bompani audit 00153 ROMA
Piazza Albania, 10
Tel. 06 57284302
Fax 06 57250015
e-mail: roma@bompaniaudit.com
www.bompaniaudit.com
Officio Certificate

To the Sole Director of
Conte Rosso & Partners S.r.l. (formerly All Real Estate S.r.l.)
Rome (Italy)

We have audited the accompanying consolidated balance sheets of Conte Rosso & Partners S.r.l. (formerly All Real Estate S.r.l.), an Italian corporation, expressed in euros as of December 31, 2009, 2010 and 2011 and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for each of the three years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Conte Rosso & Partners S.r.l. (formerly All Real Estate S.r.l.) as of December 31, 2009, 2010 and 2011 and the results of its operations and its cash flows for each of the three years then ended in conformity with accounting principles generally accepted in the United States of America.

BOMPANI AUDIT S.r.l.

/s/ Remo Simonetti

Remo Simonetti

(partner)

Rome, August 2, 2012

bompani audit s.r.l.

Societa di revisione ed organizzazione cantabile
Iscritta all'Albo Consob e al Registro dei Revisori Contabili, associata Assirevi
Capitale Sac ale € 52.000,00 - Codice Fiscale e Partiia IVA 01683920480 - Reg. Soc. Trib. di Firenze 28874 - REA 287285
Roma, Milano, Firenze, Torino e Viareggio

Member Firm di Kreston International
organizzazione internazionale di societa di revisione e studi professionali indipendenti
presente in 92 paesi con 602 uffici ed una strutiura di circa 20.000 persona

Preliminary Note:

The financial statements of Conte Rosso & Partners S.R.L. have been prepared in euros. The euro per dollar exchange rate on June 30, 2012, December 31, 2011, 2010 and 2009 was approximately 1.2590, 1.2939, 1.3362, and 1.4406 respectively. The average exchange rate for the sixth month period ended June 30, 2012, the year ended December 31, 2011, 2010 and 2009 was approximately 1.297, 1.3917, 1.3257 and 1.3984 respectively. The pro-forma financial information has been prepared in US$, with a euro to dollar exchange rate of 1.2590.

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED BALANCE SHEET

€/000

		30-06-12			30-06-11
	Notes	US GAAP Statement (Unaudited)			US GAAP Statement (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			1.286			760
Net trade and other receivables			10.112			7.768
Trade receivables			10.988			6.495
Other receivables			2.244			1.476
Trade and other receivables total			13.232			7.971
Less allowance for doubtful accounts	1		(3.120	)		(203	)
Related parties receivables	2		1.930			2.910
Tax receivables			3.099			4.462
Advance payment on purchase and other current assets	3		2.000			6.485
Advance payment on purchase of properties			1.850			6.450
Current maturity of deferred tax assets, net
Other current assets			150			35
Available-for-sale assets			2.428			8.363
Marketable debt securities	4
Real estate held for resale	5		2.428			8.363
Investment in associates	6
Total current assets			20.855			30.748
NON-CURRENT ASSETS
Investment in other companies	7		387			395
Net properties, plant and equipment	8		91.098			94.645
Properties, plant and equipment			112.457			113.889
Less accumulated depreciation			(21.359	)		(19.244	)
Goodwill	9		1.565			1.565
Net other intangible assets	10		1.405			1.466
Other intangible assets			1.544			1.533
Less accumulated amortization			(139	)		(67	)
Other non-current assets			9.144			4.903
Related parties non-current loans	2		2.547
Other financial assets	11		254			255
Deferred tax assets
Accruals and deferred costs			274			169
Other non-current receivables	12		6.069			4.479
Total non-current assets			103.599			102.974
Total assets			124.454			133.722

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED BALANCE SHEET

€/000

		30-06-12			30-06-11
	Notes	US GAAP Statement (Unaudited)			US GAAP Statement (Unaudited)
LIABILITIES and EQUITY
CURRENT LIABILITIES
Bank overdrafts	13		10.605			12.524
Current maturities of long term loans	13		11.386			15.281
Trade payables			7.116			9.255
Related parties payables	2		257			865
Tax payables			2.326			1.205
Other current liabilities			11.241			18.667
Other payables			9.992			10.603
Accruals and deferred income			599			204
Other current liabilities			650			7.860
Total current liabilities			42.931			57.797
NON-CURRENT LIABILITIES
Long term loans	13		47.077			49.227
Shareholder’s loans	14		2.644			24.545
Severance indemnity fund			19			19
Other non-current liabilities			300			154
Other provisions			284			117
Deferred tax liabilities			10			34
Other non-current payables			6			3
Total non-current liabilities			50.040			73.944
Total liabilities			92.971			131.741
EQUITY
Common shares			98			98
Reserves			3.385			906
Retained earnings / (Accumulated loss)			27.286			3.373
Net comprehensive loss of period			(1.396	)		(2.687	)
Equity attributable to owners of Conte Rosso & Partners S.r.l.			29.373			1.690
NON-CONTROLLING INTERESTS IN THE CONSOLIDATED SUBSIDIARIES			2.110			291
Total liabilities, equity and non-controlling interests			124.454			133.722

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED STATEMENTS OF OPERATIONS

€/000

	30-06-12			30-06-11
	US GAAP Statement (Unaudited)			US GAAP Statement (Unaudited)
Revenue from operations		3.003			1.517
Operating costs and expenses
Operating costs		(981	)		(1.280	)
Administrative and other costs		(494	)		(2.635	)
EBITDA		1.528			(2.398	)
Amortization and depreciation		(1.312	)		(1.386	)
Interest expenses		(1.688	)		(1.683	)
Operating Loss		(1.472	)		(5.467	)
Other income / (loss)
Interest income/(loss)		(10	)		1
Other income/(loss)					2.563
Total other income / (loss)		(10	)		2.564
Loss from continuing operations, before income taxes		(1.482	)		(2.903	)
Income taxes		(76	)		(77	)
Net loss for the year		(1.559	)		(2.980	)
STATEMENT OF COMPREHENSIVE LOSS
€/000
Net loss for the year		(1.559	)		(2.980	)
Total comprehensive loss for the year		(1.559	)		(2.980	)
- Net loss attributable to owners of Conte Rosso & Partners S.r.l.		(1.395	)		(2.686	)
- Net loss attributable to non-controlling interests in the consolidated subsidiaries		(164	)		(294	)

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

€/000	Common shares		Reserves			Retained earnings/ (accumulated loss)			Net comprehensive loss of period			Equity attributable to non- controlling Interests			TOTAL EQUITY
Total equity at December 31, 2010 (*)		98		1.184			5.095			(3.324	)		342			3.395
Loss allocation							(3.324	)		(3.324	)
Total comprehensive loss for the year										(2.687	)		(294	)		(2.981	)
Transactions with owners
Changes in partnerships							1.324						242			1.566
Reserve write-off to cover losses				(278	)		278
Total transactions with owners				(278	)		1.602						242			1.566
Total equity at June 30, 2011 (**)		98		906			3.373			(2.687	)		291			1.980
Total equity at December 31, 2011 (*)		98		3.405			24.998			(2.964	)		41			25.577
Loss allocation							(2.964	)		2.964
Total comprehensive loss for the year										(1.396	)		(164	)		(1.560	)
Transactions with owners
Reserve write-off to cover losses				(20	)		20
Changes in partnerships							746						1.314			2.060
Spin-off reserve							4.487						499			4.985
Additional paid-in capital													421			421
Total transactions with owners				(20	)		5.253						2.233			7.466
Total equity at June 30, 2012 (**)		98		3.385			27.286			(1.396	)		2.110			31.483

