HALF-YEAR FINANCIAL REPORT AS AT 30 JUNE 2015

Transcription

1 HALF-YEAR FINANCIAL REPORT AS AT 30 JUNE

2 as at 30 June 2015 This document is an English translation of an Italian language Half-year Financial Report. In the event of any inconsistency or interpretation difficulties reference should be made to the Italian language Half-year Financial Report, which shall in any event prevail.

3

4 Table of Contents Table of Contents GOVERNANCE BODIES GROUP HIGHLIGHTS Key figures Financial Highlights Group s Structure HALF-YEAR FINANCIAL STATEMENTS AS AT 30 JUNE 2014 Directors Report on Operations 17 Financial highlights of the period 19 Group economic and financial management 23 Investments and research and development 24 Business outlook and subsequent events Consolidated condensed financial statements 25 Consolidated statement of financial position 27 Consolidated statement of income 28 Consolidated statement of comprehensive income 29 Consolidated cash flow statements 30 Summary statement of changes in consolidated shareholders equity 31 3

5

6 Governance Bodies

7 Governance Bodies 6

8 Governance Bodies BOARD OF DIRECTORS Chairman CEO Directors Diego Bravar Paolo Salotto Laura Amadesi Dario Scrosoppi Carlo Solcia BOARD OF STATUTORY AUDITORS Chairman Auditors Andrea Fasan Renato Furlani Luciano Lomarini Alternate Auditors Alessandro Baldan Andrea Vucetti INDEPENDENT AUDITORS Reconta Ernst & Young Spa 7

9

10 Group Highlights

11 Group Highlights TBS Group TBS Group was founded in research environment in the late 1980s as a advanced clinical engineering service provider. In line with integrated technology development (in both IT and telematics), the company s growth was marked by developments in Clinical Engineering itself. In fact, Clinical Engineering was no longer merely restricted to the secure and efficient management of biomedical equipment, but had expanded to comprise the integrated management of all technologies implemented in hospitals and social and healthcare facilities. Throughout the world, healthcare costs are the most significant item in public expenditure; they are growing faster than the GDP and threatening to become unsustainable. Technology accounts for 50% of overall costs. In this context, the Group s vision is to work towards containment and requalification of expenditure in the technology sector, especially in healthcare area, offering an integrated management that aims to improve the quality of social and healthcare services provided to citizens and to positively influence their healthcare expectations. The Group s mission is to develop outsourced integrated Clinical Engineering, e-health and e-government services so as to enhance the safety, effectiveness and efficiency of technologies used in hospitals, social and healthcare facilities as well as in other local authority entities. These technologies include biomedical equipment, additional medical devices, medical IT systems and solutions, telecare and telemedicine systems and solutions and e-government systems and solutions. Since December 2009 TBS Group is listed on AIM Italia (Italian Stock Exchange segment). TBS Group operates with two Business Units: Medical Devices and ICT systems TBS Group provides to public and private healthcare institutions a complete range of technologies management services in outsourcing, in particular of all medical devices, from the most simple to more complex, and all ICT systems and solutions, on a high security level in multivendor terms and with a widespread network of engineers and technicians, both biomedical and IT, presented on site and on the territory. Also offers telecare and telemedicine solutions to favor the diagnostic and therapeutical continuity between the hospital and the territory and to implement telematic services of social-healthcare home assistance. The services offered by TBS Group can be provided selectively or as part of a highly-flexible, integrated service depending on the customer requirements. Integrated Solutions of e-health&e-government TBS Group develops own solutions, provides related services, operates as system integrator and offers specific know how and projection skills in the following fields: medical IT services and products for the supply and/or consultancy on purchases, installation, testing and integrated management of all medical IT systems and solutions, and their integration with the public administration ones in hospitals and social healthcare structures products, systems and solutions for the supply and management of computerised running of demographic, social, tax, administration and government services as well as of human resources management, protocol and document management for the Public institutions, in particular for the local entities. 10

12 Group Highlights Key figures Group 1 Business Unit 2 Countries 21 Companies more than 20 Personnel 2,400 Internal workshops more than 300 Regional operational centres 46 Competence centres or companies 26 Healthcare structures more than 1,000 Public bodies and local entities more than 200 Medical equipment and devices managed 850,000 Maintenance activities 1,300,000 Telecare and telemedicine users 34,000 note: as at 30 June

13 Group Highlights Financial Highlights Revenue EBITDA /13 06/14 06/15 06/13 06/14 06/15 Shareholders Equity Net financial debt /13 12/14 06/15 06/13 12/14 06/15 12

14 Group Highlights Group s structure TBS Group Medical devices and ICT systems Integrated solutions of e-health & e-government Italy operations 100% EBM (Italy) 100% Delta X (Italy) 51% Ing. Burgatti (Italy) 100% Insiel Mercato (Italy) 51% Erre Effe Informatica (Italy) 100% PCS (Austria) 100% 75.1% TBS Imaging (Italy) TeSAN Televita (Italy) 55.7% 56% 100% Crimo Italia (Italy) SLT (Italy) TBS IT (Italy) Foreign operations 100% 100% 100% 100% 100% 100% MSI MedServ International (Germany) Surgical Technologies (The Netherlands) TBS BE (Belgium) TBS Bohemia (Repubblica Ceca) TBS ES (Spain) TBS FR (France) 96.13% TBS GB (United Kingdom) 100% TBS PT (Portugal) 100% TBS India (India) 100% TBS SE (Serbia) 100% TBS Group also participates at: Sinopharm TBS (Cina) 03 Enterprise Fondazione Easy Care Consorzio sociale Care Expert Kell note: as at 30 june

15

16 Half-year financial statements as at 30 June 2015

17 Directors report on operations 16

18 Directors report on operations Interim Financial Report at 30 June 2015 Directors Management Report KEY EVENTS OF THE PERIOD The following significant events occurred in the first half of They are described in further detail in the press releases on the company s website in the Investor Relations and News & Media section. Regarding Corporate Governance, we remind you that the Shareholders Meeting held on 28 April 2015 decided on five members to be appointed to the Board of Directors for the next three financial periods, until the approval of the Financial Statements at 31 December On 7 May, the new Board of Directors appointed Mr Diego Bravar as Chairman of the Company, and Mr Paolo Salotto as the Chief Executive Officer. During the same session, another three board members Carlo Solcia, Laura Amadesi and Dario Scrosoppi were appointed as members of the Internal Control and Risks Committee and the Nomination, Remuneration and Governance Committee. On 25 May and 17 June 2015, the Board appointed the new responsible for Investor Relations and the new Surveillance Body, respectively. We note that the simplification of the organisational structure of the TBS Group in Italy continued with the following transactions: merger by incorporation of the company Tesan into EBM, finalised on 19 February 2015; transfer of the ownership of Insiel Mercato from TBS IT to the TBS Group (already holding 49.29%), whereas ownership in TBS Imaging (formerly REM DI S.r.l.) was transferred from the TBS Group to EBM; operations to merge TBS Imaging and Delta X began and these should be completed during the second part of Work continued on implementing the strategic lines for services to manage and maintain multi-vendors of medicalimaging equipment. On this point, we note that on 7 January 2015, the subsidiary Elettronica Bio Medicale S.r.l.- making use of the subsidiary Delta X S.r.l. - signed the definitive contract for the purchase of 51% of the share capital of Ing. Burgatti S.p.A. of San Lazzaro di Savena (BO). The purchase price for 51% of the shares was confirmed at Euro 2,900,000 and has been fully paid. During the first quarter of 2015, we continued to grow the maintenance services of IT systems in hospitals and other public and private entities. Included among the most relevant results, we remind you that TBS IT was awarded: on 31 March 2015, the renewal of the contract regarding the integrated management service supporting the diagnostic and outpatient equipment at the Regional San Carlo Hospital in Potenza; the contract is effective from 1 October 2014 for five years, and has a total value of Euro 1.4 million, of which Euro 998,000 are attributable to the Company; on 01 May 2015, TBS IT signed a contract for the coordination, management and development of the electronic medical file [ CCE - Cartella Clinica Elettronica ] application solution with the Ospedale Niguarda Cà Granda Hospital in Milan; the contract is effective for nine years, for a total value of approximately Euro 2.2 million; on 20 May, the Company signed the contract to for to manage the information systems for the Municipality of Mogliano Veneto; the contract runs for 4 years (with the possible addition of another 6 months), for a total value of Euro 1.37 million. 17

19 Directors report on operations Finally, we outline some of the relevant events that occurred during the period in the Group s most important companies. EBM was awarded the renewal of the contract in respect of the maintenance of the proprietary electro-medical equipment at the Hospitals of the Greater North Western Region of Tuscany; the agreement is effective from 1 January 2015 for three years and has a total value of over Euro 25.3 million (excluding VAT), of which almost Euro 20.3 million refer to EBM. The Company TBS GB was awarded: on 20 February, the renewal of the contract for the management and maintenance of biomedical equipment of the 32 Nuffield Health hospitals, one of the largest UK Charities active in healthcare services. The contract which will be valid for two years runs from 1 April 2015 and has a total financial value of over 2.7 million pounds sterling. on 17 June 2015, a five-year contract to provide clinical engineering services to the Royal National Orthopaedic Hospital; the total value is estimated at approximately Euro 5.3 million pounds. On 05 June 2015, TBS IMAGING was awarded the supply of 16 newly manufactured ultrasounds on a lease bases for the Hospital in Avellino. The contract has a 5-year duration and a total value of Euro 415,000. Furthermore, we remind you that the company TBS Bohemia was established on 29 January It is a 100% subsidiary of the TBS Group S.p.A. and will operate in the field of clinical engineering in the Czech Republic. Finally on 01 June 2015, the Cerved Rating Agency an Italian rating agency specialising in assessing the creditworthiness of non-financial companies updated its rating of the TBS Group, which had originally voluntarily submitted to an evaluation on 25 June A new rating of A3.1 was assigned, confirming an improvement compared to the previous B1.1. level; this evaluation represents the sixth level in the Cerved risk scale that covers 13 classes (from A1.1, representing the first level to the least risk at C2.1). The relevant statement defines the TBS Group as a company with solid fundamentals and a good ability to meet its financial commitments. Its credit risk is low. 18

20 Directors report on operations ECONOMIC AND FINANCIAL MANAGEMENT The table below presents a summary of the Group financial data for the first half of 2015 and a comparison with the same period of 2014, prepared in accordance with IAS/IFRS, with further information on the interim EBITDA, corresponding to earnings before amortisation and depreciation, write-downs of intangible assets and property, plant and equipment, measurement of investment, net financial expenses and income taxes. TBS Group (in thousands of Euro) 1 st half st half 2014 Revenue from sales and services 115, ,469 Other income Total revenue and income 116, ,099 Cost of materials 16,796 17,215 External services costs 39,742 39,859 Personnel costs 48,851 47,785 Other operating costs 2,084 1,558 Cost adjustments for in-house generation of non-current assets ,394 Other provisions Total costs 106, ,155 EBITDA 9,813 9,944 ebitda % 8.4% 8.6% Amortisation and write-downs on fixed assets 5,692 5,024 EBIT (operating profit) 4,121 4,920 ebit % 3.5% 4.3% Gains (losses) from investments Financial income Financial expenses -3,530-3,186 PROFIT BEFORE TAX 1,084 1,967 Income taxes ,962 PROFIT FOR THE PERIOD attributable to the Group attributable to third parties The Group recorded a slight drop in sales in the first six months of 2015 that could have been higher, due mainly to the delayed start of certain international tenders, which had characterised the beginning of the previous period. Specifically at 30 June 2015, a total of revenues and other income for Euro million were recognised, an increase of Euro 1.5 million over the million for the same period in 2014, thus recording an increase of 1.3%. 19

