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VIEWS: 33 PAGES: 234

  • pg 1
									AnnuAl RepoRt 2009
Buongiorno. n°1 Company
in moBile entertainment
                          Contents




Letter to the shareholders                                                       008
Board of Directors                                                               010
Economic and Financial Highlights of the Buongiorno Group                        011
Stock Performance and Capitalization                                             012

1 Directors’ report on operations                                                015
  1.1 The Group at December 31, 2009, and Related Developments                   016
  1.2 The Market of Mobile Value Added Services (VAS)                            020
  1.3 Market Positioning and Evolution of Buongiorno’s Business                  022
  1.4 Profit and Loss Account and Balance Sheet Items of Buongiorno              025
        1.4.1 Profit and Loss Account Items                                      025
        1.4.2 Investment Operations                                              033
        1.4.3 Financial Operations                                               035
  1.5 Risk Management                                                            040
  1.6 Related-party Transactions                                                 054
  1.7 Foreseeable Evolution                                                      056
  1.8 Report on Operations of the Parent Company Buongiorno S.p.A.               056
        1.8.1 Economic Operations                                                058
        1.8.2 Financing and Investment Operations                                061
  1.9 Human Resources                                                            064
  1.10 Technological Innovation                                                  065
  1.11 Main Company Events in the Financial Year                                 067
  1.12 Events Following December 31, 2009                                        069
  1.13 Main Shareholders                                                         070
  1.14 Report on the Stock Option Plans                                          070
  1.15 Shares Held by Directors, General Managers and Key Management Personnel   073
  1.16 Annual Corporate Governance Report (Article 123-bis TUF)                  074
  1.17 Code Governing the Protection of Personal Data of the Personnel           074
  1.18 Auditing                                                                  074
  1.19 Treasury Stocks                                                           075
  1.20 Proposal for Allocating the Result for the Year                           075
Contents




2 Consolidated annual report of the Buongiorno group as of December 31, 2009                                    077
  2.1 Accounting Statements of the Consolidated Annual Report as of December 31, 2009                           078
       2.1.1 Consolidated Balance Sheet of the Buongiorno Group at December 31, 2009                            079
       2.1.2 Consolidated Profit and Loss Account of the Buongiorno Group at December 31, 2009                  080
       2.1.3 Consolidated Statement of Comprehensive Profit and Loss Account of the Buongiorno Group for 2009   081
       2.1.4 Statement of Changes in Equity of the Buongiorno Group at December 31, 2009                        081
       2.1.5 Consolidated Cash Flow Statement of the Buongiorno Group for 2009                                  083
  2.2 Financial Statements for the Year Ended December 31, 2009 - Buongiorno S.p.A.                             150

3 report of the supervisory Committee                                                                           211

4 attestations of the executive in Charge of the Company’s Financial reports                                    221

5 independent auditors’ report                                                                                  224

6 Company Data and information for shareholders                                                                 229
                              letter to the shareholders




Dear Shareholders,

During 2009, despite a challenging macro economic environment, Buongiorno delivered a strong business performance. Its
share price rose 87%: this performance compares favourably to a 20% increase for the Italian market and a 32% increase for
the Star Segment of the Italian Stock Exchange - the index on which Buongiorno is listed.

Within the context of a tough macro economy, Buongiorno ended 2009 with revenues of €259 million (down by 18%
compared to 2008, due to the rationalisation of the product portfolio and changes in the accounting treatment of certain
outstanding contracts) and EBITDA in line with 2008. Furthermore, the Group’s EBITDA margin increased from 12.4% to
15%. Pretax profit rose 165% relative to 2008, to €13.1 million, whilst net profit reduced by 1.4 million, to €7 million. The net
profit figure was strongly influenced by tax carried forward losses.

In a notably difficult year for the financial sector, Buongiorno was able to obtain a new loan facility with a pool of banks headed
by Banca Imi SpA (Intesa Sanpaolo Group). The multi-year loan facility, for a total consideration of €87 million, has significantly
strengthened Buongiorno’s financial structure. At the end of 2009 Buongiorno reported a consolidated net debt of €47.4
million; with a reduction of almost €20 million on the 2008 figure..

Buongiorno’s core business, which focuses on traditional mobile content, has not been significantly impacted by the macro
economic environment. This is thanks, in most part, to the opportunities of geographical growth on a global level. The total
number of users who subscribe to traditional B2C services - BlinkoGold and Movilisto - increased to 9 million during 2009
(6 million at the end of 2008).

In November 2009, the Company strengthened its B!Digital division (previously Buongiorno Marketing Services) with the
launch of its new website, www.buongiornodigital.com. B!Digital - which achieves a reach of over 25 million pages visited
from mobile devices and 4 million unique mobile users - offers companies, advertisers and publishers a Pan-European
platform to manage their digital campaigns via mobile phone.

In 2009, Buongiorno completed the integration with iTouch, which was launched on 30 June 2007. The integration generated
total savings of €14 million, exceeding the €10 million of savings that had been estimated in 2007.

The completion of the integration with iTouch was then followed by a management reorganisation of the Company. The
Company is now split into three main business areas: B2C B2B (which includes marketing services); and a New Business
area, which is responsible for all new initiatives. The result of these processes is the creation of a new, fully integrated
company in terms of products, processes, and technical and logistical infrastructures.
The success of Buongiorno also depends heavily on the strength of its employee base; 977 people located in 24 offices
around the world. The Company continues to dedicate significant resources to its employee base, investing in the training
and development required to maintain a work force that is up to speed with the challenges of the industry. In October
2009, Buongiorno became the first Italian company to receive the Dale Carnegie Leadership Award for management and
human resources training. This award recognised the Company’s ability to place value on its human resources and create
a workplace environment which allows its employees to realise their full potential as they strive towards the company’s
objectives.

The Company also continued its long-lasting commitment to Corporate Social Responsibility. In 2009, Buongiorno addressed
an issue very important to the company and the industry in which it operates - cyberbullying - which resulted in the publication
of the book “Stop cyberbullying.” This book is an invaluable instrument to both parents and teachers in addressing the
responsible use of modern technology.

Looking ahead to 2010, the Company is confident that, despite a continued challenging macro economic environment,
it will continue to grow in its traditional business. Buongiorno will continue to focus on its current B2C and B2B business,
leveraging its global platform and reshaped organisation, and taking advantage of it stronger financial structure. At the same
time, the Company plans to intensify its innovation efforts in identifying opportunities on the market where it can be expected
to play a significant role. In this context, the company has recently entered the online gaming and skill game industry, through
the acquisition of a proprietary Italian license, with Winga, which is a natural complement to Buongiorno’s traditional B2C
business in mobile entertainment.

Best Regards

                                                                     Chairman of the Board of Directors of Buongiorno S.p.A.
                                                                                          Mauro Del Rio




                                                                                                                                   8
                                                                                                                                   9
                             Company Boards



Board of Directors
                        Mauro Del Rio
                        Sant’Ilario d’Enza (Reggio Emilia) - Italy, 02/20/1964   ChaiRMan
                        andrea Casalini
                        Parma - Italy, 05/02/1962                                Chief exeCutive OffiCeR
                        holger van Den heuvel
                        Stuttgart - Germany, 11/15/1953                          DiReCtOR
                        Riccardo Lia
                        La Spezia - Italy, 02/03/1965                            DiReCtOR
                        nevid nikravan
                        Istanbul - Turkey, 04/30/1968                            DiReCtOR
                        anna Gatti
                        Pavia - Italy, 01/30/1972                                inDepenDent DiReCtOR
                        Giovanni Massera
                        Parma - Italy, 04/22/1961                                inDepenDent DiReCtOR
                        anna puccio
                        Udine - Italy, 03/10/1964                                inDepenDent DiReCtOR
                        felipe fernandez atela
                        Mexico city - Mexico, 03/01/1956                         inDepenDent DiReCtOR
                        Wayne pitout
                        Ladysmith - South Africa, 07/22/1961                     DiReCtOR
                        Giorgio Ricchebuono
                        Savona - Italy, 06/10/1946                               DiReCtOR

The current Board of Directors was appointed by the Ordinary Shareholders’ Meeting held on May 2, 2007 and its term
will expire with the approval of this Annual Report. According to the one-tier system of governance adopted by Buongiorno
S.p.A. (hereinafter “Buongiorno”, “B!” or “the Company”), control of operations is performed by a Supervisory Committee
within the Board of Directors comprised solely of independent members of the Board: Giovanni Massera (Chairman), Anna
Puccio and Felipe Fernandez Atela.

Independent Auditors: PricewaterhouseCoopers S.p.A.
Executive in Charge of the Company’s Financial Reporting: Carlo Frigato

Pursuant to Art. 154-bis, paragraph 2 of Legislative Decree 58 dated February 24, 1998, the Executive in charge of the
Company’s Financial Reporting was appointed by the Board of Directors during the meeting held on October 22, 2007.
eConomiC and FinanCial highlights oF the Buongiorno group
The following table contains the consolidated economic and financial, balance sheet and operating highlights of Buongiorno
S.p.A. and its direct and indirect subsidiaries (hereinafter the “Buongiorno Group”, or the “Group”, or “Buongiorno).

    (in thousands of Euro)                                                            YTD 2009                       YTD 2008                         Var. %

    economic and financial highlights
    Sales of Services                                                                  259,519                         315,948                          (18%)
    Value of Production                                                                262,618                         318,938                          (18%)
    Added Value (Val. of prod. - Mat., cons. and services)                              91,120                          92,872                           (2%)
    Industrial Added Value (IAV)                                                       115,599                         121,106                           (5%)
    Normalized Gross Operating Margin                                                  39,012                           39,824                           (2%)
    Normalized Operating Profit (Loss)                                                 22,798                           20,113                           13%
    Financial Operations                                                                (4,062)                        (10,979)                         (63%)
    Net non-recurrent earnings / (charges)                                              (5,588)                         (4,177)                          34%
    Profit (Loss) before Taxes                                                         13,148                            4,957                          165%
    Profit (Loss) before Minority Interests                                              7,078                           8,391                          (16%)
    Balance Sheet highlights
    Net invested capital                                                               205,501                         217,061                           (5%)
    Net current assets                                                                 (14,992)                        (10,091)                          49%
    Capital and reserves                                                               158,118                         150,373                            5%
    Net financial position                                                             (47,383)                        (66,688)                          29%
    earning ratios
    Added value/Revenues                                                                 35.1%                          29.4%                            19%
    Gross Operating Margin/Revenues                                                      15.0%                          12.6%                            19%
    Gross Operating Margin/Net invested capital                                          19.0%                          18.3%                             3%
    Financial Charges/Gross Operating Margin                                            (10.4%)                        (27.6%)                          (62%)
    Operating Result/Revenues (ROS)                                                       8.8%                           6.4%                            38%
    Operating Result/Net invested capital (ROI)                                          11.1%                           9.3%                            20%
    Profit (Loss) before Minority Interests/Capital and reserve (ROE)                     4.5%                           5.6%                           (20%)
    Cost of staff
    Staff (average of the period)                                                        1,004                          1,086                            (8%)
    Annual Revenues/Average staff                                                         258                            291                            (11%)

Certain figures presented in the profit and loss account and balance sheet, above, as well as the indicators (PROFITABILITY AND FINANCIAL ratios), are not referred to by IAS/IFRS, but are
used by Buongiorno’s management to monitor and assess the Group’s operating performance. Management feels that such figures are important parameters for measuring the Group’s
operating performance.

The indicators/items that are not descriptive of the amounts they are intended to measure are explained below:
Value added: the difference between the value of production and all recurring direct costs (costs for services, leased assets and materials).
Industrial IAV: calculated as total revenues from core business minus variable costs of sales and marketing expenses.
Normalized Gross Operating Margin: calculated as Gross Operating Margin less all non-recurring restructuring costs.
Normalized Operating Profit: calculated as Operating Profit less all non-recurring restructuring costs.
Financial Operations: calculated as the sum of net finance income/expense and adjustments to financial assets. The “finance expense” indicated in the ratio “Finance Income/Gross


                                                                                                                                                                                              10
Operating Margin” includes expense/income relating to currency overlay.
Net Working Capital: it includes all current assets, inventories and current liabilities, excluding funds for risks.
Other balance sheet items: please refer to paragraph 1.4.2 of this Report.

                                                                                                                                                                                              11
                           stoCk perFormanCe and Capitalization




                        Sector                                Media
                        Market Segment                        STAR
                        Ticker Symbol                         BNG
                        Reuters Code                          BNI.MI
                        Bloomberg Code                        BNG IM
                        Isin Code                             IT0001488607
                        Specialist                            Centrobanca SIM S.p.A. (up to October 2009),
                                                              then Intermonte SIM S.p.A.
                        No. of shares at December 30, 2009    106,353,675
                        Par Value                             Euro 0.26 cad
                        Price at December 30, 2009            Euro 1.16
                        Capitalization at December 30, 2009   Euro 123 mn
                        Average Daily Volume                  628,802


Buongiorno S.p.A. is listed in the MTA market, in the FTSE ITALIA STAR segment of Borsa Italiana S.p.A..
The role of Market Specialist was held by Centrobanca SIM until October 2009, then replaced by Intermonte SIM SPA.

As of December 31, 2009, the shareholders of Buongiorno SpA, in addition to Mauro Del Rio and Hoger Van Den
Huevel, include the investors Mitsui & Co Ltd with a 3.3% stake, and Axa Rosenberg with a 2% stake. On the same
date, the Company’s free float as a percentage of share capital stood at 71.5%.
BNG stock performed very well in 2009, recording 87% growth and closing the year with one of the best performances
compared to the other shares included in the FTSE ITALIA STAR index (which grew overall by 32%) .

The BNG share price closed the year at Euro 1.16 per share with a market capitalization of Euro 123.37 million.
The average price for the year was Euro 0.92, with a maximum value of Euro 1.49 recorded on September 29, 2009.

On average 628,802 shares were traded every day in 2009, up compared to the 528,936 shares traded in 2008.




                                                                                                                     12
                                                                                                                     13
1 Directors’ report on operations




                                    123
                                    124
                              Directors’ report on operations




Buongiorno S.p.A.’s Financial Statements at December 31, 2009 were prepared in compliance with the requirements of the
“Regulations for Implementing Legislative Decree No. 58 of February 24, 1998 regarding Issuers” (CONSOB Resolution No.
11971 of May 14, 1999 and subsequent amendments), European Community Regulations No. 1606 of July 19, 2002, on
international accounting standards.
The Annual Report refers to the consolidated situation of Buongiorno S.p.A. and its direct and indirect subsidiaries (hereinafter
the “Buongiorno Group” or the “Group”) as of December 31, 2009.

The consolidated financial statements have been prepared using the layout prescribed by the IAS/IFRS adopted by the
European Union.


1.1       The Group aT December 31, 2009, anD relaTeD DevelopmenTs

In 2009, the company successfully completed its two-year Buongiorno-iTouch merger plan, after iTouch was acquired at
the end of 2007, which resulted in the creation of a new, fully integrated entity in terms of corporate structure, products,
processes and technical and logistical infrastructures. The annualized savings generated by the company’s ambitious plan
to streamline operations and create synergies amounted to about Euro 13 million, compared to pro-forma results at June
30, 2007, far exceeding the objective of Euro 10 million. The main projects put in place under the merger plan continued
in 2009. In particular: the streamlining of the company’s processes and product offering allowed it to reduce the number of
employees to 977 at year-end 2009, down 22% from 1253 at the beginning of the plan (including employees added with
the acquisitions of Llama TV and By-Cycle), exceeding objectives by a large margin; Buongiorno also completed its plan to
streamline its technological processes. All of the planned Data Center closings were completed, and 31 of the 34 migration
projects undertaken following the iTouch merger were successfully completed (the last three projects, in Spain, Portugal and
Brazil, will be completed by the first half of 2010). These activities are in addition to those completed as of December 31,
2008, including the closing of offices in 13 countries and the transfer of Customer Care activities to South Africa.
The Group also continued the plan to rationalize the corporate structure, which led to a decrease in the number of active legal
entities from over 100 to 62 at the end of 2009.

The consolidation area of the Buongiorno Group compared to December 31, 2008 was as follows:

The following transactions became effective from a legal and accounting standpoint on January 1, 2009:
 n   acquisition of minority interests in the South African subsidiary iTouch South Africa (Pty) Ltd, increasing the stake from
     87.5% to 100%;
 n   merger of Grupo iTouch Movilisto Mexico S.A. de CV in the Mexican company My Alert SL de CV;
 n   merger of iTouch (UK) Ltd. into Buongiorno UK Ltd.
On April 1, 2009:
 n   a procedure was initiated to close Telitas Sweden AB.

On May 25, 2009:
 n   iTouch Denmark A.S. was placed into liquidation.

On July 1, 2009:
 n   acquisition of minority interests in the Nigerian subsidiary iTouch Global Concepts Nigeria Ltd, increasing the stake from
     80% to 100%;
 n   increase in the share capital of the Dutch holding company Buongiorno Marketing Services Netherland B.V., underwritten
     through the contribution of the 100% equity investment in Buongiorno Russia LLC by the associate Buongiorno Hong
     Kong Ltd. As a result of this transaction, the Buongiorno Group’s ownership of the Dutch holding company Buongiorno
     Marketing Services Netherland B.V. fell from 60% to the present 54.5%. The other minority-interest shareholders are the
     Mitsui & Co. Ltd. Group and the associate Buongiorno Hong Kong Ltd., which respectively hold 36.4% and 9.1% stakes
     in Buongiorno Marketing Services Netherland B.V..


On September 30, 2009:
 n   merger of the Spain-based Movilisto S.A., Gruppo iTouch Movilisto S.A. and Initiatives Especiales S.A. into Buongiorno
     MyAlert S.A.;
 n   sale of the Norwegian company Mobilnet A.S.;
 n   wounding up of the German company Fleck Capital GmbH.


On October 7, 2009:
 n   acquisition of minority interests in the Turkish subsidiary Buongiorno Dijital Iletisim A.S., increasing the stake from 79.66%
     to 100%.




                                                                                                                                      16
                                                                                                                                      17
                               Directors’ report on operations




On November 30, 2009:
 n   merger of the French companies Mobivillage S.A. and iTouch Movilisto France into Buongiorno France S.A.;

In December 2009:
 n   winding-up procedures were started for the English companies iTouch Holdings Ltd and iTouch Ventures Ltd, the Spanish
     companies Corporacion Crossbow SL, Kunno Systems SL and Movilisto TV, the Australian company Telequity Pty Ltd,
     the New Zealand company iTouch New Zealand Ltd and the Bolivian company Buongiorno MyAlert Bolivia S. de R.L.;
 n   at the same time as the start of the above proceedings to wind up the companies iTouch Holdings Ltd and iTouch Ventures
     Ltd, the parent company Buongiorno S.p.A. acquired from iTouch Holding Ltd (a company controlled by Buongiorno
     S.p.A. through iTouch Ventures Ltd) a 100% stake in the company iTouch Ltd, at an equivalent value to the book value
     of Buongiorno S.p.A.’s own holding in the company iTouch Venture Ltd in liquidation, which is also controlled. The above
     transfer has resulted in inter-company payables and receivables being recognized in the financial statements of the
     companies involved. At the end of the liquidation proceedings for iTouch Venture Ltd and its subsidiary iTouch Holding
     Ltd, these inter-company payables and receivables will be offset so as not to alter the balance sheet and financial position
     of the Buongiorno Group. It should be noted that at December 31, 2009 this inter-company transfer of equity had no
     significance at consolidation level.
The following table shows an outline of the Buongiorno Group’s structure at December 31, 2009. A list of consolidated
companies at December 31, 2009 is included in Annex B.
Buongiorno S.p.a. - group Structure




                                      18
                                      19
                             Directors’ report on operations




1.2     The markeT of mobile value aDDeD services (vas)

In 2009, the global VAS (Value Added Services for mobile and fixed-line telephone users) market, after a decade of rapid
growth, remained stable, in spite of the climate of recession, at about Euro 24 billion (source: MEF). According to the
Business Confidence Index prepared by MEF and KPMG Advisory the industry could grow in the next 18 months up to
20% with regional variations between the different markets, recording major growth in the developing countries (Africa, South
America and India) and steady growth in the mature markets (Western Europe and the United States).
Multiple factors contribute to these inconsistent growth patterns, including regulatory issues, demand trends, and the
competitive strategies employed by the various players throughout the value chain. Buongiorno has confirmed its leading
position in terms of revenue volume in 3 countries and is one of the main players in another 5 key countries (with an overall
market share of 4% compared to market net value), despite operating in a competitive scenario which is still highly fragmented
and marked by a large number of small-size local players (with a turnover of less than Euro 20 million).
Demand in the VAS, or as it is also known the MC1.0 market, which represents the most substantial part of Buongiorno’s
business, continues to be steady despite the market’s rapid evolution. Moreover, as the business is very fragmented, there
is an expectation of further consolidation and hence good prospects for the leaders, including Buongiorno, to expand their
market share. However, the global web-mobile convergence trend requires the market and its evolution to be examined from
two different points of view. On the one hand, there are markets and geographies where the pure Mobile VAS players benefit
from a relatively protected business model, based on direct consumer billing (as opposed to an advertising-based model),
open VAS offerings (as opposed to closed offerings) by mobile phone manufacturers and where the telephone operators
are increasing their propensity to outsource, generating new opportunities for the pure Mobile VAS players because their
penetration is less than 15%, with substantial room for growth.
On the other hand, there are the more mature markets, particularly the United States, some of the Western European
countries, Japan and Korea, where the presence of smartphones and application stores is generating new opportunities for
the pure Mobile VAS players with the introduction of new business models.
According to a number of research studies, by 2013 the mobile phone will overtake the PC for Internet browsing; in fact,
by that date it is estimated that there will be 1.78 billion computers, whilst mobiles fitted with a browser will be 1.82 billion
(source: Gartner). This represents a very interesting opportunity for companies whose core business is the development and
distribution of mobile content and whose “silicon valley” is actually in Italy.

In 2009, Buongiorno also extended its position as a provider of solutions for telephone operators, managing its two leading
solutions: IMM (Intelligent Mobile Marketer) and SuperContest ― which allowed it to gain market shares in the CRM solutions
segment, a sector that generated a turnover of 8.9 billion dollars in 2008 and which is estimated to reach 13.3 billion dollars
by 2012 (values relating to CRM software, source: Gartner).

Turning to Marketing Solutions for Businesses (the B!Digital division of Buongiorno), the business model of which is founded
on advertising revenues, analysts and researchers agree in the belief that mobile advertising (estimated to reach Euro 7-12
billion by 2011), in a global context in which there are over four billion mobile telephone users, 1.4 billion televisions and one
billion personal computers, may attract an increasing share of the advertising expenditures of leading brands. In 2009, the
advertising sector saw (Nielsen data), on the one hand, Internet and digital media hold steady, with moderate growth (+7%)
at the same time as the move away from the use of offline media toward digital and mobility media. On the other hand, the
year witnessed a fall in advertising investments with a decrease in offline media (reductions between -17% and -30%). In
the mobile advertising market, the recent acquisitions of Admob by Google, Quattro Wireless by Apple and RingRing by
Amobee prove that the sector is going through a very tumultuous phase. In particular for Italy, the estimates published by the
Osservatorio (Monitoring Unit) of the Milan Polytechnic, confirm the mobile sector’s growing importance for the advertising
market. Indeed Italian companies’ investments on Mobile Advertising rose 21% reaching a turnover of more than Euro 15
million, in a scenario in which advertising investments on traditional media fell by more than 20%.




                                                                                                                                     20
                                                                                                                                     21
                                Directors’ report on operations




1.3      markeT posiTioninG anD evoluTion of buonGiorno’s business

Buongiorno is an Italian independent multinational, a leader in the digital mobile entertainment market (Mobile VAS) on an international
level. Buongiorno works with the major telephone and Internet service providers and media companies in 57 countries, designing and
distributing a broad range of mobile digital content and interactive applications: music, games, video, wallpaper, ringtones, user-generated
services, chat and advertising. As of the second half of 2008, Buongiorno has started operating also in the Mobile Social Networking
segment. Buongiorno is present in all the major European countries, in Russia, the United States, Australia, and several countries in Central
and South America, Africa and the Middle East. Through a joint-venture with Mitsui, it also operates in India, Vietnam and Philippines.
Buongiorno operates with two business lines: value-added services for mobile and fixed-line telephone users (B2C), and
services for telephone carriers and relationship marketing services for businesses (B2B).

                                         B2c                                                                              B2B

                                                                                      Telco and media                                    B!Digital
               n	   Designing, aggregating, delivering and CRM of mobile content   n	 Designing,  aggregating, delivering      n	 Branding & Awareness; On device
                    subscriptions products trough proprietary brands                 and CRM of mobile content subscrip-         applications & mobile internet sites;
   What




                                                                                     tions products in white label for tele-     Digital Loyalty & CRM; Social Media
                                                                                     com operators                               Marketing; Sales Promotion



               n	   9 million clients                                              n	 Direct connection with 120 telecom       n	 1 pan European agency, several multi
   Features




                                                                                      operators                                  local offices, from Russia to UK
               n	   Flagship products: BlinkoGold and Movilisto subscriptions,     n	 Flagship products: Intelligent mobile    n	 +500 clients served
                    Movisexy Club                                                     marketer (IMM), Mobile sweepstakes,
                                                                                      Music/game portal store


               n	   Revenue share of end user price with telecom operator; Tele-   n	 Upfront service management fee +         n	 Consultancy fees + media space
   Economics




                    com operator rebates monthly to B!                               revenue share of end user price




               n	   End user pays to Telecom operator                              n	 Telecom operator pays B! for the up-     n	 Brand owners, media agencies, ad
   Who pays




                                                                                     front mgmt fee and rebates to B! part       agencies pay B!MS
                                                                                     of the recurrent end user price




The size of its business, the extensiveness of its content and services portfolio and the geographical coverage provided by
its team of nearly 970 professionals have made Buongiorno the global leader in mobile entertainment. For Buongiorno, 2009
proved to be a year for consolidation in which the Company confirmed the quality of the business in terms of stable profits
and cash flows, and laid the foundations for developing new business lines.

As for the VAS market, the year saw a continuation of the inconsistent trend with a slight slowdown in mature markets
and stable growth in emerging markets. As of today, the number of B2C customers served by Buongiorno worldwide has
exceeded 9 million; this increase occurred against the backdrop of a rationalization of marketing expenses, which resulted
in lesser advertising investments on general channels and a greater focus on innovative markets and channels that offer a
higher return on investment.




                                                                                                                                                                         22
                                                                                                                                                                         23
                              Directors’ report on operations




Moreover, during 2009 the company enriched its B2B offering in several directions. On the one hand, Intelligent Mobile
Marketing (IMM) - the suite of technology and CRM services - was launched by the operator Telefonica O2 in England in
February 2009 and is now also implemented by the telephone operators Proximus in Belgium and Telecom Italia Mobile.
Moreover, Buongiorno extended its contracts in Africa to include two major telephone carriers, bringing its coverage to
16 countries in the continent. Buongiorno manages the WAP Orange World portal for Orange, which entails providing the
technology platform, applications, consulting and marketing formats for the portal in Cameroon, Côte d’Ivoire, Equatorial
Guinea, Kenya, Madagascar, Mali, Nigeria, Central African Republic and Senegal.
Management contracts for the exclusive management of mobile telephone contest initiatives, known as SuperContests, continued
on behalf of large telephone companies; this business was closely tied to the attractiveness in many emerging countries of basic
VAS (MC1.0) involving simple interactions through SMS text messages. The most significant agreements are in Latin America
and Africa. Finally, the supply contracts in place for Full Portal solutions offered by Buongiorno to the telephone operators (B2O)
have been expanded. These include the creation and management of the Game Store portal for TIM, the expansion of the alert
platform for the telephone operator Sprint in the United States and the development of the Brew solution customised for the INQ
telephone social networking (H3G) awarded a prize by the Mobile Entertainment Forum (MEF) for the best handset in 2009.
B!Digital (formerly Buongiorno Marketing Services), the Buongiorno division which offers advice to companies for marketing
campaigns on digital technologies, renewed up to 2011 the contract for the supply of a multi-year digital marketing programme,
known as Orange Wednesday, for the English operator Orange; it won the contract to manage and sell on an exclusive basis the
advertising concession for the mobile internet sites - including iPhone - of the L’Espresso Group (La Repubblica, Radio Deejay,
Repubblica Sport and TrovaCinema) and the Finelco Group (Radio 105, Radio Monte Carlo and Virgin Radio).
The division has entered into agreements for the supply of numerous mobile marketing campaigns for customers such as BMW,
Citroen, Ford and Terme di Sirmione, has managed the advertising campaigns for the community mobile MyMadrid dedicated to
fans of the Spanish football team Real Madrid, and has managed the interactive communication platform for Parque Reunidos
(one of the main amusement and water park companies in Europe) in 6 countries including Italy, Spain and the UK.

Buongiorno continued its innovation strategy with the development and placement of Hellotxt at Application Stores. Hellotxt,
an innovative social network and microblog aggregator that allows users to read their contacts’ updates and update their
status easily and immediately also from their mobile phones, which was already available through Vodafone 360 in Italy and
Spain, is now available on Android, while peoplesound, the mobile social networking service that has more than 500,000
subscribers is available at the iPhone Store, Nokia Ovi and Google Android.

In addition, during the year the Company pursued a strict process aimed at validating several options that tailor Buongiorno’s
expertise in the mobile-content market to fit new market opportunities (specifically, mobile payment, mobile skilled games,
and mobile social gaming).
1.4      profiT anD loss accounT anD balance sheeT iTems of buonGiorno


foreword
The operating data for 2009 have been analyzed using a normalized Gross Operating Margin figure that excludes the non-
recurring expenses recognized due to the Group’s integration/restructuring activities.


1.4.1 profit and loss account items

 conSoLiDateD proFit anD LoSS account
  (in thousands of Euro)                                            YTD 2009    YTD 2008             VARIANCE
  SaLeS oF gooDS anD SerViceS                                        259,519     315,948              (56,429)
  Other income and increase of fixed assets for internal works         3,099       2,990                  109
  totaL VaLue oF proDuction                                          262,618     318,938              (56,320)
  Services, use of third-party assets, consumables and goods        (171,497)   (226,066)               54,569
  Personnel costs                                                    (52,109)    (53,048)                 939
  groSS operating Margin                                              39,012      39,824                 (812)
  Amortization, depreciation and write-downs                         (13,674)    (17,491)                3,817
  Allowance for bad debts and other provisions                        (1,668)      (427)                (1,241)
  Other operating costs                                                (872)      (1,793)                 921
  operating proFit / (LoSS)                                           22,798      20,113                 2,685
  Net financial earnings / (charges)                                   4,464       3,893                  571
  Value adjustments on financial assets                               (8,625)    (13,246)                4,621
  Earnings / (charges) from assets held for sale                         99       (1,626)                1,725
  Net non-recurrent costs                                             (5,588)     (4,177)               (1,411)
  proFit (LoSS) BeFore taXation                                       13,148       4,957                 8,191
  Current income taxes                                                (2,402)     (4,023)                1,621
  Deferred income taxes                                               (3,668)      7,457               (11,125)
  conSoLiDateD proFit (LoSS) For tHe perioD                            7,078       8,391               (1,313)
  Profit (loss) for the period attributable to Minority Interests       140         264                  (124)
  group conSoLiDateD proFit (LoSS) For tHe perioD                      6,938       8,127                (1,189)
  Basic earnings per share (Basic epS)                                0.0652      0.0764              (0.0112)
  Diluted earnings per share (Diluted epS)                            0.0617      0.0739              (0.0122)




                                                                                                                         24
                                                                                                                         25
                                Directors’ report on operations




The consolidated value of production for 2009 amounted to Euro 262.6 million (Euro 318.9 million at December 31,
2008), with an 18% decrease. Sales of goods and services generated by the core business amounted to Euro 259.5 million
(Euro 315.9 million at December 31, 2008), down by 18%.
The decline in revenues is primarily attributable to a differing method of recognition of an agreement with an Australian carrier
and the strategy of reducing less profitable services decided upon following the acquisition of iTouch, which allowed for a
significant decrease in fixed costs.

breakdown of revenues by Geographical area
Revenues for 2009 are broken down in accordance with IFRS 8. For this purpose, information is provided in terms of
revenues and gross operating margin by geographical area.

Buongiorno Group’s business was broken down in the following geographical areas:
 n   Iberia: including operations in Spain and Portugal;
 n   UK: including UK-based operations;
 n   Italy: including operations of Buongiorno S.p.A. and Buongiorno Marketing Services S.r.l.;
 n   France: including France-based operations;
 n   Other Euro Countries: including operations in the Netherlands, Germany, and Austria;
 n   Latam: including operations in South America;
 n   Other Non-Euro Countries: including operations outside Europe, specifically in North America, Africa, Turkey and Australia.

  reVenueS BY geograpHicaL area
     (in thousands of Euro)                                2009             2008           VARIANCE          VAR. %
     IBERIA                                               96,353          107,979           (11,626)         (10,8%)
     UK                                                   15,253           30,662           (15,409)         (50,3%)
     ITALY                                                26,688           33,062            (6,374)         (19,3%)
     FRANCE                                               24,300           24,499             (199)           (0,8%)
     OTHER EURO COUNTRIES                                 23,354           33,261            (9,907)         (29,8%)
     LATAM                                                22,604           22,518               86             0,4%
     OTHER NON EURO COUNTRIES                             50,738           63,713           (12,975)         (20,4%)
     SHARED SERVICES                                       229              254                (25)           (9.8%)
     totaL reVenueS                                      259,519          315,948          (56,429)           (18%)
During 2009, consolidated revenues fell by approximately 18%. In further detail, a breakdown of revenues by geographical
area shows:
 n   a decrease in B2B operations (mainly services provided in partnership with Media operators and Call TV services) in Iberia,
     the UK and other European countries (Other Euro countries), resulting in a total decline in revenues of approximately Euro
     37 million. B2B operations are characterized by high volumes but low margins, with the result that this decline in revenues
     had minimal effects on the Group’s operating margin. Given the reduction in fixed costs associated with the discontinued
     services, net margin gains were actually achieved;
 n   a decline of approximately Euro 13 million in Other Non-Euro Countries (Rest of World). This decrease was chiefly the
     result of a change in the agreement with an Australian company and the accounting treatment of the same, without an
     impact on margins. The new commercial agreements call for Buongiorno to receive rebates of the portion of margins to
     which it is entitled rather than to invoice the gross revenue paid by the telephone company;
 n   the decrease in Italy was primarily attributable to a decline in B2C operations.
Annex A1 to the Notes on the Consolidated Financial Statements contains a table showing a reconciliation of 2008 revenues
by geographical area classified according to the new organizational structure.

breakdown of revenues by business line
In order to provide a more detailed reporting analysis, revenues are shown by “business line”, representing a group of
activities and operations aimed at the supply of goods and services, featuring a certain level of business risk and a given level
of economic margin that differ from other business segments.

  reVenueS BY BuSineSS Line
     (in thousands of Euro)                                2009             2008          VARIANCE           VAR. %
     CONSUMER SERVICES                                   242,914          299,908           (56,994)          (19%)
     MARKETING SERVICES                                   16,605           16,040             565              4%
     totaL reVenueS                                      259,519          315,948          (56,429)          (18%)

In terms of business lines, the largest share of core-business revenues was earned by Consumer Services, with Group
revenues for the segment reaching Euro 242.9 million (93.6% of the Group total) in the year. The share of the total accounted
for by revenues from Marketing Services amounted to Euro 16.6 million, or 6.4%.

The decrease in revenues in the Consumer Services line is attributable, as mentioned above, to a differing method of
recognition of an agreement with an Australian telephone carrier and voluntary withdrawal from agreements generating little
or no profit, whereas revenues from Marketing Services remained largely in line with the previous year.




                                                                                                                                    26
                                                                                                                                    27
                             Directors’ report on operations




“other revenues” amounted to Euro 3 million in 2009, in line with 2008, and refer primarily to the internal capitalization of
technological research and development activities on the proprietary technological platform B!3A, and other projects.

industrial added value (iav), calculated as total revenues from core business minus variable costs of sales and marketing
expenses. In 2009 IAV was about Euro 115.6 million (45% on net sales), compared to Euro 121.1 million at December 31,
2008 (38% on net sales).

As regards operating costs, one of the main cost items for the Group was personnel costs. Personnel costs increased
as a percentage of revenues (20.1% for 2009, compared to 16.8% at December 31, 2008) due to the decline in revenues,
caused in part by the amendments to contractual terms with telephone companies. In absolute terms personnel costs fell
from Euro 53 million at 31 December 2008 to about Euro 52.1 million at the end of 2009. The balance includes about Euro
4 thousand of non-monetary costs servicing the stock option plans (about Euro 0.7 million at 31 December 2008) and about
Euro 5 million of costs relating to the variable components of gross remuneration for achieving objectives (about Euro 2 million
in 2008). The average number of employees went from 1,086 at December 31, 2008 to 1,004 at December 31, 2009.

In 2009, costs for services and use of third-party assets amounted to Euro 171.5 million compared to Euro 226.1
million in 2008, down by 24.1% and with an 18% decrease in sales. Costs for services stood at 66.1% of revenues, down
compared to 2008 (71.6% at December 31, 2008). The sharp reduction in costs of services is due to:
 n   the differing accounting treatment of an agreement with an Australian telephone carrier. In further detail, instead of
     recognizing gross revenues and the associated expenses, the Company now recognizes net revenues, i.e. without the
     associated expenses;
 n   the rationalization of several agreements that generated small margins while entailing very high costs;
 n   the restructuring plan which led to a significant reduction in fixed costs.
However, marketing expenses increased as a percentage of revenues, rising from 17.5% to 20.7%, despite decreasing
slightly in absolute value on the previous year, due to the lower costs of acquiring new subscribers.

Financial year 2009 closed with a normalized Gross operating margin of approximately Euro 39 million, corresponding
to 15% of revenues, compared to Euro 39.8 million in the same period of 2008 (12.6% of net consolidated revenues). The
stability of the normalized gross operating margin may be related primarily to a slight contraction in operating margins offset
by the aforesaid reduction in operating costs.
breakdown of Gross operating margin by Geographical area
The following table provides a breakdown of normalized Gross Operating Margin (GOM) by geographical area:

  goM BY geograpHicaL area
     (in thousands of Euro)      IBERIA     UK      ITALY   FRANCE       oThER   LATAM   oThER   ToTAL                   ShARED ToTAL
                                                                          EURo          NoN EURo REgIoN                  SERVICES
                                                                       CoUNTRIES       CoUNTRIES
     Total value of production    96,353 15,253 26,688 24,300            23,354       22,604     50,738       259,290       229     259,519
     Total operative costs       (74,975) (11,541) (21,356) (15,645)    (18,604)     (19,489)   (37,862)     (199,472)    (20,662) (220,134)
     totaL groSS operating        21,378 3,712 5,332 8,655               4,750        3,115      12,876       59,818     (20,806) 39,012
     Margin at 12.31.2009
     Gross Operating Margin%     35.7%     6.2%     8.9%     14.5%       7.9%         5.2%      21.5%        100.0%        (53%)    100.0%
     totaL groSS operating       20,322    7,120   10,483    8,314       4,711        3,761     6,443        61,154      (21,330)   39,824
     Margin at 12.31.2008
     Gross Operating Margin%     33.2%     11.6%   17.1%     13.6%       7.7%         6.2%      10.5%        100.0%       (53.6%)   100.0%

An analysis of individual geographical areas indicates:
 n   growth in the Iberia area thanks to the high profitability of the B2C segment;
 n   significant growth in the Rest of the World (Other Non-Euro Countries), essentially due to the increase in operations in
     Australia, South Africa and Nigeria, an improvement in margins on operations in the United States of America, and certain
     extraordinary projects in the Nordic area;
 n   a decrease in margins in Italy mainly due to a contraction in B2C operations. The UK has also been affected by this
     reduction (drop in B2B margins). In the Latam region the reduced margin is linked primarily to a decrease in B2B operations
     in Argentina and the higher advertising investments for B2C in the other countries.
Annex A1 to the Notes on the Consolidated Financial Statements contains a table showing a reconciliation of 2008 EBITDA
by geographical area classified according to the new organizational structure.

breakdown of Gom by business line
The following table provides a breakdown of GOM by business line.

  BuSineSS Line
     (in thousands of Euro)                                     2009               2008           VARIANCE               VAR. %
     CONSUMER SERVICES                                        37,862               38,034            (172)                (0%)
     MARKETING SERVICES                                        1,150                1,790            (640)               (36%)
     totaL groSS operating Margin                             39,012               39,824            (812)               (2%)

The Consumer Services business line was mostly in line with 2008 figures.



                                                                                                                                               28
                                                                                                                                               29
                             Directors’ report on operations




On the other hand, the profitability of the Marketing Services segment decreased by approximately Euro 640 thousand
(GOM -36%). In relative terms, Marketing Services accounted for approximately 3% of total GOM (4% in 2008), whereas the
Consumer Services division accounted for 97% of the total (96% in 2008).

Depreciation and amortization amounted to about Euro 13.7 million in 2009 (Euro 17.5 million in 2008) and are broken
down as follows:

  aMortizationS
  (in thousands of Euro)                                                                  YEAR 2009        YEAR 2008
  Amortization of intangible fixed assets                                                  10,937            11,087
  Depreciation of tangible fixed assets                                                     1,612             2,107
  Other fixed assets write-downs                                                            1,125             4,297
  total amortization, depreciation and other write-downs                                   13,674            17,491

The reduction in amortization on intangible assets is due primarily to the completion of the amortization plan for a number of
exclusive commercial licenses relating to the B2O operations in Latin America totalling in the region of Euro 1.4 million in 2009
compared to Euro 2.6 million in 2008.

This item also includes the write-downs due essentially to impairment test for goodwill arising from the acquisition of the
business connected to Call TV amounting to Euro 1,111 thousand.

other operating expenses amounted to about 0.9 million in 2009, a decrease of about 51% compared to the previous
year (Euro 1.8 million in 2008). This is due primarily to the savings arising from the Group’s restructuring operations.

As a result, normalized operating profit for 2009 amounted to Euro 22.8 million, marking an increase of approximately
13% compared to the Euro 20.1 million reported in 2008.

net financial charges amounted to approximately Euro 4.2 million, compared to Euro 9.4 million in 2008. Financial charges
include about Euro 0.7 million of exchange gains from operations in Africa, South America and Australia. Net of exchange
gains, financial charges decreased by about 48%, primarily due to the decrease in the level of short-term interest rates, to
which the company’s debt is tied in its entirety, in addition to the decline in the average balance of borrowings due to the
redemptions during the period.

value adjustments on financial assets were positive at about Euro 0.1 million, compared to a negative value of about
Euro 1.6 million for 2008, mainly due to the valuation of the equity of the affiliated company Buongiorno Hong Kong Ltd. In
fact, the company Buongiorno Hong Kong Ltd, incorporated at the end of 2006, in 2009 completed the launch period of
Buongiorno’s core operations in the Asian countries and, whilst the initial years were marked by high levels of investments
due to the markets opening up, in line with the 2009 strategic plan, the company substantially broke even during the year.

non-recurring income and charges of Euro 5.6 million are primarily related to the costs incurred by the Group under the
restructuring process initiated in January 2008. In detail, the balance includes Euro 3 million for technology costs sustained
on rationalising the technology platforms, about Euro 1.3 million for voluntary redundancy incentives, Euro 494 thousand
for consultancy services related to Group restructuring and Euro 828 million for the provision for risks. The following table
provides a breakdown of non-recurring income and charges recognized through profit or loss in 2009:

  (in thousands of Euro)                                                                YEAR 2009        YEAR 2008
  Redundancy costs                                                                        1,259             966
  Data center and platform restructuring                                                  3,007            4,545
  Legal entities closing                                                                   494              162
  Other restructuring costs                                                                828            (1,496)
  total                                                                                   5,588            4,177

In comparison with the previous year, it should be remembered that a large portion of the restructuring costs in 2008 had
been covered using provisions for restructuring previously set aside. This meant that the 2008 profit and loss account was
only partially impacted by the restructuring costs actually incurred.

pre-tax profit increased sharply by 165%, from about Euro 5 million for 2008 to about Euro 13.1 million for 2009.




                                                                                                                                 30
                                                                                                                                 31
                                   Directors’ report on operations




Income taxes for the year amounted to a negative Euro 6.1 million and consist of the sum between a total of approximately
Euro 2.4 million in current income taxes payable and the effect of deferred taxes amounting to Euro 3.7 million. The latter
are mainly due to the reversal effect from the use of prior tax losses previously included in the Group’s assets. Current taxes
were estimated on the basis of the profit and loss account figures of individual companies and refer primarily to the effect of
IRAP (regional production tax) in Italy and the income taxes of several foreign consolidated companies.

consolidated net income for 2009 amounted to about Euro 7.08 million compared to Euro 8.4 million for 2008, when
the result was strongly influenced by the positive effect of the use of part of the Group’s tax losses carried forward. During
the reporting period, Profit Attributable to Minority Interests amounted to Euro 140 thousand (compared to a profit of Euro
264 thousand in 2008). Accordingly, the Consolidated Net Profit Attributable to the Group amounted to Euro 6.94 million,
compared to Euro 8.1 million in 2008.


earnings per share
  (in thousands of Euro)                                                                 12.31.2009       12.31.2008
  Basic earnings per share (Basic EPS)                                                     0.0652           0.0764
  Diluted earnings per share (Diluted EPS)                                                 0.0617           0.0739
  Average No. of shares                                                                  106,352,187      106,353,675
  Average No. of shares + No. of options and bonds convertible into shares               113,114,652      110,404,675
  Interest payable on the convertible bond                                                 36,812           37,089

basic
Basic EpS is calculated by dividing the net Group profit for the year by the average number of ordinary shares outstanding
during the period, namely 106,352,187 in 2009 (106,353,675 in 2008).

Diluted
Diluted EpS is calculated by dividing the net Group profit for the year, gross of interests on the convertible bond, by the
average number of ordinary shares outstanding during the period plus the number of outstanding options that can be
potentially exercised (or other instruments potentially convertible into ordinary shares, such as convertible bonds), or granted
at year-end, a total of 113,114,652 in 2009 (110,404,675 in 2008).
1.4.2 investment operations

The following table shows the reclassified consolidated balance sheet of the Buongiorno Group at December 31, 2009
compared with that at December 31, 2008.

 recLaSSiFieD BaLance SHeet
  (in thousands of Euro)                                           12.31.2009   12.31.2008       Variance

  Intangible fixed assets                                           201,876      207,029           (5,153)
  Tangible fixed assets                                               3,353        4,292            (939)
  Financial fixed assets                                              3,646        2,894             752
  Deferred tax assets                                                25,232       29,898           (4,666)
  FiXeD aSSetS                                                      234,107      244,113          (10,006)

  Inventories                                                            0          1,429          (1,429)
  Trade receivables                                                   55,481       68,432         (12,951)
  Other assets                                                        12,403       12,053            350
  Trade payables                                                     (60,638)     (77,276)         16,638
  Other liabilities                                                  (22,236)     (14,729)         (7,507)
  net WorKing capitaL                                               (14,990)     (10,091)         (4,899)

  SeVerance inDeMnitY FunD                                          (1,054)      (1,141)             87
  DeFerreD taX proViSionS                                           (4,451)      (6,424)            1,973
  proViSion For riSKS anD cHargeS                                   (8,111)      (9,396)            1,285
  net inVeSteD capitaL                                              205,501      217,061          (11,560)

  Paid-up capital                                                    27,652       27,652              0
  Reserves and profits (losses) carried forward                     108,790      102,185            6,605
  Profit (loss) for the period                                        6,938        8,127           (1,189)
  Minority interests                                                 14,738       12,409            2,329
  capitaL anD reSerVeS                                              158,118      150,373            7,745

  MeDiuM anD Long-terM BorroWingS                                    47,826       8,005            39,821
  Cash and equivalents and other short-term financial assets (*)    (38,761)     (45,544)           6,783
  Financial receivables                                               (28)           0               (28)
  Debts to bans and other financial institutions                     38,346      104,227          (65,881)

  SHort-terM BorroWingS                                               (443)       58,683          (59,126)
  net FinanciaL poSition                                             47,383       66,688          (19,305)
  totaL SHareHoLDerS’ eQuitY anD BorroWingS                         205,501      217,061          (11,560)
 (*) if negative, it constitutes an asset for the Company




                                                                                                                     32
                                                                                                                     33
                               Directors’ report on operations




At December 31, 2009, the Buongiorno Group’s net invested capital amounted to Euro 205.5 million, including: Net Fixed Assets
of Euro 234.1 million; a negative Net Working Capital of Euro 14.9 million; and Funds (including the Provision for Risks and Charges, the
Severance Indemnity Fund and Deferred Tax Liabilities) totaling approximately about Euro 13.6 million.

