1. Held-for-trading financial liabilities 403,749 403,749 2. Financial liabilities at fair value 3. Hedging derivatives

Total 403,749 403,749

Available-for-sale financial assets in level 1 relate to an open-ended securities mutual fund, those in level 2 represent the value of units in closed-end funds limited to qualified investors and managed by IDeA Capital Funds SGR, while those in level 3 consist of investments in equity instruments totalling EUR 286 thousand. For further details, see the comments in Section 4 under “Assets” in of Part B - Notes to the balance sheet.

46

Held-for-trading financial liabilities relate to a put option granted by IDeA Alternative to Banca Ifigest covering the equity investment held by the latter in Soprarno SGR as indicated Section 3 under “Liabilities” in Part B - Notes to the balance sheet.

47

A.3.2.2 – ANNUAL CHANGES IN FINANCIAL ASSETS VALUED AT LEVEL 3 FAIR VALUE

(in EUR)

FINANCIAL ASSETS

held for trading valued at fair value

available for sale for hedging

1. Opening balance 35,030,367 2. Increases 2.1 Purchases 2.2 Profits posted to: 2.2.1 Income statement of which: capital gains 2.2.2 Shareholders' equity 2.3 Transfers from other levels 2.4 Other increases 3. Decreases 34,743,750 3.1 Sales 3.2 Repayments 3.3 Losses posted to: 3.3.1 Income statement of which: capital losses 3.3.2 Shareholders' equity 3.4 Transfers to other levels 3.5 Other decreases 34,743,750 4. Closing balance 286,617 For information on the method used to determine the value of these available-for-sale financial assets, see the comments in Section 4 under “Assets” in Part B - Notes to the balance sheet. A.3.2.2 – ANNUAL CHANGES IN FINANCIAL LIABILITIES VALUED AT LEVEL 3 FAIR VALUE

(in EUR)

FINANCIAL LIABILITIES

held for trading valued at fair value for hedging

1. Opening balance 0 2. Increases 403,749

2.1 New issues 2.2 Losses posted to:

2.2.1 Income statement 403,749 of which: capital losses 403,749 2.2.2 Shareholders' equity

2.3 Transfers from other levels 2.4 Other increases

3. Decreases 3.1 Repayments 3.2 Repurchases 3.3 Profits posted to:

3.3.1 Income statement of which: capital gains 3.3.2 Shareholders' equity

3.4 Transfers to other levels 3.5 Other decreases

4. Closing balance 403,749 For information on the method used to determine the value of these held-for-trading financial liabilities, see the comments in Section 3 under “Liabilities” in Part B - Notes to the balance sheet.

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PART B

NOTES TO THE BALANCE SHEET

ASSETS SECTION 1 – CASH AND CASH EQUIVALENTS – ITEM 10 1.1 Cash and cash equivalents: breakdown of ITEM 10 This item includes cash, which at 31 December 2011 totalled EUR 0.4 thousand (EUR 1.9 thousand at 31 December 2010). SECTION 4 – AVAILABLE-FOR-SALE FINANCIAL ASSETS – ITEM 40 4.1 Breakdown of item 40: Available-for-sale financial assets

(in EUR)

Item/Value Total 2011 Total 2010

Level 1 Level 2 Level 3 Level 1 Level 2 Level 31. Debt securities 0 34,743,750

- structured securities - other debt securities 0 34,743,750

2. Equity securities and shares in UCITS 1,270,101 2,755,122 286,617 2,809,771 2,355,896 286,617 3. Loans

Total 1,270,101 2,755,122 286,617 2,809,771 2,355,896 35,030,367 Available-for-sale financial assets classified under levels 1, 2 and 3 totalled EUR 4,312 thousand (EUR 40,196 thousand at 31 December 2010). Level 1 includes the investment in the Soprarno Inflazione + 1.5% open-ended money market fund totalling EUR 1,270 thousand. This amount corresponds to 219,854,781 units at a unit market value of EUR 5.777 at 30 December 2011 (the last day in the year that markets were open). Level 2 includes the value of units in four closed-end mutual funds managed by IDeA Capital Funds SGR totalling EUR 2,755 thousand (EUR 2,356 thousand at 31 December 2010). This amount included IDeA I FOF funds totalling EUR 1,941 thousand, IDeA OF I (formerly CoIF) funds of EUR 632 thousand, ICF II funds of EUR 181 thousand and IDeA EESS funds totalling EUR 1 thousand. The valuation of the three funds at fair value at 31 December 2011 was performed on the basis of operating reports received. This measurement showed a permanent reduction in the value of IDeA OF I making it necessary to record impairment for this fund as detailed in Section 8.2 of the Notes to the income statement. Investments in equity instruments (EUR 287 thousand) consisted of: a minority interest (10% of capital) in Alkimis SGR totalling EUR 286 thousand

(unchanged from 31 December 2010)

49

the investment in TLcom Capital LLP (management company under English law) and TLcom II Founder Partner SLP (limited partnership under English law) for a total of EUR 1 thousand (unchanged from the previous year)

Based on impairment tests on minority investments in equity instruments, it was not deemed necessary to record any impairment. 4.2 Available-for-sale financial assets: breakdown by debtor/issuer

(in EUR) Item/value Total 2011 Total 2010

Financial assets a) Governments and central banks b) Other public sector authorities c) Banks d) Financial institutions e) Other issuers 4,311,840 40,196,034

Total 4,311,840 40,196,034 4.3 Available-for-sale financial assets: changes for the year

(in EUR)

Change/Type Debt securities Equity securities

and shares in UCITS

Loans Total

A. Opening balance 34,743,750 5,452,284 40,196,034 B. Increases 844,129 844,129

B.1 Purchases B.2 Increases in fair value 242,943 242,943 B.3 Other changes 601,186 601,186

