"BALANCE SHEET AND INCOME STATEMENT"
FIDIA S.p.A. REPORT ON THE SEMESTER AT JUNE 30, 2002 BALANCE SHEET AND INCOME STATEMENT Board of Directors September 24, 2002 FIDIA S.p.A. FINANCIAL STATEMENT BALANCE SHEET FOR THE SIX MONTHS ENDED JUNE 30, 2002 (All amounts in thousands of Euro) ASSETS 06/30/2002 12/31/2001 06/30/2001 A) DUE FROM SHAREHOLDERS FOR CAPITAL NOT PAID IN - - - B) FIXED ASSETS I) Intangible fixed assets BI1) Incorporation and subsequent expenses - - - BI2) Development costs - - - BI3) Industrial patent and intellectual property rights 52 103 207 BI4) Concessions, licenses, trademarks and similar rights 118 143 179 BI5) Goodwill - - - BI6) Intangibles in progress and payments on account - - - BI7) Other 35 205 37 283 21 407 II) Tangible fixed assets BII1) Land and buildings 280 280 280 BII2) Plant and machinery 269 189 213 BII3) Production and commercial equipment 211 195 106 BII4) Other 291 307 280 BII5) Tangibles in course of construction and payments on account - 1,051 - 971 - 879 III) Financial fixed assets BIII1) Investments BIII1a) - Subsidiaries 5,351 5,351 5,333 BIII1b) - Associated companies 7 7 4 BIII1c) - Parent companies - - - BIII1d) - Other enterprises 51 5,410 51 5,410 51 5,388 BIII2) Receivables BIII2a) Subsidiaries 1,129 1,129 1,129 BIII2b) Associated companies - - - BIII2c) Parent companies - - - BIII2d) Other - 1,129 - 1,129 - 1,129 BIII3) Other securities - - - BIII4) Treasury stock 76 - - TOTAL FIXED ASSETS (B) 7,871 7,793 7,803 C) CURRENT ASSETS I) Inventories: CI1) Raw materials, ancillary materials and consumables 2,346 2,081 2,343 CI2) Work-in-progress and semi-finished goods 517 373 505 CI3) Contract work-in-progress - - - CI4) Finished goods and goods for resale 1,392 733 612 CI5) Advances 310 4,565 155 3,342 181 3,641 II) Receivables: CII1) Trade 5,883 8,329 5,907 CII2) Subsidiaries 9,347 7,265 5,121 CII3) Associated companies 302 272 97 CII4) Parent companies - - - CII5) Other - amounts due within 12 months 5,125 4,637 2,418 - amounts due after 12 months 1,601 22,258 2,132 22,635 3,601 17,144 III) Financial assets not representing fixed assets CIII1) Investments in subsidiaries - - - CIII2) Investments in associated companies - - - CIII3) Investments in parent companies - - - CIII4) Investments in other companies - - - CIII5) Treasury stock - - - CIII6) Other securities 1,006 1,006 - - 4,660 4,660 IV) Cash at bank and on hand: CIV1) Bank and post-office deposits 1,330 6,349 7,849 CIV2) Checks - - - CIV3) Cash and valuables on hand 4 1,334 13 6,362 10 7,859 TOTAL CURRENT ASSETS ( C) 29,163 32,339 33,304 D) PREPAID EXPENSES AND ACCRUED INCOME D1) Discount on loans issued and similar expense - - - D2) Other 506 506 396 396 521 521 TOTAL ASSETS 37,540 40,528 41,628 FIDIA S.p.A. FINANCIAL STATEMENT BALANCE SHEET FOR THE SIX MONTHS ENDED JUNE 30, 2002 (All amounts in thousands of Euro) LIABILITIES AND SHAREHOLDERS' EQUITY 06/30/2002 12/31/2001 06/30/2001 A) SHAREHOLDERS' EQUITY AI) Share capital 4,700 4,700 4,700 AII) Share premium reserve 15,600 15,600 15,600 AIII) Revaluation reserves - - - AIV) Legal reserve 272 192 192 AV) Reserve for treasury stock 76 - - AVI) Statutory reserves - - - AVII) Other reserves, shown separately 3,367 2,590 2,590 AVIII) Retained earnings (accumulated deficit) - - - AIX) Net income (loss) for the accounting period (2,220) 1,591 966 TOTAL SHAREHOLDERS' EQUITY 21,795 24,673 24,048 B) RESERVES FOR RISKS AND CHARGES B1) Reserve for severance indemnities and similar obligations - - - B2) Taxation reserves 20 20 - B3) Other 430 450 430 450 433 433 C) RESERVE FOR EMPLOYEE TERMINATION 1,576 1,455 1,393 INDEMNITIES D) PAYABLES D1) Debentures - - - D2) Convertible debentures - - - D3) Banks - amounts due within 12 months 2,126 3,345 2,840 - amounts due after 12 months - 700 D4) Other financers - amounts due within 12 months 17 17 104 - amounts due after 12 months 57 57 74 D5) Advances - amounts due within 12 months 659 434 396 - amounts due after 12 months 819 886 1,183 D6) Suppliers - amounts due within 12 months 3,359 3,154 4,012 - amounts due after 12 months 232 279 325 D7) Payables represented by negotiable instruments - - - D8) Subsidiaries 4,543 3,805 4,159 D9) Associated companies 226 229 281 D10) Parent companies - - - D11) Taxes 107 344 149 D12) Provident and social security institutions 324 403 319 D13) Other - amounts due within 12 months 760 451 