(*) Audited

(**) Unaudited

CONTE ROSSO & PARTNERS S.R.L. GROUP

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS OF CONTE ROSSE & PARTNERS S.R.L. AND SOUTHERN STATE SIGN COMPANY – SIX MONTHS PERIOD ENDED JUNE 30, 2012

€/000

	30-06-12			30-06-12			30-06-12	30-06-12
	CONTE ROSSO & PARTNERS S.R.L. GROUP			SOUTHERN STATE SIGN COMPANY			Pro-forma adjustments	COMBINED PRO-FORMA
Revenue from operations		3.895							3.895
Operating costs and expenses
Operating costs		(1.272	)		(196	)			(1.468	)
Administrative and other costs		(640	)		(46	)			(686	)
EBITDA		1.982			(242	)			1.740
Amortization and depreciation		(1.701	)						(1.701	)
Interest expenses		(2.190	)						(2.190	)
Operating Loss		(1.909	)		(242	)			(2.151	)
Other income / (loss)
Interest income		(13	)						(13	)
Other income/(loss)
Total other income / (loss)		(13	)						(13	)
Loss from continuing operations, before income taxes		(1.922	)		(242	)			(2.164	)
Income taxes		(99	)						(99	)
Costs from discontinued operations		(1	)						(1	)
Net loss for the year		(2.023	)		(242	)			(2.265	)

STATEMENT OF COMPREHENSIVE LOSS €/000
Net loss for the year	(2.023	)	(242	)	(2.265	)
Foreign currency Translation differences	52				52
Other comprehensive income/(loss) for the year	(1.971	)			(1.971	)
Total comprehensive loss for the year	(1.971	)	(242	)	(2.213	)

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED CASH FLOWS

€/000

	30-06-12			30-06-11
€/000	US GAAP Statement (Unaudited)			US GAAP Statement (Unaudited)
Cash Flows from Operating Activities
Net Loss		(1.559	)		(2.980	)
Depreciation and amortization of non-current assets		1.312			1.386
Allowance and depreciation for doubtful accounts		28			1.629
Change in deferred taxes		1			(20	)
Other non-cash adjustments					1.747
Cash flows from operations before changes in assets and liabilities		(218	)		1.762
Changes in assets and liabilities
Change in Real Estate held for resale		5.935			1.727
Change in trade receivables		278			(2.683	)
Change in related parties receivables		(403	)		(65	)
Change in other receivables		(653	)		(858	)
Change in advance payment on purchase of properties		4.600			7.406
Change in other assets		87			(170	)
Change in trade payables		(2.779	)		4.307
Change in related parties payables		(350	)		(555	)
Change in other payables		22			(866	)
Change in income current taxes		312			(1.962	)
Change in other liabilities		(102	)		(2.015	)
Net cash provided by Operating Activities (A)		6.729			6.028
Cash Flows from Investing Activities
Purchase of intangible assets					(2	)
Proceeds from sale of intangible assets		32
Payment for purchase of properties, plant and equipment					(25.575	)
Proceeds from sale of properties, plant and equipment		1.421
Payments for purchase of associates and other company
Proceeds from sale of associates and other company		0			659
Dividends received
Payment for financial investing activity		0			(5	)
Other investing change		(1.590	)		(672	)
Net cash used in investing activities (B)		(137	)		(25.594	)
Cash Flows from Financing Activities
Net borrowings from bank overdrafts		273			3.165
Principal payments under financial lease obligation
Net proceeds from issuance of long-term debt					13.443
Net proceeds from issuance of shareholders loan		404			3.287
Net repayment of long-term debt		(6.949	)
Proceeds from issuance of common stock		0			0
Proceeds from paid-in capital		421
Capital reimbursement
Dividends paid
Other financing change
Net cash provided by Financing Activities (C)		(5.851	)		19.896
Net Increase/(decrease) in Cash and Cash Equivalents (A+B+C)		741			330
Cash and cash equivalents at beginning of the year		545			430
Cash and cash equivalents at end of the year		1.286			760

CONTE ROSSO & PARTNERS S.R.L. GROUP

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF CONTE ROSSO & PARTNERS S.R.L AND SOUTHERN STATE SIGN COMPANY - SIX MONTHS PERIOD ENDED JUNe 30, 2012

$ '000	30-06-12		30-06-12		30-06-12			30-06-12
	CONTE ROSSO & PARTNERS S.R.L. GROUP		SOUTHERN STATE SIGN COMPANY		Pro-forma adjustments			COMBINED PRO-FORMA
ASSETS
CURRENT ASSETS
Cash and cash equivalents		1.619		94					1.713
Net trade and other receivables		12.731							12.731
Related parties receivables		2.430		423		(423	)		2.430
Tax receivables		3.902							3.902
Advance payment on purchase and other current assets		2.518		238					2.756
Available-for-sale assets		3.057							3.057
Total current assets		26.256		755		(423	)		26.588
NON-CURRENT ASSETS
Investment in other companies		487							487
Net properties, plant and equipment		114.692							114.692
Goodwill		1.970							1.970
Net other intangible assets		1.769							1.769
Other non-current assets		11.512							11.512
Total non-current assets		130.431							130.431
Total assets		156.687		755		(423	)		157.019

CONTE ROSSO & PARTNERS S.R.L. GROUP

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF CONTE ROSSO & PARTNERS S.R.L AND SOUTHERN STATE SIGN COMPANY - SIX MONTHS PERIOD ENDED JUNE 30, 2012

$ '000	30-06-12			30-06-12			30-06-12
	CONTE ROSSO & PARTNERS S.R.L. GROUP			SOUTHERN STATE SIGN COMPANY			Pro-forma adjustments			COMBINED PRO-FORMA
LIABILITIES and EQUITY
CURRENT LIABILITIES
Bank overdrafts		13.352									13.352
Current maturities of long term loans		14.335									14.335
Trade payables		8.959									8.959
Related parties payables		324									324
Tax payables		2.928									2.928
Other current liabilities		14.152			90			(423	)		13.819
Total current liabilities		54.050			90			(423	)		53.717
NON-CURRENT LIABILITIES
Long term loans		59.270									59.270
Shareholder's loans		3.329									3.329
Severance indemnity fund		24									24
Other non-current liabilities		378									378
Total non-current liabilities		63.001									63.001
Total liabilities		117.051			90			(423	)		116.718
EQUITY
Common shares		123			18						141
Reserves		4.262			1.050						5.312
Retained earnings / (Accumulated loss)		34.353			(161	)					34.192
Net comprehensive loss of period		(1.971	)		(242	)					(2.213	)
Total Equity		39.636			665						40.301
Total liabilities and equity		156.687			755			(423	)		157.019