C. Decreases 34,743,750 1,984,573 36,728,323 C.1 Sales 1,593,028 1,593,028 C.2 Repayments 245,555 245,555 C.3 Decreases in fair value 142,696 142,696 C.4 Other changes 34,743,750 3,294 34,747,044

D. Closing balance 0 4,311,840 4,311,840 The change in debt securities was due to the partial non-proportional demerger, as a result of which, the amounts for usufruct rights to the shares of Investitori Associati and Wise were fully broken up. The increases in UCITS units included EUR 243 thousand due to the adjustment of units held in open-ended and closed-end funds to the year-end value, and EUR 601 thousand due to capital calls in 2011 by the four closed-end funds managed by IDeA Capital Funds SGR . The decreases in UCITS units included EUR 1,593 thousand due to redemptions of units in the Soprarno Inflazione + 1.5% fund (to cover the company's temporary cash requirements), EUR 246 thousand for repayments of principal in 2011 by three closed-end funds managed by IDeA Capital Funds SGR, EUR 143 thousand due to the write-down of the IDeA OF I fund (with a balancing entry in the income statement), and EUR 3 thousand for equalisation interest expense for the ICF II fund.

50

SECTION 6 – FINANCIAL RECEIVABLES – ITEM 60 This item, which totalled EUR 48 thousand (EUR 1,068 thousand at 31 December 2010) was for cash in the bank account at 31 December 2011. 6.1 Receivables from banks

(in EUR) Item Total 2011 Total 2010

1. Deposit and current accounts 48,024 479,068 2. Loans

2.1 Repurchase agreements 2.2 Finance leases 2.3 Factoring

- with recourse - without recourse

2.4 Other loans 3. Debt securities

- structured securities - other debt securities

4. Other assets Total carrying amount 48,024 479,068

Total fair value 48,024 479,068 6.3 Receivables from customers (in EUR)

Item Total 2011 Total 2010

Performing Non- performing Performing Non-

performing 1. Finance leases

of which: without purchase option 2. Factoring

- with recourse - without recourse

3. Retail financing (including revolving card loans)

4. Credit cards 5. Loans provided in relation to payment

services rendered

6. Other financing of which: enforcements of guarantees and

commitments

7. Debt securities 0 578,443 - structured securities - Other securities 0 578,443

8. Other assets 0 10,622 Total carrying amount 0 589,065

Total fair value 0 589,065

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At 31 December 2010 this amount included EUR 578 thousand in receivables for returns on usufruct rights to shares in Investitori Associati SGR and Wise SGR, which were the subject of the partial non-proportional demerger. SECTION 9 – EQUITY INVESTMENTS – ITEM 90 9.1 Equity investments: investee companies This item, which totalled EUR 3,807 thousand (EUR 24,800 thousand at 31 December 2010) includes investments in subsidiaries.

(in EUR)

Company name Carrying amount % held % voting

rights Branch Total assets Operating income Shareholders’

equity Latest

year’s net profit

Listed (yes/no)

A. Controlling interests

1. Soprarno SGR S.p.A. 2,596,169 65% 65% Florence 3,699,426 3,134,511 2,363,583 545,152 No

2. IDeA Capital Funds SGR S.p.A. 1,200,000 100% 100% Milan 10,567,728 12,998,004 6,601,441 4,861,800 No

3. IDeA SIM S.p.A. 11,495 65% 65% Milan 439,542 301,541 261,742 (234,436) No

B. Jointly held companies

C. Companies subject to substantial influence

Figures for the assets, revenues, shareholders' equity and profit or loss of subsidiaries are from the latest approved financial statements to 31 December 2011. As of the reporting date, investments in subsidiaries showed no signs of impairment. 9.2 Equity investments: changes for the year

(in EUR)

Group interest Minority interest Total

A. Opening balance 24,800,474 24,800,474 B. Increases

B.1 Purchases B.2 Reversals B.3 Revaluations B.4 Other changes 250,250 250,250

C. Decreases C.1 Sales 50,000 50,000 C.2 Impairment 584,191 584,191 C.3 Other changes 20,608,869 20,608,869

D. Closing balance 3,807,664 3,807,664 The EUR 250 thousand increase in equity investments relates to the payment into the future capital increase account (which may not be claimed except in the event of the company's liquidation) in favour of IDeA SIM to maintain an adequate level of regulatory capital. The decrease in equity investments was due to: decreases in stakes held in associates Investitori Associati SGR and Wise SGR of EUR

18,221 thousand and EUR 2,388 thousand respectively following the partial non-proportional demerger finalised on 17 January 2011

52

reduction in the stake held in the subsidiary IDeA AI S.à.r.l. totalling EUR 50 thousand

following the sale to Omega Skye Partners L.P. finalised on 1 February 2011 impairment of the stake held in IDeA SIM in the amount of EUR 584 thousand SECTION 10 – TANGIBLE ASSETS – ITEM 100 10.1 Breakdown of item 100: Tangible assets Below is a breakdown of this item which totalled EUR 83 thousand (EUR 103 thousand at 31 December 2010):

(in EUR)

Item/Amount Total 2011 Total 2010

Assets measured at cost

Assets measured at fair value or

revalued



revalued

1. Assets in use 1.1 Owned 82,718 103,008 a) Land b) Buildings c) Furniture 62157 68,230 d) Equipment e) Other 20,561 34,778 1.2 Acquired under finance leases a) Land b) Buildings c) Furniture d) Equipment e) Other

Total 1 82,718 103,008 2. Assets relating to finance leases

2.1 Assets for which purchase option was not exercised

2.2 Assets withdrawn at contract termination

2.3 Other assets Total 2

3. Assets held for investment purposes of which: transferred under operating

leases (to be specified)