The detailed breakdown of movements in the main balance sheet items shows that:
 n   Net Fixed Assets decreased by approximately Euro 10 million, of which Euro 6.1 million was due to the negative change in
     tangible and intangible assets, Euro 1 million to the increase in investments, and Euro 4.7 million to the reversal of prepaid
     taxes;
 n   Net Working Capital decreased Euro 4.9 million; this movement is explained by trends of the individual components
     making up the item, as per the breakdown presented in the above table of the reclassified balance sheet. Inventories at
     31 December 2008 consisted of prepaid telephone cards relating to the Australian subsidiary and which had been entirely
     transferred at 31 December 2009;
 n   The Severance Indemnity Fund for salaried employees remained substantially unchanged compared to 2008;
 n   Provisions for Risks and Charges decreased by Euro 1.3 million, declining from Euro 9.4 million at the end of 2008 to
     approximately Euro 8.1 million as at December 31, 2009 due to the release thereof for restructuring activities during the
     period;
 n   provisions for deferred taxes decreased by Euro 1.9 million, falling from Euro 6.4 million at the end of 2008 to approximately
     Euro 4.5 million at December 31, 2009, primarily due to the release of deferred tax liabilities set aside during the purchase
     price allocation for the iTouch Group.
Net Invested Capital consisted of Consolidated Shareholders’ Equity of Euro 158.1 million and net financial debt of Euro 47.4
million at the end of 2009.
1.4.3 financial operations

The following table shows the consolidated Net Financial Debt of Buongiorno as of December 31, 2009:

  net conSoLiDateD FinanciaL poSition
  (in thousands of Euro)                                                                   12.31.2009        12.31.2008
  totaL caSH anD otHer FinanciaL aSSetS                                                       38,761            45,545
  Total payables to banks                                                                     (2,711)          (101,119)
  Total bank loans - current share                                                           (33,514)            (1,978)
  Total other current financial liabilities                                                   (1,127)            (1,900)
  Guaranted convertible bond                                                                   (994)                0
  Financial receivables                                                                          28                 0
  totaL net current FinanciaL LiaBiLitieS                                                   (38,317)          (104,997)
  conSoLiDateD net current FinanciaL poSition                                                  443            (59,452)
  Total bank loans - non-current share                                                       (47,789)           (5,296)
  Guaranted convertible bond                                                                     0               (965)
  Total other non-current financial liabilities                                                (37)              (975)
  totaL non-current FinanciaL LiaBiLiiteS                                                   (47,826)           (7,236)
  net FinanciaL DeBt (poSition)                                                             (47,383)          (66,688)


Buongiorno Group closed 2009 with consolidated net financial Debt of Euro 47.4 million, compared to Euro 66.7 million
at the end of 2008. The decrease may be ascribed entirely to cash provided by core business operations, inasmuch as the
investments for the period were not particularly significant. Working capital, despite increasing pressure due to the liquidity
crisis affecting stock markets, which has led to a lengthening of collection times from telephone carriers, has been tightly
controlled and has significantly contributed to the improvement of net financial debt.

cash and cash equivalents and short-term financial investments stood at approximately Euro 38.8 million and consisted
mainly of cash deposited in current accounts denominated primarily in euro and in US dollars, pounds sterling, Australian dollars,
South African rand, and Argentine pesos, in addition to investments in money market funds denominated in euro and managed
by leading financial institutions with maturities in the short term and immediate liquidity. The item decreased by Euro 6.5 million
compared to December 31, 2008 (Euro 45.5 million) due to the use of cash to sharply pay down the Group’s debt.
At December 31, 2009, this balance included Euro 3 million which was not available, being tied up for 3 months with a primary
English Bank to support a planned commercial transaction in India.




                                                                                                                                      34
                                                                                                                                      35
                              Directors’ report on operations




current financial liabilities amounted to Euro 38.3 million at December 31, 2009, down compared to December 31, 2008
(Euro 105.0 million). A breakdown of current financial liabilities is provided below.

The item Debt to banks mainly refers to bank overdrafts in Euro, Columbian pesos and Turkish lira.

The current portion of bank borrowings (Euro 33.5 million) consists primarily of the share of borrowings maturing within
one year and the medium-/long-term revolving portion of the loan contracted in the total amount of Euro 87 million from a pool
of banks organized by Banca IMI (a member of the Intesa Sanpaolo Group). The funds were disbursed on June 26, 2009. In
particular, the sum of Euro 13.4 million refers to the portion of “Tranche A” of the pool loan maturing within one year. The line of
credit was authorized in the amount of Euro 67 million, matures in 2014, and calls for half-yearly payments, the first installment
of which will fall due on December 31, 2009. Said loan was contracted in order to make repayment in full of the loan originally
contracted from Banca IMI in the amount of Euro 100 million maturing on June 26, 2009. The new loan also calls for a line
of credit known as the “Revolving Credit Facility”, or “Tranche B”. Said line of credit was authorized in the amount of Euro 20
million, and on December 31, 2009 the Company applied to draw it down for Euro 18.0 million with use in the near term.
The facility matures in five years, calls for a gradual reduction in the credit limit beginning on December 31, 2012, and allows
for the possibility of multiple draw-downs with separate maturities and for separate amounts, within the maximum credit limit.
Both Tranche A and Tranche B of the loan call for the application of a spread of 300 basis points on the benchmark interest
rate. Said spread may vary on a half-yearly basis according to a reward mechanism involving the performance of the ratio of
gross financial debt to EBITDA. The shares of certain Group companies were pledged as security for the loan.

The loan agreement also calls for compliance with certain financial covenants, to be reviewed at the end of each half-year,
beginning on December 31, 2009. These parameters were determined according to a conservative medium-term business
plan and allow for headroom that the management currently considers wholly adequate.

These covenants are:
 n	 the ratio of Consolidated Gross Operating Margin (EBITDA) to Consolidated Net Borrowing Costs;
 n	 the ratio of Consolidated Gross Financial Debt to Consolidated Gross Operating Margin (EBITDA);
 n	 the ratio of Consolidated Gross Financial Debt to Consolidated Equity.


At December 31, 2009 the covenants were respected.
With the new loan agreement, the Group has achieved its goal of extending the duration of its debt and scheduling repayment
according to its future debt-servicing capacity, prudentially estimated on the basis of the cash flow that the Company expects
its core business to generate.

The current share of bank loans also includes Euro 2.1 million in bank debt maturing within one year contracted with national
banks (Credito Emiliano and Medio Credito Centrale - a member of the Unicredit banking group) and Simest, a financial
company involved in the development and promotion of Italian enterprises outside Italy.

Current financial liabilities also include the outstanding portion of the convertible bond (Euro 1.0 million compared to an
original value of Euro 12 million) underwritten on September 22, 2005 by Mitsui & Co Ltd and Banca IMI and maturing in
2010. The balance at December 31, 2008 refers to the amount held by Banca IMI, net of the underlying option.

Convertible bonds, like other long-term financial liabilities, are valued at amortized cost, which is calculated bearing in mind all
related costs and using a market interest rate for equivalent non-convertible bonds or financial liabilities (IAS 32, Paragraphs
64, 28 and 31). In this connection, a net discount rate of 4.5% was used. This rate approximates those obtained by the
banking system for medium-/long-term loans at the time of issue of the convertible bond (September 2005).

other current financial liabilities amounted to Euro 1.1 million and consist mainly of amounts due in relation to recent
acquisitions and financial transactions. Specifically, this item is broken down as follows:
 n   Euro 1.0 million due to the former Axis Mundi S.A. (By-Cycle group) shareholders in relation to the deferred payment of
     the sale price and earn-out clauses provided in the acquisition contract;
 n   Euro 0.1 million payable to former iTouch Ventures Ltd. shareholders as established at the closing of the transaction.
non-current financial liabilities amounted to Euro 47.8 million at the end of 2009 (Euro 7.2 million at December 31, 2008).
At December 31, 2009, the item consisted chiefly of:
 n   Euro 44.6 million representing the long-term portion of Tranche A of the loan issued by a pool of banks. As stated above,
     the current portion of Tranche A of the loan is Euro 13.4 million;
 n   the approximately Euro 0.3 million long-term, fixed-rate loan issued at a subsidized rate by Simest S.p.A. (as per Italian
     Law 394/81 on internationalization projects);
 n   Euro 0.9 million representing the medium-term portion of the floating-rate loan issued by Credito Emiliano S.p.A. in the
     total amount of Euro 3.0 million;
 n   Euro 2.0 million long-term representing the medium/long-term portion of the unsecured loan issued by MCC S.p.A.
     (Unicredit banking group) in the total amount of Euro 5 million.




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                             Directors’ report on operations




The consolidated cash flow statement at December 31, 2009 is shown in the following table:

 recLaSSiFieD conSoLiDateD caSH FLoW StateMent
  (in thousands of Euro)                                                              YTD 2009   YTD 2008
  net FinanciaL poSition at perioD Start                                              (66.688)   (66.664)
  caSH FLoW FroM operating actiVitieS
  Consolidated Group result                                                            6,938      8,127
  Amortization, depreciation and write-off                                            13,575     19,117
  Net change in the severance indemnity fund                                            (87)        0
  Net change in funds for risks and charges                                           (1,285)    (9,085)
  Other ordinary activities items                                                      3,812     (3,560)
                                                                                      22,953     14,599
  cHange in WorKing capitaL                                                            4,279      7,703
  caSH FLoW FroM inVeSting actiVitieS
  Intangible fixed assets                                                              (6,443)    (12,067)
  Tangible fixed assets                                                                 (959)      (3,188)
  Investments                                                                           (752)       (262)
  Changes in consolidation area                                                           0          (54)
                                                                                      (8,154)    (15,571)
  caSH FLoW FroM Financing actiVitieS
  Paid capital increase                                                                   0         504
  Other changes in capital                                                             (1,854)    (2,277)
                                                                                      (1,854)    (1,773)
  otHer cHangeS in tHe eQuitY anD FinanciaL Situation tHat Do not entaiL caSH FLoWS
  Other increses (decreases) in capital                                                 (108)      (5,189)
  Minority interests                                                                    2,189        207
                                                                                        2,081     (4,982)
  net FinanciaL poSition at perioD enD                                                (47,383)   (66,688)

The Cash Flow Statement was prepared using the indirect method.
The Group’s consolidated net debt amounted to approximately Euro 47.4 million at December 31, 2009, compared to net
debt of approximately Euro 66.7 million at December 31, 2008.

This change was mostly attributable to:
 n   cash flow generated by core business operations amounting to Euro 22.9 million;
 n   the change in net working capital, which had a negative impact on net debt of approximately Euro 4.2 million;
 n   investing activities totalling about Euro 8.2 million, mainly for:
 n   the subscription of shares in the company Digital Innovation India Private Ltd amounting to Euro 0.7 million, a company
     which will receive the Indian assets of the Joint Venture with the Mitsui & Co. Ltd Group,
 n   as well as the investment in intangible assets due both to capitalization of internal costs for the development of the
     proprietary platform and external acquisitions amounting to Euro 6.5 million.




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                              Directors’ report on operations




1.5      risk manaGemenT

General risk management principles
The principles that make up the Buongiorno Group’s risk management policy are based on preventing the main risks
associated with the Group’s objectives and relate to the Company’s strategic, operative and financial areas. The purpose of risk
management within the Buongiorno Group is to determine the opportunities and threats that might impact the achievement of
long-term objectives, as opposed to safeguarding a single event. As set out in the individual policies and corporate processes,
management of the Group’s exposure to risks is based on the principle according to which operating and financial risks are
managed by the process owner. The main risks are reported and discussed by the Group’s top management in order to create
the conditions necessary to ensure their coverage, obtain the necessary insurance and evaluate the residual risk.

operating risks
The Buongiorno Group takes steps to ensure that operating and product risks, as well as any losses that could be incurred
by the Group or its customers, are constantly monitored, managed or insured. For this purpose, the Buongiorno Group has
formulated a plan with a major international insurance broker that provides optimal coverage for risks that may be associated
with the Group’s main assets, including intangible assets (brand and intellectual property) and material investments. The plan
also covers liabilities that might arise as a result of product or software malfunctions experienced by customers or the Group’s
companies. Specific guidelines exist for the main financial risks, including interest rate risks and credit risks.

financial risks
The Buongiorno Group’s priorities are value creation, sustainable growth, profitability and the minimization of risks. Accordingly,
the Group’s financial structures are focused on guaranteeing the utmost efficiency in using credit lines for developing its
business and in minimizing financial risks associated with operating management (adverse risk). The Group’s Financial
Department, which is located in Milan, is governed by operating policies regarding interest rate, exchange rate, liquidity,
credit and price risks.

exchange rate risk
The Group is exposed to market risk deriving from fluctuations in exchange rates, insofar as it operates in an international context
in which transactions are carried out in currencies other than the Euro. Moreover, the Buongiorno Group has subsidiaries
in non-Euro areas; as such, the value of its shareholdings (and related equity) is affected by fluctuations in exchange rates
denominated in local currencies. Changes in net capital and reserves as a result of exchange rate fluctuations are charged
to a reserve called the “conversion reserve” in the consolidated balance sheet.
The following table highlights the balance of the Group’s foreign currency exposure as of December 31, 2009 and 2008.

  (in thousands of Euro)                                                               totaL
                                                                              2009                2008
  current aSSetS
  TRADE RECEIVABLES
  - of which denominated in Pound Sterling                                    3,890              4,346
  - of which denominated in US Dollars                                        2,880              3,874
  - of which denominated in other currencies                                 11,034              17,837
  CASH AND CASH EQUIVALENTS
  - of which denominated in Pound Sterling                                    4,686              1,553
  - of which denominated in US Dollars                                        4,613              4,898
  - of which denominated in other currencies                                 14,059              13,757
  non current LiaBiLiitieS
  OTHER NON CURRENT FINANCIAL LIABILITIES
  - of which denominated in Pound Sterling                                      0                   0
  - of which denominated in US Dollars                                          0                  934
  - of which denominated in other currencies                                    0                   0
  current LiaBiLitieS
  TRADE PAYABLES
  - of which denominated in Pound Sterling                                    4,035              7,038
  - of which denominated in US Dollars                                        2,731              2,827
  - of which denominated in other currencies                                 10,863              13,014
  OTHER CURRENT FINANCIAL LIABILITIES
   - of which denominated in Pound Sterling
   - of which denominated in US Dollars                                        956               1,705
   - of which denominated in other currencies                                  714               1,004

The trade receivables and payables and the cash and cash equivalents expressed in GBP and USD refer to the monetary
balances disclosed on the financial statements of foreign subsidiaries as arising from the operations of said subsidiaries. For
the purposes of the consolidated financial statements, these balances were converted into euro at the exchange rate on
December 31, 2009.




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                             Directors’ report on operations




interest rate risk
Risks associated with changes in cash flows due to interest rate fluctuations arise mainly as a result of existing financing.
Variable-rate financing exposes the Buongiorno Group to the risk of cash flow variations relating to interest charges. Fixed-
rate financing exposes the Buongiorno Group to the risk that the fair value of the loans received will change.
The Buongiorno group may make use of derivative contracts to hedge its interest rate risk, typically Interest Rate Swaps,
which allow floating rate exposure to be transformed into fixed rate exposure. Currently, the Group has not exchange rate
hedging contracts.
Buongiorno Group’s exposure to the risk of changes in fair value is associated with its fixed-rate soft loans; accordingly, the
effects of changes in the fair value of these loans could have a marginal impact on the Buongiorno Group’s financial position.

price risk
The Group is not exposed to the price risk generated by commodity purchases, given the nature of the business which
characterizes it.
The Buongiorno Group invests its short-term cash resources in monetary instruments listed on regulated markets that are
measured at their market prices.

credit risk
Trade receivables are reported in the balance sheet net of the write-down calculated on the basis of the default risk of the
individual counterparties. In accordance with Group policy, financing is not granted to customers, and rigorously defined
terms are imposed for normal accounts receivable collection. On a monthly basis, the Group’s Financial Department monitors
the risks associated with expired accounts receivable collection (aging) and the exposure of the main customers of each of
the Group’s companies. Such information is reported to Buongiorno’s CFO, who defines the guidelines to follow in monitoring
the risk and any credit safeguard policies.

liquidity risk
The liquidity risk to which the Group might be exposed is the failure to secure financial resources sufficient for its operations
and the development of its industrial and commercial activities. The two main factors that determine the Group’s liquidity
situation are the resources provided by or used in operating and investing activities and the maturity and extension of debt or
the liquidity of financial investments and market conditions. The cash flows and liquidity of the Group’s operating companies
are monitored by the finance department of the parent company with the objective of guaranteeing effective management of
financial resources.
As of December 31, 2009 the Group had access to a significant amount of liquidity immediately available for company
purposes and immediately available sufficient lines of credit issued by several banks and factoring companies. The Group
believes that the currently available funds and lines of credit, in addition to the resources that will be generated by operating
and financing activities, will permit it to satisfy its investment, working capital management, and debt-servicing needs at their
natural maturities.

During the year, group debt was repositioned, through the closure of the syndicated loan agreement for the sum of Euro 87
million to cover the financial needs related to the partial refinancing of the Bridge Loan provided by the IntesaSanpaolo Group
to Buongiorno S.p.A. and iTouch Ventures Ltd. in December 2007. In this way, a large part of the debt was positioned in the
medium-long term, and the short-term portion is balanced by the substantial liquidity available at December 31, 2009, and
so does not include the liquidity that will be generated during 2010 by core operations.

With the new loan agreement, the Company has achieved its goal of extending the duration of its debt and scheduling
repayment according to its future debt-servicing capacity, prudentially estimated on the basis of the cash flow that the
Company expects its core business to generate.

risks of a General nature
The Group operates in an industry that by its very nature is less exposed to the negative effects of the unfavorable economic
situation than others. Nonetheless, at present it is difficult to predict the extent of the economic crisis in the countries in which
the Group operates. As a consequence of the foregoing, if the current crisis should continue for a significant period, it could
have an impact on the Group’s earnings results.

additional information required by the international financial reporting standard n° 7
The Group is exposed to financial risks associated with its operations:
 n   credit risk relating to normal commercial relationships with clients and users;
 n   liquidity risk, with particular regard to the availability of financial resources and access to the credit market and the market
     for financial instruments in general;
 n   market risks (principally with regard to exchange and interest rates), insofar as the Group operates at international level in
     various currency areas and uses financial instruments which generate interest;
As described in the section relating to risk management, the Group, constantly monitors the financial risks to which it is
exposed, so as to evaluate the potential negative effects of these in advance and to take suitable action to mitigate them.
The following section provides qualitative and quantitative information on the incidence of such risks on the Group. The
quantitative data presented below do not have a predictive value, in particular, the sensitivity analyses of market risk cannot
reflect the complexity and correlated reactions of markets which may derive from every forecasted change.




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classes of financial instruments
Items of the Balance Sheet, classified according to the respective risk categories as of December 31, 2009 and 2008, are
presented below.

Situation at December 31, 2009

  (in thousands of Euro)                         totaL               cLaSSeS oF HoMogeneouS riSKS
                                               12.31.2009   CREDIT     LIQUIDITY   INTEREST   EXChANgE   PRICE
                                                                                     RATE       RATE
  current aSSetS
  TRADE RECEIVABLES                              54,874
  - of which denominated in Euro                            37,070
  - of which denominated in other currencies                                                   17,804
  OTHER RECEIVABLES                              2,593       2,593
  CURRENT FINANCIAL ASSETS                         19
  - of which SICAVs                                19                                                     19
  - of which commercial paper
  CASH AND CASH EQUIVALENTS                      38,761
  - of which denominated in Euro                                         15,402
  - of which denominated in other currencies                                                   23,358
  non current LiaBiLiitieS
  CONVERTIBLE BOND                                                         -
  LONG TERM BANK BORROWINGS                      47,789                             47,789
  OTHER NON CURRENT FINANCIAL LIABILITIES
  - of which denominated in Euro
  - of which denominated in other currencies
  current LiaBiLitieS
  TRADE PAYABLES                                 61,888
  - of which denominated in Euro                                         44,259
  - of which denominated in other currencies                                                   17,629
  SHORT TERM BANK BORROWINGS                     36,231                             36,231
  OTHER CURRENT FINANCIAL LIABILITIES            2,114
 - of which denominated in Euro
 - of which denominated in other currencies                                          1,093      1,022
Situation at December 31, 2008

  (in thousands of Euro)                         totaL               cLaSSeS oF HoMogeneouS riSKS
                                               12.31.2008   CREDIT     LIQUIDITY   INTEREST   EXChANgE   PRICE
                                                                                     RATE       RATE
  current aSSetS
  TRADE RECEIVABLES                              68,276
  - of which denominated in Euro                            42,219
  - of which denominated in other currencies                                                   26,057
  OTHER RECEIVABLES                              4,369       4,369
  CURRENT FINANCIAL ASSETS                        573
  - of which SICAVs                               573                                                    573
  - of which commercial paper
  CASH AND CASH EQUIVALENTS                      44,972
  - of which denominated in Euro                                         24,765
  - of which denominated in other currencies                                                   20,207
  non current LiaBiLiitieS
  CONVERTIBLE BOND                                965                     965
  LONG TERM BANK BORROWINGS                      5,296                               5,296
  OTHER NON CURRENT FINANCIAL LIABILITIES         975
  - of which denominated in Euro
  - of which denominated in other currencies                                          41        934
  current LiaBiLitieS
  TRADE PAYABLES                                 77,805
  - of which denominated in Euro                                         54,926
  - of which denominated in other currencies                                                   22,879
  SHORT TERM BANK BORROWINGS                    103,097                             103,097
  OTHER CURRENT FINANCIAL LIABILITIES            1,900
  - of which denominated in Euro
  - of which denominated in other currencies                                         195        1,705




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                                Directors’ report on operations




financial assets and liabilities categories
The following tables show Balance Sheet items classified according to the categories provided for by IAS 39 as of
December 31, 2009 and 2008.
The carrying amount of financial assets and liabilities was fairly equal to their fair value.

Situation at December 31, 2009

  (in thousands of Euro)        AT FAIR VALUE       LoANS           VALUED AT      VALUED    ToTAL     FAIR
                                                AND RECEIVABLES   AMoRTIzED CoST   AT CoST            VALUE
  current aSSetS
  Trade receivables                                 54,874                                   54,874   54,874
  Other receivables                                 2,593                                     2,593    2,593
  Current financial assets           19                                                         19       19
  Cash and cash equivalents        38,761                                                    38,761   38,761
  non current LiaBiLitieS
  Convertible bond                                                                                       -
  Bank loans                                                          47,789                 47,789   47,789
  Other financial liabilities                                                                            -
  current LiaBiLitieS
  Trade payables                                                                   61,888    61,888   61,888
  Bank loans                                                          36,231                 36,231   36,231
  Other financial liabilities                                                       2,114    2,114     2,114
Situation at December 31, 2008

  (in thousands of Euro)         AT FAIR VALUE    LoANS        VALUED AT         VALUED          ToTAL       FAIR
                                             AND RECEIVABLES AMoRTIzED CoST      AT CoST                    VALUE
  current aSSetS
  Trade receivables                    -         68,276             -                -           68,276     68,276
  Other receivables                    -          4,369             -                -            4,369      4,369
  Current financial assets           573            -               -                -             573        573
  Cash and cash equivalents         44,972          -               -                -           44,972     44,972
  non current LiaBiLitieS
  Convertible bond                     -           -               965               -            965         965
  Bank loans                           -           -              5,296              -           5,296       5,296
  Other financial liabilities          -           -                -                -            975         975
  current LiaBiLitieS
  Trade payables                       -           -                -             77,805         77,805     77,805
  Bank loans                           -           -             103,097             -          103,097    103,097
  Other financial liabilities          -           -                -              1,900         1,900       1,900

Trade and other receivables generated Euro 1,317 thousand in costs pertaining to losses on receivables and allocations to
the bad debt provision (Euro 477 thousand at December 31, 2008). It is deemed that the carrying value of these estimates
provides a reasonable approximation of their respective fair values.




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                              Directors’ report on operations




Other financial assets and cash and cash equivalents generated Euro 661 thousand in finance income and interest income
in 2009 (Euro 1,552 thousand in 2008).

Bank loans, in addition to current account overdrafts, generated total interest expenses of approximately Euro 5,574 thousand
(compared to Euro 7,877 thousand in 2008). This reduction is due to the lower average level of debt and the marked
reduction in interest rates to which most of the bank loans are linked. The current value of short-term bank borrowings was
measured by assuming a fair value corresponding to the recognized fair value inasmuch as said borrowings have maturities
falling in 2010 and bear interest at floating market rates. The fair value of borrowings with maturities beyond 2009, which also
bear interest at floating rates, approximates the market value.

Financial debts measured at cost arise from the acquisition of equity investments that do not have a quoted market price and
therefore their fair value cannot be reliably measured.

Guarantees
As of December 31, 2009 the Group had issued the following guarantees:
 n   pledge of the shares of a number of subsidiaries as collateral for the financing of the contract with Banca IMI S.p.A.;
 n   short-term pledge on the balances held in a current account amounting to Euro 3 million to support a commercial
     transaction on the Indian market;
 n   pledge of the cash and cash equivalents in a current account for an amount of Euro 250,000 as security against any
     default on the credit line granted by Simest to Buongiorno S.p.A.
liquidity risk
The following table shows financial liabilities, classified by maturity:

Situation at December 31, 2009

  (in thousands of Euro)                        <1 YEAR      >1 <2 YEARS >2 <3 YEARS >3 <4 YEARS >4 <5 YEARS   >5 YEARS
  non current LiaBiLitieS
  Convertible bond                                  -              -         -           -             -          -
  Bank loans                                        -            14,891    13,989      13,097       5,812         -
  Other financial liabilities                       -              -         -           -            -           -
  current LiaBiLitieS
  Convertible bond                                61,888           -          -           -           -            -
  Bank loans                                      36,231           -          -           -           -            -
  Other financial liabilities                     2,114            -          -           -           -            -

Situation at December 31, 2008

 (in thousands of Euro)                          <1 YEAR     >1 <2 YEARS >2 <3 YEARS >3 <4 YEARS >4 <5 YEARS   >5 YEARS
  non current LiaBiLitieS
  Convertible bond                                  -             965         -           -           -           -
  Bank loans                                        -            2,062      2,149       1,086         -           -
  Other financial liabilities                       -             975         -           -           -           -
  current LiaBiLitieS
  Convertible bond                                77,805           -          -           -           -           -
  Bank loans                                     103,097           -          -           -           -           -
  Other financial liabilities                     1,900            -          -           -           -

credit risk
The Group is subject to various concentrations of credit risk based on the nature of the business segments termed Marketing
Services (MS) and Consumer Services, (CS) as well as from the markets in question.




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For the purposes of this analysis, macroclasses of homogeneous risk have been highlighted, identified on the basis of the
business models of Group companies in order to represent their exposure to credit risk more accurately. The following
classes have been highlighted:
 n   Trade receivables consisting of such receivables deriving from identified business segments. The CS segment receivables
     with leading companies operating in national and international mobile telephony markets are significant.
 n   Other receivables mainly consist of receivables arising on operations of a non-commercial nature for which an individual
     solvency analysis has been carried out.
The following tables present the breakdown by maturity of the identified risk classes:

Situation at December 31, 2009

 (in thousands of Euro)
   cLaSSeS                   totaL                         eXpireD                  totaL      to eXpireD    Write-DoWnS
                          RECEIVABLES   0-30days 31-60days 61-90days more than 90   EXPIRED
     Trade receivables      56,451      4,648      1,723      1,289   3,323         10,983       45,468          (1,577)
     Other receivables       2,964         -          -          -       -             -          2,964              -
     total                  59,416      4,648      1,723      1,289   3,323         10,983       48,432         (1,577)

Situation at December 31, 2008

 (in thousands of Euro)
   cLaSSeS                   totaL                         eXpireD                  totaL      to eXpireD    Write-DoWnS
                          RECEIVABLES   0-30days 31-60days 61-90days more than 90   EXPIRED
     Trade receivables      68,276      4,619      1,015       605    2,148          8,387       59,889          (695)
     Other receivables       4,369         -          -         -        -              -         4,369            -
     total                  72,646      4,619      1,015       605    2,148          8,387       64,258          (695)

The Group does not renegotiate expired credits.

The notes to the consolidated financial statements present the movements in the fund for bad debts.
market risks: sensitivity analysis
In terms of market risks, the Group is exposed to interest rate risk, exchange rate risk, and price risk. A sensitivity analysis
was conducted of the balance sheet items that could undergo a change in value due to the fluctuation of exchange rates,
interest rates, and market prices. The estimate referred to the following balance sheet items in detail:
 n   trade receivables and payables in foreign currencies;
 n   bank deposits in foreign currencies;
 n   loans;
 n   financial liabilities;
 n   short-term financial assets.
The Group is exposed to risks deriving from the fluctuation of exchange rates which may have an impact on its profit or
equity. These risks mainly derive from the fact that some subsidiaries of the Group are located in countries not belonging
to the European Monetary Union, such as the United States, the United Kingdom, Turkey, Bolivia, Chile, Peru, Mexico,
Argentina, Brazil, Colombia, Ecuador, Hong Kong, South Africa, Nigeria, Australia, New Zealand, Norway, Denmark, Sweden,
Finland, Switzerland, Romania, Morocco and Venezuela. Since the Group’s reference currency is the Euro, the profit and
loss accounts of such companies are converted into Euros at the average exchange rate for the period, and for constant
revenues and margins in local currency, variations in exchange rates may have an effect on the countervalue in Euros of
the revenues, costs and profits. Assets and liabilities of the consolidated companies with a currency of account other than
the Euro may have different countervalues in Euro, depending on the evolution of exchange rates. As established by the
accounting principles adopted, the effects of such evolutions are recognized directly in equity under the item conversion
difference. At the reporting date, there were no hedges in existence for such exposure. The following assumptions and
methods were applied to conduct the sensitivity analysis:
 n   assumptions and calculation methods: the risk is substantially tied to the fluctuation of the USD and GBP, which are the
     foreign currencies of greatest relevance to the Buongiorno Group. For these currencies, immediate positive and negative
     shifts of 5% in the spot exchange rate at December 31 were assumed. The table shows the impact of this change on the
     figure disclosed on the financial statements.




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                               Directors’ report on operations




With reference to interest rates, Group companies use external financial resources in the form of debt and deploy available
liquidity in money and financial market instruments. Changes in levels of market interest rates influence the cost and yield
of the various forms of financing, and applications, hence affecting the amount of net financial charges of the Group. The
following assumptions and methods were applied to conduct the sensitivity analysis:
 n   assumptions and calculation methods: the effect of an immediate increase and decrease of 0.5% in annual rates on the
     profit and loss account was calculated. The interest rates on bank deposits that generate interest income are almost
     entirely linked to the performance of interbank rates. To estimate the increase or decrease in interest income, a 0.5% shift
     was applied to the average annual balance of bank deposits. Floating-rate loans generate interest expenses, the amount
     of which is linked to the performance of the benchmark interest rates. To estimate the increase or decrease in interest
     expenses, a 0.5% shift was applied to the principal of outstanding loans at the balance sheet date.

price risk applies to short-term cash investments. The following assumptions and methods were applied to conduct the
sensitivity analysis:
 n   assumptions and calculation methods: the effect of an immediate 5% increase and decrease in the market value of
     financial assets at December 31, 2009 on the profit and loss account was calculated.
The following table shows the effects of the assumptions set out above on the consolidated financial statements:

                                                   intereSt rate riSK     eXcHange rate riSK            price riSK
                                                   -0,5%       0,5%        -5%         5%            -5%          5%
                                                   ChANgE     ChANgE     ChANgE       ChANgE       ChANgE      ChANgE
                                                  INTEREST   INTEREST   EXChANgE     EXChANgE        NAV         NAV
  (in thousands of Euro)                            RATE       RATE       RATE         RATE
  aSSetS
  TRADE RECEIVABLES IN FOREIGN CURRENCY
  - of which denominated in Pound Sterling                                 (194)        194
  - of which denominated in US Dollar                -           -         (144)        144            -           -
  caSH anD caSH eQuiVaLentS
   - of which denominated in Euro                   (78)        78           -           -             -           -
   - of which denominated in Pound Sterling           -          -         (234)        234            -           -
   - of which denominated in US Dollar                -          -         (231)        231            -           -
  Short term financial assets (SICAVs)                -          -           -           -             -           -
  Total impact of pre-tax financial assets          (78)        78         (803)        803            -           -
  non current LiaBiLitieS
  MEDIUM/LONG TERM BANKS LOANS                       56         (56)         -            -            -           -
  OTHER NON CURRENT FINANCIAL LIABILITIES             -           -          -            -            -           -
  current LiaBiLitieS
  TRADE PAYABLES
   - of which denominated in Pound Sterling          -            -        202          (202)          -           -
   - of which denominated in US Dollar               -            -        122          (122)          -           -
  SHORT TERM BANK LOANS                             82          (82)        -             -            -           -
  OTHER CURRENT FINANCIAL LIABILITIES
   - of which denominated in Pound Sterling           -          -            -            -           -           -
   - of which denominated in US Dollar                -          -           48          (48)          -           -
  Total impact of pre-tax financial liabilities     138        (138)        371         (371)          -           -
  Impact on pre-tax results                         (60)        60         (432)         432           -           -




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1.6       relaTeD-parTy TransacTions

At December 31, 2009, the Buongiorno Group maintained relationships with companies qualifying as related parties within
the meaning of the Code for Related-party Transactions:

Companies or parties holding rights in Group companies:
 n   Mitsui & Co. Ltd which holds a 18.96% stake in the share capital of the subsidiary Buongiorno USA inc and, consequently
     of Rocket Mobile Inc; Mitsui & Co. Ltd also holds a 45.5% stake in the share capital of Buongiorno Marketing Services B.V.;
 n   Nevid Nikravan, a director of Buongiorno S.p.A., from whom was purchased on October 7, 2009 the minority holding
     of 20.34% of the share capital that he held in the company Buongiorno Dijital Iletisim A.S. (Turkey) through Yamdez
     Consulting Advisers SL, a company controlled by the same.
Commercial transactions pertaining to the core business of companies included in the consolidation area were realized with
the said companies\entities at arm’s length during the course of the year.

The Group holds a non-controlling interest in Buongiorno Hong Kong Ltd, in which Mitsui & Co. Ltd. holds 51% stake and
Buongiorno a 49% stake, and which was consolidated using the equity method. The Buongiorno Group effects, at arm’s
length, commercial transactions pertaining to its core business, with the same company and/or its subsidiaries.
Moreover, increase in the share capital of the Dutch holding company Buongiorno Marketing Services Netherland B.V.,
underwritten through the contribution of the 100% equity investment in Buongiorno Russia LLC by the associate Buongiorno
Hong Kong Ltd. As a result of this transaction, the Buongiorno Group’s ownership of the Dutch holding company Buongiorno
Marketing Services Netherland B.V. fell from 60% to the present 54.5%. The other minority-interest shareholders are the
Mitsui & Co. Ltd. Group and the associate Buongiorno Hong Kong Ltd., which respectively hold 36.4% and 9.1% stakes in
Buongiorno Marketing Services Netherland B.V..

On November 3, 2009, the company Buongiorno Digital Innovation India Private Ltd was set up, in which Mitsui & Co holds
a 51% stake and Buongiorno 49%; the company was consolidated by the latter using the equity method. At December 31,
2009 no commercial transactions had yet taken place with that company, given its recent formation.
Transactions completed during the year between Buongiorno and these related parties are summarized in the following table:

  (in thousands of Euro)                           TURNoVER    RE-DEBITINg oF DIRECT/INDIRECT     FINANCIAL    oThER
                                                              PERSoNNEL CoSTS     CoSTS       EXPENSES/INCoMES
  Buongiorno Marketin Services España, S.L.           7             -                9                -             -
  Buongiorno Marketing Services B.V.                 321           329              63               (6)            -
  Buongiorno Marketing Services Deutschland GmbH      8             -                -                -             -
  Buongiorno Marketing Services France S.A.           3             -                -                -             -
  Buongiorno Marketing Services GmbH At               4             -               16                -             -
  Buongiorno Marketing Services Italy S.r.l.         376           88               15                -             -
  Buongiorno Marketing Services UK Ltd                4             3                -                -             -
  Buongiorno Marketing Services US Inc                2             -                -                -             -
  Buongiorno RUS LLC                                  7             -                -                -             -
  Buongiorno USA Inc                                 930            1              773              155             -
  Hotsms.com B.V.                                     7             1              318                -             -
  Rocket Mobile Inc                                  444            -              156                -             -
  Yamdez Consulting Advisers SL                       -             -                -                -           (260)
  Buongiorno Hong Kong Ltd                            -             -              438                -             -
  Buongiorno Hong Kong Ltd INDIA                     75             -              227                -             -

At December 31, 2009, the Company held 35% of the share capital of the company Inches Music Group S.r.l. The latter
is partly owned by Capital B!, in which Mauro Del Rio - Buongiorno’s reference shareholder - holds the majority stake. The
company’s purpose is to manage and sell “Artist community” tracks. During the year, the Company made a payment of Euro
53,846 to Inches Music Group S.r.l. to replenish losses; the equity investment was then written down by a like amount.
The Group also undertook commercial transactions with said company and recognized costs of Euro 6,874.

With regard to related-party transactions, including inter-company transactions, it must be pointed out that the same do not
qualify as either atypical or unusual, since they were effected in the normal course of the business operations of the Group
companies in question, and concluded at arm’s length, in light of the features of the goods and services involved.




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1.7     foreseeable evoluTion

2009 was a difficult year due to the global crisis that has affected nearly all geographical areas in which Buongiorno operates,
albeit to varying extents. Buongiorno has, however, proved itself capable of tackling the situation and closed the year with
results in line with the expectations expressed by management at the beginning of the year. The Company has confirmed
the quality of its business in terms of stable profits and cash generation, as well as having laid the foundations for developing
new business lines.
Buongiorno is looking to 2010 with confidence and renewed growth prospects.
In detail:
In the B2C sector (which currently accounts for about 50% of Buongiorno’s Revenues) B! wants to strengthen its leadership
focusing on growing its market share in those areas where it is already present, opening up new markets and introducing
new products into its portfolio, including apps for iPhone and Android.

In the B2B sector (which includes services for the telephone operators and the brands) its aim is to grow by strengthening
successful products further in order to allow upselling on existing contracts as well as winning new contracts for: IMM
(Intelligent Mobile Marketing), SuperContest, Loyalty and CRM programs, Application and Games Stores, Messaging and
alert platforms and Mobile ADV platform and network.

Buongiorno’s core competencies offer very real potential for opening new business lines: the mobile social network and
related tools already feature in Buongiorno’s product portfolio, other services will require a longer period and significant
investments to generate profits. In 2010, the direction indicated by management has already identified at least 2 new
business lines capable of generating profits over the next 2-3 years.


1.8     reporT on operaTions of The parenT company buonGiorno s.p.a.

The Parent Company, confirming a trend which started last year, has strengthened its role as a service company for the
Group. This has involved greater commitment in terms of coordination, control and technical support, which has translated
into an increase in the services delivered to Group companies and, as a result, a rise in inter-company revenues (+11%
compared to December 31, 2008).

Revenues relating to third parties fell by about 23% compared to the previous year. This result has to be seen in a dual light:
although, on the one hand, revenues generated by the direct business model (“B2C”) in the Mobile Content 1.0 market fell
by about 11%, on the other hand, this reduction represents a significant achievement for a year in which market conditions
were difficult for the whole VAS sector. This business model, sustained by levels of advertising spending predicted to rise, is
expected to perform well during next year.
The “B2O” business line (based on collaboration with the main mobile telephone operators in which the Company provides
technology, content and marketing advice), on the other hand, experienced difficulties in replacing a number of services
terminated last year with new initiatives, resulting in a 47% fall in revenues. However, this segment is showing encouraging
signs resulting from the trials carried out during the last quarter on new types of services as part of the marketing advice
offered by the Company to the mobile telephone operators.

The combination of inter-company and third party revenues show a moderately negative trend. The Value of Production fell
from about Euro 51.6 million in 2008 to about Euro 47.1 million in 2009, a fall of 9%.

From a financial point of view, the refinancing operation led to the full repayment of the Loan originally taken out with Banca
IMI (Intesa Sanpaolo Group) falling due on June 26, 2009 and amounting to Euro 100 million. This took place at the same
time as the drawdown of the medium/long-term loan granted for the total amount of Euro 87 million taken out with a pool of
banks, which was organised by Banca IMI.




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1.8.1 economic operations

 Separate proFit anD LoSS account
  (in thousands of Euro)                                         YTD 2009    YTD 2008    VARIANCE    VAR. %
  SaLeS oF gooDS anD SerViceS                                      45,008      49,715     (4,707)      (9%)
  Other income and increase of fixed assets for internal works      2,053       1,832        221        12%
  totaL VaLue oF proDuction                                        47,061      51,547     (4,486)      (9%)
  Services, use of third-party assets, consumables and goods      (31,099)    (28,676)     (2,423)       8%
  Personnel costs                                                 (11,566)    (10,804)      (762)        7%
  groSS operating Margin                                            4,397      12,066     (7,669)     (64%)
  Amortization, depreciation and write-downs                       (3,124)     (2,278)      (846)       37%
  Allowance for bad debts and other provisions                      (686)      (1,237)       551       (45%)
  Other operating costs                                             (254)       (314)         60       (19%)
  operating proFit / (LoSS)                                          333        8,238     (7,905)     (96%)
  Net financial earnings / (charges)                               (4,153)     (5,861)      1,708      (29%)
  Value adjustments on financial assets                              (54)          -         (54)         -
  Earnings / (charges) from assets held for sale                       -           -           -          -
  Net non-recurrent costs                                              -           -           -          -
  proFit (LoSS) BeFore taXation                                   (3,874)       2,376     (6,250)    (263%)
  Current income taxes                                              (402)       (702)        300       (43%)
  Deferred income taxes                                            (2,373)     (3,421)      1,048      (31%)
  net proFit (LoSS) For tHe perioD                                (6,650)      (1,747)    (4,903)     281%
  Basic earnings per share (Basic epS)                           (0.0625)    (0.0164)    (0.0461)     281%
  Diluted earnings per share (Diluted epS)                       (0.0585)    (0.0155)    (0.0430)     278%

Buongiorno S.p.A.’s revenues for 2009 were approximately Euro 47.1 million, marking a decrease of 9% compared to
December 31, 2008.
The following table provides a breakdown of revenues from third parties, subsidiaries and associates:

  SaLeS oF gooDS anD SerViceS
  (in thousands of Euro)                                                                    YTD 2009         YTD 2008
  Consumer Services                                                                          23,082           29,932
  Intercompany Services                                                                      21,926           19,783
  Associates Services                                                                           -                -
  Sales of goods and services                                                                45,008           49,715

Revenues from third parties, traditionally identified as “Consumer Services”, fell 23% during the year from Euro 29.9 million in
2008 to Euro 23.1 million in 2009 .

This reduction, as already illustrated above, can be attributed to the difficulties of replacing services offered in collaboration
with the mobile telephone carriers terminated during last year, as well as the difficult conditions in the entire VAS sector during
the year which led to the moderate fall also in revenues from the B2C business line.

Revenues from Intercompany Services, i.e. services provided by the Parent Company to its subsidiaries or associates,
increased by 11% as of December 31, 2009 compared to the previous year (from Euro 19.8 million in 2008 to Euro 21.9
million in 2009). This increase is attributable to the extension of services rendered to a growing number of Group companies.

The Parent Company’s Gross Operating Margin (GOM) at December 31, 2009 amounted to Euro 4.4 million, compared to
Euro 12.1 million for the previous year, a fall of 64%; this movement is due primarily to the drop in sales but also to the rise in
costs, both for personnel (due to the provision set aside to cover the variable portion of the remuneration which was higher
than last year’s provision) and for variable costs due to the increase in services rendered by other Group companies and in
the costs incurred to complete restructuring and reorganisation after the acquisition of the iTouch group.

The Operating Profit of Euro 0.3 million, down 96% compared to Euro 8.2 million at December 31, 2008. Provisions for
risks and charges decreased from Euro 1.2 million in 2008 to about Euro 0.7 million in 2009 and mainly refer to provisions
to partially cover penalty proceedings instigated by regulatory authorities and the Revenue Service. Although the company
deems that it is able to respond to the claims received with more than adequate evidence, it has considered it prudent to set
aside provisions to cover the amounts disputed.

“Other operating costs” amounted to Euro 0.25 million, with a slight decrease compared to the previous year (Euro 0.3
million).




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“Net financial charges” fell significantly from Euro 5.9 million in 2008 to Euro 4.2 million at December 31, 2009. The 29%
reduction of Euro 1.7 million can be attributed primarily to:
 n   lower financial and accessory charges on bank loans received, reducing from Euro 7.6 million in the previous year to
     the current figure of Euro 4.7 million, a positive movement of Euro 2.9 million; the fall may be attributed both to the fall in
     interest rates in the period in question and the significant reduction in the value of gross debt;
 n   reduced interest income accrued from Group companies, amounting to Euro 0.4 million at December 31, 2009, compared
     to Euro 0.9 million in the previous year with a decrease of Euro 0.5 million;
 n   exchange gains of about Euro 0.1 million against Euro 0.8 million for the previous year, a decrease of Euro 0.7 million.
“Value adjustments on financial assets” at December 31, 2009 amounted to about Euro 54 thousand, whilst they showed a
zero balance at the end of the previous year.

Profit before taxation went from Euro 2.4 million at December 31, 2008 to Euro 3.9 million for 2009.

Income taxes for the year were negative at Euro 2.8 million compared to Euro 4.1 million for the previous year.

Deferred taxes relate to the reversal effect due to the expiry of prior tax losses of about Euro 3 million and the recognition of
Euro 0.6 million tax receivables relating to research and development costs incurred during 2009 and 2008.

Estimated taxes for the year, essentially IRAP, amounted to Euro 0.4 million, a reduction of Euro 0.7 million compared to the
previous year.