21 Directors report on operations The contribution of the two operating segments to the results achieved is summarised in the following table: (in thousands of Euro) Medical Devices and ICT Systems 1 st half st half 2014 Integrated solutions of e-health & e-government Total Medical Devices and ICT Systems Integrated solutions of e-health & e-government Revenue Revenue from third parties and other revenue 100,403 16, ,615 99,584 15, ,099 Total revenue 100,403 16, ,615 99,584 15, ,099 % of total 86.1% 13.9% 86.5% 13.5% EBITDA 9, ,813 9, ,943 EBITDA % 9.5% 1.9% 9.4% 3.5% Total Analysis of revenues per line of business gave the following results: Revenue from the Medical Devices & ICT Solutions division showed an increase of Euro 0.8 million, thus rising from 99.6 million at 30 June 2014 to million in the same period in 2015 (+0.8%) and representing 86.1% of the revenue for the entire Group (86.5% at 30 June 2015). The Integrated solutions of e-health & e-government division saw an increase in revenues, up from 15.5 million at 30 June 2014 to Euro 16.2 million during the same period in 2015 (+4.5%). Although Italy was once again the main market for the TBS Group s business, an analysis of revenues by geographic area shows significant growth in European countries (owing mainly to TBS GB) which in the first six months represented 27.6% of total revenues compared with 25.6% in the same period of Italy s portion of revenue reached 70.4% (67.6% in the first six months of 2014), whereas revenue for non-eu countries dropped due to the postponement of international tenders. Revenue (in thousands of Euro) 1 st half st half 2014 difference difference % Italy 82,065 77,755 4, % United Kingdom 14,541 12,676 1, % France 6,774 6, % Austria 4,371 3, % Germany 1,367 1, % Spain 2,234 2, % Total other European Union countries 2,844 2, % Other non-european Union countries 2,419 7,855-5, % Total revenue 116, ,099 1, % Consolidated EBITDA came to Euro 9.8 million, in line with the Euro 9.9 million in the first 6 months of The improvement in overall profitability compared to 2014 was offset by the contribution lacking from project development services, global supplies and the maintenance of equipment envisaged in the context of international tenders. Operating profit (EBIT) dropped by Euro 0.8 million, going from Euro 4.9 million in the first six months of 2014 to 4.1 million over the same period in 2015; this drop is attributable to the increase in amortisations following the added investments and new acquisition. 20

22 Directors report on operations Financial management during the period was basically stable in terms of results, despite the higher charges due to the worsening in net financial debt, which was balanced by the increased financial income for the period. Taxes fell by Euro 1.3 million, mainly owing to the lower IRAP payable, as a result of the deduction of labour costs for employees appointed with an open-ended contract. The first six months of 2015 closed with a net positive result of Euro 0.4 million, compared with the same period in The table below presents a summary of the Group s key equity data at 30 June 2015 compared with those for the end of FY 2014, in accordance with IAS/IFRS standards: (in thousands of Euro) 30/06/ /12/2014 Difference Intangible assets 60,076 54,481 5,595 Tangible assets 20,975 19,899 1,076 Other non-current assets 10,230 9, Non-current assets 91,281 84,320 6,961 Current assets 181, ,817 13,314 TOTAL ASSETS 272, ,137 20,275 Group net equity 48,759 49, Equity attributable to third parties 2,596 2, Net Equity 51,355 51, Non-current liabilities 64,596 52,633 11,963 Current liabilities 156, ,850 8,611 NET EQUITY AND LIABILITIES 272, ,137 20,275 The key economic and financial indicators as at 30 June 2015 and 31 December 2014, deriving from the ratios between certain data recorded in the Income Statement and Balance Sheet, are shown below. 30/06/ /06/ /12/2014 EBITDA/Total revenue and income 8.4% 8.6% 10.4% EBIT/Total revenue and income 3.5% 4.3% 5.9% EBT/Total revenue and income 0.9% 1.7% 3.0% Net profit for the year/total revenue and income 0.3% 0.0% 1.0% Financial charges/revenue 3.0% 2.8% 3.0% NFD/Group net equity Total liabilities/net Group Equity NFD/EBITDA (*) OWC/Total revenue and income (**) 36.6% 36.0% 35.1% (*) Rolling EBITDA for the period 30/06/ /06/2015 and 30/06/ /06/2014 (**) Rolling revenues for the period 30/06/ /06/2015 and 30/06/ /06/2014 At 30 June 2015, net financial debt stood at Euro 82.2 million, an increase of Euro 19.4 million compared to the Euro 62.5 million at the end of 2014; the increase can mainly be ascribed to the price for the purchase transaction for 51% of the company Ing.Burgatti, the appreciation in the relevant Put&Call in the contract, as well as the incorporation of this company s financial debt and change in the net working capital. Transactions to transfer receivables came down slightly compared to the previous year, due in part to the introduction of the so-called split payment legislation (Euro 44.8 million at 30 June 2015 compared to 46.1 million for the same period the previous year). 21

23 Directors report on operations This increase can also be seen in the trend for operating working capital, which went from Euro 81.4 million (35.1% of revenues) at the end of 2014 to 85.4 million at 30 June 2015 (36.6% of revenues); the split payment regulations impacted significantly on other current liabilities that came down by Euro 6.1 million compared to the end of The overall effect resulted in a significant increase in net working capital for Euro 13.3 million, once again compared to the year-end result. (in thousands of Euro) 30/06/ /12/ /06/2014 Non-current financial liabilities -44,702-33,377-19,325 Current financial liabilities -73,177-65,549-73,743 Other financial assets Current financial assets 1,410 5,193 4,991 Cash and cash equivalents 33,834 30,763 28,593 Debt in assets held for sale 0 0-3,731 Net financial debt -82,177-62,535-62,810 (in thousands of Euro) 31/12/ /06/ /06/2014 Inventories 9,465 11,071 9,938 Trade receivables 110, , ,859 Trade payables -38,866-45,103-43,864 Operating working capital 81,422 85,433 81,933 Other current assets 11,573 15,351 11,277 Other current liabilities 43,435 38,181 44,679 Net working capital 49,560 62,603 48,531 The financial movements are analysed in the summary elements from the statements of cash-flows, summarised below. CONSOLIDATED CASH FLOW STATEMENT (in thousands of Euro) 30/06/ /06/2014 CASH FLOW GENERATED BY OPERATING ACTIVITIES -3,165 6,138 CASH FLOW USED BY INVESTMENT ACTIVITIES -5,920-5,277 CASH FLOW PROVIDED BY (USED IN) FINANCING ACTIVITIES 12, TOTAL CASH FLOWS 3, CASH AND CASH EQUIVALENTS (NET) AT THE BEGINING OF THE PERIOD 30,763 27,656 Net foreign exchange differences CASH AND CASH EQUIVALENTS (NET) AT THE END OF THE PERIOD 33,834 28,597 Cash flow from operating activities in the first half of 2015 had a negative balance of Euro -3.2 million, as a consequence of the before tax result (+1.1 million), amortisation and write-downs (Euro +5.8 million), financial charges (Euro +3.0 million), the increase in working capital for the year (Euro million), other provisions (Euro +0.6 million) and taxes paid (Euro -1.0 million). Investments, including the disbursement made to acquire the company Ing. Burgatti, used cash flow for Euro 5.9 million, gross of disinvestments. Cash flows from financing activities (balance between increase and decrease of financial liabilities, including interest payments) generated Euro 12.2 million. 22

24 Directors report on operations The resulting total cash flow was Euro 3.1 million. INVESTMENTS IN RESEARCH & DEVELOPMENT At 30 June 2015, investments were made in intangible assets, with the exclusion of the change in the scope of the consolidation, totalling Euro 1,312,000 during the year in the following areas: Intangible assets with a finite useful life (in thousands of Euro) Acquisitions for the period Development 7 Industrial patents, intellectual works and trademarks 278 Other intangible fixed assets 63 Fixed assets in progress 964 Total 1,312 Investments made during the first six months totalled Euro 1,312,000 and mainly include: in the category Intangible fixed assets in progress, costs incurred by the Parent Company to implement software in the administrative and technical areas (Euro 148,000), by Insiel Mercato (Euro 539,000), by EBM (Euro 252,000) for the management of specialistic centres and other projects and by PCS for software (Euro 25,000); in the category, Industrial patents, intellectual property rights and works, licenses and trademarks, purchases of software licenses made by companies in the Group. At 30 June 2015, investments were also made in intangible assets, with the exclusion of the change in the scope of the consolidation, totalling Euro 2,561,000 during the year in the following areas: Tangible assets with a finite useful life (in thousands of Euro) Acquisitions for the period Land and buildings 24 Plants and machinery 2,044 Other tangible fixed assets 493 Total 2,561 Investments in tangible assets stand at Euro 2,044,000 and mainly refer to equipment, machinery and other assets for the business of EBM in the amount of Euro 1,030,000 and of TBS GB in the amount of Euro 392,000, Crimo Italia for Euro 294,000, TBS Imaging (formerly REM DI) for Euro 230,000, Ing. Burgatti for Euro 145,000 and TBS France for Euro 113,

25 Directors report on operations BUSINESS OUTLOOK AND SUBSEQUENT EVENTS We note that on 23 July 2015, the subsidiary TBS FR formalised the total acquisition of Crimo France Sas, a company which operates in the maintenance of biomedical equipment, especially endoscopic devices and surgical instruments. Crimo France employs around sixty people and operates throughout the transalpine region. During the last period ended 31 March 2015, it closed with a turnover of over Euro 7 million. The maximum purchase price was set at Euro 6.0 million, and included the company s net financial position at the date of sale. Euro million was paid on signing the contract; the balance will be paid by latest by March Finally on 30 July 2015, the TBS Group repaid the bond loan of Euro 10 million, in addition to the interest for the period, which had been signed with the Fondo Italiano di Investimento on 09 February 2012; the decision was made based on the provision allowed in the loan rules, whereby early repayment could be made in relation to the natural deadline set for February Trieste, 24 August 2015 On behalf of the Board of Directors Chief Executive Officer Paolo Salotto 24

26 Half-Year Financial Statements as at 30 June 2015 Consolidated interim financial statements as at 30 June 2015 Prepared according to the International Financial Reporting Standards (IFRS) Consolidated statement of financial position (in thousands of Euro) Notes 30/06/ /12/2014 ASSETS NON-CURRENT ASSETS - Assets with indefinite useful life (goodwill) 36,410 31,557 - Intangible assets with a finite useful life 23,666 22,924 Intangible assets 7 60,076 54,481 - Land and buildings 6,727 6,827 - Plants and machinery 10,867 9,735 - Other tangible assets 3,381 3,337 Property, plant and equipment 8 20,975 19,899 - Investments in associated companies Iinvestments in other companies Other financial assets Other non-current assets Advance tax assets 33 7,836 7,792 Other non-current assets 10,230 9,941 NON-CURRENT ASSETS 91,281 84,321 Inventories 10 11,071 9,465 Trade receivables , ,823 Assets held for trading Other current assets 13 12,993 9,789 Income tax receivables 14 2,358 1,784 Current financial assets 16 1,410 5,192 Cash and cash equivalents 16 33,834 30,763 CURRENT ASSETS 181, ,816 TOTAL ASSETS 272, ,137 SHAREHOLDERS' EQUITY - Share capital 4,142 4,142 - Reserves 44,617 44,897 GROUP SHAREHOLDERS' EQUITY 48,759 49,038 EQUITY ATTRIBUTABLE TO MINORITY INTERESTS 2,596 2,616 CONSOLIDATED SHAREHOLDERS' EQUITY 15 51,355 51,654 25

27 Half-Year Financial Statements as at 30 June 2015 Consolidated statement of financial position (in thousands of Euro) Notes 30/06/ /12/2014 LIABILITIES Non-current financial liabilities 16 44,702 33,378 Employee Severance Indemnity 17 9,170 9,026 Deferred tax provision 33 9,446 8,930 Provisions for risks and charges Other medium/long-term liabilities NON-CURRENT LIABILITIES 64,596 52,633 Trade payables 20 45,103 38,866 Other current liabilities 21 35,957 42,018 Current financial liabilities 16 73,177 65,550 Income tax payables 14 2,225 1,418 CURRENT LIABILITIES 156, ,851 TOTAL LIABILITIES 221, ,484 Liabilities held for sale 0 0 TOTAL LIABILITIES 272, ,137 26

28 Half-Year Financial Statements as at 30 June 2015 Consolidated Statement of Income (in thousands of Euro) Notes 1 st half st half 2014 Revenue from sales and services , ,469 Other income Total revenue and income 116, ,099 Cost of materials 24 16,796 17,215 Service costs 25 39,742 39,859 Personnel costs 26 48,851 47,785 Other operating costs 27 2,084 1,558 Cost adjustments for in-house generation of non-current assets ,394 Amortisation and write-downs on fixed assets 29 5,692 5,024 Other provisions Total operating costs 112, ,179 OPERATING PROFIT 4,121 4,920 Gains (losses) from investments Financial income Financial charges 32-3,530-3,186 PROFIT BEFORE TAX 1,084 1,967 Income taxes ,962 PROFIT/(LOSS) FOR THE PERIOD (Profit)/Loss for the period attributable to third parties GROUP PROFIT (LOSS) FOR THE PERIOD Earnings per share attributable to ordinary shareholders of the Parent Company (in Euro) 6 - base diluted