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED BALANCE SHEET

€/000

		31-12-11			31-12-10			31-12-09
	Notes	US GAAP Statement (Audited)			US GAAP Statement (Audited)			US GAAP Statement (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			545			430			1.224
Net trade and other receivables			9.765			5.856			5.837
Trade receivables			11.294			5.308			3.758
Other receivables			1.591			618			2.079
Trade and other receivables total			12.885			5.926			5.837
Less allowance for doubtful accounts	1		(3.120	)		(70	)
Related parties receivables	2		1.527			2.845			1.820
Tax receivables			3.824			2.777			2.734
Advance payment on purchase and other current assets	3		6.608			13.858			16.682
Advance payment on purchase of properties			6.450			13.856			16.681
Current maturity of deferred tax assets, net
Other current assets			158			2			1
Available-for-sale assets			8.363			10.090			11.062
Marketable debt securities	4								987
Real estate held for resale	5		8.363			10.090			10.071
Investment in associates	6								4
Total current assets			30.632			35.856			39.358
NON-CURRENT ASSETS
Investment in other companies	7		387			1.054			2.060
Net properties, plant and equipment	8		93.830			70.457			53.460
Properties, plant and equipment			114.085			74.524			56.239
Less accumulated depreciation			(20.255	)		(4.067	)		(2.779	)
Goodwill	9		1.565			1.565			1.565
Net other intangible assets	10		1.437			3.211			3.076
Other intangible assets			1.523			3.212			3.109
Less accumulated amortization			(86	)		(1	)		(33	)
Other non-current assets			7.633			4.091			2.103
Related parties non-current loans	2		2.547
Other financial assets	11		254			250			250
Deferred tax assets						1			1
Accruals and deferred costs			353			32			132
Other non-current receivables	12		4.479			3.807			1.720
Total non-current assets			104.852			80.377			63.255
Total assets			135.484			116.233			101.622

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED BALANCE SHEET

€/000

		31-12-11			31-12-10			31-12-09
	Notes	US GAAP Statement (Audited)			US GAAP Statement (Audited)			US GAAP Statement (Audited)
LIABILITIES and EQUITY
CURRENT LIABILITIES
Bank overdrafts	13		10.332			9.359			6.858
Current maturities of long term loans	13		15.120			5.738			1.874
Trade payables			9.895			4.948			5.228
Related parties payables	2		607			1.420			782
Tax payables			2.739			1.482			1.485
Other current liabilities			17.847			21.649			10.793
Other payables			9.970			11.469			3.191
Accruals and deferred income			314			138			42
Other current liabilities			7.563			10.042			7.560
Total current liabilities			56.540			44.596			27.020
NON-CURRENT LIABILITIES
Long term loans	13		50.292			45.327			42.070
Shareholder’s loans	14		2.383			22.823			24.842
Severance indemnity fund			21			19			7
Other non-current liabilities			671			74			20
Other provisions			656
Deferred tax liabilities			9			55			4
Other non-current payables			6			19			16
Total non-current liabilities			53.367			68.242			66.939
Total liabilities			109.907			112.838			93.959
EQUITY
Common shares			98			98			98
Reserves			3.405			1.184			1.259
Retained earnings / (Accumulated loss)			24.998			5.095			10.510
Net comprehensive loss of period			(2.964	)		(3.324	)		(5.231	)
Equity attributable to owners of Conte Rosso & Partners S.r.l.			25.537			3.053			6.636
NON-CONTROLLING INTERESTS IN THE CONSOLIDATED SUBSIDIARIES			41			342			1.027
Total liabilities, equity and non-controlling interests			135.484			116.233			101.622

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED STATEMENTS OF OPERATIONS

€/000

	31-12-11			31-12-10			31-12-09
	US GAAP Statement (Audited)			US GAAP Statement (Audited)			US GAAP Statement (Audited)
Revenue from operations		11.976			4.338			5.815
Operating costs and expenses
Operating costs		(3.281	)		(1.550	)		(3.799	)
Administrative and other costs		(6.951	)		(1.476	)		(2.694	)
EBITDA		1.744			1.312			(678	)
Amortization and depreciation		(2.834	)		(1.517	)		(1.660	)
Interest expenses		(3.879	)		(3.139	)		(3.232	)
Operating Loss		(4.969	)		(3.344	)		(5.570	)
Other income / (loss)
Interest income/(loss)		18			5			20
Other income/(loss)		2.476			(5	)		261
Total other income / (loss)		2.494						281
Loss from continuing operations, before income taxes		(2.475	)		(3.344	)		(5.290	)
Income taxes		(1.187	)		(181	)		(1	)
Net loss for the year		(3.662	)		(3.525	)		(5.290	)
STATEMENT OF COMPREHENSIVE LOSS €/000
Net loss for the year		(3.662	)		(3.525	)		(5.290	)
Total comprehensive loss for the year		(3.662	)		(3.525	)		(5.290	)
- Net loss attributable to owners of Conte Rosso & Partners S.r.l.		(2.964	)		(3.324	)		(5.231	)
- Net loss attributable to non-controlling interests in the consolidated subsidiaries		(698	)		(201	)		(59	)

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

€/000	Common shares		Reserves			Retained earnings/ (accumulated loss)			Net comprehensive loss of period			Equity attributable to non- controlling Interests			TOTAL EQUITY
Total equity at December 31, 2008 (**)		98		1.347			1			10.425			62			11.933
Loss allocation							10.425			(10.425	)
Total comprehensive loss for the year										(5.231	)		(59	)		(5.290	)
Transactions with owners
Additional paid in capital													1.024			1.024
Reserve write-off to cover losses				(88	)		88
Other transactions							(4	)								(4	)
Total transactions with owners				(88	)		84						1.024			1.020
Total equity at December 31, 2009 (*)		98		1.259			10.510			(5.231	)		1.027			7.663
Loss allocation							(5.231	)		5.231
Total comprehensive loss for the year										(3.324	)		(201	)		(3.525	)
Transactions with owners
Share capital reimbursement							(165	)								(165	)
Changes in partnerships							(94	)					(483	)
Reserve write-off to cover losses				(75	)		75
Total transactions with owners				(75	)		(184	)					(483	)		(742	)
Total equity at December 31, 2010 (*)		98		1.184			5.095			(3.324	)		342			3.395
Loss allocation							(3.324	)		3.324
Total comprehensive loss for the year										(2.964	)		(698	)		(3.662	)
Transactions with owners
Shareholders loans renounce				2.480			21.288									23.768
Changes in partnerships							1.680						396			2.076
Reserve write-off to cover losses				(259	)		259
Total transactions with owners				2.221			23.227						396			25.844
Total equity at December 31, 2011 (*)		98		3.405			24.998			(2.964	)		41			25.577

(*) Audited
(**) Unaudited

CONTE ROSSO & PARTNERS S.R.L. GROUP

CONSOLIDATED CASH FLOWS

€/000

	31-12-11			31-12-10			31-12-09
€/000	US GAAP Statement (Audited)			US GAAP Statement (Audited)			US GAAP Statement (Audited)
Cash Flows from Operating Activities
Net Loss		(3.662	)		(3.525	)		(5.290	)
Depreciation and amortization of non-current assets		2.834			1.517			1.660
Allowance and depreciation for doubtful accounts		5.746			424			1.886
Change in deferred taxes		(45	)		51			(264	)
Other non-cash adjustments		1.765
Cash flows from operations before changes in assets and liabilities		6.638			(1.533	)		(2.009	)
Changes in assets and liabilities
Change in Real Estate held for resale		1.727			(19	)		(932	)
Change in trade receivables		(8.682	)		(1.904	)		5.789
Change in related parties receivables		1.318			(1.025	)		0
Change in other receivables		(973	)		1.461			2.722
Change in advance payment on purchase of properties		7.406			2.825			(16.681	)
Change in other assets		(477	)		1.086			2.133
Change in trade payables		4.947			(280	)		(7.214	)
Change in related parties payables		(813	)		638			490
Change in other payables		(1.499	)		8.278			1.459
Change in income current taxes		210			(47	)		858
Change in other liabilities		(1.658	)		2.593			6.847
Net cash provided by Operating Activities (A)		8.144			12.073			(6.539	)
Cash Flows from Investing Activities
Purchase of intangible assets					(135	)		(76	)
Proceeds from sale of intangible assets		9
Payment for purchase of properties, plant and equipment		(26.208	)		(18.514	)		(3.535	)
Proceeds from sale of properties, plant and equipment
Payments for purchase of associates and other company								(1.886	)
Proceeds from sale of associates and other company		667			1.010
Dividends received
Payment for financial investing activity		(2.551	)		0			0
Other investing change		(672	)		(2.087	)		(1.170	)
Net cash used in investing activities (B)		(28.754	)		(19.727	)		(6.667	)
Cash Flows from Financing Activities
Net borrowings from bank overdrafts		973			2.501			(2.679	)
Principal payments under financial lease obligation
Net proceeds from issuance of long-term debt		14.348			7.120			1.211
Net proceeds from issuance of shareholders loan		5.404			(2.597	)		11.536
Net repayment of long-term debt
Proceeds from issuance of common stock		0						0
Proceeds from paid-in capital								1.024
Capital reimbursement					(165	)
Dividends paid
Other financing change					0			(4	)
Net cash provided by Financing Activities (C)		20.724			6.860			11.088
Net Increase/(decrease) in Cash and Cash Equivalents (A+B+C)		115			(794	)		(2.118	)
Cash and cash equivalents at beginning of the year		430			1.224			3.342
Cash and cash equivalents at end of the year		545			430			1.224

