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THE PITTINI GROUP IN FIGURES page 6

Fin Fer S.p.A. CONSOLIDATED BALANCE SHEET OF 2012 Board of Directors page 11 Board of Directors’ Report page 12 Consolidated Balance Sheet at 31st December 2012: Balance Sheet page 18 Income Statements page 22 Notes to the Financial Statements page 25 Indipendent Auditor’s Report page 47

Ferriere Nord S.p.A. FINANCIAL STATEMENTS 2012 Board of Directors page 51 Board of Directors’ Report page 52 Financial Statements at 31st December 2012: Balance Sheet page 58 Income Statements page 62 Notes to the Financial Statements page 64 Report of the Board of Statutory Auditors page 92 Indipendent Auditor’s Report page 94

PITTINI GROUP COMPANIES RECLASSIFIED FINANCIAL STATEMENTS 2012 Fin Fer S.p.A. page 98 S.I.A.T. S.p.A. page 100 La Veneta Reti S.r.l. page 102 Pittini Stahl G.m.b.H. page 104 Kovinar D.o.o. page 106 Trafilerie e Zincherie di Celano S.r.l. page 108

The Pittini Group in figures The Pittini Group in Figures

THE PITTINI GROUP IN FIGURES values expressed in thousands of euro

% of % of % of % of % of 2012 2011 2010 2009 2008 sales sales sales sales sales

Revenues 982,028 1,028,721 839,973 674,420 1,317,944 EBITDA* 43,664 4.4% 57,988 5.6% 42,666 5.1% 31,540 4.7% 108,072 8.2% EBIT** 6,131 0.6% 18,907 1.8% 7,022 0.8% (6,629)(1.0%) 58,699 4.5% Net interest expenses 3,293 0.3% 5,387 0.5% 4,042 0.5% 5,459 0.8% 10,846 0.8%

Net income, Group 3,020 0.3% 9,082 0.9% 2,395 0.3% (9,578)(1.4%) 24,873 1.9%

Opening shareholders’ equity, Group 186,857 177,775 175,398 190,075 120,959 R.O.E. (Net income/Opening shareholders’ 1.6% 5.1% 1.4% (5.0%) 20.6%

Total fixed assets 163,855 167,247 177,186 198,733 213,891 Net financial debt (41,945) (82,480) (111,420) (101,722) (115,893)

Net capital employed 229,901 269,423 289,378 277,429 306,057 R.O.I. (EBIT/Net capital employed) 2.7% 7.0% 2.4% (2.4%) 19.2%

Investments 21,477 21,618 15,104 18,292 40,001

Employees 1,203 1,208 1,248 1,305 1,236

* Earnings Before Interests, Taxes, Depreciation and Amortization **Earnings Before Interests & Taxes

 The Pittini Group in Figures

Shareholders, the slowdown of global economy and recession of European economy were still deeply felt in 2012. Economic difficulties led to en even lower growth than in 2011. In Italy, demand reduction is still persisting and is dramatically affecting the production system. In this scenario adversely affecting the building market, the Pittini Group was able to contain the effects of domestic market shrinking by turning to exports so as to keep the 2011 volumes unchanged through both cost reduction actions and rational reorganisation of manufacturing units, to achieve a positive margin and to protect market shares. The income of the Pittini Group in 2012 was about euro 982 million against euro 1,030 million in 2011, which marks a decrease by 5% mostly resulting from decrease in prices. The Group EBITDA recorded euro 44 million and reached 4.4% of income, which amounts to a decrease compared with the result of the previous year (euro 58 million). EBIT was positive by about euro 6.1 million. The Group net income after taxes reached euro 3 million, i.e. a decrease over the previous year (euro 9.1 million). The year-end net financial debt was euro 41.9 million, i.e. 22% of the final shareholders’ equity, which amounts to a marked improvement over 2011 (44%). The Chairman



Fin Fer S.p.A Consolidated Balance Sheet of 2012

Fin Fer S.p.A. Board of Directors

Federico Pittini Chairman Andrea Pittini Marina Pittini Ottavino Di Filippo Vincenzo Chiari

Statutory Auditors

Standing Members

Gianfranco Romanelli Chairman Mario Marino Giuseppe Varisco

Alternate Members

Maurizio Paiola Claudio Sambri

Osoppo (Udine) - Zona Industriale Stock capital € 30,000,000 fully paid up Registered in the Register of Companies of Udine Tax no. and V.A.T. no. 00490250305 Fin Fer S.p.A.

FIN FER S.p.A. DIRECTORS’ REPORT ON 2012 CONSOLIDATED FINANCIAL STATEMENTS

Shareholders, the slowdown of global economy and recession of European economy were still deeply felt in 2012. Economic difficulties, which were systemic in some countries, entailed an even lower growth (3.1%) than in 2011 (3.8 %). In Italy (where since 2008 the manufacturing sector has been losing 30% of its capacity), reduction of demand is still dramatic and adversely affects the production system, mainly supported by exchanges with foreign countries pending the approval of business supporting plans and easing of credit restraints by the banking system. The steel sector Global steel production increased by 2.3%, whereas European steel production decreased by 5.3 % (around 1.5 billion tons as in 2011). In Europe, there was an excess of production capacity of about 50 million tons and consumption decreased by 9.6 %. In Italy, there was an excess of production capacity of about 15 million tons (more than 50% in some sectors), production (around 27 million tons) lost 5.3%, mostly in the second half of the year, and consumption decreased by 23.6%, reflecting the dramatic fall in the building and mechanical sectors. The current economic situation makes vain the efficiency and competitiveness laboriously gained over the last years by companies like those belonging to your Group that invested in advanced technology and structural reorganisation.

THE PITTINI GROUP In Italy, the building sector, to which the steel produced by the companies belonging to the Group is mostly destined, is dramatically affected. To counteract such negative effects and to face the reduction of volumes on the domestic market, exports were promoted. There was also a strong decrease in selling prices of products resulting from the fall in demand and inevitable very aggressive commercial policies on the various markets. The contribution given by the trends of raw materials, especially ferrous scraps (decrease by 4%), was very scarce. On the one side, they were affected by the increase in demand in emerging countries; on the other side, they were affected by the decrease in European countries resulting from reduced production. Lastly, the incidence of excise duties on many cost inputs such as methane and electricity is still very high.

FIN.FER. S.p.A. (Parent company) Economic and financial data (EUR/.000) 2011 Consolidated 2012 Consolidated Net revenues 1,028,721 982,028 Depreciation 33,057 31,368 Ebitda 57,988 43,664 Ebit 18,907 6,131 Profit (loss) for the year 9,087 3,023 Investments in property, plant and equipment 21,618 21,477 Shareholders’ equity 186,943 187,956 Net financial position (82,480) (41,945) Average number of staff members 1,208 1,203 Profitability ratio (%)

Ebitda/net revenues 5.6 4.4 R.O.S. 1.8 0.6 Financial expenses (income)/net revenues 0.5 0.3 Labor cost/net revenues 5.7 6.0 Structures ratios (%) Shareholders’ equity/fixed assets 111.8 114,7 Shareholders’ equity/total liabilities 31.8 33,7 Invested capital/shareholders’ equity 144.1 122,3 Net financial position/shareholders’ equity 44.1 22,3

12 Consolidated Balance Sheet of 2012

The holding company is always leading and coordinating the rationalisation plan for the production system of all the companies belonging to the Group so as to minimise the impact of reduced production flows on costs and overhead expenses. It is mainly focused on actions aimed at supporting and raising awareness of research and development activities at its subsidiaries in order to strengthen and improve their competitiveness.

SHAREHOLDINGS

Ferriere Nord S.p.A. Financial and economic figures (EUR/,000) 2011 2012 Net revenues 963,655 923,239 Depreciation 29,109 27,390 Ebitda 49,427 35,315 Ebit 15,007 3,225 Profit (loss) for the year 7,965 1,222 Investments in property, plant and equipment 18,192 19,559 Shareholders’ equity 155,544 156,766 Net financial position (57,018) (15,504) Average number of staff members 860 867 Profitability ratios (%) Ebitda/net revenues 5.1 3.8 R.O.S. 1.6 0.3 Financial expenses (income)/net revenues 0.5 0.3 Labor cost/net revenues 4.7 5.0 Structure ratios (%) Shareholders’ equity/fixed assets 116.6 119.3 Shareholders’ equity/total liabilities 29.0 30.9 Invested capital/shareholders’ equity 136.7 109.9 Net financial position/shareholders’ equity 36.7 9.9

In the scenario of crisis that is still affecting the building market, the company was able to compensate the reduction on the domestic market with exports so as to keep the volumes of the previous year unchanged. Turnover decreased by 4% over 2011, only reflecting the reduction of average selling prices. Exports were 38% of flows (30% in 2011). Thanks to actions aimed at reducing costs and rationalising manufacturing processes, a positive margin was achieved and market shares were protected. According to estimates, at the end of 2013, the figure for turnover could be about euro 850 million.

S.I.A.T. S.p.A. Financial and economic figures (EUR/,000) 2011 2012 Net revenues 73,312 68,689 Depreciation 2,227 1,839 Ebitda 3,723 2,122 Ebit 1,400 (302) Profit (loss) for the year 831 (359) Investments in property, plant and equipment 340 614 Shareholders’ equity 9,937 9,578 Average number of staff members 138 136 Profitability ratios (%) Ebitda/net revenues 5.1 3.1 R.O.S. 1.9 (0.4) Financial expenses (income)/net revenues 0.2 0.2 Labor cost/net revenues 6.5 7.4

13 Fin Fer S.p.A.

Structure ratios (%) Shareholders’ equity/fixed assets 100.8 111.0 Shareholders’ equity/total liabilities 25.1 26.6 Invested capital/shareholders’ equity 239.0 189.8 Net financial position/shareholders’ equity 139.0 89.8

The domestic market for the products manufactured by this company, excluding those manufactured by the Pittarc division, was especially affected by the crisis. Volumes and prices of drawn wires for industrial applications recorded a decrease over the previous year. On the contrary, welding products placed on the markets of emerging countries achieved good contribution margins. However, owing to market criticalities, it is still attempting to strike a difficult balance between industrial and economic aspects taking into account its size. According to estimates, at the end of 2013, the figure for turnover could be about euro 64 million.

LA VENETA RETI S.r.l. Financial and economic figures (EUR/,000) 2011 2012 Net revenues 38,546 45,283 Depreciation 577 597 Ebitda 25 194 Ebit (632) (800) Profit (loss) for the year (816) (493) Investments in property, plant and equipment 1,127 334 Shareholders’ equity 7,973 7,480 Average number of staff members 56 52 Profitability ratios (%) Ebitda/net revenues 0.1 0.4 R.O.S. (1.6) (1.8) Financial expenses (income)/net revenues 0.4 0.2 Labor cost/net revenues 5.9 4.5 Structure ratios (%) Shareholders’ equity/fixed assets 64.2 61.5 Shareholders’ equity/total liabilities 24.4 22.1 Invested capital/shareholders’ equity 245.8 220.4 Net financial position/shareholders’ equity 145.8 120.4

The sector of prefabricated units, which is typical of large public works and industrial building works, remains seriously undermined by the lack of initiatives aimed at developing the infrastructure system. The traditional reference market for the products of this company deteriorated. The company pursued the reorganisation of its structure and staff. Furthermore, it increased volumes thanks to niche products intended for the agro-energy market, thus properly covering its overhead expenses. Its production still falls within the Group strategy and is partly commercially profitable for the company. According to estimates, at the end of 2013, the figure for turnover could be about euro 40 million.

TRAFILERIE E ZINCHERIE DI CELANO S.r.l. Financial and economic figures (EUR/,000) 2011 2012 Net revenues 36,086 34,639 Depreciation 674 743 Ebitda (503) 162 Ebit (1,224) (1,024) Profit (loss) for the year (1,513) (1,110) Investments in property, plant and equipment 600 454 Shareholders’ equity 2,465 1,355 Average number of staff members 85 83

14 Consolidated Balance Sheet of 2012

Profitability ratios (%) Ebitda/net revenues (1.4) 0.5 R.O.S. (3.4) (3.0) Financial expenses (income)/net revenues 0.9 0.5 Labor cost/net revenues 9.7 9.3 Structure ratios (%) Shareholders’ equity/fixed assets 75.1 46.5 Shareholders’ equity/total liabilities 11.1 7.0 Invested capital/shareholders’ equity 358.2 876.6

The system crisis also persisted in 2012 and affected the environmental engineering market to which the products of the company are devoted and which mainly deals with public procurements, whose demand is significantly lower. The remaining products (fences, electro-welded panels and screenbacks) also recorded a further decrease. The reorganisation of plants and production systems is still under way to make the company more efficient. However, the dramatic condition on the market for the products manufactured by this company requires important reflections on the actions to be taken. According to estimates, at the end of 2013, the figure for turnover could be about euro 20 million.

KOVINAR D.o.o. Financial and economic figures (EUR/,000) 2011 2012 Net revenues 27,901 25,467 Depreciation 250 227 Ebitda 451 280 Ebit (261) 41 Profit (loss) for the year (312) 40 Investments in property, plant and equipment 45 605 Shareholders’ equity 4,489 4,529 Average number of staff members 60 55 Profitability ratios (%) Ebitda/net revenues 1.6 1.1 R.O.S. (0.9) 0.2 Financial expenses (income)/net revenues 0.2 0.1 Labor cost/net revenues 4.9 5.3 Structure ratios (%) Shareholders’ equity/fixed assets 190.7 165.9 Shareholders’ equity/total liabilities 33.7 34.9 Invested capital/shareholders’ equity 82.4 77.3

Crisis is still affecting the traditional markets (Slovenia, Croatia) for the products manufactured by this company. Investment in building projects further decreased in 2012. However, the strategic importance of the presence of the company on the markets of neighbouring countries is confirmed in terms of both logistics and trade. The action plan to review the plant system and production structure in order to bring again efficiency to more competitive levels is being pursued. According to estimates, at the end of 2013, the figure for turnover could reach euro 23 million.

PITTINI STAHL GMBH This company, based in Germany, markets products manufactured by the companies belonging to the Group on two important markets: Austria and Germany.

ALPE ADRIA ENERGIA S.p.A. In 2012, like in previous financial years, the activity to obtain the authorisations required to implement the grid interconnection project between Italy and Austria continued. No active transactions were made by the company.

15 Fin Fer S.p.A.

OFFICINA PITTINI per la FORMAZIONE Like every year, all staff members of the Group, both from plants and central functions, were involved in corporate training plans designed by this Association and providing for extensive training activities in the field of safety, understanding of their tasks within the Group and corporate culture issues.

RELATIONSHIPS WITH SUBSIDIARIES, ASSOCIATES AND RELATED COMPANIES The commercial and financial relationships with subsidiaries, associates and related companies produced the following balances:

Receivables Payables Companies Revenues Costs Financial Commercial Financial Commercial Alpe Adria Energia S.p.A. 970 60 - - - -

RESEARCH AND DEVELOPMENT ACTIVITIES WITHIN SUBSIDIARIES In 2012, Ferriere Nord alone, which is the most significant operating company belonging to the Group, invested more than 10,400 hours in research and development activities for innovative products and processes in various production areas, especially in the environmental field. Other research activities involved the following projects, which are still under way: • GREENEAF; study on the replacement of fossil fuels by biomass fuels • RUSTEEL; study on steel corrosion applied to seismically safe buildings. Within the RFCS program, the following projects were submitted and approved: • MELTICON temperature measurements and continuous analysis • THERELEXPRO energy recovery.

INFORMATION PURSUANT TO ART. 2428 OF THE ITALIAN CIVIL CODE With reference to the provisions laid down in sub-pars. 3-4 of art. 2428 of the Italian Civil Code, the company does not hold any own shares or shares in holding companies. During the financial year, the company did not acquire and/or dispose of ordinary shares, not even through trust companies or intermediaries.

With reference to the provisions laid down in sub-par. 2, item 6-bis, of the same article, it is worth noting that the management report of each subsidiary describes the approaches adopted for credit risk, liquidity risk and exchange rate risk management.

Credit risk: In general, the Group shows different levels of risk credit according to its various reference markets; this risk is mitigated by its credit exposure being spread over a large number of counter-parties and customers mainly based in the EU.

Liquidity risk: For the Group, this risk is reduced to very low levels thanks to sound financial ratios, balanced medium-term debt and significant unused short- and medium-term credit amounts. Cash flows, funding needs and liquidity of the companies belonging to the Group are monitored and managed by a centralised treasury function under the control of the Finance department of the Group established at Ferriere Nord for the subsidiaries S.I.A.T. S.p.A. and La Veneta Reti S.r.l. as well as, since March 2012, for Trafilerie e Zincherie di Celano S.r.l. Financial assets are posted net of depreciation calculated on the basis of default risk, as determined according to the information available on customers’ solvability and historical data. Where deemed advisable, bank guarantees were requested, assignations of debts without recourse were agreed upon or procedures aimed at limiting the relevant risk were activated.

Market risk: Risks resulting from changes in the level of selling and purchasing prices against current commitments are largely mitigated by the short operating cycle of the company.

Interest rate risk: Exchange rate risks are limited; transactions in currencies other than euro are generally hedged by suitable US$ derivative instruments.

The notes to the financial statements provide information on the position of the company and its management trends. The holding company has significant commercial, financial and regulated service performance relationships with subsidiaries at arm’s length. The policy paper on safety of data and privacy was updated for all companies belonging to the Group and is kept by the company in accordance with the relevant legal provisions.

16 Consolidated Balance Sheet of 2012

MAIN SUBSEQUENT FACTS AND PREDICTABLE MANAGEMENT TRENDS The current European economic policy is clearly not up to the situation. Therefore, recession is worsening instead of improving. In the first quarter of 2013, the eurozone recorded the sixth consecutive quarterly decrease in GDP. In Italy, the seventh decrease was recorded. Unfortunately, the expectations of higher focus on the fundamentals of economy in Italy and in Europe as a whole through measures mainly aimed at promoting the production system combined with energy policies in line with those implemented by our competitors, including some European countries, have not yet been fulfilled. The Group management has to face a very difficult situation. Undoubtedly, harsh choices are to be made and strong measures are to be taken. However, they will always be inspired by the entrepreneurial optimism and responsibility that has led over the years to the creation and development of our current industrial Group. Traditional leadership on the domestic market, advanced technologies, intensive commercial penetration of export markets of all companies belonging to the Group will keep on producing their effects together with the positive impact of massive investment made in the past. The Group is pursing its plan to reduce overhead expenses and is increasingly focusing on innovation, research and development.

Shareholders, the shareholders’ equity resulting from the financial statements exceeds euro 187.8 million, mostly referring to the Group. The analysis and presentation of corporate facts being completed, you are kindly requested to approve the consolidated financial statements and management report as drawn up.

Osoppo, 14th May 2013

The Chairman of the Board of Directors Federico Pittini

The Directors Andrea Pittini Marina Pittini Ottavino Di Filippo Vincenzo Chiari

17 Fin Fer S.p.A.

FIN FER S,p,A, CONSOLIDATED FINANCIAL STATEMENTS AT 31st DECEMBER 2012

BALANCE SHEET Values expressed in euro

ASSETS 31/12/2012 31/12/2011

A) SUBSCRIBED CAPITAL UNPAID uncalled capital 0 0 called capital 0 0 Total subscribed capital unpaid A) 0 0

B) FIXED ASSETS I Intangible fixed assets 1) start-up and expansion expenses 10,493 20,987 2) research, development and advertising costs 0 0 3) industrial patent rights and intellectual property rights 24,057 34,161 4) concessions, licenses, trademarks and similar rights 397 433 5) goodwill 180,000 210,000 6) goodwill arising on consolidation 0 0 7) intangible fixed assets under construction and advances 181,103 0 8) other 643,682 879,284 total I 1,039,732 1,144,865 II Tangible fixed assets 1) land and buildings 98,788,389 99,347,800 2) plant and machinery 45,481,135 58,068,787 3) industrial and commercial equipment 450,111 627,838 4) other assets 1,309,133 1,356,192 5) tangible fixed assets in course of construction and advances 10,281,760 5,034,511 total II 156,310,528 164,435,128 III Financial fixed assets 1) equity investments in a) subsidiaries 0 0 b) associates 615,032 637,855 d) other companies 4,447,963 20,463 total 1) 5,062,995 658,318 2) receivables a) subsidiaries within 12 months 0 0 beyond 12 months 0 0 total a) 0 0 b) associates within 12 months 0 0 beyond 12 months 969,975 749,250 total b) 969,975 749,250 c) parent companies within 12 months 0 0 beyond 12 months 0 0 total c) 0 0 d) others within 12 months 0 0 beyond 12 months 470,817 259,285 total d) 470,817 259,285 total 2) 1,440,792 1,008,535 3) other securities 0 0 4) treasury shares 0 0 total III 6,503,787 1,666,853 Total fixed assets B) 163,854,047 167,246,846

18 Consolidated Balance Sheet of 2012

C) CURRENT ASSETS I Inventories 1) raw, ancillary materials and consumables 54,332,427 62,072,594 2) work-in-progress and semi-finished products 17,780,956 8,902,196 3) construction contracts, work-in-progress 0 0 4) finished products and goods 88,024,317 84,292,505 5) advances 0 0 total I 160,137,700 155,267,295 II Receivables 1) trade within 12 months 128,294,877 195,956,686 beyond 12 months 0 0 total 1) 128,294,877 195,956,686 2) subsidiaries within 12 months 0 0 beyond 12 months 0 0 total 2) 0 0 3) associates within 12 months 0 0 beyond 12 months 60,000 60,000 total 3) 60,000 60,000 4) parent companies within 12 months 0 0 beyond 12 months 0 0 total 4) 0 0 4-bis) taxes within 12 months 2,829,274 4,169,803 beyond 12 months 3,056 44,740 total 4-bis) 2,832,330 4,214,543 4-ter) deferred tax assets within 12 months 0 0 beyond 12 months 8,899,325 8,578,581 total 4-ter) 8,899,325 8,578,581 5) others a) other Group companies 0 0 b) other debtors within 12 months 20,472,912 17,122,579 beyond 12 months 10,000 10,000 total 5) 20,482,912 17,132,579 total II 160,569,444 225,942,389 III Financial assets not held as fixes assets 1) investments in subsidiaries 0 0 2) investments in associates 0 0 3) investments in parent companies 0 0 4) others investments 22,941 21,219 5) treasury shares 0 0 6) other securities 10,740,000 9,470,000 total III 10,762,941 9,491,219 IV Cash and cash equivalents 1) bank and postal deposits 61,356,591 29,319,335 2) cheques 0 0 3) cash in hand 32,008 31,658 total IV 61,388,599 29,350,993 Total current assets C) 392,858,684 420,051,896

D) ACCRUED INCOME AND PRE-PAID EXPENSE accrued income and pre-paid expenses 1,167,444 1,440,191 discount on loans 0 0 Total accrued income and pre-paid expenses D) 1,167,444 1,440,191

Total assets (A+B+C+D) 557,880,175 588,738,933

19 Fin Fer S.p.A.

LIABILITIES 31/12/2012 31/12/2011

A) SHAREHOLDERS’ EQUITY I Share capital 30,000,000 30,000,000 II Additional paid-in capital 0 0 III Revaluation reserves 142,354 142,354 IV Legal reserve 6,000,000 6,000,000 V Statutory reserves 0 0 VI Reserve for treasury shares 0 0 VII Other reserves: - extraordinary reserve 148,704,623 148,814,212 total VII 148,704,623 148,814,212 VIII Profits (losses) carried forward 0 (7,181,483) IX Profit (loss) for the year 3,019,799 9,081,894 Total shareholders’ equity, Group: sub-total 187,866,776 186,856,977 minority interests: X Capital and reserves 86,051 80,597 XI Profit (loss) for the year 2,781 5,454 Total shareholders’ equity, minority interests: sub-total 88,832 86,051 Total shareholders’ equity A) 187,955,608 186,943,028

B) PROVISION FOR CONTINGENCIES AND OTHER CHARGES 1) pensions and similar obligations 1,767,987 1,644,942 2) provision for taxation a) taxes 0 0 b) deferred taxes 469,639 460,683 3) provision for contingencies and other charges for consolidation purposes 0 0 4) other provisions for contingencies and other charges 9,993,185 13,846,535 Total provision for contingencies and other charges B) 12,230,811 15,952,160

C) EMPLOYEES’ SEVERANCE INDEMNITY 11,480,780 11,967,503

D) PAYABLES 1) bonds within 12 months 0 0 beyond 12 months 34,300,000 29,740,000 total 1) 34,300,000 29,740,000 2) convertible bonds within 12 months 0 0 beyond 12 months 0 0 total 2) 0 0 3) amounts due to shareholders for loans within 12 months 0 0 beyond 12 months 0 0 total 3) 0 0 4) amounts due to banks within 12 months 25,768,840 31,817,218 beyond 12 months 54,028,484 59,764,783 total 4) 79,797,324 91,582,001 5) amounts due to other financial companies within 12 months 0 0 beyond 12 months 0 0 total 5) 0 0 6) advances within 12 months 2,635,144 8,359,290 beyond 12 months 0 0 total 6) 2,635,144 8,359,290