29 Half-Year Financial Statements as at 30 June 2015 Consolidated comprehensive income statement (in thousands of Euro) Notes 1 st half st half 2014 Profit/(Loss) for the period (A) Other items of the comprehensive income statement that will be subsequently reclassified to profit/(loss) for the period Difference in foreign currency balance sheet translations Other items of the comprehensive income statement that will not be subsequently reclassified to profit/(loss) for the period Actuarial gains/losses Tax effect on actuarial gains/losses Actuarial profits/(losses) net of tax effect Total other comprehensive income statement items (B) Total profit/loss for the period (A)+(B) Total profit for the period attributable to: - Minority interests Group Total

30 Half-Year Financial Statements as at 30 June 2015 CONSOLIDATED CASH FLOW STATEMENT (in thousands of Euro) 1 st half st half 2014 Profit before tax from operating assets 1,084 1,967 - Write-downs (revaluations) of investments Amortisation, depreciation and write-downs of tangible and intangible assets 5,692 5,024 - Write-downs/(write-backs) on non-investment assets Net increase/(decrease) in the Employee Severance Indemnity provision and other personnel funds Net increase/(decrease) in provisions for risks and charges Interest and other financial income Financial expenses 3,530 3,186 Flow from disposed assets Total 10,385 9,214 Net change in working capital for the period (Increase)/decrease in inventories (Increase)/decrease in trade receivables -6,463 1,098 Increase/(decrease) in trade payables 4,801-4,263 Increase/(decrease ) in other receivables and payables -10,502 1,573 Changes in working capital from disposed assets Total -12,565-2,488 Interest income and other financial income received 0 0 Income taxes paid CASH FLOW GENERATED BY OPERATING ACTIVITIES -3,165 6,138 - Purchases of intangible assets -1,312-2,257 - Purchases of tangible assets -2,561-3,235 - Acquisitions of other investments Disposal of intangible assets Disposal of tangible assets Acquisition of subsidiaries, net of financial resources -2,151 Flow from investment activities from disposed assets 0 67 CASH FLOW USED BY INVESTMENT ACTIVITIES -5,920-5,277 CASH FLOWS FROM FINANCING ACTIVITIES - Net Increase/(decrease) in current financial liabilities 4,616 4,770 - Net Increase/(decrease) in non-current financial liabilities 7, Net change in financial receivables and other financial assets 3,794-1,543 - Purchase of minority interests Dividends paid Dividends distributed to third parties Interest and other financial expenses paid -3,310-3,059 - Interest receivables and other financial income received Flow from financing activities from disposed assets 0 1,135 CASH FLOW PROVIDED BY (USED IN) FINANCING ACTIVITIES 12, TOTAL CASH FLOWS 3, CASH AND EQUIVALENTS AT THE START OF THE PERIOD 30,763 27,655 CASH AND CASH EQUIVALENTS AT THE START OF THE PERIOD of disposed assets Exchange-rate differences CASH AND EQUIVALENTS AT THE END OF THE PERIOD of disposed assets 33,834 28,597 29

31 Half-Year Financial Statements as at 30 June 2015 SUMMARY STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY (in thousands of Euro) Share capital Reserve, Share premium Foreign currency transl. reserve Other reserves and retained earnings Profit for the period Group shareholders' equity Minority interests and reserves Profit (loss) attributable to third parties Equity attributable to third parties Consolidated shareholders equity Consolidated shareholders' equity 31/12/2014 IAS/IFRS 4,142 42, ,896 49,038 2, ,616 51,654 Allocation of 2014 profit 0 1,896-1, Changes in foreign currency translation reserve Net profit at 30 June Actuarial profit/(loss) net of tax effect Total profit/loss for the period Dividends resolved ,055 Reserve for translation Chile and Peru Distribution of dividends to fully consolidated companies due to call and put option contracts Purchase of additional minority interests of subsidiaries Consolidated shareholders' equity 30/06/2015 IAS/IFRS 4,142 42, , ,759 2, ,596 51,355 Consolidated shareholders' equity 31/12/2013 IAS/IFRS 4,142 42, ,765-10,955 47,802 2, ,783 50,585 Allocation of 2013 profit 0-10,955 10, Changes in foreign currency translation reserve Net profit as at 30 June Actuarial profit/(loss) net of tax effect Total profit/loss for the period Dividends resolved Reserve for translation Chile and Peru Distribution of dividends to fully consolidated companies due to call and put option contracts Purchase of additional minority interests of subsidiaries Treasury shares Consolidated shareholders' equity 30/06/2014 IAS/IFRS 4,142 42, , ,106 2, ,511 49,617 30

32 NOTE 1 General information, layout and content of the Consolidated Financial Statements, IFRS compliance and scope of Consolidation Layout and content of the consolidated financial statements and IFRS compliance The Group s annual consolidated financial statements are prepared in compliance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Commission in compliance with the procedure pursuant to Art. 6 of European Parliament and Council Regulation (EC) No 1606/2002 of 19 July These interim abridged consolidated financial statements for the six-month period as at 30 June 2015 have been prepared in accordance with the provisions of IAS 34 Interim financial reporting. These interim abridged consolidated financial statements do not include all the information required in the preparation of the annual consolidated financial statements as at 31 December 2014 and should therefore be read together with the latter. The preparation of the interim financial statements requires management to make estimates and assumptions that affect the reported amounts of the income, costs, assets and liabilities and the disclosure of information on contingent assets and liabilities at the date of the interim financial statements. If in the future, these estimates and assumptions, which are based on management s best evaluations, should differ from the effective circumstances, they would be modified appropriately in the period in which the relevant circumstances arise. For a more extensive description of the most significant evaluation processes for the Group, please refer to the information given in the paragraph entitled Use of estimates of the consolidated financial statements as at 31 December Please also note that some evaluation processes, in particular the more complex ones such as the determination of any loss of value of non-current assets, are generally carried out completely only when preparing the annual financial statements, when all the required information is available, except where impairment indicators are seen that require an immediate evaluation of any loss of value. The accounting standards adopted are consistent with those used as at 31 December 2014, with the exception of the adoption of new standards, amendments and interpretations, in force from 1 January IFRS accounting standards, amendments and interpretations applied from 01 January 2015 Below the nature and impact of each new standard/change is listed: Changes to IAS 19 Defined contribution plan: employee contributions IAS 19 requires entities to consider employee or third-party contributions in recording Defined Benefit Plans. When contributions are associated with the service rendered they should be allocated to the periods of service as a negative benefit. This amendment clarifies that, if the amount of the contributions is independent of the number of years of 31

33 service, the entity can recognise these contributions as a reduction to the cost of service during the period in which the service is provided, rather than allocating the contributions to the periods of service. The change came into effect for the financial periods starting from 01 July 2014 or afterwards. This change is not relevant for the Group, given that no entity that is part of the Group has plans that requires contributions from employees or third parties. Annual improvements to IFRS cycle These improvements came into effect on 01 July They include: IFRS 2 Share-based payments This improvement is applied prospectively and clarifies a number of points relative to the definition of performance and service conditions that represent conditions for accrual, including: a performance-based condition must contain a service condition; a performance-based objective must be achieved while the counterparty provides the service; a performance-based objective can refer to operations or activities of an entity, or to those of another entity within the same Group; a performance-based objective can be a market condition or non-market-related condition; If the counterpart ceases providing service during the accrual period, irrespective of the reason, the service condition is not satisfied. IFRS 3 Business Combinations The change applies prospectively and clarifies that all agreements for potential payments classified as liabilities (or assets) arising from a business combination must be subsequently measured at fair value with a contra entry to the income statement, whether or not they fall within the scope of IFRS 9 (or IAS 39, whichever is applicable). IFRS 8 Operating segments The amendment applies retrospectively and clarifies that: An entity should disclose information about the measurements made by management in applying the aggregation criteria foreseen in section 12 of IFRS 8, including a brief description of the operating segments that have been combined and the economic characteristics (for example, sales or gross margin) used to determine whether the sectors are similar ; It is necessary to present a reconciliation of the assets in the segment and total assets only if the reconciliation is presented to the highest decision-making authority, as required for liabilities in the segment. IAS 16 Property, plant and equipment and IAS 38 Intangible assets The amendment applies retrospectively and clarifies that in IAS 16 and IAS 38 an asset can be revalued with reference to observable data either by adjusting the asset s gross and net book value, and by calculating the 32

34 accounting market value, and adjusting the gross book value proportionately so that the book value is the same as the market value. In addition, accumulated amortisation and depreciation is the difference between the gross and book value of the asset. IAS 24 Related party disclosures The amendment applies retrospectively and clarifies that a management entity (an entity that provides key management personnel services) is a related party subject to the related-party disclosure requirements. In addition, an entity that seeks recourse to a management entity must disclose the costs sustained for the management services. IFRS 3 Business Combinations The amendment applies prospectively and for the purposes of exceptions to the scope of IFRS 3, clarifies that: not only joint ventures but also joint arrangements fall outside the scope of IFRS 3; this exclusion from the scope of IFRS 3 is only applicable in the drafting of the joint arrangement balance sheet. IFRS 13 Fair-value measurement The amendment applies prospectively and clarifies that the portfolio exception foreseen in IFRS 13 can be applied not only to financial assets and liabilities, but also to the other contracts that fall within the scope of IFRS 9 (or IAS 39, whichever is applicable). IAS 40 Investment property The description of additional services in IAS 40 differentiates between investment property and property used by the owner (for example, property, plant and equipment). The amendment applies prospectively and clarifies that in order to define whether an operation represents the purchase of an asset or a business combination, IFRS 3 must be used and not the description of additional services found in IAS 40. This refers to amendments to the principles and/or interpretations that did not have any impact on the abridged interim consolidated financial statements at 30 June Scope of consolidation The consolidated financial statements comprise the financial statements of TBS Group S.p.A. and the subsidiaries over which it exercises direct and indirect control. 33

35 The companies included in the scope of consolidation as at 30 June 2015 are listed below: Subsidiary Head Office Share capital Type of Investment Shareholding % TBS Group S.p.A. Trieste (Italy) EUR 4,142,137 Parent Company Parent Company Consolidation method Tesan Televita Srl Udine (Italy) EUR 46,800 Indirect 75.1 Line by line PCS Professional Clinical Software GmbH Klagenfurt (Austria) EUR 1,230,000 Indirect 100 Line by line TBS FR Telematic & Biomedical Services Sarl Lyon (France) EUR 1,690,500 Direct 100 Line by line TBS BE Telematic & Biomedical Services BVBA Loncin (Belgium) EUR 150,000 Direct 100 Line by line TBS G.B. Telematic & Biomedical Services Ltd. Southend on Sea (United Kingdom) GBP 500,000 Direct (1) Line by line Telematic & Biomedical Services SL (singlemember Company) STB Servicios Telematicos e Biomedicos Lda Unipessoal Surgical Technologies BV SLT Srl Crimo Italia Srl Barcelona (Spain) EUR 650,000 Direct 100 Line by line Dafundo (Portugal) EUR 100,000 Direct 100 Line by line Didam (The Netherlands) EUR 18,200 Direct 100 Line by line Cernusco sul Naviglio (Italy) EUR 47,000 Direct 56 Line by line Gualdo Tadino (Italy) EUR 103,165 Direct Line by line Elettronica Bio Medicale Srl Foligno (Italy) EUR 1,897,765 Direct 100 Line by line MSI MedServ International Deutschland GmbH Pfullendorf (Germany) EUR 321,000 Direct 100 Line by line TBS IT Srl (single member Company) Trieste (Italy) EUR 5,295,860 Direct 100 Line by line TBS SE Telematic & Biomedical Services doo Belgrade (Serbia) RSD 467,000 Direct 100 Line by line Insiel Mercato S.p.A. Trieste (Italy) EUR 3,246,808 Direct 100 Line by line TBS INDIA Telematic&Biomedical Services Prv. Ltd Bangalore (India) INR 5,000,100 Direct 100 Line by line Erre Effe Informatica Srl Arezzo (Italy) EUR 41,280 Indirect 51 (2) Line by line Delta X Srl Perugia (Italy) EUR 10,000 Indirect 100 Line by line TBS Imaging Srl Fisciano (Italy) EUR 100,000 Indirect 100 Line by line Ing. Burgatti Spa San Lazzaro di Savena (Italy) EUR 312,000 Indirect 51 (2) Line by line TBS Bohemia S.r.o. Prague (Czech Republic): CZK 200,000 Direct 100 Line by line (1) Following the valuation of final sale of the remaining 3.87% of the shares, the consolidation percentage is 100%. (2) Following the valuation of a put and call option on the remaining 49% of the shares, the consolidation percentage is 100%. The scope of consolidation as at 30 June 2015 has changed since 31 December 2014, following: the acquisition on 08 January 2015 of a shareholding in Ing. Burgatti Spa; the establishment on 29 January 2015 of TBS Bohemia, with a share capital payment of 200,000 Czech Koruna. During the six-month period, Tesan Spa merged with EBM, and EBME merged with TBS GB. Finally, it should be noted that REM DI Srl changed its name to TBS Imaging Srl. 34