The result for the year thus showed a loss net of tax of Euro 6.65 million, compared to a net loss of Euro 1.8 million for 2008.
1.8.2 financing and investment operations
 BaLance SHeet - Buongiorno S.p.a.
 (in thousands of Euro)                                    12.31.2009   12.31.2008   VARIANCE
 FiXeD aSSetS
 Intangible fixed assets                                     8,300        6,938       1,362
 Tangible fixed assets                                        252          194          59
 Financial fixed assets                                     304,099      195,309     108,789
                                                            312,651      202,441     110,210
 net WorKing capitaL
 Inventories                                                     -            -           -
 Trade receivables                                           26,188       21,780       4,409
 Other assets                                                 1,985        1,223        762
 Trade payables                                             (18,705)     (12,228)     (6,478)
 Other liabilities                                           (4,522)      (2,837)     (1,685)
                                                              4,946        7,938     (2,992)
 SeVerance inDeMnitY FunD                                     (933)      (1,035)        102
 proViSion For riSKS anD cHargeS                            (1,964)      (1,352)       (611)
 net inVeSteD capitaL                                       314,700      207,991     106,709
 capitaL anD reSerVeS
 Paid-up capital                                             27,652       27,652          -
 Reserves and profits (losses) carried forward              104.,366     106,318      (1,952)
 Profit (loss) for the period                                (6,650)      (1,747)     (4,903)
                                                            125,369      132,223     (6,854)
 MeDiuM anD Long-terM BorroWingS                             19,529        (750)      20,279
 SHort-terM BorroWingS                                                                   -
 Financial current assets                                    (2,678)      (3,921)      1,243
 Cash                                                        (3,824)      (4,210)       386
 cash and equivalents (*)                                   (6,502)      (8,131)       1,629
 Debts to bans and other financial institutions             176,305       84,649      91,656
                                                            169,803       76,518      93,285
 net FinanciaL poSition                                     189,331       75,768     113,563
 totaL SHareHoLDerS’ eQuitY anD BorroWingS                  314,700      207,991     106,709
(*) if negative, it constitutes an asset for the Company




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At December 31, 2009, Buongiorno’s Net Invested Capital was Euro 314.7 million, composed of Net Fixed Assets of Euro
312.6 million, and Net Working Capital of Euro 4.9 million, net of the Provisions for Risks and Charges and the Severance
Indemnity Fund of Euro 2.9 million.

The main changes in the balance sheet for the year relate to the following movements due to utilization:
 n   investments rose by Euro 108.8 million primarily as the result of an inter-company transaction involving the acquisition
     of a stake in iTouch Ltd for Euro 110 million from iTouch Holding Ltd. In fact, the latter company, together with its parent
     company iTouch Venture Ltd, also an investee company of Buongiorno S.p.A., have been going through liquidation
     proceedings since December 2009 (for further details about the transaction please refer to paragraph 1.1 “The Group at
     December 31, 2009 and Related Developments”) . In addition, the subscription of 4,900,000 shares representing 49%
     of the share capital of Buongiorno Digital Innovation India Private Ltd for a total of about Euro 0.7 million (in this regard see
     paragraph 1.6 Related-party Transactions). Investments include the transfer to the profit and loss account of deferred tax
     assets amounting to Euro 3 million. The balance went from Euro 14.4 million at December 31, 2008 to Euro 11.4 million
     at December 31, 2009;
 n   net Working Capital decreased by Euro 3 million due to the increase in trade payables from Euro 12.3 million to Euro
     18.7 million and other liabilities (up from Euro 2.8 to 4.5 million), which were only partly offset by the increase in trade
     receivables from Euro 21.8 million to Euro 26.2 million and other assets that increased by Euro 762 thousand;
 n   the Severance Indemnity Fund for salaried employees decreased by Euro 102 thousand compared to about Euro 20
     thousand for the previous year. Provisions for Risks and Charges increased by Euro 611 thousand mainly due to prudential
     provisions made for proceedings instigated by regulatory authorities and the Revenue Service.
Net Invested Capital is covered by financial resources composed of Shareholders’ equity of Euro 125.4 and the net financial
debt of Euro 169.8.

Equity decreased by Euro 6.9 million due to:
 n   a decrease of about Euro 0.2 million relating to unrealized losses on receivables on the inter-company loan denominated
     in USD;
 n   a decrease of Euro 6.7 due to the loss for the year.
The Reclassified Consolidated Cash Flow Statement as of December 31, 2009 is provided below:

 recLaSSiFieD caSH FLoW StateMent oF Buongiorno S.p.a.
                                                                        YTD 2009        YTD 2008        VARIAzIoNI
  net FinanciaL poSition at perioD Start                                (75,768)         (72,236)         (3,532)
  cash Flow from operating activities
  Net result                                                             (6,650)          (1,747)          (4,903)
  Amortization, depreciation and write-off                                3,124            2,278             846
  Net change in the severance indemnity fund                              (102)              20             (123)
  Net change in funds for risks and charges                                611              865             (254)
  Other ordinary activities items                                         2,999            4,064           (1,065)
                                                                           (18)            5,481          (5,498)
  change in working capital                                               2,999          (4,181)            7,181
  cash Flow from investing activities
  Intangible fixed assets                                                  (4,388)        (2,508)           (1,879)
  Tangible fixed assets                                                     (157)           (19)             (137)
  Investments                                                            (111,792)         (531)          (111,261)
  Non-current assets held for sale                                             -              -                -
                                                                        (116,336)        (3,058)         (113,278)
  cash Flow from Financing activities
  Paid capital increase                                                     0               504            (504)
  Other changes in capital                                                (209)           (2.277)          2,069
                                                                          (209)          (1,774)           1,565
  other changes in the equity and financial                                 -                 -               -
  situation that do not entail cash flows
  net FinanciaL poSition at perioD enD                                  (189,331)        (75,768)        (113,563)

The movement in the Net Financial Position appears to be contrary to the movement in the Group’s Net Financial Position,
since net financial debt for the period increased from Euro 75.8 million at December 31, 2008 to Euro 189.3 million. This
result is mostly due to the cash flow from loan activity which absorbed Euro 116.3 million (against Euro 3.1 million in the
previous year) and particularly to the inter-company loan taken out, in December 2009, to service the acquisition of the
holding in iTouch Ltd which will not generate monetary outlays (for further details about the operation refer to paragraph 1.1
“The Group at December 31, 2009 and Related Developments”).
Cash flow from operating activities was negative at Euro 18 thousand (as against a positive balance of Euro 5.5 million in the
previous year), whilst net working capital increased by about Euro 3 million.




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1.9     human resources

At December 31, 2009, Buongiorno’s workforce had a total of 977 employees and collaborators (1,045 units at December
31, 2008), despite 30 employees of Buongiorno Russia LLC being included in the consolidation scope. At December 31,
2009, employees and staff in Italy totaled 189, of which 168 in Buongiorno S.p.A. and 21 in Buongiorno Marketing Services
S.r.l., based in the offices in Milan and Parma.

During 2009, the Group’s integration and reorganization activities permitted, inter alia, a reduction in the total workforce,
despite the engagement of new personnel for the development of next-generation services.

Buongiorno’s professionals located in 24 different countries are driven by their passion and the global culture required to best
support the local spirit. Ongoing expansion in new countries represents a constant challenge in Resource management and
an opportunity to enhance knowledge and enrich expertise.

The workforce’s average age (32) and high level of education (75% of employees have a university degree or equivalent)
contribute to a young and dynamic environment that is always open and receptive to new professional challenges and
guarantees a strong capacity for innovation, flexibility, and an effective understanding of the logic underlying the consumption
of the Company’s services.

At Buongiorno, we privilege the hiring of young, high-potential resources, who, after a period of mentoring under the tutelage
of expert managers, may experiment in the field with the knowledge they have acquired during their studies, and who are
immediately involved in international projects. This approach allows us to increase the motivation of our new resources,
optimize the time required to integrate them into the company, and promote the sharing of knowledge, thereby ensuring the
continuity of the new company’s operations. We also provide specific relocation and international career plans for our most
talented employees.

Spreading and promoting the Group’s culture and sense of belonging have been, and remain, crucial top-priority goals during
the globalization process and the integration of new resources. The values of synergy, quality, innovation and commitment
have steered the establishment of shared management and control tools so that the Group’s resources, wherever in the
world they may be, can count on the same support and identify with the same management style and criteria of internal
equity.
Over the last two years, HR Recruiting has taken important action in terms of forming contacts with the academic world and
participating in events aimed at promoting the Company’s visibility and attracting new talent with a passion for technology,
such as job fairs and a presence in publications with a target readership consisting of recent graduates.

Finally, we can report that, during 2009:
 n	 there were no dealings with trade unions;
 n	 no use was made of redundancy arrangements and these are not expected to be used in the future;

 n	 the current National Collective Labour Contract is generally the Metalworkers contract with a minority of employees being

    covered by the Commerce and Journalist Contract.



1.10       TechnoloGical innovaTion

In 2009, Buongiorno made considerable investments in the following technological-/application-development projects:

b3a platform
 n    WEB/WAP Platform: The Group has completed the base components of the WEB and WAP site development platform
      using a framework that is widely available on the market (Life Ray). The WEB/WAP platform is a development environment
      based on reusable components (portlets). The introduction of this tool will allow the Group to speed up the time to market
      and react more quickly to its customers’ needs. This framework has already been used to develop an Application Store for
      an important mobile phone manufacturer and forms the basis for the migration of all the Spanish sites from the Movilisto
      platform to the B3A platform.
 n    Content Management: During 2009, the Group developed a new content management environment, with a very simple
      and effective interface and with functionalities that will significantly reduce the times for Content Ingestion activities and
      management of the User Agents, which define the characteristics of mobile devices that interact with the B3A platform
      for content download. An initial version of the environment based on the “Alfresco” product has been finalized and will be
      distributed to all the company functions during 2010.
 n    Online Subscriber Acquisition: The Group implemented CAT (Customer Acquisition Tool). A technological environment to
      assist in the acquisition of new subscribers, both directly and through marketing partners (affiliate networks). This set of
      tools and methodologies allows marketing personnel to plan and design “splash pages” and link them directly to information
      on new-user acquisitions. It enables the Group to act on the results of acquisition campaigns by allowing personnel to
      easily change the related parameters in order to improve efficiency and reduce the average cost per acquisition (CPA).




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 n   IMM (Intelligent Mobile Marketing): The Group improved the functions available to customers for the iMM product aimed at
     increasing subscriber retention and raising ARPU for large mobile network operators. The product was implemented both
     on O2 UK and on TIM Italia and Proximus in Belgium.
 n   Social Networking Platform (peoplesound): The Group invested in resources and tools for the development of a Mobile
     Social Networking platform (blinko). The platform is designed to meet the requirements of Mobile Content 2.0 and is
     based on methodologies and technologies that meet the collaboration standards of WEB 2.0. The platform obtained
     recognition and international Awards in 2009.


upgrading and enhancement of methodologies, processes and organization supporting
systems and services
During 2009, the Group invested in software, methodologies and processes for “7*24” monitoring of our systems. B2C
services require very high service continuity, especially during peak times for online acquisition, whilst B2O services, which
now impact on the loyalty of “voice” service subscribers, must likewise be available at any hour of the day or night. The
infrastructure management service consists of a team of monitoring technicians, located in South Africa, with shifts covering
24 hours a day every day of the year and second-level specialists who are activated if the monitoring service is unable to
resolve the problem. This team uses service coupon monitoring and management tools (Nagios and Request Tracker) which
are quite widely used at international level.
The monitoring service is also accompanied by the “Second-Level Help Desk”, also located in South Africa, which allows the
telephone Operators to interact with our agents at any time of the day or night.
The monitoring service watches over 500 servers located in Italy and France through 5500 “probes” which check the
functionality of the system base components and the operating parameters of our applications.
The Group will continue to leverage its geographical presence, including in regions with low labor costs, in order to achieve
the best optimization of infrastructure operating costs, thereby also ensuring better levels of service for our customers.

upgrading and enhancement of hardware and system components
In 2009, the Group continued to invest in the expansion and modernization of the basic hardware and software resources
supporting the services offered to our customers. Investments were made, in particular, to expand the capabilities for handling
SMS traffic and for the Internet connections to our systems, which have grown significantly during the year both downstream
the consolidations and migrations and due to the change in our service mix. During 2009 the number of SMS handled by the
infrastructure in Milan doubled and Internet band usage tripled. The handling of such volumes required investment in new-
generation networking equipment that can manage these traffic peaks effectively. Investments also continued in operating
system “virtualization”, with the acquisition of modern high-performance multiprocessor servers. In addition, extra storage
farms based on Storage Area Network technologies were acquired.

upgrading and enhancement of management applications
The Group invested in the improvement of its business-support applications. During 2009, the Group completed the
development of a Global Management Control System - this system, implemented by Accenture, allows the Group to obtain
up to date information on the business operation’s fundamental parameters, which improves the timeliness of decision-
making. The system rollout has been completed in the key regions (Spain, Italy, France, UK).
In 2009 the Group selected SAP HR as its standard platform for managing human resources at global level - two initial
components have been implemented on SAP HR: management of global master records and their alignment with all the
payroll systems distributed worldwide, the dynamic management of organization charts and management of performance
evaluations and calculation of bonuses. These initiatives allow the Group to base all human resources-related topics on a
single control point (SAP HR).
The Group has also improved the internal intranet, offering more information and services to its employees, with the aim of
raising productivity and increasing motivation.

Lastly, with reference to the Group’s technological restructuring and rationalization initiatives, in 2009, Buongiorno invested
in resources and methodologies to migrate its platforms towards Group standards. This migration programme includes
34 projects - 21 were completed in 2008 and 12 in 2009. In 2010 there remains to complete the tail-end of the project
to migrate the WEB/WAP sites in Spain, which will come to an end during the first 4 months of the year. To back up the
technological activities supporting the migrations, the Group has enlisted the support of external consultants in Spain, France
and Italy. These migration and consolidation activities have produced further operating savings in addition to those already
achieved during 2008.


1.11      main company evenTs in The financial year

In February:
 n   On February 16, 2009, the Board of Directors of Buongiorno S.p.A. analyzed the preliminary data for 2008.




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                               Directors’ report on operations




In March:
 n   On March 16, the Board of Directors of Buongiorno S.p.A. approved the draft 2008 Annual Report.
 n   On March 24, 2009, during its presentation to the financial community at the 2009 STAR Conference, the Company
     announced its priorities for the current year and next few years and disclosed its preliminary results for the first two months
     of 2009.
In April:
 n   On April 10, the Company published its annual Corporate Governance Report.
 n   On April 30, the Ordinary Shareholders’ Meeting of Buongiorno approved the 2008 Annual Report.
 n   During the same meeting, the shareholders authorized a buy-back of up to 10,000,000 own shares. The resolution
     authorizes the Board of Directors to repurchase up to 10,000,000 ordinary Buongiorno shares at a par value of Euro 0.26
     each (approximately 9.4% of the Company’s share capital) in one or more tranches on a revolving basis up to the approval
     of the financial statements for the year ending December 31, 2009, or in the 18 months following the authorization given
     by the Shareholders’ Meeting.
 n   In the same meeting, the Company signed a binding agreement with a pool of banks headed by Banca IMI for total
     refinancing of Euro 87 million.
In May:
 n   On May 11, the Board of Directors of Buongiorno S.p.A. approved the financial statements for the first quarter of 2009.
 n   During the same meeting, the Board of Directors of Buongiorno S.p.A., acting on the authority vested in it by the
     Extraordinary Shareholders’ Meetings held on May 2, 2006 and May 5, 2008, also resolved to cancel 868,000 options
     considered no longer exercisable and assign 4,900,000 options to 40 of the Group’s managers, as part of its employee
     incentive and loyalty programs, with a strike price of Euro 0.70 each, equal to the average price over the previous 30 days,
     according to the criteria for determining the strike price approved by the Shareholders’ Meeting.
In June:
 n   On June 23, 2009, Buongiorno signed a loan agreement with a pool of banks headed by Banca IMI (Intesa Sanpaolo
     Group) that provides for the granting of a new multi-year loan of Euro 87 million. The loan agreement is divided into a
     five-year, Euro 67 million senior loan with payments due every six months (Tranche A) and a Euro 20 million revolving
     credit facility, also with a duration of five years, with early repayment possible starting the fourth year after the issuance
     date (Tranche B). The loan calls for a spread of 300 basis points with respect to the benchmark interest rate, subject to
     adjustment on a six-monthly basis according to a reward mechanism linked to the ratio of gross financial debt to EBITDA.
In August:
 n   On August 4, the Board of Directors of Buongiorno S.p.A. analysed the preliminary consolidated results for the first half of
     2009.
 n   On August 27, the Board of Directors of Buongiorno S.p.A. approved the financial statements for the first half of 2009.
 n   During the same meeting, the integration with iTouch was declared successfully concluded 24 months after the acquisition,
     with savings exceeding those initially planned.
In November:
 n   On November 9, the Board of Directors of Buongiorno S.p.A. approved the financial statements for Q3 2009.

In December:
 n   Winding-up proceedings were started for the English companies iTouch Holdings Ltd and iTouch Ventures Ltd;
 n   at the same time as the start of the above proceedings to wind up the companies iTouch Holdings Ltd and iTouch Ventures
     Ltd, the parent company Buongiorno S.p.A. acquired from iTouch Holding Ltd (a company controlled by Buongiorno
     S.p.A. through iTouch Ventures Ltd) a 100% stake in the company iTouch Ltd, at an equivalent value to the book value
     of Buongiorno S.p.A.’s own holding in the company iTouch Venture Ltd in liquidation, which is also controlled. The above
     transfer has resulted in inter-company payables and receivables being recognized in the financial statements of the
     companies involved. At the end of the liquidation proceedings for iTouch Venture Ltd and its subsidiary iTouch Holding Ltd,
     these inter-company payables and receivables will be offset so as not to alter the balance sheet and financial position of
     the Buongiorno Group. It should be noted that at December 31, 2009 this inter-company transfer of the equity investment
     was not material at consolidation level.


1.12      evenTs followinG December 31, 2009

As of the date of preparation of these Financial Statements, the following significant events had occurred subsequent to
December 31, 2009:
 n   On February 1, 2010, the Board of Directors of Buongiorno S.p.A. analysed the preliminary results for 2009 and approved
     the Group’s internal budget for 2010.




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                             Directors’ report on operations




1.13    main shareholDers

(Holdings as per the Share Register and/or disclosures pursuant to Article 120 of Legislative Decree 58/1998)

The chart below shows the equity investments of the shareholders who, at December 31, 2009, owned more than 2% of
Buongiorno S.p.A.’s Share Capital.




                             20.20%

                                               3.32%
                                               2.98%                       Mauro Del Rio*
                                               2.03%                       Mitsui

                                                                           Holger Van Den Heuvel

              71.47%                                                       AXA Rosenberg

                                                                           Market
                                                                *directly 17.02% and 3.18% through Capital B!



1.14    reporT on The sTock opTion plans

Buongiorno has always favored the possibility of implementing stock option plans, feeling that they are an appropriate tool in
building relationships between the Company and its employees/directors by providing an incentive to create a professional,
long-lasting relationship. As such, over the years various equity-based incentive plans have been implemented, in compliance
with CONSOB notice No. 11508 of February 15, 2000 regarding stock option plans, as described below.
Rispetto alla Situation at December 31, 2008, non si segnala l’emissione di nuovi piani di incentivazione azionaria.
As a consequence, the following Plans were in force as of December 31, 2009:

2006-2012 stock option plan (plan 6)
In the Shareholders’ Meeting of May 2, 2006, Buongiorno defined an increase in share capital for the purposes of assigning
options to employees and directors.
The objective of this plan, just as for previous plans, is to offer the Company the possibility of assigning new stock options to
the employees and directors of the Company and Group companies and to employees who are newly recruited or arriving
from acquired companies and who merit special professional recognition.
A reserved capital Increase, of a maximum of 4,500,000 new issue shares, has been approved to cover this plan.

characteristics of the incentive plan
The Plan is regulated by a Regulation, issued by the Board of Directors on May 10, 2006 on the basis of those already
existing for the previous plans.

Some of the most important terms and conditions are as follows:
 n   plan expiry: December 31, 2012, with the possibility for the Board to establish different dates, but always prior to December
     31, 2012, as the latest date for exercising specific assignments;
 n   deadline for assigning stock options: June 30, 2011;
 n   stock option maturity: upon reaching objectives and/or following a minimum time of employment or director service with
     the Company;
 n   determination of the stock option issue price: the exercise price for each option, to be paid to the Company in order
     to obtain the relevant new issue share, will be the price that the Board of Directors has determined, when attributing
     the options, for each beneficiary or category of beneficiaries, and in any event will not be below the market value of the
     stock on the assignment date as laid down in the resolution of the Company’s Extraordinary Shareholders’ Meeting on
     May 2, 2006.


2008-2014 stock option plan (plan 7)
In the Shareholders’ Meeting of May 5, 2008, Buongiorno defined an increase in share capital for the purposes of assigning
options to employees and directors.
The objective of this plan, just as for previous plans, is to offer the Company the possibility of assigning new stock options to
the employees and directors of the Company and Group companies and to employees who are newly recruited or arriving from
acquired companies and who merit special professional recognition.
A reserved capital Increase, of a maximum of 5,000,000 new issue shares, has been approved to cover this plan.




                                                                                                                                     70
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                               Directors’ report on operations




characteristics of the incentive plan
The Plan is regulated by a Regulation, issued by the Board of Directors on May 11, 2009 on the basis of those already
existing for the previous plans.

Some of the most important terms and conditions are as follows:
 n   plan expiry: December 31, 2014, with the possibility for the Board to establish different dates, but always prior to December
     31, 2014, as the latest date for exercising specific assignments;
 n   deadline for assigning stock options: June 30, 2013;
 n   stock option maturity: upon reaching objectives and/or following a minimum time of employment or director service with
     the Company;
 n   determination of the stock option issue price: the exercise price for each option, to be paid to the Company in order
     to obtain the relevant new issue share, will be the price that the Board of Directors has determined, when attributing
     the options, for each beneficiary or category of beneficiaries, and in any event will not be below the market value of the
     stock on the assignment date as laid down in the resolution of the Company’s Extraordinary Shareholders’ Meeting on
     May 5, 2008.


summary of active stock option plans as of December 31, 2009
Further details on the stock option plans in effect at the end of the period are provided in the table below.

  pLan 6
                       12.31.2008                                        YEAR 2009                                   12.31.2009
     STRIKE          NoT EXERCISED       ASSIgNED       EXERCISED       EXPIRED    CANCELLED       To BE CANCELLED     ToTAL
     PRICE (EURo)
     5.16              1,545,000                             -              -          56,000           164,000      1,325,000
     4                  133,000                              -              -             -              40,000        93,000
     3.86                35,000                              -              -             -              35,000           -
     2.79                75,000                              -              -             -                            75,000
     1.94              1,938,000                             -              -          38,000           164,000      1,736,000
     1.92                60,000                              -              -             -                            60,000
     0.76                15,000                              -              -             -                            15,000
     0.7                                  790,000            -              -             -              50,000       740,000
                       3,801,000          790,000            -              -          94,000           453,000      4,044,000
 pLan 7
                         12.31.2008                                                 YEAR 2009                                  12.31.2009
  STRIKE               NoT EXERCISED           ASSIgNED         EXERCISED          EXPIRED    CANCELLED    To BE CANCELLED       ToTAL
  PRICE (EURo)
  0.7                           -                4,110.000             -                 -         -              200,000      3,910,000
                                -                4,110.000             -                 -         -              200,000      3,910,000

The “To be cancelled” column includes those options relating to personnel who have left and so can no longer be exercised.


1.15      shares helD by DirecTors, General manaGers anD key manaGemenT
          personnel

In compliance with the provisions of Article 79 of CONSOB regulation No. 11971/1999, the table below lists the shares
held during financial year 2009 by the Directors and Statutory Auditors of Buongiorno, as well as their spouses who are not
legally separated and children who are minors. These shares may be held directly or through subsidiaries, trust companies
or through third parties.

  NAME AND SURNAME                                      No. oF ShARES            No. oF ShARES         No. oF ShARES    No. oF ShARES
                                                        AT YEAR-START         ACQUIRED/SUBSCRIBED           SoLD         AT YEAR-END
  Mauro DEL Rio, Chairman                                  18,282,173                  249,300            (435,001)         18,096,472
  Mauro DEL RIO, Chairman (through Capital B!)             3,385,698                      -                    -             3,385,698
  Andrea CASALINI, CEO                                     1,437,000                      -                    -             1,437,000
  Felipe FERNANDEZ ATELA, Director                              -                         -                    -                 -
  Anna GATTI, Director                                        690                         -                    -                690
  Riccardo LIA, Director                                        -                         -                    -                 -
  Giovanni MASSERA, Director                                    -                         -                    -                 -
  Nevid NIKRAVAN, Director                                      -                         -                    -                 -
  Wayne PITOUT, Director *                                  296,378                       -               (296,378)              -
  Anna PUCCIO, Director                                         -                         -                    -                 -
  Giorgio RICCHEBUONO, Director                              50,000                       -                    -              50,000
  Holger VAN DEN HEUVEL, Director                          3,172,075                      -                    -            3,172,075
  Key management personnel                                  919,112                       -                (13,000)           906,112
 * Wayne Pitout is the beneficiary of a Trust that at December 31, 2009 held 500,000 shares




                                                                                                                                            72
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                            Directors’ report on operations




1.16     annual corporaTe Governance reporT (arTicle 123-bis Tuf)

The Corporate Governance Report will be published on the website www.buongiorno.com in the section Investor Relations-
Corporate Governance.


1.17    coDe GoverninG The proTecTion of personal DaTa of The personnel

The company complies with Legislative Decree 196/03 “Code Governing the Protection of Personal Data”.

Complying with the order issued by the Italian Data Protection Authority on November 27, 2008, entitled “Requirements for
Data Controllers for data processed using electronic means regarding system administrator duties and extension of the time
limits for these to be discharged” as amended by the order dated June 25, 2009, Buongiorno S.p.A. has formally appointed
the system administrators within the time limits specified therein.

At the same time as appointing the administrators, the Company completed an early update of the security planning
document, provided for by Legislative Decree 196/2003, an update which generally takes place by March 31 of each year.


1.18    auDiTinG

The Consolidated and Separate Financial Statements of Buongiorno S.p.A. for the year ended December 31, 2009 have
been audited by PricewaterhouseCoopers S.p.A. based on the audit appointment (for the 2007-2011 period) approved by
the Shareholders in their meeting of May 2, 2007.

Audits of the other Group companies were carried out by Deloitte & Touche for Buongiorno France S.A., Dioranews Sas and
Buongiorno Marketing Services France Sas.
1.19     Treasury sTocks

At year-end 2009, the Company retained 1,488 treasury shares worth a total of Euro 1,326 (measured at the market price
of the last purchase undertaken). At the end of the previous year, the company held the same number of treasury stocks.


1.20     proposal for allocaTinG The resulT for The year

Shareholders,

We propose that you approve the Financial Statements and the Report on Operations, as presented to you herein. We also
ask you to deliberate on the proposal for replenishing the loss for the year of Euro 6,649,628.95 as follows:
 n   Euro 6,649,628.95 with Other Reserves.

Parma, March 15, 2010

                                                        On behalf of the Board of Directors of Buongiorno S.p.A.
                                                                             The Chairman
                                                                            Mauro Del Rio




                                                                                                                          74
                                                                                                                          75
2 Consolidated annual RepoRt
   of the BuongioRno gRoup as
           of deCemBeR 31, 2009




                                  77
                            Consolidated annual RepoRt of
                            the BuongioRno gRoup as of deCemBeR 31, 2009




2.1     Accounting StAtementS of the conSolidAted AnnuAl RepoRt AS
        of decembeR 31, 2009

The following accounting statements are included in the Buongiorno Group’s Consolidated Annual Report as of
December 31, 2009:
 n Consolidated Balance Sheet at December 31, 2009;
 n Consolidated Profit and Loss Account at December 31, 2009;
 n Consolidated Statement of Comprehensive Profit and Loss Account at December 31, 2009;

 n Statement of Changes in Equity at December 31, 2009;

 n Consolidated Cash Flow Statement for 2009.




Related-party transactions are reported in Note 35 herein.
2.1.1 consolidated balance Sheet of the buongiorno group at december 31, 2009
 CONSOLIDATED BALANCE SHEET
 Note (in thousands of Euro)                     12.31.2009   12.31.2008   VARIANCE
       NON-CURRENT ASSETS
 1)    Goodwill                                   174,978      176,638      (1,660)
 2)    Other intangible assets                     26,898       30,391      (3,493)
 3)    Tangible fixed assets                        3,353        4,292       (939)
 4)    Investments in associate companies           2,459        1,727        732
 5)    Other non-current financial assets           1,187        1,167         20
 6)    Deferred tax assets                         25,232       29,898      (4,666)
                                                  234,107      244,113     (10,006)
       CURRENT ASSET
 7)    Inventories                                    -          1,429       (1,429)
 8)    Trade debtors and other receivables         67,911       80,485      (12,574)
 9)    Other current financial assets               3,040         573         2,467
 10)   Cash and cash equivalents                   35,721       44,972       (9,251)
                                                  106,672      127,459     (20,787)
 11)   NON-CURRENT ASSETS HELD FOR SALE               -            -             -
       TOTAL ASSETS                               340,779      371,572     (30,793)
 12)   CAPITAL AND RESERVES                       158,118      150,373        7,745
       NON-CURRENT LIABILITIES
 13)   Long-term borrowings                       47,826        7,236       40,590
 14)   Deferred taxes                              4,451        6,424       (1,973)
 15)   Non-current provisions                      2,075        2,855        (780)
                                                  54,352        16,515      37,837
       CURRENT LIABILITIES
 16)   Trade creditors and other payables          79,672       90,061      (10,389)
 17)   Current tax payables                         3,202        1,944        1,258
 18)   Short-term borrowings                        4,831      103,019      (98,188)
 18)   Long-term borrowings (current part)         33,514        1,978       31,536
 19)   Current provisions                           7,090        7,682        (592)
                                                  128,309      204,684     (76,375)
 20)  LIABILITIES DIRECTLY ATTRIBUTABLE               -             -            -
      TO NON-CURRENT ASSETS HELD FOR SALES
 TOTAL LIABILITIES AND CAPITAL AND RESERVES       340,779      371,572     (30,793)




                                                                                       78
                                                                                       79
                                 Consolidated annual RepoRt of
                                 the BuongioRno gRoup as of deCemBeR 31, 2009




2.1.2 consolidated profit and loss Account of the buongiorno group at december 31, 2009
 CONSOLIDATED PROFIT AND LOSS ACCOUNT
 Note   (in thousands of Euro)                                            ytd 2009    ytd 2008    VARIANCE
 21)    SALES OF GOODS AND SERVICES                                        259,519     315,948    (56,429)
 22)    Other income and increase of fixed assets for internal works         3,099       2,990        109
        TOTAL VALUE OF PRODUCTION                                          262,618     318,938    (56,320)
 23)    Services, use of third-party assets, consumables and goods        (174,197)   (227,865)     53,668
 24)    of which other non recurrent costs                                  (2,700)     (1,799)      (901)
 25)    Personnel costs                                                    (53,640)    (55,215)      1,575
 24)    of which non recurrent personnel costs                              (1,531)     (2,167)       636
        GROSS OPERATING MARGIN                                              34,781      35,858     (1,077)
 26)    Amortization, depreciation and write-downs                         (13,674)    (17,491)      3,817
 27)    Allowance for bad debts and other provisions                        (2,496)      1,069      (3,565)
 24)    of which other non recurrent accruals                                (828)       1,496      (2,324)
 28)    Other operating costs                                               (1,401)     (3,500)      2,099
 24)    of which other non recurrent costs                                   (529)      (1,707)      1,178
        OPERATING PROFIT / (LOSS)                                           17,210      15,936       1,274
 29)    Net financial earnings / (charges)                                   4,464       3,893        571
 30)    Value adjustments on financial assets                               (8,625)    (13,246)      4,621
 31)    Earnings / (charges) from assets held for sale                         99       (1,626)      1,725
        PROFIT (LOSS) BEFORE TAXATION                                       13,148       4,957       8,191
 32)    Current income taxes                                                (2,402)     (4,023)      1,621
 32)    Deferred income taxes                                               (3,668)      7,457     (11,125)
        CONSOLIDATED PROFIT (LOSS) FOR THE PERIOD                            7,078       8,391     (1,313)
        Profit (loss) for the period attributable to Minority Interests       140         264        (124)
 33)    GROUP CONSOLIDATED PROFIT (LOSS) FOR THE PERIOD                      6,938       8,127      (1,189)
 34)    Basic earnings per share (Basic EPS)                                0.0652      0.0764    (0.0112)
 34)    Diluted earnings per share (Diluted EPS)                            0.0617      0.0739    (0.0122)
2.1.3 consolidated Statement of comprehensive profit and loss Account of the buongiorno
      group for 2009
  (in thousands of Euro)                                                                                        12.31.2009                    12.31.2008
  Consolidated profit (loss) for the period (A)                                                                   7,078                             8,391
  Other incomes and costs
  Gains (losses) from conversion of foreing currency balance sheet                                                1,005                              (4,949)
  Total other incomes and costs for the period (B)                                                                1,005                             (4,949)
  Total Consolidated profit (loss) for the period (A+B)                                                           8,083                               3,442
  Profit (loss) for the period attributable to the Group                                                          8,046                               3,029
  Profit (loss) for the period attributable to Minority Interests                                                   37                                 413


2.1.4 Statement of changes in equity of the buongiorno group at december 31, 2009
 STATEMENT OF CHANGES IN CONSOLIDATED CAPITAL AND RESERVES AT 12/31/2009
(in thousands of Euro)                         shARE          shARE          othER         pRofIt      pRofIt        tot      CApItAl     pRofIt    totAl      totAl
 dEsCRIptIoN                                  CApItAl        pREmIum        REsERVEs        (loss)     (loss)       CApItAl ANd REsERVEs (loss)     CApItAl CoNsolIdAtEd
                                                             ACCouNt                       CARRIEd     of thE     REsERVEs of mINoRItIEs    of   ANd REsERVEs CApItAl
                                                                                          foRwARd      gRoup     of thE gRoup INtEREst mINoRItIEs ofmINoRItIEs  ANd
                                                                                                                                         INtEREst INtEREst REsERVEs
Balance at period-start                             27,651,955 69,905,466   31,938,385     341,963     8,126,724 137,964,493 12,144,469 264,303       12,408,772 150,373,265
- Allocation of profit (loss) for the period                                              8,126,724   (8,126,724)       -      264,303  (264,303)                      -
- (-) Own shares                                                                                                       0                                              0
- Reserve of assigned stock options                               3,880                                              3,880                                          3,880
- Capital increase and Stock Option Plan, exercised                                                                    0                                   0          0
- Change in % ownership                                                     (1,325,655)                           (1,325,655) 1,325,655                1,325,655      0
- Due Shareholders payments                                                                                            0                                              0
- Other movements due to reclassification                                    (421,122)    (888,377)               (1,309,499)  967,022                  967,022   (342,477)
- Profit (loss) for the period                                               1,108,155                 6,938,210   8,046,365  (102,857)  139,536         36,679   8,083,044
Balance at period-end                               27,651,955 69,909,346   31,299,763    7,580,310   6,938,210 143,379,584 14,598,592 139,536        14,738,128 158,117,712




                                                                                                                                                                               80
                                                                                                                                                                               81
                                             Consolidated annual RepoRt of
                                             the BuongioRno gRoup as of deCemBeR 31, 2009




 STATEMENT OF CHANGES IN CONSOLIDATED CAPITAL AND RESERVES AT 12/31/2008
(in thousands of Euro)                           shARE          shARE          othER       pRofIt     pRofIt        tot      CApItAl     pRofIt    totAl      totAl
dEsCRIptIoN                                     CApItAl        pREmIum        REsERVEs      (loss)    (loss)       CApItAl ANd REsERVEs (loss)     CApItAl CoNsolIdAtEd
                                                               ACCouNt                     CARRIEd    of thE     REsERVEs of mINoRItIEs    of   ANd REsERVEs CApItAl
                                                                                          foRwARd     gRoup     of thE gRoup INtEREst mINoRItIEs ofmINoRItIEs  ANd
                                                                                                                                        INtEREst INtEREst REsERVEs
Balance at period-start                             27,651,955 80,455,616     26,364,089 (14,020,083) 13,858,371 134,309,949 12,088,786 (151,065)   11,937,721 146,247,670
- Allocation of profit (loss) for the period                                              13,858,371 (13,858,371)      -      (151,065)  151,065                      -
- (-) Own shares                                                              (2,277,491)                         (2,277,491)                                  (2,277,491)
- Reserve of assigned stock options                              642,727                                            642,727                              0       642,727
- Capital increase and Stock Option Plan, exercised                                        1,536,374               1,536,374   288,047                288,047   1,824,421
- Change in % ownership                                                                                                0                                 0            -
- Due Shareholders payments                                                     503,655                             503,655                                      503,655
- Other movements due to reclassification                      (11,192,877)   12,445,644 (1,032,700)                220,067   (229,322)              (229,322)    (9,255)
- Profit (loss) for the period                                                (5,097,512)              8,126,724   3,029,212   148,023   264,303      412,326   3,441,538
Balance at period-end                               27,651,955 69,905,466     31,938,385 341,963      8,126,724 137,964,493 12,144,469 264,303      12,408,772 150,373,265

(note12)
2.1.5 consolidated cash flow Statement of the buongiorno group for 2009
 Note     (in thousands of Euro)                                  yEAR 2009   yEAR 2008
           Cash and cash equivalent at period start                44,972      59,567
 A) Cash flow generated by (used for) ordinary activities          27,232      22,303
  33)      Group consolidated profit (loss) for the year            6,938        8,127
  26)      Depreciation and amortization                           12,549      13,194
  26)      Write-downs of fixed assets                              1,125        4,298
  31)      Write-downs of unconsolidated equity investments          (99)        1,626
  15)      Net change in employee benefits                           (87)          0
 15) e 19) Net change in provision for risks and charges           (1,285)      (9,085)
           Minority interest                                         140          264
  32)      Change in deferred taxes                                 3,668       (4,477)
           (Gains) losses and other non-monetary accounts              4          653
   8)      (Increase) / decrease in trade receivables              12,952       (6,441)
  16)      (Increase) / decrease in trade payables                (16,638)     12,470
           Change in other current asset items                      7,965        1,674
           Cash flow generated by ordinary activities              27,232      22,303
 B) Cash flow generated by (used for) investing activities        (7,581)      (5,749)
           Net (investments) disinvestments in:
 1) e 2)    - intangible assets                                     (6,443)    (12,076)
   3)       - property and equipment                                 (959)      (3,188)
 4) e 5)    - investments                                            (752)       (262)
           Net change in current securities (*)                       573        9,831
           Change in consolidation area                                0          (54)
           Cash flow generated by investing activities             (7,581)     (5,749)
 C) Cash flow generated by (used for) financing activities        (28,902)    (31,149)
           Net change in other financial assets/liabilities         16,882     (20,521)
           Short term loan reinbursment                           (100,005)        0
           New loan increase                                        67,537         0
           Medium and long-term borrowings reinbursment            (13,544)     (3,873)
           Capital increase (reimbursement)                            0          504
           Exchange rate gains (losses)                               673       (5,097)
 12)       Other changes in equity                                   (445)      (2,162)
           Cash flow generated by financing activities            (28,902)    (31,149)
           Cash flow for the period (A+B+C)                        (9,251)    (14,595)
           Cash and cash equivalent at period end                   35,721      44,972

The Cash Flow Statement was prepared using the indirect method.



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                             Consolidated annual RepoRt of
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noteS on the AnnuAl conSolidAted finAnciAl StAtementS

general principles followed in preparing the consolidated Annual Report and Accounting
Standards Adopted
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board (IASB) and endorsed by the European Commission for the
preparation of the consolidated financial statements of companies with equity and/or debt securities listed on a regulated
market within the European Community.
IFRS means all of the International Financial Reporting Standards, International Accounting Standards (IAS) and interpretations
of the Standing Interpretations Committee (SIC) that had been adopted by the European Union and were contained in the EU
Regulations as of the date the company’s Board of Directors approved the draft financial statements.
The consolidated financial statements have been prepared under the historical cost convention, except where IFRS require
measurement at fair value, as indicated in the accounting policies.
Figures are expressed in thousands of euro and any other currencies are specifically indicated.

measurement criteria, Accounting Standards, Amendments and interpretations not yet
Approved
The Group has not carried out “early adoptions” of approved international standards, the first-time adoption of which is
scheduled for January 1, 2010.
The Group has also considered the effects of Other Standards, Interpretations and Updates approved but not yet formally
adopted by the Community legislator, listed below, and has not found that these could have a material potential impact on its
balance/sheet, operating and financial position:
 n   amendments to IAS 24 : These simplify the reporting requirements concerning related parties where public bodies are
     involved and provide a new definition of related parties;
 n   2009 enhancements: Minor amendments to 12 IFRS; IFRIC 19 : These relate to situations where a lender reaches an
     agreement with a debtor company to extinguish its debt by means of company shares;
 n   amendments to IFRIC 14: These concern the situation when a company has to comply with minimum funding requirements
     for defined benefit plans and makes an early payment to guarantee such requirements;
 n   amendments to IFRS 2: These clarify the accounting treatment in separate financial statements of share-based payments
     settled for cash at group level;
 n   IFRS 9: This establishes new criteria for classifying financial assets;
 n   Amendments to IFRS 1: Further exemptions during the IFRS transition phase.
consolidation process

consolidation method
The Consolidated Financial Statements include the Financial Statements of Buongiorno (Parent Company) and the companies
upon which it either directly or indirectly exercises control, starting at the date the strategic and operating control of such
companies is acquired and up to the time it ceases. Specifically, control can be exercised through the direct or indirect
possession of the majority of a company’s shares with voting rights or through the exercise of a dominant influence on the
company (including indirectly, through contractual or legal agreements) by virtue of its power to make the companies’ financial
and managerial decisions and thus obtain the related benefits, even without owning shares. Voting rights at the reporting date
of the Financial Statements are taken into account when determining control.

The Balance Sheet, Profit and Loss Account and Cash Flow Statement of the consolidated companies were prepared as of
December 31, 2009 and were specifically provided and approved by the Boards of Directors of the individual companies.
Where necessary, adjustments were made to adapt them to the accounting principles used by the Parent Company.

The following criteria were used in preparing the line-by-line consolidation of subsidiaries:
 n   assets, liabilities, charges and income are consolidated line by line; where applicable, the appropriate portion of equity
     and the net result for the period are attributed to minority shareholders;
 n   transactions involving business combinations whereby control of an entity is acquired are recognized using the purchase
     method. The purchase cost corresponds to the fair value at the date of acquisition of the assets sold, the liabilities
     assumed, the equity instruments issued and any other type of direct related incidental costs. The difference between
     purchase cost and the fair value of the assets and liabilities acquired is recognized in the Goodwill, if positive, or in the
     Profit and Loss Account if negative;
 n   profits and losses related to third parties and arising from transactions between companies consolidated on a line-by-line
     basis that have not yet been realized are eliminated, if material. The same method is used for reciprocal receivables and
     payables, costs and revenues and finance income and expense;
 n   profits or losses arising from the sale of equity investments in consolidated companies are recognized through profit
     or loss for an amount corresponding to the difference between the sale price and the portion of assets and liabilities
     transferred.




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                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




Equity stakes in companies over which the Buongiorno Group exercises a significant influence (hereinafter the “associates”),
or in which the Group holds a stake of 20%-50%, were recognized using the equity method. The equity method is applied
in the following manner:
 n   the book value of the equity investments is aligned with the equity of the investee company (at the latest available date);
     where necessary, equity is adjusted to reflect the application of accounting standards that conform to those used by
     Buongiorno and, where appropriate, any goodwill recognized at the time of the acquisition;
 n   the profits or losses attributable to the Buongiorno Group are recognized through profit or loss starting on the date the
     significant influence begins and until the date it ends. If, due to the losses incurred, the Company records negative equity,
     the book value of the equity investment is written off and any excess amounts attributable to the Buongiorno Group
     are recognized in a special reserve - only in the case that the Buongiorno Group has taken steps to fulfil its legal or
     constructive obligations to cover such losses. Changes in equity of the associates that are not determined by the results
     of the Profit and Loss Account are accounted for as direct adjustments to the reserves;
 n   unrealized profits and losses on transactions carried out between the Company and/or subsidiaries or associates are
     eliminated in proportion to Buongiorno Group’s investment in the subsidiaries or associates. Unrealized losses are
     eliminated except when they reflect an impairment loss.
The financial statements of the companies included in the consolidated accounts are prepared based on the currency used
in the main economic context in which the companies operate (“functional currency”). The Consolidated Financial Statements
are presented in euro, which is the functional currency of the Company and the currency used to present the consolidated
financial statements. The following rules apply for translating financial statements denominated in foreign currencies other
than the euro:
 n   assets and liabilities are converted using the exchange rates prevailing on the reporting date;
 n   costs and income are converted using the period’s average exchange rate;
 n   the “foreign currency conversion reserve” is used to record both exchange rate differences arising from the conversion of
     amounts using a different exchange rate than the one prevailing at the end of the period as well as those arising from the
     translation of opening equity using a different exchange rate than the one prevailing at the end of the accounting period;
 n   goodwill and fair value adjustments arising on the acquisition of foreign entities are treated as assets and liabilities of the
     foreign entities and translated using the exchange rate prevailing at the end of the period.
The following table shows the companies in which Buongiorno holds a direct or indirect stake, and which were included in
the consolidation area:

  LIST OF COMPANIES INCLUDED IN CONSOLIDATION AREA
  Name                                                             Country of Incorporation   % Consolidation
  Buongiorno S.p.A.                                                            Italy                 -
  Akumiitti Content Services Ltd                                            Finland               100.0%
  Akumiitti Oy                                                              Finland               100.0%
  Axis Mundi S.A.                                                          Argentina              100.0%
  Buongiorno CS Limited                                                         UK                100.0%
  Buongiorno Deutschland GmbH                                              Germany                100.0%
  Buongiorno Dijital Iletisim A.S.                                           Turkey               100.0%
  Buongiorno France S.A. (formerly Freever France Sas)                       France               100.0%
  Buongiorno Hellas Mobile Ltd                                              Greece                100.0%
  Buongiorno Marketing Netherlands B.V.                                 The netherlands            54.5%
  Buongiorno Marketing Service Deutschland GmbH                            Germany                 54.5%
  Buongiorno Marketing Services España, S.L.                                  Spain                54.5%
  Buongiorno Marketing Services France S.A.                                  France                54.5%
  Buongiorno Marketing Services Italy SRL                                      Italy               54.5%
  Buongiorno Marketing Services UK Ltd                                          UK                 54.5%
  Buongiorno Marketing Services US INC                                          US                 54.5%
  Buongiorno MyAlert Brasil Servicios Celulares Ltda.                         Brasil              100.0%
  Buongiorno MyAlert Colombia SRL                                          Colombia               100.0%
  Buongiorno MyAlert Ecuador S.A.                                           Ecuador               100.0%
  Buongiorno MyAlert S.A.                                                     Spain               100.0%
  Buongiorno MyAlert Servicios de Telecomunicaciones Chile Ltda.               Chile              100.0%
  Buongiorno Russia LLc                                                      Russia                54.5%
  Buongiorno uk Ltd                                                             UK                100.0%
  Buongiorno USA Inc.                                                           US                 81.0%
  Buongiorno Venezuela, S.A.                                               Venezuela              100.0%
  BY Cycle Perù SAC                                                            Peru               100.0%
  Dioranews S.A.                                                             France               100.0%
  Groupo iTouch Movilisto Maroc SARL                                       Marocco                100.0%
  Grupo iTouch Movilisto Mexico Servicios, S.A de CV                        Mexico                100.0%
  Grupo iTouch Movilisto R.S.R.L                                           Romania                100.0%
  Hotsms.com B.V.                                                       The Netherlands            54.5%
  Intouch Technologies Ltd (t/a iTouch Ireland)                              Ireland              100.0%




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                                                                                                                           87
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009




 Name                                                       Country of Incorporation   % Consolidation
 iTouch Australia Pty Ltd                                           Australia              100.0%
 iTouch Finance 1 Ltd                                                  UK                  100.0%
 iTouch Finance 2 Ltd                                                  UK                  100.0%
 iTouch Global Concepts Nigeria Ltd                                  Nigeria               100.0%
 iTouch Ltd                                                            UK                  100.0%
 iTouch Movilisto Portugal Lda                                       Portugal              100.0%
 iTouch Nordics A.S.                                                 Norway                100.0%
 iTouch South Africa (Pty) Ltd                                     South Africa            100.0%
 iTouch Spain Holdings SL                                             Spain                100.0%
 Jippii Mobile Entertainment Oy                                      Finland               100.0%
 Jippii Schweiz AG                                                 Switzerland             100.0%
 Jippii Spain SL                                                      Spain                100.0%
 Llama Television S.L.                                                Spain                100.0%
 MyAlert S.L. de C.V.                                                Mexico                100.0%
 Ostrich Media Limited                                                 UK                  100.0%
 Pajala B.V.                                                     The Netherlands           100.0%
 Producciones y Promociones Especiales de Television S.L.             Spain                100.0%
 Rainbow Development sa                                             Argentina              100.0%
 Rivertam S.A.                                                      Uruguay                100.0%
 Rocket Mobile Inc.                                                    US                   81.0%
 SMS Cosmos A.S.                                                     Norway                100.0%
 sms.at Holding AG                                                    Austria              100.0%
 sms.at Marketing Services GmbH                                       Austria               54.5%
 sms.at Mobile Internet Services GmbH                                 Austria              100.0%
 sms.ch AG                                                         Switzerland             100.0%
 Telitas Belgium B.V.                                               Belgium                100.0%
 Tutch Mobile Media B.V.                                         The Netherlands           100.0%
 Xama TV Televisao Interactiva L.d.a.                               Portugal               100.0%
 Buongiorno Hong Kong Ltd                                             China                 49.0%
(*) consolidated with net equity method
In 2009, the consolidated area underwent some changes compared to December 31, 2008. See paragraph 1.1 above for
a detailed analysis of the main changes in the consolidation area.