20 Consolidated Balance Sheet of 2012

7) trade payables within 12 months 215,250,931 225,806,190 beyond 12 months 0 0 total 7) 215,250,931 225,806,190 8) trade notes issued within 12 months 0 0 beyond 12 months 0 0 total 8) 0 0 9) amounts due to subsidiaries within 12 months 0 0 beyond 12 months 0 0 total 9) 0 0 10) amounts due to associates within 12 months 0 0 beyond 12 months 0 0 total 10) 0 0 11) amounts due to parent companies within 12 months 0 0 beyond 12 months 0 0 total 11) 0 0 12) amounts due to tax authorities within 12 months 2,851,168 5,275,593 beyond 12 months 0 0 total 12) 2,851,168 5,275,593 13) amounts due to social security institutions within 12 months 2,944,838 2,801,425 beyond 12 months 0 0 total 13) 2,944,838 2,801,425 14) other payables a) other Group companies within 12 months 0 0 beyond 12 months 0 0 b) other within 12 months 7,581,559 9,666,677 beyond 12 months 26,289 26,769 total 14) 7,607,848 9,693,446 Total payables D) 345,387,253 373,257,945

E) ACCRUED LIABILITIES AND DEFERRED INCOME accrued liabilities and deferred income 825,723 618,297 premiums on loans 0 0 Total accrued liabilities and deferred income E) 825,723 618,297

Total shareholders’ equity and liabilities 557,880,175 588,738,933

MEMORANDUM ACCOUNTS guarantees provided to - group companies 9,900,000 11,700,000 garantees issued by banks on behalf of the company 1,416,878 6,272,438 others 7,525,229 7,555,458 18,842,107 25,527,896

21 Fin Fer S.p.A.

INCOME STATEMENT 31/12/2012 31/12/2011

A) VALUE OF PRODUCTION 1) revenues from sales and services subsidiares 0 0 associates 0 0 parent companies 0 0 other Group companies 0 0 third parties 982,028,401 1,028,721,473 total 1) 982,028,401 1,028,721,473 2) changes in inventories work-in-progress 0 0 semi-finished products 8,878,760 1,871,829 finished products 3,871,421 2,558,842 total 2) 12,750,181 4,430,671 3) changes in construction contracts, work-in-progress 0 0 4) increases in fixed assets from internal production 1,143,189 1,077,961 5) other revenues and income other income 5,299,614 3,682,106 operating grants 437,522 452,860 total 5) 5,737,136 4,134,966 Total value of production A) 1,001,658,907 1,038,365,071

B) COST OF PRODUCTION 6) raw, ancillary materials, consumables and goods subsidiares 0 0 associates 0 0 parent companies 0 0 other Group companies 0 0 third parties 700,410,867 742,082,778 total 6) 700,410,867 742,082,778 7) services subsidiares 0 0 associates 0 0 parent companies 0 0 other Group companies 0 0 third parties 186,520,048 186,188,504 total 7) 186,520,048 186,188,504 8) leases and rentals subsidiares 0 0 associates 0 0 parent companies 0 0 other Group companies 0 0 third parties 2,064,123 1,878,089 total 8) 2,064,123 1,878,089 9) personnel a) wages and salaries 41,468,824 40,839,362 b) social security 14,058,361 13,986,048 c) employee severance indemnity 3,327,250 3,317,995 d) pensions and similar 0 0 e) other costs 338,817 397,811 total 9) 59,193,252 58,541,216 10) amortization, depreciation and writedowns a) amortisation of intangible fixed assets 1,116,987 1,869,224 b) depreciation of tangible fixed assets 30,250,628 31,187,528 c) other fixed assets writedowns 0 0 d) writedown of current receivables and cash and cash equivalents 6,165,108 6,024,355 total 10) 37,532,723 39,081,107

22 Consolidated Balance Sheet of 2012

11) changes in inventories raw materials 8,679,946 (7,798,734) ancillaries (394,939) (945,493) consumables (544,840) (675,609) goods 139,609 (147,718) total 11) 7,879,776 (9,567,554) 12) provisions for contigencies and other charges 0 0 13) other provisions 0 0 14) other operating costs 1,927,226 1,253,789 Total cost of production B) 995,528,015 1,019,457,929

Difference between value and cost of production (A - B) 6,130,892 18,907,142

C) FINANCIAL INCOME AND EXPENSES 15) income from investments in subsidiaries 0 0 associates 0 0 other companies 51,346 133 total 15) 51,346 133 16) other financial income a) from receivables held as financial fixed assets subsidiaries 0 0 associates 0 0 parent companies 0 0 other companies 0 0 b) from securities held as financial fixed assets other than equity investments 0 0 c) from securities held as current assets other than equity investments 0 0 d) income other than above, from subsidiaries 0 0 associates 0 0 parent companies 0 0 other income 2,227,004 1,038,619 total 16) 2,227,004 1,038,619 17) interest and other financial expenses subsidiaries 0 0 associates 0 0 parent companies 0 0 others (5,570,975) (6,426,099) total 17) (5,570,975) (6,426,099) 17-bis) foreign currency exchange gains and losses 337,923 61,585 Total financial income and expenses (15+16-17) C) (2,954,702) (5,325,762)

D) ADJUSTMENTS TO FINANCIAL ASSETS 18) revaluations of a) equity investments 0 0 b) financial fixed assets other than equity investments 0 0 c) securities held as current assets other than equity investments 1,270,000 0 total 18) 1,270,000 0 19) writedowns of a) equity investments 0 (139,068) b) financial fixed assets other than equity investments 0 0 c) securities held as current assets other than equity investments 0 (2,330,000) total 19) 0 (2,469,068) Total adjustments to financial assets (18 - 19) D) 1,270,000 (2,469,068)

23 Fin Fer S.p.A.

E) EXTRAORDINARY INCOME AND EXPENSES 20) extraordinary income gains on disposals not included under 5) 0 0 other extraordinary income 0 0 total 20) 885,594 16,875 21) extraordinary expenses 885,594 16,875 losses on disposals not included under 14) prior years taxes 0 0 other extraordinary expenses 0 0 total 21) (944) 0 Total extraordinary income and expenses (20 - 21) E) (944) 0 884,650 16,875 Earnings before income tax (A - B +/- C +/- D +/- E) 5,330,840 11,129,187 22) income taxes for the year a) current (3,992,262) (3,950,143) b) deferred tax assets and liabilities 1,684,002 1,908,304 total 22) (2,308,260) (2,041,839)

23) PROFIT (LOSS) FOR THE YEAR INCLUDING MINORITY INTERESTS 3,022,580 9,087,348

Profit (loss) for the year, minority interests 2,781 5,454

Profit (loss) for the year, Group 3,019,799 9,081,894

24 Consolidated Balance Sheet of 2012

FIN FER S.p.A. Notes to the consolidated financial statements at 31st December 2012

The Group controlled by Fin-Fer S.p.A. is characterised by a high degree of industrial integration between its operating companies, which covers a range of processes from making steel from scrap and cast iron to marketing products such as wire rod, bar, wire, electro-welded wire mesh and lattice girders mostly for the construction industry (infrastructure and homes) as well as for mechanical engineering. The Group headed by Fin.Fer S.p.A. includes Ferriere Nord S.p.A., based in Osoppo (UD), S.I.A.T. Società Italiana Acciai Trafilati S.p.A., based in Gemona del Friuli (UD), La Veneta Reti S.r.l., based in Loreggia (PD), Trafilerie e Zincherie di Celano S.r.l., based in Osoppo (UD), Kovinar D.o.o., based in Jesenice (Slovenia), and Pittini Stahl G.m.b.H., based in Bad Aibling (Germany). The consolidated financial statements for the year ended 31st December 2012, of which these Notes form an integral part pursuant to art. 29, clause 1, Law Decree 127/91, were drafted in accordance with Title III of the said law. The financial statements are presented with the 2011 figures for comparative purposes. The consolidated cash flow statement is also provided to give a fuller picture. In these Notes we comment on the more significant changes with respect to assets and liabilities values in the previous year’s financial statements, which were drawn up in the same format. Values are expressed in euro.

Shareholders’ equity with the result for the year of the Group parent company at 31st December 2012 exactly corresponds to Group shareholders’ equity with the result for the year stated in the consolidated financial statements.

BASIS OF CONSOLIDATION CRITERIA AND ACCOUNTING POLICIES

The financial statements used for consolidation purposes are those drawn up as of 31st December 2012 for approval by the shareholders’ meetings of the various consolidated companies, adjusted where necessary by postings of a fiscal nature and to come into line with the accounting standards and evaluation criteria used by the Group parent company. The consolidation criteria adopted include: • statement of all assets and liabilities and income and expenses of the companies under consolidation; • elimination of the carrying amount of equity investments in consolidated companies and the corresponding fractions of the shareholders’ equity of same; the amount of third party interests in the shareholders’ equity of consolidated companies is written to the shareholders’ equity item under “Shareholders’ equity, minority interests”; • elimination of profits arising from major infra-group operations not yet realised in respect of third parties and eventual statement of the relative deferred tax assets; • elimination of receivables, payables, charges and income arising from business between consolidated companies; • statement of leasing contracts using the financial method and related fiscal effects.

ACCOUNTING POLICIES Detailed below are the criteria applied in stating balance sheet items, value adjustments and conversion of values originally stated in foreign currencies.

Intangible fixed assets These are stated at cost and, where provided for, subject to approval by the statutory auditors. Amounts are stated net of amortisation charges, which are calculated on a straight-line basis over the residual useful life.

Tangible fixed assets Tangible fixed assets are stated at purchase cost including directly related additional charges or at internal construction cost; the said construction cost includes the costs of raw materials, ancillary materials, energy, personnel, general production and industrial expenses to reasonably attributable degrees and any financial expenses relative to loans for such purpose accruing in the construction period. Historical costs were adjusted up to reflect monetary revaluations under laws 576/75, 72/83, 491/91, 342/2000, 350/2003 and 266/2005, revaluation on the incorporation of Sideros S.p.A. as well as revaluation under legislative decree 185/2008, turned into law 2/2009 and adjusted down by the related accumulated depreciation. Depreciation charges written to the income statement were calculated on a straight-line basis at rates reflecting the estimated useful economic-technical life of assets. Such rates are detailed in the notes to the balance sheet. Maintenance and repair costs are written to the income statement in the year they are incurred, if of a routine nature, and capitalised, if of an extraordinary nature.

25 Fin Fer S.p.A.

Fixed assets under construction are stated at cost including directly related additional charges. This class also includes advances for supplies of fixed assets.

Financial fixed assets The item “Receivables” is set out at its net realizable value. The other equity investments are recognized at their adjusted cost for durable impairment.

Inventories Inventories are stated on a LIFO basis with annual adjustments; products are written down to the lower between market value and the above LIFO value.

Receivables and payables Receivables are stated at their expected realizable value, net of any allocation to the provision for bad debts, while payables are stated at their nominal value.

Foreign currency and off-balance sheet items Payables and receivables in foreign currency are stated at the euro equivalent using exchange rates in force at the time of customs clearance of goods or of entry in the books in the case of services. Any positive or negative differences between the value of payables and receivables in non-euro currencies, converted at the rate in force when booked and their values when converted at year-end spot exchange rates, also considering any exchange rate risk hedging, are written to the income statement and any net gains are written to the appropriate reserve, which is not distributable until such gains are realised. The company does not perform derivative transactions for speculation purposes. If existing, the derivatives would be stated at the relevant market values.

Financial assets not held as fixed assets Securities stated under financial assets not held as fixed assets are stated at the lower between acquisition cost and market value.

Accruals and deferrals Income and expenses items involving two or more periods are dealt with on an accrual basis.

Provision for contingencies and other charges This item contains provisions taken in view of realistically probable charges and losses that are not attributable to specific asset items. In particular, it mainly includes the provision for agents’ leaving indemnity, provisions for taxation, the provision for upgrading the sites in Osoppo and San Giorgio di Nogaro, the provision for reinstatement costs of the landfill in Potenza, the provision to cover the re-adoption of the dispute for alleged breach of the ECSC Treaty.

Employee severance indemnity This reflects liabilities accruing as of 31st December in respect of employees under current legislation.

Taxation Current year taxes are stated under “Amounts due to tax authorities” on the basis of a realistic forecast of the charge to pay under current tax law net of prepaid amounts. Deferred taxes mainly arise from the fiscal effect of consolidation operations and the temporary differences between the value of an asset or liability and the value attributed to that asset or liability for tax purposes in line with accounting standard 25 of the “Organismo Italiano di Contabilità”. Deferred tax liabilities and assets are stated, respectively, under “Provision for deferred taxes” and “Deferred tax assets”.

Grants to the capital account Grants to the capital account are written off the relative asset when their receipt is certain and reflected in the income statement in proportion to the depreciation charges for the relative assets.

Operating grants Operating grants are written to the income statement on an accrual basis.

Costs and revenues Revenues and income, costs and charges are stated net of returns, discounts, allowances and bonuses and also of taxes directly related to the sale of products and provision of services.

26 Consolidated Balance Sheet of 2012

COMPANIES IN THE CONSOLIDATION AREA AND EQUITY INVESTMENTS Listed below are the companies consolidated on a line-by-line basis (all interests are held directly by the Group parent company).

name registered office share capital interst held

DIRECTLY HELD SUBSIDIARIES included in the consolidation area Ferriere Nord S.p.A. Osoppo (UD) 60,000,000 99.950% S.I.A.T. S.p.A. Osoppo (UD) 5,000,000 99.996% La Veneta Reti S.r.l. Loreggia (PD) 6,000,000 100.000% Trafilerie e Zincherie di Celano S.r.l. Osoppo (UD) 100,000 100.000% Pittini Stahl G.m.b.H. Bad Aibling (Germania) 500,000 99.000% Kovinar D.o.o. Jesenice (Slovenia) 779,829 100.000%

The financial year of the above listed companies closes on 31st December.

27 Fin Fer S.p.A.

NOTES TO THE BALANCE SHEET ITEMS

ASSETS

B) FIXED ASSETS

B.I) INTANGIBLE FIXED ASSETS

Intangible fixed assets amount to euro 1,039,732, down euro 105,133 on the previous year.

Depreciation is charged as follows: • patent costs: 3 years; • R&D and advertising: 1/3/5 years; • goodwill: 10 years; • other intangible assets: the item includes deferred charges on loans and charges for the securitisation operation, started in previous years, which are amortised over the term of the operation, and other costs to amortise over five years.

The following table details movements in such items. No revaluations have ever been made to intangible fixed assets and no write- downs were made in 2012.

historical depreciation value at decreases value at increases transfers depreciation cost at 31/12/2011 01/01/2012 write-downs 31/12/2012 Start up and expansion expenses 52,467 31,480 20,987 0 0 0 10,494 10,493 R&D and advertising costs 0 0 0 738,666 0 0 738,666 0 Patent rights 117,026 82,865 34,161 11,191 10,894 0 32,189 24,057 Concessions, licenses, trademarks 650 217 433 0 0 0 36 397 Goodwill 6,300,000 6,090,000 210,000 0 0 0 30,000 180,000 Tangible fixed assets under 0 0 0 191,997 (10,894) 0 0 181,103 construction and advances Other intangible fixed assets 1,616,486 737,202 879,284 70,000 0 0 305,602 643,682 SUM TOTAL 8,086,629 6,941,764 1,144,865 1,011,854 0 0 1,116,987 1,039,732

In 2012, the subsidiary Ferriere Nord S.p.A continued its R&D work on a number of particularly innovative projects, including:

Activity 1: Research and development of innovative projects in the field of steelworks, marked by innovative technological contents with the aim of gaining a competitive edge against the market and its competitors. More specifically: • follow-up of study, design and simulation activities in order to upgrade the melting furnace • follow-up of study and re-engineering activities for the industrial waste water treatment system and water resources of the steelworks • study and design of the “roto burner” in order to use a higher gradient flame in the burner • follow-up of study and development activities for the oscillation analysis system in oscillating benches for continuous casting • study and analysis activities aimed at increasing mould cross-section and at obtaining larger billets • study and analysis activities aimed at using magnesium lime for ladle tapping • survey and testing activities aimed at determining the metal yield of scraps used in the induction furnace • study of an innovative system of adjusters for the pre-finishing train of the cold skin high speed rolling process • completion of the development of the low temperature hot rolling process to produce steels for reinforced concrete.

IIndustrial patent rights and intellectual property rights, totalling euro 24,057, recorded an increase following the purchase of software packages (euro 22,086) and a decrease for the effect of amortisation charges (euro 32,189). Goodwill, now standing at euro 180,000, derives from the investment in Trafilerie e Zincherie di Celano S.r.l., carried out in 2009. Because these operations entailed the acquisition of important domestic market share and significant commercial synergy, amortisation over 10 years was deemed appropriate. Assets in course of construction and payments on account reflect the implementation and development of new management software for the subsidiary Ferriere Nord S.p.A.. The decrease by euro 235,602 of Other intangible fixed assets results from the increase by euro 70,000 for charges on new medium- long term loans to the subsidiary Ferriere Nord S.p.A. and the decrease by euro 305,602 of ordinary depreciation of the year.

28 Consolidated Balance Sheet of 2012

B.II) TANGIBLE FIXED ASSETS

The table below shows acquisitions, disposals, revaluations as well as depreciation and write-downs recorded over the period.

decrease in accum. depreciation closing value in the tangible fixed assets opening value increases decreases closing value accumulated deprec. 2011. for the year accum. depr. fin. stat. depreciation LAND AND BUILDINGS Land and non industrial buildings 43,164,945 544,384 0 43,709,329 160,557 9,395 0 169,952 43,539,377 Yards 8,432,440 965,159 0 9,397,599 2,621,715 429,168 0 3,050,883 6,346,716 Industrial buildings 86,793,193 2,731,544 0 89,524,737 37,005,445 3,958,740 0 40,964,185 48,560,552 Lightweight constructions 820,164 102,701 0 922,865 529,521 51,600 0 581,121 341,744 TOTAL 139,210,742 4,343,788 0 143,554,530 40,317,238 4,448,903 0 44,766,141 98,788,389

PLANT AND MACHINERY General plant 77,871,922 7,707,931 417,745 85,162,108 60,690,856 4,839,838 410,045 65,120,649 20,041,459 Non automatic plant 16,835,019 208,558 154,614 16,888,963 15,800,385 445,312 154,614 16,091,083 797,880 Automatic plant 260,428,079 2,203,346 546,586 262,084,839 238,303,117 14,308,550 498,575 252,113,092 9,971,747 Furnaces 38,856,727 358,150 422,069 38,792,808 33,010,295 2,526,813 245,450 35,291,658 3,501,150 Water treatment plant 17,903,817 1,526,466 0 19,430,283 5,567,828 2,693,556 0 8,261,384 11,168,899 TOTAL 411,895,564 12,004,451 1,541,014 422,359,001 353,372,481 24,814,069 1,308,684 376,877,866 45,481,135

EQUIPMENT Tools and equipment 5,866,733 200,583 352,248 5,715,068 5,238,895 378,310 352,248 5,264,957 450,111 TOTAL 5,866,733 200,583 352,248 5,715,068 5,238,895 378,310 352,248 5,264,957 450,111

OTHER ASSETS Freight vehicles 2,430,191 115,884 26,804 2,519,271 1,778,867 234,258 26,804 1,986,321 532,950 Office furniture 868,396 55,343 188,891 734,848 832,220 11,437 188,891 654,766 80,082 Computers 2,923,805 66,886 14,762 2,975,929 2,673,518 163,602 14,483 2,822,637 153,292 Cars, motorbikes, etc. 1,298,861 347,426 320,842 1,325,445 880,456 200,049 297,869 782,636 542,809 Tangible assets < euro 516 3,592 0 0 3,592 3,592 0 0 3,592 0 TOTAL 7,524,845 585,539 551,299 7,559,085 6,168,653 609,346 528,047 6,249,952 1,309,133

WORK IN PROGRESS Advances 1,172,550 2,168,725 1,576,596 1,764,679 0 0 0 0 1,764,679 Work in progress 3,861,961 4,655,120 0 8,517,081 0 0 0 0 8,517,081 TOTAL 5,034,511 6,823,845 1,576,596 10,281,760 0 0 0 0 10,281,760

SUM TOTAL 569,532,395 23,958,206 4,021,157 589,469,444 405,097,267 30,250,628 2,188,979 433,158,916 156,310,528

The main changes occurred during the year mostly involved the subsidiary Ferriere Nord S.p.A. The most significant capitalisation in the financial year include those relative to the photovoltaic system, the new reception area, the purchase of a furnace loading crane for the steel plant in Osoppo and a converter for the substation in Osoppo, the extension of the scarp area in Osoppo and the purchase of the “Liquigas” complex next to the manufacturing site in Potenza. The decrease in tangible assets mainly results from the sale of some dust detection system components of the steel plant as well as of two overhead travelling cranes and two strapping machines belonging to the bar rolling mill. As for work in progress, the most significant are: - new reception area and office building; - purchase of the new furnace for the steelworks in Osoppo; - extra pre-finishing train at the steelworks in Osoppo; - air coolers for the steelworks in Osoppo; - upgrade of smoke extraction system (step 2) in Potenza. The table below details revaluations of assets at 31st December 2012. None of such assets have ever been written down in value

29 Fin Fer S.p.A.

Monetary revaluation under law 576/75 - Visentini Increase in historical cost Decrease in the depreciation fund Land 11,254 0 TOTAL 11,254 0

Revaluation on merger of Sideros S.p.A. into Ferriere Nord S.p.A. Increase in historical cost Decrease in the depreciation fund Industrial buildings 316,773 0 TOTAL 316,773 0

Monetary revaluation under law 72/83 - Visentini Bis Increase in historical cost Decrease in the depreciation fund Land 69,138 0 Yards 50,178 0 Industrial buildings 2,737,225 0 General plant 734,173 0 Non-automatic plant 184,365 0 Automatic plant 3,128,370 0 Furnaces and appurtenances 9,058 0 Office furniture and machines 849 0 Sundry equipment and tools 1,456 0 TOTAL 6,914,812 0

Monetary revaluation under law 413, 30th December 1991 Increase in historical cost Decrease in the depreciation fund Land 133,538 0 Non industrial buildings 21,523 0 Yards 108,520 0 Industrial buildings 6,395,802 0 General plant 2,626 0 TOTAL 6,662,009 0

Monetary revaluation under law 342, 21st November 2000 Increase in historical cost Decrease in the depreciation fund Automatic plant 25,861,505 0 TOTAL 25,861,505 0

Monetary revaluation under law 350, 24th November 2003 Increase in historical cost Decrease in the depreciation fund Automatic plant 20,302,887 0 TOTAL 20,302,887 0

Monetary revaluation under law 266, 23rd December 2005 Increase in historical cost Decrease in the depreciation fund Automatic plant 2,794,674 0 TOTAL 2,794,674 0

Monetary revaluation Law Decree 185, 29th November 2008 Increase in historical cost Decrease in the depreciation fund Land and non industrial buildings 26,130,104 0 Non industrial buildings 0 32,803 Yards 609 609,754 Industrial buildings 3,410,806 20,109,437 TOTAL 29,541,519 20,751,994

30 Consolidated Balance Sheet of 2012

Land, buildings, plant and machinery are tied by mortgages and liens securing the loans described in the comment on “Payables to banks”. Depreciation is calculated for all depreciable assets at the following rates: • Yards, roads, sewers, etc...... 3-5% • Industrial buildings ...... 3-5% • General plant ...... 10-12% • Non-automatic plant ...... 10-12% • Automatic plant ...... 17.5-20% • Furnaces and appurtenances ...... 12.5-15% • Freight vehicles ...... 10-20% • Office furniture ...... 12% • Computers, electronic office machines ...... 18-20% • Equipment and tools ...... 25% • Lightweight constructions ...... 10% • Water and air treatment plant ...... 10-15% • Cars, motorbikes, etc...... 25%

B.III.1) FINANCIAL ASSETS: EQUITY INVESTMENTS Equity investments can be detailed as follows:

historical value at acquisitions/ disposals/ value at revaluation write-down revaluation write-down cost 01/01/2012 increases decreases 31/12/2012

Alpe Adria Energia S.p.A. 585,750 585,750 36,273 59,096 562,927

Emme-Fer S.r.l. 30,000 30,000 0 0 30,000

Ecoin 22,105 22,105 0 0 22,105

ASSOCIATES 637,855 0 0 637,855 36,273 59,096 0 0 615,032

Veneto Banca 0 0 4,427,500 0 4,427,500

Other 20,463 0 0 20,463 0 0 0 0 20,463

OTHER COMPANIES 20,463 0 0 20,463 4,427,500 0 0 0 4,447,963

TOTAL EQUITY INVESTMENTS 658,318 0 0 658,318 4,463,773 59,096 0 0 5,062,995

In 2012, Fin.Fer. S.p.A. purchased pro-quota from Verbund Italia S.p.A. a share in Alpe Adria Energia amounting to 9.5% of its share capital and then sold it to Burgo S.p.A.. The subsidiary Ferriere Nord purchased 110,000 Veneto Banca ordinary shares at a unit par value of euro 40.25.

B.III.2 b) RECEIVABLES FROM ASSOCIATES This item amounting to euro 969,975 at the end of the year relates to a non interest bearing loan granted in favour of Alpeadria Energia S.r.l. by its parent company Fin.Fer. S.p.A. By a resolution passed by the Board of Directors, the company waived its receivables from Alpe Adria Energia S.p.A. to proportionally fund its related company. The said waiver shall be effective when all shareholders pay their shares.