36 The exchange rates applied as at 30 June 2015 for translating financial statements into foreign currency are as follows (1 Euro=foreign currency) and they correspond to those made available by the Bank of Italy: Currency Average exchange rate 1 st half 2015 Exchange rate as at 30/06/2015 Exchange rate at 31/12/14 Average exchange rate 1 st half 2014 Exchange rate as at 30/06/2014 Pound Sterling (GBP) Serbian dinar (RSD) Indian rupee Czech koruna NOTE 2 Seasonal nature of business There are no significant seasonal trends in the segment in which the Group operates. Moreover, please note that historically we see a better trend in the second half with respect to the first in terms of margins. NOTE 3 Segment reporting Managerially, the Group is organised into two segments of business: Medical Devices and ICT Systems, and Integrated Solutions of e-health & e-government. The Medical Devices and ICT Systems segment provides effective management support to public and private health facilities for medical devices and other telematic technology, both in terms of purchasing advice and lowering maintenance and operating costs and of training and enhanced safety. It also provides telemedicine and telecare solutions for the integration of assistance between the territory and the hospital and for the implementation of telematic assistance services for social and home healthcare for the purpose of cost reduction. The Integrated Solutions of e-health & e-government sector provides solutions and services for the integrated management of clinical reporting systems for hospitals and/or departments, local health units and/or home care services and IT solutions to manage the demographic, social, tax, administrative, management and document services of local and regional entities and the public administration in general. Management separately monitors the operating results of each business unit in order to make decisions on resource allocation and performance appraisal. The results of financial management and income taxes are managed at group level and are not therefore allocated to individual operating segments. Prices for transferring items between operating segments are determined under the same conditions as those applied to third party transactions. 35

37 Operating segments The table below presents data on Group revenues and results for the financial years ended 30 June 2015 and 2014 respectively. (in thousands of Euro) Medical Devices and ICT Systems 1 st half st half 2014 Integrated Solutions of e-health & e-government Total Medical Devices and ICT Systems Integrated Solutions of e-health & e-government Revenue Revenue from third parties and other revenue 100,403 16, ,615 99,584 15, ,099 Total revenue 100,403 16, ,615 99,584 15, ,099 Operating profit by business segment 5, ,121 5, ,920 Gains (losses) from investments Financial income (expenses) -2,974-2,923 Profit before taxes 1,084 1,967 Taxes 708 1,962 Profit/(loss) for the period Result of assets held for sale 0 0 Total Total Revenue rose from Euro 99,584,000 in the first half of 2014 to Euro 100,403,000 in the first half of 2015 in the Medical Devices and ICT Systems segment, posting an absolute increase of Euro 819,000 and a percentage increase of 0.8%. The increase is attributable for Euro 2,332,000 to the entry of Ing. Burgatti Spa into he consolidation, offset by the Parent Company s drop in revenue due to the delayed start of some international projects that had characterised the six-month period last year. The operating profit of the segment decreased in absolute terms by Euro 437,000, from Euro 5,511,000 to Euro 5,074,000, with the incidence on revenue equal to 5.1% against 5.5% during the first half of Revenue went from Euro 15,515,000 in the first half of 2014 to Euro 16,212,000 in the first half of 2015 in the Integrated e-health & e-government Solutions segment, posting an absolute increase of Euro 697,000 and a percentage increase of 4.5%. This increase can mainly be attributed to PCS for Euro 477,000 and to Insiel Mercato for Euro 217,000. EBIT, negative at Euro 953,000, fell in absolute terms by Euro 362,000. This decrease is mainly attributable to the drop recorded in profitability at PCS (Euro 228,000). 36

38 (in thousands of Euro) Medical Devices and ICT Systems 30/06/ /12/2014 Integrated Solutions of e-health & e-government Total Medical Devices and ICT Systems Integrated Solutions of e-health & e-government Assets and liabilities Assets by segment 228,446 42, , ,924 40, ,012 Equity investments , ,125 Non-allocated assets Total assets 229,025 43, , ,479 40, ,137 Liabilities by segment 175,846 45, , ,218 29, ,483 Non-allocated liabilities Total liabilities 175,846 45, , ,218 29, ,483 Total The table below shows assets and investments relating to the Group s individual operating segments as at 30 June 2015 and 2014: 1 st half st half 2014 Medical Devices and ICT Integrated Solutions of e-health & Total Medical Devices and ICT Integrated Solutions of e-health & Total (in thousands of Euro) Systems e-government Systems e-government Other information Investments in fixed assets 8, ,334 4, ,492 Depreciation and amortisation 4,436 1,256 5,692 3,894 1,130 5,024 Other non-monetary costs 2, ,486 1, ,170 The following table shows Group revenue by geographic area as at 30 June 2015 and 2014: 1 st half st half 2014 Italy European Other Total Italy European Other Total (in thousands of Euro) Union Union Revenue Sales to third parties 82,065 32,131 2, ,615 77,755 29,486 7, ,099 Infra-sector Sales Total revenue 82,065 32,131 2, ,615 77,755 29,486 1, ,099 The increase in revenues seen in Italy is mainly due to the contribution of Ing. Burgatti, which was partially offset by the decrease in revenues from the Parent Company. The increase in revenues seen in the other European Union countries is due to the increase in turnover by the English subsidiary TBS GB and the Austrian subsidiary PCS. The decrease in revenues achieved in the other non-eu countries is mainly due to the contribution of the Parent Company through trading activities. 37

39 NOTE 4 Business combinations Acquisition of Ing. Burgatti S.p.A. On 08 January 2015, the Group through its subsidiary Delta X (100% shareholding by EBM) signed the final contract to acquire Ing. Burgatti S.p.A. in San Lazzaro di Savena (BO), a company operating in the health sector, providing distribution and technical assistance for radiology electromedicine equipment. The purchase price for 51% of the share capital was Euro 2,900,000. The parties agreed on the buying/selling options for the entire remaining shareholding. Specifically: An intermediate put option in favour of the minority shareholders of Ing. Burgatti granted by EBM, where the latter undertook to purchase a shareholding representing 14% of the Company s share capital from the above during period included between the approval of the Financial Statements at 31/12/2014 and 30 September The strike price was defined on the basis of the following formula: (Ebitda 2014 X net financial position resulting from the Financial Statements) X (number of shares sold/ number of shares in circulation); A put option in favour of the minority shareholders of Ing. Burgatti granted by EBM, where the latter undertook to buy from the above a shareholding representing 49% (or the remaining portion if the above intermediate put option was exercised) of the Company s share capital in the period included between the expiry of the fourth year subsequent to the transfer of the majority shareholding in the capital of Ing. Burgatti and the expiry of the fifth year subsequent to the transfer of the share capital. The strike price was defined on the basis of the following formula: (Ebitda X 5 - net financial position) X (number of shares sold/number of shares in circulation); Call option where the minority shareholders of Ing. Burgatti gave EBM the right to acquire the remaining shareholding representing 49% of the Company s share capital, to be exercised during the period included between the expiry of the third year from the closing date and within four years of the above. The strike price was defined on the basis of the following formula: (Ebitda X 6 - net financial position) X (number of shares sold/number of shares in circulation); Based on the most recent information regarding EBM s intentions, the Directors calculated the put & call option as follows: the intermediate put option to be exercised with the acquisition of 14% of the capital was set at Euro 669,000, with this amount stated among the current financial payables; the principal put option to be exercised for the purchase of the remaining capital was set at Euro 3,617,000. This amount was recorded among the non-current financial payables. The fair value of assets and liabilities identified at the date of acquisition is as follows: Fair value recorded Carrying value in the financial statements at (in thousands of Euro) acquisition Total current assets 4,237 4,260 Total non-current assets 3, TOTAL ASSETS 7,788 4,603 Total current liabilities 2,989 2,818 Total non-current liabilities 2,353 1,242 TOTAL LIABILITIES 5,342 4,060 Fair value of net assets 2, Goodwill 4,740 Price 7,186 Cash acquired

40 Note that the price for the acquisition was greater than the net fair value of the Company s net assets as of the acquisition date. For said difference, goodwill was recognised in the amount of Euro 4,740,000. The fair value of the net acquired assets includes Euro 2,706,000 relating to the recognition of customer relations, gross of the related tax effect amounting to Euro 850,000. Recognition of customer relations has been made on the basis of the discounted net margins that is believed the Company can develop according to its existing customer base as at the date of acquisition. It should be noted that the initial recognition for this business combination is to be considered provisional. It is noted that the contribution to the Group s result from the Companies equals a profit of Euro 385,000, and consolidated revenue for Euro 2,332,000. The impairment test conducted on the Goodwill figures did not show any losses in value. NOTE 5 Financial risk management The main financial liabilities of the Group include the bond loan, and bank loans, trade payables and miscellaneous payables and financial guarantees. The main objective of these liabilities is to finance the Group s operations and its associated investment plans, including for entities external to the Group. The Group has financial receivables and other trade and non-trade receivables, liquid assets and short-term deposits directly originating from operating activities. The assessment of interest rate risk, credit risk, liquidity risk and foreign exchange risk is a responsibility the Group Management is entrusted with, and the relevant information is given below. Interest rate risk The Group is exposed to interest rate risk in that the existing financial debt is variable rate (Euribor, plus a margin which varies based on the line of financing in question), with the exception of the convertible bond loan and the mini-bond loan, which have an fixed interest rate of a nominal 8% and 6.5% per year, respectively. Fluctuations in market interest rates influence the cost of the various types of financing directly affecting financial expenses at Group level. Credit risk Most Group loans are contracted by public bodies or private bodies affiliated with the public sector. It is therefore felt that the Group has no significant exposure to credit risk. There is no significant concentration of credit risk in the Group and a provision for doubtful debts has in any case been allocated to protect against residual doubtful debts. Liquidity risk The Group continuously maintains balance and flexibility between funding sources and uses. Two primary factors that influence the Group s liquidity are, on the one hand, resources generated or absorbed by operations or investments, and on the other hand, the expiry and renewal of debts. The breakdown of financial payables as at 30 June 2015 is presented under Note

41 In any event, it is felt that liquidity from operations should be sufficient to cover requirements. It should however be emphasized that considering the fact that the customers primarily consist of public bodies, with significantly extended payment terms and anyway subject to the availability of financial resources, even linked to public debt management policies, the leading Italian Group companies have assigned credit to factoring companies in order to boost cash flows. Specifically, during the first half of 2015, receivables (and relevant benefits and risks) totalling Euro 44.7 million (Euro 96.5 million as at 31 December 2014) were assigned. Exchange rate risk The Group operates primarily in the Eurozone. There is therefore no significant exposure to exchange rate risk. The main currency fluctuations relate to the translations into Euro of the financial statements of its English subsidiary, which are presented in pounds sterling, its Indian subsidiary, presented in Indian rupees, its Serbian subsidiary, presented in Serbian dinars, the Czech subsidiary in Koruna and the Chinese joint venture, presented in renminbi. Capital Management The Group s primary capital management objective is to guarantee that a solid credit rating and appropriate levels of capital indicators are maintained in order to support its work and maximize shareholder value. The Group manages the capital structure, making changes to it in line with changes in economic conditions. The Group may adjust the dividends paid to shareholders, reimburse capital or issue new shares in order to maintain or adapt the capital structure. The Group monitors its capital via the net financial debt / Group shareholders equity ratio. This ratio for each period considered is shown below: (in thousands of Euro) 30/06/ /12/2014 Non-current financial liabilities 44,702 33,378 Current financial liabilities 73,177 65,550 Non-current financial assets Current financial assets -1,410-5,192 Cash and cash equivalents -33,834-30,763 Net financial debt 82,177 62,537 Total net financial debt 82,177 62,537 Group shareholders' equity 48,759 49,038 Ratio net financial debt/group shareholders' equity

42 Fair value valuation and the relative hierarchical levels of valuation The following statement indicates the categories of financial instruments held by the Group: as at 30/06/2015 (thousands of Euro) Notes Borrowings and receivables Financial assets at fair value recognised in the income statement Derivatives Investments held to maturity Assets held for sale Total Fair value Financial assets as in the balance sheets Other non-current financial assets Other non-current assets Trade receivables , , ,465 Assets held for trading Other current assets 13 12,993 12,993 12,993 Current financial assets 16 1, ,410 1,410 Cash and cash equivalents 16 33,834 33,834 33,834 Total financial assets 168, , ,999 as at 30/06/2015 Notes Borrowings Financial Derivatives Investments Liabilities held Total Fair value and receivables assets at fair value recognised in the income held to maturity for sale (thousands of Euro) statement Financial liabilities as in the balance sheets Non-current financial liabilities 16 44,702 44,702 45,220 Other medium/long-term liabilities Trade payables 20 45,103 45,103 45,103 Other current liabilities 21 35,957 35,957 35,957 Current financial liabilities 16 73,177 73,177 73,177 Total financial liabilities 199, , ,770 41

