The consolidated financial statements have been compiled based on the draft financial statements at 31 December 2010, prepared by the Board members of the companies included in the consolidation scope, for approval by the Shareholders’ Meeting.

They include the financial statements of the parent company, Banca IFIS S.p.A, and its subsidiary, IFIS Finance Sp. Z.o.o. - the Polish factoring company, drawn up using the line-by-line method of consolidation.

Here follows a summary of the 2009 financial highlights of the remaining subsidiary (in thousands of Euro):

Company Name

Registered Office

Equity at 31/12/2010

Profit for

31/12/2010

% of direct investment

IFIS Finance Sp. Z o.o..

Warsaw

26,409

1,477

100%

The carrying amounts of investments in companies consolidated on a line-by-line basis are eliminated against the carrying amounts of their assets and liabilities, offsetting the corresponding portion of equity held by the parent company.

The financial statements of subsidiaries expressed in foreign currencies are translated into Euro in asset and liability items according to the rate of exchange at the end of the period. In the income statement, figures are translated according to the average exchange rate, which is considered as a valid approximation of the spot exchange rate. The consequent exchange differences deriving from the application of different exchange rates for the statement of financial position and the income statement, together with the exchange differences from the translation of the investee company’s equity, are recognised under capital reserves.

Assets and liabilities, off-balance sheet transactions, income and expenses, and the profit and loss between companies included in the consolidation scope are all eliminated.

For companies that are included in the consolidation area for the first time, the fair value of the cost incurred in obtaining control of such equity investment is measured on the acquisition date.

The acquisition cost for business combinations carried out before 1 July 2009 is determined, under IFRS 3 (2004), as the sum of:

  • The fair value at the acquisition date of the assets and liabilities acquired;

  • Any directly attributable costs.

The results of a subsidiary purchased within the accounting period in question are included in the consolidated statement of financial position as from the date of purchase. Similarly, the financial results of subsidiaries sold within the accounting period in question are included in the consolidated statement of financial position up to the date in which control is transferred.

During line-by-line consolidation, the acquisition cost is allocated to the different identifiable assets, liabilities and contingent liabilities acquired, modifying their value to adapt it to their fair value.

Any positive differences are recognised as goodwill under item 130 “intangible assets”. Negative differences are recognised in the income statement.

As far as concerns the subsidiary, IFIS Finance Sp. Z o.o., the line-by-line consolidation process has brought about goodwill for 868 thousand Euro, at end of period exchange rates, recognised under item 130 ‘intangible assets’.

1. Investments in exclusively and jointly controlled companies (consolidated using the proportional method)

Name of company

Registered Office

Type

Investment

Voting rights %

(2)

Held by

Quota %

A. Companies

A.1 Consolidated line-by-line

1. IFIS Finance Sp. Z o.o..

Warsaw

1

Banca IFIS S.p.A.

100%

100%

A.2 Consolidated proportionally

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Key

  • Type (1):

1 = majority of voting rights in the Annual Shareholders’ Meeting

2 = dominant influence in the Annual Shareholders’ Meeting

3 = agreement with other shareholders

4 = other forms of control

5 = exclusive control as per article 26, paragraph 1, of Legislative Decree no. 87/92

6 = exclusive control as per article 26, paragraph 2, of Legislative Decree no. 87/92

7 = joint control

  • Voting rights in the Annual Shareholders’ Meeting, distinguishing between effective and potential voting rights.