739 - amounts due after 12 months - 13,229 - 13,404 - 15,281 E) ACCRUED EXPENSES AND DEFERRED INCOME E1) Premiums on loans issued - - - E2) Other 490 490 546 546 473 473 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 37,540 40,528 41,628 FIDIA S.p.A. FINANCIAL STATEMENT MEMORANDUM ACCOUNTS FOR THE SIX MONTHS ENDED JUNE 30, 2002 (All amounts in thousands of Euro) 06/30/2002 12/31/2001 06/30/2001 1 Personal guarantees granted 1a) Guarantees in favor of: - Subsidiaries - - - - Associated companies - - - - Parent companies - - - - Fellow companies - - - - Other - - - - - 1b) Endorsements in favor of: - Subsidiaries - - - - Associated companies - - - - Parent companies - - - - Fellow companies - - - - Other - - - - - 1c) Other personal guarantees in favor of: - Subsidiaries - - - - Associated companies - - - - Parent companies - - - - Fellow companies - - - - Other - - - Total personal guarantees granted - - - 2 Real guarantees granted 2a) For liabilities and obligations of others - Subsidiaries - - - - Associated companies - - - - Parent companies - - - - Fellow companies - - - - Other - - - 2b) For liabilities recorded in the balance sheet - - - 2c) For other own obligations - - - Total real guarantees granted - - - 3 Commitments 3a) Purchases - - - 3b) Sales - - 1,300 Total commitments - - 1,300 4 Contingencies 4a) Discounted notes 3,066 3,392 2,817 4b) Other - - - Total contingencies 3,066 3,392 2,817 5 Other 5a) Commitments for repurchase from customers - - - 5b) Goods belonging to the Company with third parties 842 1,428 1,194 5c) Goods belonging to third parties with the Company 140 99 146 5d) Counter-guarantees received from third parties 1,207 1,417 1,454 5e) Tax Authorities, for items deductible in future years 121 121 122 5f) Depositary for own securities - - 2,669 Total Other 2,310 3,065 5,585 Total Memorandum accounts 5,376 6,457 9,702 FIDIA S.p.A. INCOME STATEMENT as of December 31, 2001 (All amounts in Euro) 06/30/2002 12/31/2001 06/30/2001 A) VALUE OF PRODUCTION A1) Revenues from the sale of goods and services 12,834 31,384 15,977 A2) Change in work-in-progress, semi-finished goods and finished goods 802 310 320 A3) Change in contract work-in-progress - - - A4) Increase in fixed assets for internal work 145 89 - A5) Other revenues and income A5a) Contributions towards operating costs 435 1,177 646 A5b) Other 163 598 493 1,670 228 874 TOTAL VALUE OF PRODUCTION 14,379 33,453 17,171 B) PRODUCTION COSTS B6) Raw materials, ancillary materials, consumables and goods for resale (7,952) (16,223) (8,632) B7) Service costs (3,777) (7,700) (4,124) B8) Expenses relating to the use of third party assets (316) (567) (272) B9) Personnel B9a) Salaries and wages (2,744) (4,909) (2,526) B9b) Social contributions (857) (1,560) (787) B9c) Employee termination indemnities (197) (360) (177) B9d) Severance and similar charges - - - B9e) Other - (3,798) - 6,829 - (3,490) B10) Depreciation and write-downs B10a) Amortization of intangible fixed assets (87) (344) (168) B10b) Depreciation of tangible fixed assets (137) (261) (128) B10c) Write-down of intangible and tangible fixed assets - - - B10d) Write-down of receivables included in current assets and of liquid funds (705) (929) (96) (701) (58) (354) B11) Change in raw materials, ancil. materials, consumables and goods for resale 265 35 297 B12) Provisions for risks - (12) (15) B13) Other provisions - - - B14) Other operating expenses (179) (573) (261) TOTAL PRODUCTION COSTS (16,686) (32,570) (16,851) (A)-(B) DIFF. BETWEEN VALUE OF PRODUCTION AND PRODUCTION COSTS (2,307) 883 320 C) FINANCIAL INCOME AND EXPENSES C15) Income from investments - dividends and other income from subsidiaries - 1,106 252 - dividends and other income associated companies - - - 1,106 - 252 C16) Other financial income C16a) From securities classified under fixed assets - from subsidiaries - - - - from associated companies - - - - from parent companies - - - - from other enterprises - - - C16b) From securities classified under fixed assets, not representing investments - - - C16c) From securities classified under fixed assets, not representing investments 14 99 132 C16d) Income other than that listed above - interest and commissions from subsidiaries - - - - interest and commissions from associated companies - - - - interest and commissions from parent companies - - - - interest and commissions from