43 as at 31/12/2014 ((in thousands of Euro) Notes Borrowings and receivables Financial assets at fair value recognised in the income statement Derivatives Investments held to maturity Assets held for sale Total Fair value Financial assets as in the balance sheets Other non-current financial assets Other non-current assets Trade receivables , , ,823 Assets held for trading Other current assets 13 9,789 9,789 9,789 Current financial assets 16 5, ,192 5,192 Cash and cash equivalents 16 30,763 30,763 30,763 Total financial assets 157, , ,590 as at 31/12/2014 Notes Borrowings Financial Derivatives Investments Liabilities held Total Fair value and receivables assets at fair value recognised in the income held to maturity for sale (in thousands of Euro) statement Financial liabilities as in the balance sheets Non-current financial liabilities 16 33,484 33,484 34,002 Other medium/long-term liabilities Trade payables 20 38,866 38,866 38,866 Other current liabilities 21 42,018 42,018 42,018 Current financial liabilities 16 65,550 65,550 65,550 Total financial liabilities 180, , ,756 All the financial instruments recognised at fair value are classified in the three categories shown below: Level 1: market quotation Level 2: evaluation techniques (based on observable market data) Level 3: evaluation techniques (not based on observable market data) Finally, note that there were no transfers from Level 1 to Level 2 or to Level 3 and vice versa. NOTE 6 Earnings per share As required by IAS 33 Earnings per share, information pertaining to the data used in calculating the basic and diluted earnings per share is provided. Basic earnings per share are calculated by dividing the net profit for the period attributable to the ordinary shareholders of the Parent Company by the weighted average number of ordinary shares outstanding during the period, net of weighted treasury shares. 42

44 It is further highlighted that there are no preference dividends, conversions of preference shares or other similar effects that affect the financial results attributable to the holders of ordinary capital instruments. The results and the number of ordinary shares used in the calculation of basic and diluted earnings per share are presented below. Basic and diluted earnings per share (in Euro) 30/06/ /06/2014 Net profit/(loss) attributable to ordinary shareholders of the parent company for the purposes of calculating basic and diluted earnings per share 45, ,000 Average weighted number of ordinary shares, including own shares, for the purposes of calculating basic and diluted earnings per share 41,591,969 41,591,969 Average weighted number of own shares -764, ,210 Average weighted number of ordinary shares, excluding own shares, for the purposes of calculating basic and diluted earnings per share 40,827,759 40,827,759 Effect of dilution: - share options - - conversion of convertible bond loan Weighted average number of ordinary shares, excluding own shares, for the purposes of calculating diluted earnings per share 40,827,759 40,827,759 Earnings per share - basic, per period income attributable to ordinary shareholders of the parent company diluted, per period income attributable to ordinary shareholders of the parent company NOTE 7 Intangible assets Goodwill Goodwill refers to cost of the business combination paid by the Group in excess allocation of merger deficits or for the acquisition of controlling interests in certain subsidiaries. The following table details the goodwill value allocated to the respective cash generating units ( CGU ): (in thousands of Euro) 30/06/ /12/2014 Clinical Engineering Italy 18,917 11,408 Clinical Engineering Europe 4,755 4,642 Telemedicine and telecare (*) 0 7,560 e-health & e-government Software Production 4,921 4,921 Clinical Engineering India 3,026 3,026 Diagnostic Imaging 4,791 Total goodwill 36,410 31,557 (*) reclassified under Clinical Engineering Italy The book value of goodwill as at 30 June 2015 amounted to Euro 36,410,000. The difference compared to the value as at 31 December 2014, equal to Euro 4,853,000, derives from: the recording of goodwill for Euro 4,740,000 following the merger of Ing. Burgatti Spa. For the details of the operation, please refer to Note 4. from recognition of the TBS GB EUR/GBP foreign exchange translation difference of Euro 113 thousand attributed to the Clinical Engineering Europe CGU; 43

45 The Diagnostic Imaging CGU, in addition to the company Ing. Burgatti, includes Delta X and TBS Imaging given that the business conducted by the 3 companies falls within the scope of diagnostic imaging (the goodwill relating to the acquisition by TBS Imaging of the REM business unit in liquidation for Euro 51,000 was reclassified from Clinical Engineering Italy to Diagnostic Imaging). Goodwill impairment test The residual goodwill recorded in the financial statements and detailed above was allocated to a number of CGUs in both business segments. In particular, goodwill was allocated as follows (broken down by legal entity/business branch and reference CGU): CGU Cash Generating Units Goodwill for acquisition of business branches and/or companies Clinical Engineering Italy EBM, Tecse, Serisia, DMS, Amplisim, General Electric, Surgical Technologies Italia, GS Service, Tecnobiopromo, Asic, SLT, Crimo, Pancli, MD, TBS IT, Finter, Medicall, Gesan, Comtel, Tesan, Tesan Televita, Clinical Engineering Europe TBS FR, TBS GB, TBS PT, TBS BE, TBS ES, Surgical Technologies, MSI, EBME Clinical Engineering India TBS India Diagnostic Imaging Ing. Burgatti, Delta X; TBS Imaging e-health & e-government Software Production Insiel Mercato,PCS, Eurosystems, Caribel, Erre Effe The above CGUs were created by combining business activities based on the type of service provided and the areas in which cash flows are generated through the provision of such services. Subsequent to Tesan s merger with EBM, the Telemedicine and teleassistance CGU was reclassified under the Clinical Engineering Italy CGU. Intangible assets with a finite useful life The table below provides a breakdown Intangible assets with a finite useful life as they appear in the Balance Sheet: (in thousands of Euro) 30/06/ /12/2014 Development 2,266 2,555 Concessions, licenses, trademarks and similar rights 6,672 5,189 Other intangible fixed assets 12,369 11,128 Intangible assets in progress and advances 2,359 4,052 Total intangible fixed assets 23,666 22,924 44

46 Changes in the period for Intangible assets with a finite useful life are shown below: (in thousands of Euro) Development Industrial Other patents, intangible fixed licenses, assets trademarks and similar rights Intangible Total Intangible investments in fixed assets progress and advances Cost at 1 January 2015 net of provisions 2,555 5,188 11,129 4,052 22,924 Net increases ,312 Net disposals Change in the scope of consolidation 0 0 2, ,726 Amortisations for the period 481 1,265 1, ,329 Foreign exchange differences Reclassifications and other 184 2, , At 30 June ,266 6,672 12,369 2,359 23,666 At 1 January 2015 (in thousands of Euro) Cost or fair value 6,470 18,856 28,716 4,052 58,094 Amortisation provisions and impairment -3,915-13,668-17, ,170 Residual net value 2,555 5,188 11,129 4,052 22,924 At 30 June 2015 (in thousands of Euro) Cost or fair value 6,662 21,605 31,539 2,359 62,165 Amortisation provisions and impairment -4,396-14,933-19, ,499 Residual net value 2,266 6,672 12,369 2,359 23,666 Total Investments made during the first six months totalled Euro 1,312,000 and mainly include: in the category Intangible fixed assets in progress, costs incurred by the Parent Company to implement software in the administrative and technical areas (Euro 148,000), by Insiel Mercato (Euro 539,000), by EBM (Euro 252,000) for the management of specialistic centres and other projects and by PCS for software (Euro 25,000); in the category, Industrial patents, intellectual property rights and works, licenses and trademarks, purchases of software licenses made by companies in the Group. The increases relating to the change in the consolidation scope refer to the recognition of the customer portfolio of Ing. Burgatti for Euro 2,706,000 and for Euro 20,000 to other fixed assets owned by the latter. The reclassifications mainly refer to transfer to the concessions, licenses, trademarks and similar rights category, of the costs incurred by Insiel Mercato (Euro 2,383,000), for the software to be used for the public administration or for hospital facilities, completed during the first half of the year and therefore ready for use. The amortisation of capitalised costs is based on the useful life estimated at three or five years. We remind you that the other intangible assets item mainly included portfolio orders and relations with customers acquired through business combinations. 45

47 NOTE 8 Tangible fixed assets The table below presents the net balances for tangible fixed assets: (in thousands of Euro) 30/06/ /12/2014 Land and buildings 6,727 6,827 Plants and machinery 10,867 9,735 Other tangible fixed assets 3,381 3,337 Total tangible fixed assets 20,975 19,899 Changes in the period are shown below: (in thousands of Euro) Land and buildings Plants and machinery Other tangible fixed assets Total tangible fixed assets Cost at 1 January 2015 net of provisions 6,827 9,735 3,337 19,899 Net increases 24 2, ,561 Disposals (historical cost) Disposals (amortisation provision) Change in the scope of consolidation Depreciation for the period 124 1, ,363 Foreign exchange differences At 30 June ,727 10,867 3,381 20,975 At 1 January 2015 (in thousands of Euro) Cost or fair value 8,646 30,258 8,151 47,055 Amortisation provisions and impairment -1,819-20, ,156 Residual net value 6,827 9,735 3,337 19,899 At 30 June 2015 (in thousands of Euro) Total Cost or fair value 8,670 32,529 8,740 49,939 Amortisation provisions and impairment -1,943-21,662-5,359-28,964 Residual net value 6,727 10,867 3,381 20,975 Investments in tangible assets stand at Euro 2,561,000 and mainly refer to equipment, machinery and other assets for the business of EBM in the amount of Euro 1,030,000 and of TBS GB in the amount of Euro 392,000, Crimo for Euro 294,000, TBS Imaging for Euro 230,000, Ing. Burgatti for Euro 145,000 and TBS France for Euro 113,000. The change in the scope of the consolidation for Euro 735,000 relates to the assets (of which under leasing for Euro 484,000) of Ing. Burgatti. 46

48 Financial leased assets mainly refer to the equipment, vehicles, plants and machinery, and buildings of consolidated companies; minimum payments, present value and the presumed repayment period of these leased assets are detailed in the table below. 30/06/ /12/2014 (in thousands of Euro) Minimum payment Present value Minimum payment Present value Within 1 year Between 1 and 5 years 1,628 1,349 1, Over 5 years Total minimum payments 2,610 2,227 2,300 1,938 Financial charges Total minimum payments present value 2,227 2,227 1,938 1,938 Present value was determined based on the amortisation schedules communicated by finance leasing companies and does not significantly diverge from the present value of minimum payments calculated by discounting cash flows due to the instalment payments as indicated in the schedule at the same interest rate of the finance lease contract. NOTE 9 Other non-current assets Investments in associated companies The table summarises the breakdown of investments in associated companies: (in thousands of Euro) 30/06/2015 % held 31/12/2014 % held SMS in liquidation % TH MED % % O3 Enterprise % % Easy Care Foundation % % SIGE Consortium % % Care Expert Social Consortium % % Kell Srl % % Saim % % Sinopharm TBS % % Total investments in associated companies and joint ventures None of the companies mentioned are listed on any regulated or organised market. 47

49 Investments in other companies Interests held by the Group in other companies are summarized below: (in thousands of Euro) 30/06/2015 % held 31/12/2014 % held Medic4All AG % % Molecular Biology Consortium % % ISBEM % % UTE (ES) 25 N/A 5 N/A ReMedia Consortium 1 N/A 1 N/A Ancitel % % Venice Research Consortium 16 N/A 16 N/A IRCAB Foundation 17 N/A 17 N/A Sanitanet % % Polo meccatronico umbro 1 N/A 1 N/A ITS Foundation 13 N/A 13 N/A Other investments 14 N/A N/A Total investments in other companies Other non-current assets (in thousands of Euro) 30/06/ /12/2014 Other non-current assets Total other non-current assets Other non-current assets relate almost entirely to deposits and guarantees. NOTE 10 Inventories The breakdown of inventories as at 30 June 2015 is as follows: (in thousands of Euro) 30/06/ /12/2014 Work in progress on order Cost Work in progress on order write-down provision Net realisable value Inventories consumables, spare parts and goods Cost 12,014 10,164 Inventory write-down provision -1, Net realisable value 10,764 9,195 Inventory advances 2 8 Total 11,071 9,465 Work in progress refers to the subsidiaries PCS and MSI. 48