Total 3 Total (1+2+3) 82,718 103,008

Total (assets measured at cost or revalued

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10.2 Tangible assets: changes for the year Below are changes in tangible assets in 2011:

(in EUR) Land Buildings Furniture Equipment Other Total A. Opening balance 68,230 34,780 103,010

B. Increases 6,054 6,054 B.1 Purchases 6,054 6,054

B.2 Reversals B.3 Positive changes in fair value recognised

in: a) shareholders' equity b) income statement

B.4 Other changes C. Decreases 12,127 14,219 26,346

C.1 Disposals 2,162 2,162 C.2 Depreciation 12,127 10,569 22,696 C.3 Impairment losses recognised in:

a) shareholders' equity b) income statement 1,488 1,488

C.4 Negative changes in fair value recognised in: a) shareholders' equity b) income statement

C.5 Other changes D. Closing balance 62,157 20,561 82,718

See Section A - Accounting principles and policies for details on the depreciation criteria used. SECTION 11 – INTANGIBLE ASSETS – ITEM 110 11.1 Breakdown of item 110: Intangible assets This item, which totalled EUR 11 thousand (EUR 15 thousand at 31 December 2010), relates to management software usage licences.

(in EUR)

Item/Amount

Total 2011 Total 2010



revalued

Assets measured

at cost

Assets measured

at fair value or revalued

1. Goodwill 2. Other intangible assets

2.1 Owned 11,046 15,138 - internally generated - other 11,046 15,138 2.2 Acquired under finance leases

Total 2 11,046 15,138 3. Assets relating to finance leases

3.1 Assets for which purchase option was not exercised 3.2 Assets withdrawn at contract termination 3.3 Other assets

Total 3 4. Assets transferred under operating leases

Total (1+2+3+4) 11,046 15,138 Total (assets measured at cost or revalued 11,046 15,138

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11.2 Intangible assets: changes for the year Below are changes for intangible assets in 2011:

(in EUR)

TotalA. Opening balance 15,138 B. Increases

B.1 Purchases B.2 Reversals B.3 Increases in fair value

- to shareholders' equity - to income statement

B.4 Other changes C. Decreases 4,092

C.1 Sales C.2 Amortisation 4,092 C.3 Impairment

- to shareholders' equity - to income statement

C.4 Decreases in fair value - to shareholders' equity - to income statement

C.5 Other changes D. Closing balance 11,046

See Section A - Accounting principles and policies for details on the amortisation criteria used. SECTION 12 - TAX ASSETS AND LIABILITIES - ITEM 120 12.1 Breakdown of item 120: Current and deferred tax assets This item, which totalled EUR 84 thousand (EUR 1 thousand at 31 December 2010), related to receivables from tax authorities for IRAP. 12.2 Breakdown of item 70: Current and deferred tax liabilities Tax liabilities, which totalled EUR 152 thousand (EUR 161 thousand at 31 December 2010), related to IRES payables resulting from the tax consolidation scheme (EUR 77 thousand) and deferred taxes (EUR 75 thousand) calculated on the fair value adjustment of available-for-sale financial assets.

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12.6 Changes in deferred taxes (balancing entry to shareholders' equity)

(in EUR)

2011 2010 1. Opening balance 2,883 2. Increases 85,311 2,883

2.1 Deferred tax assets recognised in the year 85,311 2,883 a) relating to prior years b) due to changes in accounting policies c) other 85,311 2,883

2.2 New taxes or increases in tax rates 2.3 Other increases

3. Decreases 13,452 3.1 Deferred tax assets eliminated during the year 13,452

a) transfers b) due to changes in accounting policies c) other 13,452

3.2 Decreases in tax rates 3.3 Other decreases

4. Closing balance 74,742 2,883 SECTION 14 – OTHER ASSETS – ITEM 140 14.1 Breakdown of item 140: Other assets This item, which totalled EUR 649 thousand (EUR 577 thousand at 31 December 2010), was mainly due to an IRES credit of EUR 620 thousand from the tax consolidation scheme. The remaining EUR 29 thousand related to receivables from intercompany customers.

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LIABILITIES SECTION 3 - HELD-FOR-TRADING FINANCIAL LIABILITIES - ITEM 30 3.1 Breakdown of item 30: Held-for-trading financial liabilities This item, which totalled EUR 404 thousand (zero at 31 December 2010) related to the put option provided by IDeA AI to Banca Ifigest covering the equity investment of the latter in Soprarno SGR. (in EUR)

Liabilities

Total 2011

Total 2010

Fair value Fair value

Notional value

Fair value Fair value

Notional value L1 L2 L3 L1 L2 L3

A. Balance sheet liabilities 1. Payables 2. Debt securities

- bonds - structured - other

- Other securities - structured - other

B. Derivatives 1. Financial derivatives 403,749 0 2. Credit derivatives

Total 403,749 0 In previous years no entry was recorded for this item since none of the prerequisites for its exercise were likely to be met.

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3.3 Held-for-trading financial liabilities: financial derivatives

Type/Underlying assets Interest rates Currencies Equity securities Other Total 2011 Total 2010

1. Over the counter Financial derivatives - Fair value 403,749 403,749 0

- Notional value Credit derivatives - Fair value - Notional value

Total 403,749 403,749 0

2. Other Financial derivatives - Fair value - Notional value Credit derivatives - Fair value - Notional value

Total Total 403,749 403,749 0

SECTION 7 - TAX LIABILITIES - ITEM 70 See section 12 Current and deferred tax assets and liabilities for information on this item. SECTION 9 – OTHER LIABILITIES – ITEM 90 This item totalled EUR 409 thousand (EUR 359 thousand at 31 December 2010) and consisted of: Payables to suppliers 203,160 Payables to IDeA SIM from tax consolidation 68,877 Payables to employees 50,535 Payables to social security/aid organisations 42,717 Taxes payable 41,815 Other payables 2,340 TOTAL 409,444 SECTION 10 - POST-EMPLOYMENT BENEFITS - ITEM 100 The post-employment benefit fund is a defined benefit plan, and has therefore been valued using actuarial assessments. The assumptions used in calculating the fund were a discount rate of 4.60%; an annual rate of inflation of 2.0%; annual salary growth of 3.0%; and an annual rate of increase for the fund of 3.0%.