B.III.2 d) RECEIVABLES FROM OTHERS

Balance at 01/01/2012 259,285 Increases 214,234 Decreases (2,702) Total at 31/12/2012 470,817

The increase recorded in the financial year mostly results from an interest bearing fund granted by the parent company to Officine Maccaferri amounting to euro 208,799. The item includes a loan in favour of “Officina Pittini per la formazione” (euro 160,000), which remained unchanged during the financial year, loans to employees (euro 101,057) and caution money in favour of various companies and entities (euro 961).

31 Fin Fer S.p.A.

C) CURRENT ASSETS

C.I) INVENTORIES Inventories are carried at purchase or production cost, or at the realisable value inferable from market performance, if lower, as provided for by point 9 of art. 2426 of the Civil Code. The cost of raw materials, consumables, ancillaries, semi-finished and finished products was calculated according to the LIFO method with annual adjustments. Inventories stand at euro 160,137,700. The increase on the previous year amounts to euro 4,870,405 and is determined by a different composition and lower amounts of goods in stock at year-end. Infra-group gains were eliminated.

C.II) RECEIVABLES

C.II.1) TRADE RECEIVABLES Trade receivables decreased by euro 67,661,809 over the previous financial year owing to decrease in turnover and prudential provisions to cover current difficulties and market trends. The total amount is net of receivables involved in the securitisation operation. It should also be noted that the item is stated net of the 3-year securitisation operation under which trade receivables are transferred without recourse, on a monthly revolving basis, by a special-purpose vehicle. The item breaks down as follows:

Clients, Italy 90,985,464 Clients, outside Italy 29,005,385 0 Cash orders and notes receivable for collection and in portfolio with banks 21,346,636 Invoices to issue 3,739,560 Provision for bad debts (16,782,168) TOTAL 128,294,877

There are no receivables falling due beyond five years. Over the year the provision for bad debts saw the following changes:

Balance at 01/01/2012 15,038,377 Decreases (use for write off of bad debts) (4,421,317) Provision for the year 6,165,108 TOTAL 16,782,168

C.II.3) RECEIVABLES FROM ASSOCIATES This item, amounting to euro 60,000, includes receivables falling due beyond 12 months from the associate Alpe Adria Energia S.p.A.

C.II.4-bis) TAX RECEIVABLES Tax receivables break down as follows:

Falling due within 12 months Receivables from tax authorities for duty drawback 64,303 Tax authorities: IRES, IRAP, VAT 2,764,971 2,829,274 Falling due beyond 12 months Duty drawback 3,056 TOTAL 2,832,330

This item globally decreased by euro 1,382,213. The decrease mainly results from the receivables from tax authorities for VAT. This item also includes receivables from non-deduction of IRAP for expenses related to employees and equivalent workers for the taxation years from 2007 to 2011.

C.II.4-ter) DEFERRED TAX ASSETS

Falling due beyond 12 months 8,899,325

32 Consolidated Balance Sheet of 2012

This item shows the amount of deferred tax assets relative to conservative allocations (to the taxed provision for bad debts, provision for contingencies, provision for the upgrading of the sites in Osoppo and San Giorgio di Nogaro, provision for post-operative landfill management in Potenza and non-deductible repairs and maintenance), consolidation adjustments for capital gains not yet realised, unrealised infra-group gains and negative temporary differences between the accounting value of an asset or a liability and their fiscal value.

C.II.5) RECEIVABLES FROM OTHERS

Falling due within 12 months Credit notes to receive 1,489,094 Advances to suppliers 95,221 Receivables from INPS (Social security) 44,759 Receivables from INAIL (National Insurance Institute for industrial accidents) 183,402 INAIL (National insurance institute for industrial accidents) advances 163,036 Receivables for deferred purchase price 14,044,672 Sundry short-term receivables 4,452,728 20,472,912 Falling due beyond 12 months Sundry receivables 10,000 TOTAL 20,482,912

This item increased by euro 3,350,332 over the previous financial year, mostly reflecting receivables from deferred purchase price.

C.III. FINANCIAL ASSETS NOT HELD AS FIXED ASSETS The item is made up as follows:

Other investments: Unicredito shares 22,941

Other securities: Junior Notes 10,740,000 TOTAL 10,762,941

During the year this item changed as follows.

value at increase/ decrease/ value at 01/01/2012 revaluation write-down 31/12/2012 Other investments: Unicredito shares 21,219 1,722 0 22,941

6) Other securities: Junior Notes 9,470,000 1,270,000 0 10,740,000

TOTAL 9,491,219 1,271,722 0 10,762,941

The non interest bearing Junior Notes were underwritten following the securitisation of trade receivables initiated in 2006; their nominal value is euro 12,800,000; during the year, they have been revaluated by euro 1,270,000 for adjustment to market value. During the financial year, Fin.Fer. S.p.A. purchased 886 Unicredit shares at euro 1.943 each.

C.IV) CASH AND CASH EQUIVALENTS These are temporarily available funds held in banks for the purposes of treasury management amounting to euro 61,356,591 and recording a increase by euro 32,037,256 on the previous year, and cash and equivalents in hand amounting to euro 32,008. This increase results from the subsidiary Ferriere Nord, which in the last months of the year increased the incidence of sales to foreign customers under more favourable payment terms for the company.

33 Fin Fer S.p.A.

D) ACCRUED INCOME AND PRE-PAID EXPENSES This item amounts to euro 1,167,444, that is a decrease by euro 272,747 on 2011. There are no items falling due beyond five years. It can be detailed as follow:

Accrued income: industrial revenues 8,450 Accrued income: financial revenues 186,096 Accrued income: general revenues 10,201 Total accrued income: 204,747

Prepaid expenses: industrial costs 182,346 Prepaid expenses: commercial costs 28,008 Prepaid expenses: financial costs 182,373 Prepaid expenses: general expenses 569,970 Total pre-paid expenses 962,697 TOTAL 1,167,444

LIABILITIES

A) SHAREHOLDERS’ EQUITY

Shareholders’ equity, Group

profits share legal revaluation other (losses) of profit (loss) shareholders’ description capital reserve reserve reserve previous for the year equity years

DECEMBER 2007 30,000,000 5,346,655 0 50,621,744 0 34,990,498 120,958,897 Allocation of profit, previous year 653,345 34,337,153 (34,990,498) 0 Distribution of dividends (5,100,000) (5,100,000) Kovinar investment, adjustment 34,880 34,880 Revaluation under legislative decree 160,924 49,147,303 49,308,227 185/08 Profit (loss) for the year 24,873,132 24,873,132 DECEMBER 2008 30,000,000 6,000,000 160,924 129,041,080 0 24,873,132 190,075,136 Allocation of profit, previous year 24,873,132 (24,873,132) 0 Distribution of dividends (5,100,000) (5,100,000) Profit (loss) for the year (9,577,139) (9,577,139) DECEMBER 2009 30,000,000 6,000,000 160,924 148,814,212 0 (9,577,139) 175,397,997 Result of previous year carried forward (9,577,139) 9,577,139 0 Revaluation adjustment under legislative (18,570) (18,570) decree 185/08 Profit (loss) for the year 2,395,656 2,395,656 DECEMBER 2010 30,000,000 6,000,000 142,354 148,814,212 (9,577,139) 2,395,656 177,775,083 Allocation of loss, previous year 2,395,656 (2,395,656) 0

Profit (loss) for the year 9,081,894 9,081,894

DECEMBER 2011 30,000,000 6,000,000 142,354 148,814,212 (7,181,483) 9,081,894 186,856,977 Allocation of loss, previous year 1,900,411 7,181,483 (9,081,894) 0 Distribution of dividends (2,010,000) (2,010,000) Profit (loss) for the year 3,019,799 3,019,799 DECEMBER 2012 30,000,000 6,000,000 142,354 148,704,623 0 3,019,799 187,866,776

34 Consolidated Balance Sheet of 2012

Share capital The share capital amounts to euro 30,000,000, fully subscribed and paid in, and made up of 30,000,000 ordinary shares of par value euro 1 each.

Legal reserve At 31st December 2012, this reserve shows a balance of euro 6,000,000. The item did not record changes over the year.

Other reserves At 31st December 2012, this reserve shows a balance of euro 148,704,623. During the financial year, a net negative change amounting to euro 109,589 was recorded.

Shareholders’ equity, minority interests Standing at euro 88,832, this is the value of shareholders’ equity belonging to minority interests.

shareholders’ equity, description capital and reserves profit (loss) minority interests DECEMBER 2007 44,152 20,719 64,871 Allocation of profit for the year 20,719 (20,719) 0 Distribution of dividends (12,059) (12,059) Monetary revaluation under legislative decree 185/08 19,531 19,531 Profit (loss) for the year 16,169 16,169 DECEMBER 2008 72,343 16,169 88,512 Allocation of profit for the year 16,169 (16,169) 0 Distribution of dividends (5,000) (5,000) Consolidation of Trafilerie e Zincherie di Celano S.r.l. 241,249 241,249 Profit (loss) for the year (15,420) (15,420) DECEMBER 2009 324,761 (15,420) 309,341 Allocation of profit for the year (15,420) 15,420 0 Profit (loss) for the year (126,443) (126,443) DECEMBER 2010 309,341 (126,443) 182,898 Allocation of profit for the year (126,443) 126,443 0 Acquisition of the subsidiary Trafilerie e Zincherie di Celano S.r.l. (102,181) (102,181) Distribution of dividends (120) (120) Profit (loss) for the year 5,454 5,454 DECEMBER 2011 80,597 5,454 86,051 Allocation of profit for the year 5,454 (5,454) 0 Profit (loss) for the year 2,781 2,781 DECEMBER 2012 86,051 2,781 88,832 The company does not draw up a reconciliation of the shareholders’ equity of the Group parent company and consolidated shareholders’ equity as there are no consolidation differences other than those already included in the statutory financial statements of Fin.Fer. S.p.A.

B) PROVISION FOR CONTINGENCIES AND OTHER CHARGES

B.1) PROVISION FOR PENSIONS AND SIMILAR OBLIGATIONS This stands at euro 1,767,987 and consists entirely of the provisions for the agents’ leaving indemnity made up over the years in accordance with the current labour agreement governing relationships with commercial agents.

B.2) PROVISIONS FOR TAXATION This amounts to euro 469,639 and includes deferred tax liabilities as detailed in the comment on income tax for the year.

B.4) OTHER PROVISIONS FOR CONTINGENCIES AND OTHER CHARGES The remaining provisions grouped in this item amount to euro 9,993,185 as follows:

35 Fin Fer S.p.A.

• euro 3,433,237: extraordinary work in future years to upgrade areas currently used for treating secondary materials produced in the Osoppo plants; • euro 1,276,080: post-operative management of Potenza landfill; • euro 700,000: possible upgrading of land; • euro 3,600,000 accrual to cover the re-adoption of the dispute for alleged breach of article 65 of the ECSC Treaty; • euro 954,137: possible settlement of a fiscal dispute; • euro 29,731 result from provisions set aside by foreign subsidiaries.

Changes in the year are summarized below: balance at balance at description reclassification decrease increase 01/01/2012 31/12/2012 Coiro landfill 1,398,372 (122,292) 1,276,080 ECSC dispute 3,600,000 3,600,000 Osoppo disposals 7,116,788 (1,183,551) (2,500,000) 3,433,237 Land upgrading 700,000 700,000 Fiscal dispute 1,000,000 1,183,551 (1,229,414) 954,137 Pittini Stahl, sundry disputes 19,580 (1,270) 18,310 Kovinar, other accruals 11,795 (374) 11,421 TOTAL 13,846,535 0 (3,853,350) 0 9,993,185

C) EMPLOYEE SEVERANCE INDEMNITY This item amounts to euro 11,480,780 and represents the Group’s liabilities towards its employees under current legislation, as of 31st December. The reserve shows a decrease by euro 486,723 on the previous year as a result of its ordinary management.

D) PAYABLES

D.1) BONDS This item amounting to euro 34,300,000 euro globally increased by euro 4,560,000; during the financial year, the following bond loans were repaid: nos. 8, 9, 11, 12, 16, 17 and 18 totalling euro 29,740,000. At the same time, by a resolution passed by the Board of Directors dated 02.04.2012, new bond loans were issued as follows: nos. 19, 20, 21, 22, 23, 24, 25 and 26 globally having a nominal value of euro 41,000,000 entered into at the end of the year for a total amount of euro 34,300,000. Bonded loans at year-end were as follows:

Bonded loan N° 19 Board of directors of 02/04/2012 n. 3,000,000 non convertible bonds, euro 1 each, expiry date 30/06/14 12-month Euribor rate + 3 basis point 2,600,000

Bonded loan N° 20 Board of directors of 02/04/2012 n. 4,000,000 non convertible bonds, euro 1 each, expiry date 30/06/14 12-month Euribor rate + 3 basis point 4,000,000

Bonded loan N° 21 Board of directors of 02/04/2012 n. 6,000,000 non convertible bonds, euro 1 each, expiry date 30/06/14 12-month Euribor rate + 3 basis point 5,000,000

Bonded loan N° 22 Board of directors of 02/04/2012 n. 4,000,000 non convertible bonds, euro 1 each, expiry date 30/06/15 12-month Euribor rate + 3 basis point 3,200,000

Bonded loan N° 23 Board of directors of 02/04/2012 n. 6,000,000 non convertible bonds, euro 1 each, expiry date 30/06/15 12-month Euribor rate + 3 basis point 5,500,000

Bonded loan N° 24 Board of directors of 02/04/2012 n. 6,000,000 non convertible bonds, euro 1 each, expiry date 30/06/15 12-month Euribor rate + 3 basis point 6,000,000

36 Consolidated Balance Sheet of 2012

Bonded loan N° 25 Board of directors of 02/04/2012 n. 6,000,000 non convertible bonds, euro 1 each, expiry date 30/06/16 12-month Euribor rate + 3 basis point 6,000,000

Bonded loan N° 25 Board of directors of 02/04/2012 n. 6,000,000 non convertible bonds, euro 1 each, expiry date 30/06/16 12-month Euribor rate + 3 basis point 2,000,000

TOTALE 34,300,000

D.4) AMOUNTS DUE TO BANKS This item includes payables to banks and credit institutions in general, as summarized below:

Falling due within 12 months Bank overdrafts 9,616 Import advances 0 Collection current account 990 Loan installments falling due 25,715,647 Bank balances to receive 42,586 TOTAL 25,768,840 Falling due beyond 12 months Loan installments 54,028,484 TOTAL 79,797,324

Of which falling due beyond 60 months 976,500

The change in payables within 12 months was due to the repayment of the short-term portions of medium/long-term loans and to ordinary financial management. The increase of the amounts due beyond 12 months is due to a new medium-long term loan obtained by the subsidiary Ferriere Nord S.p.A., while the decrease of the amounts due beyond 12 months results from the payment of short- term loan instalments falling during the year. The table below details the main loans:

instalments instalments falling instalments year of opening resid. debt at increases amounts due resid. debt at Bank maturity falling due due beyond falling due disburs. amount 31/12/2011 in the year in the year 31/12/2012 within 12 months 12 months beyond 60 month

BANCA ANTONIANA* 2002 40,000,000 2015 7,500,000 - 1,875,000 1,875,000 3,750,000 5,625,000 - CREDITO BERGAMASCO * 2003 2,000,000 2013 329,524 - 282,014 47,510 - 47,510 - BANCA DI ROMA 2004 2,006,970 2016 1,027,449 - 201,582 203,517 622,350 825,867 - MEDIOCREDITO CENTRALE * 2006 10,000,000 2013 3,145,259 - 1,541,491 1,603,768 - 1,603,768 - MEDIOCREDITO DEL F.V.G. * 2006 10,000,000 2015 5,103,927 - 1,165,157 1,236,116 2,702,654 3,938,769 - BANCA POPOLARE DI VERONA 2007 5,000,000 2012 796,898 - 796,898 - - - - BANCA ANTONVENETA 2007 7,000,000 2012 ------BANCA POPOLARE DI VERONA 2007 3,000,000 2012 478,139 - 478,139 - - - - BANCA POPOLARE DI VICENZA 2008 10,000,000 2015 5,553,985 - 1,449,989 1,479,337 2,624,659 4,103,996 - MEDIOCREDITO DEL F.V.G. - FRIE * 2008 6,510,000 2019 4,882,500 - 651,000 651,000 3,580,500 4,231,500 976,500 BANCA POPOLARE FRIULADRIA 2008 10,000,000 2013 5,000,000 - 2,500,000 2,500,000 - 2,500,000 - VENETO BANCA 2009 5,000,000 2014 2,589,073 - 1,014,271 1,045,106 529,697 1,574,802 - BANCA DI CIVIDALE 2009 10,000,000 2016 6,712,782 - 1,399,602 1,450,672 3,862,508 5,313,180 - MEDIOCREDITO ITALIANO 2009 11,000,000 2014 6,111,111 - 2,444,444 2,444,444 1,222,222 3,666,667 - BANCA ANTONVENETA 2009 10,000,000 2015 6,400,000 - 1,800,000 1,800,000 2,800,000 4,600,000 - BANCO DI BRESCIA 2010 10,000,000 2015 7,587,156 - 1,971,536 2,008,744 3,606,876 5,615,620 - BANCA ANTONVENETA 2011 10.000.000 2015 10.000.000 - 2.500.000 2.500.000 5.000.000 7.500.000 - MEDIOCREDITO ITALIANO 2011 8,000,000 2018 8,000,000 - 666,667 1,333,333 6,000,000 7,333,333 VENETO BANCA * 2011 1,620,487 2017 1,505,233 - 241,114 251,277 1,012,842 1,264,119 - VENETO BANCA 2012 10,000,000 2017 - 10,000,000 - - 10,000,000 10,000,000 - CASSA DEL RISPARMIO DEL F.V.G. 2012 10,000,000 2015 - 10,000,000 - 3,333,333 6,666,667 10,000,000 - TOTAL 82,723,037 20,000,000 22,978,905 25,763,157 53,980,974 79,744,131 976,500 * Loans covered by collateral securities

D.6) ADVANCES FROM CUSTOMERS This item amounts to euro 2,635,144, down euro 5,724,146 on the previous year mainly on the part of Ferriere Nord S.p.A. The item also includes payables resulting from the clients portfolio.

37 Fin Fer S.p.A.

D.7) TRADE PAYABLES Trade payables total euro 215,250,931 with a decrease by euro 10,555,259 over the previous year mostly resulting from the subsidiary Ferriere Nord S.p.A. and connected with the performance of the scrap market. There are no payables falling due beyond five years.

D.12) AMOUNTS DUE TO TAX AUTHORITIES Amounting to euro 2,851,168, the item represents the Group’s liability towards the tax authorities.

Falling due within 12 months IRPEF (Personal income tax), employees 2,693,455 IRPEF, self-employed collaborators 50,551 Tax authorities, VAT 107,162 TOTAL 2,851,168

D.13) AMOUNTS DUE TO SOCIAL SECURITY INSTITUTIONS This item is substantially in line with the previous year.

Falling due within 12 months INPS (Social security) 2,062,745 INAIL (National Insurance Institute for industrial accidents) 10,470 Contributions, managers 74,835 Enasarco (National board for assistance to commercial agents and representatives) 58,600 Gestione Cometa 368,653 Pension funds 369,535 TOTAL 2,944,838

D.14) OTHER PAYABLES

Falling due within 12 months Holidays accrued and not taken 3,224,742 Pre-holiday bonus 73,875 Results bonus 245,325 Credit notes to issue 1,525,223 Payables, wages and salaries 2,201,259 Other payables 311,135 TOTAL 7,581,559

Falling due beyond 12 months Payables to Istituto per lo sviluppo dell’economia 26,289 TOTAL 7,607,848

E) ACCRUED LIABILITIES AND DEFERRED INCOME Standing at euro 825,723, this item may be summarised as follows:

Accrued liabilities: industrial costs 3,948 Accrued liabilities: commercial costs 0 Accrued liabilities: financial costs 754,032 Accrued liabilities: general expenses 50,977 Total accrued liabilities 808,957

Deferred income: general revenues 16,766 Total deferred income 16,766 TOTAL 825,723

38 Consolidated Balance Sheet of 2012

MEMORANDUM ACCOUNTS This item breaks down as follows:

GUARANTEES PROVIDED TO GROUP COMPANIES • Credit warrant to Banca Antoniana Popolare Veneta in favor of Trafilerie e Zincherie di Celano S.r.l. 4,600,000 • Guarantee to Sardaleasing in favor of Trafilerie e Zincherie di Celano S.r.l. 5,300,000

TOTAL 9,900,000

Guarantees issued by banks on behalf of the company • Banca Antoniana Popolare Veneta Guarantee in favor of Consorzio Acquedotto Friuli Centrale 27,157 Guarantee in favor of Ministry of Infrastructure and Transport 11,455 • Intesa San Paolo Guarantee in favor of Customs and Tax Authorities, Bari 16,600 • Banca Popolare di Vicenza Guarantee in favour of Terna S.p.A. 1,061,666 Guarantee in favour of Liquigas S.p.A. 300,000

TOTAL 1,416,878

OTHER GUARANTEES ISSUED ON BEHALF OF THE COMPANY

• Vittoria Assicurazioni Guarantee in favor of Province of Potenza 893,671 • Atradius Società Italiana Cauzioni Guarantee in favor of Province of Potenza 1,259,980 • Compagnia Assicuratrice Edile Guarantee in favor of Municipality of Osoppo 251,958 Guarantee in favor of Municipality of Osoppo 3,054,120 • Cattolica Assicurazioni Guarantee in favor of Friuli Venezia Giulia Region 2,065,500 TOTAL 7,525,229

OTHER COLLATERAL GUARANTEES Collateral guarantees are commented within “Amounts due to banks”.

39 Fin Fer S.p.A.

INCOME STATEMENT

A) VALUE OF PRODUCTION Revenues from sales and services amount to euro 982,028,401. The decrease by euro 46,693,072 on the previous year results from the decrease in turnover recorded by subsidiaries, mainly Ferriere Nord S.p.A.

Sales by geographical area were as follows (percentages refer to the total value of item A.1 in the income statement):

2012 % 2011 % Italy 579,515,145 59.01% 696,556,057 67.71% EU countries 294,160,044 29.95% 261,652,570 25.43% Non-EU countries 108,353,211 11.03% 70,512,846 6.85% TOTAL 982,028,401 100.00% 1,028,721,473 100.00%

Sales by type of product were as follows:

2012 % 2011 % Steel making 954,689,953 97.22% 998,633,417 97.08% Sundry sales 4,304,181 0.44% 7,003,823 0.68% Transport 26,021,572 2.65% 25,413,105 2.47% Net of: Discounts, returns, client allowances and bonuses (2,999,882) (0.31%) (2,347,618) (0.23%) TOTAL PRODUCT SALES 982,015,824 100.00% 1,028,702,727 100.00% Provision of services 12,577 0.00% 18,746 0.00% TOTAL REVENUES 982,028,401 100.00% 1,028,721,473 100.00%

A.4) INCREASES IN FIXED ASSETS FROM INTERNAL PRODUCTION This items includes the cost of personnel, materials and other production costs relating to in-house construction of fixed assets. The balance of euro 1,143,189 covers both costs for drawing materials from stocks and the R&D costs already commented on in the relevant section of the notes to the balance sheet.

A.5) OTHER REVENUES AND INCOME This item amounts as follows:

Miscellaneous proceeds:

Duty drawback 163,991 Insurance rebates 291,525 Gains on disposal of assets 212,587 Other extraordinary income 4,068,697 Other income 562,814 TOTAL MISCELLANEOUS PROCEEDS 5,299,614

Revenue grants:

Sundry grants 350,768 GSE contribution to photovoltaic system 86,754 TOTAL REVENUE GRANTS 437,522 TOTAL SUNDRY OTHER REVENUES AND INCOME 5,737,136

40 Consolidated Balance Sheet of 2012

B) COST OF PRODUCTION

B.6) COSTS FOR RAW AND ANCILLARY MATERIALS, CONSUMABLES AND GOODS This item amounting to euro 700,410,867 recorded a decrease by euro 41,671,911 on the previous year mostly due to smaller quantities purchased to meet the lower turnover.

B.7) COST OF SERVICES This item amounts to euro 186,520,048 euro reflecting a slight increase over the previous financial year by euro 331,544. Board of Directors’ fees totalled euro 575,672 while Board of Auditors’ fees amounted to euro 155,175. In compliance with Law decree 39/2011, transposing the relative EEC Directive, the fees for the annual audit of financial statements and tax consulting services totalled euro 118,354.

B.8) LEASES AND RENTALS This items amounts to euro 2,064,123 and refers largely to plant and machinery.

B.9) PERSONNEL COSTS This item amounting to euro 59,193,252 recorded an increase by euro 652,036 on the previous year. The average number of employees in 2012 was 1,203 as detailed below by grade.

2012 2011 2010 Operatives 889 895 924 Technical/administrative staff 299 298 306 Managers 15 15 18 TOTAL 1,203 1,208 1,248

B.10) AMORTIZATION, DEPRECIATION AND WRITE-DOWNS This item globally amounts to euro 37,532,723, out of which euro 6,165,108 result from the provision for bad debts.