The changes relate to the purchase of minority interests in companies already previously controlled and the increase in share
capital of the Dutch Holding Buongiorno Marketing Services Netherland B.V. subscribed through the contribution of the 100%
stake in Buongiorno Russia LLC held by the affiliated company Buongiorno Hong Kong Ltd. As a result of this transaction,
the Buongiorno Group’s ownership of the Dutch holding company Buongiorno Marketing Services Netherland B.V. fell from
60% to the present 54.5%. The other minority-interest shareholders are the Mitsui & Co. Ltd. Group and the associate
Buongiorno Hong Kong Ltd., which respectively hold 36.4% and 9.1% stakes in Buongiorno Marketing Services Netherland
B.V.. Although the above transactions have entailed changes to the consolidation area, they have not produced significant
changes to the Group’s capital and financial structure.

It is reported that the assets and liabilities as well as the costs and revenues arising from the financial statements of the
Venezuelan company are of an insignificant amount, bearing in mind that operations’ level of the company is minimal. For this
reason the routine procedures to be followed in the case of “hyperinflationary” economies have not been carried out.

Accounting Standards Adopted

The accounting standards applied are listed below:

intangible Assets
(a) Goodwill
Consolidation differences arising from the higher value of equity investments with respect to the subsidiary’s portion of equity
at the time it was acquired (fair value of the company’s net assets) have been recognized as goodwill (IFRS 3).

Goodwill is reduced by the amount of any losses that may result from the impairment test, which are recognized in the Profit
and Loss Account (IAS 36). An impairment test is carried out at least once a year or, in any case, whenever an impairment
indicator emerges.

During acquisition, goodwill is allocated to a cash-generating unit (CGU). A CGU is the smallest group of assets and liabilities
that generates cash inflows and outflows (associated with the goodwill subject to impairment) that are largely independent of
the cash flows generated by other CGUs.




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                              Consolidated annual RepoRt of
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In the case of acquisitions of non-controlling equity holdings no goodwill is recognized although an adjustment is made
to equity for the difference between the value of the shareholdings and the affiliated company’s portion of equity at the
acquisition date.

Specifically, the CGUs that correspond to the goodwill recognized in the financial statements represent Buongiorno Group’s
investment in a particular geographic area (primary reporting segment) in which cash flows are discounted at a rate that
incorporates both the timeframe and the level of risk of the investment itself. When these net discounted flows associated
with the CGU are unable to justify the goodwill value recognized in the Balance Sheet, the excess is recognized in the Profit
and Loss Account as an impairment loss. Impairment losses that have been previously recognized in the Profit and Loss
Account are not reversed.

(b) Intangible Assets with Finite Useful Life
Intangible assets and expenses the useful life of which is deemed to extend beyond the period to which they refer, and that
can be separated and used or sold separately from other assets included in the Balance Sheet are recognized as assets on
the Balance Sheet. Intangible assets are recognized at purchase or production cost, including ancillary costs, and they are
systematically amortized based on their potential residual use (finite useful life).

The main categories of capitalized intangible assets are as follows:
 n   Research and development costs are recognized in the Profit and Loss account for the year in which they are incurred,
     except for development costs recognized among intangible assets that satisfy all of the following conditions:
         n the project is clearly identified and the costs associated with it can be identified and measured in a reliable manner;
         n the technical feasibility of completing the project has been demonstrated;

         n the intention to complete the project and sell the intangible assets generated by it has been demonstrated;

         n the existence of a market for the intangible asset has been demonstrated or, if it is to be used internally,

            the usefulness of the intangible asset;
         n for the production of intangible assets generated by the project has been demonstrated;

         n the availability of adequate technical and financial resources to complete the project has been demonstrated.
Amortization charges associated with development costs are included under intangible assets from the date on which the
product/service generated by the project becomes available for sale. Development costs are amortized on a straight-line
basis over three years, which is the estimated useful life of the capitalized costs. In detail:
 n   costs incurred for purchasing patent and intellectual property rights, licenses and similar rights are capitalized on the basis
     of the charges incurred for their purchase and are amortized on a straight-line basis over a period of three years;
 n   the costs borne for the creation and registration of trademarks are amortized at a fixed percentage over a period of ten
     years;
 n   internal software development costs are amortized on a straight-line basis over a three-year period and represent the
     costs of personnel directly involved in software development.
When external events or changes in conditions (so-called “trigger events”) indicate the permanent impairment of intangible
assets, an impairment test is conducted. If necessary, the assets are written down to the higher of their value in use or
recoverable amount, i.e., selling price less incidental disposal costs (IAS 36). As opposed to goodwill, if appropriate, the value
can be reversed to the extent of the impairment losses previously recognized in the Profit and Loss Account.

property and equipment
Property and equipment are recognized at purchase or production cost, including ancillary costs, and they are systematically
depreciated based on their potential residual use (finite useful life). The book value of property and equipment, together with
their remaining useful life, is reviewed annually and, if necessary, the relevant depreciation rates are adjusted. In the case of
permanent impairment loss, the carrying value is written down in order to bring it in line with the recoverable value from the use
or sale of the asset.

Costs for ordinary maintenance are recognized fully in the profit and loss account; any such costs that increase the life of the
asset to which they refer are attributed at increasing rates for the cost of the assets and are depreciated in relation to possible
residual use.
It is also reported that, during the year, there were no revaluations of assets, nor were any financial charges capitalized to
increase their value since the conditions specified in IAS 23 do not apply.

If the tangible asset consists of several significant components having different useful lives, depreciation is calculated separately
for each component.




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                                                                                                                                        91
                                     Consolidated annual RepoRt of
                                     the BuongioRno gRoup as of deCemBeR 31, 2009




The annual depreciation rates that were used are detailed below:

                                                                       pERCENtAgE
  Plant and machinery                                                      10%
  Industrial and commercial equipment                                      15%
  Other fixed assets:
   - furnishing and ordinary office equipment                              12%
   - electrical and electronic office equipment                            20%

investments
This account shows the non-controlling interests held by the Parent Company or by other Group companies, and thus in
unconsolidated subsidiaries (See paragraph “Consolidation Process”).

Shareholdings in affiliated companies were evaluated using the equity method, whereas those in other companies have been
evaluated at the cost adjusted to take account of impairment losses, as their fair value could not be determined.

business combination
Acquisitions in subsidiary companies are accounted for using the “acquisition method”. The acquisition cost will hence
be determined taking into account the fair value of any of the Group’s equity instruments issued following the transaction,
increased by all the costs directly attributable at the date of the acquisition and allocated to the fair value of the assets
acquired, the certain and potential liabilities assumed without taking account of any minority interests.

The cost in excess of the fair value of the net assets of the acquired company is first allocated to intangible assets not
recognized in the balance sheet of the acquired company and any excess is then recognized as goodwill. In contrast, if the
acquisition cost is lower than the fair value of the assets acquired after allocation of intangible assets which has not already
been recognized, the difference is accounted for through profit or loss

inventories
Inventories are measured at the lower of cost and net realizable value. The estimate of net realizable value takes into
consideration the market price during the ordinary activity of the company, less costs to sell. The cost is calculated using the
weighted average cost method and includes all ancillary costs of purchase.
Receivables, payables, derivatives and convertible bonds
Receivables are measured at amortized cost and if there is objective evidence indicating an impairment loss, they are
reduced through a provision for doubtful receivables to the amount of the expected realizable value. The provisions are
recognized in the Profit and Loss Account. Payables are recognized at their nominal value.

The amounts of receivables and payables thus calculated approximate fair value since discounting of these amounts would
not result in any significant adjustment.

Derivative financial instruments are measured at fair value based on the market values on reference active markets.

Contracts that include an obligation for the Group to acquire its own equity instruments by the exchange of cash or other
financial assets, give rise to a financial liability for the actual value of the reimbursement amount (future buyback price or option
exercise price), even where the obligation to acquire is subordinate to the right of the counterparty to reimbursement (Put
option). Whenever the contract falls due without completion, the carrying value of the financial liability is transferred to equity
(IAS 32, Paragraph 23).

Convertible bonds, like other financial liabilities, are measured at amortized cost, which is calculated bearing in mind all related
costs and using a market interest rate for equivalent non-convertible bonds or financial liabilities. The difference between the
amortized cost and the redemption amount represents the capital component or the amount of the conversion right and is
included in the Group’s equity under “Other reserves” (IAS 32, Paragraphs 64, 28 and 31).

cash and cash equivalents
Cash and cash equivalents mainly include cash, demand deposits with banks and other highly liquid short-term investments
(that can be turned into cash within 90 days). To determine the net financial position, current account liabilities, which are
included under “Short-term financial liabilities” are recognized net of cash and cash equivalents. The elements included in net
liquidity are measured at fair value, and changes recognized through profit or loss.




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                                                                                                                                        93
                                Consolidated annual RepoRt of
                                the BuongioRno gRoup as of deCemBeR 31, 2009




interest-bearing borrowings
Interest-bearing borrowings are initially recognized at their fair value, net of ancillary costs. Subsequent to initial recognition,
interest-bearing borrowings are measured based on the amortized-cost method. The difference between the resulting value
and the value at initial recognition is recognized through profit and loss account over the duration of the loan on the basis of
the loan’s repayment schedule.

provisions for Risks and charges
Provisions for risks and charges include certain or probable costs of a specific nature, the amount or settlement date of which
could not be determined at year-end. Provisions are recognized when:
 (i) it is probable that there is a present obligation (legal or constructive) arising from a past event;
 (ii) it is probable that an outflow of resources will be required to settle the obligation;
 (iii) the amount of the obligation can be reliably estimated.
The amount recognized as a provision is the best estimate of the amount the company would reasonably pay to settle the
obligation or transfer it to a third party at year-end. Where the effect of time value of money is material and the payment date
of the obligation can be reliably estimated, the amount of the provision must be discounted.

The costs the Group expects to incur to implement restructuring programs are recognized in the year in which the program is formally
planned and a valid expectation has been created among interested parties that it will take place.

The amount of the provisions is adjusted on a regular basis to reflect changes in cost estimates, completion times and discount rates.
Changes to estimates are recognized in the same item for which the provision is made.

The notes to the financial statements provide information on potential liabilities, which include:
 (i) possible, but not probable, obligations arising from past events whose existence can be confirmed only by the
      occurrence or non-occurrence of one or more uncertain future events that are not completely under the company’s
      control;
 (ii) present obligations arising from past events where the amount cannot be reliably estimated or it is probable that
      financial resources will not be required to settle the obligation.
employee benefits: Severance indemnity fund
Following the changes in employee benefit regulations introduced by Law 296/06 (the “2008 Finance Act”) and subsequent
decrees and regulations issued over the first few months of 2008, the severance indemnity fund accrued as of December
31, 2006 was classified as defined-benefit plan and hence required an actuarial assessment involving a series of factors
(current cost of labor, personnel turnover, expected return, financial charges, actuarial gains and losses, etc.). The portion
of the severance indemnity accrued after January 1, 2007 is considered a defined-contribution plan, regardless of whether
the participants opt for supplementary pension planning or earmark their indemnities for the treasury fund maintained by
INPS (the Italian social-security agency); the accounting treatment of said portion will therefore be assimilated to the current
treatment of other types of contribution payments. The portion of the severance indemnities accrued prior to December 31,
2006 was therefore allocated as required by law, labor contracts in force, and actuarial adjustments provided for by IAS 19.
It reflects the liabilities that have fallen due to employees of the Italian companies included in the consolidation area at the
reporting date, net of any advances already disbursed.

Stock options
IFRS 2 specific accounting treatment is adopted for transactions that involve share-based payments and, specifically, for the
Stock Options plans assigned to employees and collaborators.

In accordance with IFRS 2, the valuation of stock option plans currently in force leads to the disclosure of non-monetary costs
in the Profit and Loss Account, in the item “Personnel costs”.

Recognition of Revenues and costs
Revenues and costs are recognized at the fair value of the consideration received (recognized net of returns, discounts,
rebates and premiums). Revenues are recognized and accounted for in the Profit and Loss Account when it is probable
that the related future economic benefits will be enjoyed by the company (probability of receiving the amount underlying the
revenue) and when the amount can be reliably ascertained.
In detail, revenues and costs of the main business lines have been recognized as follows:

Advertising costs and revenues: these are recognized through profit or loss in accordance with the underlying contract,
based on the accruals concept (length of contract) or on the actual number of advertising services rendered or received the
year;
Costs and revenues for Business Services: these are recognized through profit or loss in accordance with the underlying
contract and with regard to the status of service delivery;
Costs and revenues for Consumer Services: these are recognized through profit or loss based on the actual number of
contacts made by the end user and/or on the actual telephone traffic generated;
Costs and revenues from the sale of royalties and licenses: these are recognized through profit or loss according to the
underlying contracts.




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                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009



conversion criteria for entries in other currencies
Receivables and payables denominated in currencies other than the Euro were initially converted into Euro at contractual
exchange rates or the rates in force at the time of the individual transactions. The exchange gains and losses that arose when
receivables were collected and payables were paid in foreign currency have been recognized in the Profit and Loss Account.
Exchange gains or losses for items in currencies of countries that are not members of the European Monetary Union and
that arise from the adjustment to the precise period-end exchange rates are reflected in the Profit and Loss Account for the
period.

finance income and expense
Finance income and expenses are recognized through profit and loss according to the accruals concept and on the basis
of the “effective rate method”. Profits and losses arising from valuation of assets and liabilities at fair value are carried through
profit and loss. Financial instruments in the closing balance sheet are similarly treated.

current and deferred taxes
Income taxes recognized in the profit and loss account include current and deferred taxes. Income taxes are generally
recognized in the profit and loss account, except when they pertain to items recognized directly in equity. In this case, income
taxes are also recognized directly in equity.
Current taxes are taxes that it is expected will be paid as calculated by applying the tax rate in force on the balance sheet
date to taxable income and adjustments to taxes from previous years.
Deferred taxes are calculated by using the liability method on temporary differences between the assets and liabilities
recognized on the consolidated balance sheet and the corresponding figures for tax purposes. Deferred taxes are calculated
as a function of the required method of reversal of temporary differences by using the tax rate that is expected to be in force
in the years when the temporary differences are realized or cancelled.
Deferred tax assets are only recognized where it is likely that sufficient taxable income will be generated in future years to
realize the assets.

Also recorded in the financial statements are the benefits relating to tax losses permitted for carryforward without time limit in
subsequent years, which relate to the core business of the Group.

Segment Reporting
The primary segment for the Group’s structure is the geographical segment and represents a set of activities and transactions
involved in the supply of products and services in a given geographical area, featuring a certain level of business risk and a
given level of economic margin that differs from other geographical segments.
In order to provide a more detailed reporting analysis, revenues are shown by “business line”, representing a group of
activities and operations aimed at the supply of goods and services, featuring a certain level of business risk and a given level
of economic margin that differ from other business segments.

earnings per Share
Basic earnings per share is calculated by dividing the Group’s net profit (loss) by the weighted average number of shares
outstanding during the period. To calculate diluted earnings per share, the weighted average number of shares outstanding
is adjusted to assume conversion of all potential dilutive shares.

use of estimates
The preparation of the financial statements and consolidated financial statements requires that management use accounting
principles and methodologies that at times may be based on complex subjective evaluations and estimates linked to past
experience and on assumptions that are considered reasonable and realistic given the circumstances at hand. The use of
such estimates and assumptions influences the amounts reported in the balance sheet, profit and loss account, cash flow
statement and this report. The amounts reported in the financial statements on the basis of the aforementioned estimates and
assumptions may differ from actual amounts due to the uncertainty surrounding the assumptions and conditions on which
such estimates are based. Estimates and assumptions are reviewed on an ongoing basis, and adjustments are recognized
in the period in which the estimates are revised and in any future period affected. The accounting estimates that require a
higher level of subjectivity on the part of management and for which changes in conditions may have a significant impact on
the financial statements are: goodwill, deferred taxes, provisions for bad debts and the fund for risks and charges.

further information
Pursuant to article 2428 of the Italian Civil Code, as well as Art. 40 of Legislative Decree 127/1991, we hereby specify that:
 n   the Parent Company, Buongiorno S.p.A., is not, in turn, controlled by other companies;
 n   no subsidiaries hold shares in the Company, either directly or through trust companies or other intermediaries;
 n   the Company held 1,488 treasury shares at December 31, 2009.




                                                                                                                                    96
                                                                                                                                    97
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009




directors’ Report on operations
The reader is referred to the Directors’ Report on Operations for a discussion on the nature of the activities carried out by the
Buongiorno Group and significant events following December 31, 2009.


noteS on the ASSet itemS of the conSolidAted bAlAnce Sheet

non-current assets

1. goodwill
Goodwill amounted to Euro 176,079 thousand. Details on changes to goodwill during 2009 are provided below.

  (in thousands of Euro)          12.31.2008       dECREAsE           othER moVEmENts                12.31.2009
  Goodwill                          176,638         (1,111)                    (549)                  174,978

The balance at December 31, 2009 was broken down as follows (amounts in thousands of euro):

  CAsh gENERAtINg uNIt                                            12.31.2009            12.31.2008              dEltA
  Buongiorno Myalert - Movilisto (Spain)                            64,145                64,145                  -
  Rocket Mobile Inc (Business to Operator in US)                    16,546                17,127               (581)
  Freever - DioràNews - Mobivillage (France)                        24,277                24,277                  -
  Llama TV group                                                     5,897                 5,897                  -
  Axis Mundi (By-Cycle group)                                        7,283                 7,250                 33
  South Africa                                                      17,016                17,016                  -
  Gsmbox S.r.l. (Buongiorno S.p.A.)                                 6,141                 6,141                   -
  Tutch Media Mobile B.V. (Benelux)                                 5,989                 5,989                   -
  HotSMS.com B.V.                                                   4,080                 4,080                   -
  Buongiorno MS Uk Ltd (già Flytxt Ltd)                             3,839                 3,840                  (1)
  Call TV                                                              -                   1,111              (1,111)
  Australia                                                         11,072                11,072                  -
  Sms.at                                                            8,693                 8,693                   -
  Total                                                            174,978               176,638             (1,660)
Under IAS 36, goodwill is not amortized, but is tested for impairment annually or more frequently if specific events or
circumstances indicate that an asset might be impaired. Goodwill was tested for impairment at the time of the preparation of
the consolidated financial statements at December 31, 2009.
It is important to note that, although the past and current global economic and financial crisis has been generating partial
uncertainty as to possible future economic scenarios, the Group’s results at December 31, 2009 were in line with the 2009
budget.
For purposes of impairment test preparation, an evaluation was carried out for the above “cash generating units (CGU)” of
the impact that such changed conditions have had on expected operating cash flows and on the related implicit projections.
The information and data used were those contained in the Budget 2010 document approved by the Board of Directors
on 1 February 2010 . As a result of the above, prospective economic plans have been prepared up to 2012 for the CGUs
identified.

It should be noted that CGUs are the smallest group of assets and liabilities that generate cash inflows and outflows
(associated with the goodwill subject to impairment) that are largely independent of the cash flows generated by other CGUs.

To estimate recoverable amounts, the value in use of the CGUs’ net invested capital was determined using the discounted
cash flow method, which considers the cash flows expected by the company on the basis of the aforementioned budget
plan.
Cash flow projections are based on ordinary operating conditions and therefore do not consider cash flows arising from
extraordinary operations.

The formula used to calculate the discounted cash flow is provided below:




where:
FCF = free cash flow, i.e., cash flow generated by operating activities (net of the tax effect), adjusted for changes in net
working capital and Capex;
WACC = Weighted Average Cost of Capital (net of the tax effect);
 n = explicit forecast period;
TV = terminal value, i.e., the value of all cash flows after the explicit forecast period.




                                                                                                                               98
                                                                                                                               99
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




Cash flows for periods after 2012 were calculated using the following formula (Gordon formula):




where:
FCFn = sustainable cash flow beyond the last year of the explicit forecast period;
g = growth rate of business beyond the anticipated plan period;
WACC = weighted average cost of capital.

The main assumptions used to calculate the value in use have been revised to reflect the specific situations by geographical
Area/reference country for the individual CGUs and are indicated below:
 n   rate of growth beyond the explicit forecast period (“g”) generally equal to 1.5% except for Argentina (Bycycle) equal to
     8.6% and South Africa equal to 5.5% since these are “emerging” countries with a higher rate of inflation;
 n   rate of discount (Weighted Average Cost of Capital – WACC) at Group level: 9.8% (weighted average for the Buongiorno
     Group). This rate varies from 8.4% to 10.3% with reference to the “mature” Countries (Euro Area, UK and US) and from
     11% to 19.7% with reference to “emerging” Countries with a higher inflation rate (South America, South Africa, Australia).
The discount rate used reflects the specific risk of the industry in which the Group operates.

To estimate the value in use, the recoverable amount of each CGU that was tested for impairment was compared to the
relative carrying amount of Net Invested Capital at December 31, 2009 (including goodwill). The results obtained indicated
that it was necessary to write down the goodwill of the subsidiary Call TV Ltd amounting to Euro 1,111 thousand. The write-
down was reflected in the consolidated profit and loss account for 2009.
In accordance with the contents of document No. 4 of March 3, 2010 issued by the Bank of Italy-Consob-Isvap, any
external signs of “impairment loss”, have been identified and analyzed. Mention is made, within this context, of the market
capitalization of BuongiornoS.p.A. below its equity value. In this regard, one should note both the marked improvement in
the price of the BuongiornoS.p.A. stock (and hence the respective Stock market capitalization) compared to December 31,
2008 (up by about 90%), and the consideration that current stock market values continue to suffer the current economic-
financial crisis that has generally affected the national and international markets in the past 18 months. We do not therefore
believe that this market undercapitalization is due, in the specific case, either to the economic performance of the sector
concerned nor to the economic-financial results of the Buongiorno Group, but rather to the general market trend.
As required by the joint document issued by Banca d’Italia, CONSOB (Italy’s stock market regulator) and ISVAP (Italy’s
insurance sector regulator), a sensibility analysis was also carried out. In the worst-case hypothesis formulated which
envisages a 0.5 percentage point increase in the cost of capital used to discount the expected flows (equal to 10.3% at
Group weighted average level) and a fall of 0.5 percentage points in the perpetual growth rate (equal to 1%), there would be
no further impairments of the goodwill recognized in the balance sheet at December 31, 2009.

In relation to movements during the period, the net decrease of Euro 1,660 thousand recorded during 2009 is given:
 n   by the aforesaid write-down of goodwill relating to the subsidiary Call TV;
 n   by the adjustment to the year-end exchange rate for goodwill in Rocket Mobile Inc originally stated in a foreign currency. In
     this regard it is reported that this goodwill amounts to 23,836 thousand dollars (USD) and that the adjustment to the year-
     end exchange rate has resulted in a negative exchange difference of Euro 581 thousand accounted for in the translation
     reserve.


2. other intangible Assets
The net values of intangible assets and movements for 2009 are listed below:

     (in thousands of Euro)                             12.31.2008   Increase   Amortization   Other movements   12.31.2009
     R&D Costs                                              718        1774       (1,854)            2,576          3,214
     Patents and intellectual property rights              3,050         21       (1,651)            (217)          1,203
     Concessions, licenses, trademarks and sim.rights     17,348        521       (2,995)             219          15,093
     Other intangible assets                               9,275       4,127      (4,437)           (1,577)         7,388
     Total                                                30,391       6,443     (10,937)            1,001         26,898

Movements in intangible assets at December 31, 2008 are given in the following table:

                                                        31.12.2007   Increase   Amortization   Other movements   12.31.2008
     (in thousands of Euro)                              Restated
     R&D Costs                                              92         574          (193)             245            718
     Patents and intellectual property rights               196       5373         (3,034)            515           3,050
     Concessions, licenses, trademarks and sim.rights     19,214      812          (2,760)             82          17,348
     Other intangible assets                              10,679      5969         (5,100)          (2,273)         9,275
     Total                                                30,181     12,728       (11,087)         (1,431)         30,391

“Development Costs” refer to the capitalization of external costs, consultancy costs particularly, sustained primarily to develop
a new asset portfolio and business line management system amounting to Euro 0.7 million and the mobile social network
Peoplesound amounting to Euro 0.5 million.




                                                                                                                                 100
                                                                                                                                 101
                                      Consolidated annual RepoRt of
                                      the BuongioRno gRoup as of deCemBeR 31, 2009




“Patents and intellectual property rights” include costs of purchasing management and accounting software developed and
sold by third parties.
The item “Concessions, licenses and trademarks” includes the residual balance of the costs of registering trademarks in Italy
and in the rest of the world as well as the costs of purchasing Group domains (particularly ”Buongiorno”, “Blinko”, as well as
the Trademarks valued during the Purchase Price Allocation for the iTouch Group amounting to a net carrying amount at 31
December 2009 of Euro 13.9 million).
The item “Other assets” also includes:
 n	 approximately Euro 3.7 million paid by iTouch South Africa to acquire rights associated with agreements with a local
    telephone service provider for the distribution of digital contents on the South African market;
 n	 the costs incurred to develop technology. During the year, this item increased by approximately Euro 4 million; in further

    detail, this includes the investments in the development of new modules of the internally developed proprietary platform
    known as “B!3A” (Euro 1.2 million) and for the creation of a platform devoted to mobile social networking (Blinko) (Euro 0.4
    million);
 n	 approximately Euro 1.2 million associated with the valuation of the Customer Relationship Management acquired through

    iTouch and based on the calculation of the current value of iTouch’s assets;
 n	 approximately Euro 2.0 million associated with the valuation of the software acquired through iTouch and based on the

    calculation of the current value of iTouch’s assets.
The other movements refer to reclassifications of intangible asset items amounting to approximately Euro 1.6 million,
reclassifications of tangible assets amounting to Euro 0.5 million and, for the remaining amount, to exchange differences
arising from the translation of the financial statements in foreign currency.

3. property and equipment
Below is a description of the changes to property and equipment in terms of Historical Cost, Accumulated Depreciation, and
Net Value at December 31, 2009 and 2008. At December 31, 2009:

                                                    Historical cost       Cumulated         Net value         Net value
      (in thousands of Euro)                         12.31.2009          depreciation      12.31.2009        12.31.2008
      Plant and machinery                                 76                  (56)              20               209
      Industrial and commercial equipment                 15                   (7)               8                36
      Other assets                                      12,198              (8,873)           3,325             4,047
      Total tangible fixed assets                       12,289             (8,936)            3,353             4,292
At December 31, 2008:

                                                       Historical cost        Cumulated            Net value        Net value
   (in thousands of Euro)                               12.31.2008           depreciation         12.31.2009       12.31.2007
   Plant and machinery                                       956                 (747)                209              118
   Industrial and commercial equipment                        48                  (12)                 36               13
   Other assets                                            13,150               (9,103)              4,047            2,783
   Total tangible fixed assets                             14,154              (9,862)               4,292            2,914

plant and machinery
This item includes telephone and electrical systems. The changes that took place during the year are shown in the following table:

   (in thousands of Euro)
   plANt ANd mAChINERy                                hIstoRICAl Cost         CumulAtEd dEpRECIAtIoN                NEt VAluE
   Year start                                                956                          (747)                         209
   Increase                                                   0                              0                            0
   Decrease                                                   0                              0                            0
   Changes in consolidation area and other changes          (880)                          695                         (185)
   Depreciation                                               0                             (4)                          (4)
   At December, 31 2009                                      76                            (56)                         20

No purchases of significant amounts were made during the reporting period.

Movements at December 31, 2008 are reported in the following table:

   (in thousands of Euro)
   plANt ANd mAChINERy                                hIstoRICAl Cost         CumulAtEd dEpRECIAtIoN                NEt VAluE
   Year start                                                542                         (424)                          118
   Increase                                                  473                            -                           473
   Decrease                                                  (82)                          69                           (13)
   Changes in consolidation area and other changes            23                            2                            25
   Depreciation                                                -                         (394)                         (394)
   At December, 31 2008                                      956                         (747)                          209




                                                                                                                                     102
                                                                                                                                     103
                                  Consolidated annual RepoRt of
                                  the BuongioRno gRoup as of deCemBeR 31, 2009




industrial and commercial equipment
The following changes took place during the year:

  (in thousands of Euro)
  INdustRIAl ANd CommERCIAl EquIpmENt               hIstoRICAl Cost          CumulAtEd dEpRECIAtIoN   NEt VAluE
  Year start                                                48                        (12)                36
  Increase                                                   0                          0                  0
  Decrease                                                   0                          0                  0
  Changes in consolidation area and other changes          (33)                         5                (28)
  Depreciation                                               0                          0                  0
  At December, 31 2009                                      15                         (7)                8

No purchases of significant amounts were made during the reporting period.

Movements at December 31, 2008 are reported in the following table:

  (in thousands of Euro)
  INdustRIAl ANd CommERCIAl EquIpmENt               hIstoRICAl Cost          CumulAtEd dEpRECIAtIoN   NEt VAluE
  Year start                                               21                          (8)               13
  Increase                                                  6                           -                 6
  Decrease                                                  -                           -                 0
  Changes in consolidation area and other changes          21                           4                25
  Depreciation                                              -                          (8)               (8)
  At December, 31 2008                                     48                         (12)               36
other Assets
This item includes furnishings, office equipment and computers. Changes during the year were as follows:

      (in thousands of Euro)
      othER AssEts                                      hIstoRICAl Cost     CumulAtEd dEpRECIAtIoN           NEt VAluE
      Year start                                            13,150                     (9,103)                  4,047
      Increase                                                991                         0                      991
      Decrease                                               (117)                        81                     (36)
      Changes in consolidation area and other changes       (1,826)                     1,759                    (67)
      Depreciation                                             0                       (1,610)                 (1,610)
      At December, 31 2009                                  12,198                    (8,873)                   3,325

The increase of Euro 0.1 million is attributable to the acquisition of office furniture and equipment.

Movements at December 31, 2008 are reported in the following table:

      (in thousands of Euro)
      othER AssEts                                      hIstoRICAl Cost     CumulAtEd dEpRECIAtIoN           NEt VAluE
      Year start                                            11,163                     (8,380)                  2,783
      Increase                                               2,571                         -                    2,571
      Decrease                                              (1,800)                     1,398                   (402)
      Changes in consolidation area and other changes        1,216                      (416)                    800
      Depreciation                                              -                      (1,705)                 (1,705)
      At December, 31 2008                                  13,150                    (9,103)                   4,047

4. investments in Associates
At December 31, 2009 the following interests were held:
 n	 the equity investment in Buongiorno Hong Kong Ltd equivalent to a 49% stake in the share capital, for a value of Euro
    2,809 thousand at December 31, 2009;
 n	 the shareholding in Inches Music Srl for a value of about Euro 74 thousand with a 35% stake in the share capital;

 n	 the shareholding in Buongiorno Digital Innovation India Private Ltd, incorporated on November 23, 2009 for a value of Euro

    732 thousand equal to 49% of share capital.




                                                                                                                             104
                                                                                                                             105
                                        Consolidated annual RepoRt of
                                        the BuongioRno gRoup as of deCemBeR 31, 2009




These shareholdings were measured using the equity method (on the basis of the most recent available data).

      (in thousands of Euro)
      shAREholdINgs IN AssoCIAtE CompANIEs                 hEld by          shAREholdINg VAluE   wRItE-dowNs     12.31.2009
      Buongiorno Hong Kong Ltd                          Buongiorno S.p.A.         1,653               0            1,653
      Buongiorno Digital Innovation India Private Ltd   Buongiorno S.p.A.          732                0             732
      Inches Music S.r.l.                               Buongiorno S.p.A.           74                0              74
      TOTAL SHAREHOLDINGS                                                         2,459               0            2,459

There were no movements during the year in the investment in Buongiorno Hong Kong which, at the end of 2008, amounted
to Euro 1,653 thousand, since the percentage of equity owned in Euro was substantially in line with the investment’s book
value.

During the year 4,900,000 shares were subscribed, representing 49% of the share capital of Buongiorno Digital Innovation
India Private Ltd, a company set up on November 23, 2009, for a value equal to Euro 732 thousand. For this reason the
percentage of equity owned in Euro was substantially in line with the investment’s book value.

In July 2005, the Company subscribed to 35% of the share capital (about Euro 74 thousand) of the company Inches Music
Srl. The latter is partly owned by Capital B! S.p.A., in which Mauro Del Rio - Buongiorno’s reference shareholder - holds the
majority stake. The company’s purpose is to manage and sell “Artist community” songs. The book value of this investment
approximates the value of equity relating to the percentage owned.

5. other financial Assets
This item includes:
 n	 non-current receivables totalling Euro 452 thousand (Euro 431 thousand at December 31, 2008); these essentially
    include amounts paid as guarantee deposits at the time of stipulating rental contracts for the offices used by the various
    companies of the Group;
 n	 other minor shareholdings (not in subsidiaries or associates) held by the Parent Company or by other Group companies

    for Euro 736 thousand.
The table below lists the gross book value of the shareholdings, the write-downs that were taken, and the net value posted
in the Financial Statements:

  (in thousands of Euro)
  shAREholdINgs IN AssoCIAtE CompANIEs                       hEld by           shAREholdINg VAluE   wRItE-dowNs   12.31.2009
  77Agency Ltd                                            Buongiorno S.p.A.                736           -           736
  TOTAL SHAREHOLDINGS                                                                      736           -           736

6. deferred tax Assets
This item totaled Euro 25,232 thousand (Euro 29,898 thousand at December 31, 2008) and pertains chiefly to tax-loss
carry-forwards. Of these, approximately Euro 11.4 million refer to the Parent Company, of which the majority (approximately
Euro 10.6 million) may be carried forward indefinitely, approximately Euro 9.2 million to the Group’s Spanish companies,
and approximately Euro 1 million to certain of the Group’s French companies, approximately Euro 1.6 million to other Group
companies while approximately Euro 2 million was recognized following the determination of the current value of the assets
arising from the acquisition of iTouch.

It should be noted that the Group has cumulative tax losses carried forward totaling Euro 156 million, of which Euro 84 million
have been recognized as deferred tax assets.


current assets

7. inventories
These showed a zero balance at December 31, 2009 with a decrease of Euro 1,429 thousand on the previous year; the
amount was due solely to the cost of prepaid cards in Australia by the company iTouch Australia Pty Ltd.

8. trade and other Receivables
  (in thousands of Euro)
                                                                              12.31.2009            12.31.2008
  Trade debtors                                                                54,874                67,947
  Receivables from subsidiaries and associate companies                          606                   485
  Financial receivables                                                           28                    0
  Tax receivables                                                               7,190                 5,599
  Other debtors                                                                 2,964                 4,369
  Accrued income and prepayments                                                2,249                 2,085
  Trade debtors and other receivables                                          67,911                80,485




                                                                                                                               106
                                                                                                                               107
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




trade Receivables
The balance at December 31, 2009 is detailed below:

  (in thousands of Euro)
                                                                12.31.2009                    12.31.2008
  Trade debtors                                                  56,451                        68,641
  Fund for bad debts                                             (1,577)                        (694)
  Total                                                          54,874                        67,947

The Fund for bad debts was established pursuant to specific and timely analysis and is considered to be adequate to adjust
the receivable amounts based on their estimated realizable value. The following changes in the fund for bad debts took place:

                                                                                         (in thousands of Euro)
  Fund for bad debt at December 31, 2008                                                          694
  Use                                                                                             (49)
  Allocations                                                                                     932
  Fund for bad debt at December 31, 2009                                                         1,577

All trade receivables are due within twelve months.

Movements at December 31, 2008 are reported in the following table:

                                                                                         (in thousands of Euro)
  Fund for bad debt at December 31, 2008                                                          902
  Use                                                                                            (685)
  Allocations                                                                                     477
  Fund for bad debt at December 31, 2008                                                          694

Receivables from Subsidiaries and Associates
At December 31, 2009, receivables from subsidiaries and associates amounted to Euro 606 thousand (at December 31,
2008 they amounted to Euro 485 thousand). These receivables relate to Buongiorno Hong Kong Ltd.
financial Receivables
At December 31, 2009 financial receivables totalled Euro 28 thousand. These relate to the amount payable by Buongiorno
Digital Innovation India Private Ltd to the Parent Company Buongiorno S.p.A...

tax Receivables
This item includes:

  (in thousands of Euro)
                                                               12.31.2009                    12.31.2008
  Tax receivables                                                 7,190                        5,599

Tax receivables amounted to Euro 7,190 thousand (Euro 5,599 thousand at December 31, 2008) and pertain to the VAT credit
of Euro 2,243 thousand, tax credits due to prepayments of Euro 2,299 thousand, credits due to withholding taxes paid of Euro
1,501 thousand, and other tax receivables from the Treasury of Euro 1,147 thousand among which Euro 0.6 million for research
and development tax credits held by the Parent Company. The increase in this item compared to the previous year was mainly
due to tax receivables of the parent company Buongiorno S.p.A. and its subsidiaries Buongiorno MyAlert S.A., Buongiorno
MyAlert Brasil Servicios Celulares Ltda, iTouch Global Concept Nigeria and iTouch South Africa (Pty) Ltd.

other Receivables
This item is broken down as follows:

  (in thousands of Euro)
                                                               12.31.2009                    12.31.2008
  Trade debtors and receivables from employees for advances       2,047                        3,047
  Other receivables                                                917                         1,322
  Total                                                           2,964                        4,369

Other receivables decreased by Euro 1.4 million on the previous year.




                                                                                                                           108
                                                                                                                           109
                                  Consolidated annual RepoRt of
                                  the BuongioRno gRoup as of deCemBeR 31, 2009




other prepayments and Accrued income
This item is broken down as follows:

  (in thousands of Euro)
                                                               12.31.2009                    12.31.2008
  Accrued income                                                    0                            329
  Prepayments                                                     2,249                         1,756
  Total                                                           2,249                         2,085

Prepayments refer mainly to operating costs and rent. Operating costs can essentially be attributed to the contractual terms
for content offered by the music labels, which required payment of guaranteed minimums as well as advance payment for
the licensing agreements and for marketing costs.

9. other investments
At December 31, 2009, these amounted to Euro 3 million and referred to deposits not available since they were tied up for
3 months with a primary English Bank to support a commercial transaction planned in India.

10. cash and cash equivalents
At December 31, 2009 this item amounted to Euro 36 million and was broken down as follows:

  (in thousands of Euro)
                                                               12.31.2009                    12.31.2008
  Bank and similar accounts                                      35,712                        44,948
  Cash-in-hand and cash equivalents                                 9                            24
  Total                                                          35,721                        44,972

Investment flows relating to 2009 are shown and explained in the consolidated Cash Flow Statement.

For the notes on the net financial position see Paragraph 1.4.3 of the Directors’ Report on Operations.

Cash and cash equivalents amounted to Euro 35.7 million and consisted of cash deposited in current bank accounts
denominated primarily in euro and in U.S. dollars, pounds sterling, Australian dollars, South African rand, and Argentine
pesos, in addition to investments in money market funds denominated in euro and managed by leading financial institutions
with maturities in the short term and immediate liquidity. The item decreased by Euro 9.3 million compared to December 31,
2008 (Euro 44.9 million) due to the use of cash to pay down the Group’s debt.

11. non-current Assets held for Sale
At December 31, 2009 there were no assets held for sale or disposal.


noteS on the liAbilitY itemS of the conSolidAted bAlAnce Sheet


12. equity
At December 31, 2009, consolidated equity was broken down as follows:

  (in thousands of Euro)
                                                                  12.31.2009                    12.31.2008
  Share capital                                                     27,652                         27,652
  Share premium account                                             69,909                         69,905
    - other reserves                                                36,825                         38,571
    - exchange reserve                                              (5,525)                        (6,633)
  Total other reserve                                               31,300                         31,938
  Profit (loss) carried forward                                      7,581                           342
  Profit (loss) for the Group                                        6,938                          8,127
  Equity attributable to the Group                                 143,380                        137,964
  Equity attributable to Minority interest                          14,738                         12,409
  Consolidated equity and profit for the period                    158,118                        150,373

Annex B details the reconciliation between the Equity and the results of Buongiorno with the same items for the Group, while
the changes for the items composing the consolidated equity are shown in the Statement of Changes in Equity (attached to the
consolidated Balance Sheet and Profit and Loss Account).
The increase in consolidated equity (Euro 158.1 million at December 31, 2009 compared to Euro 150.4 million at December
31, 2008) amounting to Euro 7.7 million, is attributable to the consolidated net profit for the year, amounting to about Euro 7.1
million, the increase in the foreign currency translation reserves amounting to approximately Euro 1 million, the decrease in the
reserves following the changes to the consolidation area and in particular due to the liquidation of certain Group companies, the




                                                                                                                                    110
                                                                                                                                    111
                                     Consolidated annual RepoRt of
                                     the BuongioRno gRoup as of deCemBeR 31, 2009




acquisition of the company Buongiorno Russia LLC and the minorities of the South African subsidiary iTouch South Africa (Pty)
Ltd, the Turkish subsidiary Buongiorno Dijital Iletisim A.S and the Nigerian subsidiary iTouch Global Concept Nigeria amounting
to Euro 0.6 million and to other increases of Euro 0.2 million.

Share capital
As of December 31, 2009, the share capital of Buongiorno was composed of 106,353,675 ordinary shares with a par value
of Euro 0.26 each.

The objectives identified by the Group in managing capital are to create value for shareholders in general, protect the
business as a going concern and support Group development. For this reason the Group wishes to maintain an adequate
level of capitalization, so as to provide at the same time a satisfactory financial return for shareholders as well as ensure
affordable access to external sources of funding, also through the award of a suitable rating. The Group constantly monitors
movements in the level of indebtedness in relation to equity, particularly the level of net debt and the cash generation of
industrial activities. In order to achieve the above objectives the Group constantly strives to improve the profitability of the
businesses in which it operates. In addition, the Board of Directors may propose to the Shareholders’ Meeting a reduction or
increase in share capital or, where allowed by the law, the distribution of reserves. In this context the Group also purchases
treasury stocks, always within the limits authorized by the Shareholders’ Meeting, following the same value creation criteria,
consistent with the objectives of achieving financial balance and improving the rating.

In line with standard practice in the sector, the Group monitors capital based on the gearing ratio. This ratio is calculated as
the ratio of net debt to total share capital.

  (in thousands of Euro)
                                                                 12.31.2009                     12.31.2008
  Net financial position (A)                                       47,383                         66,688
  Consolidated equity and profit for the period (B)               158,118                        150,373
  Total capital [(A)+(B)]=C                                       205,501                        217,061

  “Gearing ratio” (A)/ (C)                                         23.1%                          30.7%
consolidated profit for the Year
Net profit of the Buongiorno Group for the year was Euro 6,938 thousand.

minority interests
Minority interests at December 31, 2009 amounted to Euro 14,738 thousand, and result attributable to minority interests was
Euro 140 thousand.

Statement of Reconciliation for the Result Attributable to the group and to minority interests

  RECONCILIATION CONSOLIDATED PROFIT 2009
  (in thousands of Euro)                  gRoup CoNsolIdAtEd    pRofIt (loss) foR                  CoNsolIdAtEd
                                                pRofIt       thE pERIod AttRIbutAblE                  REsult
                                            foR thE pERIod    to mINoRIty INtEREsts
  Other reserve                                   1,108                     (103 )                     1,005
  Group consolidated Profit/loss                  6,938                       140                      7,078
  Consolidated result                             8,046                       37                       8,083

  RECONCILIATION CONSOLIDATED PROFIT 2008
  (in thousands of Euro)                  gRoup CoNsolIdAtEd    pRofIt (loss) foR                  CoNsolIdAtEd
                                                pRofIt       thE pERIod AttRIbutAblE                  REsult
                                            foR thE pERIod    to mINoRIty INtEREsts
  Other reserve                                   5,097                    (148)                       4,949
  Group consolidated Profit/loss                  8,127                     264                        8,391
  Consolidated result                             3,030                     412                        3,442

eARningS peR ShARe
basic
Basic EpS is calculated by dividing the net Group profit for the year by the average number of ordinary shares outstanding
during the period, namely 106,352,187 in 2009 (106,353,675 in 2008).

diluted
Diluted EpS is calculated by dividing the net Group profit for the period, gross of interests on the convertible bond, by
the average number of ordinary shares outstanding during the period plus the number of outstanding options that can be
potentially exercised (or other instruments potentially convertible into ordinary shares, such as convertible bonds), or granted
at the end of the period, a total of 113,114,652 in 2009 (110,404,675 in 2008).