50 In particular, Euro 552,000 relates to a single project referred to as NoeHIT for the supply of software programmes and services in the Lower Austria Region. The value at issue is fully covered by drawing from the provision for impairment of contract work, accrued in previous years to cover a customer dispute, regarding which legal proceedings have been brought to recover the amounts owing. Raw materials mainly consisted of consumables and spare parts for endoscopy and clinical engineering activities, mainly stored at contracting parties premises. They are valued at the purchase cost calculated using the FIFO method, adjusted by the inventory write-down provision of Euro 1,250,000 at 30 June 2015 (Euro 969,000 at 31 December 2014). The cost increase for Euro 150,000 relates to the change in the scope of the consolidation. Overall changes in the inventory write-down provision for the two financial periods are shown below: (in thousands of Euro) 30/06/ /12/2014 Inventory write-down provision at start of the period Utilisation during the year Change in the scope of consolidation 150 Allocations for the period Inventory write-down provision at end of the period 1, NOTE 11 Trade receivables The table below provides a breakdown of trade receivables: (in thousands of Euro) 30/06/ /12/2014 Trade receivables 123, ,656 Receivables write-down provision -4,163-3,833 Total 119, ,823 Trade receivables at 30 June 2014 amount to Euro 119,465,000 (Euro 110,823,000 as at 31 December 2014), net of a write-down provision for receivables of Euro 4,163,000 (Euro 3,833,000 at 31 December 2014). As in previous years, in the first half of 2015, some Group companies entered into non-recourse factoring deals, resulting in receivables assigned totalling Euro 44.7 million being removed from the balance sheets (Euro 96.5 million in 2014). The increase in receivables is partly due to the entry of Ing. Burgatti into the scope of the consolidation (Euro 2,178,000). Changes in the provision for doubtful debts in the two periods under consideration are as follows: (in thousands of Euro) 30/06/ /12/2014 At the start of the period 3,833 3,505 Change in the scope of consolidation 16 0 Provisions 364 1,229 Utilisation At the end of the period 4,163 3,833 49

51 The analysis of the past-due loans and those not overdue at 30 June 2015 is as follows: (in thousands of Euro) Total Not overdue < 30 days days days days Over 180 days Trade receivables at 30/06/ ,628 91,270 3,314 3,368 2,767 5,396 17,513 (in thousands of Euro) Total Not overdue < 30 days days days days Over 180 days Receivables write-down provision at 30/06/2015 4,163 4,163 The analysis of the receivables write-down provision at 31 December 2014 was the following: Total Not < Over 180 (in thousands of Euro) overdue days days days days days Trade receivables at 31/12/ ,656 86,438 1,439 4,374 2,012 5,591 14,802 (in thousands of Euro) Total Not overdue < 30 days days days days Over 180 days Receivables write-down provision at 31/12/2014 3,833 3,833 The high total for overdue receivables is justified by the fact that the Group works primarily with public bodies, which are known for their extended repayment time frames. Despite payments being received with significant delays compared to contractual repayment terms, this does not expose the amounts shown to any repayment risk, apart from those amounts already presented in the financial statements. NOTE 12 - Assets held for trading The item Assets held for trading had a value of zero at 30 June 2015, similarly to 31 December In the context of the strategy followed by the Group to increase the services offered to current customers, on 2 March 2012, the TBS Group signed an investment agreement with REM S.p.A. of Fisciano (Italy), which specialises in the diagnostic imaging equipment sector. The agreement provided for the entry of the TBS Group into the share capital of REM through a reserved capital increase that involved the payment of Euro 2 million as the nominal value plus premium, at the end of which the TBS Group holds a 35% holding in said company. During the course of 2012, the company s performance was not in line with expectations and the plans presented and on 19 December 2012, REM submitted a request for a composition arrangement to the Court of Salerno, pursuant to article 160 and subsequent of the Finance Law, as amended by Law 134/2012 (the so-called Competitiveness and Development Decree). In addition, the same company was transformed to REM Srl in January 2013, and was wound up. As a consequence of these events, it is no longer in the interests of the company to maintain its investment in this associated company. Following the request for a composition arrangement put forward and the winding up of the subsidiary, it is held that the TBS Group has lost the power to determine the financial and management policies of the associated company in order to obtain the benefits of its activities, meaning the significant influence over the same no longer exists. It follows that the wound up REM Srl is no longer to be considered an associated company, hence leaving the area of application of IAS 28 and instead entering the area of application of IAS 39. In this context as with the previous year, the investment has been classified among current assets. 50

52 Finally, in consideration of the significant losses seen in 2012 by the wound up REM Srl (formerly REM S.p.A.), which led to negative shareholders equity, the directors hold that the investment made will not be recoverable in any way and hence acted to entirely write-down the company as, additionally, there is no obligation to make additional payments to cover the losses realised. Furthermore on 27 December 2014, REM DI (now TBS Imaging Srl) acquired the business unit referred to in the lease contract entered into on 14 March 2013 with REM srl in liquidation. NOTE 13 Other current assets The table below provides a breakdown of other current assets: (in thousands of Euro) 30/06/ /12/2014 Social security receivables Receivables for contributions to public entities Receivables from employees Other prepaid expenses and accrued income 1, Other tax receivables 2,174 2,034 Other receivables 7,882 6,123 Total other current assets 12,993 9,789 Receivables from employees mainly consist of advances paid to employees against expenses incurred for performing their work and of cash given to employees who travel at the time of their recruitment and withheld when the employee leaves the company. The increased accrued income with respect to 31 December is consequent to the recording of annual costs (insurance, maintenance contracts), which in terms of competence only partially affect the half-year. Other tax credits mostly include VAT credits. Receivables from others mainly include receivables from temporary associations of companies for rebilling the subsidiary EBM and receivables for advances to suppliers by TBS GB. NOTE 14 Income taxes payable and receivable (in thousands of Euro) 30/06/ /12/2014 Income tax receivable 2,358 1,784 Total income tax receivables 2,358 1,784 Income tax receivable refers to amounts receivable from individual countries for direct taxes (IRES - corporate income tax and income tax of various countries) which should be recovered within the following year, as well as amounts receivable for tax withheld by companies on interest receivables. During the course of 2012, income tax receivables were booked for the reimbursement of income taxes for previous years, following the presentation of the request for IRES reimbursement following the lack of the IRAP deduction relative to expenses for payroll employees and assimilated for the years , equal to a total of Euro 1,354,000 not yet deposited. 51

53 (in thousands of Euro) 30/06/ /12/2014 Income tax payables 2,225 1,418 Total income tax payables 2,225 1,418 Income taxes payable refer to current taxes for the year still to be paid and record the amounts that the individual companies must pay to the financial administrations of the individual countries. Such payables are calculated in accordance with the tax rates currently in force in the individual countries. NOTE 15 Consolidated shareholders equity At 30 June 2015, the item amounted to Euro 51,354,000 as opposed to Euro 51,654,000 at 31 December For changes in shareholders equity, please refer to the relevant Statement of changes in consolidated shareholders equity. Share capital The subscribed and paid-up share capital of TBS Group at 30 June 2015 consists of 41,421,370 shares, entirely subscribed and paid up (net of own shares), with a nominal value of Euro 0.10 each. The total amount of treasury shares held by the Company at 30 June 2015 amounts to 764,210. The value shown in the financial statements is net of the own shares held by the company, for the part attributable to capital (Euro 76,000). Share premium account The share premium account, set up following a number of Parent Company capital increases, amounted to Euro 42,832,000 at 30 June Foreign currency translation reserve The foreign currency translation reserve at 30 June 2015 showed a loss of Euro 278,000 (loss of Euro 597,000 at 31 December 2014) and was generated by including the following into the consolidated statements: the subsidiary TBS GB, whose functional currency is the British pound, TBS SE, whose functional currency is the Serbian dinar, TBS India, whose currency is the Indian rupee, TBS Bohemia whose functional currency is the Czech koruna and Sinopharm TBS, whose currency is the renminbi. Other reserves and retained earnings Other reserves include: the First-time Adoption (FTA) reserve deriving from the first-time application of the international accounting standards as at 1 January 2004; retained earnings: the item includes the retained results achieved by the consolidated companies and their consolidation adjustments; 52

54 the item also includes actuarial gains/losses net of the relative tax effects, following the amendment to IAS 19 entering into force. Minority interests and reserves As at 30 June 2015, the item amounted to Euro 2,596,000 as opposed to Euro 2,616,000 at 31 December This change, and the profits in the period attributable to minority interests, is mainly attributable to: dividends resolved by Tesan Televita to minority interests (Euro 54,000); dividends decided by Crimo Italy for minorities (Euro 243,000); dividends distributed by SLT to minorities (Euro 54,000) actuarial gains/losses net of the relative tax effect, booked following the amendment to IAS 19 entering into effect, attributable to minority interests. For the changes in shareholders equity attributable to minority interests, please refer to the Summary statement of changes in shareholders equity. NOTE 16 Net financial debt The Group s net financial debt can be broken down as follows: (in thousands of Euro) 30/06/ /12/2014 A. Current financial assets 1,410 5,192 B. Cash and cash equivalents 33,834 30,763 C. Liquidity (A. + B.) 35,244 35,955 D. Non-current financial assets E. Non-current financial liabilities 44,702 33,378 F. Current financial liabilities 73,177 65,550 G. Net financial debt (C. + D. - E. - F.) -82,177-62,537 For further information on the breakdown of financial assets and liabilities, please refer to the paragraphs below. Current financial assets The table below provides a breakdown of the current financial assets: (in thousands of Euro) 30/06/ /12/2014 Short-term financial receivables 1,384 5,168 Marketable securities Total current financial assets 1,410 5,192 Short-term financial receivables total Euro 1,384,000 and mainly include loans transferred without recourse and not collected as at 30 June 2015 for Euro 247,000 for EBM and Euro 833,000 for Insiel Mercato. The securities are held by Insiel Mercato. 53

55 Cash and cash equivalents The table below provides a breakdown of cash on hand: (in thousands of Euro) 30/06/ /12/2014 Cash and cash equivalents 33,834 30,763 Total cash and cash equivalents 33,834 30,763 This relates to temporary cash on hand at banking institutions and liquid assets normally on hand at company offices. Other non-current financial assets The table below provides a breakdown of the non-current financial assets: (in thousands of Euro) 30/06/ /12/2014 Other non-current financial assets Total other financial assets Other non-current financial assets mainly refer to a policy held by EBM, which partially covers the severance indemnity and end-of-term indemnity for directors. Non-current financial liabilities The table below provides a breakdown of the non-current financial liabilities: (in thousands of Euro) within 5 years 30/06/ /12/2014 over 5 years Total within 5 years over 5 years Bond Loans 14,388 14,388 24,326 24,326 Leasing contracts debts 1, , ,615 Medium/long term bank loans 22, ,279 4,593 4,879 Payables to other lenders 6,307-6,307 2,558 2,558 Total non-current financial liabilities 44, ,702 32, ,378 Total 54

56 Non-current financial liabilities are detailed in the following table: Non-current liabilities (in thousands of Euro) 30/06/ /12/2014 Convertible bond loan 0 9,997 Mini bond loan 14,388 14,329 Euro 3 million loan granted to TBS Group by Banca Popolare in January ,077 na Euro 3.5 million loan granted to TBS Group by Friuladria Credit Agricole in May ,802 na Euro 15 million loan granted to TBS Group by Banca Popolare di Milano in June ,310 na Loan granted to EBM by CariUmbria Intesa San Paolo in June 2015 for the original amount of Euro 2.5 million 2,021 na Loan granted to Crimo by CariUmbria Intesa San Paolo in June 2015 for the original amount of Euro 0.4 million 134 na Euro 2.5 million loan granted to TBS Group by Cassa di Risparmio del FVG in August Euro 3 million mortgage granted to TBS Group by UniCredit in March ,364 1,719 Euro 2.5 million loan granted to TBS Group by Friuladria in December ,323 1,570 Loan granted to TBS Group by Mediocredito del Trentino in September 2012 for the original amount of Euro 1,000, Euro 5 million loan granted to TBS IT by B.P di Vicenza in December Mortgage granted by BKS to PCS in December Loan granted to TBS Group by Banca Popolare di Milano in March 2011 and transferred to Insiel Mercato for the original amount of Euro 5 million Loan granted to Erre Effe by MPS in October 2013 for the original amount of Euro 150, Euro 180,000 loan granted to Caribel, merged with Insiel Mercato, by Antonveneta in September Euro 150,000 loan granted to TBS Imaging by Banca Popolare della Campania in October Euro 100,000 loan granted to Delta X by Banca di Credito Cooperativo in Loan granted to Ing. Burgatti 579 na Total medium/long term portion of medium/long loans 22,279 4,879 Financial payable to minority shareholders for the acquisition of a 35.00% interest in Ing. Burgatti (put & call option) 3,755 na P.I.A. loan granted to subsidiary Insiel Mercato Financial payable to EBM minority shareholders for the acquisition of a 5.03% interest in EMB (put & call options) Financial payable to Erre Effe minority shareholders for the acquisition of a 49.00% interest in Erre Effe (put & call options) 1,182 1,144 Financial payable to EBME minority shareholders for the acquisition of a 36.75% interest in TBS GB 1,278 1,278 Other payables of the subsidiary EBM 8 11 Total medium/long term portion of debts payable to others 6,307 2,558 Non-current portion of leasing contracts debts 1,728 1,615 Total non-current financial liabilities 44,702 33,378 Some loans require compliance (financial covenants) with certain parameters based on the consolidated financial statements of the Parent Company at the year-end. These financial parameters, to be calculated on an annual basis, do not have characteristics or expenses different from those generally established under market practices and at the end of 2014 were respected. 55