CONTE ROSSO & PARTNERS S.R.L. GROUP

(FORMERLY ALL REAL ESTATE S.R.L. GROUP)

Notes to unaudited Consolidated Financial Statements

for the six months periods ended June 30, 2012 and 2011

(Euros, thousands)

THE COMPANY AND ITS OPERATIONS

Conte Rosso & Partners S.r.l. (formerly “All Real Estate S.r.l. – “CR&P” or “the Company”) is a limited liability company incorporated in Italy. Operations are carried out through CR&P and its subsidiary companies, and mainly consist of investment in operating properties, real estate trading and development.

Currently the Company and its subsidiaries (together “CR&P Group” or “the Group”) are in start-up phase. Most of the investments in real estate have been made recently and have not started to yield income.

At June 30, 2012 the consolidated operating subsidiaries are the following:

	%		% voting			Principal
Subsidiary	ownership		capital		Location	activity
8 + 23 Immobiliare S.r.l.		96.00		96.00	Italy	Real estate
Aral Immobiliare S.r.l.		100.00		100.00	Italy	Real estate
Aros S.r.l.		95.00		95.00	Italy	Real estate
Bruno Buozzi Immobiliare S.r.l.		100.00		100.00	Italy	Real estate
Carciano Immobiliare S.r.l.		95.10		95.10	Italy	Real estate
CR&P Immobiliare S.r.l.		90.00		90.00	Italy	Real estate
CR&P Service S.c.a.r.l.		90.00		90.00	Italy	Group’s exclusive financial services
Enital S.r.l.		50.00		50.00	Italy	Power & petrochemical
Galzignano Terme Golf & Resort S.p.A.		97.25		97.25	Italy	Investment Company

	%		% voting			Principal
Subsidiary	Ownership		capital		Location	activity
Guinean Energy Enterprises S.A.		71.25		71.25	Guinea	Power, plantation and hotels
Investimenti Immobiliari S.r.l.		95.00		95.00	Italy	Real estate
Investimenti Industriali
Triestini S.r.l.		50.00		50.00	Italy	Real estate
Preneste Real Estate S.r.l.		100.00		100.00	Italy	Real estate
Primesint S.r.l.		70.00		70.00	Italy	Real estate
Ripa Hotel & Resort S.r.l.		100.00		100.00	Italy	Hotel & Leisure
Terme di Galzignano S.p.A.		97.25		97.25	Italy	Hotel & Leisure
West African Enterprises Ltd.		75.00		75.00	United Kingdom	Sub-holding

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

All majority-owned subsidiaries in which CR&P has both voting share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Subsidiaries over which control is achieved through other means, such as stockholders agreement, are also consolidated even if less than 51% of voting capital is held. The equity attributable to non-controlling interests in subsidiaries is shown separately in the consolidated financial statements. The consolidation has been prepared according to the parent company policy. Investments in unconsolidated associates are accounted for under the equity method.

The carrying value of our equity investments is accounted for at historic cost.

Associate is defined as a business in which the Group participates through a non-controlling interest but has significant influence over the operating and financial policies of the investee.

The financial year of all consolidated companies ends on December 31. The financial year ended December 31, 2009 is the first year of consolidation.

Since most of subsidiaries were acquired before 2009, December 31, 2008 has been taken as the date of acquisition of controlling ownership.

Under Italian law, the Company is not obliged to prepare consolidated financial statements.

Basis of presentation

The consolidated financial statements for the six months ended June 30, 2012 and 2011 are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and are unaudited. The separate financial statements of each subsidiary and of the Company used for the consolidation have been prepared in accordance with the accounting practices adopted in Italy (“Italian GAAP”), then reclassified and adjusted in accordance with US GAAP.

These interim financial statements should be read in conjunction with the audited consolidated financial statements of the Group for the fiscal year ended December 31, 2011 and 2010.

Historical cost is used as the measurement basis unless otherwise indicated. In this regard it is noted that some valuations carried out by independent experts, which estimate the current value of the primary properties, indicate a potential significant revaluation of the carrying value of real estate of the Group, if the fair value method were applied.

The Company has considered subsequent events through August 2, 2012 being the date these audited consolidated financial statements ended December 31, 2011 were issued. Certain of these events will have significant effects on the financial statements for the year to December 31, 2012. The results of operations for the six months ended June 30, 2012 are not indicative of the results that may be expected for the full year. A description of such significant subsequent events is given in the relevant notes below.

The Euro is the functional currency of all companies included in these consolidated financial statements.

Major acquisitions and divestments

In line with the strategy to expand operations in the real estate and hotels business areas, on January 1, 2011 Galzignano Terme Golf & Resort S.p.A, a subsidiary of CR&P, acquired 100.00% of the equity capital of Terme di Galzignano S.p.A (“TdiG”). The cost of acquisition of TdiG of €4.99 million was paid in a series of cash payments completed during 2011.

Using equity ratio method, the percentage of ownership held indirectly by the Company in TdiG is 97.25%.

The primary asset of TdiG is a resort spa located in the Euganean Hills, a few miles from Padua. The complex consists of four four-star hotel, a nine hole golf course with putting green, driving range and clubhouse, a revitalizing center and spa, six indoor and outdoor pools, two sports pools, six tennis clay courts, a jogging and shopping center. The complex is surrounded by 350,000 square meters of parkland.

The Company is working on the strategic repositioning of the complex to the highest standards in the industry. In particular:

- refurbishment and upgrading of the structure leading to the complete renovation of the hotels;

- diversification of the profiles of the four structures (family hotels, luxury hotels, leisure hotel); and

- partnerships between the individual hotels and international brands of high standing.

The balance sheet effects of the acquisition are summarized below:

Acquisition of Terme di Galzignano S.p.A.

	€’000
Net cash outflow		4,990
Net assets acquired		7,466
Badwill		(2,476	)

Following table summarizes the acquisition costs, which represent the fair value, of TdiG assets and liabilities:

Purchase price allocation for the acquisition of Terme di Galzignano S.p.A.

	January 1, 2011
Total purchase price		4,990
Allocated to:
Property, plant and equipment		25,580
Net working capital		1,205
Bank overdrafts		(848	)
Current maturity of long-term debt		(6,539	)
Long-term debt		(11,737	)
Provisions		(195	)
Badwill		(2,476	)

The badwill is recognized in the income statement.