B.14) OTHER OPERATING COSTS At euro 1,927,226, the item increased by euro 673,440 on the previous year-end. This item can be broken down as follows:

Revenue stamps 811,833 Capital losses on disposal of assets 188,424 Losses on receivables 798,381 Other operating expenses 128,588 TOTAL 1,927,226

C) FINANCIAL INCOME AND EXPENSES

C.15) INCOME FROM EQUITY INVESTMENTS IN OTHER COMPANIES

This item amount to euro 51,346 and includes capital gains from shareholdings realised by the parent company.

C.16.d) OTHER FINANCIAL INCOME OTHER THAN ABOVE This item amounts to euro 2,227,004, as follows:

Interest on trade receivables 29,430 Interest from banks 1,848,628 Sundry financial income 348,946 TOTAL OTHER FINANCIAL INCOME 2,227,004

41 Fin Fer S.p.A.

C.17) INTEREST AND OTHER FINANCIAL EXPENSES The item amounts to euro 5,570,975 , as follows:

Others: Interest on loans 2,028,325 Interest on bonds 1,205,321 Interest on securitization 1,873,616 Interest, import/export 40,693 Other interest charges and financial expenses 423,020 TOTAL INTEREST AND OTHER FINANCIAL EXPENSES, OTHERS 5,570,975 TOTAL INTEREST AND OTHER FINANCIAL EXPENSES 5,570,975

This item decreased by euro 855,124 on the previous year reflecting the interest on the securitisation operation by the subsidiary Ferriere Nord S.p.A. and the interest relating to medium/long-term loans.

C.17.bis) FOREIGN CURRENCY EXCHANGE GAINS AND LOSSES

Foreign currency exchange gains 337,923

At the closing date of these financial statements, the subsidiary Ferriere Nord holds derivatives (forward agreements) to hedge its exposure to euro/dollar exchange rate fluctuations resulting from purchases of raw materials and semi-finished products. Even though the said agreements were entered into to eliminate the risk resulting from exchange rate fluctuations, at the closing date of the financial year 2012 they do not provide full hedging inasmuch as currently they no longer correspond to maturities of foreign currency cash flows. At the closing date of the financial year, the fair value of these transactions is irrelevant.

D) ADJUSTMENTS TO FINANCIAL ASSETS

D.18.c) REVALUATION OF SECURITIES HELD AS CURRENT ASSETS OTHER THAN EQUITY INVESTMENTS The item, amounting to euro 1,270,000, reflects the adjustment to market value of Junior Notes, as explained in the relevant comment in the notes to balance sheet assets.

E) EXTRAORDINARY INCOME AND EXPENSES

E.20) EXTRAORDINARY INCOME - Others This item amounting to euro 885,594 includes the extraordinary income resulting from the application for repayment of the IRES tax paid in excess from 2007 to 2011, owing to non-deduction of IRAP for expenses related to employees and equivalent workers.

E.20) EXTRAORDINARY EXPENSES – Others This item amounting to euro 944 contains the extraordinary expenses resulting from the subsidiary Kovinar D.o.o.

22) INCOME TAXES FOR THE YEAR On the basis of the result for the year, a provision of euro 3,992,262 was taken to cover current year taxes. The amount for deferred taxes (euro 1,684,002) reflects the changes over the year already commented on in the notes to the balance sheet items.

42 Consolidated Balance Sheet of 2012

DEFERRED TAXES YEAR 2012 YEAR 2011 fiscal effect fiscal effect amount of fiscal effect for amount of fiscal effect for for IRES for IRES description of changes temporary IRAP purposes TOTAL temporary IRAP purposes TOTAL purposes purposes differences (3.90%-4.82%) differences (3.90%-4.82%) (27.50%) (27.50%) DEFERRED TAX ASSETS Taxed provision for bad debts 13,823,652 3,801,504 3,801,504 8,870,000 2,484,845 2,484,845 Agents’ leaving indennity 684,695 188,291 26,704 214,995 655,964 183,140 25,973 209,113 Agents’ leaving indennity (2009) 524,273 20,447 20,447 404,191 15,763 15,763 Agents’ leaving indennity (2009) 7,152 345 345 4,189 202 202 Upgrading of Osoppo/San Giorgio Nogaro areas 4,131,877 1,136,266 161,143 1,297,409 7,816,788 2,149,617 304,853 2,454,470 Post-operative management of landfill 731,460 201,152 28,527 229,679 731,460 201,152 28,527 229,679 Depreciation, stattutory/fiscal differences 816,619 224,570 31,848 256,418 742,261 204,122 28,948 233,070 High statutory depreciation 485,145 133,415 133,415 437,182 120,225 120,225 Revaluations, depreciation 4,053,742 1,114,779 158,096 1,272,875 2,785,517 766,018 108,635 874,653 Unrealized infra-group gains 1,798,421 494,566 70,138 564,704 2,499,276 687,301 97,472 784,773 Intercompany profits for goods in warehouse 972,899 267,547 37,943 305,490 886,254 243,720 34,564 278,284 Intercompany profits for goods in warehouse Kovinar 555,069 99,913 99,913 Goodwill 53,280 14,652 2,568 17,220 39,960 10,989 1,926 12,915 Goodwill 1,531,200 421,080 59,717 480,797 1,864,800 512,820 72,727 585,547 Litigation (employees) and voluntary severance package 130,917 36,002 36,002 Non-deductible repairs and maintenance 131,737 36,228 5,138 41,366 Non-deductible repairs and maintenance (2009) 742,222 204,114 204,114 791,541 217,674 217,674 TOTAL DEFERRED TAX ASSETS 8,899,325 8,578,581

DEFERRED TAX LIABILITIES Accelerated depreciation 985,881 271,117 271,117 1,086,170 298,697 298,697 Deferred realized gains Leasing 446,783 122,865 17,425 140,290 301,050 82,789 11,741 94,530 Leasing 147,357 40,523 7,103 47,626 100,613 27,669 4,850 32,519 Other provisions 10,606 34,937 TOTAL DEFERRED TAX LIABILITIES 469,639 460,683 Use of the credit in the National Consolidated Tax Return 4,989,875 1,372,214 1,372,214 deriving from losses carried forward Total net deferred tax assets 9,801,900 8,117,898

Information on the nature of the Group’s business and key events after the year-end, as well as further information on business with subsidiaries, may be found in the Board of Directors’ report.

Osoppo, 14th May 2013

The Chairman of the Board Federico Pittini

The Directors Andrea Pittini Marina Pittini Ottavino Di Filippo Vincenzo Chiari

43 Fin Fer S.p.A.

RECLASSIFIED BALANCE SHEET Values expressed in thousands of euro

CAPITAL EMPLOYED 31/12/2012 31/12/2011

Current operating assets Trade receivables 145,077 210,995 Other receivables 32,273 29,986 Inventories 160,138 155,267 Accrued income and prepaid expenses 1,167 1,440 338,655 397,688 Current liabilities Trade payables (215,251) (225,806) Other payables (16,038) (26,129) Accrued liabilities and deferred income (826) (618) (232,115) (252,553) NET WORKING CAPITAL 106,540 145,135

Long-term liabilities Provision for taxes (470) (461) Provision for employee severance indemnity (11,481) (11,968) Other medium/long-term liabilities (28,543) (30,530) (40,494) (42,959) NET WORKING CAPITAL, NET OF LONG-TERM LIABILITIES 66,046 102,176

Fixed assets Net tangible fixed assets 156,311 164,435 Net intangible fixed assets 1,040 1,145 Financial fixed assets 6,504 1,667 163,855 167,247 NET CAPITAL EMPLOYED 229,901 269,423

R.O.I. (return on investment) EBIT/Net capital employed 2.7% 7.0%

Net short-term financial assets (liabilities) Cash, banks 61,389 29,351 Securities 10,763 9,491 Short-term financial payables (25,769) (31,817) 46,383 7,025 Medium/long-term financial assets (liabilities) Medium/long-term financial payables (88,328) (89,505) (88,328) (89,505) NET FINANCIAL INDEBTEDNESS (41,945) (82,480)

Net financial indebtedness/shareholders’ equity 0.2 0.4

Shareholders’ equity, minority interests 89 86 Shareholders’ equity, Group 187,867 186,857 Shareholders’ equity 187,956 186,943

R.O.E. Net income/opening shareholders’ equity 1.6% 5.1%

Net Working Capital 106,540 145,135 Short-term financial assets (liabilities) 46,383 7,025 Total Net Financial Working Capital at year-end 152,923 152,160

44 Consolidated Balance Sheet of 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011

Revenues from sales and services 982,028 1,028,721 982,028 1,028,721 Cost of sales Consumption of raw materials (net of change in inventories) 708,291 732,515 Industrial services 147,854 147,461 Personnel costs 52,108 51,534 Other industrial costs 2,064 1,878 Industrial depreciation 30,251 31,188 Change in semi-finished and finished product inventories (12,750) (4,431) Capitalization of internal constructions (1,143) (1,078) 926,675 959,067 Gross industrial margin 55,353 69,654 Sales and administrative costs and operating expenses Sales costs 41,670 41,510 Administrative costs 3,160 3,242 Personnel costs 7,085 7,007 Amortization of deferred charges 487 1,239 Amortization of goodwill 630 630 Other sundry income (expenses) (3,810) (2,881) 49,222 50,747 Operating margin 6,131 18,907 Non-operating income (expenses) Net financial income (expenses) (3,293) (5,387) Exchange gains (losses) 338 61 Revaluations (writedowns) of financial assets 1,270 (2,469) (1,685) (7,795) Income before extraordinary items and taxes 4,446 11,112 Extraordinary income and expenses Extraordinary income 886 17 Extraordinary expenses (1) 0 885 17 Income before taxes and minority interests 5,331 11,129 Income taxes (2,308) (2,042) Net income for the year 3,023 9,087 Net income, minority interests 3 5 NET INCOME, GROUP 3,020 9,082 EBIT (Earnings Before Interest and Taxes) Income before extraordinary items and taxes 4,446 11,112 Net financial expenses (income) 3,293 5,387 Net exchange gains (losses) (338) (61) Revaluations (writedowns) of financial assets (1,270) 2,469 EBIT (Earnings Before Interest and Taxes) 6,131 18,907 EBIT/REVENUES 0.6% 1.8% EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) EBIT 6,131 18,907 amortization of goodwill 630 630 amortization of deferred charges 487 1,239 industrial depreciation 30,251 31,188 provisions and writedowns 6,165 6,024 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) 43,664 57,988 EBITDA/REVENUES 4.4% 5.6%

45 Fin Fer S.p.A.

CASH FLOW STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011 Net income 3,023 9,087 Amortization and depreciation 31,368 33,057 Allocation for employee severance indemnity 714 776 Decrease in employee severance indemnity provision (1,201) (1,357) Allocation to provisions (1,978) 4,958 Writedowns (revaluations) of fixed assets 0 0 Self-financing generated by operating activities 31,926 46,521

Change in short-term operating receivables 65,918 (6,495) Change in other short-term operating receivables and accruals and deferrals (1,737) 2,486 Change in inventories (4,870) (13,998) Change in short-term trade payables (10,553) 20,520 Change in other operating payables and accruals and deferrals (9,883) 5,056 Change in medium/long-term non financial receivables and payables (280) (1,932) Cash flow from change in net working capital 38,595 5,637 Cash flow from operating activities 70,521 52,158

Cash flow from investing activities Investments in tangible fixed assets (23,958) (25,717) Investments in intangible fixed assets (1,012) (1,886) Investments in financial fixed assets (4,405) (2) Disposals of tangible fixed assets 1,832 4,126 Disposals of intangible fixed assets 0 435 Disposals of financial fixed assets 0 0 Change in financial fixed assets (434) (72) Cash flow from investing activities (27,977) (23,116) Net cash flow 42,544 29,042

Cash flow from financing activities Long-term loan amounts collected 20,000 19,620 Long-term loan repayments (25,736) (19,442) Bond issues 4,560 8,500 Changes in shareholders’ equity 0 (102) Dividends distribution (2,010) 0 Net cash flow from financing activities (3,186) 8,576

Change in net liquidity 39,358 37,618

Opening short-term financial position 7,026 (30,592) Change in net liquidity 39,358 37,618 Closing short-term financial position 46,384 7,026

Change in net liquidity 39,358 37,618 Change in net working capital (38,595) (5,637) Change in net financial working capital 763 31,981

46

Ferriere Nord S.p.A Financial Statements 2012

Ferriere Nord S.p.A. Board of Directors

Andrea Pittini Chairman Federico Pittini Vice Chairman and Chief Executive Officer Marina Pittini Luigi de Puppi de Puppi Vincenzo Chiari Paolo Felice Lino Carrer

Statutory Auditors

Standing Members

Gianfranco Romanelli Chairman Giuseppe Varisco Claudio Sambri

Alternate Members

Mario Marino Maurizio Paiola

General Manager

Paolo Felice

Osoppo (Udine) - Zona Industriale Stock capital € 60,000,000 fully paid up Registered in the Register of Companies of Udine Tax no. and V.A.T. no. 00163780307 Company subject to the management and coordination by Fin.Fer S.p.A. Ferriere Nord S.p.A.

FERRIERE NORD S.p.A. DIRECTORS’ REPORT ON THE POSITION OF THE COMPANY AND MANAGEMENT TRENDS FOR THE YEAR 2012

Shareholders, before a detailed analysis of the data included in the financial statements, it is worth stressing some elements that characterised international and national economic trends, especially those recorded in the iron- and steel-working sector.

1. INTERNATIONAL AND NATIONAL SITUATION In the second half of 2012, global economy significantly slowed down and business activities weakened both in advanced and emerging countries; international trade lost the momentum of the first half of the year. In the end, global economy growth reached 3.1% (3.8% in 2011). The eurozone was still affected by negative trends for domestic demand, which has been decreasing from the first half of 2011; gross fixed investments decreased and there was a stagnation of household consumption. Production in the eurozone decreased by 0.4%, whereas it had been growing in the previous year (1.4%). In Italy, a significant slowdown in trade exchanges with foreign countries and a marked weakening of expenditure by households and companies led to a major GDP reduction (decrease by 2.4%). Domestic product trends are still affected by lower income of households and uncertainty in investment choices made by companies. Looking ahead, the difficulties that are currently affecting some major manufacturing sectors such as the automobile and iron- and steel-working sectors will persist.

2. TRENDS IN THE STEEL SECTOR Global raw steel production remained stable at 1.5 billion tons. Production is no longer driven by China, which shows the first significant signs of slowdown after a constant double-digit growth in the last decade. All EU countries recorded major decreases, including Germany (-4%) and Italy (-5%). In the Italian steel production scenario, there are still unused production capacities that even exceed 50% in some fields. In particular, the most affected sector is building (both residential and industrial building). Apparent consumption on the domestic market of long rolled steel products, which is the reference market for the plants of your company, recorded a decrease by more than 20%; Italian manufacturers were able to partially compensate domestic market shrinking with exports, which increased by 38%.

3. FINANCIAL AND ECONOMIC TRENDS Your company was also obliged to resort to exports, which increased by more than 23%, i.e. the volumes lost on the domestic market. Negative trends on the domestic market were also followed by a significant reduction in average selling prices since Italian manufacturers adopted very aggressive selling policies to protect their market shares. Net revenues in 2012 were euro 923 million against euro 964 million in the previous year, i.e. a decrease by 4% reflecting the decrease in average selling prices. Exports were 38% of shipped volumes (30% in 2011). Market trends for ferrous scraps are still affected by inflationary pressures resulting from increase in demand by iron and steel manufacturers on emerging markets on the one side and decrease in offer from low production by manufacturing companies on the other side; the decrease in cost of ferrous materials (just 4%) was entirely absorbed by a larger decrease in average selling prices. With reference to costs of energy inputs, the iron and steel sector is still adversely affected by government policies in the field of excise duties on some consumables, especially methane, whose cost increased by 30% over the previous year, thus entailing an increase in expenditure by euro 5 million.

The significant decrease in margin between average selling price and cost of raw materials affected profitability; in 2012, EBITDA was euro 35.3 million (49.4 million in the previous year). The incidence on income decreased from 5.1% in 2011 to 3.8%. Depreciation and provisions amounted to euro 32.1 million against euro 34.4 million in 2011. EBIT was positive (about euro 3.2 million against euro 15 million in the previous year).

52 Financial Statements 2012

The balance of financial expenses was euro 3 million, which shows a major improvement over 2011 (euro 4.7 million) resulting from both decrease in applied interest and significant decrease in average annual debt. The profit for the year, net of current and deferred taxes, was euro 1.2 million, reflecting a decrease over 2011 (euro 8 million).

The assets of the company at the end of the last year were as follows: • investment in net fixed assets of about euro 131 million, i.e. a slight decrease over the previous year; • net working capital of about euro 41 million, i.e. a decrease by euro 38 million over 2011, mostly reflecting a lower incidence of trade receivables thanks to the increase in exports under more favourable conditions; • net debit position amounting to euro 16 million, i.e. sensible improvement (about euro 41 million) over the previous financial year, especially thanks to cash generated by a decrease in working capital; • shareholders’ equity reaching euro 156.8 million against euro 155.5 million recorded in the previous year.

The net debt ratio, expressed as the ratio between net financial position and shareholders’ equity, was 10%, i.e. a decrease over the previous financial year (37%). In 2012, self-financing amounted to euro 25.4 million, which marks a decrease compared with the result of 2011 (euro 41 million). The cash generated by working capital was about euro 41 million. Hence, the cash flow resulting from operating management (gross of investments) was positive by euro 67 million. The cash allocated for investments and disinvestments in intangible, tangible and financial assets was about euro 25 million. The final net cash flow was positive by about euro 41 million, which considerably improved the financial position with a closing net debt amounting to about euro 16 million; this improved net financial position enables the company to plan future growth activities on a sound basis and with a moderate optimism.

The investments launched in the previous year and aimed at improving production efficiencies in the various plants were completed. The Company continued the implementation of its action plan in the field of safety and the environment. The investments in tangible assets carried out in 2012 were about euro 21 million (against euro 18.2 million in 2011). The most significant are listed below: • Site in Osoppo - Photovoltaic system - New reception - Converter for substation - Purchase of furnace loading crane - Extension of third scrap area • Site in Potenza - Purchase of property adjacent to the manufacturing site

As for work currently in progress that will be completed in 2013, the most significant projects are: • Site in Osoppo - New office building - New furnace for steel mill - Extra pre-finishing train at rolling mill - Air coolers for steel mill • Site in Potenza - Rationalisation of smoke treatment plant – step 2 – at steel mill.

4. INFORMATION ON STAFF, INFORMATION SYSTEMS AND ENVIRONMENT

Staff: At 31.12.12, the staff included 866 members (out of which 45 engaged with fixed-term contracts), i.e. an increase by 13 units compared with December 2011; the yearly average number of staff members is 862 people in line with the previous year. Again, redundancy arrangements were used, such as CIG/GIGO unemployment regulations, for 75,000 hours, i.e. an increase by 30% compared with the previous year. As usually, at the initiative of the Owners and the General Management, strongly persuaded that continuously investing in the development of knowledge and professional skills of human resources is strategically important, the staff members from plants and central functions were involved in extensive training activities dealing with safety, prevention, protection, proper use, maintenance and innovation of systems and processes, understanding of their tasks within the company and corporate culture issues. All training activities are managed by an ad hoc body named “Officina Pittini per la Formazione - OPF”, which directly deals with both identification and analysis of training needs and design and implementation of a permanent corporate training plan named “la Cultura dell’acciaio” (Steel Culture) and focused on technical issues with a view to professional enhancement.

53 Ferriere Nord S.p.A.

At the same time, the Association co-operates with the education system at the regional level, including universities: in particular, the 5th edition of the “Alternanza Scuola Lavoro” (School to Work Transition) project was implemented, which makes students from technical and vocational schools familiar with steel manufacturing processes within the framework of a both theoretical and practical teaching program designed and implemented by schools, companies and training experts. Since 2005, this project has been involving more than 300 students. About 20 of them are now working at Ferriere Nord. The training activity carried out by OPF was particularly intensive from September 2011 to August 2012: around 1,500 users were involved in training activities (more than 800 coming from the local area). On the overall, 3,500 hours of classroom training were provided. These figures confirm that OPF plays a significant role amongst training institutions at the regional level, thus consolidating its two-fold mission: being a corporate school and an institution at the service of the territory.

Information systems: As for information systems, the main activities performed in 2012 were as follows: • Design of strategies and management of corporate mobile devices • Launch of the Sibilla project in the field of management control • Automation of arrival and departure of goods in the new reception area in Osoppo • Specifications for handling the new 2013-2015 emission trading procedures • New labelling system management for finished products in Potenza • System management of plant movements in Kovinar • Updating of new As/400 operating system release • Centralised handling of printing and scanning operations with user accounting • New handling and filing application for technical drawings

Environment: a) Environmental and safety certification The SGSA (Safety and Environmental Management System) system, after 3 years of certification by IGQ in accordance with UNI EN ISO 14001 for the environment and OHSAS 18001 for safety, was submitted to the relevant renewal checks in November 2012 (environment) and January 2013 (safety). All checks were successful and certification was renewed for three additional years. The Energy Management System was certified in May 2012 by IGQ according to UNI EN ISO 50001. This system is operating. One of its main objectives is constant management improvement in this crucial field. The Zero Waste Water project was launched in Osoppo. Its objective is to reduce water consumption and to eliminate industrial effluents from facilities thanks to a reverse osmosis system. Review and optimisation of industrial waste water circuit management were launched. Waste water effluents are expected to be zeroed in 2013. b) AIA – (Environmental Integrated Authorization) Osoppo obtained its Environmental Integrated Authorisation (AIA) in 2010. In 2012, ARPA inspected the management and monitoring system provided for by the said authorisation. This inspection was successful. The Environmental Integrated Authorisation (AIA) for the site in Potenza was issued by Regional Decision no. 176 of 22.2.2012. Control and monitoring activities were started as provided for by the authorisation. At the plant in Potenza, updating and upgrading activities for the smoke detection and suppression system at the steel mill continued. The main section of the system is expected to be installed during the planned downtime in August 2013. c) Regulation on safety and reclamation of polluted sites In 2013, the reclamation activities provided for by the plan approved according to Ministerial Decree no. 471/1999 as well as the checks and tests required for this area to be released by the competent authorities will be completed. A provision for future expenses was already set aside in 2008. d) CO2 emissions In March, the procedure to obtain the IGQ certification for emission monitoring and statement in 2012 was successfully completed. The period 2008-2012 closed with an allowance surplus of 51,067 tons that may be used in the period 2013-2020. IGQ also certified the reference quantities for the allowances to be allocated for the new period by the European Commission. In the new period, allowances will be allocated according to European benchmark criteria.

54 Financial Statements 2012

5. PARENT COMPANY AND GROUP COMPANIES The commercial and financial relationships with the parent company and the Group companies, which occur at arm’s length, produced the following balances (in euro):

CompanY Expenses Revenues Payables Receivables

FIN.FER. S.p.A. (Holding company) 5,452,946 49,978 7,053,265 50,189

FIN.FER. S.p.A. (Financial) 1,601,214 75,930 36,561,833 3,792,275

S.I.A.T. S.p.A. 335,202 33,613,150 283,252 7,011,065

S.I.A.T. S.p.A. (Financial – Centralised Treasury) 0 111,833 4,329,866 8,599,637

LA VENETA RETI 31,071 36,794,946 121 14,355,904

LA VENETA RETI S.r.l. (Financial – Centralised Treasury) 0 106,401 6,534,783 8,952,985

TRAFILERIE E ZINCHERIE DI CELANO S.r.l. 47,682 21,942,542 481,195 4,441,256

TRAFILERIE E ZINCHERIE DI CELANO S.r.l. (Financial) 0 43,054 1,209,509 5,976,317

PITTINI STAHL G.m.b.H. 523,575 0 89,324 0

KOVINAR D.o.o. 0 22,677,011 0 7,853,414

6. RESEARCH AND DEVELOPMENT ACTIVITIES The company invested more than 10,400 hours (20,000 in 2011) in analysis, research and development activities for innovative products and processes in its various production areas as well as in the environmental field. The most significant activities launched in 2009 and completed in 2012 within the European research framework (RFCS program) were: • GREENEAF; study on the replacement of fossil fuels by biomass fuels. • RUSTEEL; study on steel corrosion applied to seismically safe buildings. Within the framework of the RFCS program, two research projects were submitted and approved. The agreement with the European Union is currently under finalisation. The projects should start at mid-2013: • MELTCON; temperature measurements and continuous analysis in the EAF furnace by optical fibre through a tube. • THERELEXPRO; energy recovery from the EAF low temperature smoke cooling circuit (90°C) by thermoelectric system. We are confident that the positive outcome of such innovations may generate good results both in terms of more competitive products to sell and reduction of production costs through reduction of specific consumables and optimisation of processes.

7. INFORMATION PURSUANT TO SUB-PARS. 3-4 OF ART. 2428 OF THE ITALIAN CIVIL CODE The company does not hold any own shares and no own shares were purchased or disposed of directly or through trust companies.