57 Convertible bond loan On 31 January 2012, the Shareholders Meeting approved the issuing of a convertible bond loan, reserved for the Fondo Italiano d Investimento, with the issue of 4,347,826 bonds with a nominal value of Euro 2.30 each, for a total of Euro 10 million. The conversion expired on 09 February 2015, without being exercised. The repayment will therefore be made by February 2016 at the nominal value. The interest rate provided for on the convertible bond loan has been set at the fixed nominal rate of 8% per year. The fair value of said convertible bond loan as of the signing date (9 February 2012) was determined as Euro 10,515,000. The value of the loan at 30 June 2015, booked at the amortised cost, is equal to Euro 9,997,000, entirely at short-term. Five year non-convertible bond loan (mini bond) On 25 August 2014 the Extraordinary Shareholders Meeting of TBS Group resolved the issuing of a non-convertible bond loan with a five-year duration for a total amount of Euro 15 million. The placement of this loan ended on 29 October The five year bond loan - reserved exclusively for Italian and foreign institutional investors, with an annual nominal rate of 6.5% - consists of 150 bonds with a nominal unit value of Euro 100,000 each, not divisible, and was issued at 100% of the nominal value. Banca Popolare di Vicenza was the arranger, subscriber of the securities and guarantor of 100% of the total amount, while placement of securities with foreign institutional investors was done by KNG Securities LLP. The capital will be repaid in a single payment at maturity (October 2019), while interest accrued will be paid on a quarterly basis. The value of the loan at 30 June 2015, booked at the amortised cost, is equal to Euro 14,388,000, entirely medium/long-term, net of issuing costs attributed to the loan. The bond loan contract envisages respect for the parameters calculated with reference to the yearly and consolidated financial statements, as well as the respect for the other pre-established contractual conditions. As of 31 December 2014, these parameters and conditions were respected. Leasing contracts debts Leasing contract debts refer to financial leasing contracts stipulated by the parent company and the subsidiaries Insiel Mercato, EBM, Erre Effe, Delta X TBS Imaging and Ing. Burgatti. For additional details, please refer to the section in Note 8 on leased assets. Medium/long term bank loans During the six-month period, the Group took out the following new medium/long terms loans: Euro 3 million loan granted to TBS Group by Banca Popolare in January The loan is repayable in 16 quarterly deferred instalments; the first instalment fell due on 31 March 2015 and the final one is due on 31 March The loan interest rate is the 3-month Euribor rate plus a spread. Euro 3.5 million loan granted to TBS Group by Friuladria Credit Agricole in May The loan is repayable in 10 six-monthly deferred instalments; the first instalment falls due in November 2015 and the final one is due in May The loan interest rate is the 3-month Euribor rate plus a spread. 56

58 Euro 15 million loan granted to TBS Group by Banca Popolare di Milano in June The loan is repayable in quarterly deferred instalments; the first instalment falls due on 30 September 2015 and the final one is due in June The loan interest rate is the 3-month Euribor rate plus a spread. In addition, the financing contract requires certain parameters to be met based on the consolidated financial statements at the year-end. Loan granted to EBM by CariUmbria Intesa San Paolo in June 2015 for the original amount of Euro 2.5 million. The loan is repayable over 20 quarterly deferred instalments with the first falling due in September 2015 and the last instalment due in June The loan interest rate is the 3-month Euribor rate plus a spread. Loan granted to Crimo by CariUmbria Intesa San Paolo in June 2015 for the original amount of Euro 0.4 million. The loan is repayable over 18 monthly deferred instalments with the first instalment falling due in July 2015 and the last instalment due in December The loan interest rate is the 1-month Euribor rate plus a spread. Payables to other lenders At 30 June 2015, payables to other lends increased compared to 31 December 2014, as a result of the recognition of the financial debt in respect of the minority shareholders of Ing. Burgatti for Euro 3,755,000 for the acquisition of an additional minority shareholding in the company. For additional details, please refer to Note 4. Current financial liabilities The table below provides a breakdown of the current financial liabilities: (in thousands of Euro) 30/06/ /12/2014 Short-term leasing Short-term payables to banks 60,049 47,519 Payables to factoring companies 10,844 16,216 Other short-term financial liabilities 1,785 1,492 Current financial liabilities 73,177 65,550 Current financial liabilities relate to those Group short-term borrowings from leasing companies, factoring companies, banks, other financial institutions and other lenders. Amounts due to banks include bank overdrafts, advanced payments of invoices, current portion of medium/long term borrowings and other short term loans. 57

59 Details of current financial liabilities are shown below: (in thousands of Euro) 30/06/ /12/2014 Convertible bond loan 9,997 Euro 3 million loan granted to TBS Group by Banca Popolare in January Euro 3.5 million loan granted to TBS Group by Friuladria Credit Agricole in May Euro 15 million loan granted to TBS Group by Banca Popolare di Milano in June ,630 - Loan granted to EBM by CariUmbria Intesa San Paolo in June 2015 for the original amount of Euro 2.5 million Loan granted to Crimo by CariUmbria Intesa San Paolo in June 2015 for the original amount of Euro 0.4 million Euro 2.5 million loan granted to TBS Group by Cassa di Risparmio del FVG in August ,153 1,680 Mortgage granted to TBS Group by UniCredit in March Euro 2.5 million loan granted to TBS Group by Friuladria in December Mortgage granted to TBS Group by BMPS in April Loan granted to TBS Group by Mediocredito in August 2012 for the original amount of Euro 1,000 thousand Loan granted to TBS Group by Mediocredito del Trentino in September 2012 for the original amount of Euro 1,000, Loan granted to TBS Group by BNL in December 2012 for the original amount of Euro 3,000 thousand 500 1,000 Euro 1 million loan granted to TBS Group by MPS in September ,000 Euro 5 million loan granted to TBS IT by B.P di Vicenza in December Mortgage granted by BKS to PCS in December Euro 5 million loan granted to TBS Group by Banca Popolare di Milano in March 2011, transferred to Insiel Mercato in ,045 Euro 180,000 loan granted to Caribel, merged with Insiel Mercato, by Antonveneta in September Loan granted to Erre Effe by MPS in October 2013 for the original amount of Euro 150, Euro 150,000 loan granted to TBS Imaging by Banca Popolare della Campania in October Euro 100,000 loan granted to Delta X by Banca di Credito Cooperativo in Loan granted to Ing. Burgatti - short-term portion Total non-current portion of long-term loans 11,089 7,096 Current account overdrafts, advances on invoices and other short-term borrowings 38,905 40,423 Short-term payables to banks 49,994 47,519 Financial payable to minority shareholders for the acquisition of a 14.00% interest in Ing. Burgatti (put option) 669 F.I.T. loan granted to subsidiary Caribel, merged with Insiel Mercato - 28 P.I.A. loan granted to subsidiary Caribel, merged with Insiel Mercato TBS IT debts payable to Agile procedure - 1,152 Debts payable to EBM minority shareholders - Debts payable to Erre Effe minority shareholders MSI loan 3 3 Debts payable to Crimo Italia minority shareholders 243 Debts payable to Tesan Televita minority shareholders 54 - Debts payable to SLT minority shareholders 54 Payables for various Sava loans of the subsidiary EBM

60 (in thousands of Euro) 30/06/ /12/2014 Other financial payables Total short-term portion of other borrowings 1,843 1,492 Current leasing contracts debts Current payables to factoring companies 10,844 16,216 Total current financial liabilities 73,177 65,550 NOTE 17 Employee Severance Indemnity The table below shows changes in the Employee Severance Indemnity provision: (in thousands of Euro) 30/06/ /12/2014 At the start of the period 9,026 7,836 Change in the scope of consolidation Provision for the period Actuarial gains (losses) Financial charges Benefits paid At the end of the period 9,170 9,026 According to international accounting standards, and IAS 19 in particular, the employee severance indemnity is regarded as a defined benefit obligation whereby the liability is measured on the basis of actuarial methods. In the aftermath of the Italian Financial Law 2007, for Italian companies the employee severance indemnity accrued from 1 January 2007 or from the date the option to be exercised by employees was selected is included in the category of programmes with defined contribution, both in the case of supplementary allowance as well as in the case of allocation to the INPS Treasury Fund. The accounting of this Employee Severance Indemnity is therefore assimilated with other types of contribution deposits. At 30 June 2015 and 31 December 2014 the breakdown of the provisions by Italian and foreign companies, which said reserve applies to, is expressed in percentage terms and absolute values in the following table: 30/06/ /12/2014 (in thousands of Euro) % Value % Value Italian companies 90.1% 8, % 7,325 Foreign companies 9.9% % 1,701 Total 100.0% 9, % 9,026 Employee Severance Indemnity liabilities were measured by independent actuaries, applying the Projected Unit Credit Method. 59

61 For Italian entities, the actuarial assumptions used were as follows: Annual probability of termination due to death ISTAT 08 death-rate tables lowered to 85%, lowered per gender 30/06/ /12/2014 ISTAT 08 death-rate tables lowered to 85%, lowered per gender Annual probability of termination due to disability INPS data lowered to 70% INPS data lowered to 70% Annual probability of attrition due to other causes 5.00% 5.00% Annual probability of request of indemnity advance by employees 2.00% 2.00% Annual interest rate 2.11% 1.49% Annual inflation rate 2.00% 2.00% Retirement age according to current INPS retirement rules according to current INPS retirement rules In order to indicate the potential effects that could have occurred to the Group s defined benefit obligations following changes in some of the main actuarial hypotheses, we note the following: in the case the discount rate used was to increase by 0.5%, the impact on the debt registered in the financial statements would be reduced by Euro 192,000; in the case the discount rate used was to decrease by 0.5%, the impact on the debt registered in the financial statements would be increased by Euro 205,000; if pension costs were increased by 1%, the impact on the debt booked to the balance sheet would increase by Euro 250,000; if pension costs were decreased by 1%, the impact on the debt booked to the balance sheet would decrease by Euro 233,000; NOTE 18 Provisions for risks and charges The table below provides a breakdown of provisions for liabilities and charges: Other provisions for liabilities and FISC Provision for litigation Total (in thousands of Euro) charges At 1 January Change in the scope of consolidation Provisions for the year Utilisation for the year Reclassifications and other At 30 June The changes in other provisions for risks and future charges refer to: for Euro 155,000 for provisions carried out during the period by EBM for risks deriving from the breakage of components connected to high-tech D.I. equipment that the company holds due to a maintenance full risk contract (the provision was utilised during the six-month period for Euro 120,000); for Euro 9,000 for provisions to PCS for legal risks (utilised during the six-month period for Euro 20,000); for Euro 81,000 for the Parent Company s use of the risk provision for compensation on contracts; for Euro 4,000 for TBS India s use of the risk provision; for Euro 4,000 for Crimo Italia s use of the risk provision. 60

62 An allocation was made by the subsidiary TBS FR to the litigation provision for Euro 15,000. Contributions to the supplementary customer indemnity provision were made by the Italian companies EBM, Crimo Italia, TBS Group and Ing. Burgatti and include provisions for indemnity payable in certain cases for the dissolution of agent contracts. The provision was calculated in accordance with the Collective Bargaining Agreements for Agents and Sales Representatives for Industry of 20 March 2002 and is recorded at current value (the provisions amount in total to Euro 20,000 and the utilisation of Euro 4,000). NOTE 19 Other medium/long-term liabilities (in thousands of Euro) 30/06/ /12/2014 Other non-current liabilities Total other non-current liabilities Other medium/long-term liabilities mainly refer to deferred income relating to grants obtained by Caribel and Crimo Italia. The amount will be recognised in the Income Statement as revenue, according to the occurrence, on the basis of depreciation schedules of property, plant and equipment that the grants were obtained for. NOTE 20 Trade payables The table below provides a breakdown of trade payables: (in thousands of Euro) 30/06/ /12/2014 Payables to suppliers 45,103 38,866 Total trade payables 45,103 38,866 Payables to suppliers at 30 June 2015 amount to Euro 45,103,000 (38,866,000 at 31 December 2014). The consolidation of the company Ing. Burgatti impacted on the trade payables at the acquisition date for Euro 1,435,000. Trade payables are not interest bearing and the payment terms are in line with the commercial practices of the business areas in which they fall. Trade payables are not secured. NOTE 21 Other current liabilities The table below provides a breakdown of other current liabilities: (in thousands of Euro) 30/06/ /12/2014 Payables to employees 12,363 9,297 Payables to social security institutions 5,307 5,753 Customer advance payments on invoices 1,327 1,196 VAT payables 8,793 16,778 Other tax liabilities 2,350 3,228 Other payables 5,817 5,766 Total other current liabilities 35,957 42,018 61