58

10.1 Post-employment benefits (TFR): changes for the year

(in EUR)

Total 2011 Total 2010A. Opening balance 7,883 280 B. Increases 13,673 7,603

B.1 Provision for the year 13,673 7,603

B.2 Other increases C. Decreases 5,457

C.1 Payments C.2 Other decreases 5,457

D. Closing balance 16,099 7,883 At 31 December 2011 the TFR fund totalled EUR 16 thousand (EUR 8 thousand at 31 December 2010), and included a provision for the amount accrued in 2011 for three employees. The nominal value of the TFR fund, which totalled EUR 21 thousand, was adjusted due to the discounting of EUR 5 thousand. SECTION 12 - SHAREHOLDERS' EQUITY - ITEMS 120, 150, 160 AND 170 12.1 Breakdown of item 120: Share capital Share capital, which totalled EUR 2,461 thousand (EUR 5,000 thousand at 31 December 2010), was made up of 2,461,500 shares with a value of EUR 1.00 each. It was fully subscribed and paid up. The decrease in share capital was due to the elimination of 2,538,500 shares as a result of the partial non-proportional demerger that came into effect on 17 January 2011.

(in EUR) Type Amount

1. Share capital 2,461,500 1.1 Ordinary shares 2,461,500

12.4 Breakdown of item 150: Share issue premium The share premium reserve, which totalled EUR 35,500 thousand at 31 December 2010 and related to shares that were eliminated at the time of the demerger, was eliminated. 12.5 Other information Item 160 Reserves totalled EUR 130 thousand (EUR 3,040 thousand at 31 December 2010). The decrease from the previous year was mainly due to the demerger (EUR 3,865 thousand), and the remainder consisted of: a legal reserve of EUR 1,087 thousand an extraordinary reserve of EUR 2,451 thousand

59

costs related to the issuance of shares (EUR 30 thousand) losses of EUR 3,378 thousand carried forward at the time of the first-time adoption of the

International Accounting Standards (IAS/IFRS) Item 170 Revaluation reserves of EUR 179 thousand (EUR 15,039 thousand at 31 December 2010) include the after-tax revaluation reserves for units of IDeA FoF I mutual funds (EUR 129 thousand), Soprarno Inflazione + 1.5% (EUR 39 thousand), ICF II (EUR 15 thousand) and IDeA EESS (EUR - 4 thousand). Pursuant to art. 2427, para. 7-bis, of the Italian Civil Code, the table below shows the potential uses of the items that make up shareholders' equity; as suggested by OIC no. 1, the availability of the reserves is classified using the first three letters of the alphabet: A) for a share capital increase B) to cover losses C) for distribution to shareholders

(in EUR)

Type/description Amount Potential uses

Amount available

Total usage in previous three years

To cover losses

Other reasons

Share capital 2,461,500 Legal reserve 1,087,133 B Extraordinary reserve 2,451,480 A-B-C 2,451,480 Share issue costs (30,112) = = Fair value reserves 179,441 = = Profits (losses carried forward) resulting from the transition to IAS/IFRS (3,377,926) = = 44,742 Profit for 2011 5,242,118 A-B-C 5,242,118

Total 8,013,634 7,693,598 44,742 8,013,634

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PART C

NOTES TO THE INCOME STATEMENT

SECTION 1 - INTEREST - ITEMS 10 AND 20 1.1 Breakdown of item 10: Interest and similar income

(in EUR) Item/Type Debt

securities Loans Other transactions Total 2011 Total 2010

1. Held-for-trading financial assets 2. Financial assets at fair value 3. Available-for-sale financial assets 4. Held-to-maturity financial assets 5. Receivables 4,231 4,231 5,686

5.1 Due from banks 4,231 4,231 1,163

5.2 Due from financial institutions 5.3 Due from customers 0 0 4,523

6. Other assets 7. Hedging derivatives

Total 4,231 4,231 5,686

This item, which totals EUR 4 thousand (EUR 6 thousand at 31 December 2010) relates solely to interest income accrued in 2011 on the bank current account. 1.3 Breakdown of item 20: Interest and similar expenses

(in EUR) Item/Type Loans Securities Other Total 2011 Total 2010

1. Payables to banks 11,075 11,075 14,789 2. Payables to financial institutions 3,294 3. Payables to customers 3,294 4. Securities in issue 5. Trading financial liabilities 6. Financial liabilities at fair value 7. Other liabilities 99 99 8. Hedging derivatives

Total 14,468 14,468 14,789

This item, which totalled EUR 15 thousand (the same amount as at 31 December 2010) relates to interest expenses accrued in 2011 on the current account held at Banca Popolare di Novara. SECTION 3 - DIVIDENDS AND SIMILAR INCOME - ITEM 50 3.1 Breakdown of item 50: Dividends and similar income This item totalled EUR 5,294 thousand (EUR 9,846 thousand at 31 December 2010) and relates to:

61

(in EUR)

Item/Income category Total 2011 Total 2010

Dividends Income from UCITS units Dividends Income from

UCITS units1. Held-for-trading financial assets 2. Available-for-sale financial assets 0 319,061 3. Financial assets at fair value 24,338 4. Equity investments: 5,270,000 9,526,563