8. INFORMATION PURSUANT TO ART. 2428, SUB-PAR. 2, ITEM 6-BIS, OF THE ITALIAN CIVIL CODE With reference to the provisions laid down in art. 2428, sub-par. 2, item 6-bis of the Italian Civil Code, it is worth stressing the following:

Credit risk: The company directly manages the commercial risk towards its domestic customers by assigning each of them a specific rating. This risk is constantly monitored according to formalised procedures for the selection and assessment of customers, determination of credit limits, check of expected collection flows and debt collection actions, if any. Under some circumstances, it requires additional guarantees, mainly sureties, from customers. As for foreign customers, except for some special cases, according to its general policy, the company does not take any risk and covers supplies with letters of credit or bank guarantees and/or guarantees provided by customers. Thanks to these procedures, the company controls its credit risk, which is however globally marginal.

Liquidity risk: The liquidity risk is the risk that the financial means required to meet payment obligations resulting from ordinary activities, investment activities and maturities of financial instruments are not available. In order to monitor and manage this risk, the company adopts specific policies and procedures, including centralised management of financial debts and liquidity, identification of providers of medium- and long-term financial resources on the capital market, provision of

55 Ferriere Nord S.p.A. short-term credit lines to largely obtain the margins for manoeuvre required in the light of its working capital and financial flows. The company has two banking credit lines: the medium-term credit line covers its current financing transactions; the short-term credit line covers its working capital financing and other operating needs. It is worth noting that: • the company does not hold any financial assets for which there is no liquid market, • there are debt instruments or other credit lines to meet its liquidity needs; unused credits are significant, • its medium- and long-term financial debt is fully governed by floating taxes (Euribor at 6 and 3 months), • Junior Notes are discounted and properly valued. For those reasons, the liquidity risk is very limited.

Exchange rate risk: There are substantially no trade receivables in foreign currencies; as for amounts owed to suppliers in foreign currencies, their extent is marginal and, according to its policy, the company partially covers this exposure through US$ derivative contracts. In general, financial instruments are managed according to the experience gained by the company.

Market risk: Market risks as well as risks resulting from changes in the level of selling and purchasing prices against current commitments are largely mitigated by a short operating cycle.

Security - and environment-related risks: The company adopted all necessary protection and monitoring measures in the field of safety and the environment and it complies with all applicable regulations for the prevention of such risks. An especially designed unit continuously monitors and controls the severity of such risks and applies the requirements provided for by national and Community regulations in force; this intensive monitoring activity of the safety and environment management system is completed by a yearly monitoring meeting of the General Management. During such meeting, the General Management reviews the trends of all activities, identifies the existing conditions, promotes improvement initiatives, allocates the relevant financial resources and certifies the position as a whole in a final audit. The variables that are constantly monitored include: production waste, greenhouse gases, air emissions, state of soils and water resources, waste water effluents, external noise, radioactivity and production of certain chemical substances. Safety and environment management policies are assessed on a yearly basis by competent external certification bodies; in 2013, the IGQ certification procedures concluded that the policies adopted by the company are appropriate taking into account its system and compliant with regulations. The company entered into insurance policies to cover damage to third parties and the environment, whose sums insured are deemed appropriate by the parent company according to the assessment of the relevant risks.

9. FUTURE EXPECTABLE MANAGEMENT TRENDS Even though global trade is slightly improving in this first half of the year, a global production growth of 3% is currently estimated in 2013, which is in line with the rate recorded 2012. This only and increasingly results from the expansion of trade flows between emerging countries. With reference to domestic economy, in 2013 recession will persist, as in 2012, with a average annual decrease in GDP of 1.5%; investment expenditure will still be affected by uncertainties of domestic demand, low use of production capacity and credit restraints. Following significant increase in the last three years, unemployment rate will remain high and will inevitably affect domestic demand. The building sector will remain the most affected and this will entail a further decrease in the demand of steel building materials. However, the company can confidently rely on the leadership gained in its field of activity at the national level, also thanks to improved production quality, extended range and more extensive and improved penetration activity on export markets based on a commercial organisation highly focused on and well-established in each country. The sales recorded in the first four months of 2012 show a result of euro 260 million, i.e. a decrease by 15% over 2011. This decrease in turnover can be partly explained by a decrease in average selling prices (9%) and partly by the reduction of volumes. In this period, exports almost reached 50% over total sales, which is a clear sign of persisting stagnation on the domestic market. The market of ferrous scraps is still inflationed by the increase in demand from advanced countries and low offer from reduced industrial production all over Europe; the costs in the first four months are almost aligned with those recorded in the same period in 2012, which were highly inflationed. Profitability was affected and, given a sharp decrease in average selling prices, the company is obliged to launch further cost reduction actions (both manufacturing and overhead expenses). The lines followed by the company in its approach – aggressive protection of domestic market shares, stronger penetration of the closest countries and reduction of processing costs – will effectively support corporate profitability and will enable the company to keep its economic balance.

56 The projections for the whole year 2013 according to volumes and prices currently estimated for the next period show an overall turnover of about euro 850 million, i.e. a decrease by 8% over 2012.

10. OBLIGATIONS IN THE FIELD OF PRIVACY The policy paper on safety was updated and is kept by the company in accordance with the relevant legal provisions.

Shareholders, the analysis and presentation of corporate facts being completed, you are kindly requested to approve the draft financial statements and management report as drawn up and showing a net profit of euro 1,221,747, to be allocated as follows according to our proposal: • 5%, amounting to euro 61,087, to the legal reserve; • the remaining amount of euro 1,160,660 to the extraordinary reserve.

Osoppo, 14th May 2013

The Chairman of the Board of Directors Cav. Lav. Andrea Pittini

The Directors Federico Pittini Marina Pittini Paolo Felice Vincenzo Chiari Luigi de Puppi de Puppi Lino Carrer Ferriere Nord S.p.A.

FERRIERE NORD S.p.A. FINANCIAL STATEMENTS AT 31st December 2012

BALANCE SHEET Values expressed in euro

ASSETS 31/12/2012 31/12/2011

A) SUBSCRIBED CAPITAL UNPAID uncalled capital 0 0 called capital 0 0 Total subscribed capital unpaid A) 0 0

B) FIXED ASSETS I Intangible fixed assets 1) start-up and expansion expenses 0 0 2) research, development and advertising costs 0 0 3) industrial patent rights and intellectual property rights 20,016 28,622 4) concessions, licenses, trademarks and similar rights 0 0 5) goodwill 0 0 7) intangible fixed assets under construction and advances 181,103 0 8) other 441,211 604,472 total I 642,330 633,094 II Tangible fixed assets 1) land and buildings 73,110,464 73,223,718 2) plant and machinery 38,900,145 50,169,312 3) industrial and commercial equipment 346,991 445,262 4) other assets 1,098,526 1,084,866 5) tangible fixed assets in course of construction and advances 9,401,798 4,366,420 total II 122,857,924 129,289,578 III Financial fixed assets 1) equity investments in a) subsidiaries 0 0 b) associated 22,105 22,105 d) other companies 4,445,207 17,707 total 1) 4,467,312 39,812 2) receivables a) subsidiaries within 12 months 0 0 beyond 12 months 0 0 total a) 0 0 b) associates within 12 months 0 0 beyond 12 months 0 0 total b) 0 0 c) parent companies within 12 months 0 0 beyond 12 months 0 0 total c) 0 0 d) others within 12 months 0 0 beyond 12 months 81,361 80,126 total d) 81,361 80,126 total 2) 81,361 80,126 3) other securities 3,360,000 3,360,000 4) treasury shares 0 0 total III 7,908,673 3,479,938 Total fixed assets B) 131,408,927 133,402,610

58 Financial Statements 2012

C) CURRENT ASSETS I Inventories 1) raw, ancillary materials and consumables 45,378,174 53,408,906 2) work-in-progress and semi-finished products 17,780,956 8,902,196 3) construction contracts, work-in-progress 0 0 4) finished products and goods 79,646,959 76,013,142 5) advances 0 0 total I 142,806,089 138,324,244 II Receivables 1) trade within 12 months 110,014,975 174,336,411 beyond 12 months 0 0 total 1) 110,014,975 174,336,411 2) subsidiaries within 12 months 0 0 beyond 12 months 0 0 total 2) 0 0 3) associates within 12 months 0 0 beyond 12 months 0 0 total 3) 0 0 4) parent companies within 12 months 456,193 4,264,192 beyond 12 months 0 0 total 4) 456,193 4,264,192 4-bis) taxes within 12 months 1,425,680 418,242 beyond 12 months 1,699 39,742 total 4-bis) 1,427,379 457,984 4-ter) deferred tax assets within 12 months 0 0 beyond 12 months 7,140,185 6,882,710 total 4-ter) 7,140,185 6,882,710 5) others a) other Group companies 23,528,939 24,617,778 b) other debtors within 12 months 19,909,327 16,362,737 beyond 12 months 10,000 10,000 total 5) 43,448,266 40,990,515 total II 162,486,998 226,931,812 III Financial assets not held as fixes assets 1) investments in subsidiaries 0 0 2) investments in associates 0 0 3) investments in parent companies 0 0 4) others investments 0 0 5) treasury shares 0 0 6) other securities 10,740,000 9,470,000 total III 10,740,000 9,470,000 IV Cash and cash equivalents 1) bank and postal deposits 59,082,412 26,687,792 2) cheques 0 0 3) cash in hand 20,264 18,405 total IV 59,102,676 26,706,197 Total current assets C) 375,135,763 401,432,253

D) ACCRUED INCOME AND PRE-PAID EXPENSE accrued income and pre-paid expenses 814,609 1,074,846 discount on loans 0 0 Total accrued income and pre-paid expenses D) 814,609 1,074,846

Total assets (A+B+C+D) 507,359,299 535,909,709

59 Ferriere Nord S.p.A.

LIABILITIES 31/12/2012 31/12/2011

A) SHAREHOLDERS’ EQUITY I Share capital 60,000,000 60,000,000 II Additional paid-in capital 0 0 III Revaluation reserves 31,567,719 31,567,719 IV Legal reserve 7,019,624 6,621,387 V Statutory reserves 0 0 VI Reserve for treasury shares 0 0 VII Other reserves: - extraordinary reserve 64,063,972 56,497,461 total VII 64,063,972 56,497,461 VIII Profits (losses) carried forward (7,107,117) (7,107,117) IX Profit (loss) for the year 1,221,747 7,964,748 Total shareholders’ equity A) 156,765,945 155,544,198

B) PROVISION FOR CONTINGENCIES AND OTHER CHARGES 1) pensions funds and similar obligations 1,149,581 1,068,137 2) provision for taxation a) taxes 0 0 b) deferred taxes 271,117 298,697 3) other provisions for contingencies and other charges 9,963,454 13,815,160 Total provision for contigencies and other charges B) 11,384,152 15,181,994

C) EMPLOYEE SEVERANCE INDEMNITY 8,464,606 8,707,556

D) PAYABLES 1) bonds within 12 months 0 0 beyond 12 months 0 0 total 1) 0 0 2) convertible bonds within 12 months 0 0 beyond 12 months 0 0 total 2) 0 0 3) amounts due to shareholders for loans within 12 months 0 0 beyond 12 months 35,000,000 35,000,000 total 3) 35,000,000 35,000,000 4) amounts due to banks within 12 months 23,707,479 28,963,745 beyond 12 months 50,168,132 53,848,430 total 4) 73,875,611 82,812,175 5) amounts due to other financial companies within 12 months 0 0 beyond 12 months 0 0 total 5) 0 0 6) advances within 12 months 2,541,775 8,280,954 beyond 12 months 0 0 total 6) 2,541,775 8,280,954 7) trade payables within 12 months 199,762,791 211,209,880 beyond 12 months 0 0 total 7) 199,762,791 211,209,880 8) trade notes issued within 12 months 0 0 beyond 12 months 0 0 total 8) 0 0

60 Financial Statements 2012

9) amounts due to subsidiaries within 12 months 0 0 beyond 12 months 0 0 total 9) 0 0 10) amounts due to associates within 12 months 0 0 beyond 12 months 0 0 total 10) 0 0 11) amounts due to parent companies within 12 months 8,615,098 6,054,801 beyond 12 months 0 0 total 11) 8,615,098 6,054,801 12) amounts due to tax authorities within 12 months 2,171,016 2,696,579 beyond 12 months 0 0 total 12) 2,171,016 2,696,579 13) amounts due to social security institutions within 12 months 2,406,581 2,334,058 beyond 12 months 0 0 total 13) 2,406,581 2,334,058 14) other payables a) other Group companies within 12 months 0 0 beyond 12 months 0 0 b) other within 12 months 6,166,281 7,977,726 beyond 12 months 0 0 total 14) 6,166,281 7,977,726 Total payables D) 330,539,153 356,366,173

E) ACCRUED LIABILITIES AND DEFERRED INCOME accrued liabilities and deferred income 205,443 109,788 premiums on loans 0 0 Total accrued liabilities and deferred income E) 205,443 109,788

Total shareholders’ equity and liabilities 507,359,299 535,909,709

MEMORANDUM ACCOUNTS guarantees provided to - group companies 9,900,000 11,700,000 garantees issued by banks on behalf of the company 1,416,878 6,272,438 others 7,525,229 7,525,229 18,842,107 25,497,667

61 Ferriere Nord S.p.A.

INCOME STATEMENT 31/12/2012 31/12/2011

A) VALUE OF PRODUCTION 1) revenues from sales and services 923,238,995 963,655,350 2) changes in inventories: work-in-progress 0 0 semi-finished products 8,878,760 1,871,829 finished products 3,633,817 4,168,382 total 2) 12,512,577 6,040,211 3) changes in construction contracts, work-in-progress 0 0 4) increases in fixed assets from internal production 1,136,077 1,077,961 5) other revenues and income other income 4,392,194 3,499,172 operating grants 429,746 437,214 total 5) 4,821,940 3,936,386 Total value of production A) 941,709,589 974,709,908

B) COST OF PRODUCTION 6) raw, ancillary materials, consumables and goods 676,928,261 715,276,171 7) services 172,620,517 174,110,603 8) leases and rentals 1,775,923 1,523,509 9) personnel a) wages and salaries 32,253,643 31,612,858 b) social security 11,060,563 11,072,737 c) employee severance indemnity 2,545,618 2,482,510 d) pensions and similar 0 0 e) other costs 257,331 312,736 total 9) 46,117,155 45,480,841 10) amortization, depreciation and writedowns a) amortisation of intangible fixed assets 999,469 1,730,699 b) depreciation of tangible fixed assets 26,390,484 27,377,802 c) other fixed assets writedowns 0 0 d) writedown of current receivables and cash and cash equivalents 4,700,177 5,310,654 total 10) 32,090,130 34,419,155 11) changes in inventories raw materials 8,148,038 (9,556,039) ancillaries (394,939) (945,493) consumables 277,633 (1,209,112) goods 0 0 total 11) 8,030,732 (11,710,644) 12) provisions for contigencies and other charges 0 0 13) other provisions 0 0 14) other operating costs 922,272 603,490 Total cost of production B) 938,484,990 959,703,125

Difference between value and cost of production (A - B) 3,224,599 15,006,783

C) FINANCIAL INCOME AND EXPENSES 15) income from investments in subsidiaries 0 0 associates 0 0 other companies 0 0 total 15) 0 0 16) other financial income a) from receivables held as financial fixed assets subsidiaries 0 0 associates 0 0 parent companies 0 0 other companies 0 0 b) from securities held as financial fixed assets other than equity investments 75,930 92,275 c) from securities held as current assets other than equity investments 0 0

62 Financial Statements 2012

d) income other than above, from subsidiaries 0 0 associates 0 0 parent companies 0 0 other income 2,497,739 1,408,055 total 16) 2,573,669 1,500,330 17) interest and other financial expenses subsidiaries 0 0 associates 0 0 parent companies (1,601,214) (1,237,250) others (4,003,601) (4,984,437) total 17) (5,604,815) (6,221,687) 17-bis) foreign currency exchange gains and losses 297,845 37,606 Total final income and expenses (15+16-17) C) (2,733,301) (4,683,751)

D) ADJUSTMENTS TO FINANCIAL ASSETS 18) revaluations of a) equity investments 0 0 b) financial fixed assets other than equity investments 0 0 c) securities held as current assets other than equity investments 1,270,000 0 total 18) 1,270,000 0

19) writedowns of a) equity investments 0 0 b) financial fixed assets other than equity investments 0 0 c) securities held as current assets other than equity investments 0 (2,330,000) total 19) 0 (2,330,000) Total adjustments to financial assets (18 - 19) D) 1,270,000 (2,330,000)

E) EXTRAORDINARY INCOME AND EXPENSES 20) extraordinary income gains on disposals not included under 5) 0 0 other extraordinary income 701,778 0 total 20) 701,778 0 21) extraordinary expenses losses on disposals not included under 14) 0 0 prior years taxes 0 0 other extraordinary expenses 0 0 total 21) 0 0 Total extraordinary income and expenses (20 - 21) E) 701,778 0

Earnings before income tax (A - B +/- C +/- D +/- E) 2,463,076 7,993,032

22) income taxes for the year a) current (2,431,545) (2,000,392) b) deferred tax assets and liabilities 1,190,216 1,972,108 total 22) (1,241,329) (28,284)

23) PROFIT (LOSS) FOR THE YEAR 1,221,747 7,964,748

63 Ferriere Nord S.p.A.

FERRIERE NORD S.p.A. Notes to the financial statements at 31st December 2012

Ferriere Nord S.p.A., which has a subscribed and paid-in share capital of euro 60,000,000 (sixty million) and whose registered office is in Osoppo (UD) – Zona Industriale Rivoli, was incorporated on 23/05/1970 as attested by Notary Rodolfo Ridolfi of the Udine and Tolmezzo Register of Notaries, index no. 42559, and is registered with the Udine Chamber of Commerce (CCIAA) under tax code 00163780307 and REA code 117431. Since its incorporation, it has been a producer of electro-welded products for the construction industry (wire, electro-welded wire mesh and lattice girders) and has gradually widened its production capacity both through investments in technologically advanced systems to improve productivity in its original sector and diversification and integration of the production cycle. Ferriere Nord S.p.A. is part of a group of companies controlled by Fin.Fer S.p.A., which are highly integrated on an economic – manufacturing level and, as will be seen hereunder, includes the following operating companies: S.I.A.T. Società Italiana Acciai Trafilati S.p.A., based in Gemona del Friuli (UD), La Veneta Reti S.r.l., based in Loreggia (PD), Pittini Stahl GmbH, based in Bad Aibling (Germany), Kovinar D.o.o., based in Jesenice (Slovenia), and Trafilerie e Zincherie di Celano S.r.l., based in Celano (AQ). The financial statements for the year ended 31st December 2012, of which these Notes form an integral part pursuant to art. 2423, clause 1, are in line with duly kept accounting records and were drafted in accordance with articles 2423-ter, 2424, 2424-bis, 2425, 2425-bis and the accounting standards contemplated in art. 2423-bis, clause 1. There were no exceptional cases warranting exemption under art. 2423, clause 4.

The main items in the last approved financial statements of Fin.Fer S.p.A., which exercises direction and co-ordination activity over Ferriere Nord S.p.A. and which draws up consolidated financial statements, are as follows:

BALANCE SHEET

ASSETS 31/12/2011 31/12/2010 A) Subscribed capital unpaid 0 0 B) Tangible 217,952,710 207,493,840 C) Current assets 10,937,260 13,429,650 D) Accruals and deferrals 58,691 50,771 TOTAL ASSETS (A+B+C+D) 228,948,661 220,974,261

LIABILITIES 31/12/2011 31/12/2010 A) Shareholders’ equity Share capital 30,000,000 30,000,000 Reserves 154,956,566 154,956,566 Profits (losses) carried forward (7,181,483) (9,577,139) Profit (loss) for the year 9,081,894 2,395,656 B) Provision for contingencies and other charges 0 0 C) Employee severance indemnity 197,090 181,352 D) Payables 41,357,330 42,539,512 E) Accruals and deferrals 537,264 478,314 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (A+B+C+D+E) 228,948,661 220,974,261

INCOME STATEMENT 31/12/2011 31/12/2010 A) Value of production 5,849,064 5,503,926 B) Cost of production (1,704,905) (1,878,792) C) Financial income and expenses 225,140 43,687 D) Adjustments to financial assets 6,188,441 (93,138) E) Extraordinary income and expenses 0 0 Income taxes for the year (1,475,846) (1,180,027) Profit (loss) for the year 9,081,894 2,395,656

Value are expressed in euro.

64 Financial Statements 2012

EVALUATION CRITERIA, ACCOUNTING PRINCIPLES AND BASIS OF PREPARATION The financial statements have been prepared in compliance with the current law and the evaluation criteria and accounting principles applied are consistent with those used in the previous year. In cases where income statement and balance sheet items are not comparable, the previous year’s items were adjusted. Pursuant to art. 2427, clause 1, detailed below are the criteria applied in stating financial statements items, value adjustments and conversion of values originally stated in foreign currencies.

Intangible fixed assets These are stated at cost and, where provided for, subject to approval by the statutory auditors. Amounts are net of depreciation charges, which are calculated on a straight-line basis over the residual useful life of the asset, and write-downs. The depreciation criteria adopted were as follows: • intellectual property rights: 3 years; • goodwill: 10 years; • other intangible fixed assets: include both additional charges on loans amortized every year for the duration of the loan and securitization charges amortized over five years, as well as expenses on long-term supply contracts, which are amortized over five years.

Tangible fixed assets Tangible fixed assets are stated at purchase cost, including directly related additional charges, or at internal construction cost; said construction cost includes the costs of raw materials, ancillary materials, energy, personnel, production and industrial overheads to reasonably attributable degrees and any financial expenses relative to loans for such purpose accruing in the construction period. Historical costs were adjusted up to reflect revaluations under laws 576 dated 2nd December 1975, 72 dated 19th March 1983, 413 dated 30th December 1991, 342 dated 21st November 2000, 350 dated 24th December 2003 and law 2/2009; the industrial buildings of Sideros S.p.A. were revalued in 1981 when the company was merged into Ferriere Nord S.p.A. Pursuant to art. 10, law 72/1983, we declare that no other monetary or economic revaluations were made. Depreciation charges written to the income statement were calculated on a straight-line basis at rates reflecting the estimated useful economic-technical life of assets (at 50% in the case of assets entering service during the year). Such rates are detailed in the notes to the balance sheet. Maintenance and repair costs are written to the income statement in the year they are incurred, if of a routine nature, and capitalized, if of an extraordinary nature. Fixed assets under construction are stated at cost including directly related additional charges. This class also includes advances for supplies of fixed assets.

Financial fixed assets “Receivables” are stated at their expected realizable value in the case of caution money of a financial or commercial nature, while investments in associates and in other companies are stated at acquisition cost and written down in cases of durable impairment.

Inventories Inventories are stated on a LIFO basis with annual adjustments; products are written down to the lower between market value and the above LIFO value.

Receivables and payables Receivables are stated at their expected realizable value, while payables are stated at their nominal value. Receivables are adjusted to their expected realizable value by the provision for bad debts.

Foreign currency and off-balance sheet items Payables and receivables in foreign currency are stated at the euro equivalent using exchange rates in force at the time of customs clearance of goods or of entry in the books in the case of services. Any positive or negative differences between the value of payables and receivables in non-euro currencies, converted at the rate in force when booked and their values when converted at year-end spot exchange rates, also considering any exchange rate risk hedging, are written to the income statement and any net gains are written to the appropriate reserve, which is not distributable until such gains are realized. At year-end, no derivative instruments to hedge the currency exchange risks inherent in its type of business have been recorded. If existing, such instruments are stated at market value.

Financial assets not held as fixed assets Fixed income securities stated under financial assets not held as fixed assets are stated at the lower between acquisition cost and market value.

65 Ferriere Nord S.p.A.

Accruals and deferrals Income and expenses items involving two or more periods are dealt with on an accrual basis.

Provision for contingencies and other charges This item contains provisions taken in view of realistically probable charges that are not attributable to specific asset items. In particular, it mainly includes the provision for agents’ leaving indemnity, provisions for taxation, the provision for upgrading some industrial sites, the provision for the dispute with the European Commission and the provision for post-operative management costs of the landfill in Potenza.

Employee severance indemnity This reflects liabilities accruing as of 31st December in respect of employees under current legislation.

Taxation Current year taxes are stated under “Amounts due to tax authorities” on the basis of a realistic forecast of the charge to pay under current tax law net of prepaid amounts. Deferred tax is stated on the basis of the cumulative amount of all temporary differences between the value of an asset or liability and the value attributed to that asset or liability for tax purposes in line with accounting standard 25 of the “Organismo Italiano di Contabilità”. Deferred tax liabilities and assets are stated, respectively, under “Provisions for taxation” and “Deferred tax assets”. The company participates in the “National Consolidated Tax Return” (Consolidato Fiscale Nazionale) together with its parent company Fin.Fer. S.p.A.

Grants to capital account Grants to the plant account are written off the relative asset when their receipt is certain and reflected in the income statement in proportion to the depreciation charges for the relative assets.

Operating grants Operating grants are written to the income statement on an accrual basis.

Costs and revenues Revenues and income, costs and charges are stated net of returns, discounts, allowances and bonuses. Infra-group transactions are at normal market conditions.