Pro-forma disclosures on acquisition of Terme di Galzignano S.p.A.

Due to the acquisition date (January 1, 2011), no year-to-date pro-forma unaudited consolidated results of CR&P is shown.

Divestment of Laudatio ltd

In order to focus on the strategy of expanding the real estate and hotel businesses, Laudatio Ltd (owner of pleasure boats) has been sold. The Company sold all the issued equity capital of Laudatio Ltd on January 1, 2011.

The balance sheet effects of this disposal are summarized in the next table:

Divestment of Laudatio Ltd
	€’000
Inflow of cash and other assets		(830	)
Net assets divested		(830	)
Recognized gain/(loss)		0

Divestment of 50.00 % interest in Investimenti Industriali Triestini S.r.l.

A 50.00 % interest in the Company’s subsidiary Investimenti Industriali Triestini S.r.l. (“IIT”) (the owner together with another subsidiary, Enital S.r.l., of a part of the petrochemical & power plants in Livorno, Italy) was sold on January 1, 2011 to A. & E. Immobiliare S.a.s. The Company retained a 50% ownership and voting interest in IIT. The sale was aimed at sharing the expected financial commitment of the Group to the start-up and development costs of the project.

The balance sheet effects of this disposal are summarized in the next table:

Divestment of 50.00 % of Investimenti Industriali Triestini S.r.l.

	€’000
Inflow of cash and other assets		5
Net assets divested		(5	)
Recognized gain/(loss)		0

West Arfrican Enterprises Ltd. (United Kingdom) incorporation

West Arfrican Enterprises Ltd. was incorporated in March 2012 and the Group has a 75% interest in its issued share capital held through the Group’s parent company.

The West Arfrican Enterprises Ltd. was established to hold the companies acquisitions of the Group in Africa in the future.

Guinean Energy Enterprises S.A. (Republic of Guinea) incorporation

Guinean Energy Enterprises S.A. was incorporated in April 2012 and the Group has a 95% indirect interest (71.25 calculating as equity ratio method) in its issued share capital held through West African Enterprises Ltd., the Group’s african sub-holding.

The Guinean Energy Enterprises S.A. was established to seek to exploit opportunities in the Republic of Guinea and in particular opportunities in oil palm plantations, construction and operation of power plants, real estate development and construction and operation of hotels.

Antonio S.r.l. spin-off

It has been decided to split the subsidiary Antonio S.r.l. (“Antonio”) into two entities so that each can focus on its own operations. Antonio has transferred its industrial property assets and operations into a newly created company, CRP Immobiliare S.r.l. (“CRPI”), focused on industrial operations, and has distributed the shares of this new company to the existing shareholders of Antonio on a pro rata basis.

As a result CRPI will acquire total assets with a book value as at December 31, 2011 of €15.15 million and liabilities of €10.12 million. The equity of CRPI (assets less liabilities transferred) will amount to €5.03 million.

Set out below are details of assets and liabilities transferred:

TRANSFERRED ASSETS	€/000
Tangible assets
Cars		44
Investment in suibsidiaries, associates and other companies
Comunicazioni Globali S.r.l.		3
Sacomar S.r.l. in liquidazione		5
Investimenti Immobiliari S.r.l.		5
Aros S.r.l.		100
Intermedia Finance S.p.A.		372
Life insurance policy		250
Total Investment in suibsidiaries, associates and other companies		735
Assets held for resale
Properties held for resale		4.933
Receivables
Receivables from Aral rl		5.464
Receivables from I.IMM.RI SRL		3.757
Receivables from Aros Srl		215
Total receivables		9.436
TOTAL TRANSFERRED ASSETS		15.148
TRANSFERRED LIABILITIES		€/000
Financial debt
Long term debt		1.501
Bank overdraft		496
Total financial debt		1.997
Other current liabilities
Shareholder loans		1.129
Payables to Ripa S.r.l.		475
Payables to Preneste Re srl		5.654
Total other current liabilities		7.258
Other non-curent liabilities
Advance payment on property		169
Notes paybles		700
Total other non-current liabilities		869
TOTAL TRANSFERRED LIABILITIES		10.124
TOTAL TRANSFERRED EQUITY		5.024

In March, 2012 – after the spin-off – there was a sale of participation in Antonio to third parties which will impact the consolidated financial report for the six months period ended June 30, 2012. In particular, included in the assets held by Antonio is a building located in Via Brussels in Rome which is the subject of litigation. As a result, the Group has benefited in 2012 from the elimination of the associated risk.

Pro-forma disclosures on Antonio S.r.l. spin-off

Due to the fiscal effect of the spin-off date (January 1, 2011), no six-months-period-to-date pro-forma unaudited consolidated results of CR&P is shown.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, cash on current accounts with banks, bank deposits and other highly liquid short-term investments with original maturities of less than three months.

Accounts receivable and loans issued

Receivables and loans issued are stated at cost less an allowance for doubtful debts. Management quantifies this allowance based on current information regarding the customers’ and borrowers’ ability to repay their obligations. Amounts previously written off which are subsequently collected are recognized as income.

Investment in associates and other companies

Investments in associates are accounted for under the equity method.

Investments in other companies are accounted for under the historical cost.

The impairment losses are determined primarily on the basis of critical information concerning the issuer, if known and assessable.

Property, plant and equipment

Property, plant and equipment are stated at acquisition cost less accumulated depreciation and adjustments for impairment losses. Property, plant and equipment also includes assets under construction and plant and equipment awaiting installation.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in an item of property, plant and equipment. All other expenditures are recognized as expenses in the consolidated statement of income as incurred.

Capitalization ceases when construction is interrupted for an extended period or when the asset is substantially complete.

Where funds are borrowed specifically for the purpose of acquiring or constructing a qualifying asset, the amount of interest costs to be capitalized in a period on that asset is the actual interest cost incurred on the borrowing during the period.

Depreciation is charged on a straight-line basis over the estimated remaining useful lives of the individual assets.

Depreciation commences from the time an asset is put into operation. Depreciation is not charged on assets to be disposed of or on land. The range of the estimated useful lives is as follows:

- Buildings and constructions: 33 years

- Machinery and equipment: 2 – 20 years

- Others: 5 years

Real estate assets are stated at historical cost. Expenditures for repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method. Buildings are depreciated over their estimated useful lives of approximately 33 years, with the rates used for individual buildings being based on the property’s age, overall physical condition, type of construction materials and intended use.

Improvements to buildings are depreciated over the shorter of the estimated useful life of the improvement or the remaining useful life of the building at the time the improvement is completed.

Real estate investments and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

Due to the recent date of acquisition of most of the real estate investments and/or that they are the subject of ongoing building development and the consequent inability to assess their longer term earning capacity, no impairment test has been performed to date.

Assets to be disposed of are separately presented on the balance sheet and reported at their historic cost since the expected realization value is greater. These assets and the relevant liabilities are classified separately as held for sale in the consolidated balance sheet and are no longer depreciated. An analysis of these assets and liabilities is presented separately in the relevant section of these notes.

Assets and liabilities held for resale

In connection with the strategy of concentrating in the portfolio of hotel, power, and plantations investments, in the periods presented we entered into various negotiations with potential purchasers to sell properties as detailed in the note n. 5. Most of these sales are concluded at the date of presentation of the interim financial statements ended June 30, 2012.

The Company has assessed that the potential realizable (or realized) value of these assets at the market value are higher than the net asset carrying value and accordingly no impairment has been provided for.