4.1 for merchant banking operations 4.2 for other operations 5,270,000 9,526,563

Total 5,294,338 9,845,624 Alkimis SGR paid dividends of EUR 24 thousand. Dividends from equity investments totalled EUR 5,270 thousand as follows: EUR 5,000 thousand from IDeA Capital Funds SGR and EUR 270 thousand from IDeA AI S.à.r.l. SECTION 4 - NET PROFIT/LOSS FROM TRADING ACTIVITY - ITEM 60 4.1 Breakdown of item 60: Net profit/loss from trading activity

Item/Income component Capital gains Trading profits Capital losses Trading losses Net profit/(loss)

1. Financial assets 1.1 Debt securities 1.2 Equity securities and UCITS units 1.3 Loans 1.4 Other assets

2. Financial liabilities 2.1 Debt securities 2.2 Debt 2.3 Other liabilities

3. Financial assets and liabilities: Translation differences 4. Financial derivatives 403,749 403,749

5. Credit derivatives Total 403,749 403,749

This is the balancing entry for the strike price of the option described in Section 3 of Liabilities. Please see that section for further details.

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SECTION 7 - GAINS (LOSSES) ON SALE OR REPURCHASE - ITEM 90 7.1 Breakdown of item 90: Gains (losses) on sale or repurchase (in EUR)

Item/Income component Total 2011 Total 2010

Gain Loss Net gain/(loss) Gain Loss Net

gain/(loss)1. Financial assets

1.1 Receivables 1.2 Available-for-sale assets: 13,468 1,588 11,880 109 109 1.3. Held-to-maturity assets

Total (1) 13,468 1,588 11,880 109 109 2. Financial liabilities

2.1 Debt 2.2 Securities in issue

Total (2) Total (1+2) 13,468 1,588 11,880 109 109

This item refers to gains and losses realised from the sale of units of Soprarno funds in the portfolio. SECTION 8 - NET IMPAIRMENT LOSSES/REVERSALS - ITEM 100 8.2 Net impairment losses/reversals of available-for-sale financial assets This item, which totalled EUR 143 thousand (EUR 235 thousand at 31 December 2010) relates to the write-down from the permanent loss in value of IDeA OF I (formerly CoIF) units.

(in EUR) Item/Net impairment or reversal Impairment Reversal 2011 2010

1. Debt securities 2. Equity securities and UCITS units 142,697 142,697 235,024 3. Loans 4. Securities in issue

Total 142,697 142,697 235,024 SECTION 9 – ADMINISTRATIVE EXPENSES – ITEM 110 This item, which totalled EUR 1,631 thousand (EUR 2,356 thousand at 31 December 2010) included EUR 1,091 thousand for personnel costs (EUR 1,147 thousand in 2010) and EUR 540 thousand for other operating expenses (EUR 1,208 thousand for the previous year). Details are provided below.

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9.1 Breakdown of item 110 a): Personnel costs

(in EUR) Item/Sector Total 2011 Total 2010 1. Employees 607,975 569,744 a) salaries and wages 436,710 407,677 b) social security charges 136,976 127,697 c) post-employment benefits d) pension expenses e) provisions to post-employment benefit fund 8,216 7,603 f) provisions for retirement and similar obligations:

- defined contribution - defined benefit

g) contributions to external supplementary social security funds: 21,099 22,704 - defined contribution 21,099 22,704 - defined benefit

h) other expenses 4,974 4,063 2. Other active employees 54,430 107,141 3. Directors and auditors 179,875 182,176 4. Retired staff 5 Recovery of expenses relating to employees seconded to other companies 6. Reimbursement of expenses relating to employees seconded to the company 248,250 288,450

Total 1,090,530 1,147,511

At 31 December 2011, IDeA Alternative had four employees: one senior manager, two middle managers and one clerical employee. The item "Other active employees" refers to two employees contracted to work on a specific project. The reimbursement of expenses for employees seconded to the company relates to the secondment of the general manager from DeA Capital S.p.A. 9.2 Average number of employees broken down by category

Employee category Total 2011 Total 2010A. Senior managers 1 1 B. Middle managers 2 2 C. Other employees 1 0 Total 4 3

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9.3 Breakdown of item 110 b): other administrative expenses

(in EUR) Item Total 2011 Total 2010

Costs relating to the demerger 474,693 Independent auditors 132,426 146,858 External consultants 121,460 264,851 Rental and leasing 110,728 112,019 Other intercompany services 66,290 57,437 Utilities and general expenses 30,923 35,004 Travel expenses 29,054 34,869 Insurance 18,524 16,497 Books, stationery supplies and conventions 14,559 14,400 Other external services 7,496 42,110 Planned maintenance 7,477 6,803 Transport and postal costs 695 844 Banking expenses 416 1,976 Currency translation differences 3

Total 540,048 733,671

External consulting expenses, which totalled EUR 121 thousand, related to legal and corporate consulting services (EUR 80 thousand) and tax consulting (EUR 41 thousand). Rental and leasing expenses (EUR 111 thousand) were for the rental of office space and related service charges (EUR 86 thousand), the rental payment for a company car (EUR 18 thousand) and the fee for the use of office machinery (EUR 7 thousand). Intercompany services totalling EUR 66 thousand related to consulting, tax, administrative and legal expenses and to communications and human resources management. SECTION 10 - NET ADJUSTMENTS/REVERSALS TO TANGIBLE ASSETS - ITEM 120 10.1 Net adjustments/reversals to tangible assets: breakdown of item 120 Net adjustments to tangible assets totalled EUR 24 thousand (EUR 22 thousand at 31 December 2010) as detailed below:

65

(in EUR)

Item/Net adjustments and reversals Depreciation (a)

Impairment (b)

Reversals

(c) Net adjustments

(a+b-c) 1. Assets in use 22,696 1,488 24,184

1.1 Owned 22,696 1,488 24,184 a) Land b) Buildings c) Furniture 12,127 12,127 d) Equipment e) Other 10,569 1,488 12,057 1.2 Acquired under finance leases a) Land b) Buildings c) Furniture d) Equipment e) Other

2. Assets relating to finance leases 3. Assets held for investment purposes

of which: transferred under operating leases Total 22,696 1,488 24,184

SECTION 11 - NET ADJUSTMENTS/REVERSALS TO INTANGIBLE ASSETS - ITEM 130 11.1 Breakdown of item 130: Net adjustments/reversals to intangible assets Net adjustments to intangible assets totalled EUR 4 thousand. The whole amount related to amortisation charges for the year (the same amount as at 31 December 2010).