other and other income 258 272 810 909 580 712 C17) Interest and other financial charges - Subsidiaries - - - - Associated companies - - - - Parent companies - - - - Other (185) (185) (587) (587) (318) (318) TOTAL FINANCIAL INCOME AND EXPENSES 87 1,428 646 D) ADJUSTMENTS TO THE VALUE OF FINANCIAL ASSETS: D18) Revaluations - Investments - 4 - - Financial fixed assets, not representing investments - - - - Securities classified under current assets, not representing investments - - - 4 - - D19) Write-downs - Investments - (161) - - Financial fixed assets, not representing investments - - - - Securities classified under current assets, not representing investments - - - (161) - - TOTAL ADJUSTMENTS TO THE VALUE OF FINANCIAL ASSETS - (157) - E) EXTRAORDINARY INCOME AND EXPENSE E20) Income - Gains on disposals - - - - Other - - - - - - E21) Expenses - Losses on disposals - - - - Taxes relative to prior periods - (35) - - Other - - - (35) - - TOTAL EXTRAORDINARY ITEMS - (35) - RESULT BEFORE TAXES (2,220) (2,119) 966 R22) INCOME TAXES - (528) - R26) PROFIT (LOSS) FOR THE ACCOUNTING PERIOD (2,220) 1,591 966 It is hereby declared that this Financial Statements agree with the underlying accounting records By Order of the Board of Directors Giuseppe Morfino Chairman FIDIA S.p.A. REPORT ON THE SEMESTER AT JUNE 30, 2002 Board of Directors September 24, 2002 FIDIA S.p.A. Issued and paid-in share capital: EURO 4,700,000 Entered under Number 05787820017 in the Turin Register of Companies Turin Business Code (“R.E.A.”) 735673 Registered office: in San Mauro Torinese (Turin) Corso Lombardia n. 11 Internet Web site: http://www.fidia.com e-mail: firstname.lastname@example.org BOARD OF DIRECTORS Chairman and Managing Director (°) (*) Giuseppe Morfino Directors Fabio Alberto Regoli Giuseppe Floridia Gianfranco Carbonato Leonardo Cuttica (°°) BOARD OF STATUTORY AUDITORS Chairman (**) Enrico Bonicelli Standing Auditors Piera Braja Maurizio Ferrero Alternate Auditors Mario Beraldi Ivano Gasco INDEPENDENT AUDITORS Mazars & Guerard S.p.A. (***) (*) Appointed at the Shareholders’ Meeting of April 29, 2002 up to the approval of the annual financial statements for 2004. (**) Appointed at the Shareholders’ Meeting of April 29, 2002 up to the approval of the annual financial statements for 2004. (***) (***) Appointed at the Shareholders’ Meeting of July 3, 2000 for the three-year period 2000- 2002. (°) Appointed Managing Director by the Board of Directors meeting held on 17th September 2002 up to the approval of the annual financial statements for 2004. (°°) Appointed by co-optation by the Board of Directors meeting held on 17th September 2002 until the next shareholders’ meeting. POWERS OF THE CHAIRMAN OF THE BOARD AND MANAGING DIRECTOR The main powers that may be wielded by the Chairman of the Board of Directors and Managing Director are listed hereafter. For the full list of the powers please refer to the contents of the certificate issued by Turin Chamber of Commerce, Industry, Handicraft and Agriculture. Chairman of the Board of the Director, and Managing Director: Giuseppe Morfino He is the legal representative of the company in respect of third parties and in any proceedings, with single signature, to exercise any and all, and the amplest powers of ordinary and extraordinary administration, with the power to appoint special proxy-holders for single banking transactions of any kind, and without any limit of amount, with the sole exclusion of the powers and rights expressly reserved to the Board of the Directors under the Law or the company’s By-laws. The Board of the Directors retains the following powers: • Purchase, sale, and conferment of any holdings; • Assignment, conferment, and/or renting the company or any branches thereof; • Purchase of branches of a company; • Purchase and/or sale of real estate and/or tangible rights and/or related servitude; • Registration of mortgages on corporate buildings. FIDIA GROUP STRUCTURE AS AT 31ST JULY 2002 FOREWORD The following notes, referring to the half-yearly position of Fidia as at 30th June 2002, have been prepared according to the provisions in annex 3c-bis of the set of regulations that include the implementation norms of the Law Decree dated 24th February 1998 n. 58. A) INFORMATION ON THE BUSINESS MANAGEMENT Gentlemen and Shareholders, in submitting to your attention the results related to