                                                                                                                                   112
                                                                                                                                   113
                                             Consolidated annual RepoRt of
                                             the BuongioRno gRoup as of deCemBeR 31, 2009




non-current liabilities

13. long-term borrowings
Long-term borrowings may be broken down as follows:

      (in thousands of Euro)
                                                                  12.31.2009                     12.31.2008
      Total bank loans - current share                              47,789                          5,296
      Guaranted convertible bond                                       0                             965
      Total other current financial liabilities                       37                             975
      Total                                                         47,826                          7,236

non-current financial liabilities amounted to Euro 47.8 million at the end of 2009 (Euro 7.2 million at December 31, 2008).
At December 31, 2009, the item consisted chiefly of:
 n	 Euro 44.6 million representing the long-term portion of Tranche A of the loan issued by a pool of banks. As stated above,
    the current portion of Tranche A of the loan is Euro 13.4 million. Both Tranche A and Tranche B of the loan call for the
    application of a spread of 300 basis points on the benchmark interest rate. Said spread may vary on a half-yearly basis
    according to a reward mechanism involving the performance of the ratio of gross financial debt to EBITDA. The shares of
    certain Group companies were pledged as security for the loan;
 n	 the approximately Euro 0.3 million long-term, fixed-rate loan issued at a subsidized rate by Simest S.p.A. (as per Italian

    Law 394/81 on internationalization projects);
 n	 Euro 0.9 million representing the medium-term portion of the floating-rate loan issued by Credito Emiliano S.p.A. in the

    total amount of Euro 3.0 million;
 n	 Euro 2.0 million long-term representing the medium/long-term portion of the unsecured variable rate loan issued by MCC

    S.p.A. (Unicredit banking group) in the total amount of Euro 5 million.


14. deferred tax liabilities
The balance of deferred tax liabilities was Euro 4,451 thousand at December 31, 2009 (Euro 6,424 thousand at December
31, 2008). This balance derives primarily from the tax effects of the fair value measurement of the assets and liabilities arising
from the iTouch acquisition (Euro 4,366 thousand) and the recognition of intangible assets during previous years following the
acquisition of Rocket Mobile (Euro 76 thousand).
15. non-current provisions
These include employee benefits (severance indemnity provision) for the employees of the Italian companies in the Group
and the Provisions for risks and charges.

According to Italian GAAP, the severance indemnity fund represents the actual amount due to employees in accordance with
laws and labor contracts in force, considering every form of compensation on an ongoing basis.

The total amount corresponds to the total of the single indemnities accrued in favor of employees at the reporting date, net
of payments on account, and equal to the amount that would have been due to employees if the work relationship were to
have ended on that date.

Pursuant to the provisions of IAS 19, the severance indemnity fund is considered a defined contribution plan that requires
an actuarial valuation, taking a series of factors into account (current cost of labor, turnover of personnel, expected return,
financial charges, actuarial gains and losses, etc.). The principal actuarial assumptions used for the calculation of the
Severance Indemnity Fund at December 31, 2009 are as follows:
 n	 technical annual discount rate of 3.5%;
 n	 annual inflation rate of 2%;
 n	 annual rate of increase of severance indemnity fund of 3.9%;

 n	 annual rate of employee turnover of 11%;

 n	 under reformed employee benefit regulations, the annual rate of wage increases is no longer taken as a reference

    parameter, inasmuch as future accruals to the severance indemnity provision will no longer flow to the company, but rather
    to a supplementary pension program or the treasury fund maintained by the INPS (the Italian social-security agency).
The measurement of severance indemnity provisions using actuarial techniques in accordance with IAS 19 resulted in a Euro
73 thousand increase in the provision at December 31, 2009.




                                                                                                                                  114
                                                                                                                                  115
                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




Movements in the severance indemnity provision during the year were as follows:

                                                                          (in thousands of Euro)
  Severance indemnity fund at December 31, 2008                                  1,141
  Allocation                                                                       69
  Payments                                                                       (156)
  Severance indemnity fund at December 31, 2009                                  1,054

Provisions for risks and charges include: the provision for restructuring charges, the provision covering losses of unconsolidated
subsidiaries, the provisions to cover future costs or losses arising from completed operations, and the funds for legal
contingencies or commercially-related contractual risks.

  (in thousands of Euro)
                                                        12.31.2008   AlloCAtIoNs     dECREAsE      othER ChANgEs    12.31.2009
  Provisions for legal contingencies                       417            0              (345)           0              72
  Other provisions                                        1,297          32              (533)          153            949
  Total Provision for risks and charges (non current)     1,714          32              (878)          153           1,021

Changes in the fund for legal contingencies from year-end 2008 relate principally to settlements reached during the year and
certain contingencies existing in the French subsidiary Buongiorno France S.A..

The item “Other provisions” had a balance of Euro 949 thousand and mainly refers to funds intended for the current restructuring
plan. In detail, Buongiorno UK allocated a provision of Euro 0.7 million for the refurbishment of the London offices.
current liabilities

16. trade and other payables
  (in thousands of Euro)
                                                                12.31.2009                   12.31.2008
  Trade creditors                                                60,638                        77,276
  Other tax payables                                              5,943                         4,269
  Providence and social security charges                          2,424                         1,919
  Other creditors                                                 8,404                         5,175
  Accrued expenses and deferred income                            2,263                         1,422
  Trade creditors and other creditors                            79,672                        90,061

trade payables

  (in thousands of Euro)
                                                                12.31.2009                   12.31.2008
  Trade creditors                                                 60,638                        77,276

At December 31, 2009 trade payables amounted to approximately Euro 60 million. The decrease in trade payables compared
to last year is mainly due to a reduction in costs due to decreased business volumes.

At December 31, 2009, there were no amounts falling due after more than 12 months, nor any borrowing secured by
collateral (“real securities”). Trade payables at the end of the year mainly involved content-production services, rebates to
telephone carriers and media operators on revenues from telephone traffic, and advertising and promotion of Consumer
Services.

tax payables

  (in thousands of Euro)
                                                                12.31.2009                   12.31.2008
  Other tax payables                                              5,943                         4,269

Tax payables at December 31, 2009 were about Euro 5.9 million (Euro 4.3 million at December 31, 2008) and mainly
included Euro 0.6 million in withholding for employees and freelancers, and Euro 4.5 million in VAT payable.




                                                                                                                                116
                                                                                                                                117
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009




providence and Social Security charges

  (in thousands of Euro)
                                                                12.31.2009                    12.31.2008
  Providence and social security charges                           2,424                         1,919

This item refers to contributions that have accrued but have not yet been paid to providence and social security institutions.
At the end of the reporting period, these charges were Euro 2.4 million.

other payables
At December 31, 2009, other payables totaled Euro 8.4 million and were broken down as follows:

  (in thousands of Euro)
                                                                12.31.2009                    12.31.2008
  Account payables to employees                                    6,980                         4,443
  Other                                                            1,424                          732
  Total                                                            8,404                         5,175

Payables to employees and collaborators are composed of liabilities related to bonuses still to be paid, paid holidays and
untaken leaves, reimbursement of expenses to staff as well as payment in lieu of notice.
Other payables include interest payable, fees payable to directors, former directors and statutory auditors accrued during the
year, and other amounts payable, none of which is individually material.

Accrued expenses and deferred income
Accrued expenses and deferred income totaled approximately Euro 2.3 million at December 31, 2009 and can be broken
down as follows:

  (in thousands of Euro)
                                                                12.31.2009                    12.31.2008
  Accruals                                                           21                            42
  Deferred income                                                  2,242                         1,380
  Total                                                            2,263                         1,422
Deferred income, increasing about Euro 0.9 million compared to previous year, consists of the portion of income referring to
the next fiscal year deriving from advertising campaigns and business services already invoiced by the Company which will
be completed after the end of the current year. These sums are recognized based on the percentage of the campaign that
has been completed or on an accruals-basis according to the underlying contracts entered into with customers. The balance
can be attributed primarily to deferred income in the Austrian company sms.at Mobile Internet Services GmbH (Euro 605
thousand) and the Australian company iTouch Australia Pty Ltd (Euro 1 million).


17. current tax payables
  (in thousands of Euro)
                                                                 12.31.2009                     12.31.2008
  Current tax payables                                              3,202                         1,944
  Total                                                             3,202                         1,944

Current tax payables consist of Euro 0.5 million for IRAP with the balance representing tax payables to foreign tax authorities.


18. Short-term borrowings
  (in thousands of Euro)
                                                                 12.31.2009                     12.31.2008
  Total payables to banks                                           2,710                        101,119
  Total bank loans - current share                                 33,514                         1,978
  Total other current financial liabilities                         1,127                         1,900
  Guaranted convertible bond                                         994                            0
  Total                                                            38,345                        104,997

current financial liabilities amounted to Euro 38.3 million at December 31, 2009, down compared to December 31, 2008
(Euro 105.0 million). A breakdown of current financial liabilities is provided below.




                                                                                                                                   118
                                                                                                                                   119
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




The item payables to banks mainly refers to bank overdrafts in Euro, Columbian pesos and Turkish lira.

The current portion of bank borrowings (Euro 33.5 million) consists primarily of the share of borrowings maturing within
one year and the medium-/long-term revolving portion of the loan contracted in the total amount of Euro 87 million from a pool
of banks organized by Banca IMI (a member of the Intesa Sanpaolo Group). The funds were disbursed on June 26, 2009. In
particular, the sum of Euro 13.4 million refers to the portion of “Tranche A” of the pool loan maturing within one year. The line of
credit was authorized in the amount of Euro 67 million, matures in 2014, and calls for half-yearly payments, the first installment
of which will fall due on December 31, 2009. Said loan was contracted in order to make repayment in full of the loan originally
contracted from Banca IMI in the amount of Euro 100 million maturing on June 26, 2009. The new loan also calls for a line
of credit known as the “Revolving Credit Facility”, or “Tranche B”. Said line of credit was authorized in the amount of Euro 20
million, and on December 31, 2009 the Company applied to draw it down for Euro 18.0 million with use in the near term.
The facility matures in five years, calls for a gradual reduction in the credit limit beginning on December 31, 2012, and allows
for the possibility of multiple draw-downs with separate maturities and for separate amounts, within the maximum credit limit.
Both Tranche A and Tranche B of the loan call for the application of a spread of 300 basis points on the benchmark interest
rate. Said spread may vary on a half-yearly basis according to a reward mechanism involving the performance of the ratio of
gross financial debt to EBITDA. The shares of certain Group companies were pledged as security for the loan.

The loan agreement also calls for compliance with certain financial covenants, to be reviewed at the end of each half-year,
beginning on December 31, 2009. These parameters were determined according to a conservative medium-term business
plan and allow for headroom that the management currently considers wholly adequate.

These covenants are:
 n	 the ratio of Consolidated Gross Operating Margin (EBITDA) to Consolidated Net Borrowing Costs;
 n	 the ratio of Consolidated Gross Financial Debt to Consolidated Gross Operating Margin (EBITDA);
 n	 the ratio of Consolidated Gross Financial Debt to Consolidated Equity.


At December 31, 2009 the covenants were respected.

With the new loan agreement, the Company has achieved its goal of extending the duration of its debt and scheduling
repayment according to its future debt-servicing capacity, prudentially estimated on the basis of the cash flow that the
Company expects its core business to generate.
The current share of bank loans also includes Euro 2.1 million in bank debt maturing within one year contracted with
national banks (Credito Emiliano and Medio Credito Centrale – a member of the Unicredit banking group) and Simest,
a financial company involved in the development and promotion of Italian enterprises outside Italy (interest rates are
discussed in note 14).

Current financial liabilities also include the outstanding portion of the convertible bond (Euro 1.0 million compared to an
original value of Euro 12 million) underwritten on September 22, 2005 by Mitsui & Co. Ltd and Banca IMI and maturing in
2010. The balance at December 31, 2008 refers to the amount held by Banca IMI, net of the underlying option.

Convertible bonds, like other long-term financial liabilities, are valued at amortized cost, which is calculated bearing in mind all
related costs and using a market interest rate for equivalent non-convertible bonds or financial liabilities (IAS 32, Paragraphs
64, 28 and 31). In this connection, a net discount rate of 4.5% was used. This rate approximates those obtained by the
banking system for medium-/long-term loans at the time of issue of the convertible bond (September 2005).

other current financial liabilities amounted to Euro 1.1 million and consist mainly of amounts due in relation to recent
acquisitions and financial transactions. Specifically, this item is broken down as follows:
 n	 Euro 1.0 million due to the former Axis Mundi S.A. (By-Cycle group) shareholders in relation to the deferred payment of
    the sale price and earn-out clauses provided in the acquisition contract;
 n	 Euro 0.1 million payable to former iTouch Ventures Ltd. shareholders as established at the closing of the transaction.




19. current provisions
Provisions for risks and charges include the provisions for restructuring charges, the provisions covering losses of
unconsolidated subsidiaries, the provisions to cover future costs or losses arising from completed operations, and the
provisions for legal contingencies or commercially-related contractual risks. These provisions were included in current
liabilities as their use by the end of the following year is considered probable.

      (in thousands of Euro)
                                                        12.31.2008 AlloCAtIoNs    dECREAsE       othER ChANgEs        12.31.2009
      Provisions for legal contingencies                   303          0              (80)            (32)              191
      Other provisions                                    7,379       1,583          (2,067)             4              6,899
      Total Provision for risks and charges (current)     7,682       1,583         (2,147)            (28)             7,090

The Fund for legal contingencies includes potential liabilities associated with litigation underway with the Argentine company
Axis Mundi S.A..




                                                                                                                                   120
                                                                                                                                   121
                                         Consolidated annual RepoRt of
                                         the BuongioRno gRoup as of deCemBeR 31, 2009




Other Provisions, which amounted to Euro 6.9 million, refers to provisions intended to cover potential liabilities related
possible future charges generated by current business activity undertaken by various Group companies. In detail:
 n	 Euro 4.5 million is for potential liabilities associated with the restructuring of the iTouch Group companies; as this initiative
    had already been approved by the Group’s former management prior to the acquisition, such liabilities were allocated to
    goodwill;
 n	 Euro 1.1 million is for other restructuring and reorganization expenses incurred by the Buongiorno Group;

 n	 Euro 1.3 million refer to other operating charges and losses related to commercial contracts. Said provision also includes

    Euro 225 thousand set aside to account for the risk of payment of a financial penalty levied by AGICOM, which, additionally
    Buongiorno S.p.A. does not believe it owes, as a consequence of which the Company has submitted a petition to the
    Regional Administrative Court.


20. non-current liabilities directly Associated with Assets held for Sale
At December 31, 2009 there were no non-current liabilities held for sale or disposal.


noteS on the mAin itemS of the conSolidAted pRofit And loSS Account

Value of production
Value of production can be broken down as follows:

      (in thousands of Euro)
                                                                    12.31.2009                     12.31.2008
      Sales of goods and services                                    259,519                         315,948
      Increase of fixed assets for internal works                     2,950                           2,667
      Other incomes                                                    149                             323
      Total value of production                                      262,618                         318,938


21. Sales of goods and services
A breakdown is given below of revenues by geographical area and business line.

It should be noted that, for purposes of preparing segment information, the data analyzed by top managers in the Buongiorno
Group (the highest operational decision-making level) focuses primarily on the major economic values (Revenues and Gross
Operating Margin) since, taking account of the type of typical activity carried out by the companies belonging to the Group,
the balance sheet values are not particularly significant in terms of “non-current assets”, except for the deferred tax assets,
trademarks and goodwill items. Given the nature of these balance sheet items, they have not been included in the analysis
and valuation of the profits and losses of the segments examined by the most senior operational decision-making level, but
have been the subject of separate less frequent analyses and different reporting procedures from the analyses carried out on
the profit and loss account figures. Therefore it has not been considered necessary in these financial statements to provide
information on the assets and liabilities of each segment.

breakdown of Revenues by geographical Area
The analysis of revenues for 2009 is in line with the provisions of IFRS 8. To this end, we can report that the information is
represented by revenues and gross operating margin by geographical area.

Buongiorno Group’s business was broken down in these geographical areas:
 n	 Iberia: including operations in Spain and Portugal;
 n	 UK: including UK-based operations;
 n	 Italy: including operations of Buongiorno S.p.A. and Buongiorno Marketing Services S.r.l.;

 n	 France: including France-based operations;

 n	 Other Euro Countries: including operations in the Netherlands, Germany, and Austria;

 n	 Latam: including operations in South America;

 n	 Other Non-Euro Countries: including operations outside Europe, specifically in North America, Africa, Turkey and Australia.




  REVENUES BY GEOGRAPHICAL AREA
  (in thousands of Euro)                                 2009              2008          VARIANCE          VAR. %
  IBERIA                                                 96,353          107,979          (11,626)         (10.8%)
  UK                                                     15,253           30,662          (15,409)         (50.3%)
  ITALY                                                  26,688           33,062           (6,374)         (19.3%)
  FRANCE                                                 24,300           24,499            (199)           (0.8%)
  OTHER EURO COUNTRIES                                   23,354           33,261           (9,907)         (29.8%)
  LATAM                                                  22,604           22,518              86             0.4%
  OTHER NON EURO COUNTRIES                               50,738           63,713          (12,975)         (20.4%)
  SHARED SERVICES                                         229              254               (25)           (9.8%)
  TOTAL REVENUES                                        259,519          315,948         (56,429)           (18%)




                                                                                                                              122
                                                                                                                              123
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




During 2009, consolidated revenues fell by approximately 18%. In further detail, a breakdown of revenues by geographical
area shows:
 n	 a decrease in B2B operations in Iberia, the UK, and other European countries (Rest of Euro Area), resulting in a total
    decline in revenues of approximately Euro 56 million. B2B operations are characterized by high volumes but low margins,
    with the result that this decline in revenues had minimal effects on the Group’s operating margin. Given the reduction in
    fixed costs associated with the discontinued services, net margin gains were actually achieved;
 n	 a decline of approximately Euro 13 million in Other Non-Euro Countries (Rest of World). This decrease was the result of

    a change in the agreement and the accounting treatment with an Australian company without an impact on margins. The
    new commercial agreements call for Buongiorno to receive rebates of the share of margins to which it is entitled rather
    than to invoice the gross revenue paid by the telephone company;
 n	 the decrease in Italy was primarily attributable to a decline in B2C operations.


Annex A to the Notes on the Consolidated Financial Statements contains a table showing a reconciliation of 2008 revenues
by geographical area classified according to the new organizational structure.

breakdown of Revenues by business line
In order to provide a more detailed reporting analysis, revenues are shown by “business line”, representing a group of
activities and operations aimed at the supply of goods and services, featuring a certain level of business risk and a given level
of economic margin that differ from other business segments.

  BUSINESS LINE
  (in thousands of Euro)                                  2009              2008          VARIANCE           VAR. %
  CONSUMER SERVICES                                     242,914           299,908           (56,994)          (19%)
  MARKETING SERVICES                                     16,605            16,040             565               4%
  TOTAL REVENUES                                        259,519           315,948          (56,429)          (18%)

In terms of business lines, the largest share of core-business revenues was earned by Consumer Services, with Group
revenues for the segment reaching Euro 242.9 million (93.6% of the Group total) in the year. The share of the total accounted
for by revenues from Marketing Services amounted to Euro 16.6 million, or 6.4%.

The decrease in revenues in the Consumer Services line is attributable, as mentioned above, to a differing method of
recognition of an agreement with an Australian telephone carrier and voluntary withdrawal from agreements generating little
or no profit, whereas revenues from Marketing Services remained largely in line with the previous year.
breakdown of gross operating margin by geographical Area
The following table provides a breakdown of normalized Gross Operating Margin (GOM) by geographical area:

  GOM BY GEOGRAPHICAL AREA
  (in thousands of Euro)                  IbERIA        uK        ItAly     fRANCE       othER lAtAm          othER totAl shAREd totAl
                                                                                         EuRo                  NoN    REgIoN sERVICEs
                                                                                       CouNtRIEs              EuRo
                                                                                                            CouNtRIEs
   Total value of production                96,353     15,253     26,688     24,300      23,354 22,604        50,738 259,290      229 259,519
 Total operative costs                     (74,975)   (11,541)   (21,356)   (15,645)    (18,604) (19,489)    (37,862) (199,472) (20,662) (220,134)
  TOTAL GROSS OPERATING MARGIN AT 12.31.09 21,378      3,712       5,332      8,655       4,750   3,115       12,876 59,818 (20,806) 39,012
 Gross Operating Margin%                    35.7%       6.2%       8.9%      14.5%        7.9%     5.2%       21.5% 100.0% (53%) 100.0%
  TOTAL GROSS OPERATING MARGIN AT 12.31.08 20,322       7,120     10,483      8,314       4,711    3,761       6,443    61,154 (21,330) 39,824
 Gross Operating Margin%                    33.2%      11.6%      17.1%      13.6%        7.7%     6.2%       10.5% 100.0% (53.6%( 100.0%

An analysis of individual geographical areas indicates:
 n	 growth in the Iberia area thanks to the high profitability of the B2C segment;
 n	 significant growth in the Rest of the World (Other Non-Euro Countries), essentially due to the increase in operations in
    Australia, South Africa and Nigeria, an improvement in margins on operations in the United States of America, and certain
    extraordinary projects in the Nordic area;
 n	 a decrease in margins in Italy substantially due to a contraction in B2C operations. A decrease was also reported in the

    UK (B2B profitability decrease) and Latam (mainly in Argentina and Venezuela).
Annex A to the Notes on the Consolidated Financial Statements contains a table showing a reconciliation of 2008 EBITDA
by geographical area classified according to the new organizational structure.

breakdown of gom by business line
The following table provides a breakdown of normalized GOM by business line.

  BUSINESS LINE
  (in thousands of Euro)                                              2009                  2008            VARIANCE           VAR. %
  CONSUMER SERVICES                                                  37,862                38,034             (172)              (0%)
  MARKETING SERVICES                                                  1,150                 1,790             (640)             (36%)
  TOTAL GROSS OPERATING MARGIN                                       39,012                39,824             (812)             (2%)




                                                                                                                                                     124
                                                                                                                                                     125
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




The Consumer Services business line was mostly in line with 2008 figures.

On the other hand, the profitability of the Marketing Services segment decreased by approximately Euro 640 thousand (GOM
-36%). In relative terms, Marketing Services accounted for approximately 3% of total EBITDA (4% in 2008), whereas the
Consumer Services division accounted for 97% of the total (96% in 2008).

22. other Revenues and increase of fixed Assets for internal Works
increase in fixed Assets for internal Work
Capitalizations refer to internal costs borne for the expansion and further development of management operating programs,
e-mail and SMS services, and the upgrade of the technological platform to meet growing business needs arising from the
rapid growth of the Consumer Services market on both a domestic and international level.

other Revenues
Major items within “Other revenues” include the effects of corrections to prior-period estimates, revenues generated by the
subleasing of offices and insurance compensation.

costs of production

23. costs for Services and use of third-party Assets
This item can be broken down as follows:

  (in thousands of Euro)
                                                                                    2009                2008
  Variable costs of production                                                     90,185             139,530
  Marketing costs                                                                  53,735              55,312
  Fixed structural costs                                                           30,277              33,023
  of which non re-current costs                                                     2,700               1,799
  Total costs for services, use of third-party assets, consumable and goods       174,197             227,865

Variable costs of production decreased by 35%, going from Euro 139.5 million in 2008 to Euro 90.2 million in 2009, and
include bandwidth leasing costs, costs for the purchase of SMS and content, amounts recognized to media partners
(Televisa and Telecinco), to list owners and telcos, and technology costs for housing and hosting, royalties and the recording
companies’ and the artists’ rights. ). The sharp decline in costs for services is closely tied to the decrease in revenues and is
chiefly attributable to two phenomena:
 n the differing accounting treatment of an agreement with an Australian telephone carrier. In further detail, instead of

   recognizing gross revenues and the associated expenses, the Company now recognizes net revenues, i.e. without the
   associated expenses;
 n the rationalization of several agreements that generated small margins while entailing very high costs.


Marketing costs decreased slightly compared to the same period of 2009 and include advertising investments for all media
channels, marketing consulting, commissions paid to media centres, and all production costs for marketing initiatives.

Fixed structural costs also dropped by 7%, from Euro 33 million in 2008 to Euro 30.3 million in 2009, and include principally
rental costs of offices and rental fees relating to hardware used by Group companies as well as consultancy expenses,
office expenses, maintenance costs, insurance, the costs of sundry services and travel and accommodation costs for all
employees.

24. non-recurring expenses
  (in thousands of Euro)
                                                                  yEAR 2009                      yEAR 2008
  Redundancy costs                                                  1,259                            966
  Data center and platform restructuring                            3,007                           4,545
  Legal entities closing                                             494                             162
  Other restructuring costs                                          828                           (1,496)
  Total                                                             5,588                           4,177

Non-recurring expenses refer to costs incurred by Group companies in connection with restructuring activity and was not
covered by sums allocated to the provision for risks at December 31, 2009. The balance of restructuring costs includes
Euro 1.259 thousand pertaining to redundancy incentives provided and Euro 3 million associated with technological costs
incurred for various activities in support of the rationalization and reorganization of technological platforms.
The companies primarily responsible for such restructuring costs include the Spanish company Buongiorno My Alert,
Buongiorno S.p.A. and the French company Buongiorno France.




                                                                                                                                126
                                                                                                                                127
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




25. personnel costs
This item includes the costs for employees, including provisions required by the law and by collective contracts, as well as
the cost of holidays that had matured but were still unused at December 31, 2009. The balance of Euro 53.4 million includes
Euro 1,259 thousand in restructuring costs associated with early retirement incentives. The Group’s workforce, net of former
iTouch Group employees, was broken down as follows (average workforce for the year):

  (in thousands of Euro)
                                                                AVERAgE 2009                   AVERAgE 2008
  Employees and middle management                                    969                           1,046
  Executives                                                          35                             40
  Total                                                             1,004                          1,086

Personnel costs include the notional cost, amounting to about Euro 4 thousand, relating to the issue of options under the
stock option plans existing at the period-end in favor of employees, collaborators and directors (IFRS 2).

Report on the Stock option plan
Buongiorno has always favored the possibility of implementing stock option plans, feeling that they are an appropriate tool in
building relationships between the Company and its employees/directors by providing an incentive to create a professional,
long-lasting relationship. As such, over the years various equity-based incentive plans have been implemented, in compliance
with CONSOB notice No. 11508 of February 15, 2000 regarding stock option plans, as described below.

No new share-based incentive plans have been issued with respect to the situation at December 31, 2008.

As a consequence, the following Plans were in force at December 31, 2009:

2006-2012 Stock option plan (plan 6)
In the Shareholders’ Meeting of May 2, 2006, Buongiorno defined an increase in share capital for the purposes of assigning
options to employees and directors.

The objective of this plan, just as for previous plans, is to offer the Company the possibility of assigning new stock options to
the employees and directors of the Company and Group companies and to employees who are newly recruited or arriving
from acquired companies and who merit special professional recognition.
A reserved capital Increase, of a maximum of 4,500,000 new issue shares, has been approved to cover this plan.

characteristics of the incentive plan
The Plan is regulated by a Regulation, issued by the Board of Directors on May 10, 2006 on the basis of those already
existing for the previous plans.

Some of the most important terms and conditions are as follows:
 n   plan expiry: December 31, 2012 with the possibility for the Board to establish different dates, but always prior to December
     31, 2012, as the latest date for exercising specific assignments;
 n   deadline for allotting stock options: June 30, 2011;
 n   stock option maturity: upon reaching objectives and/or following a minimum time of employment or director service with
     the Company;
 n   determination of the stock option issue price: the exercise price for each option, to be paid to the Company in order
     to obtain the relevant new issue share, will be the price that the Board of Directors has determined, when attributing
     the options, for each beneficiary or category of beneficiaries, and in any event will not be below the market value
     of the stock on the assignment date as laid down in the resolution of the Company’s Extraordinary Shareholders’
     Meeting on May 2, 2006.
2008-2014 Stock option plan (plan 7)
In the Shareholders’ Meeting of May 5, 2008, Buongiorno defined an increase in share capital for the purposes of assigning
options to employees and directors.

The objective of this plan, just as for previous plans, is to offer the Company the possibility of assigning new stock options to
the employees and directors of the Company and Group companies and to employees who are newly recruited or arriving
from acquired companies and who merit special professional recognition.

A reserved capital Increase, of a maximum of 5,000,000 new issue shares, has been approved to cover this plan.




                                                                                                                                128
                                                                                                                                129
                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




characteristics of the incentive plan
The Plan is regulated by a Regulation, issued by the Board of Directors on May 11, 2009 on the basis of those already
existing for the previous plans.

Some of the most important terms and conditions are as follows:
 n   plan expiry: December 31, 2014 with the possibility for the Board to establish different dates, but always prior to December
     31, 2014, as the latest date for exercising specific assignments;
 n   deadline for assigning stock options: June 30, 2013;
 n   stock option maturity: upon reaching objectives and/or following a minimum time of employment or director service with
     the Company;
 n   determination of the stock option issue price: the exercise price for each option, to be paid to the Company in order
     to obtain the relevant new issue share, will be the price that the Board of Directors has determined, when attributing
     the options, for each beneficiary or category of beneficiaries, and in any event will not be below the market value
     of the stock on the assignment date as laid down in the resolution of the Company’s Extraordinary Shareholders’
     Meeting on May 5, 2008.
Summary of Active Stock option plans as of december 31, 2009
Further details on the stock option plans in effect at the end of the period are provided in the table below.

  PLAN 6
                       12.31.2008                                     yEAR 2009                                   12.31.2009
     stRIKE          Not ExERCIsEd      AssIgNEd      ExERCIsEd      ExpIREd    CANCEllEd     to bE CANCEllEd       totAl
     pRICE (EuRo)
     5.16              1,545,000                          -             -          56,000          164,000        1,325,000
     4                  133,000                           -             -             -             40,000          93,000
     3.86                35,000                           -             -             -             35,000             -
     2.79                75,000                           -             -             -                             75,000
     1.94              1,938,000                          -             -          38,000          164,000        1,736,000
     1.92                60,000                           -             -             -                             60,000
     0.76                15,000                           -             -             -                             15,000
     0.7                                 790,000          -             -             -            50,000          740,000
                       3,801,000         790,000          -             -          94,000         453,000         4,044,000
  PLAN 7
                      12.31.2008                                      yEAR 2009                                     12.31.2009
  stRIKE            Not ExERCIsEd       AssIgNEd      ExERCIsEd      ExpIREd    CANCEllEd       to bE CANCEllEd       totAl
  pRICE (EuRo)
  0.7                      -            4,110.000           -             -              -                200,000   3,910,000
                           -            4,110.000           -             -              -                200,000   3,910,000

The “To be cancelled” column includes those options relating to personnel who have left and so can no longer be exercised.

26. depreciation, Amortization and impairment losses
  (in thousands of Euro)
                                                                   12.31.2009                      12.31.2008
  Amortization of intangible fixed assets                            10,937                          11,087
  Depreciation of tangible fixed assets                               1,612                           2,107
  Other fixed assets write-downs                                      1,125                           4,297
  Total amortization, depreciation and other write-downs             13,674                          17,491

Amortization
Amortization for the year (a total of Euro 10.9 million) is detailed in the notes on intangible assets.

depreciation
Depreciation for the year, amounting to Euro 1,612 thousand, was determined using technical and economic rates established
based on possible residual asset use as previously illustrated in the Notes on evaluation criteria for tangible assets.

impairment losses
This item includes the impairment of Call TV goodwill amounting to Euro 1,111 thousand.




                                                                                                                                 130
                                                                                                                                 131
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




27. Write-downs of bad debts and other provisions
  (in thousands of Euro)
                                                                  12.31.2009                    12.31.2008
  Write-downs of bad debt and other provisions                      2,496                          (1,069)
  of which non re-current allocations                                828                           (1,496)
  Total Write-downs of bad debt and other provisions                2,496                         (1,069)

This item corresponds to the provision for bad debts, a measure taken after specific analysis to adjust the total amount to its
probable break-up value and allocations to other provisions for potential liabilities. In 2009, provisions for bad debts amounted
to Euro 1.3 million, provisions for risks and charges amounted to Euro 1.6 million, mainly due to contingent liabilities related
to restructuring activities and transfer to profit and loss account amounting to Euro 0.4 million.

28. other operating costs
Other operating costs at December 31, 2009 amounted to Euro 2,084 thousand (Euro 3,500 thousand at December 31,
2008) and include all remaining costs, normally for amounts that are not individually material, which by their nature are not
classifiable in other items of the aggregated amount of “production costs” which are deducted from the operating result (Euro
872 thousand) and other restructuring costs for Euro 1,212 thousand.

29. finance income
Finance income at December 31, 2009 may be broken down as follows:

  (in thousands of Euro)
                                                                 12.31.2009                     12.31.2008
  Interest incoms                                                    669                           1,462
  Other financial incomes                                             12                             90
  Exchange gains                                                    3,783                          2,341
  Total                                                             4,464                          3,893


The change with respect to the previous year was primarily due to the increase in exchange profits.
30. finance expense
Finance expense at December 31, 2009 may be broken down as follows:

  (in thousands of Euro)
                                                                 12.31.2009                     12.31.2008
  Interest expenses                                                 (3,535)                       (7,878)
  Other interest expenses                                           (2,040)                       (2,197)
  Exchange losses                                                   (3,050)                       (3,171)
  Total                                                            (8,625)                       (13,246)

Interest expense amounted to approximately Euro 8.6 thousand for the year (Euro 13.2 thousand for 2008). In 2009, there
was a sharp decline in the balance of interest expense, primarily due to the decrease in short-term interest rates, to which the
Company’s debt is tied in its entirety, in addition to the decline in the average balance of borrowings due to the redemptions
during the period.

31. Value Adjustments on financial Assets
Value adjustments on financial assets were positive at about Euro 0.1 million, compared to a negative value of about Euro
1.6 million for 2008, mainly due to the write-down of the equity investment of Buongiorno S.p.A. in the associate Buongiorno
Hong Kong Ltd.

32. income taxes (current and deferred)
Income taxes for 2009 amounted to Euro 6.1 million, of which Euro 2.4 million refers to current taxes and Euro 3.7 million to
the use of tax losses previously recognized under assets.
The companies that have used the tax losses primarily are the Spanish company Buongiorno My Alert S.A., Buongiorno
S.p.A. and the French company Buongiorno France S.A..




                                                                                                                               132
                                                                                                                               133
                                      Consolidated annual RepoRt of
                                      the BuongioRno gRoup as of deCemBeR 31, 2009




The table below provides a reconciliation of the notional and the actual tax rate for the Buongiorno Group at December 31, 2009:

  RECONCILIATION BETWEEN STATUTORY AND EFFECTIVE INCOME TAXES
  (in thousands of Euro)                                              ItAly    spAIN     fRANCE    AfRICA   AustRAlIA   othER     totAl
  Profit (loss) before taxation                                      (3,664)    4,460     4,906    4,113      2,833       500     13,148
  Statutory tax rate                                                  27.5%     30.0%     33.3%    30.4%      30.0%        -       30.0%
  Statutory income taxes                                             (1,008)    1,338     1,635    1,250       850       (122)     3,944
  Fiscal effect on temporary and permanent differences                2,003     (333)       (9)     (66)       101       3,016     4,713
  Fiscal effect from utilization of fiscal losses carried forward     (996)    (1,043)   (1,579)      0                 (3,071)   (6,689)
  IRAP and other income taxes calculated on different basis            434         -         -        -         -          -        434
  Effective income taxes                                               434       (38)       47     1,184       951       (176)     2,402
  Release/allocation of deferred taxes                                2,201      492       904        0       (248)       319      3,668
  Effective deferred taxes                                            2,201      492       904       0        (248)       319      3,668
  Total taxes as at 31.12.2009                                        2,635      454       951     1,184       703        143      6,070
  Effective tax rate                                                   (*)       10%       19%      29%       25%          -        46%
 (*) Not applicable on negative result.


33. profit for the Year
The Group’s result for the period net of Minority interests amounted to Euro 6,938 thousand, compared to a profit for 2008
of Euro 8,127 thousand.

34. earnings per Share
  (in thousands of Euro)
                                                                                             12.31.2009        12.31.2008
  Basic earnings per share (Basic EPS)                                                         0.0652           0.0764
  Diluted earnings per share (Diluted EPS)                                                     0.0617           0.0739
  Average No. of shares                                                                      106,352,187      106,353,675
  Average No. of shares + No. of options and bonds convertible into shares                   113,114,652      110,404,675
  Interest payable on the convertible bond                                                     36,812           37,089
basic
Basic EpS is calculated by dividing the net Group profit for the year by the average number of ordinary shares outstanding
during the period, namely 106,352,187 in 2009 (106,353,675 in 2008).

diluted
Diluted EpS is calculated by dividing the net Group profit for the period, gross of interests on the convertible bond, by
the average number of ordinary shares outstanding during the period plus the number of outstanding options that can be
potentially exercised (or other instruments potentially convertible into ordinary shares, such as convertible bonds), or granted
at the end of the period, a total of 113,114,652 in 2009 (110,404,675 in 2008).


35. Related-party transactions
At December 31, 2009, the Buongiorno Group maintained relationships with companies qualifying as related parties within
the meaning of the Code for Related-party Transactions:

Companies or parties holding rights in Group companies:
 n	 Mitsui & Co. Ltd which holds a 18.96% stake in the share capital of the subsidiary Buongiorno USA Inc and, consequently
    of Rocket Mobile Inc; Mitsui &Co. Ltd also holds a 45.5% stake in the share capital of Buongiorno Marketing Services B.V.;
 n	 Nevid Nikravan, a director of Buongiorno S.p.A., from whom was purchased on October 7, 2009 the minority holding

    of 20.34% of the share capital that he held in the company Buongiorno Dijital Iletisim A.S. (Turkey) through Yamdez
    Consulting Advisers SL, a company controlled by the same.
Commercial transactions pertaining to the core business of companies included in the consolidation area were realized with the
said companies/entities at arm’s length during the course of the year.

The Group holds a non-controlling interest in Buongiorno Hong Kong Ltd, in which Mitsui & Co. Ltd. holds 51% stake and
Buongiorno a 49% stake, and which was consolidated using the equity method. The Buongiorno Group effects, at arm’s length,
commercial transactions pertaining to its core business, with the same company and/or its subsidiaries.
Moreover, a share capital increase was carried out for the Dutch holding company Buongiorno Marketing Services Netherland
B.V., underwritten through the contribution of the 100% equity investment in Buongiorno Russia LLC by the associate Buongiorno




                                                                                                                               134
                                                                                                                               135
                                Consolidated annual RepoRt of
                                the BuongioRno gRoup as of deCemBeR 31, 2009




Hong Kong Ltd. As a result of this transaction, the Buongiorno Group’s ownership of the Dutch holding company Buongiorno
Marketing Services Netherland B.V. fell from 60% to the present 54.5%. The other minority-interest shareholders are the Mitsui &
Co. Ltd. Group and the associate Buongiorno Hong Kong Ltd., which respectively hold 36.4% and 9.1% stakes in Buongiorno
Marketing Services Netherland B.V..

On November 3, 2009, the company Buongiorno Digital Innovation India Private Ltd was set up, in which Mitsui & Co holds a
51% stake and Buongiorno 49%; the company was consolidated by the latter using the equity method. At December 31, 2009
no commercial transactions had yet taken place with that company, given its recent formation.

Transactions completed during the year between Buongiorno and these related parties are summarized in the following table:

  (in thousands of Euro)
  YEAR 2009
  RElAtEd CompANy                                  tuRNoVER       RE-dEbItINg    dIRECt/INdIRECt     fINANCIAl    othER
                                                              of pERsoNNEl Costs     Costs       ExpENsEs/INComEs
  Buongiorno Marketin Services España, S.L.           7               -                 9                 -            -
  Buongiorno Marketing Services B.V.                 321             329               63                (6)           -
  Buongiorno Marketing Services Deutschland GmbH      8               -                 -                 -            -
  Buongiorno Marketing Services France S.A.           3               -                 -                 -            -
  Buongiorno Marketing Services GmbH At               4               -                16                 -            -
  Buongiorno Marketing Services Italy S.r.l.         376             88                15                 -            -
  Buongiorno Marketing Services UK Ltd                4               3                 -                 -            -
  Buongiorno Marketing Services US Inc                2               -                 -                 -            -
  Buongiorno RUS LLC                                  7               -                 -                 -            -
  Buongiorno USA Inc                                 930              1               773               155            -
  Hotsms.com B.V.                                     7               1               318                 -            -
  Rocket Mobile Inc                                  444              -               156                 -            -
  Yamdez Consulting Advisers SL                       -               -                 -                 -          (260)
  Buongiorno Hong Kong Ltd                            -               -               438                 -            -
  Buongiorno Hong Kong Ltd INDIA                     75               -               227                 -            -

At December 31, 2009, the Company held 35% of the share capital of the company Inches Music Group S.r.l. The latter
is partly owned by Capital B!, in which Mauro Del Rio - Buongiorno’s reference shareholder - holds the majority stake. The
company’s purpose is to manage and sell “Artist community” tracks. During the year, the Company made a payment of Euro
53,846 to Inches Music Group S.r.l. to replenish losses; the equity investment was then written down by a like amount.
The Group also undertook commercial transactions with said company and recognized costs of Euro 6,874.

With regard to related-party transactions, including inter-company transactions, it must be pointed out that the same do not
qualify as either atypical or unusual, since they were effected in the normal course of the business operations of the Group
companies in question, and concluded at arm’s length, in light of the features of the goods and services involved.

36. Additional information Required by the international financial Reporting Standard n° 7
The Group is exposed to financial risks associated with its operations
 n   credit risk relating to normal commercial relationships with clients and users;
 n   liquidity risk, with particular regard to the availability of financial resources and access to the credit market and the market
     for financial instruments in general;
 n   market risks (principally with regard to exchange and interest rates), insofar as the Group operates at international level in
     various currency areas and uses financial instruments which generate interest;
As described in the section relating to risk management, the Group, constantly monitors the financial risks to which it is
exposed, so as to evaluate the potential negative effects of these in advance and to take suitable action to mitigate them.

The following section provides qualitative and quantitative information on the incidence of such risks on the Group. The
quantitative data presented below do not have a predictive value, in particular, the sensitivity analyses of market risk cannot
reflect the complexity and correlated reactions of markets which may derive from every forecasted change.




                                                                                                                                    136
                                                                                                                                    137
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009




classes of financial instruments
Items of the Balance Sheet, classified according to the respective risk categories as of December 31, 2009 and 2008, are
presented below.
Situation at December 31, 2009

  (in thousands of Euro)                                              ClAssEs of homogENEous RIsKs
                                                  totAl      CREdIt       lIquIdIty   INtEREst ExChANgE       pRICE
                                                12.31.2009                              RAtE       RAtE
  CURRENT ASSETS
  TRADE RECEIVABLES                               54,874
   - of which denominated in Euro                            37,070
   - of which denominated in other currencies                                                      17,804
  OTHER RECEIVABLES                               2,593       2,593
  CURRENT FINANCIAL ASSETS                          19
   - of which SICAVs                                19                                                         19
   - of which commercial paper
  CASH AND CASH EQUIVALENTS                       38,761
    - of which denominated in Euro                                         15,402
   - of which denominated in other currencies                                                      23,358

  NON CURRENT LIABILIITIES
  CONVERTIBLE BOND                                                           -
  LONG TERM BANK BORROWINGS                       47,789                               47,789
  OTHER NON CURRENT FINANCIAL LIABILITIES
  - of which denominated in Euro
  - of which denominated in other currencies

   CURRENT LIABILITIES
  TRADE PAYABLES                                  61,888
   - of which denominated in Euro                                          44,259
   - of which denominated in other currencies                                                      17,629
  SHORT TERM BANK BORROWINGS                      36,231                               36,231
  OTHER CURRENT FINANCIAL LIABILITIES              2,114
   - of which denominated in Euro
   - of which denominated in other currencies                                           1,093      1,022
Situation at December 31, 2008

  (in thousands of Euro)                                               ClAssEs of homogENEous RIsKs
                                                   totAl      CREdIt       lIquIdIty   INtEREst ExChANgE   pRICE
                                                 12.31.2008                              RAtE       RAtE
  CURRENT ASSETS
  TRADE RECEIVABLES                                68,276
    - of which denominated in Euro                            42,219
    - of which denominated in other currencies                                                   26,057
  OTHER RECEIVABLES                                4,369       4,369
  CURRENT FINANCIAL ASSETS                          573
  - of which SICAVs                                 573                                                     573
   -of which commercial paper
  CASH AND CASH EQUIVALENTS                        44,972
    - of which denominated in Euro                                          24,765
    - of which denominated in other currencies                                                   20,207

  NON CURRENT LIABILIITIES
  CONVERTIBLE BOND                                  965                      965
  LONG TERM BANK BORROWINGS                        5,296                                5,296
  OTHER NON CURRENT FINANCIAL LIABILITIES           975
   - of which denominated in Euro
   - of which denominated in other currencies                                            41       934

  CURRENT LIABILITIES
  TRADE PAYABLES                                   77,805
    - of which denominated in Euro                                          54,926
    - of which denominated in other currencies                                                   22,879
  SHORT TERM BANK BORROWINGS                      103,097                              103,097
  OTHER CURRENT FINANCIAL LIABILITIES              1,900
   - of which denominated in Euro
   - of which denominated in other currencies                                           195       1,705




                                                                                                                   138
                                                                                                                   139
                                Consolidated annual RepoRt of
                                the BuongioRno gRoup as of deCemBeR 31, 2009




financial Assets and liabilities categories
The following tables show Balance Sheet items classified according to the categories provided for by IAS 39 as of December
31, 2009 and 2008.
The carrying amount of financial assets and liabilities was fairly equal to their fair value.

Situation at December 31, 2009

  (in thousands of Euro)
                                      At fAIR VAluE      loANs           VAluEd        VAluEd      totAl     fAIR VAluE
                                                          ANd         At AmoRtIzEd     At Cost
                                                      RECEIVAblEs         Cost
  CURRENT ASSETS
  Trade receivables                                       54,874                                   54,874      54,874
  Other receivables                                        2,593                                    2,593       2,593
  Current financial assets                  19                                                        19         19
  Cash and cash equivalents               38,761                                                   38,761      38,761

  NON CURRENT LIABILITIES
  Convertible bond                                                                                                -
  Bank loans                                                              47,789                   47,789      47,789
  Other financial liabilities                                                                                     -

  CURRENT LIABILITIES
  Trade payables                                                                        61,888     61,888      61,888
  Bank loans                                                              36,231                   36,231      36,231
  Other financial liabilities                                                           2,114       2,114       2,114
Situation at December 31, 2008

 (in thousands of Euro)
                                    At fAIR VAluE       loANs           VAluEd           VAluEd        totAl      fAIR VAluE
                                                         ANd         At AmoRtIzEd        At Cost
                                                     RECEIVAblEs         Cost
  CURRENT ASSETS
  Trade receivables                                     68,276                                         68,276        68,276
  Other receivables                                     4,369                                           4,369         4,369
  Current financial assets               573                                                             573           573
  Cash and cash equivalents             44,972                                                         44,972        44,972

  NON CURRENT LIABILITIES
  Convertible bond                                                        965                           965           965
  Bank loans                                                             5,296                         5,296         5,296
  Other financial liabilities                                                                           975           975

  CURRENT LIABILITIES
  Trade payables                                                                          77,805       77,805        77,805
  Bank loans                                                            103,097                       103,097       103,097
  Other financial liabilities                                                              1,900        1,900        1,900

Trade and other receivables generated Euro 1,317 thousand in costs pertaining to losses on receivables and allocations to
the bad debt provision (Euro 477 thousand at December 31, 2008). It is deemed that the carrying value of these estimates
provides a reasonable approximation of their respective fair values.

Other financial assets and cash and cash equivalents generated Euro 661 thousand in finance income and interest income
in 2009 (Euro 1,552 thousand in 2008).