(in EUR) Item/Net adjustments and reversals Amortisation

(a)Impairment

(b)Reversals

(c) Net adjustments

(a+b-c)

1. Goodwill 2. Other intangible assets 4,092 4,092

2.1 Owned 4,092 4,092

2.2 Acquired under finance leases 3. Assets relating to finance leases 4. Assets transferred under operating leases

Total 4,092 4,092 SECTION 14 - OTHER OPERATING INCOME/(EXPENSES) - ITEM 160 14.1 Breakdown of item 160: Other operating income/(expenses) This item, which totalled EUR 60 thousand (EUR 24 thousand at 31 December 2010) mainly includes revenues for the performance of intercompany services.

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SECTION 15 - GAINS/(LOSSES) ON EQUITY INVESTMENTS - ITEM 170 15.1 Breakdown of item 170: Gains/(losses) on equity investments This item totalled EUR 1,716 thousand (zero at 31 December 2011) and is detailed below: (in EUR)

Item Total 2011

Total 2010

1. Income 1.1 Revaluations 1.2 Gains on disposals 2,300,000 0 1.3 Reversals 1.4 Other income

2. Losses 2.1 Write-downs (584,191) 0 2.2 Losses on disposals 2.3 Impairment losses 2.4 Other losses

Total 1,715,809 0 The sale of IDeA AI S.à.r.l. generated a capital gain of EUR 2,300 thousand, and the investment in IDeA SIM was written down by EUR 584 thousand. SECTION 17 - INCOME TAX ON PROFIT FROM CONTINUING OPERATIONS - ITEM 190 17.1 Breakdown of item 190: Income tax on profit from continuing operations This item totalled EUR 376 thousand (EUR 413 thousand at 31 December 2010) and is detailed below:

(in EUR)

Total 2011 Total 2010 1. Current tax 483,883 412,628

- IRAP for the year (87,874) (163,291)

- IRES for the year 471,757 575,919

2. Changes in current taxes for previous years (8,072) 298 3. Reduction in current taxes for the year 4. Change in deferred tax charges 5. Changes in deferred tax

Taxes applicable to the year 375,811 412,926 In 2011 the company provided for a cost of EUR 88 thousand for IRAP and income item of EUR 472 thousand for IRES arising from the tax consolidation scheme. The company joined the national tax consolidation scheme of the IDeA Alternative Group in 2010 for the three year period 2010-2012. The merger into DeA Capital on 1 January 2012 meant that the company could no longer apply the scheme from the tax year 2012. 17.2 Reconciliation between the theoretical tax liability and the actual reported tax liability

67

The table below shows a reconciliation between the tax liability recorded in the consolidated financial statements and the theoretical tax liability determined on the basis of IRES and IRAP rates applicable in Italy: (in EUR)

Item Changes in IRES

Profit before tax 4,866,307 Theoretical tax liability 1,338,234

Theoretical tax rate 27.50%

Differences that will not be reversed in future years: Dividends from subsidiaries (5,029,621) Capital gain from the sale of an equity investment (2,185,000) Non-deductible write-down of equity investment 584,191 Non-deductible interest and costs 29,877 Non-deductible personnel costs 3,883 Non-deductible tax 8,072 Other deductions 6,811 Taxable profit (tax loss) (1,715,480) IRES (471,757)

IRAP 87,874

Taxes relating to previous years 8,072

TOTAL TAXES (375,811) Actual tax rate (7.72)%

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PART D

ADDITIONAL INFORMATION

SECTION 1 - DETAILS OF ACTIVITIES PERFORMED D Guarantees issued and commitments At 31 December 2011, residual commitments to make paid calls to closed-end mutual funds totalled EUR 3,144 thousand (EUR 3,597 thousand at 31 December 2010). These residual commitments relate to IDeA I FOF (EUR 1,219 thousand), IDeA OF I (EUR 839 thousand), ICF II (EUR 840 thousand) and IDeA EESS (EUR 246 thousand).

(in EUR) Transaction Total 2011 Total 2010

1) Financial guarantees issued a) Banks b) Financial institutions c) Customers

2) Commercial guarantees issued a) Banks b) Financial institutions c) Customers

3) Irrevocable commitments to disburse funds 3,143,743 3,596,757 a) Banks

i) where payment is certain ii) where payment is uncertain

b) Financial institutions 3,143,743 3,596,757 i) where payment is certain ii) where payment is uncertain 3,143,743 3,596,757

c) Customers i) where payment is certain ii) where payment is uncertain

4) Commitments underlying credit derivatives: sales of protection 5) Assets pledged to secure third-party obligations 6) Other irrevocable commitments

Total 3,143,743 3,596,757 SECTION 3 - RISKS AND RELATED HEDGING POLICIES IDeA Alternative operates in the alternative investment (alternative asset management) sector, and investments held by the company are exposed to numerous risks and uncertainties. See the report on operations for further information on these risks.