Goodwill and Other Intangible Assets

Since the Company doesn’t have the technical and evaluation information to reassess the correct identification of the assets acquired and the liabilities assumed, based on fair value, in application of purchase accounting to our acquisitions, tangible and identifiable intangible assets and liabilities of the acquired entity are recorded at the acquisition cost. According to information held by the Management, the acquisition cost of properties held by the Group does not differ significantly from the fair value at the date of the acquisition. Where the investment in subsidiary is greater than the net asset value the excess is treated as goodwill arising on consolidation in the balance sheet. Where the investment in subsidiary is smaller than the net asset value the difference is initially recognized as a gain in the first consolidated income statement, then accounted as accumulated earning within equity of the following years.

Goodwill and indefinite-life intangible assets are not amortized, but are tested for impairment at least annually.

Due to the recent date of acquisition of most of the real estate investments and/or that they are the subject of ongoing building development and the consequent inability to assess their longer term earning capacity, no impairment test has been performed to date.

Leasing

All lease agreements of the Company and its subsidiaries are accounted for as finance leases. The Company recognizes the asset and associated liability on its balance sheet. Finance leases are capitalized at the beginning of the lease at the lower of the fair value of the leased property and the present value of minimum lease payments. Each installment of the lease is apportioned between the liability and finance charges so as to achieve an equal reduction in capital due for each payment made at constant rate on the remaining financial balances.

Derivative financial instruments

The Company uses derivative financial instruments principally for the management of exposure to variable interest rates on long-term financing. All derivative financial instruments are classified as assets or liabilities and are accounted for at trade date. The Company measures all derivative financial instruments based on fair values derived from market prices of the instruments. Changes in the fair value of a derivative that is significant and that is designated and qualifies as a fair value hedge, along with the loss or gain on the hedged asset or liability, are recorded in the income statement.

Currently there is only one derivative instrument hedging the risk of variable interest rates (an “interest rate cap”), the notional amount of is €4 million. This derivative instrument hedges the risk from change of interest rate on a mortgage loan facility with “bullet” repayments originally of € 8 million of which € 6.6 million is outstanding and included on the consolidated balance sheet as at December 31, 2011.

The change in fair value of this derivative instrument over the period January 1, 2009 to December 31, 2011 is negligible and, therefore, no impact has been reflected on the CR&P consolidated income statements. At June 30, 2012, the Company has recorded in the six months income statement the change in fair value of the derivative instrument mentioned above as loss of € 27 thousands on the hedged liability.

Shareholders loans

Shareholders loans to the Group are all non-interest bearing. Italian law provides that the shareholders loans to a limited liability company ("S.r.l.") are not preferred and their repayment is subordinated to other categories of debt. As a result all shareholder loans are classified as non-current liabilities.

Severance indemnity fund

According to Italian accounting principles reflecting local law and applicable employment contracts, certain post-employment benefits accrue during the period of employment. Under U.S. GAAP, post-employment benefits are defined either as de fined contribution plans or defined benefit plans.

In defined contribution plans, the company's obligation is limited to the payment of contributions to the Government or to a fund. Defined benefit plans are pension, insurance and healthcare programs which cover the company's obligation, even implicitly, to provide the benefits due to former employees. The liabilities associated with defined benefit plans are determined on the basis of actuarial assumption (discounting) and accrued in the financial statements over the employment period required to obtain the benefits.

The severance indemnity fund required by Italian law is a liability similar to a defined benefit plan, which, however, according to Italian accounting principles, is not subject to discounting. Given the small number of Group employees any difference between the present provisions in the financial statements prepared in accordance with Italian GAAP and discounted value of these benefits is considered to be immaterial.

Reserves

Reserves are represented by provisions of profits required by law, the Company statute and the decisions of directors.

Commitments and contingencies

a) As of June 30, 2012, the following guarantees have been provided or obtained (no changes occurred subsequently):

Guarantees given by the Group to banks or third parties

	€’000
Mortgage on property		111,113
Sureties		1,800
Pledges		250
Total		113,163

Guarantees given on behalf of the Group by third parties

	€’000
Sureties		106,692
Pledges		492
Total		107,184

Guarantees given by banks on behalf of the Group

	€’000
Sureties		5,223
Total		5,223

Sureties received from third parties include an amount of €78,992,000 under a warranty deed jointly signed by third parties and related parties in connection with the financial leasing agreement having an initial value of €38,730,000 entered into by Ripa Hotel & Resort S.r.l.

b) The Company and certain subsidiaries are defendants in legal actions in the normal course of business. Based on the advice of legal counsel, management believes that the amounts recognized and recorded as debt provisions or asset negative adjustments are sufficient to cover probable losses in connection with such actions.

The risk provisions or negative adjustments are recognized when in accordance with the opinion of legal counsel the liability is probable and measurable.

Stockholder’s equity

As of today, the share capital of CR&P is represented by one share, fully paid as to €98,000. Mr. Antonio Conte and Ms. Maddalena Olivieri each contributed 50% of the share capital of CR&P. In accordance with Italian law, this share is registered with the Register of Companies at the Italian Chamber of Commerce.

Revenue Recognition

In order to recognize revenue four basic criteria must be met:

- existence of persuasive evidence that an arrangement exists;

- delivery has occurred or services have been rendered;

- the seller’s price to the buyer is fixed and determinable; and

- collectability is reasonably assured.

The Group’s revenue recognition policies are consistent with these criteria. The judgments involved in revenue recognition include understanding the terms of agreements and determining the appropriate time to recognize revenue for each transaction based on such terms. Each transaction is evaluated to determine: (i) at what point in time revenue is earned, (ii) whether contingencies exist that impact the timing of recognition of revenue and (iii) how and when such contingencies will be resolved. The timing of revenue recognition could vary if different judgments were made.

Taxes

Income taxes

Italian income taxes comprise national (27.50%) and regional (approximately 5%) income tax. The statutory composite enacted tax rate applicable in the periods presented is approximately 32.50%.

The Group has not taken advantage of the tax consolidation facility allowed by the Italian Fiscal Authority. Provisions for deferred taxes liabilities are always recognized, whist deferred tax assets are only recognized when their future recovery is considered probable.

To date there are some matters pending with the Italian Tax Authorities, which the Group's management believes will not occur any significant additional liabilities, also based on the opinion expressed by the Group’s fiscal advisors.

The Group's management believes that even in the event of any future investigations, no additional tax liabilities would emerge beyond those already recorded in the audited financial statements.

Tax losses carryforwards

Under Italian tax law the operating loss carryforwards available for offset against future profits can be used indefinitely. Operating loss carryforwards are only available for offset against national income tax, in the limit of 80% of taxable annual income.

The following is a summary of operating losses carried forward available for offset against future profits.

TAX LOSSES CARRYFORWARDS (in Euros)
Company	Tax losses, total
Conte Rosso & Partners S.r.l.		-
8 + 23 Immobiliare Srl		-
Antonio srl		1.391.773,00
Aral Immobiliare Srl		186.860,00
Aros Srl		336.174,00
Bruno Buozzi Immobiliare Srl		-
Carciano Immobiliare Srl		611.722,23
Enital Srl		878.367,00
Galzignano Terme Golf & Resort S.p.A.		79.062,00
Investimenti Immobiliari Srl		2.374.883,00
Investimenti Industriali Triestini Srl		15.515,00
Preneste Real Estate Srl		55.956,00
Primesint Srl		170.758,00
Ripa Hotel & Resort Srl		464.066,00
Terme di Galzignano SpA		2.736.996,00
TOTAL		9.302.132,23

Non-recognized subsequent events

Subsequent to June 30, 2012, the following events occurred. No adjustments have been made in the financial statements for the six months period ended June 30, 2012 for these events:

Merger of Terme di Galzignano S.p.A. and Galzignano Golf & Resort S.p.A.