Bank loans, in addition to current account overdrafts, generated total interest expenses of approximately Euro 5,574 thousand
(compared to Euro 7,877 thousand in 2008). This reduction is due to the lower average level of debt and the marked
reduction in interest rates to which most of the bank loans are linked. The current value of short-term bank borrowings was
measured by assuming a fair value corresponding to the recognized fair value inasmuch as said borrowings have maturities
falling in 2010 and bear interest at floating market rates. The fair value of borrowings with maturities beyond 2009, which also
bear interest at floating rates, approximates the market value.




                                                                                                                               140
                                                                                                                               141
                                Consolidated annual RepoRt of
                                the BuongioRno gRoup as of deCemBeR 31, 2009




Financial debts measured at cost arise from the acquisition of equity investments that do not have a quoted market price and
therefore their fair value cannot be reliably measured.

guarantees
As of December 31, 2009 the Group had issued the following guarantees:
 n	 pledge of the shares of a number of subsidiaries as collateral for the financing of the contract with Banca IMI S.p.A.;
 n	 short-term pledge on the balances held in a current account amounting to Euro 3 million to support a commercial

    transaction on the Indian market;
 n	 pledge of the cash and cash equivalents in a current account for an amount of Euro 250,000 as security against any

    default on the credit line granted by Simest to Buongiorno S.p.A.

liquidity risk
The following table shows financial liabilities, classified by maturity:

Situation at December 31, 2009

  (in thousands of Euro)
                                           <1 yEAR      >1 <2 yEARs        >2 <3 yEARs   >3 <4 yEARs   >4 <5 yEARs   >5 yEARs
  NON CURRENT LIABILITIES
  Convertible bond
  Bank loans                                               14,891            13,989        13,097         5,812
  Other financial liabilities

 CURRENT LIABILITIES
 Convertible bond                           61,888
 Bank loans                                 36,231
 Other financial liabilities                 2,114
Situation at December 31, 2008

  (in thousands of Euro)
                                          <1 yEAR   >1 <2 yEARs     >2 <3 yEARs     >3 <4 yEARs    >4 <5 yEARs    >5 yEARs
  NON CURRENT LIABILITIES
  Convertible bond                                       965
  Bank loans                                            2,062           2,149            1,086
  Other financial liabilities                            975              -                -

  CURRENT LIABILITIES
  Convertible bond                        77,805
  Bank loans                              103,097
  Other financial liabilities              1,900

credit risk
The Group is subject to various concentrations of credit risk based on the nature of the business segments termed Marketing
Services (MS) and Consumer Services, (CS) as well as from the markets in question.

For the purposes of this analysis, macroclasses of homogeneous risk have been highlighted, identified on the basis of the
business models of Group companies in order to represent their exposure to credit risk more accurately. The following
classes have been highlighted:
 n	 trade receivables consisting of such receivables deriving from identified business segments. The CS segment receivables
    with leading companies operating in national and international mobile telephony markets are significant.
 n	 Other receivables mainly consist of receivables arising on operations of a non-commercial nature for which an individual

    solvency analysis has been carried out.
The following tables present the breakdown by maturity of the identified risk classes:

Situation at December 31, 2009

  (in thousands of Euro)
  ClAssEs                       totAl                        ExpIREd                totAl to ExpIREd wRItE-dowNs
                                         0-30dAys 31-60dAys 61-90dAys moRE thAN 90 ExpIREd
  Trade receivables             56,451    4,648     1,723       1,289       3,323         10,983   45,468         (1,577)
  Other receivables              2,964       -         -           -           -             -      2,964             -
  Total                         59,416    4,648     1,723       1,289       3,323         10,983   48,432        (1,577)




                                                                                                                             142
                                                                                                                             143
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




Situation at December 31, 2008

  (in thousands of Euro)
  ClAssEs                   totAl                        ExpIREd                totAl  to ExpIREd             wRItE-dowNs
                                     0-30dAys 31-60dAys 61-90dAys moRE thAN 90 ExpIREd
  Trade receivables        68,276      4,619      1,015       605         2,148        8,387       59,889          (695)
  Other receivables         4,369         -          -         -             -            -         4,369            -
  Total                    72,646      4,619      1,015       605         2,148        8,387       64,258          (695)

The Group does not renegotiate expired credits.

The notes to the consolidated financial statements present the movements in the fund for bad debts.

market Risks: Sensitivity Analysis
In terms of market risks, the Group is exposed to interest rate risk, exchange rate risk, and price risk. A sensitivity analysis
was conducted of the balance sheet items that could undergo a change in value due to the fluctuation of exchange rates,
interest rates, and market prices. The estimate referred to the following balance sheet items in detail:
 n	 trade receivables and payables in foreign currencies;
 n	 bank deposits in foreign currencies;
 n	 loans;

 n	 financial liabilities;

 n	 short-term financial assets.


The Group is exposed to risks deriving from the fluctuation of exchange rates which may have an impact on its profit or
equity. These risks mainly derive from the fact that some subsidiaries of the Group are located in countries not belonging
to the European Monetary Union, such as the United States, the United Kingdom, Turkey, Bolivia, Chile, Peru, Mexico,
Argentina, Brazil, Colombia, Ecuador, Hong Kong, South Africa, Nigeria, Australia, New Zealand, Norway, Denmark, Sweden,
Finland, Switzerland, Romania, Morocco and Venezuela. Since the Group’s reference currency is the Euro, the profit and
loss accounts of such companies are converted into Euros at the average exchange rate for the period, and for constant
revenues and margins in local currency, variations in exchange rates may have an effect on the countervalue in Euros of
the revenues, costs and profits. Assets and liabilities of the consolidated companies with a currency of account other than
the Euro may have different countervalues in Euro, depending on the evolution of exchange rates. As established by the
accounting principles adopted, the effects of such evolutions are recognized directly in equity under the item conversion
difference. At the reporting date, there were no hedges in existence for such exposure. The following assumptions and
methods were applied to conduct the sensitivity analysis:
 n	   assumptions and calculation methods: the risk is substantially tied to the fluctuation of the USD and GBP, which are the
      foreign currencies of greatest relevance to the Buongiorno Group. For these currencies, immediate positive and negative
      shifts of 5% in the spot exchange rate at December 31 were assumed. The table shows the impact of this change on the
      figure disclosed on the financial statements.

With reference to interest rates, Group companies use external financial resources in the form of debt and deploy available
liquidity in money and financial market instruments. Changes in levels of market interest rates influence the cost and yield
of the various forms of financing, and applications, hence affecting the amount of net financial charges of the Group. The
following assumptions and methods were applied to conduct the sensitivity analysis:
 n	   assumptions and calculation methods: the effect of an immediate increase and decrease of 0.5% in annual rates on the
      profit and loss account was calculated. The interest rates on bank deposits that generate interest income are almost
      entirely linked to the performance of interbank rates. To estimate the increase or decrease in interest income, a 0.5% shift
      was applied to the average annual balance of bank deposits. Floating-rate loans generate interest expenses, the amount
      of which is linked to the performance of the benchmark interest rates. To estimate the increase or decrease in interest
      expenses, a 0.5% shift was applied to the principal of outstanding loans at the balance sheet date.

price risk applies to short-term cash investments. The following assumptions and methods were applied to conduct the
sensitivity analysis:
 n	   assumptions and calculation methods: the effect of an immediate 5% increase and decrease in the market value of
      financial assets at December 31, 2009 on the profit and loss account was calculated.




                                                                                                                                 144
                                                                                                                                 145
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009




The following table shows the effects of the assumptions set out above on the consolidated financial statements:

  (in thousands of Euro)
                                                    INtEREst RAtE RIsK      ExChANgE RAtE RIsK        pRICE RIsK
                                                    -0,5%         0,5%        -5%         5%       -5%           5%
                                                   ChANgE        ChANgE     ChANgE     ChANgE    ChANgE       ChANgE
                                                  INtEREst      INtEREst   ExChANgE ExChANgE       NAV          NAV
                                                     RAtE         RAtE       RAtE        RAtE
  ASSETS
  TRADE RECEIVABLES IN FOREIGN CURRENCY
  - of which denominated in Pound Sterling                                   (194)      194
   - of which denominated in US Dollars                                      (144)      144

  CASH AND CASH EQUIVALENTS
   - of which denominated in Euro                   (78)          78
   - of which denominated in Pound Sterling                                  (234)      234
   - of which denominated in US Dollars                                      (231)      231
  Short term financial assets (SICAVs)
  Total impact of pre-tax financial assets          (78)          78         (803)      803

  NON CURRENT LIABILITIES
  MEDIUM/LONG TERM BANKS LOANS                      56           (56)
  OTHER NON CURRENT FINANCIAL LIABILITIES

  CURRENT LIABILITIES
  TRADE PAYABLES
   - of which denominated in Pound Sterling                                  202        (202)
   - of which denominated in US Dollars                                      122        (122)
  SHORT TERM BANK LOANS                             82           (82)                               -              -

  OTHER CURRENT FINANCIAL LIABILITIES
  - of which denominated in Pound Sterling                                                -
  - of which denominated in US Dollars                                        48        (48)

  Total impact of pre-tax financial liabilities     138          (138)        371      (371)        -              -
  Impact on pre-tax results                          60           (60)       (432)      432
37. other information
1. The following table provides a summary of the emoluments for 2009, disbursed or payable for any reason, to the
  members of the Board of Directors of Buongiorno S.p.A..

                         offICE hEld At 12.31.2009            tERm of offICE       REmuNERAtIoN   REmuNERAtIoN   VARIAblE     totAl        stoCK
                                                                                                  As dIRECtoR    fEEs**       REmuNERAtIoN optIoN Costs
Casalini Andrea          Chief Executive Officer              01.01 - 12.31.2009   €330,000       €90,000        €204,000     €624,000          €97,505***
Del Rio Mauro            Chairman of the Board of Directors   01.01 - 12.31.2009   na             €350,000       €187,000     € 537,000         €0
Pitout Wayne *           Director                             05.01 - 12.31.2009   €239,887       €20,000        na           € 259,887         €49,928****
Holger Van Den Heuvel    Director                             01.01 - 12.31.2009                  €20,000                     €20,000
Riccardo Lia             Director                             01.01 - 12.31.2009                  € 20,000                    € 20,000
Nevid Nikravan           Director - Remuneration Committe     01.01 - 12.31.2009                  € 27,500                    € 27,500
Anna Gatti               Indipendent Director -               01.01 - 12.31.2009                  €27,500                     €27,500
                         Remuneration Committe
Giovanni Massera         Indipendent Director -               01.01 - 12.31.2009                  €41,000                     €41,000
                         Head Supervisor Committe
Anna Puccio              Indipendent Director - Supervisor    01.01 - 12.31.2009                  €49,500                     € 49,500
                         Committe - Remuneration Committe
Felipe Fernandez Atela   Indipendent Director -               01.01 - 12.31.2009                  €34,500                     €34,500
                         Supervisor Committe
Giorgio Ricchebuono      Director                             05.01 - 12.31.2009                  €20,000                     €20,000

* Wayne Pitout left his office on April 31, 2009 remaining as not executive director of the BoD and his remuneration includes the severance indemnity.
** Variable fees for 2009 to be paid in 2010
*** Notional costs booked on profit/loss for 2009 related to stock options assigned during 2006 and 2007, for an excercise price of each option of respectively
5.16 Euro and 1.94 Euro and therefore “out of the money”. The options will expire on December 31, 2012
**** Notional costs booked on profit/loss for 2009 related to stock options assigned during 2007, for an excercise price of each option of 1.94 Euro
and therefore “out of the money”. The options will expire on December 31, 2012



2.In accordance with Article 149-duodecies of the Rules for Issuers amended by CONSOB Resolution N. 15915 of May 3,
  2007 (published in Italy’s Official Journal No. 111 of May 15, 2007, Ordinary Supplement No. 115), the amounts for 2009
  for services provided to the Group by accounting firm and entities belonging to its network are listed below:
	   n		audit of Parent Company Euro 254 thousand;
	   n		audit of subsidiaries Euro 834 thousand;
	   n		other services to subsidiary company Euro 288 thousand.




                                                                            On behalf of the Board of Directors of Buongiorno S.p.A.
                                                                                                    The Chairman
                                                                                                     Mauro Del Rio



                                                                                                                                                                  146
                                                                                                                                                                  147
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




ANNEx A
RECONCILIATION STATEMENTS OF REVENUES AND EBITDA BY GEOGRAPHICAL AREA AT DECEMBER 31, 2008
CLASSIFIED ACCORDING TO THE NEW ORGANIzATIONAL STRUCTURE

Breakdown of 2008 revenues by geographical area

 (in thousands of Euro)     Ib       uK        It      fR       EuR     lAtAm    REst        ss     fy 2008
 ITALY & MED                                 33,062            3,583             3,527               40,172
 FRANCE                                               24,499                                         24,499
 IBERIA                   107,979                                                                   107,979
 GSA                                                           11,118             307                11,425
 LATAM                                                                  22,518                       22,518
 UK & INTERNATIONAL                 30,662                     18,560            41,001              90,223
 NORTH AMERICA                                                                   18,878              18,878
 Netting+Shared Service                                                                     254       254
 TOTAL REVENUES           107,979   30,662   33,062   24,499   33,261   22,518   63,713     254     315,948

EBITDA 2008 by geographical area

 (in thousands of Euro)     Ib       uK        It      fR       EuR     lAtAm    REst        ss     fy 2008
 ITALY & MED                                 10,483             808               (114)       (79)   11,098
 FRANCE                                               8,314                        (22)     (2,990)   5,302
 IBERIA                   20,322                                                             (269)   20,053
 GSA                                                           1,566              (168)       (79)    1,319
 LATAM                                                                  3,761                 (79)    3,682
 UK & INTERNATIONAL                 7,120                      2,337             6,429       (242)   15,644
 NORTH AMERICA                                                                    318        (136)     182
 Netting+Shared Service                                                                    (17,456) (17,456)
 TOTAL GOM                20,322    7,120    10,483   8,314    4,711    3,761    6,443    (21,330) 39,824
ANNEx b
RECONCILIATION BETWEEN THE FINANCIAL STATEMENTS OF BUONGIORNO S.P.A. AND THE CONSOLIDATED FINANCIAL
STATEMENTS: EQUITY AND CONSOLIDATED PROFIT (LOSS) OF BUONGIORNO S.P.A. AT DECEMBER 31, 2009

 (in thousands of Euro)    CApItAl ANd REsERVEs    moVEmENts IN           ChANgE         pRofIt (loss) CApItAl ANd REsERVEs
                                 12.31.2008     CApItAl ANd REsERVEs CoNsolIdAtIoN AREA foR thE pERIod       12.31.2009
 Buongiorno S.p.A.                  132,223             (204)                 -             (6,650)           125,369
 Elimination of equity investments (170,897)           (5,186)             4,417            14,699           (156,967)
 Consolidated goodwill              176,638             (549)                 -             (1,111)           174,978
 Capital and reserves and           137,964           (5,939)              4,417             6,938            143,380
 profit (loss) of the Group
 Capital and reserves and profit 12,409                864                 1,325             140             14,738
 (loss) of Minority interests
 Consolidated capital and           150,373           (5,075)              5,742            7,078            158,118
 reserves and profit (loss)




                                                                                                                              148
                                                                                                                              149
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009



2.2      finAnciAl StAtementS foR the YeAR ended decembeR 31, 2009 - buongioRno S.p.A.

The financial statements of Buongiorno S.p.A. have been prepared in accordance with IAS 1.

 SEPARATE BALANCE SHEET
  Note   (in thousands of Euro)                                    12.31.2009     12.31.2008     VARIANCE
         NON-CURRENT ASSETS
   1)    Goodwill                                                   4,095,876       4,095,876         -
   2)    Other intangible assets                                   4,204,071       2,842,042     1,362,029
   3)    Tangible fixed assets                                       252,312         193,756       58,556
   4)    Investments in associate companies                       292,639,381     180,847,386   111,791,995
   5)    Other non-current financial assets                        28,344,798       7,103,294    21,241,504
   6)    Deferred tax assets                                       11,375,249      14,370,549    -2,995,300
                                                                  340,911,688     209,452,903   131,458,785
         CURRENT ASSET
  7)     Inventories                                                    -               -             -
   8)    Trade debtors and other receivables                       30,850,517      26,923,585    3,926,932
   9)    Other current financial assets                                 -               -            0
  10)    Cash and cash equivalents                                  3,824,494       4,209,974     -385,480
                                                                   34,675,011      31,133,559    3,541,452
  11)    NON-CURRENT ASSETS HELD FOR SALE                               -               -             -
         TOTAL ASSETS                                             375,586,699     240,586,462   135,000,237
  12)    CAPITAL AND RESERVES                                     125,368,727     132,223,069   (6,854,342)
         NON-CURRENT LIABILITIES
  13)    Long-term borrowings                                      47,789,451      6,261,893    41,527,558
  14)    Deferred tax provisions                                        -              -             -
  15)    Non-current provisions                                      932,783       1,035,088     (102,305)
                                                                   48,722,234      7,296,981    41,425,253
         CURRENT LIABILITIES
  16)    Trade creditors and other payables                       162,489,648      19,986,600   142,503,048
  17)    Current tax payables                                      414,023.16       12,401.00     401,622
  18)    Short-term borrowings                                     3,113,871       77,736,706   (74,622,835)
  19)    Long-term borrowings (current part)                       33,514,450       1,978,425    31,536,025
  20)    Current provisions                                         1,963,747       1,352,280     611,467
                                                                  201,495,738     101,066,412   100,429,326
  21)    LIABILITIES DIRECTLY ATTRIBUTABLE                              -               -             -
         TO NON-CURRENT ASSETS HELD FOR SALES
         TOTAL LIABILITIES AND CAPITAL AND RESERVES               375,586,699     240,586,462   135,000,237
SEPARATE PROFIT AND LOSS ACCOUNT
Note   (in thousands of Euro)                                         yEAR 2009            yEAR 2008       VARIANCE         VAR%
22)    SALES OF GOODS AND SERVICES                                    45,007,894           49,714,850     (4,706,956)         (9%)
23)    Other income and increase of fixed assets for internal works     2,053,019            1,831,700       221,319          12%
       TOTAL VALUE OF PRODUCTION                                      47,060,913           51,546,550     (4,485,636)        (9%)
24)    Services, use of third-party assets, consumables and goods     (31,098,799)         (28,676,250)    (2,422,549)         8%
25)    Personnel costs                                                (11,565,561)         (10,804,051)     (761,511)          7%
       GROSS OPERATING MARGIN                                          4,396,553           12,066,249     (7,669,696)       (64%)
26)    Amortization, depreciation and write-downs                      (3,123,721)          (2,277,814)     (845,907)         37%
27)    Allowance for bad debts and other provisions                     (686,466)           (1,236,500)      550,034         (44%)
28)    Other operating costs                                            (253,548)            (314,275)        60,727         (19%)
       OPERATING PROFIT / (LOSS)                                         332,818            8,237,659     (7,904,841)       (96%)
29)    Net financial earnings / (charges)                              (4,152,928)          (5,861,082)     1,708,154        (29%)
30)    Value adjustments on financial assets                             (53,846)                 -          (53,846)        100%
31)    Earnings / (charges) from assets held for sale                        -                    -              -              -
32)    Net non-recurrent costs                                              0                   (323)          323          (100%)
       PROFIT (LOSS) BEFORE TAXATION                                  (3,873,956)           2,376,254     (6,250,211)      (263%)
33)    Current income taxes                                             (402,228)            (701,540)       299,312         (43%)
34)    Deferred income taxes                                           (2,373,445)          (3,421,476)     1,048,031        (31%)
35)     PROFIT (LOSS) FOR THE YEAR                                    (6,649,629)          (1,746,762)    (4,902,867)        281%
36)    Basic earnings per share (Basic EPS)                             (0.0625)             (0.0164)       (0.0461)         281%
37)    Diluted earnings per share (Diluted EPS)                         (0.0585)             (0.0155)       (0.0430)         278%


TOTAL PROFIT (LOSS) ACCOUNT
(in thousands of Euro)                                                               12.31.2009               12.31.2008
Net result (A)                                                                       (6,649,629)              (1,746,762)
Other incomes and costs
Exchange losses from loans                                                             (208,578)                   -
Total other incomes and costs (B)                                                     (208,578)                    -
Total profit (loss) for the period (A+B)                                             (6,858,207)              (1,746,762)




                                                                                                                                     150
                                                                                                                                     151
                                          Consolidated annual RepoRt of
                                          the BuongioRno gRoup as of deCemBeR 31, 2009


 STATEMENT OF CHANGES IN CAPITAL AND RESERVES OF BUONGIORNO S.P.A. AT 12/31/2009
(in thousands of Euro)                       shARE           shARE        lEgAl     pRofIt (loss)     owN         RECEIVAblEs Vs     pRofIt          totAl
dEsCRIptIoN                                 CApItAl         pREmIum      REsERVE       CARRIEd       shAREs       shAREholdERs        (loss)      CApItAl ANd
                                                            ACCouNt                   foRwARd                        foR duE       of thE yEAR     REsERVEs
                                                                                                                    pAymENts
Balance at period-start                       27,651,956   69,905,466 1,394,958 35,018,777           (1,326)            -          (1,746,775) 132,223,055
- Allocation of profit (loss) for the period:                                   (1,746,775)                                          1,746,775       -
- Paid-out dividends                                                                                                                                 -
- Reserve for derivative instruments (IRS)                                                                                                           -
- Reserve of assigned stock options                          3,880                                                                                 3,880
- Capital increase (decrease)                                                                                                                        -
- Capital increase and Stock Option Plan, exercised                                                                                                    -
- Own shares purchase                                                                                                                                -
- Own shares sales                                                                                                                                   -
- Other movements due to reclassification                                            (208,578)                                      (6,649,629) (6,858,207)
- Profit (loss) for the year                                                                                                                         -
Balance at period-end                         27,651,956   69,909,346 1,394,958 33,063,423           (1,326)            0          (6,649,629) 125,368,727

Use possibility                           B             A,B,C              B           A,B,C
A: for capital increase B: for losses coverage C: for shareholders


 STATEMENT OF CHANGES IN CAPITAL AND RESERVES OF BUONGIORNO S.P.A. AT 12/31/2008
(in thousands of Euro)                       shARE           shARE        lEgAl     pRofIt (loss)     owN         RECEIVAblEs Vs     pRofIt          totAl
dEsCRIptIoN                                 CApItAl         pREmIum      REsERVE       CARRIEd       shAREs       shAREholdERs        (loss)      CApItAl ANd
                                                            ACCouNt                   foRwARd                        foR duE       of thE yEAR     REsERVEs
                                                                                                                    pAymENts
Balance at period-start                       27,651,956   69,262,738   766,165     25,347,881           -          (503,655)      12,575,854     135,100,939
- Allocation of profit (loss) for the period:                           628,793     11,947,061                                     (12,575,854)         -
- Paid-out dividends                                                                                                                                    -
- Reserve for derivative instruments (IRS)                                                                                                              -
- Reserve of assigned stock options                         642,727                                                                                  642,727
- Capital increase (decrease)                                                                                                                           -
- Capital increase and Stock Option Plan, exercised                                                                  503,655                         503,655
- Own shares purchase                                                                               (4,845,597)                                    (4,845,597)
- Own shares sales                                                                                   2,568,106                                      2,568,106
- Other movements due to reclassification                                            (2,276,165)     2,276,165                                          -
- Profit (loss) for the year                                                                                                        (1,746,775)    (1,746,775)
Balance at period-end                         27,651,956   69,905,466   1,394,958   35,018,777       (1,326)            -          (1,746,775)    132,223,055

Use possibility                           B             A,B,C                  B           A,B,C
A: for capital increase B: for losses coverage C: for shareholders
RENDICONTO FINANzIARIO SEPARATO
(in thousands of Euro)                                       yEAR 2009       yEAR 2008
Cash and cash equivalent at period start                      4,209,974      14,032,363
A) Cash flow generated by (used for) ordinary activities      3,035,656       1,299,562
Profit (loss) for the year                                    (6,649,627)     (1,746,762)
Depreciation and amortization                                  3,123,721       2,238,142
Write-downs of fixed assets                                      53,846          39,672
Dividends received                                                   -              -
Write-downs of unconsolidated equity investments                     -              -
Net change in employee benefits                                (102,305)         20,447
Net change in provision for risks and charges                   611,467         865,000
Change in deferred taxes                                       2,995,300       3,421,476
(Gains) losses and other non-monetary accounts                    3,880         642,727
(Increase) / decrease in trade receivables                    (4,408,514)      1,331,936
(Increase) / decrease in trade payables                        6,477,528      (5,599,312)
Change in other current asset items                             930,361         86,235
Cash flow generated by ordinary activities                    3,035,656       1,299,562
B) Cash flow generated by (used for) investing activities   (137,638,992)    (2,900,363)
Net (investments) disinvestments in:
 - intangible assets                                           (4,387,788)    (2,508,363)
 - property and equipment                                        (156,518)      (19,054)
 - investments                                               (133,094,686)     (530,548)
Change in non-current assets held for sale                           -              -
Net change in current securities                                     -          157,602
Cash flow generated by investing activities                 (137,638,992)    (2,900,363)
C) Cash flow generated by (used for) financing activities    134,217,856     (8,221,589)
subsidiaries debts increase                                   134,742,540           -
IMI new loan (non current share)                               31,536,025           -
Net change in other financial assets/liabilities                3,943,346     (4,501,569)
IMI loan (current share) reinbursment                         (77,323,020)          -
Net change in medium and long-term borrowings                  41,527,559     (1,946,184)
Capital increase (reimbursement)                                     -          503,655
Dividend payout                                                      -              -
Other changes in equity                                          (208,593)    (2,277,491)
Cash flow generated by financing activities                  134,217,856     (8,221,589)
Cash flow for the period (A+B+C)                                (385,480)    (9,822,390)
Cash and cash equivalent at period end                         3,824,494      4,209,973




                                                                                            152
                                                                                            153
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




noteS on the SepARAte finAnciAl StAtementS

general principles followed in preparing the Separate financial Statements and Accounting
Standards Adopted
The Separate Financial Statements of Buongiorno S.p.A. (hereinafter also “Buongiorno” or the “Company”), which consist
of the Balance Sheet, Profit and Loss Account, Cash Flow Statement, Statement of Changes in Equity and Notes to the
Consolidated Financial Statements, were prepared in compliance with the requirements of the “Regulations for implementing
Legislative Decree No. 58 of February 24, 1998 regarding Issuers” (CONSOB Resolution No. 11971 of May 14, 1999
and subsequent amendments), European Community Regulation No. 1606 of July 19, 2002 on international accounting
principles, and Legislative Decree No. 38 of February 28, 2005, which defines rules for exercising the options described in
Article 5 of the aforementioned European Regulation.

In particular, following the entry into force of Regulation (EC) No. 1606/2002 of the European Parliament and Council of July
19, 2002, as from 2006 companies with securities admitted for trading in a regulated market of European Union member
states prepare separated financial statements in accordance with the international accounting standards (IAS/IFRS) approved
by the European Commission.

Figures are expressed in euro and any other units are specifically indicated.

The financial statements indicated above refer to the figures from Buongiorno S.p.A.’s Separate Financial Statements at
December 31, 2009 and, for comparison purposes, at December 31, 2008.

The Parent Company Buongiorno adopted the IAS/IFRS that were issued by the International Accounting Standards Board
and approved by the European Commission following the entry into force, as of January 1, 2006, of European Regulation
No. 1606 of July 2002.

The accounting standards are those described hereafter and have been applied consistently for all the periods presented.
Summary of the most Significant “iAS/ifRS” Standards Applied
The most significant accounting standards applied are listed below:

iAS 38 - intangible Assets
(a) goodwill
Goodwill is reduced by the amount of any losses that may result from the impairment test, which are recognized in the Profit
and Loss Account (IAS 36). An impairment test is carried out at least once a year or, in any case, whenever an impairment
indicator emerges.

During acquisition, goodwill is allocated to a cash-generating unit (CGU). A CGU is the smallest group of assets and liabilities
that generates cash inflows and outflows (associated with the goodwill subject to impairment) that are largely independent of
the cash flows generated by other CGUs.

In the case of acquisitions of non-controlling equity holdings no goodwill is recognized although an adjustment is made
to equity for the difference between the value of the shareholdings and the investee company’s portion of equity at the
acquisition date.

Specifically, the CGUs that correspond to the goodwill recognized in the financial statements represent Buongiorno Group’s
investment in a particular geographic area (primary reporting segment) in which cash flows are discounted at a rate that
incorporates both the timeframe and the level of risk of the investment itself. When these net discounted flows associated
with the CGU are unable to justify the goodwill value recognized in the Balance Sheet, the excess is recognized in the Profit
and Loss Account as an impairment loss. Impairment losses that have been previously recognized in the Profit and Loss
Account are not reversed.

(b) intangible Assets with finite useful life
Intangible assets and expenses the useful life of which is deemed to extend beyond the period to which they refer, and that
can be separated and used or sold separately from other assets included in the Balance Sheet are recognized as assets on
the Balance Sheet. Intangible assets are recognized at purchase or production cost, including ancillary costs, and they are
systematically amortized based on their potential residual use (finite useful life).




                                                                                                                               154
                                                                                                                               155
                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




The main categories of capitalized intangible assets are as follows:
 n	   Research and development costs are charged to the Profit and Loss Account the year in which they are incurred, except
      for development costs recognized under intangible assets that satisfy all of the following conditions:
 	    	   n		 the project is clearly identified and the costs associated with it can be identified and measured in a reliable manner;
 	    	   n		 the technical feasibility of completing the project has been demonstrated;
 	    	   n		the intention to complete the project and sell the intangible assets generated by it has been demonstrated;

 	    	   n		a potential market exists or, in the case of in-house use, the usefulness of the intangible asset has been demonstrated

 	    	   				for the production of intangible assets generated by the project;

 	    	   n		he availability of adequate technical and financial resources to complete the project has been demonstrated.


Amortization charges associated with development costs are included under intangible assets from the date on which the
product/service generated by the project becomes available for sale. Development costs are amortized on a straight-line
basis over three years, which is the estimated useful life of the capitalized costs.
 n	 Costs incurred for purchasing patent and intellectual property rights, licenses and similar rights are capitalized on the basis
    of the charges incurred for their purchase and are amortized on a straight-line basis over a period of three years;
 n	 the costs incurred for the creation and registration of trademarks are amortized at a fixed percentage over a period of ten

    years;
 n	 internal software development costs are amortized on a straight-line basis over a three-year period and represent the

    costs of personnel directly involved in software development.
When external events or changes in conditions (so-called “trigger events”) indicate the permanent impairment of intangible
assets, an impairment test is conducted through the allocation of the assets to the CGU to which they relate. If necessary,
the assets are written down to the higher of their value in use or recoverable amount, i.e., selling price less incidental disposal
costs (IAS 36). As opposed to goodwill, if appropriate, the value can be reversed to the extent of the impairment losses
previously recognized in the Profit and Loss Account.

iAS 16 - property and equipment
Property and equipment are recognized at purchase or production cost, including ancillary costs, and they are systematically
depreciated based on their potential residual use (finite useful life). The book value of property and equipment, together with
their remaining useful life, is reviewed annually and, if necessary, the relevant depreciation rates are adjusted. In the case of
permanent impairment loss, the carrying value is written down in order to bring it in line with the recoverable value from the
use or sale of the asset.
Costs for ordinary maintenance are recognized fully in the profit and loss account; any such costs that increase the life of
the asset to which they refer are attributed at increasing rates for the cost of the assets and are depreciated in relation to
possible residual use.

Moreover, during the year there were no revaluations of assets, nor were any financial charges capitalized to increase their
value since the conditions specified in IAS 23 do not apply.

If the tangible asset consists of several significant components having different useful lives, depreciation is calculated
separately for each component.

The annual depreciation rates that were used are detailed below:

                                                                         RAtE
  Plant and machinery                                                     10%
  Industrial and Commercial Equipment                                     15%
  Other fixed assets:
  - Furnishings and ordinary office equipment                             12%
  - Electrical and electronic office equipment                            20%

iAS 27 and 28 - investments
Investments in subsidiaries and associates and in other companies were measured using the cost method, whereas those in
other companies were measured at cost, and write-downs were taken in the event of losses that are considered permanent
and long-term, to align the carrying value to the fair value.

ifRS 3 - business combination
Acquisitions in subsidiary companies are accounted for using the “acquisition method”. The acquisition cost will
hence be determined taking into account the fair value of any of the Group’s capital instruments issued following the
operation, increased by all the costs directly attributable at the date of the acquisition and allocated to the fair value of
the assets acquired, the certain and potential liabilities assumed. The cost in excess of the fair value of the net assets
of the acquired company is first allocated to intangible assets not recognized in the balance sheet of the acquired
company and any excess is then recognized as goodwill. In contrast, if the acquisition cost is lower than the fair value
of the assets acquired after allocation of intangible assets which has not already been recognized, the difference is
accounted for through profit or loss.




                                                                                                                             156
                                                                                                                             157
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




iAS 32 and 39 - Receivables, payables, derivatives and convertible bonds
Receivables are recognized based on presumable realizable value, done via entry in a write-down provision to lower their
nominal value. The provisions are recognized in the Profit and Loss Account. Payables are recognized at their nominal value.

The amounts of receivables and payables thus calculated approximate fair value since discounting of these amounts would
not result in any significant adjustment.

Derivative financial instruments are measured at fair value based on the market values on reference active markets.

Contracts that include an obligation for the Company to acquire its own equity instruments by the exchange of cash or other
financial assets, give rise to a financial liability for the actual value of the reimbursement amount (future buy-back price or
option exercise price), even where the obligation to acquire is subordinate to the right of the counterparty to reimbursement
(Put option). Whenever the contract falls due without completion, the carrying value of the financial liability is transferred to
equity (IAS 32, Paragraph 23).

Convertible bonds, like other financial liabilities, are measured at amortized cost, which is calculated bearing in mind all related
costs and using a market interest rate for equivalent non-convertible bonds or financial liabilities. The difference between the
amortized cost and the redemption amount represents the capital component or the amount of the conversion right and is
included in the Company’s equity under “Other reserves” (IAS 32, Paragraphs 64, 28 and 31).

cash and cash equivalents
Cash and cash equivalents mainly include cash, demand deposits with banks and other highly liquid short-term investments
(that can be turned into cash within 90 days). To determine net liquidity, current account liabilities, which are included in the
item “Short-term financial liabilities” are stated net of cash and cash equivalents. The elements included in net liquidity are
measured at fair value, and changes recognized through profit or loss.

interest-bearing borrowings
Interest-bearing borrowings are initially recognized at their fair value, net of ancillary costs. Subsequent to initial recognition,
interest-bearing borrowings are measured based on the amortized-cost method. The difference between the resulting value
and the value at initial recognition is recognized through profit and loss account over the duration of the loan on the basis of
the loan’s repayment schedule.
provisions for Risks and charges
Provisions for risks and charges include certain or probable costs of a specific nature, the amount or settlement date of which
could not be determined at year-end. Provisions are recognized when:
 (i) it is probable that there is a present obligation (legal or constructive) arising from a past event;
 (ii) it is probable that an outflow of resources will be required to settle the obligation;
 (iii) the amount of the obligation can be reliably estimated.
The amount recognized as a provision is the best estimate of the amount the company would reasonably pay to settle the
obligation or transfer it to a third party at year-end. Where the effect of time value of money is material and the payment date
of the obligation can be reliably estimated, the amount of the provision must be discounted.

The costs the Group expects to incur to implement restructuring programs are recognized in the year in which the program
is formally planned and a valid expectation has been created among interested parties that it will take place.

The amount of the provisions is adjusted on a regular basis to reflect changes in cost estimates, completion times
and discount rates. Changes to estimates are recognized in the same item of the profit and loss account for which the
provision is made.

The notes to the financial statements provide information on potential liabilities, which include:
 (i) possible, but not probable, obligations arising from past events whose existence can be confirmed only by the occurrence
     or non-occurrence of one or more uncertain future events that are not completely under the company’s control;
 (ii) present obligations arising from past events where the amount cannot be reliably estimated or it is probable that financial
     resources will not be required to settle the obligation.

employee benefits: Severance indemnity fund
Following the changes in employee benefit regulations introduced by Law 296/06 (the “2008 Finance Act”) and subsequent
decrees and regulations issued over the first few months of 2008, the severance indemnity fund accrued as of December
31, 2006 was classified as defined-benefit plan and hence required an actuarial assessment involving a series of factors
(current cost of labor, personnel turnover, expected return, financial charges, actuarial gains and losses, etc.). The portion
of the severance indemnity accrued after January 1, 2007 is considered a defined-contribution plan, regardless of whether
the participants opt for supplementary pension planning or earmark their indemnities for the treasury fund maintained by
INPS (the Italian social-security agency); the accounting treatment of said portion will therefore be assimilated to the current
treatment of other types of contribution payments. The portion of the severance indemnities accrued prior to December 31,




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                                                                                                                                159
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




2006 was therefore allocated as required by law, labor contracts in force, and actuarial adjustments provided for by IAS 19.
It reflects the liabilities that have fallen due to employees of the Italian companies included in the consolidation area at the
reporting date, net of any advances already disbursed.

ifRS 2 – Stock options
IFRS 2 specific accounting treatment is adopted for transactions that involve share-based payments and, specifically, for the
Stock Options plans assigned to employees and collaborators.
In accordance with IFRS 2, the valuation of stock option plans currently in force leads to the disclosure of non-monetary costs
in the Profit and Loss Account, in the item “Personnel costs”.

Recognition of Revenues and costs
Revenues and costs are recognized in accordance with the accruals principle, and are net of returns, discounts, rebates and
premiums. Revenues are recognized and accounted for in the Profit and Loss Account when it is probable that the related
future economic benefits will be enjoyed by the Group (probability of receiving the amount underlying the revenue) and when
the amount can be reliably ascertained.

In detail, Costs and Revenues of the main business lines have been recorded as follows:

 n	 Costs and Revenues for Consumer Services: these are recognized through profit or loss based on the actual number of
    contacts made by the end user and/or on the actual telephone traffic generated;
 n	 Cost and Revenues from the Sale of royalties and licenses: these are recognized through profit or loss according to the

    underlying contracts.


conversion criteria for entries in other currencies
Receivables and payables denominated in foreign currencies were initially converted into Euro at contractual exchange rates
or the rates in force at the time of the individual transactions. The exchange gains and losses that arose when receivables
were collected and payables were paid in foreign currency have been recognized in the Profit and Loss Account.

Exchange gains or losses for items in currencies of countries that are not members of the European Monetary Union and
that arise from the adjustment to the precise period-end exchange rates are reflected in the Profit and Loss Account for the
period.
finance income and expense
These are recognized in the Profit and Loss Account according to the accruals principle and on the basis of the “effective
rate method”. Profits and losses arising from valuation of assets and liabilities at fair value are carried through profit and loss.
Financial instruments in the closing balance sheet are similarly treated.

iAS 12 - current and deferred taxes
Income taxes recognized in the profit and loss account include current and deferred taxes. Income taxes are generally
recognized in the profit and loss account, except when they pertain to items recognized directly in equity. In this case, income
taxes are also recognized directly in equity.
Current taxes are taxes that it is expected will be paid as calculated by applying the tax rate in force on the balance sheet
date to taxable income and adjustments to taxes from previous years.
Deferred taxes are calculated by using the liability method on temporary differences between the assets and liabilities
recognized on the consolidated balance sheet and the corresponding figures for tax purposes. Deferred taxes are calculated
as a function of the required method of reversal of temporary differences by using the tax rate that is expected to be in force
in the years when the temporary differences are realized or cancelled.
Deferred tax assets are only recognized where it is likely that sufficient taxable income will be generated in future years to
realize the assets.

Also recorded in the financial statements are the benefits relating to tax losses permitted for carryforward without time limit in
subsequent years, which relate to the core business of Buongiorno S.p.A.

ifRS 8 - Segment reporting
As opposed to the segment identified at Group level in the consolidated financial statements, the segment is the business
segment and represents a set of activities and operations involved in the supply of goods and services, featuring a certain
level of business risk and a given level of economic margin that differ from other business segments.

use of estimates
The preparation of the financial statements requires that management use accounting principles and methodologies that
at times may be based on complex subjective evaluations and estimates linked to past experience and on assumptions
that are considered reasonable and realistic given the circumstances at hand. The use of such estimates and assumptions
influences the amounts reported in the balance sheet, profit and loss account, cash flow statement and this report. The
amounts reported in the financial statements on the basis of the aforementioned estimates and assumptions may differ from




                                                                                                                                   160
                                                                                                                                   161
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009




actual amounts due to the uncertainty surrounding the assumptions and conditions on which such estimates are based.
Estimates and assumptions are reviewed on an ongoing basis, and adjustments are recognized in the period in which the
estimates are revised and in any future period affected. The accounting estimates that require a higher level of subjectivity on
the part of management and for which changes in conditions may have a significant impact on the financial statements are:
goodwill, deferred taxes, provisions for bad debts and the fund for risks and charges.


noteS on the ASSet itemS of the bAlAnce Sheet

non-current Assets

1. goodwill
Goodwill remained unchanged compared to December 31, 2008, amounting to Euro 4,095,876 and refers to the acquisition
of the business line from the company Gsmbox Srl, finalized in 2006.

  (in thousands of Euro)          12.31.2008           INCREAsE      wRItE-dows ANd othER moVEmENts       12.31.2009
  Goodwill                         4,095,876               0                          0                   4,095,876

The Goodwill section in the Notes to the Consolidated Financial Statements provides further information on the impairment
test carried out.

2. other intangible Assets
The net values of intangible assets and movements for 2009 are listed below:

  (in thousands of Euro)                             12.31.2008   INCREAsE     AmoRtIzAtIoN     wRItE-dows ANd    12.31.2009
                                                                                               othER moVEmENts
  R&D Costs                                            61,644     1,638,996       (602,218)           -           1,098,423
  Patents and intellectual property rights            160,674        1,570        (114,661)           -             47,583
  Concessions, licenses, trademarks and sim.rights    483,117       196,964       (389,749)           -            290,333
  Other intangible assets                            1,776,468    2,905,199      (1,919,131)          -           2,762,537
  Work in progress and advances suppliers             360,138      (354,942)          -               -              5,196
  Total                                              2,842,042    4,387,787     (3,025,758)           0           4,204,071
The following table reports movements for the previous year:

  (in thousands of Euro)                             12.31.2007   INCREAsE    AmoRtIzAtIoN     wRItE-dows ANd   12.31.2008
                                                                                              othER moVEmENts
  R&D Costs                                            77,771       33,741        (49,868)             -          61,644
  Patents and intellectual property rights            167,179      137,403       (143,908)             -         160,674
  Concessions, licenses, trademarks and sim.rights    518,693      321,176       (356,751)             -         483,117
  Other intangible assets                            1,490,694    1,887,915     (1,602,141)            -        1,776,468
  Work in progress and advances suppliers             273,764      126,046           0             (39,672)      360,138
  Total                                              2,528,102    2,506,280    (2,152,667)        (39,672)      2,842,042

“Development costs” refer primarily to the capitalization of the costs of technological consultancy for developing new products
and services completed during the year and for developing the technology platform.

“Patents and intellectual property rights” include costs of purchasing management and accounting software developed and
sold by third parties.

“Concessions, licenses and trademarks” primarily include costs sustained for the registration of trademarks in Italy and
around the world, as well as costs related to the purchase of Internet domains for the Group (“Buongiorno” and “Blinko” in
particular). The increases relate to the purchase of licenses and personalisation of software produced by third parties.

The item Other intangible assets primarily includes the capitalization of internal costs of employees assigned to the development
of new modules of the internally produced “B!3A” software program. The increases derive from the capitalization of internal
costs and external consultancy relating to the “Management Control and Reporting System” project which entered production
in the last quarter and the introduction of a personalized version of the SAP and Microsoft Sharepoint software. During 2009,
internal costs of Euro 2,046,661 were capitalized; the balance of Euro 858,538 relates to costs for third party consultancy.

The change in “Works in progress and advances to suppliers” can be related primarily to the capitalization of costs prepaid
in previous years relating to the Management Control and Reporting System project.




                                                                                                                                162
                                                                                                                                163
                                  Consolidated annual RepoRt of
                                  the BuongioRno gRoup as of deCemBeR 31, 2009




3. tangible Assets
Below is a description of the changes to property and equipment in terms of Historical Cost, Accumulated Depreciation, and
Net Value at December 31, 2009

  (in thousands of Euro)                hIstoRICAl Cost       dEpRECIAtIoN           NEt VAluE           NEt VAluE
                                           12.31.2009            fuNd                12.31.2009          12.31.2008
  Plant and machinery                       76,148                (55,902)             20,245              24,198
  Industrial and commercial equipment        2,164                 (2,164)                -                   -
  Other assets                            2,333,184             (2,101,117)           232,067             169,558
  Total tangible fixed assets             2,411,495            (2,159,183)            252,312             193,756

and 2008:

  (in thousands of Euro)                hIstoRICAl Cost       dEpRECIAtIoN           NEt VAluE           NEt VAluE
                                           12.31.2008            fuNd                12.31.2008          31.12.2007
  Plant and machinery                     76,147.74               (51,949)             24,198              28,151
  Industrial and commercial equipment      2,163.52                (2,164)                -                   -
  Other assets                            2,176,665             (2,007,108)           169,558             232,026
  Total tangible fixed assets             2,254,977            (2,061,221)            193,756             260,177

plant and machinery
This item includes telephone and electrical systems. The following changes took place during the year:

  (in thousands of Euro)
  plANt ANd mAChINERy                              hIstoRICAl Cost            dEpRECIAtIoN fuNd             NEt VAluE
  At December 31, 2008                                    76,148                   (51,949)                  24,198
  Increase                                                                                                      0
  Decrease
  Depreciation                                                                      (3,953)                  (3,953)
  At December 31, 2009                                    76,148                   (55,902)                  20,245
industrial and commercial equipment
The following changes took place during the year:

  (in thousands of Euro)
  INdustRIAl ANd CommERCIAl EquIpmENt                hIstoRICAl Cost             dEpRECIAtIoN fuNd           NEt VAluE
  At December 31, 2008                                    2,164                       (2,164)                     0
  Increase                                                  -                            -                        -
  Decrease                                                  -                            -                        -
  Depreciation                                              -                            -                        -
  At December 31, 2009                                    2,164                       (2,164)                    -0

other Assets
This item includes furnishings, office equipment and computers. Changes during the year refer to the purchase of new
furnishings for a total amount of Euro 11,603, and the purchase of new servers for a total amount of Euro 144,916 thousand.
Changes during the year were as follows:

  (in thousands of Euro)
  othER AssEts                                     hIstoRICAl Cost        dEpRECIAtIoN fuNd                 NEt VAluE
  At December 31, 2008                               2,176,665                   (2,007,108)                 169,558
  Increase                                            156,519                                                156,519
  Decrease
  Depreciation                                                                     (94,010)                  (94,010)
  At December 31, 2009                               2,333,184                   (2,101,117)                 232,067

4. Shareholdings
Shareholdings amounted to Euro 292,639,381 at December 31, 2009 and the item is broken down as follows:

  (in thousands of Euro)              bAlANCE At        INCREAsE         dECREAsE        wRItE-dowNs       bAlANCE At
                                      12.31.2008                                                           12.31.2009
  Subsidiaries                        176,760,579     111,059,807                                   -      287,820,386
  Associates                           3,351,296        786,035              -                  (53,846)    4,083,485
  Other companies                       735,510            -                 -                      -        735,510
  TOTAL EQUITY INVESTMENTS            180,847,386     111,845,841            0                 (53,846)    292,639,381




                                                                                                                          164
                                                                                                                          165
                                  Consolidated annual RepoRt of
                                  the BuongioRno gRoup as of deCemBeR 31, 2009




investments in Subsidiaries
At December 31, 2009, investments in subsidiaries were as set out in the table below. They were measured at the acquisition
cost, net of write-downs for impairment.