the first half of the financial year 2002, we must, unfortunately, point out a continuing difficult situation for the machine tools industry. The improvement signals for our Group are still, at this moment, limited to the increase of the new orders, and portfolio. The favourable commercial situation of the milling systems, materialised during the second quarter, let’s allow anticipating a good outlook over the next few months. However, it has had no favourable impact on the first half-yearly Profit and Loss Account. The Company’s turnover, for the first half of the year, stood at Euro 12,8 million, down from Euro 16 million during the same period last year (-19.7%). The result before taxes (EBT) was negative at Euro 2,220 thousand, against a positive result for the first half 2001 amounting to Euro 966 thousand. In detail, the reclassified Profit and Loss Account for the period compared to the same period 2001, shows the following figures: (Euro/ thousands) 06/30/2002 % 06/30/2001 % Revenues from the sale of goods and services 12,834 89.3% 15,977 93.0% Change in inventories 802 5.6% 320 1.9% Increase in fixed assets for internal work 145 1.0% 0 0.0% Other revenues and income 598 4.2% 874 5.1% Value of production 14,379 100.0% 17,171 100.0% Raw material purchasing costs (7,687) -53.5% (8,335) -48.5% Service costs and other operating expenses (4,272) -29.7% (4,657) -27.1% Added value 2,420 16.8% 4,179 24.3% Personnel expenses (3,798) -26.4% (3,490) -20.3% Gross Operating Margin (EBITDA) (1,378) -9.6% 689 4.0% Provision for the write-down of receivables (705) -4.9% (58) -0.3% Provision for risks and charges 0 0.0% (15) -0.1% Amortization and depreciation (224) -1.6% (296) -1.7% Operating Result (EBIT) (2,307) -16.0% 320 1.9% Net financial income/(expenses) 87 0.6% 646 3.8% Write-down of investments 0 0.0% 0 0.0% Extraordinary income/(expenses), net 0 0.0% 0 0.0% Result before income tax (EBT) (2,220) -15.4% 966 5.6% The gross operating margin (EBITDA) was negative for Euro 1,378 thousand in respect of a Euro +689 thousand in the first half of the financial year 2001. The decrease of the gross operating margin was, basically, due to the decrease of the turnover and other income and revenues. However, it is necessary to stress that, though facing such remarkable decrease, the Company has not scaled down its goals for the financial year 2002, above all, as far as the commercial strengthening and the product innovation are concerned, thus getting ready to exploit the market opportunities that, we believe, will materialise during the second half of the financial year. The operating result (EBIT) was negative for Euro 2,307 thousand, down from Euro +320 thousand in the first half of the financial year 2001. Such result was affected by the provisions for losses on accounts receivable amounting to Euro 705 thousand due to, for Euro 517 thousand, to the starting of the composition proceedings (Prior Composition) involving the company Rambaudi Industriale S.p.A., an historical brand in the machine tools industry, and an important client of the Group’s electronic division. The loss before taxes (EBT) amounted to Euro 2,220 thousand, down from a gross profit of Euro 966 thousand in the first half of the financial year 2001. Such result, was affected, among the others by the foreseeable worsening of the financial position. The reclassified patrimonial position is the following: (Euro/ thousands) 06/30/2002 12/31/2001 06/30/2001 Tangible fixed assets, net 1,051 971 879 Intangible fixed assets 205 283 407 Financial fixed assets 6,539 6,539 6,517 Fixed assets – (A) 7,795 7,793 7,803 Customers trade receivables, net 5,883 8,175 5,753 Inventories 4,565 3,342 3,641 Other current assets 16,881 14,857 11,912 Current assets – (B) 27,329 26,374 21,306 Supplier payables (3,591) (3,433) (4,337) Other current liabilities (7,928) (7,099) (7,699) Current liabilities – (C) (11,519) (10,532) (12,036) Net working capital (D) = (B+C) 15,810 15,842 9,270 Reserve for employee severance indemnities (E) (1,576) (1,455) (1,393) Reserves for risks and charges (F) (450) (450) (433) Net invested capital (G) = (A+D+E+F) 21,579 21,730 15,247 Financial position Financial assets not representing fixed assets (1,006) 0 (4,660) Bank deposits and cash at hands (1,334) (6,362) (7,859) Current bank liabilities 2,126 3,345 2,840 Current portion of long-term bank loans 