63 Payables to employees include payables for salaries and wages for the month of June 2015, to be paid in the following month, and payables to employees for holidays and leave. Social security liabilities primarily consist of payables to the Italian Institute for Social Security (INPS), the Italian Workers Compensation Authority (INAIL) and the Local Social Security Institutes, as well as amounts due for contributions towards leave. The significant decrease in VAT payables, which also has a notable impact on decreasing the item Other current liabilities is a result of the split payments mechanism coming into effect, whereby VAT is no longer applied on invoices issued to public offices. Other taxes payables primarily comprise employee and collaborator tax withholdings. The Other payables item relates to various payables such as amounts due to directors, freelancers, etc. NOTE 22 Revenue The table below provides a breakdown of revenues as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Revenue from the sale of goods and services 115, ,553 Change in work in progress on order Total revenue 115, ,469 Revenue primarily relates to contractual amounts accrued on the basis of the progress of services performed and accrued in the year, changes in contract work in progress for services that have a value at period end but have not been completed, invoices issued to customers or entities in temporary joint ventures with the Group for the sale of consumables and spare parts, and ISTAT adjustment invoices. With regard to the trend in revenues, please refer to note 3 Segment reporting. NOTE 23 Other revenue and income The table below provides a breakdown of other revenue and income as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Contributions Other operating revenue Total other income Revenue contributions include both revenues linked to cost components and revenues linked to investments in non-current assets, and are recognised on an accruals basis for their offsetting against related costs. Positive components relative to the use of the provisions for risks and charges are included among other revenues, where risks did not arise or arose at a value of less than that allocated. 62

64 NOTE 24 Cost of raw materials and consumables The table below provides a breakdown of the cost of raw materials and consumables as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Raw materials, consumables and goods 17,160 17,811 Changes in inventories of raw materials, consumables and goods Total raw materials, consumables and goods 16,796 17,215 The costs shown primarily relate to the purchase of spare parts for medical devices on receipt of orders. NOTE 25 Service costs The table below provides a breakdown of service costs as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Consultancy and technical contracts 22,950 22,582 Legal, administrative and commercial services 2,479 3,391 Travel expenses 1,668 1,736 Telephone expenses Directors remuneration Board of statutory auditors remuneration Commissions Bank commissions and factoring charges Insurances Transportation and shipping Other repairs and maintenance Advertising, promotion, exhibitions and trade fairs Use of third party assets 1,611 1,738 Vehicle rental 1,868 1,849 Other service costs 3,659 3,323 Total service costs 39,742 39,859 Other costs for services is a residual item that includes other charges such as utilities, postal charges and meal vouchers. 63

65 NOTE 26 Personnel costs The table below provides a breakdown of personnel costs as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Salaries and wages 36,536 35,930 Social security contributions on salaries 9,521 9,402 Retirement benefits Severance pay 1,759 1,541 Other personnel costs Total personnel costs 48,851 47,785 The Other personnel costs item primarily relates to costs for temporary work. NOTE 27 Other operating costs The table below provides a breakdown of other operating costs as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Write-downs of receivables under current assets Taxes and duties Other costs 1, Total other operating costs 2,084 1,558 Other costs primarily relate to membership charges, marketing and promotional costs and costs pertaining to previous years. NOTE 28 Cost adjustments for in-house generation of non-current assets The following table illustrates the extent of the cost adjustments for in-house generation of non-current assets as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Cost adjustments for in-house generation of non-current assets ,394 Total cost adjustments for in-house generation of non-current assets ,394 The item Cost adjustments for in-house generation of non-current assets as at 30 June 2015 amounted to Euro 870,000 (Euro 1,394,000 at 30 June 2014). It related entirely to personnel and service expenses incurred for some development of new software and information technology. In particular, should such costs be deducted from the corresponding Income Statement item, there would be a reduction in personnel and service costs. 64

66 NOTE 29 Amortisation, depreciation and write-downs The following table shows the breakdown of amortization, depreciation and write-downs as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Depreciation of tangible fixed assets 2,363 2,147 Amortisation of intangible fixed assets 3,329 2,877 Total amortisation, depreciation and impairment 5,692 5,024 The increase in the amortisation of intangible fixed assets at 30 June 2015 with respect to 30 June 2014 is due to the amortisation of the customer portfolio of the subsidiary Ing. Burgatti S.p.A. (Euro 271,000) and the significant investments made by the subsidiary Insiel Mercato S.p.A. that were stated under amortisations during the six-month period. The increase in the amortisations of tangible fixed assets mainly relates to the inclusion in the scope of consolidation of Ing. Burgatti S.p.A. NOTE 30 Other provisions for risks and charges The table below provides a breakdown of other provisions for risks and charges at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Provisions Contractual risk provision for disputes 15 4 Provisions Supplementary customer indemnity provision Provisions Other provisions for liabilities and charges Total allocation to provisions Please refer to Note 19 for the related comments. NOTE 31 Gains (losses) from investments (in thousands of Euro) 1 st half st half 2014 Write-downs on equity investments Revaluations of equity investments 0 1 Total (write-downs) revaluations

67 NOTE 32 Financial income and expenses The table below provides a breakdown of financial income and expenses as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Interest payable on loans 3,444 3,123 Other financial charges 42 0 Actuarial severance indemnity loss Total Financial Charges 3,530 3,186 Bank interest receivable Other interest receivable Other financial income Total Financial Income Total financial income and expenses 2,974 2,923 NOTE 33 Income taxes The table below provides a breakdown of income taxes distinguishing between current, deferred and pre-paid taxes. A breakdown of Italian and foreign taxes is provided in relation to current taxes. (in thousands of Euro) 1 st half st half 2014 Current IRAP 216 1,074 IRES Current income taxes, Foreign Current income taxes 1,093 1,530 (Pre-paid)/deferred taxes Total income taxes 708 1,962 The following table shows the tax incidence on earnings before tax as at 30 June 2015 and 30 June 2014: (in thousands of Euro) 1 st half st half 2014 Pre-tax profit 1,084 1,967 Income taxes 708 1,962 Incidence on earnings before taxes 65.3% 99.7% The significant decrease in income taxes, similarly with the incidence of the latter on pre-tax profits was mainly the result of the drop in IRAP, following the full deduction of labour costs for employees appointed with an open-ended contract. With reference to deferred tax payable, note that liabilities for deferred tax of Euro 61,000 were booked directly as a contra-entry in shareholders equity. Said amount refers to the tax effect of the actuarial gains stated on the basis of IAS

68 Deferred tax receivables and payables The Group recorded deferred taxes relating to temporary differences between the civil and fiscal assessment of Group companies, based on the consideration that future taxable amounts will absorb all the temporary differences (including consolidation adjustments) that generated them. In calculating deferred taxes, reference was made to the rates in force in the various countries. One of the most significant amounts is the allocation of deferred tax assets on tax losses arising in TBS FR, MFI and TBS ES that can be offset by the future taxable profits of the companies in which the losses arose. In particular, the deferred tax assets recorded and the theoretical tax assets arising from tax losses that may be carried forward are as follows: 30/06/ /12/2014 Deferred tax assets Theoretical deferred Deferred tax assets Theoretical deferred (in thousands of Euro) recorded tax assets recorded tax assets TBS FR 855 1, ,037 MSI TBS ES 98 1, ,503 Deferred tax assets on losses carried forward 1,093 2, ,661 The amount of deferred tax receivables which can be carried forward, linked to the corresponding tax base, can be broken down by individual company as follows: (in thousands of Euro) Unlimited Total TBS FR MSI TBS ES Deferred tax receivables on losses carried forward ,093 The deferred tax liabilities were recorded against all the taxable temporary differences, and more specifically: on write-downs of goodwill amortisation after their initial recognition on the basis of the fiscally deductible amortisation; on the portfolio order and customer relations accounting on the basis of the purchase price allocations of the various purchases made by the Group. NOTE 34 Related party disclosures The consolidated financial statements include the financial statements of the TBS Group and of those subsidiaries falling under the scope of consolidation. Transactions between TBS Group and the related subsidiaries were eliminated from the Consolidated Financial Statements. 67

69 Transactions with related parties (relating to financial and equity interests) were not removed when preparing the consolidated financial statements and are broken down as follows: 1 st half /06/ st half /12/2014 (in thousands of Euro) costs revenue receivables payables costs revenue receivables payables SEGES Paolo Salotto Alessandro Firpo N/A 0 0 N/A MEA Consulting Nicholas Bosanquet Innovation Global Health S.A Total Mr. Paolo Salotto was confirmed in his appointment as the Chief Executive Officer of the TBS Group on 07 May The costs indicated in the table refer to fees accrued during the first half of 2015 as the Manager of Strategic Planning, Manager of M&A, General Manager for Corporate activities and Managing Director. Seges Srl is considered a related party since Mr. Paolo Salotto is its Chairman. Relations with Seges are governed by a consulting contract, with particular reference to administration, accounting and legal issues. Innovating Global Health S.A. is considered to be a related party as it is a subsidiary of Capitol Health Special Fund L.P., one of the shareholders of the Company. Relations with Innovating Global Health S.A. are regulated by a strategic and financial consulting agreement under General Management, which was activated during the course of The services company MEA Consulting is a related party in that Laura Amadesi, a Director of the TBS Group is a shareholder and partner of said company. Costs for the period relative to MEA Consulting refer to consulting activities. Mr. Nicholas Bosanquet is a manager at TBS GB, and entered into a consultancy contract with TBS GB. Relations with the associated companies are stated in amounts in thousands of Euro as at 30 June 2015 below. 1 st half /06/ st half /12/2014 (in thousands of Euro) costs revenue receivables payables costs revenue receivables payables REM Srl in liquidation SAIM - Südtirol Alto Adige Informatica Medica Srl , , Enterprise TH MED Group SarL SIGE ,470 10,636 1,152 Care Expert Social Consortium Total 10 1,633 2, ,098 12,235 1,194 68

70 Accrued remuneration for TBS Group directors with strategic responsibilities is shown below: 1 st half st half 2014 (in thousands of Euro) Salaries (*) Remuneration (**) Salaries (*) Remuneration (**) Diego Bravar Nicola Pangher Fabio Faltoni Paolo Salotto (***) (*) The amounts shown relate to the gross salaries paid to Company employees (**) The amounts shown relate to remuneration paid to Company directors (***) For the fees relative to Mr. Paolo Salotto please refer to the figures in the table above, Relations with other related parties NOTE 35 Subsequent events On 23 July 2015, the subsidiary TBS FR formalised the total acquisition of Crimo France Sas, a company involved in the maintenance of biomedical equipment, especially endoscopic devices and surgical instruments. Crimo France employs around sixty people and operates throughout the transalpine region. During the last period ended 31 March 2015, it closed with a turnover of over Euro 7 million. The maximum purchase price was set at Euro 6.0 million, and included the company s net financial position at the date of sale. Euro million was paid on signing the contract; the balance will be paid by latest by March To date, no exact assessment has been made of the fair value of assets, liabilities and the potential liabilities acquired. Finally on 30 July 2015, the TBS Group repaid the bond loan of Euro 10 million, in addition to the interest for the period, which had been signed with the Fondo Italiano di Investimento on 09 February 2012; the decision was made based on the provision allowed in the loan rules, whereby early repayment could be made in relation to the natural deadline set for February Trieste, 24 August 2015 On behalf of the Board of Directors Chief Executive Officer Paolo Salotto 69

71 Company data and information for the shareholders Headquarters TBS Group Spa AREA Science Park. Padriciano Trieste Italy Tel Fax Legal data Share capital: 4,218, fully paid-up Number of ordinary shares: 42,185,576 Own shares: 764,210 Fiscal code, VAT and Companies Register of Trieste under n. IT REA Investor Relations Tel Fax The present document is also available in the section Investor Relations on the website 70

72 redpoint communication

73 TBS Group Spa AREA Science Park Padriciano Trieste - Italy tel fax info@tbsgroup.com