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SECTION 4 - SHAREHOLDERS' EQUITY 4.1 Company shareholders' equity 4.1.1 Qualitative information International Accounting Standards define shareholders' equity as the residual interest in the assets of an entity after deducting all of its liabilities. From a financial standpoint, equity represents the monetary amount of funds contributed by the owners or generated by a company. The shareholders' equity of IDeA Alternative Investments S.p.A. consists of fully paid-up share capital, the share premium reserve, the legal reserve (created over the years pursuant to art. 2430 of the Italian Civil Code), the extraordinary reserve and the fair value reserves. Fully paid-up share capital consists of a total of 2,461,500 shares with a nominal value of EUR 1 each. 4.1.2 Quantitative information 4.1.2.1 Company shareholders' equity: breakdown

(in EUR) Item/Value 2011 2010

1. Share capital 2,461,500 5,000,000 2. Share premium 0 35,500,008 3. Reserves 130,575 3,039,904

- of profits 160,687 3,070,016

a) legal 1,087,133 1,087,133

b) required by articles of association c) own shares d) other (926,446) 1,982,883

- other (30,112) (30,112)

4) (Own shares) 5. Revaluation reserves 179,441 15,038,723

- Available-for-sale financial assets 179,441 15,038,723 - Tangible assets - Intangible assets - Foreign investment hedging - Cash flow hedging - Translation differences - Non-current assets and groups of assets held for sale - Special revaluation laws - Actuarial gains/losses related to defined benefit pension plans - Portion of the revaluation reserves for investments valued at equity

6. Equity instruments 7. Profit/(loss) for the year 5,242,118 7,656,299

Total 8,013,634 66,234,934

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4.1.2.2 Revaluation reserves relating to available-for-sale financial assets: breakdown

(in EUR)

Asset/Value Total 2011 Total 2010

Positive reserve Negative reserve Positive reserve Negative reserve1. Debt securities 0 15,026,926 2. Equity securities 3. UCITS units 183,432 3,991 11,797 4. Loans Total 183,432 3,991 15,038,723

4.1.2.3 Revaluation reserves relating to available-for-sale financial assets: changes for the

year

(in EUR)

Debt

securitiesEquity

securities UCITS units Loans 1. Opening balance 15,026,926 11,797 2. Increases 171,635

2.1 Increases in fair value 171,635 2.2 Transfer to income statement of negative reserves: from impairment from sales 2.3 Other changes

3. Decreases 3,991 3.1 Decreases in fair value 3,991 3.2 Adjustments due to impairment 3.3 Transfer to income statement of positive reserves: from sales 3.4 Other changes 15,026,926

4. Closing balance 0 179,441

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SECTION 5 - BREAKDOWN OF COMPREHENSIVE INCOME

(in EUR)

Item Pre-tax amount Income tax After-tax

amount10. Profit/(loss) for the year 5,242,118

Other income components 20. Available-for-sale financial assets 242,943 75,299 167,644

a) changes in fair value 242,943 75,299 167,644

b) transfer to income statement

- adjustments due to impairment

- gains/losses from sales

c) other changes 30. Tangible assets 40. Intangible assets 50. Foreign investment hedges:

a) changes in fair value


c) other changes 60. Cash flow hedges:



c) other changes 70. Translation differences:

a) changes in value


c) other changes 80. Non-current assets held for sale:



c) other changes 90. Actuarial gains/(losses) on defined benefit plans 100. Portion of the revaluation reserves for investments valued at

equity:



- adjustments due to impairment

- gains/losses from sales

c) other changes 110. Total other income net of tax 242,943 75,299 167,644 120. Comprehensive income (Item 10 + 110) 5,409,762

SECTION 6 - TRANSACTIONS WITH RELATED PARTIES 6.1 Remuneration of senior managers with strategic responsibilities The remuneration payable to directors and auditors of the parent company, IDeA Alternative, for the performance of their duties is given below:

72

(in EUR)

Individuals in office at 31 December 2011 Position Period during which position

was held

Pro forma annual

amount for 2011

Lino Benassi Chairman of the Board of Directors 01.01.2011 - 31.12.2011 151,000.00

Renzo Pellicioli Director 01.01.2011 - 31.12.2011 1,000.00 Paolo Ceretti Director 01.01.2011 - 31.12.2011 1,000.00

Gian Piero Balducci Chairman of the Board of Statutory Auditors 01.01.2011 - 31.12.2011 12,480.00

Cesare Andrea Grifoni Permanent Auditor 01.01.2011 - 31.12.2011 6,240.00 Roberto Spada Permanent Auditor 01.01.2011 - 31.12.2011 6,240.00

Remuneration paid to the General Manager of IDeA Alternative in 2011 totalled EUR 206 thousand. 6.2 Loans and guarantees issued in favour of directors and statutory auditors No loans or guarantees were issued in favour of the group's directors or statutory auditors. 6.3 Transactions with related parties Details of the relations existing between IDeA Alternative and related parties at 31 December 2011 are shown below:

(in EUR) Balance sheet assets 31 December 2011

Receivables Subsidiaries IDeA Capital Funds SGR S.p.A. 620,205 - Receivables relating to tax consolidation scheme 620,205 IDeA SIM S.p.A. 28,000 - Receivables for services 22,000 - Receivables for payments made in the name of and on behalf of others 6,000 Soprarno SGR S.p.A. 1,050 - Receivables for attendance fees for the secretary of the Board of Directors 1,050

Total 649,255

(in EUR) Balance sheet liabilities 31 December 2011

Payables Subsidiaries IDeA SIM 68,877 - Payables relating to tax consolidation scheme 68,877 Total 68,877

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(in EUR)