66 Financial Statements 2012

NOTES TO THE BALANCE SHEET ITEMS

ASSETS

B) FIXED ASSETS

B.I.) INTANGIBLE FIXED ASSETS With reference to intangible assets under class B.I. of fixed assets, the first table details the costs and previous revaluations, accumulated depreciation and write-downs of intangible assets, while the second details acquisitions, decreases and depreciation in 2012, as shown on the book of depreciable assets.

historical depreciation decreases/ Value revaluation cost prior to 31/12/2011 write-downs at 01/01/2012 START-UP AND EXPANSION EXPENSES Change in share capital, etc. - - - - - TOTAL - - - - - R&D AND ADVERTISING COSTS Research & Development - - - - - TOTAL - - - - - PATENT RIGHTS Patents 9,504 - 6,335 - 3,169 Software packages 54,183 - 28,730 - 25,453 TOTAL 63,687 - 35,065 - 28,622 GOODWILL Goodwill 6,000,000 - 6,000,000 - - TOTAL 6,000,000 - 6,000,000 - - OTHER INTANGIBLE FIXED ASSETS Additional charges on loans 621,158 - 412,359 - 208,799 Other deferred charges 478,273 - 82,600 - 395,673 TOTAL 1,099,431 - 494,959 - 604,472 WORK IN PROGRESS Study and research, work in progress - - - - - TOTAL - - - - - SUM TOTAL 7,163,118 - 6,530,024 - 633,094

value decreases/ value acquisitions transfers depreciation at 01/01/2012 write-downs at 31/12/2012 START-UP AND EXPANSION EXPENSES Change in share capital, etc. ------TOTAL ------R&D AND ADVERTISING COSTS Research & Development - 738,666 - - 738,666 - TOTAL - 738,666 - - 738,666 - PATENT RIGHTS Patents 3,169 - - - 3,169 - Software packages 25,453 8,043 10,894 - 24,374 20,016 TOTAL 28,622 8,043 10,894 - 27,543 20,016 GOODWILL - Goodwill ------TOTAL ------OTHER INTANGIBLE FIXED ASSETS Additional charges on loans 208,799 70,000 - - 73,346 205,453 Other deferred charges 395,673 - - - 159,914 235,758 TOTAL 604,472 70,000 - - 233,260 441,211 WORK IN PROGRESS Study and research, work in progress - 191,997 (10,894) - - 181,103 TOTAL - 191,997 (10,894) - - 181,103 SUM TOTAL 633,094 1,008,706 - - 999,469 642,330

67 Ferriere Nord S.p.A.

B.I.2) R&D AND ADVERTISING COSTS – detail In 2012, the company continued its R&D work, focusing on the following projects, which we consider particularly innovative:

Activity 1: Research and development of innovative projects in the field of steelworks, marked by innovative technological contents with the aim of gaining a competitive edge against the market and its competitors. More specifically: • follow-up of study, design and simulation activities in order to upgrade the melting furnace • follow-up of study and re-engineering activities for the industrial waste water treatment system and water resources of the steelworks • study and design of the “roto burner” in order to use a higher gradient flame in the burner • follow-up of study and development activities for the oscillation analysis system in oscillating benches for continuous casting • study and analysis activities aimed at increasing mould cross-section and at obtaining larger billets • study and analysis activities aimed at using magnesium lime for ladle tapping • survey and testing activities aimed at determining the metal yield of scraps used in the induction furnace • study of an innovative system of adjusters for the pre-finishing train of the cold skin high speed rolling process • completion of the development of the low temperature hot rolling process to produce steels for reinforced concrete.

These projects were performed in Osoppo (UD), Zona Industriale Rivoli. The development of the projects listed above produced costs for the company totalling euro 738,666. With reference to the amount of euro 485,883, the company plans to avail itself of the detaxation allowed for IRAP (Regional income tax on productive activities) under art. 11, law decree 446, 15th December 1997, as amended by art. 17, clause 3, law decree 247, 18th November 2005, as enforced by law 296/06, art. 1 clause 266. The research work in question is continuing in 2013. We are confident that the successful development of such innovations will improve our results in terms of sales and profitability.

B.I.3) PATENT RIGHTS – INTELLECTUAL PROPERTY RIGHTS – detail

Balance at 01/01/2012 28,622 Increase 18,937 Decrease due to depreciation for the year 3rd quota at 33%: euro 41,519 (13,842) 2nd quota at 33%: euro 22,168 (7,389) 1st quota at 33%: euro 18,937 (6,312) (27,543) Total at 31/12/2012 20,016

The item refers to patents and software packages used by the company.

B.I.6) ASSETS IN COURSE OF CONSTRUCTION AND ADVANCE PAYMENTS This item includes the expenses to implement and develop a new management software.

B.I.7) OTHER INTANGIBLE FIXED ASSETS: Deferred charges on loans – detail

Balance at 01/01/2012 208,799 Increase 70,000 Decrease due to depreciation for the year (73,346) Total at 31/12/2012 205,453

The amount refers to charges in connection with disbursement of medium/long-term loans.

68 Financial Statements 2012

B.I.7) OTHER INTANGIBLE FIXED ASSETS: Other deferred charges – detail

Balance at 01/01/2012 395,673 Increase 0 Decrease 0 Decrease due to depreciation for the year (159,914) Total at 31/12/2012 235,758

This item includes expenses incurred for the renewal of a securitisation project to be amortised over the project’s five-year term.

B.II) TANGIBLE FIXED ASSETS The table below details the costs and previous revaluations, accumulated depreciation and write-downs of tangible assets on the balance sheet at the start of the year. The value stated for “Industrial buildings” in the “Revaluations under law 576/75” column includes the revaluation made following the incorporation of Sideros S.p.A. in 1981, as detailed hereunder

rev. ex law revaluation ex revaluation revaluation revaluation revaluation ex law gross fixed depreciation historical 342/00 law 2/2009 value at ex law ex law ex law 2/2009 increasing assets at prior to cost (former law decreasing the 01/01/2012 576/75 72/83 413/91 the historical cost 31/12/2011 31/12/2011 350/03) depreciation fund LAND AND BUILDINGS Land 10,616,845 11,254 69,138 133,538 - 17,930,319 28,761,094 - - 28,761,094 Non industrial buildings ------Yards 7,136,906 - 49,625 107,029 - - 7,293,560 601,805 2,036,835 5,256,724 Industrial buildings 56,983,932 316,773 2,611,227 6,111,941 - 3,367,889 69,391,762 17,781,264 30,396,507 38,995,254 Lightweight constructions 627,591 - - - - - 627,591 - 416,945 210,646 TOTAL 75,365,274 328,027 2,729,990 6,352,508 - 21,298,208 106,074,007 18,383,069 32,850,287 73,223,718

PLANT AND MACHINERY General plant 70,571,741 - 710,630 - - - 71,282,371 - 55,486,985 15,795,386 Non automatic plant 16,165,820 - 181,721 - - - 16,347,541 - 15,391,805 955,736 Automatic plant 170,110,921 - 3,119,822 - 46,164,392 - 219,395,135 - 203,899,780 15,495,355 Furnaces 38,563,701 - 9,058 - - - 38,572,760 - 32,855,526 5,717,234 Water treatment plant 16,723,983 - - - - - 16,723,983 - 4,518,383 12,205,601 TOTAL 312,136,166 - 4,021,231 - 46,164,392 - 362,321,790 - 312,152,479 50,169,312

EQUIPMENT Tools and equipment 3,918,995 - - - - - 3,918,995 - 3,473,733 445,262 TOTAL 3,918,995 - - - - - 3,918,995 - 3,473,733 445,262

OTHER ASSETS Freight vehicles 1,893,999 - - - - - 1,893,999 - 1,283,549 610,450 Office furniture 646,949 - - - - - 646,949 - 629,538 17,411 Computers 2,264,065 - - - - - 2,264,065 - 2,068,108 195,957 Vehicles 944,557 - - - - - 944,557 - 683,508 261,048 TOTAL 5,749,570 - - - - - 5,749,570 - 4,664,703 1,084,866

FIXED ASSETS UNDER CONSTRUCTION Advances 1,172,550 - - - - - 1,172,550 - - 1,172,550 Work in progress 3,193,870 - - - - - 3,193,870 - - 3,193,870 TOTAL 4,366,420 - - - - - 4,366,420 - - 4,366,420 SUM TOTAL 401,536,425 328,027 6,751,221 6,352,508 46,164,392 21,298,208 482,430,782 18,383,069 353,141,202 129,289,578

The table below details acquisitions, transfers and restatements from one item to another, disposals and revaluations over the year, accumulated depreciation and write-downs over the year and total revaluations of fixed assets at year-end, as shown on the book of depreciable assets.

69 Ferriere Nord S.p.A.

net value at decrease in tangible fixed assets total increases transfers decreases depreciation 01/01/2012 depreciation fund at 31/12/2012 revaluations

LAND AND BUILDINGS

Land 28,761,094 - 344,467 - - - 29,105,561 18,144,249

Yards 5,256,724 102,737 843,423 - - 394,197 5,808,687 758,459

Industrial buildings 38,995,254 24,641 2,450,964 - - 3,546,888 37,923,971 30,189,093

Lightweight constructions 210,646 - 102,700 - - 41,101 272,245 -

TOTAL 73,223,718 127,378 3,741,554 - - 3,982,186 73,110,464 49,091,801

PLANT AND MACHINERY

General plant 15,795,386 298,365 7,293,002 396,764 396,764 4,548,374 18,838,379 710,630

Non automatic plant 955,736 102,229 35,333 146,764 146,764 425,763 667,535 181,721

Automatic plant 15,495,355 79,516 1,009,518 636,005 636,005 11,566,539 5,017,850 49,284,214

Furnaces 5,717,234 74,545 167,276 374,450 197,831 2,474,128 3,308,308 9,058

Water treatment plant 12,205,601 - 1,515,084 - - 2,652,612 11,068,073 -

TOTAL 50,169,312 554,655 10,020,213 1,553,983 1,377,364 21,667,416 38,900,145 50,185,623

EQUIPMENT

Tools and equipment 445,262 155,147 10,201 283,332 283,332 263,619 346,991 -

TOTAL 445,262 155,147 10,201 283,332 283,332 263,619 346,991 -

OTHER ASSETS

Freight vehicles 610,450 - 96,000 - - 198,576 507,874 -

Office furniture 17,411 7,511 44,679 188,891 188,891 7,074 62,527 -

Computers 195,957 38,044 15,635 14,762 14,483 132,181 117,176 -

Cars, motorbikes, etc. 261,048 305,021 - 301,414 285,726 139,432 410,949 -

TOTAL 1,084,866 350,576 156,314 505,067 489,100 477,263 1,098,526 -

WORK IN PROGRESS

Advances 1,172,550 2,168,726 -- 1,576,596 - - 1,764,680 -

Fixed assets under construction 3,193,870 18,371,530 (13,928,282) - - - 7,637,118 -

TOTAL 4,366,420 20,540,256 (13,928,282) 1,576,596 - - 9,401,798 -

SUM TOTAL 129,289,578 21,728,012 - 3,918,978 2,149,796 26,390,484 122,857,924 99,277,424

The most significant capitalisation in the financial year include those relative to the photovoltaic system, the new reception area, the purchase of a furnace loading crane for the steel plant in Osoppo and a converter for the substation in Osoppo, the extension of the scarp area in Osoppo and the purchase of the “Liquigas” complex next to the manufacturing site in Potenza. The decrease in tangible assets mainly results from the sale of some dust detection system components of the steel plant as well as of two overhead travelling cranes and two strapping machines belonging to the bar rolling mill. As for work in progress, the most significant are: - new reception area and office building; - purchase of the new furnace for the steelworks in Osoppo; - extra pre-finishing train at the steelworks in Osoppo; - air coolers for the steelworks in Osoppo; - upgrade of smoke extraction system (step 2) in Potenza. Land, buildings, plant and machinery are tied by mortgages and liens securing the loans described in the comment on “Payables to banks”. Depreciation is calculated for all depreciable assets at the following rates:

Yards, roads, sewers, etc...... 5% Industrial buildings ...... 5% General plant ...... 10-12% Non-automatic plant ...... 10-12% Automatic plant ...... 17.5-20% Furnaces and appurtenances ...... 12.5-15%

70 Financial Statements 2012

Freight vehicles ...... 20% Office furniture ...... 12% Computers, electronic office equipment...... 18-20% Equipment and tools ...... 25% Lightweight constructions ...... 10% Water and air treatment plant ...... 10-15% Cars, motorbikes, etc...... 25% In 2012, the Company did not enter into any new leasing agreements.

As required by art. 10, law 72/1983 (and also art. 27 of the subsequent revaluation law 413/1991), the following tables detail assets still at the company’s disposal and which have undergone monetary revaluation. Monetary revaluation under law 576/75 - Visentini Increase in historical cost Decrease in the depreciation fund Land 11,254 0 TOTAL 11,254 0

Revaluation on merger of Sideros S.p.A. into Ferriere Nord S.p.A. Increase in historical cost Decrease in the depreciation fund Industrial buildings 316,773 0 TOTAL 316,773 0

Monetary revaluation under law 72/83 - Visentini Bis Increase in historical cost Decrease in the depreciation fund Land 69,138 0 Yards 49,625 0 Industrial buildings 2,611,227 0 General plant 710,630 0 Non-automatic plant 181,721 0 Automatic plant 3,119,822 0 Furnaces and appurtenances 9,058 0 TOTAL 6,751,222 0

Monetary revaluation under law 413, 30th December 1991 Increase in historical cost Decrease in the depreciation fund Land 133,538 0 Yards 107,029 0 Industrial buildings 6,111,941 0 TOTAL 6,352,508 0

Monetary revaluation under law 342, 21st November 2000 Revalued in Increase in historical cost Decrease in the depreciation fund Automatic plant 2000 25,861,505 0 TOTAL 25,861,505 0

Monetary revaluation under law 350, 24th November 2003 Revalued in Increase in historical cost Decrease in the depreciation fund Automatic plant 2003 20,302,887 0 TOTAL 20,302,887 0

Monetary revaluation under law decree 185/08 turned into law 2/09 Revalued in Increase in historical cost Decrease in the depreciation fund Land 2008 17,930,319 0 Yards 2008 0 601,805 Industrial buildings 2008 3,367,889 17,781,264 TOTAL 21,298,208 18,383,069

71 Ferriere Nord S.p.A.

B.III.1. FINANCIAL FIXED ASSETS – EQUITY INVESTMENTS The table below details movements in the equity investments item, showing cost, previous revaluations and write-downs, acquisitions or increases, disposals or decreases and revaluations and write-downs during the year.

historical value at acquisitions/ disposals/ value at total revaluation write-down revaluation write-down cost 01/01/2012 increases decreases 31/12/2012 revaluation Ecoin S.r.l. 22,105 0 0 22,105 0 0 0 0 22,105 0 ASSOCIATES 22,105 0 0 22,105 0 0 0 0 22,105 0

Other 17,707 0 0 17,707 4,427,500 0 0 0 4,445,207 0 OTHER COMPANIES 11,792,924 0 11,775,217 17,707 4,427,500 0 0 0 4,445,207 0 TOTAL EQUITY INVESTMENTS 11,815,029 0 11,775,217 39,812 4,427,500 0 0 0 4,467,312 0 In 2012, 110,000 Veneto Banca ordinary shares were purchased at a unit par value of euro 40.25.

B.III.1.b. EQUITY INVESTMENTS IN ASSOCIATES – detail

registered shareholders’ equity profit (loss) Interest relative portion of shareholders’ balance sheet name share capital office before result for year for the year held equity on balance sheet value Ecoin S.r.l. Osoppo 34,209 euro 31,002 (696) 100% 30,306 22,105

B.III.2. FINANCIAL FIXED ASSETS – RECEIVABLES The table below shows increases, decreases and write-downs of financial receivables:

receivables receivables increase decrease 01/01/2012 31/12/2012 Subsidiaries 0 0 0 0 Associates 0 0 0 0 Parent companies 0 0 0 0 Others 80,126 2,335 1,100 81,361 TOTAL 80,126 2,335 1,100 81,361

B.III.2.d. RECEIVABLES FROM OTHERS WITHIN FINANCIAL FIXED ASSETS – detail The amount refers to caution money in favor of:

Ferrovie dello Stato (State Railways) 266 Customs, Udine 570 Telecom 8,696 Local warehouse 145 Utif 12,648 Consorzio acquedotto Friuli centrale 4,567 Gas bottle suppliers 150 Sundry suppliers 49,739 Acquedotto Pugliese - Potenza 464 Telecom Potenza 207 Ferrovie Potenza 1,549 Total gas Venneri 88 Utif Potenza 2,272 TOTAL 81,361

B.III.3. FINANCIAL FIXED ASSETS – OTHER SECURITIES This item amounts to euro 3,360,000 in bonds issued by the parent company FIN.FER. S.p.A. and maturing on 30th June 2013.

72 Financial Statements 2012

C) CURRENT ASSETS

C.I.) INVENTORIES – detail The make up of stock inventories at the year-end is briefly summarized in the table below:

Value at Value at Change Types 01/01/2012 31/12/2012 in the year Scrap 30,675,908 24,295,948 (6,379,960) Ferroalloys 3,460,920 1,692,842 (1,768,078) TOTAL RAW MATERIALS 34,136,828 25,988,790 (8,148,038) Scorifiers 168,289 200,381 32,092 Refractories 1,749,722 2,066,030 316,308 Electrodes 2,556,231 2,597,406 41,175 Gases 28,612 33,976 5,364 TOTAL ANCILLARIES 4,502,854 4,897,793 394,939 Sundry materials 14,176,815 14,425,204 248,389 Consumables 581,463 60,720 (520,743) Other materials 10,946 5,666 (5,280) TOTAL CONSUMABLES 14,769,224 14,491,590 (277,634) Billets 8,902,196 17,780,956 8,878,760 TOTAL SEMI-FINISHED PRODUCTS 8,902,196 17,780,956 8,878,760 TOTAL FINISHED PRODUCTS 76,013,142 79,646,959 3,633,817 TOTAL INVENTORIES 138,324,244 142,806,089 4,481,845

Pursuant to article 2426, Italian Civil Code, paragraphs 9 – 10, inventories are valued at the lower between purchase or production cost and the expected realisable value defined on the basis of market trends Raw materials, consumables, ancillaries, semi-finished and finished products are valued at LIFO with annual adjustments.

C.II) RECEIVABLES Receivables under current assets break down as follows:

C.II.1) TRADE RECEIVABLES - detail Clients, Italy 60,907,913 Clients, outside Italy 16,178,961 Group companies 32,940,472 Cash orders and notes receivable for collection and in portfolio with banks 8,984,527 Invoices to issue 3,731,383 Invoices to issue/Group companies 721,167 Provision for bad debts (13,449,448) TOTAL 110,014,975

This item shows a net decrease by euro 64,321,436 mainly resulting from the policy aimed at improving payment terms and the higher incidence of sales on foreign markets under more favourable terms for the company during the last months of the year. The total amount is net of receivables involved in the securitisation operation. There are no receivables falling due beyond five years.

Trade receivables by geographical area break down as follows: Italy 80.53% EU countries 13.33% Non-EU countries in Europe and rest of world 6.14% TOTAL 100%

73 Ferriere Nord S.p.A.

The item is stated net of the provision for bad debts, which showed the following movements during the year:

PROVISION FOR BAD DEBTS Balance at 01/01/2012 4,288,725 Decreases (use for write off of bad debts) (3,839,454) Provision for the year 600,177 TOTALE 1,049,448

TAXED PROVISION FOR BAD DEBTS Balance at 01/01/2012 8,300,000 Decreases 0 Provision for the year 4,100,000 TOTAL 12,400,000

The total provision, amounting to euro 13,449,448, is deemed adequate to cover the risk the company is exposed to and complies with the principle of prudence.

C.II.4) RECEIVABLES FROM PARENT COMPANY - detail This item includes receivables due to Ferriere Nord S.p.A. from the parent company FIN.FER. S.p.A.; the balance at the year-end was as follows.

Trade receivables 210 Invoices to issue to parent company 49,978 Receivables from parent company for Group VAT 406,004 TOTAL 456,193

C.II.4-bis) TAX RECEIVABLES - detail The “Tax receivables” item increased by euro 969,395 over the previous year, mostly reflecting IRAP advances and a repayment applied for owing to non-deduction of IRAP for expenses related to employees and equivalent workers for the taxation years from 2007 to 2011. The item breaks down as follows:

Falling due within 12 months Duty drawback 35,144 Receivables from tax authorities for IRAP drawback 701,778 Lieu tax on severance indemnity revaluation 1,953 IRAP (Regional income tax on productive activities) - advances 615,146 VAT receivables from tax authorities 71,659 1,425,680 Falling due beyond 12 months Duty drawback 1,699 TOTAL 1,427,379

C.II.4-ter) DEFERRED TAX ASSETS - detail

Deferred tax assets 7,140,185

Deferred tax assets increased by euro 257,475 from the prior year-end: This item includes the accruals for deferred tax assets set aside in connection with foreseeable future charges and accelerated amortisation/depreciation whose fiscal benefit is deferred. Further details on this item can be found in the relevant section of the notes to the income statement.

74 Financial Statements 2012

C.II.5.a) RECEIVABLES FROM OTHERS – from other Group companies Starting from September 2008, Ferriere Nord S.p.A. accepted to centrally manage the treasury of S.I.A.T. S.p.A. and La Veneta Reti S.r.l. and, starting from March 2012, it accepted to centrally manage the treasury of Trafilerie e Zincherie di Celano S.r.l.; this cash pooling is managed through separate current account contracts signed between Ferriere Nord S.p.A. and each of the two aforesaid companies. This decision stems from the desire to improve the management of Group financial operations.

The item breaks down as follows:

Falling due within 12 months Current account with S.I.A.T. S.p.A. 8,599,637 Current account with Trafilerie e Zincherie di Celano S.r.l. 5,976,317 Current account with La Veneta Reti S.r.l. 8,952,985 TOTAL 23,528,939

C.II.5.b) RECEIVABLES FROM OTHERS – other debtors Falling due within 12 months Advances to suppliers 29,688 Credit notes to receive 1,332,963 Receivables from suppliers 678,659 Receivables from INAIL (National insurance institute for industrial accidents) 160,115 Allocation for employee expenses 3,650 INAIL (National insurance institute for industrial accidents) advances 85,084 Sundry short-term receivables 3,574,496 Receivables for deferred purchase price 14,044,672 19,909,327 Falling due beyond 12 months Allocation for Ferriere Nord Funding expenses 10,000 TOTALE 19,919,327

This item globally increased by euro 3,546,590 over the previous financial year, mostly reflecting receivables from deferred purchase price.

C.III.6) OTHER SECURITIES - detail The table below details the situation and changes over the year in “Other securities”. value at increase decrease value at revaluation write-down 01/01/2012 in year in year 31/12/2012 Junior Notes 9,470,000 0 0 1,270,000 0 10,740,000

TOTAL 9,470,000 0 0 1,270,000 0 10,740,000

The non interest bearing Junior Notes were underwritten following the securitisation of trade receivables initiated in 2006; their nominal value is euro 12,800,000 and have revaluated by euro 1,270,000 for adjustment to market value.

75 Ferriere Nord S.p.A.

C.IV.) CASH AND CASH EQUIVALENTS

C.IV.1) BANK AND POSTAL DEPOSITS – detail These are temporarily available funds held in banks for the purposes of treasury management. They amount to euro 59,082,412, that is an increase by euro 32,394,620 on the previous year; this increase results from the increase in the incidence of sales to foreign customers during the last months of the year under more favourable payment terms for the company. They are ordinary current accounts in the following banks: Banca Antoniana 18,775,024 Banca Nazionale del Lavoro 335,339 Banca Popolare di Vicenza 10,940,300 Banca Popolare di Verona 620,493 Banca Popolare Friuladria 481,525 Nova Ljubljanska Banka 904 Credifriuli 1,540,412 Unicredit 7,046,486 Popolare di Cividale 6,478,762 Hypobank 973,942 Veneto Banca 11,489,959 Cassa Risparmio Friuli Venezia Giulia 239,711 Banca Popolare Milano 37,170 Banca Unicredit Ungheria 3,733 Deutsche Bank 953 Banco di Brescia 94,712 Bank balances to receive 22,987 TOTAL 59,082,412

C.IV.3) CASH AND CASH EQUIVALENTS – detail Cash in hand 15,855 Postal franking 2,243 Cash in foreign currency 2,166 TOTAL 20,264

The item shows a negligible increase by euro 1,859 on the previous year.