17 17 104 Current financial position (197) (3,000) (9,575) Long-term financing and loans, net of current portion 57 57 774 Net financial position (I) (140) (2,943) (8,801) Share capital 4,700 4,700 4,700 Reserves 19,315 18,382 18,382 Profit (Loss) for the financial period (net as at 12/31/2001) (2,220) 1,591 966 Total Group Net Equity inclusive of own shares 21,795 24,673 24,048 Less own shares in portfolio (76) 0 0 Total net equity (I) 21,719 24,673 24,048 Shareholders’ equity and net financial position (L) = (H+I) 21,579 21,730 15,247 The net current assets remained, basically, steady in respect of 12/31/2001. During the period being examined, the difference between the commercial account receivable and payable was down from Euro 4,742 thousand to Euro 2,292 thousand, thus confirming the company’s ability to co-ordinate, under the financial point of view, the supply policies with the commercial credit ones. The increase of the inventory, equal to Euro 1,223 thousand, to a certain extend, punctually, seen at the end of June every year as we prepare to face the second semester production undertakings, is here evidenced by the circumstance that the Company substantially reduced its production budget. The worsening of the net financial position was a direct consequence of the negative economic position, and the piloted increase of the inventories. TREND OF THE COMPANY’S SHARES As at 8th June 2002 the closing price of the shares stood at Euro 8,054, or a 20.3% loss in respect of the beginning of the years. However, the shares trend, during the first half of the financial year 2002 was better than the trend of the reference Bourse index (NUMTEL –38.7%). As at 17th September 2002 Fidia shares recorded a 23.1% loss since the beginning of the year (NUMTEL –50.1%). TURNOVER The Company’s turnover as at 30th June recorded a 19.7% decrease in respect of the first half 2001, down from Euro 15,977 thousand to Euro 12,834 thousand. The trend of the turnover, by business line, is shown in the following table: (Euro/ thousands) 06/30/2002 % 06/30/2001 % Numerical controls, drives and software 3,218 25.1% 4,261 26.7% After-sales service 1,193 9.3% 1,305 8.2% Total numerical controls 4,411 34.4% 5,566 34.8% High-speed milling systems 8,227 64.1% 10,255 64.2% After-sales service 196 1.5% 156 1.0% Total high-speed milling systems 8,423 65.6% 10,411 65.2% Total turnover 12,834 100.0% 15,977 100.0% Numerical Control and Software The electronic products line, including the CAM software programs and drives evidenced a 24.5% decrease compared to the same period of 2001, while customer service worsened 8.6%. The reduction in turnover for this business line was equal to 20.8%. High-speed milling systems During the first quarter of 2002. the turnover in the high-speed milling business line showed a 19.1% loss if compared to the same period of 2001. Such outcome still too much negative shall improve thanks to the notable acquisition of new orders during the second quarter. In the two reference periods, the turnover is divided by geographical area: (Euro thousand) NUMERICAL NUMERICAL CONTROLS CONTROLS AND AND Change GEOGRAPHIC SOFTWARE SOFTWARE % AREA 06/30/2002 % 06/30/2001 % ITALY 1,863 42.24% 2,867 51.51% -35.02% GERMANY 1,085 24.60% 971 17.45% 11.74% SPAIN/PORTUGAL 488 11.06% 472 8.48% 3.39% FRANCE/BELGIUM 276 6.26% 299 5.37% -7.69% PR CHINA 219 4.96% 144 2.59% 52.08% BRAZIL 8 0.18% 80 1.44% -90.00% USA/CANADA 270 6.12% 396 7.11% -31.82% REST OF THE WORLD 202 4.58% 337 6.05% -40.06% TOTAL 4,411 100.00% 5,566 100.00% -20.75% (Euro thousand) High-Speed High-Speed milling milling Systems Systems Change GEOGRAPHIC 06/30/2002 06/30/2001 % AREA % % ITALY 1,811 21.50% 2,208 21.21% -17.98% GERMANY 2,097 24.90% 3,721 35.74% -43.64% SPAIN/PORTUGAL 459 5.45% 407 3.91% 12.78% FRANCE/BELGIUM 1,365 16.21% 409 3.93% 233.74% PR CHINA 482 5.72% 1,292 12.41% -62.69% BRAZIL 147 1.75% 0 0.00% -- USA/CANADA 1,965 23.33% 986 9.47% 99.29% REST OF THE WORLD 97 1.15% 1,388 13.33% -93.01% TOTAL 8,423 100.00% 10,411 100.00% -19.10% (Euro thousands) TOTAL TOTAL TURNOVER TURNOVER GEOGRAPHIC AS AT AS AT Change AREA 06/30/2002 % 06/30/2001 % % ITALY 3,674 28.63% 5,075 31.76% -27.61% GERMANY 3,182 24.79% 4,692 29.37% -32.18% SPAIN/PORTUGAL 947 7.38% 879 5.50% 7.74% FRANCE/BELGIUM 1,641 12.79% 708 4.43% 131.78% PR CHINA 701 5.46% 1,436 8.99% -51.18% BRAZIL 155 1.21% 80 