  (in thousands of Euro)                          bAlANCE At     INCREAsE     dECREAsE    wRItE-dowNs        bAlANCE At
                                                  12.31.2008                                                 12.31.2009
   iTouch Ltd                                            -      109,980,876      -               -           109,980,876
  iTouch Ventures Limited                         109,980,876     817,302        -               -           110,798,178
  Freever UK Ltd                                   22,353,970        -           -               -            22,353,970
  iTouch Spain Holdings SL                         21,895,137        -           -               -            21,895,137
  Buongiorno Marketing Services Netherlands B.V     9,718,000        -           -               -             9,718,000
  Tutch Mobile Media B.V.                           6,327,791        -           -               -             6,327,791
  Buongiorno US Inc                                 6,110,948        -           -               -             6,110,948
  Buongiorno Dijital Iletisim A.S.                       -        261,629        -               -              261,629
  Buongiorno Deutschland GmbH                        182,662         -           -               -              182,662
  Buongiorno UK Ltd                                  173,326         -           -               -              173,326
  Buongiorno Hellas S.A.                              17,820         -           -               -               17,820
  Buongiorno MyAlert Bolivia S. de R.L.                 41           -           -               -                 41
  Buongiorno MyAlert Ecuador S.A.                        8           -           -               -                  8
  TOTAL SHAREHOLDINGS                             176,760,579   111,059,807      0               0           287,820,386


The year 2009 saw the following movements with regards to investments in subsidiaries:
 n	 inter-company acquisition of an equity stake in Itouch Ltd for Euro 109,980,876 from Itouch Holding Ltd. In fact, the latter
    company, together with its parent company Itouch Venture Ltd, in which Buongiorno S.p.A. also holds a stake, are in the
    process of being wound up (for more information on this operation refer to paragraph 1.1 “The Group at December 31,
    2009 and Related Developments”);
 n	 acquisition of the residual minority shareholding in the company Buongiorno Digital Iletisim A.S. amounting to 99,999

    shares representing 20% of the share capital. At year-end the company held a 100% stake.
investments in Associates
At December 31, 2009, investments in associates owned by Buongiorno S.p.A. were as set out in the table below. They
were measured at the acquisition cost, net of write-downs for impairment:

  (in thousands of Euro)                              bAlANCE At        INCREAsE       dECREAsE       wRItE-dowNs             bAlANCE At
                                                      12.31.2008                                                              12.31.2009
  Buongiorno Hong Kong Ltd                             3,277,796                           -                 0                3,277,796
  Inches Music srl                                       73,500           53,846           -              (53,846)              73,500
  Buongiorno Digital Innovation India Private Ltd           -            732,189           -                  -                732,189
  TOTAL SHAREHOLDINGS                                  3,351,296         786,035           -             (53,846)             4,083,485

During 2009, the following transactions took place:
 n	 subscription of 4,900,000 shares representing 49% of the share capital of Buongiorno Digital Innovation India Private Ltd,
    a company set up on November 23, 2009;
 n	 payment of Euro 53,846 to cover losses followed by the write-down of the same amount in the company Inches Music

    Group Srl in which 35% of the share capital is held.
The associate company Buongiorno Hong Kong Ltd, in which the Parent Company has a 49% stake, closes its
financial year on March 31. The following table shows highlights from the company’s approved and audited balance
sheet as of March 31, 2009:

  (in thousands of Euro)                                         bAlANCE shEEt buoNgIoRNo hoNg KoNg ltd
                                   03.31.2009       03.31.2008                                                   03.31.2009     03.31.2008
  NON CURRENT ASSETS                  1,007            845           CAPITAL AND RESERVE                           3,928          2,810
  CURRENT ASSETS                      4,858           3,899          NON CURRENT LIABILITIES                        124             1
                                                                     CURRENT LIABILITIES                           1,812          1,933
  TOTAL ASSETS                        5,865           4,745          TOTAL LIABILITIES AND CAPITAL AND RESERVE     5,865          4,745




                                                                                                                                             166
                                                                                                                                             167
                            Consolidated annual RepoRt of
                            the BuongioRno gRoup as of deCemBeR 31, 2009




The following table shows the company’s estimated unaudited balance sheet figures as at December 31, 2009, following the
capital increase subscribed by the company, the change in exchange rates, and the results for the year:

 (in thousands of Euro)                              bAlANCE shEEt buoNgIoRNo hoNg KoNg ltd
                           12.31.2009   12.31.2008                                                        12.31.2009     12.31.2008
  NON CURRENT ASSETS         3,670        1,104          CAPITAL AND RESERVE                                5,741          3,374
  CURRENT ASSETS             4,504        3,899          NON CURRENT LIABILITIES                             171            138
                                                         CURRENT LIABILITIES                                2,262          1,491
  TOTAL ASSETS               8,174        5,003          TOTAL LIABILITIES AND CAPITAL AND RESERVE          8,174          5,003

The investment was not written down in that management feels that the company will not sustain any impairment loss in
coming years.

Shareholdings in other companies

  (in thousands of Euro)                bAlANCE At        INCREAsE              dECREAsE         wRItE-dowNs           bAlANCE At
                                        12.31.2008                                                                     12.31.2009
  77Agency Ltd                           735,510               -                   -                  -                 735,510
  TOTAL SHAREHOLDINGS                    735,510               -                   -                  -                 735,510

During 2009 the shareholding in the company 77Agency Ltd purchased in 2007 for Euro 735,510 was maintained,
representing 10% of share capital.

5. other financial Assets
  (in thousands of Euro)                          bAlANCE At       INCREAsE        dECREAsE        wRItE-dowNs          bAlANCE At
                                                  12.31.2008                                                            12.31.2009
   LONG TERM LOANS TO SUBSIDIARIES                7,011,996        22,381,322      (1,132,478)             -            28,260,840
  GUARANTEE DEPOSITS                                91,298                            (7,340)              -              83,958
  TOTAL OTHER NON CURRENT FINANCIAL ASSETS        7,103,294        22,381,322     (1,139,818)              -            28,344,798

Loans to subsidiaries consist of a partially repaid loan in US dollars to Buongiorno US Inc and a loan of Euro 22 million
to Itouch Ltd. The loan to Buongiorno UK Limited in place at the end of the previous year has been extinguished in full.
Movements in this item are detailed below:


  (in thousands of Euro)                         bAlANCE At      INCREAsE      dECREAsE      wRItE-dowNs   bAlANCE At
                                                 12.31.2008                                                12.31.2009
  iTouch Ltd                                          -         22,169,327           -            -        22,169,327
  Buongiorno US Inc.                              6,863,291       211,995        (983,772)        -         6,091,514
  Buongiorno UK Limited                            148,706           -           (148,706)        -             0
  LONG TERM LOANS TO SUBSIDIARIES                 7,011,996     22,381,322     (1,132,478)        -        28,260,840

The guarantee deposits include the amounts paid as guarantee deposits at the time of stipulating rental contracts for the
offices amounted to about Euro 83,958.

6. deferred tax Assets
Deferred tax assets are recognized in respect of tax losses to the extent that management feels that it is probable that
Buongiorno will be able to use such losses to offset future taxable income. At December 31, 2009, the balance was Euro
11,375,249, calculated as follows:

  (in thousands of Euro)
  dEfERREd tAx AssEts                                                          yEAR 2009
  Balance at year start                                                        14,370,549
  Increase                                                                          -
  Reversal                                                                     (2,995,300)
  Balance at year end                                                          11,375,249


current Assets

7. inventories
There are no inventories at the end of the year in question nor in the previous year.




                                                                                                                        168
                                                                                                                        169
                            Consolidated annual RepoRt of
                            the BuongioRno gRoup as of deCemBeR 31, 2009




8. trade and other Receivables
The balance at December 31, 2009 is detailed below:

  (in thousands of Euro)                                    12.31.2009                12.31.2008
  Trade debtors                                             5,250,929                 5,142,118
  Debtors from subsidiaries                                23,039,476                20,085,977
  Debtors from associates                                    575,514                   472,466
  Tax receivables                                           1,677,524                  870,890
  Other debtors                                               33,720                    45,246
  Accrued income and prepayments                             273,355                   306,888
  Trade debtors and other receivables                      30,850,517                26,923,585

trade Receivables

  (in thousands of Euro)                                    12.31.2009                12.31.2008
  Trade debtors                                             5,274,178                 5,165,367
  Fund for bad debts                                         (23,249)                  (23,249)
  Total                                                     5,250,929                 5,142,118

Trade receivables have remained more or less stable despite the reduction in Consumer Services turnover (-23%) due to the
lengthening of customer payment times.

The Provision for bad debts pursuant to specific and timely analysis did not change compared to last year and is considered
to be adequate to adjust the receivable amounts based on their estimated realizable value.

                                                                                (in thousands of Euro)
  Fund for bad debt at December 31, 2008                                               (23,249)
  Use                                                                                      -
  Allocations                                                                              -
  Fund for bad debt at December 31, 2009                                               (23,249)

All trade receivables are due within twelve months.
The following table reports movements for the previous year:

                                                                            (in thousands of Euro)
  Fund for bad debt at December 31, 2007                                         (110,869)
  Use                                                                             159,134
  Allocations                                                                      (71,514)
  Fund for bad debt at December 31, 2008                                          (23,249)

Receivables from Subsidiaries
At December 31, 2009, receivables from associates amounted to Euro 23,039,476 million (at December 31, 2008 they
amounted to Euro 20,085,977 thousand), broken down as follows:

  (in thousands of Euro)                                       12.31.2009        12.31.2008
  Buongiorno MyAlert S.A.                                      5,980,209          6,707,303
  Buongiorno UK Ltd                                            2,889,027          1,986,226
  iTouch South Africa (Pty) Ltd                                2,093,245           811,618
  iTouch Spain Holdings SL                                     1,618,480          1,513,000
  Buongiorno US Inc                                            1,365,108          1,193,873
  Buongiorno France S.A.                                       1,361,228            32,970
  Buongiorno Dijital Iletisim A.S.                             1,023,802           686,697
  Buongiorno Marketing Services Italia S.r.l.                   983,222            638,847
  MyAlert S.L. de C.V.                                          735,151             25,968
  iTouch Movilisto Portugal Lda                                 710,158              4,900
  Buongiorno Deutschland GmbH                                   689,626            377,323
  Buongiorno Marketing Services Netherlands B.V                 650,373            487,333
  Buongiorno Hellas S.A.                                        627,125            425,805
  Rocket Mobile Inc.                                            457,671            467,319
  LlamaTV S.L.                                                  356,103            132,924
  Buongiorno Myalert Brasil Serv.Celulares Ltd                  343,500              4,549
  Ostrich Media Limited                                         216,858            392,086
  iTouch Australia Pty Ltd                                      172,727            693,800
  sms.at Mobile Internet Services GmbH                          133,185               131
  Tutch Mobile Media B.V.                                       128,767            323,889
  iTouch Spain Holdings SL                                                             -
  DioraNews S.a.s.                                              82,170             148,131
  iTouch Ltd                                                    79,554            1,057,840




                                                                                                               170
                                                                                                               171
                                Consolidated annual RepoRt of
                                the BuongioRno gRoup as of deCemBeR 31, 2009




(in thousands of Euro)                                           12.31.2009   12.31.2008
iTouch Nordics AS                                                 71,014        65,067
iTouch Global Concepts Nigeria Ltd                                57,934       461,307
Buongiorno Marketing Services Deutschland GmbH                    50,868        54,824
Buongiorno MyAlert Venezuela, S.A.                                27,110           -
Buongiorno MyAlert Equador S.A.                                   16,223          556
Axis Mundi S.A.                                                   14,259        83,084
Buongiorno MyAlert Servicios de Telecomunicaciones Chile Ltda.    14,115           -
Grupo iTouch Movilisto Mexico Servicios, S.A de CV                12,805        6,089
Telitas Netherlands NV                                            11,725       100,214
Hotsms.com B.V.                                                   11,285         3,736
Jippii Schweiz AG                                                  8,467        13,540
Akumiitti Oy                                                       8,257         4,029
Buongiorno Marketing Services Uk Ltd                               7,370         3,381
Buongiorno Russia LLC                                              6,649           -
BY Cycle Perù SAC                                                  5,608         3,077
Intouch Technologies Ltd                                           3,685       156,903
Buongiorno.at email services GmbH                                  3,552         -244
Buongiorno Marketing Services España, S.L.                         3,420         2,682
Buongiorno MyAlert Colombia S.R.L.                                 2,487          315
Xama TV Televisao Interactiva L.d.a.                               2,405          804
Buongiorno Marketing Services US Inc.                              1,832         1,409
Buongiorno Marketing Services France S.a.s                         1,046          923
Jippii Spain SL                                                     538           158
sms.at Holding AG                                                   486            -
Movilisto S.A.                                                      374           374
Producciones y Promociones Especiales de Television S.L.            340           194
SMS Cosmos AS                                                       283           162
Grupo iTouch Movilisto R.S.R.L                                      233            -
Rivertam S.A.                                                       36            36
iTouch New Zealand Ltd                                               3             3
Group iTouch Movilisto Espana SL                                     -         869,175
iTouch (UK) Ltd                                                      -         119,814
Mobivillage S.A.                                                     -          15,938
  (in thousands of Euro)                                        12.31.2009                 12.31.2008
  Mobile Fun Sistemas de Informatica Ltda                           -                         3,473
  iTouch Ventures Limited                                            -                        1,186
  Buongiorno MyAlert Bolivia S.r.l.                                  -                          60
  iTouch Denmark AS                                                 -                           60
  Mobilnet AS                                                    (2,222)                      1,119
  TOTAL DEBTORS FROM SUBSIDIARIES                              23,039,476                  20,085,977
  of which financial receivables
  iTouch Spain Holdings SL                                      1,513,000                  1,513,000
  Buongiorno UK Ltd                                              798,930                        -
  Buongiorno Marketing Services Italia S.r.l.                    246,286                     16,286
  Buongiorno MyAlert S.A.                                         72,344                   1,051,013
  Buongiorno Dijital Iletisim A.S.                                11,308                     11,308
  Buongiorno Hellas S.A.                                          8,011                     274,139
  iTouch Ltd                                                         -                     1,055,106
                                                                2,649,880                  3,920,852

In order to optimize cash flows, the Company, as the Group’s Parent, provides a centralized treasury service to the Group.
The financial receivables listed in the table reflect this service.

Receivables from Subsidiaries and Associates
Receivables from subsidiaries and associates, amounting to Euro 575,514, increased 22% compared to the end of the
previous year. In the breakdown by company set out below, it should be noted that the receivable from Buongiorno Hong Kong
Ltd. is a trade receivable whilst the receivable from Buongiorno Digital Innovation India Private Limited is of a financial nature.

  (in thousands of Euro)                                        12.31.2009                 12.31.2008
  BUONGIORNO (HONG KONG) LIMITED                                 547,703                    472,466
  BUONGIORNO DIGITAL INNOVATION INDIA PRIVATE LIMITED             27,811                       -
  Total                                                          575,514                    472,466

tax Receivables

  (in thousands of Euro)                                        12.31.2009                 12.31.2008
  Tax receivables                                               1,677,524                    870,890

This item consists primarily of approximately Euro 621,855 accrued pursuant to Law 296/06 art. 1 paragraph. 280-283 TAX
CREDIT FOR RESEARCH AND DEVELOPMENT EXPENSES, approximately Euro 556,558 for IRAP paid on account and
Euro 483,943 for VAT receivable.



                                                                                                                                  172
                                                                                                                                  173
                                  Consolidated annual RepoRt of
                                  the BuongioRno gRoup as of deCemBeR 31, 2009




other Receivables
This item is broken down as follows:

  (in thousands of Euro)                                      12.31.2009              12.31.2008
  Trade debtors and receivables from employees for advances     3,426                   15,278
  Other debtors                                                30,294                   29,968
  Total                                                        33,720                   45,246

Accrued income and prepayments
This item is broken down as follows:

  (in thousands of Euro)                                      12.31.2009              12.31.2008
  Accrued income                                                  -                       -
  Prepayments                                                  273,355                 306,888
  Total                                                        273,355                 306,888

Prepayments primarily relate to the cost of software licenses, insurance, rental fees and commissions applicable to 2010 not
yet rendered at December 31, 2009.

9. other financial Assets
This item shows a zero balance, which is the same as the previous year.

10. cash and cash equivalents
Cash and cash equivalents amounted to Euro 3,824,494 at December 31, 2009 (Euro 4,209,974 at December 31, 2008).
They are broken down as follows:

  (in thousands of Euro)                                      12.31.2009              12.31.2008
  Bank and similar accounts                                   3,824,324               4,205,155
  Cheques                                                         0                       -
  Cash-in-hands and cash equivalents                             169                    4,819
  Total                                                       3,824,494               4,209,974
Bank deposits include :
 n	 a Euro 258,122 tied-up current account given in pledge by the Company to guarantee a bank bond issued by a Credit
    Institution in favor of Simest S.p.A.., relating to the loan issued by the latter, totaling Euro 993,285 thousand;
 n	 an escrow account with a Euro 101,460 balance at year-end associated with an obligation to a former shareholder of the

    iTouch Ventures Limited Group.
Cash flows relating to 2009 are shown and explained in the consolidated Cash Flow Statement. The breakdown of the Net
Financial Position as of December 31, 2009 is reported in the table below:

  (in thousands of Euro)
  NEt fINANCIAl posItIoN                                   12.31.2009             12.31.2008            VARIANCE
  Cash and cash equivalents                                  3,824,494              4,209,974             (385,480)
  Financial receivables from subsidiaries                    2,677,691              3,920,852            (1,243,161)
  TOTAL CASH AND OTHER FINANCIAL ASSETS                     6,502,185              8,130,826            (1,628,641)
  Total payables to banks                                   (2,015,847)           (77,534,389)           75,518,542
  Total bank loans - current share                         (33,514,450)            (1,978,425)          (31,536,025)
  Guaranted convertible bond                                 (993,639)                  -                 (993,639)
  Total other current financial liabilities                  (104,386)              (195,602)               91,216
  Short term loans to subsidiaries                        (139,676,725)            (4,940,901)         (134,735,824)
  INDEBITAMENTO FINANzIARIO CORRENTE                     (176,305,047)           (84,649,317)          (91,655,730)

  SHORT NET FINANCIAL POSITION                           (169,802,862)           (76,518,491)          (93,284,371)

  Long term financial receivables from subsidiaries        28,260,840             7,011,997.00          21,248,843

  Total bank loans - non-current share                     (47,789,451)            (5,296,662)          (42,492,789)
  Guaranted convertible bond                                     -                  (965,230)             965,230
  TOTAL NON CURRENT FINANCIAL LIABILITIES                 (47,789,451)            (6,261,892)          (41,527,559)

  NET FINANCIAL POSITION                                 (189,331,472)           (75,768,386)         (113,563,086)




                                                                                                                         174
                                                                                                                         175
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




Buongiorno’s net financial debt at December 31, 2009 amounted to Euro 189,331,472, significantly worsening compared to
year-end 2008 (Euro 75,768,386).
The balance of cash and cash equivalents (Euro 3,824,494) reflects current account balances. The balance has remained
virtually unchanged (Euro -385,480) compared to December, 31 2008 (when the balance amounted to Euro 4,209,974).

Short-term payables to banks refer to the current account overdraft facility granted by Credito Emiliano S.p.A. for a maximum
amount of Euro 2 million. At December 31, 2008 this item included the residual amount of the secured loan provided by the
Banca Intesa group for the acquisition of the iTouch Ventures Limited group; this loan was then extinguished and replaced
with the pool loan for the original sum of Euro 87 million described in detail in paragraph 17 of this report.

The current portion of the bank loans, amounting to Euro 33,514,450 is represented by the part of the pool loan falling
due in 2009 for an original amount of Euro 87 million, the amount relating to bank borrowings taken out with national banks
(Credito Emiliano and Medio Credito Centrale - Unicredit banking group) and the amount falling due in the year of the loan
obtained from Simest, a financial company for the development and promotion of Italian companies abroad. All the items are
commented in detail in paragraph 17 of this report.

Bonds issued amounting to Euro 993,639 comprise the remaining portion of the convertible bond having an original value of
Euro 12 million subscribed on September 22, 2005 by Mitsui & Co. Ltd and Banca IMI and falling due in 2010.

Other current financial liabilities amounted to Euro 104,386 and consist of financial payables due to one of the former iTouch
Ventures Limited shareholders as established at the closing of the transaction.

Medium/long-term financial borrowings at the end of 2009 amounted to Euro 47,789,451 and consisted of the portion falling
due after the year-end of the pool loan for an original sum of Euro 87 million, the amount relating to bank loans taken out with
national banks (Credito Emiliano and Medio Credito Centrale - Unicredit banking group), the portion falling due in the year of
the loan obtained from Simest, a financial company for the development and promotion of Italian companies abroad. All the
items are described and commented in detail in paragraph 12 of this report.
Additional information Required by the international financial Reporting Standard n° 7
The Company is exposed to financial risks associated with its operations:
 n	 credit risk relating to normal commercial relationships with clients and users;
 n	 liquidity risk, with particular regard to the availability of financial resources and access to the credit market and the market
    for financial instruments in general;
 n	 market risks (principally with regard to exchange and interest rates), insofar as the Group operates at international level in

    various currency areas and uses financial instruments which generate interest.
As described in the section relating to risk management, the Company constantly monitors the financial risks to which it is
exposed, so as to evaluate the potential negative effects of these in advance and to take suitable action to mitigate them.

The following section provides qualitative and quantitative information on the incidence of such risks on the Company. The
quantitative data presented below do not have a predictive value, in particular, the sensitivity analyses of market risk cannot
reflect the complexity and correlated reactions of markets which may derive from every forecasted change.




                                                                                                                                   176
                                                                                                                                   177
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




classes of financial instruments
Items of the Balance Sheet, classified according to the respective risk categories as of December 31, 2009 and 2008, are
presented below.

Situation at December 31, 2009:

  (in thousands of Euro)                                              ClAssEs of homogENEous RIsKs
                                                totAl        CREdIt       lIquIdIty   INtEREst ExChANgE       pRICE
                                                                                        RAtE       RAtE
  NON CURRENT ASSETS
  LONG TERM LOANS TO SUBSIDIARIES               28,261       22,169                                6,092

  CURRENT ASSETS
  SHORT TERM LOANS TO SUBSIDIARIES               2,678        2,678                                  -
  TRADE RECEIVABLES                              5,142        4,729                                 414
  OTHER RECEIVABLES                               34           34
  CURRENT FINANCIAL ASSETS
  CASH AND CASH EQUIVALENTS                      3,824                     3,824

  NON CURRENT LIABILIITIES
  CONVERTIBLE BOND                               985                        985
  LONG TERM BANK BORROWINGS                     47,789                                 47,789
  OTHER NON CURRENT FINANCIAL LIABILITIES

  CURRENT LIABILIITIES
  TRADE PAYABLES                                13,322                     12,787                   535
  SHORT TERM BANK BORROWINGS                    35,484                                 35,484
  OTHER CURRENT FINANCIAL LIABILITIES            104                                    104
Situation at December 31, 2008:

  (in thousands of Euro)                                      ClAssEs of homogENEous RIsKs
                                            totAl    CREdIt       lIquIdIty   INtEREst ExChANgE   pRICE
                                                                                RAtE       RAtE
  NON CURRENT ASSETS
  LONG TERM LOANS TO SUBSIDIARIES           7,012     149                                6,863

  CURRENT ASSETS
  SHORT TERM LOANS TO SUBSIDIARIES          3,921     3,921                                -
  TRADE RECEIVABLES                         5,142     5,115                               27
  OTHER RECEIVABLES                          45        45
  CURRENT FINANCIAL ASSETS                              -
  CASH AND CASH EQUIVALENTS                 4,210                  4,210

  NON CURRENT LIABILIITIES
  CONVERTIBLE BOND                           965                    965
  LONG TERM BANK BORROWINGS                 5,297                              5,297
  OTHER NON CURRENT FINANCIAL LIABILITIES                            -

  CURRENT LIABILIITIES
  TRADE PAYABLES                            9,930                  9,863                  67
  SHORT TERM BANK BORROWINGS                79,512                            79,512
  OTHER CURRENT FINANCIAL LIABILITIES        196                               196




                                                                                                          178
                                                                                                          179
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




financial Assets and liabilities categories
The following tables show Balance Sheet items classified according to the categories provided for by IAS 39 as of December
31, 2009 and 2008.

Situation at December 31, 2009

  (in thousands of Euro)
                                            At fAIR VAluE      loANs       VAluEd    VAluEd          totAl    fAIR VAluE
                                                                ANd     At AmoRtIzEd At Cost
                                                            RECEIVAblEs     Cost
  NON CURRENT ASSETS
  LONG TERM LOANS TO SUBSIDIARIES                              28,261                                28,261     28,261
  CURRENT ASSETS
  SHORT TERM LOANS TO SUBSIDIARIES                             2,678                                 2,678      2,678
  TRADE RECEIVABLES                                            5,142                                 5,142      5,142
  OTHER RECEIVABLES                                              34                                    34         34
  CURRENT FINANCIAL ASSETS
  CASH AND CASH EQUIVALENTS                     3,824                                                3,824      3,824

  NON CURRENT LIABILIITIES
  CONVERTIBLE BOND                                                            985                     985        985
  LONG TERM BANK BORROWINGS                                                  47,789                  47,789     47,789
  OTHER NON CURRENT FINANCIAL LIABILITIES

  CURRENT LIABILIITIES
  TRADE PAYABLES                                                                         13,322      13,322     13,322
  SHORT TERM BANK BORROWINGS                                                 35,484                  35,484     35,484
  OTHER CURRENT FINANCIAL LIABILITIES                                                     104         104        104
Situation at December 31, 2008

  (in thousands of Euro)
                                            At fAIR VAluE      loANs       VAluEd    VAluEd          totAl    fAIR VAluE
                                                                ANd     At AmoRtIzEd At Cost
                                                            RECEIVAblEs     Cost
  NON CURRENT ASSETS
  LONG TERM LOANS TO SUBSIDIARIES                              7,012                                 7,012      7,012
  CURRENT ASSETS
  SHORT TERM LOANS TO SUBSIDIARIES                             3,921                                 3,921      3,921
  TRADE RECEIVABLES                                            5,142                                 5,142      5,142
  OTHER RECEIVABLES                                              45                                    45         45
  CURRENT FINANCIAL ASSETS                                                                              -          -
  CASH AND CASH EQUIVALENTS                     4,210                                                4,210      4,210

  NON CURRENT LIABILIITIES                                                                                        -
  CONVERTIBLE BOND                                                            965          -          965        965
  LONG TERM BANK BORROWINGS                                                  5,297         -         5,297      5,297
  OTHER NON CURRENT FINANCIAL LIABILITIES                                                              -          -

  CURRENT LIABILIITIES
  TRADE PAYABLES                                                                         9,930        9,930      9,930
  SHORT TERM BANK BORROWINGS                                                 79,512                  79,512     79,512
  OTHER CURRENT FINANCIAL LIABILITIES                                                     196          196        196

Trade and other receivables did not generate any costs pertaining to losses on receivables and allocations to the fund for
bad debts (about Euro 23 thousand in 2008). It is deemed that the carrying value of these estimates provides a reasonable
approximation of their respective fair values.

Other financial assets and cash and cash equivalents generated financial income and interest of approximately Euro 10
thousand during the year, compared to approximately Euro 151 thousand in 2008.

Bank borrowings generated a total of approximately Euro 3,040 thousand in interest expenses (Euro 6,127 thousand in
2008). The current value of short-term bank borrowings was measured by assuming a fair value corresponding to the




                                                                                                                           180
                                                                                                                           181
                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




recognized fair value inasmuch as said borrowings have maturities falling in 2010 and bear interest at floating market
rates. The fair value of borrowings with maturities beyond 2009, which also bear interest at floating rates, approximates
the market value.

guarantees
As of December 31, 2009, the Company had issued the following guarantees:
 n	   pledge of the shares of a number of subsidiaries as collateral for the financing of the contract with Banca IMI S.p.A.;
 n	   pledge of the cash and cash equivalents in a current account for an amount of Euro 258,000 as security against any
      default on the credit line granted by Simest to Buongiorno.


liquidity risk
The following table shows financial liabilities, classified by maturity:

Situation at December 31, 2009:

  (in thousands of Euro)
                                                  <1 yEAR    >1 <2 yEARs   >2 <3 yEARs   >3 <4 yEARs >4 <5 yEARs   >5 yEARs
  NON CURRENT LIABILIITIES
  CONVERTIBLE BOND                                  985
  LONG TERM BANK BORROWINGS                                     14,891       13,989        13,097       5,812
  OTHER NON CURRENT FINANCIAL LIABILITIES

  CURRENT LIABILIITIES
  TRADE PAYABLES                                   13,322
  SHORT TERM BANK BORROWINGS                       35,484
  OTHER CURRENT FINANCIAL LIABILITIES               104
Situation at December 31, 2008:

  (in thousands of Euro)
                                                <1 yEAR   >1 <2 yEARs   >2 <3 yEARs      >3 <4 yEARs    >4 <5 yEARs   >5 yEARs
  NON CURRENT LIABILIITIES
  CONVERTIBLE BOND                                 -          965            -                -                -         -
  LONG TERM BANK BORROWINGS                                  2,062         2,149            1,086              -         -
  OTHER NON CURRENT FINANCIAL LIABILITIES                                                                                -

  CURRENT LIABILIITIES
  TRADE PAYABLES                                9,930
  SHORT TERM BANK BORROWINGS                    79,512
  OTHER CURRENT FINANCIAL LIABILITIES            196


credit risk
For the purposes of this analysis, macro-classes of homogeneous risk have been highlighted, identified on the basis of the
business models of Company in order to represent its exposure to credit risk more accurately. The following classes have
been highlighted:
 n	 trade receivables, which include amounts due from major companies operating in national and international mobile
    telephone markets.
 n	 other receivables mainly consist of receivables arising on operations of a non-commercial nature for which an individual

    solvency analysis has been carried out.
The following tables present the breakdown by maturity of the identified risk classes:

Situation at December 31, 2009:

  (in thousands of Euro)
  ClAssEs                   totAl                       ExpIREd                totAl  to ExpIREd wRItE-dowNs
                                    0-30dAys 31-60dAys 61-90dAys moRE thAN 90 ExpIREd
  Trade receivables         5,142       1,201      285         58            -            1,545        3,597
  Other receivables           34          -         -           -            -              -            34
  Total                     5,177       1,201      285         58            -            1,545        3,631




                                                                                                                                 182
                                                                                                                                 183
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




Situation at December 31, 2008:

  (in thousands of Euro)
  ClAssEs                  totAl                        ExpIREd                totAl  to ExpIREd wRItE-dowNs
                                    0-30dAys 31-60dAys 61-90dAys moRE thAN 90 ExpIREd
  Trade receivables        5,142        2          1                         50          53         5,113           (23)
  Other receivables          45         -          -            -             -           -           45              -
  Total                    5,188        2          1            -            50          53         5,158           (23)

The Company does not renegotiate expired credits.

The notes to the financial statements present the movements in the provision for bad debts.

market Risks: Sensitivity Analysis
In terms of market risks, the Group is exposed to interest rate risk, exchange rate risk, and price risk. A sensitivity analysis
was conducted of the balance sheet items that could undergo a change in value due to the fluctuation of exchange rates,
interest rates, and market prices. The estimate referred to the following balance sheet items in detail:
 n	 trade receivables and payables in foreign currencies;
 n	 bank deposits in foreign currencies;
 n	 loans;

 n	 financial liabilities;

 n	 short-term financial assets.


The Group is exposed to risks deriving from the fluctuation of exchange rates which may have an impact on its profit or
equity. These risks derive from the fact that some subsidiaries of the Group are located in countries not belonging to the
European Monetary Union, such as the United States, the United Kingdom, Turkey, Bolivia, Chile, Peru, Mexico, Argentina,
Brazil, Colombia, Ecuador, Hong Kong, South Africa, Nigeria, Australia, New Zealand, Norway, Denmark, Sweden, Finland,
Switzerland, Romania and Morocco. Since the Group’s reference currency is the Euro, the profit and loss accounts of such
companies are converted into Euros at the average exchange rate for the period, and for constant revenues and margins
in local currency, variations in exchange rates may have an effect on the countervalue in Euros of the revenues, costs and
profits. Assets and liabilities of the consolidated companies with a currency of account other than the Euro may have different
countervalues in Euro, depending on the evolution of exchange rates. As established by the accounting principles adopted,
the effects of such evolutions are recognized directly in equity under the item conversion difference. At the reporting date,
there were no hedges in existence for such exposure. The following assumptions and methods were applied to conduct the
sensitivity analysis:
 n	   assumptions and calculation methods: the risk is substantially tied to the fluctuation of the USD and GBP, which are the
      foreign currencies of greatest relevance to the Buongiorno Group. For these currencies, immediate positive and negative
      shifts of 5% in the spot exchange rate at December 31 were assumed. The table shows the impact of this change on the
      figure disclosed on the financial statements.

With reference to interest rates, Group companies use external financial resources in the form of debt and deploy available
liquidity in money and financial market instruments. Changes in levels of market interest rates influence the cost and yield
of the various forms of financing, and applications, hence affecting the amount of net financial charges of the Group. The
following assumptions and methods were applied to conduct the sensitivity analysis:
 n	   assumptions and calculation methods: the effect of an immediate increase and decrease of 0.5% in annual rates on the
      profit and loss account was calculated. The interest rates on bank deposits that generate interest income are almost
      entirely linked to the performance of interbank rates. To estimate the increase or decrease in interest income, a 0.5% shift
      was applied to the average annual balance of bank deposits. Floating-rate loans generate interest expenses, the amount
      of which is linked to the performance of the benchmark interest rates. To estimate the increase or decrease in interest
      expenses, a 0.5% shift was applied to the principal of outstanding loans at the balance sheet date.

price risk applies to short-term cash investments. The following assumptions and methods were applied to conduct the
sensitivity analysis:
 n	   assumptions and calculation methods: the effect of an immediate 5% increase and decrease in the market value of
      financial assets at December 31 on the profit and loss account was calculated.




                                                                                                                                 184
                                                                                                                                 185
                                      Consolidated annual RepoRt of
                                      the BuongioRno gRoup as of deCemBeR 31, 2009




The following table shows the effects of the assumptions set out above on the consolidated financial statements:

  (in thousands of Euro)
                                               INtEREst RAtE RIsK      ExChANgE RAtE RIsK             pRICE RIsK
                                               -0,5%         0,5%        -5%         5%            -5%           5%
                                              ChANgE        ChANgE     ChANgE     ChANgE         ChANgE       ChANgE
                                             INtEREst      INtEREst   ExChANgE ExChANgE            NAV          NAV
                                                RAtE         RAtE       RAtE        RAtE
 ASSETS
 LONG TERM LOANS TO SUBSIDIARIES
 TRADE RECEIVABLES                                                      (21)         21

 Total impact of pre-tax financial assets                               (21)         21

 NON CURRENT LIABILIITIES
 LONG TERM BANK BORROWINGS                       3           (3)

 CURRENT LIABILITIES
 TRADE PAYABLES
 SHORT TERM BANK BORROWINGS
 OTHER CURRENT FINANCIAL LIABILITIES

 Total impact of pre-tax financial liabilities   3           (3)

 Impact on pre-tax results                       3           (3)        (21)         21


11. non-current Assets held for Sale
At December 31, 2009 there were no assets held for sale or disposal.
noteS on the liAbilitY itemS of the SepARAte bAlAnce Sheet


12. equity
Share capital
The company’s share capital remained at Euro 27,651,956 in 2009. As of December 31, 2009, the share capital of
Buongiorno is therefore composed of 106,353,675 ordinary shares with a par value of Euro 0.26 each.

other changes in equity
Equity changed as follows during the year:
 n	 no transactions took place on treasury stocks, the balance at December 31 is hence equal to 1,488 treasury stocks
    having a countervalue of Euro 1,326 recognized as a deduction from equity;
 n	 the total of unrealized exchange differences (equal to Euro 208,578) arising from the inter-company loan to Buongiorno

    USA Inc denominated in USD (see note 5) was recognized as a deduction from this item.
profit (loss) for the Year
Buongiorno’s net loss for the year was Euro 6,649,629.

A statement of changes in equity follows the balance sheet and profit and loss account.




                                                                                                                         186
                                                                                                                         187
                              Consolidated annual RepoRt of
                              the BuongioRno gRoup as of deCemBeR 31, 2009




non-current liabilities

13. long-term borrowings
Medium and long-term borrowings at the end of the year amounted to Euro 47,789,451 million (Euro 6,261,892 at December
31, 2008) and included the following items:
 n	 Remaining portion of Euro 57,973,434 (including Euro 44,573,429 included in long-term liabilities) of the secured loan
    for an original amount of Euro 67 million (Tranche A) provided by a pool of banks headed by Banca Imi (Intesa San Paolo
    banking group) disbursed on June 26, 2009. The amount falling due within the year totalling Euro 13,400,000 has been
    accounted for in short-term liabilities;
 n	 the remaining balance of a Euro 5 million unsecured loan granted by MCC S.p.A. (Unicredit banking group) on December

    18, 2007 (Euro 3,217,167, of which Euro 1,968,392 is long-term).
 n	 a long-term loan issued on April 27, 2007 by Credito Emiliano S.p.A. amounting to Euro 1,577,408; the portion recognized

    amongst long-term liabilities amounted to Euro 949,644, whereas the remainder was included amongst short-term
    liabilities;
 n	 the remaining balance of a fixed-rate soft loan granted by Simest S.p.A. under Italian Law 394/81 regarding internationalization

    projects (Euro 496,642 , of which Euro 297,986 is long-term).
Convertible bonds, like other long-term financial liabilities, are valued at amortized cost, which is calculated bearing in mind all
related costs and using a market interest rate for equivalent non-convertible bonds or financial liabilities (IAS 32, Paragraphs
64, 28 and 31). The net interest rate used was 4.5%, which corresponds to the rate obtained by the banking system on
medium- and long-term loans.

The main conditions applied to medium and long-term loans are summarized in the following table:

  typE of fINANCINg                        pRINCIpAl             mAtuRIty          INtEREst RAtE
  IMI (TRANCHE A)                          57,973,434           30/06/2014              3.44%
  MCC                                      3,217,167            13/02/2012              2.55%
  Credito Emiliano                         1,577,408            27/04/2012              1.97%
  SIMEST                                    496,643             25/03/2012              1.32%
A statement and discussion of cash flows for 2009 are reported after the balance sheet, the profit and loss account and the
statement of changes in equity.

14. deferred taxes
There are no deferred tax liabilities at the end of the year, nor at December 31, 2008.

15. non-current provision
This item includes the severance indemnity fund amounting to Euro 932,783, at December 31, 2009. According to Italian
GAAP, the severance indemnity fund represents the actual amount due to employees in accordance with laws and labor
contracts in force, considering every form of compensation on an ongoing basis.

The total amount corresponds to the total of the single indemnities accrued in favor of employees at the reporting date, net
of payments on account, and equal to the amount that would have been due to employees if the work relationship were to
have ended on that date.

Pursuant to the provisions of IAS 19, the severance indemnity fund is considered a defined contribution plan that requires
an actuarial valuation, taking a series of factors into account (current cost of labor, turnover of personnel, expected return,
financial charges, actuarial gains and losses, etc.). The principal actuarial assumptions used for the calculation of the
Severance Indemnity Fund at December 31, 2009 are as follows:
 n	 technical annual discount rate of 3.5%;
 n	 annual inflation rate of 2%;
 n	 annual rate of increase of severance indemnity fund of 3%;

 n	 annual rate of employee turnover of 10%;

 n	 under reformed employee benefit regulations, the annual rate of wage increases is no longer taken as a reference

    parameter, inasmuch as future accruals to the severance indemnity provision will no longer flow to the company, but rather
    to a supplementary pension program or the treasury fund maintained by the INPS (the Italian social-security agency).
The measurement of the severance indemnity provision using actuarial techniques applied in accordance with IAS 19 resulted
in a Euro 14,141 increase in the provision at December 31, 2008.




                                                                                                                              188
                                                                                                                              189
                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




Movements in the severance indemnity provision during the year were as follows:

                                                                                  (in thousands of Euro)
  Severance indemnity fund at December 31, 2008                                        1,035,088
  Allocation                                                                             31,906
  Payments                                                                              -134,211
  Severance indemnity fund at December 31, 2009                                         932,783


current liabilities

16. trade and other payables
  (in thousands of Euro)                                  12.31.2009                   12.31.2008
  Trade creditors                                         13,322,155                   9,961,752
  Trade creditors from subsidiaries                      145,059,715                   7,200,047
  Other tax payables                                       435,423                      479,455
  Providence and social security charges                   954,992                      663,827
  Other creditors                                         2,712,990                    1,677,146
  Accrued expenses and deferred income                      4,373                        4,373
  Trade creditors and other creditors                    162,489,648                  19,986,600

trade payables

  (in thousands of Euro)                                  12.31.2009                   12.31.2008
  Trade creditors                                         13,322,155                   9,961,752

At December 31, 2009, trade payables amounted to Euro 13,322,155, up 34% compared to about Euro 9,961,752 at
year-end 2008.

At December 31, 2009 there were no trade payables falling due after more than 12 months.
payables to Subsidiaries
Payables to subsidiaries at December 31, 2009 amounted to Euro 145,059,715 million, a sharp increase from Euro
7,200,047 million at December 31, 2008, and were broken down as follows:

  (in thousands of Euro)                                      12.31.2009                 12.31.2008
  iTouch Holding                                             110,798,178                      -
  Myalert.com S.A.                                            11,854,672                  720,202
  Buongiorno France S.A.                                      11,696,251                 1,935,327
  Buongiorno UK Ltd                                           4,289,679                    55,034
  Dioranews S.A.                                              3,113,271                  3,058,061
  Buongiorno US Inc                                           1,100,102                   327,061
  Tutch Mobile Media B.V.                                      901,638                    715,988
  sms.at Mobile Internet Services GmbH                         341,299                     99,797
  Hotsms.com B.V.                                              318,183                        -
  Buongiorno Hellas Mobile Ltd                                 200,105                        -
  Rocket Mobile Inc.                                           155,607                        -
  Axis Mundi S.A.                                               79,457                        -
  Buongiorno Marketing Services Italia S.r.l.                   78,753                      109
  Buongiorno Marketing Netherlands BV                           63,048                        -
  iTouch South Africa (Pty) Ltd                                 19,868                        -
  Buongiorno Marketing Services Espana s.l.u.                   13,887                     5,061
  Buongiorno Deutschland GmbH                                    8,987                     61,477
  iTouch Movilisto Portugal Lda                                  8,674                        -
  Buongiorno MyAlert Brasil Servicios Celulares Ltda.            7,880                        -
  Buongiorno Dijital Iletisim A.S.                              6,334                      6,334
  Buongiorno.at email services GmbH                              3,843                     22,443
  Group iTouch Movilisto Espana SL                                 -                      193,153
  Total trade creditors from subsidiaries                    145,059,715                 7,200,047

The significant increase in payables to subsidiaries is due primarily to financial movements. In fact this item amounted to
Euro 139,676,725 compared to Euro 4,934,184 at the end of the previous year. Bearing in mind that the Company, in its
capacity as a Parent Company, carries out the centralized treasury function, mention should be made of the inter-company
acquisition of the investment in Itouch Ltd amounting to approximately Euro 110 million from the company Itouch Holding
Ltd. This transaction carried out as part of the group’s corporate restructuring has generated a financial liability of the same
amount in respect of the subsidiary Itouch Holding Ltd.




                                                                                                                               190
                                                                                                                               191
                                   Consolidated annual RepoRt of
                                   the BuongioRno gRoup as of deCemBeR 31, 2009




tax payables

  (in thousands of Euro)                                     12.31.2009                 12.31.2008
  Other tax payables                                           435,423                   479,455

At Euro 435,423, tax payables (against Euro 479,455 in 2008) mainly reflect amounts withheld from compensation paid to
employees and independent contractors.

providence and Social Security charges

  (in thousands of Euro)                                     12.31.2009                 12.31.2008
  Providence and social security charges                       954,992                   663,827

This item refers to contributions that have accrued but have not yet been paid to providence and social security institutions.
At the reporting date, these charges were Euro 954,992.

other payables
At December 31, 2009, other payables totaled Euro 2,712,990 million and were broken down as follows:

  (in thousands of Euro)                                     12.31.2009                 12.31.2008
  Debts to employees                                         2,756,252                  1,713,320
  Other                                                       -43,261                    -36,174
  Total                                                      2,712,990                  1,677,146

Payables to employees and collaborators are composed of liabilities related to bonuses still to be paid, paid holidays and
untaken leaves, reimbursement of expenses to staff as well as payment in lieu of notice. The increase at December 31, 2008
is mainly attributable to an increase in employee bonuses and allocations for vacations and paid but unused leaves.
Accrued expenses and deferred income
Accrued expenses amounted to Euro 4,373 at December 31, 2009. There was no deferred income at that date (no change
from 2008).

  (in thousands of Euro)                                       12.31.2009                 12.31.2008
  Accrued expenses                                               4,373                      4,373
  Total                                                          4,373                      4,373

17. current tax payables
  (in thousands of Euro)                                       12.31.2009                 12.31.2008
  Current tax payables                                          414,023                    12,401
  Total                                                         414,023                    12,401

Current tax payables amounted to Euro 414,023 at December 31, 2009, compared to Euro 12,401 at the end of 2008.

18. Short-term borrowings
  (in thousands of Euro)                                       12.31.2009                 12.31.2008
  Payables to banks                                            2,015,846                  77,534,388
  Convertible bond                                              993,639
  Payables to other lenders                                     104,386                    202,318
  Total                                                        3,113,871                 77,736,706

Short-term payables to banks
Short-term payables to banks refer to the current account overdraft facility granted by Credito Emiliano S.p.A. for a maximum
amount of Euro 2 million. This unsecured facility is based on 2 credit lines each of Euro 1 million which are similar in terms of
operation but one expires on July 31, 2010, whilst the other can be revoked on the request of the lender.

At December 31, 2008, this item included the residual amount of the secured loan provided by the Banca Intesa group for
the acquisition of the iTouch Ventures Limited group, for the original sum of Euro 100 million; this loan was then extinguished
and replaced with the pool loan described in detail in paragraph 17 of this report.




                                                                                                                                192
                                                                                                                                193
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




A statement and discussion of cash flows for 2009 are reported after the balance sheet, the profit and loss account and the
statement of changes in equity.

bonds issued
This item refers to the remaining portion of the convertible bond having an original value of Euro 12 million, subscribed on
September 22, 2005 by Mitsui & Co. Ltd. and by Banca IMI and falling due in 2010. The balance at December 31, 2008
amounted to Euro 965,230 and was recognized under long-term liabilities.

payables to other lenders
Payables to other lenders amounted to Euro 104,386 at December 31, 2009. They mainly reflect amounts due to a former
iTouch Ventures Limited shareholder. At December 31, 2008, the item amounted to Euro 202,318.