D) ACCRUED INCOME AND PRE-PAID EXPENSES This item breaks down as follows: Accrued income: industrial revenues 4,783 Accrued income: financial revenues 206,907 Accrued income: general revenues 10,171 Prepaid expenses: industrial costs 124,831 Prepaid expenses: commercial costs 18,322 Prepaid expenses: financial costs 5,452 Prepaid expenses: general expenses 444,143 TOTAL 814,609

76 Financial Statements 2012

LIABILITIES

A) SHAREHOLDERS’ EQUITY

share legal extraordinary revaluation other profit shareholders’ description capital reserve reserve reserve reserve (loss) equity DECEMBER 2009 60,000,000 6,611,337 56,306,503 31,567,719 0 (7,107,117) 147,378,442 Profit (loss) for the period 201,008 201,008 DECEMBER 2010 60,000,000 6,611,337 56,306,503 31,567,719 0 (6,906,109) 147,579,450 Allocation of profit for the year 10,050 190,958 (201,008) 0 Profit (loss) for the period 7,964,748 7,964,748 DECEMBER 2011 60,000,000 6,621,387 56,497,461 31,567,719 0 857,631 155,544,198 Allocation of profit for the year 398,237 7,566,511 (7,964,748) 0 Profit (loss) for the period 1,221,747 1,221,747 DECEMBER 2012 60,000,000 7,019,624 64,063,972 31,567,719 0 (5,885,370) 156,765,945

A.I) Share capital The share capital of euro 60,000,000 is made up of 60,000,000 ordinary shares of par value euro 1 each. Of the share capital at 31st December 2012, euro 44,603,377 is tied under the terms of revaluation laws. The company belongs to Pittini Group and is controlled by the Group’s holding company “FIN.FER. S.p.A.”.

A.III) REVALUATION RESERVES The revaluation reserve amounts to euro 31,567,719. It did not change.

A.IV) Legal reserve The legal reserve increased by euro 398,237 following partial allocation of profit from the previous year and shows a balance of euro 7,019,624 at 31.12.12.

A.VII) OTHER RESERVES – Extraordinary reserve The balance amounts to euro 64,063,972. It shows an increase by euro 7,566,511 resulting from partial allocation of profit from the previous year. The extraordinary reserve is partly fiscally tied in the amount of euro 14,333,129 due to tax alignment carried out in 2005, to accelerated depreciation still to be absorbed and to alignment of receivables and payables in foreign currencies.

type shareholders’ equity items and details origin freely distributable non total unavailable available within limits distributable I SHARE CAPITAL - cash payments shareholders’ contributions 8,363,650 8,363,650 - extraordinary reserve profit for the year 6,360,102 6,360,102 - revaluation reserve monetary revaluation laws 44,603,377 44,603,377 - regional subsidies regional law 672,871 672,871 60,000,000 II ADDITIONAL PAID-IN CAPITAL

III REVALUATION RESERVES - reserve under law decree 185/08 legal revaluation 31,567,719 ** 31,567,719

IV LEGAL RESERVE profit for the year 7,019,624 * 7,019,624

V STATUTORY RESERVES

VI RESERVE FOR TREASURY SHARES

VII OTHER RESERVES - extraordinary reserve profit for the year 64,063,972 * 64,063,972 VIII PROFITS (LOSSES) CARRIED FORWARD (7,107,117) (7,107,117)

IX PROFIT (LOSS) FOR THE YEAR 1,221,747 1,221,747

TOTAL 58,178,602 31,567,719 67,019,624 0 0 156,765,945 * Fiscal constraints: alignment of tax values with statutory values euro 13,503,400; accelerated depreciation euro 714,763; alignment of receivables and payables in foreign currencies euro 114,966 ** Amount taxable if distributed

77 Ferriere Nord S.p.A.

B) PROVISION FOR CONTINGENCIES AND OTHER CHARGES

B.1) PROVISION FOR PENSIONS AND SIMILAR OBLIGATIONS - detail The provision for pensions and similar obligations, amounting to euro 1,149,581, showed increases by euro 81,444. It consists entirely of the agents’ leaving indemnities accrued over the years in accordance with the current labour agreement governing relationships with commercial agents.

B.2) PROVISIONS FOR TAXATION - detail TThe balance of this item at 31/12/12 is euro 271,117 relating to provisions for deferred taxes from previous years; during the year, this item decreased by euro 27,580.

B.3) OTHER PROVISIONS FOR CONTINGENCIES AND OTHER CHARGES – detail The provisions grouped in this item amount to euro 9,963,454 as follows: • euro 1,276,080: post-operative management of Potenza landfill; • euro 3,600,000 accrual to cover the re-adoption of the dispute for alleged breach of article 65 of the ECSC Treaty; • euro 3,433,237: extraordinary work in future years to upgrade areas currently used for treating secondary materials produced in the Osoppo plants; • euro 700,000: possible upgrading of land; • euro 954,137: settlement of fiscal dispute.

The table below summarizes the changes in the provisions for contingencies and other charges recorded over the year.

balance at Balance at description Reclassification Decrease Increase 01/01/2012 31/12/2012 Coiro landfill 1,398,372 (122,292) 1,276,080 ECSC dispute 3,600,000 3,600,000 Osoppo disposals 7,116,788 (1,183,551) (2,500,000) 3,433,237 Land upgrading 700,000 700,000 Fiscal dispute 1,000,000 1,183,551 (1,229,414) 954,137 TOTAL 13,815,160 0 (3,851,706) 0 9,963,454

C) EMPLOYEE SEVERANCE INDEMNITY – detail

The item changed as follows:

balance at decreases personnel balance at lieu tax decreases increases 01/01/2012 law 297/82 re-grades 31/12/2012 Operatives 5,765,959 (102,969) (19,728) (11,809) (376,714) 266,055 5,520,794 Technical/administrative staff 2,439,305 (49,040) (8,695) 11,809 (120,798) 154,173 2,426,754 Managers 502,292 (6,066) (1,825) 0 0 22,657 517,058 TOTAL 8,707,556 (158,075) (30,248) 0 (497,512) 442,885 8,464,606

78 Financial Statements 2012

D) PAYABLES

D.3) AMOUNTS DUE TO SHAREHOLDERS FOR LOANS This item includes the loan amounting to euro 35,000,000 granted by the parent company FIN.FER. S.p.A. In 2010 the loan did not change. This is a five-year loan which can be further extended; it accrues interest at the 12-month Euribor rate, 365 divisor, as published on “Il Sole 24 Ore” the first working day of the year increased by a 3 percentage point spread.

D.4) AMOUNTS DUE TO BANKS - detail This item includes payables to banks and credit institutions in general, as summarized below: Falling due within 12 months bank overdrafts 990 loan installments falling due 23,664,370 other bank balances to receive 42,119 TOTAL 23,707,479 Falling due beyond 12 months loan installments failing due beyond 12 months 50,168,132 TOTAL 73,875,611

The changes over the previous year show a decrease by euro 5,256,266 in the amounts falling due within 12 months and a decrease by euro 3,680,298 in amounts falling due beyond 12 months. The decrease in the amounts falling due within 12 months reflects the write-off of import advances. The reduction in the amounts falling due beyond 12 months was the result of compensation between new loans from banks (euro 20,000,000), to the reclassification of instalments falling due within 12 months.

Loans The table provides the main data regarding loans:

instalments instalments instalments instalments residual debt Year of opening residual debt increases falling falling falling bank maturity amounts due at disbursement amount 31/12/2011 in the year due within due beyond due beyond in the year 31/12/2012 12 months 12 months 60 months

MEDIOCREDITO DEL F.V.G. 2001 41,316,552 2011 0 0 0 0 0 0 0

BANCA ANTONIANA 2002 40,000,000 2015 7,500,000 0 1,875,000 1,875,000 3,750,000 5,625,000 0

BANCA DI ROMA 2004 2,006,970 2016 1,027,449 0 201,582 203,517 622,350 825,867 0

MEDIOCREDITO CENTRALE 2006 10,000,000 2013 3,145,259 0 1,541,491 1,603,768 0 1,603,768 0

MEDIOCREDITO DEL F.V.G. 2006 10,000,000 2015 5,103,927 0 1,165,157 1,236,116 2,702,654 3,938,769 0

BANCA POPOLARE DI VERONA 2007 5,000,000 2012 796,898 0 796,898 0 0 0 0

BANCA ANTONVENETA 2007 7,000,000 2012 0 0 0 0 0 0 0

BANCA POPOLARE DI VICENZA 2008 10,000,000 2015 5,553,985 0 1,449,989 1,479,337 2,624,659 4,103,996 0

MEDIOCREDITO DEL F.V.G. - FRIE 2008 6,510,000 2019 4,882,500 0 651,000 651,000 3,580,500 4,231,500 976,500

BANCA POPOLARE FRIULADRIA 2008 10,000,000 2013 5,000,000 0 2,500,000 2,500,000 0 2,500,000 0

VENETO BANCA 2009 5,000,000 2014 2,589,073 0 1,014,271 1,045,106 529,697 1,574,802 0

BANCA DI CIVIDALE 2009 10,000,000 2016 6,712,782 0 1,399,602 1,450,672 3,862,508 5,313,180 0

MEDIOCREDITO ITALIANO 2009 11,000,000 2014 6,111,111 0 2,444,444 2,444,444 1,222,222 3,666,667 0

BANCO DI BRESCIA 2010 10,000,000 2015 7,587,156 0 1,971,536 2,008,744 3,606,876 5,615,620 0

BANCA ANTONVENETA 2011 10,000,000 2015 10,000,000 0 2,500,000 2,500,000 5,000,000 7,500,000 0

MEDIOCREDITO ITALIANO 2011 8,000,000 2018 8,000,000 0 666,667 1,333,333 6,000,000 7,333,333 0

VENETO BANCA 2012 10,000,000 2017 0 10,000,000 0 0 10,000,000 10,000,000 0

CASSA DI RISPARMIO DEL F.V.G. 2012 10,000,000 2015 0 10,000,000 0 3,333,333 6,666,667 10,000,000 0

TOTAL 74,010,141 20,000,000 20,177,639 23,664,370 50,168,132 73,832,502 976,500

79 Ferriere Nord S.p.A.

year of type of residual debt bank maturity security 31/12/2012 BANCA ANTONIANA 2015 mortgage and lien 5,625,000 BANCA DI ROMA 2016 825,867 MEDIOCREDITO CENTRALE 2013 mortgage and lien 1,603,768 MEDIOCREDITO DEL F.V.G. 2015 mortgage and lien 3,938,769 BANCA POPOLARE DI VICENZA 2015 4,103,996 MEDIOCREDITO DEL F.V.G. - FRIE 2019 4,231,500 BANCA POPOLARE FRIULADRIA 2013 mortgage 2,500,000 VENETO BANCA 2014 1,574,802 BANCA DI CIVIDALE 2016 5,313,180 MEDIOCREDITO ITALIANO 2014 3,666,667 BANCO DI BRESCIA 2015 5,615,620 BANCA ANTONVENETA 2015 7,500,000 MEDIOCREDITO ITALIANO 2018 7,333,333 VENETO BANCA 2017 10,000,000 CASSA DI RISPARMIO DEL F.V.G. 2015 10,000,000 TOTAL 73,832,502

D.6) ADVANCES FROM CLIENTS – detail

This item also includes payables resulting from the clients portfolio. Falling due within 12 months 2,541,775

D.7) TRADE PAYABLES - detail The item can be detailed as follows:

Third party suppliers, Italy 116,620,860 Suppliers, foreign 69,082,648 Group companies, Italy 758,351 Group companies, foreign 89,324 Invoices to receive 13,211,608 TOTAL 199,762,791

The decrease by euro 11,447,089 over the previous year reflects scrap market trends. There are no payables falling due beyond five years.

Trade payables by geographical area were as follows:

Italy 64.56% EU countries 28.47% Non-EU countries in Europe and rest of world 6.97% TOTAL 100%

D.11) AMOUNTS DUE TO PARENT COMPANIES The item breaks down as follows:

Amounts due to the parent company 1,600,319 Invoices to be received from parent company 5,452,946 Amounts due to parent company for “National Consolidated Tax Return” 1,561,833 TOTAL 8,615,098

80 Financial Statements 2012

This item includes trading payables and amounts due for VAT to the Group parent company Fin.Fer. S.p.A. for Group VAT settlement.

D.12) AMOUNTS DUE TO TAX AUTHORITIES - detail The item can be detailed as follows:

Falling due within 12 months IRPEF (Personal income tax), employees 2,149,519 IRPEF, self-employed collaborators 21,497 Tax authorities, IRAP (Regional income tax on productive activities) 0 Tax authorities, IRES (Company income tax) 0 TOTAL 2,171,016

This item shows an overall decrease by euro 525,563 compared with the end of the previous year mainly owing to the amounts due to tax authorities for current taxes.

D.13) AMOUNTS DUE TO SOCIAL SECURITY INSTITUTIONS - detail Amounts were due to the following institutions:

Falling due within 12 months INPS (Social security) 1,861,399 Contributions, managers 53,370 Enasarco (National board for assistance to commercial agents and representatives) 32,473 Gestione Cometa 268,390 Pension funds 190,949 TOTAL 2,406,581

This item shows an overall increase by euro 72,523 compared with the end of the previous year.

D.14) OTHER PAYABLES - detail Other payables are summarized below:

Falling due within 12 months Holidays accrued and not taken 2,580,961 Results bonus 230,306 Provision for Metasalute 19,536 Credit notes to issue 1,525,223 Payables, wages and salaries 1,677,701 Other payables 132,554 TOTAL 6,166,281

The decrease globally amounting to euro 1,811,445 reflects credit notes to be issued.

E) ACCRUED LIABILITIES AND DEFERRED INCOME This item breaks down as follows:

Accrued liabilities: industrial costs 211 Accrued liabilities: financial costs 148,213 Accrued liabilities: general expenses 40,252 Deferred income: general revenues 16,767 TOTAL 205,443

81 Ferriere Nord S.p.A.

MEMORANDUM ACCOUNTS

This item breaks down as follows: GUARANTEES PROVIDED TO GROUP COMPANIES • Credit warrant to Banca Antoniana Popolare Veneta in favor of Trafilerie e Zincherie di Celano S.r.l. 4,600,000 • Guarantee to Sardaleasing in favor of Trafilerie e Zincherie di Celano S.r.l. 5,300,000 TOTAL 9,900,000

Guarantees issued by banks on behalf of the company • Banca Antoniana Popolare Veneta Guarantee in favor of Consorzio Acquedotto Friuli Centrale 27,157 FGuarantee in favor of Ministry of Infrastructure and Transport 11,455 • Intesa San Paolo Guarantee in favor of Customs and Tax Authorities, Bari 16,600 • Banca Popolare di Vicenza Guarantee in favor of Terna S.p.A. 1,061,666 Guarantee in favor of Liquigas 300,000 TOTAL 1,416,878

OTHER GUARANTEES ISSUED ON BEHALF OF THE COMPANY • Vittoria Assicurazioni 893,671 Guarantee in favor of Province of Potenza • Atradius Società Italiana Cauzioni Guarantee in favor of Province of Potenza 1,259,980 • Compagnia Assicuratrice Edile Guarantee in favor of Municipality of Osoppo 251,958 Guarantee in favor of Municipality of Osoppo 3,054,120 • Cattolica Assicurazioni Guarantee in favor of Friuli Venezia Giulia Region 2,065,500 TOTAL 7,525,229

OTHER COLLATERAL GUARANTEES Collateral guarantees are commented within “Amounts due to banks”.

82 Financial Statements 2012

VALUE OF PRODUCTION

A.1) REVENUES FROM SALES AND SERVICES - detail This first item in the income statement amounts to euro 923,238,995, that is a decrease by euro 40,416,355 on the previous year following both the decrease in mark-ups and prudent market trends. Sales by geographical area were as follows: Italy 62.28% EU countries 28.20% Non-EU countries in Europe and rest of world 9.52% TOTAL 100%

Sales divided by type were as follows: Steel making 901,836,603 Sundry sales 1,831,820 Transport 22,714,223 Net of: Discounts, returns, client allowances and bonuses (3,143,651) TOTAL 923,238,995

Of which revenues from sales and services to Group companies: S.I.A.T. S.p.A. 33,130,129 Trafilerie e Zincherie di Celano S.r.l. 21,739,241 La Veneta Reti S.r.l. 36,754,270 Kovinar D.o.o. 22,622,409 TOTAL 114,246,049 Such sales were mainly of steel rod at market prices.

A.4) INCREASES IN FIXED ASSETS FROM INTERNAL PRODUCTION This item amounts to euro 1,136,077 and includes euro 397,411 for goods withdrawn from the warehouse and euro 738,666 for the capitalisation of the study and research order as commented on in the balance sheet asset section, to which reference is made.

A.5) OTHER REVENUES AND INCOME - detail The detail of other revenues and income is: Miscellaneous proceeds: Duty drawback 83,422 Insurance rebates 185,303 Gains on disposal of assets 192,245 Other extraordinary income 2,795,076 Other income 1,136,147 TOTAL MISCELLANEOUS PROCEEDS 4,392,194 Revenue grants: Sundry grants 342,992 GSE contribution to photovoltaic system 86,754 TOTAL REVENUE GRANTS 429,746

Of which other revenues and income from Group companies and parent companies: S.I.A.T. S.p.A. 483,021 Trafilerie e Zincherie di Celano S.r.l. 190,556 La Veneta Reti S.r.l. 40,676 Kovinar D.o.o. 23,943 TOTAL GROUP COMPANIES 738,196 Fin.Fer. S.p.A. 49,978 TOTAL PARENT COMPANY 49,978 TOTAL 788,174 The item increased by euro 885,554 over the previous financial year. The abovementioned extraordinary income relates to the company’s ordinary activities.

83 Ferriere Nord S.p.A.

COST OF PRODUCTION

B.6) COSTS FOR RAW AND ANCILLARY MATERIALS, CONSUMABLES AND GOODS - detail TCosts for the purchase of raw materials globally amounting to euro 676,928,261 decreased by euro 38,347,910 over the previous financial year, reflecting lower purchased quantities as a result of market uncertainties and subsequent lower turnover.

Raw materials 602,909,320 Finished products 130,201 Ancillary materials 66,899,357 Consumables 6,988,577

Net of: Discounts, returns, allowances 806 TOTAL 676,928,261

B.6) COSTS FOR RAW AND ANCILLARY MATERIALS, CONSUMABLES AND GOODS The item may also be broken down to show business between Ferriere Nord S.p.A. and other Group companies:

Purchasing of raw materials, ancillaries, consumables and goods from third parties 676,520,609 Purchasing of raw materials, ancillaries, consumables and goods from Group companies: - S.I.A.T. S.p.A. 328,093 - Trafilerie e Zincherie di Celano S.r.l 47,682 - La Veneta Reti S.r.l. 31,071 406,846 676,927,455 Net of: Discounts, returns, allowances from third parties 806 TOTAL 676,928,261

B. 7) COST OF SERVICES – detail The decrease over the previous financial year amounts to euro 1,490,086, which is in line with other financial items. Costs for services by type of service were as follows:

Procurement services 28,291,670 - transport and customs clearance 16,453,741 - commissions 117,321 - other services 11,720,608

Industrial services 108,606,227 - energy costs 90,703,320 - maintenance 8,933,966 - other services 8,968,941

Commercial services 28,372,578 - transport and customs clearance 24,080,481 - commissions 3,286,380 - other services 1,005,717

Administration services 7,350,042

TOTAL 172,620,517

Board of Directors’ fees totalled euro 347,298 while Board of Auditors’ fees amounted to euro 37,351.

84 Financial Statements 2012

B.7) COST OF SERVICES – additional details Costs for services rendered by Group companies are detailed below: S.I.A.T. S.p.A. 7,109 Pittini Stahl GmbH 523,575 TOTAL GROUP COMPANIES 530,684 Fin.Fer. S.p.A. 5,452,946 TOTAL PARENT COMPANY 5,452,946 TOTAL 5,983,630

The parent company FIN.FER. S.P.A. provided the company with consulting services.

B.8) LEASES AND RENTALS - detail This item increased by euro 252,414 owing to market price trends and falls within the normal course of business. The item breaks down as follows: Leases and rentals and maintenance of third party assets: Maintenance and repairs to third party assets 86,037 Freight vehicles/cranes 1,500,046 Land and buildings rentals 13,125 Sundry office machine rentals 96,220 Other industrial rentals 63,262 Car hire 17,234 TOTALE 1,775,923

B.9) PERSONNEL COSTS - detail Compared with the previous year, the number of employees increased by 13 units (as can be seen from the table below); the average workforce in 2012 was equal to 867 people. 31/12/2010 31/12/2011 31/12/2012 AVERAGE 2012 Operatives 612 632 633 636 Technical/administrative staff 217 211 223 221 Managers 10 10 10 10 TOTAL 839 853 866 867

Personnel costs break down as follows: Salaries and wages Operatives 21,088,453 Office staff 9,994,983 Managers 1,170,207 32,253,643 Social security Pensions, operatives 6,477,489 Pensions, office staff 2,874,217 Pensions, managers 404,016 INAIL accident insurance, operatives 1,006,885 INAIL accident insurance, office staff 295,919 INAIL accident insurance, managers 2,037 11,060,563 Employee severance indemnity Operatives 1,650,578 Office staff 793,306 Managers 101,734 2,545,618 Sundry personnel costs 257,331 TOTAL 46,117,155

85 Ferriere Nord S.p.A.

B.10) AMORTIZATION, DEPRECIATION AND WRITE-DOWNS

B.10.a) Depreciation of intangible fixed assets 999,469

This item is illustrated in the notes to the balance sheet assets.

B.10.b) Depreciation of tangible fixed assets 26,390,484

The table below summarizes depreciation of tangible assets according to the various fiscal categories:

Yards, roads, sewers, etc. 394,196 Industrial buildings 3,546,889 Lightweight constructions 41,101 General plant 4,548,373 Non-automatic plant 425,763 Automatic plant 11,566,539 Furnaces and appurtenances 2,474,128 Smoke treatment plant 2,652,612 Equipment and tools 263,619 Office furniture 7,074 Computers, electronic office machines 132,181 Freight vehicles 198,577 Cars, motorbikes, etc. 139,432 TOTAL 26,390,484

Further details on this item can be found in the notes to the balance sheet.

B.10.d) Write-downs of current receivables and cash and cash equivalents 4,700,177

Details relating to the item can be found in the notes to the balance sheet assets.

B.14) OTHER OPERATING COSTS - detail Other operating costs can be detailed as follows:

Revenue stamps 530,343 Capital losses on disposal of assets 183,138 Other operating expenses 208,791 TOTAL 922,272

FINANCIAL INCOME AND EXPENSES

C.16.b) FINANCIAL INCOME FROM SECURITIES HELD AS FINANCIAL FIXED ASSETS OTHER THAN EQUITY INVESTMENTS – detail

Interest income on bond loans 75,930

This item includes interest generated by bonds stated under financial fixed assets, in the “Other securities” item.

86 Financial Statements 2012

C.16.d) FINANCIAL INCOME OTHER THAN ABOVE – detail Interest on trade receivables:

Group companies Trafilerie e Zincherie di Celano S.r.l. 12,746 Kovinar D.o.o. 30,658 43,404 Third parties 26,605 TOTAL INTEREST ON TRADE RECEIVABLES 70,009

Other financial income: Interest from banks 1,834,552 Interest income on current account S.I.A.T. S.p.A. 111,833 Trafilerie e Zincherie di Celano S.r.l. 43,054 La Veneta Reti S.r.l. 106,401 261,288 Sundry financial income 331,890 TOTAL OTHER FINANCIAL INCOME 2,427,730 TOTAL 2,497,739

This item increased by euro 1,089,684 owing to the increase in interest income from banks.

C.17) INTEREST AND OTHER FINANCIAL EXPENSES, PARENT COMPANY - detail Interest expense on medium/long-term loans 1,601,214

This item encompasses interest accrued from 1st January 2012 to 31st December 2012 on the loan granted by the parent company Fin.Fer S.p.A. to Ferriere Nord S.p.A. for which reference is made to the comments on the balance sheet liabilities.

C.17) INTEREST AND OTHER FINANCIAL EXPENSES - detail This item decreased by euro 980,836, reflecting import/export interest expenses and financial discounts following the new business policy orientation. Interest on loans 1,844,091 Interest on securitization 1,873,616 Interest, import/export 40,693 Other interest charges and financial expenses 245,201 TOTAL 4,003,601

C.17.bis) FOREIGN CURRENCY EXCHANGE GAINS AND LOSSES – detail Foreign currency exchange gains 297,845 For information, at the closing date of these financial statements, the company holds derivatives (forward agreements) to hedge its exposure to euro/dollar exchange rate fluctuations resulting from purchases of raw materials and semi-finished products. Even though the said agreements were entered into to eliminate the risk resulting from exchange rate fluctuations, at the closing date of the financial year 2012 they do not provide full hedging inasmuch as currently they no longer correspond to maturities of foreign currency cash flows. At the closing date of the financial year, the fair value of these transactions is irrelevant.

ADJUSTMENTS TO FINANCIAL ASSETS

D.18.c) REVALUATION OF SECURITIES HELD AS CURRENT ASSETS OTHER THAN EQUITY INVESTMENTS Amounting to euro 1,270,000, this item reflects the adjustment to market value of Junior Notes, as explained in the relevant comment in the notes to the balance sheet assets.

87 Ferriere Nord S.p.A.

EXTRAORDINARY INCOME AND EXPENSES

E.20) EXTRAORDINARY INCOME – OTHERS

This item amounting to euro 701,778 includes the extraordinary income resulting from the application for repayment of the IRES tax paid in excess from 2007 to 2011, owing to non-deduction of ’IRAP for expenses related to employees and equivalent workers.