0.50% 93.75% USA/CANADA 2,235 17.41% 1,382 8.65% 61.72% REST OF THE WORLD 299 2.33% 1,725 10.80% -82.67% TOTAL 12,834 100.00% 15,977 100.00% -19.67% The most worrying turnover decreases were those recorded on the Italian market (-27.6%), and on the German one (-32.2%), representing the most important markets for the Group. The two markets reflect the lull of the European economy, made more complicated by the crisis in the automotive industry, and accentuated in Germany by the pre-election period. However, we report that on the Italian market a higher interest towards the investments in durable goods may already be perceived. It could materialise new orders concurrently with BIMU Show, at the beginning of the month, and because our German distributor shall take advantage of the introduction of the new K 197 high speed milling system, already presented on the German market on the occasion of METAV trade fair in Duesseldorf at the beginning of June. As for PR China, the orders portfolio is such as to allow a quick and substantial increase of the turnover during the second half of the year. Instead, any assessment of the timing for the recovery of the American market continues to be difficult, though the situation looks positive for our Company. COMMERCIAL ACTIVITY The following table shows the trend of the new orders and of the portfolio in the two reference periods. The data are divided according to the two main lines of business NUMERIC HIGH-SPEED CONTROLS MILLING (Euro thousand) AND SOFTWARE SYSTEMS TOTAL Order Portfolio as at 01/01/2001 1,688 7,054 8,742 New orders in the 1st half 2001 5,435 9,846 15,281 1st half 2001 turnover (5,566) (10,411) (15,977) Order Portfolio as at 06/30/2001 1,557 6,489 8,046 Order Portfolio as at 01/01/2002 1,148 3,691 4,839 New orders in the 1st half 2002 4,071 14,116 18,187 1st half 2002 turnover (4,411) (8,423) (12,834) Order Portfolio as at 06/30/2002 808 9,384 10,192 As for the numeric controls and software line, the second quarter was affected by the prudential cancellation of the portfolio related to Rambaudi Industriale S.p.A. (354 thousand Euro), one of the Group’s historic Customers, unfortunately undergoing the composition proceedings. Without such cancellation, the numeric controls new orders would have been in line with UCIMU Indexes that recorded a 18.6% drop in orders over the semester in respect of the same period in 2001. In our Company’s case, in the semester, there was a 25.1% drop. However, the true positive note shown was represented, as already said, by the sizeable volume of orders in the milling systems during the second quarter 2002. Such volume, one third of which from the Chinese market, placed the new orders at a 43% level higher than the same period in 2001 and the orders portfolio at Euro 9,384 thousand up from Euro 6489 thousand Euro as at 30th June 2001. As a whole, the new orders showed a 19% increase, in the semester, in respect of the same period in 2001. The order portfolio at the moment, equal to Euro 10,192 thousand, is 26.7% higher than then the one as at 30th June 2001. In the first half 2002, the Group attended numerous and important industry’s trade fairs such as BIEMH in Bilbao, BIMO in Paris, REIFEN 2002 in Essen, FEIMAFE in Sao Paulo Do Brazil, and MOULD & DIE in Shanghai. RESEARCH AND DEVELOPMENT Even in the first half 2002, the Company was intensely carrying out several research and development activities aiming at maintaining an advanced technological position and at adjusting its products to the customers’ need. As for the numerical controls ad software, the main subjects of research and development concerned: - The designing of a new CNC (C10) model to complete the range in Class C, profoundly renewed with the introduction of WINDOWS XP, and the new processors in the real time section; - The designing of two new portable push-button panels, easier to handle and complete; - The CAM 3D HI-MILL integration to the numerical controls; - The continuing development of a new language set for the programming of the machine logic according to IEC 1131 standards. As for the high-speed milling systems, the main research and development activity were the following: - Completion of the project of the K197 5-axis new milling centre and its prototyping; - Completion of the project of the DL155 milling system, by linear engine, and the starting of the