Costs 2011 Service costs Parent companies DeA Capital S.p.A. 242,400 - Administrative, legal and tax services 36,150 - Secondment of staff 206,250 Subsidiaries Soprarno SGR S.p.A. 42,000 - Secondment of staff 42,000 Associates/affiliates De Agostini S.p.A. 12,050 - Communications 12,050 De Agostini Editore S.p.A. 18,090 - Employee administration services 14,490 - Workplace management and security services 3,600 Total 314,540

(in EUR)

Revenues 2011 Revenues and other income Subsidiaries IDeA Capital Funds SGR S.p.A. 5,016,667 - Dividends received during the year 5,000,000 - Director remuneration 16,667 IDeA AI S.à.r.l. 270,000 - Dividends received during the year 270,000 Soprarno SGR S.p.A. 10,550 - IT services 10,550 IDeA SIM S.p.A. 36,515 - Administrative, legal and IT services 36,515 Companies measured at fair value Alkimis SGR S.p.A. 24,338 - Dividends received during the year 24,338 Total 5,358,070

6.4 Shareholdings held by directors, auditors and the General Manager As of the date of this document, all the shares of IDeA Alternative are held by DeA Capital S.p.A. SECTION 7 - OTHER INFORMATION 7.1 Management and coordination Pursuant to art. 2497 et seq of the Italian Civil Code, as at the reporting date, the company was subject to the management and coordination of DeA Capital S.p.A. A summary of key figures from majority shareholder DeA Capital S.p.A.’s latest approved financial statements is given below.

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Balance sheet of the parent company

(in EUR) Notes 31 December 2010 31 December 2009 ASSETS Non-current assets Intangible and tangible assets Intangible assets 1a 5,629 40,005 Tangible assets 1b 158,969 209,390 Total intangible and tangible assets 164.598 249,395 Financial investments Investments in subsidiaries and joint ventures 2a 765,199,369 800,512,702 Investments in other companies – available for sale 2b 1,431,230 566,631 Available-for-sale funds 2c 12,977,513 13,541,968 Receivables 2d - - Total financial investments 779,608,112 814,621,301 Other non-current assets Deferred tax 3a - - Other non-current assets 3b Total other non-current assets - - Total non-current assets 779,772,710 814,870,696 Current assets Trade receivables 4a 150,541 203,104 Available-for-sale financial assets 4b 15,037,722 15,017,469 Financial receivables from the pass-through arrangement 4c 634,750 1,263,664

Tax receivables from parent companies relating to the tax consolidation scheme 4d 4,064,725 3,199,437

Other tax receivables 4e 1,759,463 1,824,440 Other receivables 4f 116,109 36,407 Cash and cash equivalents (bank deposits and cash) 4g 54,234,322 58,559,529 Total current assets 75,997,632 80,104,050 Total current assets 75,997,632 80,104,050 Held-for-sale assets - - TOTAL ASSETS 855,770,342 894,974,746

LIABILITIES AND SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY Share capital 5a 294,013,402 289,020,888 Share premium reserve 5b 395,613,265 395,880,420 Legal reserve 5c 61,322,420 61,322,420 Fair value reserve 5d (8,594,317) 20,555,910 Other reserves 5e 726,307 8,927,714 Retained earnings (losses) carried forward 5f - - Profit/(loss) for the year 5g 15,989,158 (1,798,320) Shareholders’ equity 759,070,235 773,909,032 LIABILITIES Non-current liabilities Deferred tax liabilities 3a - - End-of-service payment fund 6a 193,076 131,915 Financial liabilities 6b 90,621,354 114,876,893 Total non-current liabilities 90,814,430 115,008,808 Current liabilities Payables to suppliers 7a 986,394 982.703 Payables to staff and social security organisations 7b 1,007,040 195,936

Tax payables to parent companies relating to the tax consolidation scheme 4,911 -

Other tax payables 7c 175,930 177,328 Other payables 7d 31,547 65,059 Short-term financial payables 7e 3,679,855 4,635,880 Total current liabilities 5,885,677 6,056,906 Held-for-sale liabilities - - TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 855,770,342 894,974,746

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Income statement of the parent company

(in EUR) Notes 2010 2009

Capital gains from subsidiaries 8a 0 0Dividends from subsidiaries and joint ventures 8a 29,328,800 9,339,600Capital gains from available-for-sale funds 8a 553,574 126,865Impairment of investments in subsidiaries and joint ventures 8a (4,006,280) 0Impairment of investments in other companies – available for sale 8a (50,659) (1,185,542)Impairment of available-for-sale funds 8a (1,131,005) (682,271)Service revenues 8b 516,647 315,255Other revenues and income 8c 121,913 181,544Personnel costs 9a (3,268,826) (3,370,972)Service costs 9b (3,038,525) (3,412,505)Depreciation, amortisation and impairment losses 9c (154,436) (183,343)Other costs 9d (10,244) (15,772)Financial income 10a 1,384,249 1,623,126Financial charges 10b (6,251,938) (6,088,044)PROFIT BEFORE TAXES 13,993,270 (3,352,059)Current income tax 11a 1,759,281 1,008,402Deferred income tax 11b 236,607 545,337PROFIT (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS 15,989,158 (1,798,320)Income from assets held-for-sale/sold 0 0PROFIT/(LOSS) FOR THE YEAR 15,989,158 (1,798,320)

Basic earnings (loss) per share 12 0.06 (0.01)Diluted earnings (loss) per share 12 0.06 (0.01)

7.2 Independent auditors' fees Pursuant to the provisions of art. 149-duodecies of the Consob Issuer Regulation, an amount of EUR 132 thousand (after expenses and VAT) was paid in 2011 by way of fees to the independent auditors KPMG for the annual financial audit – for the purposes of providing a professional opinion - and the audit of the interim accounts.

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INDEPENDENT AUDITORS’ REPORT (Original available in Italian version only)

77

BOARD OF STATUTORY AUDITORS’ REPORT (Original available in Italian version only)