22) INCOME TAXES FOR THE YEAR On the basis of the result for the financial year, a provision of euro 2,431,545 was taken to cover current taxes (IRES and IRAP). The amount for deferred taxes (euro 1,190,216) reflects the changes over the year already commented on in the notes to the balance sheet. DEFERRED TAXES YEAR 2012 YEAR 2011 fiscal effect fiscal effect fiscal effect fiscal effect amount of amount of for IRES for IRAP for IRES for IRAP Description of changes temporary TOTAL temporary TOTAL purposes purposes purposes purposes differences differences (27.50%) (3.90%) (27.50%) (3.90%) DEFERRED TAX ASSETS Taxed provision for bad debts 12,400,000 3,410,000 3,410,000 8,300,000 2,328,095 2,328,095 Agents’ leaving indemnity 524,970 144,367 20,474 164,841 506,239 139,216 19,743 158,959 Agents’ leaving indemnity 364,485 14,215 14,215 283,041 11,039 11,039 Upgrading of Osoppo areas 3,431,877 943,766 133,843 1,077,609 7,116,788 1,957,117 277,555 2,234,671 Post-operative management of landfill 731,460 201,152 28,526 229,678 731,460 201,152 28,526 229,678 Depreciation, statutory/fiscal differences 816,619 224,570 31,848 256,418 742,261 204,122 28,948 233,070 Non fiscally deductible depreciation 200,630 55,173 55,173 141,134 38,812 38,812 Goodwill 1,531,200 421,080 59,717 480,797 1,864,800 512,820 72,727 585,547 Provision for risks, contaminated sites 700,000 192,500 27,300 219,800 700,000 192,500 27,300 219,800 Revaluations, depreciation 3,922,465 1,078,678 152,976 1,231,654 2,684,836 738,330 104,709 843,039 Use of previous losses 3,291,496 905,161 905,161 TOTAL DEFERRED TAX ASSETS 8,045,346 6,882,710

DEFERRED TAX LIABILITIES Accelerated depreciation 985,881 271,117 271,117 1,086,170 298,697 298,697 TOTAL DEFERRED TAX LIABILITIES 271,117 298,697

Total net deferred tax assets 7,774,229 6,584,013 *Included in the amounts owed by the parent company (C.F.N.)

Information on the nature of the company’s business and key events after the statutory year-end, as well as further information on business with the parent company, the companies controlled by it and related parties, may be found in the Board of Directors’ report.

Osoppo, 14th May 2013

The Chairman of the Board of Directors Andrea Pittini

The Directors Federico Pittini Marina Pittini Luigi De Puppi De Puppi Vincenzo Chiari Paolo Felice Lino Carrer

88 Financial Statements 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

CAPITAL EMPLOYED 31/12/2012 31/12/2011

Current operating assets Trade receivables 123,464 186,925 Other receivables 28,943 27,978 Inventories 142,806 138,324 Accrued income and prepaid expenses 815 1,075 296,028 354,302 Current liabilities Trade payables (199,763) (211,210) Other payables (21,901) (27,344) Accrued liabilities and deferred income (205) (110) (221,869) (238,664)

NET WORKING CAPITAL 74,159 115,638

Long-term liabilities Provision for taxes (271) (299) Provision for employee severance indemnity (8,465) (8,708) Other medium/long-term liabilities (24,562) (27,472) (33,298) (36,479)

NET WORKING CAPITAL, NET OF LONG-TERM LIABILITIES 40,861 79,159

Fixed assets Net tangible fixed assets 122,858 129,290 Net intangible fixed assets 642 633 Financial fixed assets 7,909 3,480 131,409 133,403

NET CAPITAL EMPLOYED 172,270 212,562

R.O.I. (Return On Investiment) EBIT/Net capital employed 1.9% 7.1%

Net short-term financial assets (liabilities ) Cash, banks 82,631 51,324 Securities 10,740 9,470 Short-term financial payables (23,707) (28,964) 69,664 31,830 Medium/long-term financial assets (liabilities) Medium/long term financial payables (85,168) (88,848) (85,168) (88,848)

NET FINANCIAL INDEBTEDNESS (15,504) (57,018)

Net financial indebtedness/shareholders’ equity 0.1 0.4

Shareholders’ equity 156,766 155,544

R.O.E. (Return On Equity) Net income/Shareholders’ equity 0.8% 5.4%

Net Working Capital 74,159 115,638 Net short-term financial assets (liabilities) 69,664 31,830 Total Net Financial Working Capital at year-end 143,823 147,468

89 Ferriere Nord S.p.A.

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

Revenues 31/12/2012 31/12/2011 Revenues from sales and services 923,239 963,655 923,239 963,655

Cost of sales Consumption of raw material (net of change in inventories) 684,959 703,566 Industrial services 136,898 137,464 Personnel costs 39,762 39,677 Other industrial costs 1,776 1,524 Writedowns and industrial amortization and depreciation 26,390 27,378 Change in semi-finished and finished product inventories (12,513) (6,040) Capitalization of internal production (1,136) (1,078) 876,136 902,491 Gross industrial margin 47,103 61,164

Sales, administration costs and operating expenses Sales costs 33,073 34,248 Administration costs 7,350 7,709 Personnel costs 6,355 5,804 Amortization of deffered charges 999 1,131 Amortization of goodwill 0 600 Other sundry expenses (income) (3,899) (3,335) Operating margin 3,225 15,007

Non operating income (expenses) Net financial income (expenses) (3,032) (4,722) Exchange gains (losses) 298 38 Revaluations (writedowns) of financial assets 1,270 (2,330) (1,464) (7,014)

Income before extraordinary items and taxes 1,761 7,993

Extraordinary Income and expenses Extraordinary income 702 0 Extraordinary expenses 0 0 702 0

Income before taxes 2,463 7,993 Income taxes (1,241) (28) NET INCOME FOR THE YEAR 1,222 7,965

EBIT (Earning Before Interests and Taxes) Income before extraordinary items and taxes 1,761 7,993 net financial expenses 3,032 4,722 net exchange losses (gains) (298) (38) writedowns (revaluations) of financial assets (1,270) 2,330 EBIT (Earning Before Interests and Taxes) 3,225 15,007

EBIT/REVENUES 0.3% 1.6%

EBITDA (Earning Before Interests, Taxes, Depreciation and Amortization) EBIT 3,225 15,007 amortization of goodwill 0 600 amortization of deffered charges 999 1,131 industrial depreciation 26,390 27,378 provisions and writedowns 4,700 5,311 EBITDA (Earning Before Interests, Taxes, Depreciation and Amortization) 35,314 49,427

EBTIDA/REVENUES 3.8% 5.1%

90 Financial Statements 2012

CASH FLOW STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011 Cash flow from operating activities Net income for the year 1,222 7,965 Depreciation and amortization 27,390 29,109 Allocation for employee severance indemnity 443 483 Decrease in employee severance indemnity (686) (923) Allocation to provisions (2,937) 4,603 Writedowns (revaluations) of fixed assets 0 0 Self-financing generated by operating activities 25,432 41,237

Change in short-term operating receivables 63,461 2,184 Change in other short-term operating receivables and accruals and deferrals (486) 212 Change in inventories (4,482) (17,751) Change in short-term trade payables (11,447) 21,621 Change in other operating payables and accruals and deferrals (5,348) 798 Change in medium/long-term non financial receivables and payables (219) (634) Cash flow generated by change in net operating working capital 41,479 6,430 Cash flow from operating activities 66,911 47,667

Cash flow from investing activities Investments in tangible fixed assets (21,728) (19,737) Investments in intangible fixed assets (1,009) (1,443) Investments in financial fixed assets (4,428) (1) Disposals of tangible fixed assets 1,769 694 Disposals of intangible fixed assets 0 0 Disposals of financial fixed assets 0 0 Change in financial fixed assets (1) (27) Cash flow from investing activities (25,397) (20,514) Net cash flow 41,514 27,153

Cash flow from finacing activities Long-term loan amounts collected 20,000 18,000 Long-term loan repayments (23,680) (16,550) Appropriation for revaluation tax 0 0 Dividends distribution 0 0 Net cash flow from financing activities (3,680) 1,450

Change in net liquidity 37,834 28,603

Opening short-term financial position 31,830 3,227 Change in net liquidity 37,834 28,603 Closing short-term financial position 69,664 31,830

Change in net liquidity 37,834 28,603 Change in net working capital (41,479) (6,430) Change in net financial working capital (3,645) 22,173

91 Ferriere Nord S.p.A.

FERRIERE NORD S.p.A. Board of Auditors’ Report to the Shareholders’ Meeting (art. 2429, section II, Italian Civil Code)

Shareholders, the draft financial statements for the year closed at 31st December 2012 submitted by the Board of Directors for your approval, which include the Statement of Assets and Liabilities, Profit and Loss Account and relevant Notes as well as the Cash Flow Statement and Management Report, were drawn up in the ordinary form. The company is under the direction and coordination of the holding company FIN. FER. S.p.A., which draws up the consolidated financial statements. During the year closed as of 31st December 2012, we performed the supervision tasks provided for by art. 2403 of the Italian Civil Code, whereas legal audit tasks provided for by art. 2409 bis of the Italian Civil Code and Legislative Decree no. 39 of 27.01.2010 were performed by the auditing firm PriceWaterhouseCoopers Spa. Our activity was performed in accordance with the legal provisions in force and the code of conduct of the Board of Auditors published by the “Consiglio Nazionale dei Dottori Commercialisti ed Esperti Contabili” (National Board of Chartered Auditors and Accountants).

Supervision activity We supervised the compliance with the law and company’ by-laws as well as the compliance with the principle of proper management pursuant to art. 2403 of the Italian Civil Code. We took part in the meetings of the Board of Directors, which occurred in compliance with the statutory and legal provisions that govern its operation and for which we can reasonably assure that the actions resolved upon are compliant with the laws and company’s by-laws. We regularly obtained information from the various Directors and departments about general business management trends and their predictable evolution as well as on the most significant transactions (in terms of size and characteristics) made by the company and we made sure that all transactions approved were compliant with the law and company’s by-laws, were based on principles of economic rationality and were not clearly imprudent, hazardous, conflicting with the interest of the company, conflicting with the resolutions passed by the meetings or such that they might jeopardize the integrity of the business property. The transactions made with the parent company Fin.Fer. Spa and with the other Group companies, whose required information are disclosed in the Management Report, are proper and compliant with the interest of the company. We periodically met and during those meetings no significant figures or information emerged that should be mentioned in this report. We regularly exchanged information with the firm entrusted with legal audits, “PricewaterhouseCoopers S.p.A.”. During those exchanges no significant information emerged that should be mentioned in this report. We obtained information on and supervised within the limits of our remit the organisation system and operation of the Company and monitored its adequacy, also by collecting information from the persons in charge of the various functions. In this regard, we have no special remarks to make. We assessed and supervised within the limits of our remit the adequacy of the administrative-accounting system as well as its reliability in terms of proper representation of management facts, also through the information received from the auditing firm and checks of business records. In this regard, no special remarks should be made in this report. The Board of Auditors did not receive any statement according to art. 2408 of the Italian Civil Code.

Financial statements We examined the draft financial statements for the year closed at 31st December 2012, which shows a profit of euro 1,221,747. In this regard, our remarks are as follows. Since we are not entrusted with legal audits, we supervised its general layout as well as its general compliance with the law with reference to its formation and structure. In this regard, no special remarks should be made in this report. We assessed the correspondence between the balance sheet and facts and information we became aware of through the performance of our duties and we have no special remarks to make. We ascertained that the provisions in the field of drafting of management reports were complied with. In this regard, no special remarks should be made in this report since the Board of Directors fully described current and future management trends, the main risks to which the company is exposed and their assessment as well as its relations with the parent company and the other companies belonging to the Group, in addition to some information about its staff, information systems, the environment and R&D activity, which is focused on very innovative projects. As far as we are aware, when drawing up the balance sheet, the Directors did not make any exception to legal provisions according to art. 2423, sub-par. 4, of the Italian Civil Code.

92 Financial Statements 2012

Conclusions On the basis of our reviews and taking into account the statements above as well as the results of the auditing activity performed by “PricewaterhouseCoopers S.p.A.”, we invite you to approve the draft financial statements at 31st December 2012 as drawn up by the Directors and to resolve upon the net result of the financial year according to the proposal put forward by the Board of Directors in the Management Report.

Osoppo, 17th May 2013

The Board of Auditors Gianfranco Romanelli Claudio Sambri Giuseppe Varisco

93

Pittini Group Companies Reclassified Financial Statements 2012 Pittini Group Companies

FIN FER S.p.A.

RECLASSIFIED BALANCE SHEET values expressed in thousands of euro

ASSETS 31/12/2012 31/12/2011

Current operating assets Cash, banks 227 941 Current financial assets 23 21 Trade receivables 9,029 7,232 Other receivables 1,282 2,744 Inventories 0 0 Accrued income and prepaid expenses 42 59 Total current operating assets 10,603 10,997

Fixed Assets Net tangible fixed assets 2,997 2,813 Net intangible fixed assets 2 0 Financial fixed assets 215,636 215,139 Total fixed assets 218,635 217,952

TOTAL ASSETS 229,238 228,949

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities Short-term financial payables 3,611 237 Trade payables 1,269 4,519 Other payables 332 2,234 Accrued expenses and deferred income 627 537 Total current liabilities 5,839 7,527

Medium/long-term liabilities Medium/long-term financial payables 35,313 34,368 Provision for taxes 0 0 Provision for employee severance indemnity 219 197 Other medium/long-term liabilities 0 0 Total medium/long-term liabilities 35,532 34,565

Shareholders’ equity 187,867 186,857

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 229,238 228,949

98 Reclassified Financial Statements 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011

Revenues Revenues from sales and services 5,783 5,824 5,783 5,824

Cost of sales Consumption of raw materials (net of change in inventories) 0 0 Industrial services 0 0 Personnel costs 0 0 Other industrial costs 76 91 Industrial amortization 40 38 Change in semi-finished and finished product inventories 0 0 Capitalization of internal constructions 0 0 116 129

Gross industrial margin 5,667 5,695

Sales and administration costs and operating expenses Sales costs 32 54 Administration costs 615 432 Personnel costs 1140 878 Amortization of deferred charges 2 23 Operating margin 3,878 4,308

Non-operating income (expenses) Net financial expenses 347 225 Exchange gains (losses) 0 0 Other non-operating income (expenses) 11 6,025 358 6,250

Income before extraordinary items and taxes 4,236 10,558

Extraordinary income and expenses Extraordinary income 18 0 Extraordinary expenses 0 0 18 0

Income before taxes 4,254 10,558

Income taxes (1,234) (1,476)

Net income for the year 3,020 9,082

99 Pittini Group Companies

S.I.A.T. S.p.A.

RECLASSIFIED BALANCE SHEET Values expressed in thousands of euro

ASSETS 31/12/2012 31/12/2011

Current operating assets Cash, banks 4 17 Current financial assets 0 0 Trade receivables 17,478 19,913 Other receivables 928 738 Inventories 8,855 9,072 Accrued income and prepaid expenses 49 53 Total current operating assets 27,314 29,793

Fixed Assets Net tangible fixed assets 8,621 9,852 Net intangible fixed assets 0 1 Financial fixed assets 10 7 Total fixed assets 8,631 9,860

TOTAL ASSETS 35,945 39,653

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities Short-term financial payables 8,601 13,829 Trade payables 14,165 12,043 Other payables 1,342 1,445 Accrued expenses and deferred income 3 2 Total current liabilities 24,111 27,319

Medium/long-term liabilities Medium/long-term financial payables 0 0 Provision for taxes 0 0 Provision for employee severance indemnity 1,809 1,977 Other medium/long-term liabilities 447 420 Total medium/long-term liabilities 2,256 2,397

Shareholders’ equity 9,578 9,937

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 35,945 39,653

100 Reclassified Financial Statements 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011

Revenues Revenues from sales and services 68,689 73,312 68,689 73,312

Cost of sales Consumption of raw materials (net of change in inventories) 51,914 55,700 Industrial services 5,302 4,787 Personnel costs 4,249 4,095 Other industrial costs 0 0 Industrial amortization 1,838 2,225 Change in semi-finished and finished product inventories (354) 236 Capitalization of internal constructions 0 0 62,949 67,043

Gross industrial margin 5,740 6,269

Sales and administration costs and operating expenses Sales costs 4,355 3,863 Administration costs 769 738 Personnel costs 856 652 Amortization of deferred charges 1 2 Operating margin (241) 1,014

Non-operating income (expenses) Net financial expenses (115) (154) Exchange gains (losses) 0 0 Other non-operating income (expenses) (61) 386 (176) 232

Income before extraordinary items and taxes (417) 1,246

Extraordinary income and expenses Extraordinary income 96 0 Extraordinary expenses 0 0 96 0

Income before taxes (321) 1,246

Income taxes (38) (415)

Net income for the year (359) 831

101 Pittini Group Companies

LA VENETA RETI S.r.l.

RECLASSIFIED BALANCE SHEET Values expressed in thousands of euro

ASSETS 31/12/2012 31/12/2011

Current operating assets Cash, banks 0 0 Current financial assets 0 0 Trade receivables 18,638 17,032 Other receivables 712 221 Inventories 2,341 2,954 Accrued income and prepaid expenses 16 6 Total current operating assets 21,707 20,213

Fixed Assets Net tangible fixed assets 12,063 12,274 Net intangible fixed assets 79 131 Financial fixed assets 11 11 Total fixed assets 12,153 12,416

TOTAL ASSETS 33,860 32,629

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities Short-term financial payables 8,961 11,575 Trade payables 15,977 10,993 Other payables 766 1,342 Accrued expenses and deferred income 9 11 Total current liabilities 25,713 23,921

Medium/long-term liabilities Medium/long-term financial payables 48 48 Provision for taxes 0 0 Provision for employee severance indemnity 455 534 Other medium/long-term liabilities 164 153 Total medium/long-term liabilities 667 735

Shareholders’ equity 7,480 7,973

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 33,860 32,629

102 Reclassified Financial Statements 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011

Revenues Revenues from sales and services 45,283 38,546 45,283 38,546

Cost of sales Consumption of raw materials (net of change in inventories) 38,451 32,179 Industrial services 2,334 2,394 Personnel costs 1,792 2,014 Other industrial costs 0 0 Industrial amortization 545 525 Change in semi-finished and finished product inventories 495 909 Capitalization of internal constructions 0 0 43,617 38,021

Gross industrial margin 1,666 525

Sales and administration costs and operating expenses Sales costs 2,092 1,375 Administration costs 276 336 Personnel costs 244 274 Amortization of deferred charges 52 52 Operating margin (998) (1,512)

Non-operating income (expenses) Net financial expenses (110) (163) Exchange gains (losses) 0 0 Other non-operating income (expenses) 198 880 88 717

Income before extraordinary items and taxes (910) (795)

Extraordinary income and expenses Extraordinary income 43 0 Extraordinary expenses 0 0 43 0

Income before taxes (867) (795)

Income taxes 374 (21)

Net income for the year (493) (816)

103 Pittini Group Companies

PITTINI STAHL G.m.b.H.

RECLASSIFIED BALANCE SHEET Values expressed in thousands of euro

ASSETS 31/12/2012 31/12/2011

Current operating assets Cash, banks 973 829 Current financial assets 0 0 Trade receivables 90 74 Other receivables 5 7 Inventories 0 0 Accrued income and prepaid expenses 2 3 Total current operating assets 1,070 913

Fixed Assets Net tangible fixed assets 3 10 Net intangible fixed assets 0 0 Financial fixed assets 0 0 Total fixed assets 3 10

TOTAL ASSETS 1,073 923

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities Short-term financial payables 0 0 Trade payables 4 0 Other payables 4 0 Accrued expenses and deferred income 0 0 Total current liabilities 8 0

Medium/long-term liabilities Medium/long-term financial payables 0 0 Provision for taxes 11 35 Provision for employee severance indemnity 0 0 Other medium/long-term liabilities 18 20 Total medium/long-term liabilities 29 55

Shareholders’ equity 1,036 868

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,073 923

104 Reclassified Financial Statements 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011

Revenues Revenues from sales and services 547 6,058 547 6,058

Cost of sales Consumption of raw materials (net of change in inventories) 0 5,468 Industrial services 0 0 Personnel costs 0 0 Other industrial costs 0 0 Industrial amortization 7 9 Change in semi-finished and finished product inventories 0 0 Capitalization of internal constructions 0 0 7 5,477

Gross industrial margin 540 581

Sales and administration costs and operating expenses Sales costs 0 0 Administration costs 0 0 Personnel costs 225 275 Amortization of deferred charges 0 0 Operating margin 315 306

Non-operating income (expenses) Net financial expenses 6 10 Exchange gains (losses) 0 0 Other non-operating income (expenses) (74) (100) (68) (90)

Income before extraordinary items and taxes 247 216

Extraordinary income and expenses Extraordinary income 0 0 Extraordinary expenses 0 0 0 0

Income before taxes 247 216

Income taxes (80) (69)

Net income for the year 167 147

105 Pittini Group Companies

KOVINAR D.o.o.

RECLASSIFIED BALANCE SHEET Values expressed in thousands of euro

ASSETS 31/12/2012 31/12/2011

Current operating assets Cash, banks 1,028 792 Current financial assets 0 0 Trade receivables 7,360 8,295 Other receivables 10 5 Inventories 1,824 1,852 Accrued income and prepaid expenses 29 27 Total current operating assets 10,251 10,971

Fixed Assets Net tangible fixed assets 2,719 2,337 Net intangible fixed assets 10 14 Financial fixed assets 1 3 Total fixed assets 2,730 2,354

TOTAL ASSETS 12,981 13,325

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities Short-term financial payables 0 0 Trade payables 8,179 8,374 Other payables 257 445 Accrued expenses and deferred income 5 5 Total current liabilities 8,441 8,824

Medium/long-term liabilities Medium/long-term financial payables 0 0 Provision for taxes 0 0 Provision for employee severance indemnity 0 0 Other medium/long-term liabilities 11 12 Total medium/long-term liabilities 11 12

Shareholders’ equity 4,529 4,489

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 12,981 13,325

106 Reclassified Financial Statements 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011

Revenues Revenues from sales and services 25,467 27,901 25,467 27,901

Cost of sales Consumption of raw materials (net of change in inventories) 23,163 24,867 Industrial services 540 569 Personnel costs 1,180 1,214 Other industrial costs 20 20 Industrial amortization 223 246 Change in semi-finished and finished product inventories (447) 344 Capitalization of internal constructions (7) 0 24,672 27,260

Gross industrial margin 795 641

Sales and administration costs and operating expenses Sales costs 398 872 Administration costs 172 173 Personnel costs 161 165 Amortization of deferred charges 4 4 Operating margin 60 (573)

Non-operating income (expenses) Net financial expenses (27) (68) Exchange gains (losses) 0 0 Other non-operating income (expenses) (19) 312 (46) 244

Income before extraordinary items and taxes 14 (329)

Extraordinary income and expenses Extraordinary income 27 17 Extraordinary expenses (1) 0 26 17

Income before taxes 40 (312)

Income taxes 0 0

Net income for the year 40 (312)

107 Pittini Group Companies

TRAFILERIE E ZINCHERIE DI CELANO S.r.l.

RECLASSIFIED BALANCE SHEET Values expressed in thousands of euro

ASSETS 31/12/2012 31/12/2011

Current operating assets Cash, banks 54 67 Current financial assets 0 0 Trade receivables 9,543 11,526 Other receivables 595 1,695 Inventories 6,110 5,301 Accrued income and prepaid expenses 241 268 Total current operating assets 16,543 18,857

Fixed Assets Net tangible fixed assets 2,606 2,917 Net intangible fixed assets 307 365 Financial fixed assets 1 1 Total fixed assets 2,914 3,283

TOTAL ASSETS 19,457 22,140

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities Short-term financial payables 7,777 1,831 Trade payables 6,403 11,968 Other payables 579 718 Accrued expenses and deferred income 3 3 Total current liabilities 14,762 14,520

Medium/long-term liabilities Medium/long-term financial payables 2,800 4,600 Provision for taxes 0 0 Provision for employee severance indemnity 533 551 Other medium/long-term liabilities 7 4 Total medium/long-term liabilities 3,340 5,155

Shareholders’ equity 1,355 2,465

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 19,457 22,140

108 Reclassified Financial Statements 2012

RECLASSIFIED INCOME STATEMENT Values expressed in thousands of euro

31/12/2012 31/12/2011 Revenues Revenues from sales and services 34,639 36,086 34,639 36,086

Cost of sales Consumption of raw materials (net of change in inventories) 26,052 27,414 Industrial services 3,602 3,193 Personnel costs 3,073 3,284 Other industrial costs 388 415 Industrial amortization 685 616 Change in semi-finished and finished product inventories (183) 429 Capitalization of internal constructions 0 0 33,617 35,351

Gross industrial margin 1,022 735

Sales and administration costs and operating expenses Sales costs 2,336 1,695 Administration costs 355 334 Personnel costs 156 210 Amortization of deferred charges 58 58 Operating margin (1,883) (1,562)

Non-operating income (expenses) Net financial expenses (190) (315) Exchange gains (losses) 40 24 Other non-operating income (expenses) 858 338 708 47

Income before extraordinary items and taxes (1,175) (1,515)

Extraordinary income and expenses Extraordinary income 0 0 Extraordinary expenses 0 0 0 0

Income before taxes (1,175) (1,515)

Income taxes 65 2

Net income for the year (1,110) (1,513)

109 © Gruppo Pittini - June 2013 Print Unicolor S.p.A.