milling and optimisation tests; - Improvement of the X axis dynamics K211 and K411 milling systems; - Improvement of the head by 2 continuous axes utilised on K197, K211, and K411; - Designing of a bi-swivelling new head to be utilised on K165, and D218/318. Finally, the Company is constantly committed to perform a systematic research activity within the projects financed by the European Union, and MURST. The Research and Development costs incurred by the Company stood at Euro 1.9 million (Euro 1.6 million in the first half 2001). Approximately two third of such costs are directed to the staff engaged in the R&D activity. PERSONNEL The labour cost stood at Euro 3,798 thousand, up from Euro 3,490 thousand in the first half 2001 (+8.8%). The increase of the labour costs was due to the increase of the average of the staff, and the wages and salaries increase. Such increase was diminished by the presence, in the first half 2001, of the bonuses linked to the company’s performance. The incidence of the labour cost over the value of the production went up from 20.3% to 26.4%. The following table shows the workforce average trend, the added value, the turnover by and the cost by head. 06/30/2002 06/30/2001 Executives 13 12 Clerks and supervisors 139 131 Workers 2 2 Total number of employees 154 145 Total average number of employees 152 138 Added value (in thousands of Euro) 2,420 4,179 Added value by employee on an annual basis (in thousands of Euro) 32 61 Cost of labour (in thousands of Euro) 3,798 3,490 Average cost by employee on an annual basis (in thousands of Euro) 50 51 The decrease of the added value by head is due to the elements already listed in connection with the EBTDA trend. INFRA-GROUP COMPANIES RELATIONSHIP The relationship between the Group companies are essentially of commercial nature. The production of the milling systems, the mechanical components, and the electrical systems is carried out, within the Group, to our subsidiaries Meccanica Cortini S.p.A., Simav S.p.A., and Sitra Automazione S.r.l. In particular Meccanica Cortini S.p.A., and Simav S.p.A. engage in the manufacturing of high speed milling machines with Fidia brand, while Sitra Automazione S.r.l. manufactures drive and supplies electrical boards to Meccanica Cortini S.p.A., and Simav S.p.A. Such products are, then, purchased by the parent company that takes care of their integration to the numerical controls, and software it manufactures. Fidia foreign subsidiaries perform the sales and technical assistance business for the Group products on the respective markets, and, for such purpose, the products are purchased from the parent company (and, in a limited quantity, directly from the Italian subsidiary). The infra-group sale relationships are on the basis of the transfer prices applied continuously and with no difference between companies; the supply relationship is on the basis of the ordinary market prices. GROUP COMPANIES TREND We are giving hereafter summarised information on the trend of the group companies in the financial period. To make it more significant the companies general picture, the amounts are denominated in thousand Euro; for the foreign subsidiaries operating in Countries outside the EU there have been utilised the exchange rates of the original currency for the reference period. Meccanica Cortini S.p.A. The first half 2002 turnover stood at Euro 4,007 thousand, down from Euro 6,100 thousand in the first half 2001 (-34%); the semester closed with a loss of Euro 53 thousand, down from a profit before taxes, in the first half 2001, amounting to Euro 315 thousand; the workforce remained unchanged at 16 units. Simav S.p.A. The first half 2002 turnover stood at Euro 3,456 thousand, up from Euro 3,441 thousand in the first half 2001; the semester closed with a gross profit of Euro 98 thousand, down from a gross profit of Euro 273 thousand in the first half 2001; the workforce increased from 27 units, as at December 31, 2001, to 28 units, as at June 30, 2002. Sitra Automazione S.r.l. The first half 2002 turnover stood at Euro 595 thousand, down from Euro 840 thousand in the first half 2001 (-29%); the semester closed with a profit before taxes of Euro 20 thousand, down from a profit before taxes of Euro 102 thousand in the first half 2001; the workforce remained unchanged at 15 units. Fidia GmbH The first half 2002 turnover stood