19. long-term borrowings (current portion)
The current portion of bank borrowings (Euro 34,514,450 million compared to Euro 1,978,425 at December 31, 2008)
consists primarily of the share of borrowings maturing within one year and the medium-/long-term revolving portion of the
loan contracted in the total amount of Euro 87 million from a pool of banks organized by Banca IMI (a member of the Intesa
Sanpaolo Group). The funds were disbursed on June 26, 2009.
In detail, the balance consists of:
 n	 the sum of Euro 13,400,000 referring to the portion of “Tranche A” of the pool loan maturing within one year. This line of
    credit was originally granted for a total amount of Euro 67 million, with maturity in 2014 and hafl-yearly amortization. Said
    loan was contracted in order to make repayment in full of the loan originally contracted from Banca IMI in the amount of
    Euro 100 million maturing on June 26, 2009;
 n	 the sum of Euro 18 million under a line of credit known as the “Revolving Credit Facility”, or “Tranche B”, of the pool loan.

    This line of credit was granted in the amount of up to Euro 20 million on June 30, for short-term use. It may be used for
    a maximum period of five years and calls for a gradual reduction of the credit limit beginning on December 31, 2012 and
    the possibility of multiple draw-downs with differing maturities and amounts, while remaining within the maximum credit
    limit in each period;
 n	 the sum of Euro 2,114,450, maturing within one year, contracted from national banks (Credito Emiliano and Medio Credito

    Centrale - a member of the Unicredit banking group) and Simest, a financial company involved in the development and
    promotion of Italian enterprises outside Italy. The amount was 1,978,425 at December 31, 2008.
Both Tranche A and Tranche B of the loan call for the application of a spread of 300 basis points on the benchmark interest
rate. Said spread may vary on a half-yearly basis according to a reward mechanism involving the performance of the ratio
of Gross Financial Debt to EBITDA.
The shares of certain Group companies were pledged as security for the loan.

The loan agreement also calls for compliance with certain financial covenants, to be reviewed at the end of each half-year,
beginning on December 31, 2009.

These covenants are:
 n		the ratio of Consolidated Gross Operating Margin (EBITDA) to Consolidated Net Borrowing Costs;
 n	 the ratio of Consolidated Financial Debt to Consolidated Gross Operating Margin;
 n	 the ratio of Consolidated Financial Debt to Consolidated Equity.


At December 31, 2009 the covenants were respected.

With the new loan agreement, the Company has achieved its goal of extending the duration of its debt and scheduling
repayment according to its future debt-servicing capacity, prudentially estimated on the basis of the cash flow that the
Company expects its core business to generate.

20. current provisions
Current provisions include Euro 1,963,747 to cover future costs or losses on equity investments, operational activities that
have already been completed, legal risks and commercial contract risks.
A breakdown is provided below:

   (in thousands of Euro)                                   12.31.2009                12.31.2008
   Provisions for legal contingencies                         7,280                     82,280
   Provisions for write-downs of investments                1,070,000                 1,070,000
   Other provisions                                          886,466                   200,000
   Total provision for risk and charges                     1,963,747                 1,352,280




                                                                                                                           194
                                                                                                                           195
                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




In detail:
 n	 the provision for write-downs of investments reflects allocations made to cover impairment losses on subsidiaries
    Buongiorno Dijital Iletisim A.S. and Buongiorno Deutschland GmbH;
 n	 the amounts included in other provisions relate primarily to penalty proceedings instigated by regulatory authorities and

    the Italian Revenue Service.


21. liabilities directly Attributable to non-current Assets held for Sale
This item showed a zero balance both at December 31, 2009 and at the previous year-end.

Sureties and guarantees
Sureties and guarantees granted by third parties in the interest of buongiorno
Buongiorno has received outstanding guarantees at the end of the year for a total amount of Euro 955,097 million, mainly
attributable to:
 n	 guarantees for Euro 549,181 from Cassa di Risparmio di Parma e Piacenza, Unionfidi and Banca Antonveneta in relation
    to financing obtained from Simest;
 n	 guarantees for Euro 217,264 from Coface Assicurazioni and Banca Monte Paschi pertaining to announced prize

    competitions;
 n	 guarantees for Euro 115,200 from banks Cassa di Risparmio di Parma e Piacenza and Banca Imi in relation to leases.


Sureties and guarantees granted by buongiorno in the interest of Subsidiaries
At December 31, 2009, Buongiorno had provided a total of Euro 1,104,800 to guarantee bank loans to the following
subsidiaries:

   (in thousands of Euro)                                    12.31.2009
   Buongiorno.at email services GmbH                           80,000
   Buongiorno Deutschland GmbH                                100,000
   Buongiorno Dijital Iletisim A.S.                           924,800
   Total sureties in favour of subsidiaries                  1,104,800
noteS on the mAin itemS of the pRofit And loSS Account

Value of production
Value of production can be broken down as follows:

  (in thousands of Euro)                                          yEAR 2009              yEAR 2008
  Sales of goods and services                                     45,007,894             49,714,850
  Other incomes and increase of fixed assets for internal works    2,053,019              1,831,700
  Total value of production                                       47,060,913             51,546,550


22. Sales of goods and Services
A breakdown by type of revenue (in the table below) shows a decrease in Consumer Services revenues of about 23%
compared to 2008.

The result has to be seen from two distinct perspectives: on the one hand, revenues generated by the direct business model
( “B2C”) in the Mobile Content 1.0 market fell by about 11% from one year to the next; this reduction, in a year in which market
conditions proved to be difficult for the whole VAS sector, actually represents a substantially solid performance.
In the “B2O” business line (based on collaboration with the main mobile telephone operators in which the Company provides
technology, content and marketing consultancy), on the other hand, difficulties were experienced in replacing a number of
services terminated last year with new initiatives; this led to a 47% reduction in turnover.

  (in thousands of Euro)                                          yEAR 2009              yEAR 2008
  Consumer Services                                               23,082,184             29,931,662
  Intercompany services                                           21,925,710             19,783,188
  Associates services                                                  -                      -
  Total sales of goods and services                               45,007,894             49,714,850

Revenues on Intercompany Services, i.e. on services provided by the Parent Company to its subsidiaries or associates,
increased by 11% as of December 31, 2009 compared to the previous year. This increase can be attributed primarily to the
Company’s increased commitment in the delivery of inter-company services in its parent company role.




                                                                                                                               196
                                                                                                                               197
                                Consolidated annual RepoRt of
                                the BuongioRno gRoup as of deCemBeR 31, 2009




SALES FOR INTERCOMPANY SERVICES AND ASSOCIATES
CompANy                                                          yEAR 2009   yEAR 2008
Buongiorno MyAlert S.A.                                          7,717,000   8,549,288
Buongiorno France S.A.S                                          2,546,834   1,009,658
Buongiorno.uk Ltd                                                2,128,552   1,256,558
iTouch South Africa (Pty) Ltd                                    1,281,627    811,618
Buongiorno USA Inc.                                               930,660     865,681
MyAlert S.L. de C.V.                                              841,252      25,968
iTouch Movilisto Portugal Lda                                     705,259       4,900
Buongiorno Marketing Netherlands BV                               650,373     532,010
Buongiorno Hellas Mobile Ltd                                      573,883     151,666
Buongiorno MyAlert Brasil Servicios Celulares Ltda                486,038       8,900
Axis Mundi S.A.                                                   473,081      97,497
Buongiorno Marketing Services Italy SRL                           464,006     569,408
Buongiorno Deutschland GmbH                                       459,966     260,603
Rocket Mobile Inc.                                                443,916     426,661
Tutch Mobile Media B.V.                                           343,530     347,219
Buongiorno Dijital Iletisim A.S.                                  337,105     327,839
iTouch Australia Pty Ltd                                          274,674     705,981
LlamaTV S.L.                                                      223,179     134,257
Ostrich Media Limited                                             216,858     394,752
Dioranews S.A.                                                    182,754     162,976
Mobile Fun Sistemas de Informatica Ltda                           159,335       5,022
sms.at Mobile Internet Services GmbH                              133,185     291,319
iTouch Spain Holdings SL                                          105,480         60
iTouch Ltd                                                         79,554       4,878
Buongiorno MyAlert Venezuela, S.A.                                 27,110         55
Buongiorno MyAlert Ecuador S.A.                                    16,223        556
Jippii Schweiz AG                                                  16,034      13,707
Buongiorno MyAlert Servicios de Telecomunicaciones Chile Ltda.     14,115         36
Telitas Netherlands NV                                             11,725     102,130
iTouch Nordics AS                                                  11,091      66,400
Buongiorno Marketing Services Deutschland GmbH                     7,854        8,746
Hotsms.com B.V.                                                    7,550        3,736
CompANy                                                    yEAR 2009    yEAR 2008
Buongiorno Marketing Services UK Ltd                          7,370        7,187
Buongiorno Marketin Services España, S.L.                     6,907        3,349
Grupo iTouch Movilisto Mexico Servicios, S.A de CV            6,716        4,962
Buongiorno Russia LLC                                         6,649          3
Akumiitti Oy                                                  4,228        5,861
Buongiorno.at email services GmbH                             3,797        4,877
Intouch Technologies Ltd                                      3,685       158,569
Buongiorno Marketing Services France S.A.                     2,757         923
BY.Cycle Perù SAC                                             2,531        3,077
Buongiorno MyAlert Colombia SRL                               2,172         315
Buongiorno MyAlert Bolivia S. de R.L.                         2,009          60
Buongiorno Marketing Services US INC                          1,832        2,075
Xama TV Televisao Interactiva L.d.a.                          1,601         804
Mobilnet AS                                                   1,103        1,285
iTouch Global Concepts Nigeria Ltd                             977        461,807
sms.at Holding AG                                              692         1,046
Jippii Spain SL                                                380          158
Grupo iTouch Movilisto R.S.R.L                                 233          966
Producciones y Promociones Especiales de Television S.L.       146          194
SMS Cosmos AS                                                  121          162
Group iTouch Movilisto Espana SL                                -         959,980
Mobivillage S.A.                                                -         527,768
iTouch Movilisto France S.A.S                                   -         374,524
iTouch (UK) Ltd                                                 -         120,466
iTouch Ventures Limited                                         -          1,186
Grupo iTouch Movilisto Mexico S.A. de CV                        -          1,126
Movilisto S.A.                                                  -           374
TOTAL INTERCOMPANY                                         21,925,710   19,783,188

Buongiorno Hong Kong Ltd.                                       -            -
Buongiorno Digital innovation India Private Ltd.                -            -
TOTAL INTERCOMPANY AND ASSOCIATES                          21,925,710   19,783,188




                                                                                     198
                                                                                     199
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




23. other income and increase of fixed Assets for internal Works
This item amounted to Euro 2,053,019 at December 31, 2009, up 12% compared to last year. Other Income refer to the
capitalization of costs for technological development, especially pertaining to Buongiorno’s proprietary B!3A platform, and
mobile social networking.

costs of production

24. costs for Services and use of third-party Assets
Costs for services and use of third-party assets amounted to Euro 31,098,799 for 2009, up 8% compared to last year. A
breakdown is provided below:

  (in thousands of Euro)                                                       12.31.2009          12.31.2008
  Variable costs of production                                                  7,281,352          8,096,198
  Marketing costs                                                               8,890,398          9,407,928
  Fixed structural costs                                                       14,927,049         11,172,124
  Total costs for services, use of third-party assets, consumable and goods    31,098,799         28,676,250
  of which Intercompany                                                         5,684,096          1,771,487

Variable costs of production include costs for the purchase of SMS and content, amounts recognized to media partners and
telcos, and technology costs for housing and hosting, royalties and the Majors’ and the artists’ rights.
The 11% fall from Euro 8,096,198 to the current figure of Euro 7,281,352 is due to the downturn in Consumer Service
revenues; marketing costs are 6% down from Euro 9,407,928 in 2008 to Euro 8,890,398 in 2009 and include advertising
investments on all the media channels, marketing consultancy, commissions paid to media centres and all production costs
for marketing initiatives.

Fixed structural costs rose by 34%, from Euro 11,172,124 to Euro 14,927,049 at year-end, and include principally the rental
cost of offices and leasing installments relating to hardware used by Group companies as well as consultancy expenses,
office expenses, maintenance costs, insurance, the costs of sundry services and travel and accommodation costs for all
employees.
A portion of the costs for services and use of third-party services recognized in 2009 were intercompany, i.e., they related to
services supplied by the subsidiaries to the Parent Company and amounted to Euro 5,684,096. The table below presents a
breakdown by subsidiary at December 31, 2009 and a comparison with 2008.

  INTERCOMPANY COSTS
  CompANy                                                     yEAR 2009                 yEAR 2008
  Buongiorno MyAlert S.A.                                     2,275,792                 1,124,428
  Buongiorno.uk Ltd                                            781,882                     4,358
  Buongiorno USA Inc.                                          773,042                    26,269
  Buongiorno France S.A.S                                      722,273                   186,560
  Hotsms.com B.V.                                              318,183                        -
  sms.at Mobile Internet Services GmbH                         249,825                    91,474
  Tutch Mobile Media B.V.                                      185,650                   210,000
  Rocket Mobile Inc.                                           155,607                        -
  Buongiorno Deutschland GmbH                                   95,172                   103,780
  Buongiorno Marketing Netherlands BV                           63,048                        -
  iTouch South Africa (Pty) Ltd                                 19,868                        -
  Buongiorno Marketing Services Italy SRL                       15,756                      109
  Buongiorno Marketin Services España, S.L.                      8,825                    1,263
  iTouch Movilisto Portugal Lda                                  8,674                        -
  Buongiorno MyAlert Brasil Servicios Celulares Ltda             7,881                        -
  MyAlert S.L. de C.V.                                           2,618                        -
  Buongiorno Dijital Iletisim A.S.                                 -                      16,271
  iTouch Australia Pty Ltd                                         -                       6,876
  Buongiorno.at email services GmbH                                -                         99
  TOTAL                                                       5,684,096                 1,771,487


25. personnel costs
The amount of Euro 11,565,561 at December 31, 2009 increased 7% compared to Euro 10,804,050 at December 31,
2008. The item include the costs for employees including provisions required by the law and by collective contracts, as well
as the notional cost, amounting to Euro 3,880, relating to the issue of options under the stock option plans existing at the
period-end in favor of employees, collaborators and directors (IFRS 2).




                                                                                                                              200
                                                                                                                              201
                               Consolidated annual RepoRt of
                               the BuongioRno gRoup as of deCemBeR 31, 2009




The calculation was carried out based on options exercisable at non-market conditions.
The summary of the stock option plan existing at period-end is shown in Section 1.14 of the Directors’ Report on Operations.

The breakdown of employees is as follows:

  (in thousands of Euro)
                                          12.31.2009             12.31.2008             AVERAgE 2009
  Employees and middle management             146                   145                      144
  Executives                                   23                    23                       23
  Total                                       169                   168                      167

The total number of employees increased by 1 compared to December 31, 2008.

26. depreciation, Amortization and impairment losses
The items “Depreciation, amortization and impairment losses” and “Write-downs of bad debts and other provisions” include
the following costs:

  (in thousands of Euro)                                         yEAR 2009                yEAR 2008
  Amortization of intangible fixed assets                        3,025,758                2,152,667
  Depreciation of tangible fixed assets                            97,963                   85,475
  Total amortization and depreciation                            3,123,721                2,238,143
  Other fixed assets write-downs                                      -                     39,672
  Total amortization, depreciation and write-downs               3,123,721                2,277,815
  Write-downs of bad debt and other provisions                    686,466                 1,236,500
  Total amortization, depreciation and other write-downs         3,810,187                3,514,315

Amortization
Amortization for the year (a total of Euro 3,025,758) is detailed in the notes on intangible assets.
depreciation
Depreciation for the year, amounting to Euro 97,963, was determined using technical and economic rates established based
on possible residual asset use as previously illustrated in the Notes on measurement criteria for property and equipment.

other fixed Asset Write-downs
No write-downs were carried out on intangible assets at the year-end date, whereas in 2008 write-downs totalled
Euro 39,672.

27. Write-downs of bad debts and other provisions
This item, amounting to Euro 686,466, refers primarily to amounts set aside to partially cover penalty proceedings instigated
by regulatory authorities and the Italian Revenue Service. Although the Company believes that it can respond to these claims
with more than adequate evidence, it has deemed it prudent to make provision to cover the amounts disputed.

After special analyses, the decision was also taken not to set aside any amount to the provision for bad debts since the
receivables are considered to be in line with their estimated realizable value.

28. other operating costs
Other operating costs at December 31, 2009 amounted to Euro 253,548 (Euro 314,275 at December 31, 2008) and include
all remaining costs, normally for amounts that are not individually material, which by their nature are not classifiable in other
items of the aggregated amount of “production costs” which are deducted from the operating result. The most significant
costs are those for memberships and subscription fees.

29. finance income and expense
Finance income and expense comprise borrowing costs incurred during the period, which amounted to Euro 4,152,928
compared to Euro 5,861,084 for 2008.
The decrease was mainly due to a strong decrease in interest rates charged by banks, as can be seen in the information on
interest and other finance expense.

  (in thousands of Euro)                                       yEAR 2009                  yEAR 2008
  Finance incomes                                                379,799                    944,703
  Finance expenses                                             (4,654,563)                (7,606,206)
  Exchange profits (losses)                                      121,835                    800,419
  Total                                                       (4,152,928)                (5,861,084)




                                                                                                                                202
                                                                                                                                203
                                      Consolidated annual RepoRt of
                                      the BuongioRno gRoup as of deCemBeR 31, 2009




finance income
This item is broken down as follows:

  (in thousands of Euro)                             yEAR 2009   yEAR 2008
  Earned banking interests                            10,122     258,039
  Interests from Group companies                     349,877     681,405
  Dividends from Group companies                      19,801        -
  Other incomes                                          -        5,258
  Total                                              379,799     944,702

Of which from Group companies:

 EARNED INTERESTS INTERCOMPANY
  CompANy                                            yEAR 2009   yEAR 2008
  Buongiorno USA Inc.                                155,347     455,104
  iTouch Ventures Limited                             87,761         -
  iTouch Ltd                                          81,566         -
  Buongiorno MyAlert S.A.                             21,331      51,013
  Buongiorno Hellas Mobile Ltd                         3,872       3,938
  Buongiorno.uk Ltd                                      -       148,449
  iTouch Spain Holdings SL                               -        22,902
  TOTAL                                              349,877     681,406

finance expense
This item is broken down as follows:

  (in thousands of Euro)                             yEAR 2009   yEAR 2008
  Financial charges paid to financial institutions    199,591     363,275
  Interests and banking fees                         4,244,549   7,044,288
  Interests paid to Group companies                   178,394      76,835
  Other minor charges                                  32,029     121,808
  Total                                              4,654,563   7,606,206
Of which to Group companies:

 INTEREST PAID TO INTERCOMPANY
  CompANy                                                    yEAR 2009                 yEAR 2008
  Buongiorno France S.A.S                                      83,237                    10,514
  Dioranews S.A.                                               55,210                    50,266
  Buongiorno MyAlert S.A.                                      25,718                       -
  Buongiorno.uk Ltd                                             8,371                       -
  Buongiorno Marketing Netherlands BV                           5,752                       -
  Buongiorno Hellas Mobile Ltd                                   105                        -
  Group iTouch Movilisto Espana SL                                -                      16,055
  TOTAL                                                       178,394                    76,835

Interest and banking fees have fallen sharply due to the reduction in bank borrowing and the fall in the EURIBOR rates during
the year to which the largest loans (MCC, Imi pool loan) are linked.

exchange gains
This item is broken down as follows:

  (in thousands of Euro)                                     yEAR 2009                 yEAR 2008
  Exchange profits                                            143,052                   858,356
  Exchange losses                                             (21,217)                  (57,937)
  Total                                                       121,835                   800,419

30. Value Adjustments on financial Assets
During the year, steps were taken to minimize the losses of the associate company Inches Music Group S.r.l., at the same
time writing down “Shareholdings” for the same amount. There were no movements on this item during the previous year.

31. income and charges from assets held for sale
This item shows the same balance as at the end of the previous year.

32. non-recurring income and charges
This item amounted to Euro 323 at the end of the previous year whilst its shows a zero balance at this year-end.




                                                                                                                            204
                                                                                                                            205
                             Consolidated annual RepoRt of
                             the BuongioRno gRoup as of deCemBeR 31, 2009




33. current income taxes
Income taxes for 2009 were recognized based on the best possible estimate using the tax rates prevailing at year-end (Euro
402,228 at December 31, 2009 compared to Euro 701,540 at December 31, 2008). Appendix B provides details of the
reconciliation between actual and theoretical tax charges.

34. deferred income taxes
The impact of the reversal effect due to the utilization of receivables arising from previous tax losses was recognized in
the income statement; this produced a negative amount of Euro 2,995,300 partially mitigated by the recognition of tax
receivables for research and development costs sustained during the year and the previous year totalling Euro 621,855. The
net impact is negative at Euro 2,373,475, compared to the negative impact of Euro 3,421,476 in the previous year.

35. profit (loss) for the Year
Buongiorno reported a loss of Euro 6,649,629 after tax for the year, compared to a loss of Euro 1,746,762 for 2009.

earnings per Share

36. basic
Basic EpS was negative at Euro 0.0625. It is calculated by dividing the net profit for the year by the average number of
ordinary shares outstanding in the period, amounting to 106,352,187. Basic EpS for 2008 was negative at Euro 0.0164
(calculation based on 106,353,675 shares).

37. diluted
Diluted EpS was negative at Euro 0.0585. it is calculated by dividing the net Group profit for the period, gross of interests
on the convertible bond, by the average number of ordinary shares outstanding during the period plus the number of
options (or other instruments potentially convertible into ordinary shares) outstanding at the end of the period, a total of
113,114,652 potential ordinary shares in 2009. In the previous year EpS was negative at Euro 0.0155 (calculation based
on 110,404,675 shares).
ANNEx A
LIST OF EQUITY INVESTMENTS OF BUONGIORNO S.P.A. IN SUBSIDIARIES, ASSOCIATES AND OTHER COMPANIES
(in thousands of Euro)
CompANy NAmE                                     REgIstEREd offICE           % of VotINg shAREs     dIRECt holdER              % oN shARE CApItAl
Shareholdings in subsidiaries:
Akumiitti Content Services Ltd                                  Finland           100.00%                 Akumiitti Oy              100.00%
Akumiitti Oy                                                    Finland           100.00%             iTouch Nordics AS             100.00%
Axis Mundi S.A.                                                Argentina          99.98%          Buongiorno MyAlert S.A.              50%
                                                                                                         Rainbow S.A.                  50%
Buongiorno Deutschland GmbH                                    Germany            100.00%             Buongiorno S.p.A.             100.00%
Buongiorno Dijital Iletisim A.S.                                Turkey            100.00%             Buongiorno S.p.A.             100.00%
Buongiorno France Sas (già Freever Sas)                         France            100.00%           iTouch Spain Holding             55.02%
                                                                                                       Buongiorno S.p.A.             44.98%
Buongiorno Hellas S.A.                                     Greece                 100.00%             Buongiorno S.p.A.             100.00%
Buongiorno Marketing Services Deutschland GmbH            Germany                  54.50%          BMS Netherlands B.V              100.00%
Buongiorno Marketing Services Espana s.l.u.                 Spain                  54.50%          BMS Netherlands B.V              100.00%
Buongiorno Marketing Services France S.a.s                  France                 54.50%          BMS Netherlands B.V              100.00%
Buongiorno Marketing Services Italia S.r.l.                   Italy                54.50%          BMS Netherlands B.V              100.00%
Buongiorno Marketing Services Netherlands B.V          the Netherlands             54.50%             Buongiorno S.p.A.              54.50%
Buongiorno Marketing Services UK Ltd. (già Flytxt Ltd)         UK                  54.50%          BMS Netherlands B.V              100.00%
Buongiorno Marketing Services US Inc. (già Flytxt inc)       USA                   54.50%          BMS Netherlands B.V              100.00%
Buongiorno MyAlert Brasil Servicios Celulares, Ltda.         Brazil                99.98%         Buongiorno MyAlert S.A.           100.00%
Buongiorno MyAlert Colombia S.R.L.                        Colombia                 99.98%         Buongiorno MyAlert S.A.           100.00%
Buongiorno MyAlert Ecuador S.A.                            Ecuador                 99.98%         Buongiorno MyAlert S.A.           100.00%
Buongiorno MyAlert S.A.                                     Spain                  99.98%           iTouch Spain Holding             98.57%
                                                                                                           iTouch Ltd                 1.41%
Buongiorno MyAlert Servicios de Telecomunicaciones Chile Limitada Chile           99.98%          Buongiorno MyAlert S.A.           100.00%
Buongiorno US Inc.                                                 USA            81.04%              Buongiorno S.p.A.              81.04%
Buongiorno.at email services GmbH                                 Austria         54.50%           BMS Netherlands B.V              100.00%
Buongiorno.UK Ltd.                                                  UK            100.00%             Buongiorno S.p.A.             100.00%
Buongiorno.Venezuela S.A.                                        Venezuela        99.98%          Buongiorno MyAlert S.A.              90%
                                                                                                  MyAlert S. De R.L. de CV             10%
By Cycle Perú S.A.C.                                             Perù             99.98%                Axis Mundi S.A.             100.00%
DioraNews S.a.s.                                                France            100.00%         Buongiorno France S.a.r.l.        100.00%
Groupo iTouch Movilisto Maroc SARL                             Marocco            100.00%                 iTouch Ltd                100.00%




                                                                                                                                                    206
                                                                                                                                                    207
                                      Consolidated annual RepoRt of
                                      the BuongioRno gRoup as of deCemBeR 31, 2009




(in thousands of Euro)
CompANy NAmE                                REgIstEREd offICE        % of VotINg shAREs        dIRECt holdER         % oN shARE CApItAl
Shareholdings in subsidiaries:
Grupo iTouch Movilisto Mexico Servicios, S.A de CV Mexico                 100.00%            iTouch Spain Holdings SL        98%
                                                                                                 Buongiorno MyAlert S.A.      2%
Grupo iTouch Movilisto R.S.R.L                       Romania              100.00%               iTouch Spain Holdings SL   100.00%
Hotsms.com B.V.                                   the Netherlands          54.50%                 BMS Netherlands B.V      100.00%
iTouch Australia Pty Ltd                              Australia           100.00%                        Pajala BV         100.00%
iTouch Finance 1 Ltd                                    UK                 99.98%                Buongiorno MyAlert S.A.   100.00%
iTouch Finance 2 Ltd                                    UK                 99.98%                Buongiorno MyAlert S.A.   100.00%
iTouch Global Concepts Nigeria Ltd                    Nigeria             100.00%                       iTouch Ltd         100.00%
iTouch Holdings Ltd                                     UK                100.00%              iTouch Ventures Limited     100.00%
iTouch Ltd                                              UK                100.00%                  Buongiorno S.p.A.       100.00%
iTouch Movilisto Portugal Lda                        Portugal             100.00%                      iTouch Ltd            25%
                                                                                                  Buongiorno MyAlert         75%
iTouch Nordics AS                                    Norway               100.00%                      iTouch Ltd          100.00%
iTouch South Africa (Pty) Ltd                      South Africa           100.00%                       Pajala BV          100.00%
iTouch Spain Holdings SL                              Spain               100.00%                   SMS Cosmos AS           58.27%
                                                                                                   Buongiorno S.p.A.        25.43%
                                                                                                       iTouch Ltd           16.30%
Intouch Technologies Ltd                                 Irlanda          100.00%                       Pajala BV          100.00%
Buongiorno CS Ltd                                           UK            100.00%                 Buongiorno.UK Ltd.       100.00%
iTouch Ventures Limited                                     UK            100.00%                  Buongiorno S.p.A.       100.00%
Jippii Mobile Entertainment Oy                          Finland           100.00%            iTouch Spain Holdings SL      100.00%
Jippii Schweiz AG                                         Swiss           100.00%         Jippii Mobile Entertainment Oy   100.00%
Jippii Spain SL                                           Spain           100.00%         Jippii Mobile Entertainment Oy   100.00%
LlamaTV S.L.                                              Spain           100.00%            iTouch Spain Holdings SL      100.00%
MyAlert S. De R.L. de CV                                Mexico             99.98%             Buongiorno MyAlert S.A.      100.00%
Ostrich Media Limited                                Regno Unito          100.00%                      iTouch Ltd          100.00%
Pajala BV                                          the Netherlands        100.00%                      iTouch Ltd          100.00%
Producciones y Promociones Especiales de Television S.L. Spain            100.00%            iTouch Spain Holdings SL      100.00%
Rainbow Development S.A.                               Argentina           99.98%             Buongiorno MyAlert S.A.      100.00%
Rivertam S.A.                                           Uruguay            99.98%                    Axis Mundi S.A.       100.00%
Rocket Mobile Inc.                                         USA             81.04%                  Buongiorno US Inc.      100.00%
(in thousands of Euro)
CompANy NAmE                           REgIstEREd offICE      % of VotINg shAREs     dIRECt holdER         % oN shARE CApItAl
Shareholdings in subsidiaries:
SMS Cosmos AS                                   Norway             100.00%                iTouch Ltd            100.00%
sms.at Holding AG                               Austria            100.00%                iTouch Ltd            100.00%
sms.at Mobile Internet Services GmbH            Austria            100.00%                  sms.ch                99%
                                                                                       sms.at holding AG           1%
sms.ch AG                                        Swiss             100.00%             sms.at Holding AG        100.00%
Telitas Belgium BV                          the Netherlands        100.00%            iTouch Nordics A.S.       100.00%
Tutch Media Mobile B.V.                     the Netherlands        100.00%             Buongiorno S.p.A.        100.00%
Xama TV Televisao Interactiva L.d.a.            Portugal           100.00%               LlamaTV S.L.             90%
                                                                                   iTouch Spain Holdings SL       10%
Shareholdings in associate companies:
Buongiorno Hong Kong                            Hong Kong             -               Buongiorno S.p.A.          49.00%
Buongiorno Digital Innovation India Private Ltd   India               -               Buongiorno S.p.A.          49.00%

Shareholdings in other companies:
77 Agency Ltd.                                    UK                  -               Buongiorno S.p.A.          10.00%
Inches Music Group S.r.l.                        Italia               -               Buongiorno S.p.A.          35.00%
Victory 247.com Malta Ltd                        Malta                -             Victory 247.com S.A.         11.00%




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3 RepoRt of the SupeRviSoRy Committee




                                  123
                                  124
RepoRt of the SupeRviSoRy Committee


                                                                          Milan - April 12, 2010




 Report of the Supervisory Committee to the General Shareholders’ Meeting, pursuant to
 Article 153 of Legislative Decree No. 58/1998 and Article 2429, paragraph 3 of the Italian
 Civil Code




 Shareholders,


 in compliance with the provisions of Legislative Decree No. 58/1998, of Art. 2429,
 paragraph 3 of the Italian Civil Code, and indications provided by CONSOB in Notice
 No. DEM/1025564 of April 6, 2001, we report to you as follows:


  we monitored compliance with laws and the Articles of Incorporation; at least
    quarterly, the Chief Executive Officer provided us with information on operations
    and major transactions carried out by the Company and its subsidiaries that were
    most significant from an economic, financial and equity standpoint;


  we verified that the Company has not undertaken atypical or unusual transactions
    with Group companies, associates, related parties, or third parties. With regard to
    related-party transactions, including inter-company transactions, it must be
    pointed out that the same do not qualify as either atypical or unusual, since they
    were effected in the normal course of the business operations of the Group
    companies in question, and concluded at arm’s length, in light of the features of
   the goods and services involved. At December 31, 2009, the Buongiorno Group
   maintained relationships with companies qualifying as related parties within the
   meaning of the Code for Related-party Transactions. The following entities or
   persons own interests in Group companies:


  - Mitsui & Co. Ltd which holds a 18.96% stake in the share capital of the
  subsidiary Buongiorno USA Inc and, consequently of Rocket Mobile Inc; Mitsui
  &Co. Ltd also holds a 45.5% stake in the share capital of Buongiorno Marketing
  Services B.V. From November 2009, also the company Buongiorno Digital
  Innovation India Private Ltd, incorporated on November 3, 2009 and 51% held by
  Mitsui & Co;
  - Nevid Nikravan, a director of Buongiorno Spa, from whom the Company
  purchased on October 7, 2009 the minority holding of 20.34% of the share capital
  that he held in the company Buongiorno Dijital Iletisim AS (Turkey);
  - Buongiorno Hong Kong Ltd, in which Mitsui & Co. Ltd. holds a 51% stake and
  Buongiorno a 49% stake, and which was consolidated using the equity method.
  The Company and its subsidiaries carried out transactions relating to the Group's
  core business with this company at market conditions.


Finally, we point out that at December 31, 2009, Buongiorno S.p.a. held 35% of the
share capital of the company Inches Music Group S.r.l., in which Mauro Del Rio —
Buongiorno’s reference shareholder — holds the majority stake. The company’s
purpose is to manage and sell “Artist community” tracks. During the year, the
Company made a payment of Euro 53,846 to Inches Music Group S.r.l. to replenish
losses; the equity investment was then written down by a like amount. The Group
also undertook commercial transactions with said company and recognized costs of
Euro 6,874.


 we monitored the most significant transactions in terms of impact on the
   Company’s income, cash flows, financial position and organization. The majority

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RepoRt of the SupeRviSoRy Committee
  of these transactions were related to the reorganization and streamlining of the
  Buongiorno Group's structure. Details are provided below:




  - effective January 1, 2009, minority interests in the South African subsidiary
  iTouch South Africa (Pty) Ltd were acquired, increasing the stake from 87.5% to
  100%;
  - effective January 1, 2009, Grupo Itouch Movilisto Mexico SA de CV was merged
  in the Mexican company My Alert SL de CV.
  - effective January 1, 2009, iTouch (UK) Ltd. was merged into Buongiorno UK Ltd.
  - on April 1, 2009, a procedure was initiated to close Telitas Sweden AB;
  - on May 25, 2009, iTouch Denmark AS was placed into liquidation.
  - on July 1, 2009, minority interests in the Nigerian subsidiary iTouch Global
  Concepts Nigeria Ltd were acquired, increasing the stake from 80% to 100%;
  - on September 30, 2009, the Spain-based Movilisto S.A., Gruppo Itouch
  Movilisto S.A. and Initiatives Especiales S.A. were merged into Buongiorno MyAlert
  S.A.;
  - on September 30, 2009, the Norwegian company Mobilnet AS was sold;
  - on September 30, 2009, the German company Fleck Capital GmbH was
  liquidated;
  - on October 7, 2009, minority interests in the Turkish subsidiary Buongiorno Dijital
  Iletisim A.S. were acquired, increasing the stake from 79.66% to 100%;
  - on November 30, 2009, the French companies Mobivillage SA and iTouch
  Movilisto France were merged into Buongiorno France SA;
  - in December 2009, winding-up procedures were started for the English
  companies iTouch Holdings Ltd and iTouch Ventures Ltd, the Spanish companies
  Corporacion Crossbow SL, Kunno Systems SL and Movilisto TV, the Australian
  company Telequity Pty Ltd, the New Zealand company iTouch New Zealand Ltd
  and the Bolivian company Buongiorno MyAlert Bolivia S. de R.L.;
  - at the same time as the start of the above proceedings to wind up the
  companies iTouch Holdings Ltd and iTouch Ventures Ltd, the parent company
  Buongiorno Spa acquired from iTouch Holding Ltd (a company controlled by
  Buongiorno Spa through iTouch Ventures Ltd) a 100% stake in the company
  iTouch Ltd, at an equivalent value to the book value of Buongiorno Spa’s own
  holding in the company iTouch Venture Ltd in liquidation, which is also controlled.


 we have verified that the information provided by the Directors in the Report on
   Operations adequately meets the guidance issued by CONSOB;


 we have verified that the Directors pursued the interests of the Company in all
   transactions undertaken;


 the independent Auditors' Report on the financial statements and the
   consolidated financial statements does not raise any significant issues or call for
   informational notes on areas of special attention;


 no dividend proposal was evaluated as no resolution has been passed in this
   regard;


 we have not received any notices of claims pursuant to Article 2408 of the Italian
   Civil Code, nor complaints by third parties, including the CONSOB;


 we have established that there are no critical issues relating to the independence
   of the independent auditors;


 we met with the independent auditors on three occasions. During these meetings,
   no significant issues came to light that required us to conduct specific enquiries;



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RepoRt of the SupeRviSoRy Committee



 we have verified the adequacy of the management structure of the Company with
   regards to the principles of correct management;


 we have not identified any specific corrective actions taken or to be undertaken to
   improve the Company’s management structure;


 we have evaluated the appropriateness of the Company’s instructions to
   subsidiary companies as defined under article 114, paragraph 2 of the TUF;


 we have not identified any specific corrective actions taken or to be undertaken to
   improve the Company’s instructions to subsidiary companies;


 through our periodic meetings with PricewaterhouseCoopers, we have obtained
   information from the local Independent Auditors of subsidiary companies as
   required under article 151-ter, paragraph 4 of the TUF;


 we feel that the organizational structure is adequate as regards matters within the
   scope of the Control Committee;


 we held eight Supervisory Committee meetings and met with independent
   auditors Pricewaterhouse Coopers on three occasions to exchange information
   on the key accounting and internal control issues facing the Company. The
   Internal Auditor participated in all the meetings reporting on its operations, and
   internal control measures implemented and to be implemented. In light of the one-
   tier governance system adopted by the Company, we attended all nine of the
   Board of Directors’ Meetings of Buongiorno S.p.A. as non-executive and
   independent directors;
 we felt that the internal control system and the activities carried out by the person
   who, during 2009, conducted financial audits (in accordance with Italian Law No.
   262/2005) and compliance audits (in accordance with Italian Legislative Decree
   231/2001) on a significant sample of Buongiorno Group companies were
   adequate. Overall audit results were positive and satisfactory. We monitored the
   preparation of adequate procedures by the Company and the update of the
   Organization, Management and Control Model 231 approved on November 9,
   2009 by the Company's Board of Directors;




 we did not identify any corrective actions that must be taken to improve the
   internal control system, except as regards the resignation of the Internal Auditor,
   who was immediately replaced by appointing a new head of internal auditing
   chosen within the company;


 we consider the system of accounting administration to be reliable and suitable to
   giving a true and fair view of the business;


 in the course of our auditing activities, we encountered no oversights, infractions
   or irregularities;


 we did not exercise our powers to call a meeting of the Board of Directors;


 we did not carry out further engagements pursuant to art. 2409–octiesdieces,
   paragraph 5, subsection c) of the Italian Civil Code.


 pursuant to article 149, paragraph 1, sub-paragraph c)-bis of Legislative Decree
   of February 24, 1998, we acknowledge that the Directors in their corporate




                                                                                          216
                                                                                          217
RepoRt of the SupeRviSoRy Committee




    governance report state that the Company has adopted the Corporate
    Governance Code of Italian listed companies; we found that the regulations
    envisaged by said Code were effectively complied with, as widely explained in the
    corporate governance report to which the reader is referred for complete and
    adequate information.


 Based on the above observations, we believe that, for the year ended December 31,
 2009, the Company, its internal control system, its accounting and administration
 systems, and its ability to provide a true and fair view of operating performance have
 been accurately and effectively monitored.




                                               Supervisory Committee


                                                        Signed
                                                  Giovanni Massera
                                                Anna Puccio
                                           Felipe Fernandez Atela
                                           Annex 1

LIST OF POSITIONS HELD BY MEMBERS OF THE SUPERVISORY COMMITTEE (ARTICLE
144 – QUINQUIES-CIES OF THE RULES FOR ISSUERS) AT THE REPORTING DATE

                                 GIOVANNI MASSERA - CHAIRMAN
             COMPANY NAME                             OFFICE                  EXPIRY
   Prosciuttificio Ghirardi Onesto S.p.A         Statutory Auditor          04/30/2010
          Verdi Multimedia S.r.l.                Statutory Auditor          04/30/2012
            Egthecnology S.r.l.                  Statutory Auditor          04/30/2010
       Azienda Cartaria Lombarda                 Statutory Auditor          04/30/2012
Casa di Cura Privata Sant’Antonino S.r.l.        Statutory Auditor          04/30/2010
Mediterraneo S.a.p.a. di Mauro Mambrini          Statutory Auditor          06/30/2012
          Soffieria Mezzadri S.r.l.              Statutory Auditor          04/30/2010
         Boschi Pietro e C. S.r.l.               Statutory Auditor          04/30/2012
        Champion Europe S.p.A.                   Statutory Auditor          06/30/2012
    Analisi Società di Revisione S.p.A           Statutory Auditor          12/31/2012
              Mineralbirra S.r.l.                Statutory Auditor          04/30/2012
                Meverin S.r.l.                   Statutory Auditor          04/30/2010
    Champion Europe Services S.r.l.              Statutory Auditor          06/30/2012
            La Rocca Golf Club                   Statutory Auditor          04/30/2012
         Game 7 Athletic S.p.A.                  Statutory Auditor          06/30/2012
  Impresa Edile Casino di Marore S.r.l.          Statutory Auditor          04/30/2011
            Calamo Studi S.r.l.                       Director                  n/a
 ALFA – Agenzia Logistica Filiere Agro –         Statutory Auditor          06/30/2012
               Alimentari - Spa
                  Uni-edil Srl                   Statutory Auditor          04/30/2012
           Geom.G. Ferrari Spa                   Statutory Auditor          04/30/2012
            Number of positions held with issuers (other than the issuer)       0
           Total number of positions held (other than with the issuer))        20
                                    ANNA PUCCIO - MEMBER
             COMPANY NAME                             OFFICE                 EXPIRY
            Number of positions held with issuers (other than the issuer)     0
            Total number of positions held (other than with the issuer))      0
                               FELIPE FERNANDEZ ATELA - MEMBER
             COMPANY NAME                             OFFICE                 EXPIRY
            Number of positions held with issuers (other than the issuer)      0
            Total number of positions held (other than with the issuer))       0




                                                                                         218
                                                                                         219
4 AttestAtions of the executive
    in chArge of the compAny’s
             finAnciAl reports




                           123
                           124
                              AttestAtions of the executive in chArge
                              of the compAny’s finAnciAl reports



Attestation on the Consolidated Financial Statements Pursuant to Article 81-ter of CONSOB Regulation No.
11971 (which makes reference to article 154-bis, paragraph 5 of the consolidated finance law, TUF) of May 14,
1999, as amended

The undersigned Andrea Casalini, in his capacity as Chief Executive Officer, and Carlo Giuseppe Frigato, in his capacity as
Executive in Charge of the Company’s Financial Reports of Buongiorno S.p.A., taking into account the provisions set out in
article154-bis, paragraphs 3 and 4 of the Legislative Decree No. 58 of February 24, 1998:

                                                           DECLARE

 1. that the administrative and accounting procedures followed are adequate in light of the Company’s characteristics (even
   in consideration of any changes occurred during the year) and have been consistently applied in the preparation of the
   consolidated financial statements for 2008.that the appropriateness of the administrative and accounting procedures for
   preparing the financial statements for the year ended December 31, 2009 was assessed based on the Internal Control
   – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which is
   generally accepted as a reference framework at international level;

 2. The undersigned further declare that:
    a) the consolidated financial statements reflect the accounting books and records;
    b) the consolidated financial statements were prepared in accordance with the International Financial Reporting Standards
    endorsed by the European Union and the provisions enacting Legislative Decree No. 38/2005, and, to the best of our
    knowledge, they provide a true and fair view of the assets, liabilities, profit or loss and financial position of the issuer and
    its consolidated companies.
    c) the report on operations provides a reliable analysis of operations, operating result, and the situation of the issuer
    and its consolidated companies, as well as a description of the main risks and uncertainties regarding the issuer and its
    consolidated companies.

Date: March 15, 2010
                                   Signed                                                 Signed
                           Chief Executive Officer                                     Carlo Frigato
                              Andrea Casalini                      Executive in Charge of the Company’s Financial Reports
Attestation on the Financial Statements of Buongiorno S.p.A. Pursuant to Article 81-ter of CONSOB Regulation
No. 11971
(which makes reference to article 154-bis, paragraph 5 of the consolidated finance law, TUF) of May 14, 1999,
as amended

The undersigned Andrea Casalini, in his capacity as Chief Executive Officer, and Carlo Giuseppe Frigato, in his capacity as
Executive in Charge of the Company’s Financial Reports of Buongiorno S.p.A., taking into account the provisions set out in
article154-bis, paragraphs 3 and 4 of the Legislative Decree No. 58 of February 24, 1998: 58:

                                                          DECLARE

 1.that the administrative and accounting procedures followed are adequate in light of the Company’s characteristics and have
   been consistently applied in the preparation of the consolidated financial statements for 2008. that the appropriateness
   of the administrative and accounting procedures for preparing the financial statements for the year ended December
   31, 2009 was assessed based on the Internal Control – Integrated Framework issued by the Committee of Sponsoring
   Organizations of the Treadway Commission, which is generally accepted as a reference framework at international level;

 2. The undersigned further declare that:
    a) the financial statements prepared in accordance with Italian Civil Code requirements reflect the accounting books and
    records;
    b) the Company’s financial statements were prepared in accordance with the International Financial Reporting Standards
    endorsed by the European Union and the provisions enacting Legislative Decree No. 38/2005, and, to the best of our
    knowledge, they provide a true and fair view of the assets, liabilities, profit or loss and financial position of the issuer.
    c) the report on operations provides a reliable analysis of operations, operating result, and the situation of the issuer, as
    well as a description of the main risks and uncertainties regarding the issuer.


Date: March 15, 2010
                                   Signed                                                Signed
                           Chief Executive Officer                                    Carlo Frigato
                              Andrea Casalini                     Executive in Charge of the Company’s Financial Reports




                                                                                                                                222
                                                                                                                                223
5 Independent AudItors’ report
224
225
Independent AudItors’ report
226
227
Independent AudItors’ report
6 Company Data anD InformatIon
  for ShareholDerS

Buongiorno S.p.A.


Registered office and headquarters:
Borgo Masnovo 2
43100 Parma, Italy

Offices:
Via Cosimo Del Fante 10
20122 Milan, Italy


www.buongiorno.com


Fully subscribed and paid-up capital stock: Euro 27,654,555.50 (February 11, 2010)
Tax code and Register of Companies of Parma No. 02699820045
Court of Parma - VAT code 07863930017

Investor Relations:
Email: investor.relations@buongiorno.com
Tel: +39 02 582131
Fax: +39 02 58431008




                                                                                     228
                                                                                     229
The Ordinary Shareholders’ meeting, held in Parma on April 30, 2010 – in its second call – resolve to approve the Annual Report
for the year ended December 31, 2009.




                                                                                                                          230
                                                                                                                          231
Buongiorno S.p.A.                   pArMA
                                     MilAn
Borgo MASnovo, 2                  london
43100 pArMA, itAly                MAdrid
ph. +39 0521 533110                liSBon
                                     pAriS
viA CoSiMo del FAnte, 10          MuniCh
20122 MilAn, itAly             MArSeille
ph. +39 02 582131                MoSCow
                                      wien
inFo@Buongiorno.CoM                   grAz
www.Buongiorno.CoM           AMSterdAM
                                   AthenS
                                iStAnBul
                                   duBlin
                              CApe town
                           SAn FrAnCiSCo
                             MexiCo City
                               SAo pAulo
                            BuenoS AireS
                                    lAgoS
                                     dehli
                                   Sidney

								
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