In July, 2012 was approved the merger of Terme di Galzignano S.p.A. in Galzignano Golf & Resort S.p.A. Since Galzignano Golf & Resort S.p.A. has a 100% stake of Terme di Galzignano S.p.A., the merger will not result in any impact on the consolidated financial statements of the Group for the fiscal year ended December 31, 2012.

Outlook for future profitability

The group is currently in a start-up phase and is seeking to grow its business and has not yet reached managed all assets to create income. In particular, at this stage of development it is concentrating in acquiring suitable assets rather than on the achievement of profitability. Shareholders and management of CR&P are confident that these investments in future years will contribute to the profitability of the Group, when put in use or sold.

NOTES TO THE ACCOUNTS

1) Allowance for doubtful accounts

The provision for 2011 and for the six months period ended June 30, 2012 arises from the agreement relating to the property at Via Carciano, Rome, Italy (see Section “Advance payment on purchase and other current assets”) and reflects a partial uncertainty in the determination of the additional revenue established in the agreement, given the fact that the conditions for its payment are still pending.

2) Related parties receivables and payables

Related parties receivables and payables relate primarily to the CEO and shareholder, Mr. Antonio Conte.

The amount shown as receivables as at June 30, 2011 relates primarily to an interest-free loan to Mr. Antonio Conte, given to complete certain acquisitions, and which is repayable in 32 monthly installments. The amount outstanding is €3.1 million, of which €0.6 million is classified as current asset and €2.5 million as non-current asset.

The amounts shown as receivables for 2010 and 2009 relate primarily to collateral given to banks for the benefit of Mr. Conte. During 2011 the loans were repaid and collateral has been released.

3) Advance payment on purchase and other current assets

Advance payments are primarily deposit paid in connection with real estate being acquired as detailed in the table below.

Advance payment on purchase and other current assets	Juin 30, 2012		Dec. 31,2011		Juin 30, 2011		Dec. 31, 2010		Dec. 31, 2009
Advance payment on purchase		€'000		€'000		€'000		€'000		€'000
Roma, via Carciano, building				4.600		4.600		9.250		8.500
Salerno, Sala Abbagnano, land under development program		1.850		1.850		1.850		1.850		1.850
Petrochemical & power plant (ENITAL S.r.l.)										500
Roma, Via Tor Tre Teste, building										3.900
Terme di Galzignano golf, building, other plant and equipment								2.756		1.931
Total advance payment on purchase		1.850		6.450		6.450		13.856		16.681
Other current assets		150		158		35		2		1
Total		2.000		6.608		6.485		13.858		16.682

The property of Via Carciano, Rome, is held under a preliminary contract and a deposit has been paid. During 2011, an agreement has been reached for the refund of the deposit to the Company. The original amount of the deposit was €9.25 million. The refund of the deposit was completed in June, 2012.

Based on the agreement mentioned above, the Company has also the right to an additional premium on the sale of the property to a third party; such right occurred early in 2011 and the amount of the premium is being finalized.

4) Marketable securities

In 2009 the Company purchased listed bonds issued by Hypo Tirol Bank at a cost of €987,000. These bonds were sold during 2010 in a series of transactions with an overall result of neither gain nor loss.

The bonds were classified as securities available for sale and the carrying value was based on purchase price;

5) Real estate held for resale

The following are the real estate assets held for resale:

Assets held for resale	Juin 30, 2012		Doc. 31, 2011		Juin 30, 2011		Doc. 31, 2010		Doc. 31, 2009
	€ '000		€ '000		€ '000		€ '000		€ '000
Roma - Via Bruxelies, building				3.235		3.235		3.235		3.235
Anzio (RM) - Loc. via della Cannuccia, building		2.428		2.428		2.428		2.428		2.410
Todi (PG), Fraz. Rapaioli, building								300		300
Pisa, via San Martino, building				2.700		2.700		2.700		2.700
Pisa, via Gereschi, building								1.427		1.427
Total		2.428		8.363		8.363		10.090		10.071

Liabilities associated with Assets held for resale	Juin 30, 2012		Dec. 31, 2011		Juin 30, 2011		Dec. 31, 2010		Dec. 31, 2009
Roma - Via Bruxelles, building				2.413		2.413		2.338		2.237
Pisa, via Gereschi, Building								1.308		1.286
Todi (PG), Fraz. Rapaioli, building								100		100
Total		2.413		4.826		6.159		1.408		1.386

6) Investment in associates

The Group owned in 2009 a 35% equity interest in Green Hotels S.r.l. at a cost of €4,000. Green Hotels S.r.l. made a small loss in 2009. No impairment testing was undertaken in respect of this holding due to the immateriality of the value of the investment.

7) Investment in other companies

Of the total of €387,000 as at June 30, 2012, €372,000 (€372,000 at June 30, 2011) is represented by the investment in Intermedia Finance S.p.A. which is carried at cost. In 2009 was also the investment in Intermedia Holding S.p.A. of € 1,519,000), which has been divested in 2010. These acquisitions have been made with the aim of diversifying investments portfolio.

8) Property, plant and equipment

Property, plant and equipment comprises:

Property, plant and equipment	Juin 30, 2072			Dec. 31, 2011			Juin 30, 2011			Dec. 31, 2010			Dec 31, 2009
	€'000			€ '000			€'000			€'000			€'000
Hotel Ripa building, plant end equipment		41.853			41.623			41.646			41.646			41.029
Terme di Galzignano golf, building, other plant and equipment		40.415			40.420			40.505
Via Buozzi, Rome, building		3.300			3.300			3.240			3.240			2.633
Petrochemical and power plant (ENITAL S.r.l.)		14.817			14.284			14.490			15.024			650
Porto Cervo (OT), Sardinia, Building					833			833			833			833
Porto Rotondo (OT), Sardinia, Building					421			421			421			421
Fregene (RM) - Via Capo d'Orlando, building					1.456			1.456			1.456			1.452
Trieste - Loc. Villa Opieina. industrial building		2.523			2.523			2.523			2.523			2.523
Milano, via Azario, building		7.205			7.205			7.205			6.708
Other properties, plant and equipment		2.344			2.020			1.570			2.673			6.698
Less accumulated depreciation		(21.359	)		(20.255	)		(19.244	)		(4.067	)		(2.779	)
Total, net		91.098			93.830			94.645			70.457			53.460

9) Goodwill

Goodwill comprises:

Goodwill	€'000		€'000		€'000		€'000		€'000
	Juin 30, 2012		Dec. 31, 2011		Juin 30, 2011		Dec. 31, 2010		Dec. 31, 2009
Ripa Hotel & Resort S.p.A. - acquisition of hotel management business unit in 2008		1.149		1.149		1.149		1.149		1.149
Consolidation difference		416		416		416		416		416
Total		1.565		1.565		1.565		1.565		1.565

The greater part, €280,000, of goodwill arising on consolidation results from the acquisition of Investimenti Immobiliari S.r.l. in 2008.

10) Other Intangible Assets

As at June 30, 2012 other intangible assets includes an interest in a time share property with a net value of €1.4 million, which was separately identified as a result of the acquisition of a subsidiary 8 +23 S.r.l. in 2008. The amount of time share property was € 2.5 million in 2010 and 2009, then impaired to reflect its fair value.

In the six months period ended June 30, 2011 are also € 0.7 million for improvements expenses to property of Via Carciano, Rome (owned by the subsidiary company Carciano Immobiliare S.r.l.) being purchased (see section 3 - Advance payment on purchase and other current assets). Due to a transaction which has been signed with third party during 2011, whose effects are still pending, such expenses has been written-off.

The remaining other intangible assets primarily comprise software and other minor items which are being amortized over their estimated useful lives ranging up to 5 years.

11) Other financial assets

In respect of each of June 30, 2012 and 2011 other financial assets comprises of a life insurance policy put in place as collateral for a bank overdraft.

12) Other non-current receivables

Other non-current receivables comprise primarily (June 30, 2012: € 6.0 million, June 30, 2011: €4.48 million) of payments made for the acquisition of a multiuse property in Sora (Frosinone), Italy. The property is being acquired from a bankrupt estate pursuant to an agreement entered into with the judge supervising the bankruptcy. The Group is making stage payments for the benefit of the bankruptcy creditors and upon completion of such payments title to the property will be transferred to the Group.

13)Bank overdrafts and Long term debt

Amounts of financial debt due to non-related parties are:

Financial debt	€'000		€ '000		€'000		€'000		€'000
Current liabilities	Juin 30, 2012		Dec. 31, 2011		Juin 30, 2011		Dec. 31, 2010		Dec. 31, 2009
Mortgage loan on property		10.103		13.852		13.393		3.688		1.241
Leasing		1.283		1.268		1.888		2.050		633
Bank overdrafts		10.605		10.332		12.524		9.359		6.858
Total		21.991		25.452		27.805		15.097		8.732

Long term liabilities	Juin 30, 2012		Dec. 31, 2011		Juin 30, 2011		Dec. 31, 2010		Dec. 31, 2009
Mortgage loan on property		17.841		20.707		22.018		17.133		9.344
Leasing		29.236		29.585		27.209		28.194		32.726
Total		47.077		50.292		49.227		45.327		42.070

The following table sets out the main terms of the long-term financial debt (€’000):

LONG-TERM FINANCIAL DEBT VS. NON-RELATED PARTIES - SIGNIFICANT TE RMS OF CO NTRACT
Company	Object	Asset pledged	Date of signing	Type of debt	Maturity (year)	Interest rate	Installments frequency	Initial capital (€/000)		Installments maturity as at December 31, 2012 (€/000)		Installments maturity as at December 31, 2013 (€/000)		Installments maturity as at December 31, 2014 (€/000)		Installments Maturity as at December 31 2015 (€/000)		Installments maturity as at Decemberr 31, 2016 (€/000)
8 + 23 IMMOBILIARE S.R.L.	Time sharing - Punta Ala. purchasing	-	Sep-08	UNSECURED LOAN	5	Variable rate(200 b p spread * Eunbor 3 mth)	quarterly		1,500		384		405		-		-		-
CONTE ROSSO & PARTNERS S.R.L.	Building purchase	Building. Rome. V 'e B Buazzi	18-07-11	FINANCIAL LEASING	18	Variable rate (Eunbor 3 mth)	monthly		3,300		94		99		103		108		112
CONTE ROSSO & PARTNERS S.R.L.	Cash facility	-	28-12-11	UNSECURED LOAN	3	variable rate (500 b p spread -Eunbor 3 mth)	monthly		1,000		312		333		355
ANTONIO S.R.L.	Building Purchase	Building, Villa Opicina (TS)	16-05-08	MORTGAGE LOAN	10	Fixed rate (58%)	monthly		2,000		180		190		192		199		204
ANTONIO S.R.L.	Building purchase	Building. Fregene 1RM1	19-07-07	MORTGAGE LOAN	20	Variable (50 b p spread * Eunbor 3 mth)	monthly		1.000		36		38		40		42		45
ANTONIO S.R.L.	Cash facility	-	18-12-08	UNSECURED LOAN	4.75	Variable rate (376 b.p spread * Eunbor 1 mth)	half-yearly		2,000		515		549		-		-		-
ARAL IMMOBILIARE S.r.l.	Building purchase	Building. Parta Cervo	21-06-07	MORTGAGE LOAN	10	Variable rate (100 b p spread * Eunbor 3 mth	quarterly		650		58		60		61		64		66
ENlTAL S.r.l.	Building and plant purchase	Petrochemical and energy plant	13-12-07	MORTGAGE LOAN	13	Variable  rate (2.8%)	half-yearly		3,500		183		193		203		214		226
ENITAL S.r.l.	Building and plant purchase	Petrochemical and energyplant	13-12-07	MORTGAGE LOAN	13	Variable rate (2.8%)	half-yearly		2,888		102		104		107		110		113
INVESTIMENTI IMMOBILIARI S.r.l.	Building Improvement	Building M Ian. Via As ano	16-02-10	MORTGAGE LOAN (“bullet” reimbursement plan)	3	Variable rate (215 bp spread * Eunbor 3 mth)	quarterly (interests only-based)		8,000		-		8,000		-		-		-
RlPA HOTEL & RESORT S.r.l.	Building purchase	Hole1 in Rome	24-04-08	FINANCIAL LEASING	20	Variable Spread indexed on the IRS * Eunbor 3 mth (*)	monthly		38.730		559		585		612		640		669
RlPA HOTEL & RESORT S.r.l.	Building Purchase	Buiding. Pisa S. Marti no	10-08-06	MORTGAGE LOAN	10	Fixed, rate (2 25%)	half-yearly		472		41		42		43		44		45
RIPA HOTEL & RESORT S.r.l.	Building purchase	Buiding. Pisa S Martino	17-07-03	MORTGAGE LOAN	15	Fixed rate (2 45%)	half-yearly		720		52		53		55		56		57
RlPA HOTEL & RESORT S.r.l.	Building purchase	Building. Pise S. Martino	17-07 03	MORTGAGE LOAN	15	Fixed rate (2 45%)	half-yearly		384		28		28		29		30		31
RIPA HOTEL & RESORT S.r.l.	Building purchase	Building Pisa Via Gereschi	aug-2006	MORTGAGE LOAN	10	Fixed rate (2 25%)	half-yearly		280		29		30		31		31		32
RlPA HOTELS. RESORT S.rl.	Building Purchase	Building. Pisa Via Gereschi	aug-2006	MORTGAGE LOAN	15	Fixed rate(2 45%)	half-yearly		335		24		25		25		26		27
TERME DI GALZIGNANO S.r.l.	Building Purchase	Hotel in Galzignano	30-12-03	MORTGAGE LOAN	20	Variable rate (150 b p spread * Eunbor 3 mth)	half-yearly		20,000		1,378		1,379		1.379		1,379		1,379
TERME Dl GALZIGNANO S.rl.	Cash facility	Hotel in Galzignano	21-07-10	MORTGAGE LOAN ("bullet" reimbursement Plan)	2.5	Variable rate (10 b.p spread * Eunbor 6 mth - floor 2.5% 1	half-yearly (interests only-based)		5,000		5,000		-		-		-		-

(*) ^{The interest rate of the financial lease afRtPA was roncgaliatocftn January of 2012}

As at June 30, 2012, there are no unused credit lines.

14) Shareholder’s loans

In order to strengthen the Group’s capital position and taking into account future financial commitments to enable the real estate investment and development projects to be progressed, in the last quarter of 2011, Mr. Conte waived repayment of a shareholder’s loan of € 23.8 million.