at Euro 2,489 thousand, down from Euro 2,685 thousand in the first half 2001 (-7%); the semester closed with a gross profit of Euro 198 thousand, down from a profit before taxes of Euro 253 thousand in the first half 2001; the workforce increased from 27 units, as at December 31, 2001, to 29 units, as at June 30, 2002. Fidia Iberica S.A. The first half 2002 turnover stood at Euro 1,776 thousand, up from Euro 1,333 thousand in the first half 2001 (+33%); the semester closed with a gross profit of Euro 70 thousand, down from a gross profit of Euro 336 thousand in the first half 2001 the workforce remained unchanged at 14 units. Fidia S.a.r.l. The first half 2002 turnover stood at Euro 2,120 thousand, up from Euro 1,205 thousand in the first half 2001 (+76%); the semester closed with a loss of Euro 79 thousand, compared with a profit before taxes of Euro 95 thousand in the first semester 2001; the workforce increased from 10 units, as at December 31, 2001, to 11 units, as at June 30, 2002. Fidia Co. The first half 2002 turnover stood at Euro 2,750 thousand, up from Euro 2,435 thousand in the first half 2001 (+13%); the semester closed with a loss of Euro 313 thousand, up from a loss of Euro 234 thousand, in the first half 2001; the workforce increased from 13 units, as at December 31, 2001, to 17 units, as at June 30, 2002. Beijing Fidia Machinery & Electronics Co. Ltd. The first half 2002 turnover stood at Euro 712 thousand, up from Euro 649 thousand in the first half 2001 (+10%); the semester closed with a profit, before taxes, of Euro 139 thousand, down from a profit, before taxes, of Euro 258 thousand in the first half 2001; the workforce increased from 12 units, as at December 31, 2001, to 13 units, as at June 30, 2002. Fidia do Brasil Ltda. The first half 2002 turnover stood at Euro 242 thousand, down from Euro 447 thousand in the first half 2001 (-46%); the semester closed with a loss of Euro 108 thousand, against a gross profit of Euro 115 thousand, in the first half 2001; the workforce decreased from 12 units, as at December 31, 2001, to 9 units, as at June 30, 2002. ASSOCIATED COMPANIES Consorzio Co.Ge.F. Within its R&D activity, Fidia participates to the Co.Ge.F. consortium, established in 1995 on the same share of Benetton Group S.p.A., and Comau Systems S.p.A. The net equity as at December 31, 2001 stood at Euro 15 thousand (Fidia holding percentage is equal to 33.33%); the 2001 financial year ended at break-even point against a net profit of Euro 6 thousand in 2000 financial year. Consorzio Prometec The Prometec consortium actively involves in promotion, and communication to its associates. As at December 31, 2001 the net equity stood at Euro 10 thousand (Fidia holding percentage is equal to 20%); the 2001 financial year ended at break-even point against a net profit of Euro 6 thousand in 2000 financial year. FORESEEABLE BUSINESS MANAGEMENT EVOLUTION AND SIGNIFICANT EVENTS OCCURRED AFTER THE HALF-YEARLY ACCOUNTS CLOSING After the half-yearly closing, the following significant events occurred: - on 26th July 2002, an agreement to establish was entered into with the largest Chinese manufacturer of machine tools, Shenyang Machine Tool Company Ltd. (SMTCL); the joint-venture, into which the Group shall have a 70% holding, shall supply high technology electronic components to the Chinese manufacturers of machine tools; - on 31st July 2002, Fidia S.p.A. took the full control of Sitra Automazione S.r.l., company where a 73% holding was owned; Sitra is a company that specialises in designing and manufacturing drives: the transaction has been completed by buying the residual 27% of the capital stock with a 66% allocation of Fidia S.p.A. ordinary shares to the minority shareholders, and a 34% cash payment amounting to Euro 93,640; - on 17th September 2002, the Board of Directors acknowledged that the Managing Director, Ing. Luigi Visconti, had resigned to start a new entrepreneurial project in the industrial automation industry; the Board of Directors appointed Ing. Giuseppe Morfino, Chairman, as the Company’s Managing Director, and co-opted dott. Leonardo Cuttica as additional member of the Board, to replace Ing. Luigi Visconti. We remind you that, since 19th June 2002, Fidia S.p.A. started buying its own shares. As at 17th September 2002 the own shares portfolio, net of said Sitra operation, stood at 16,939 for a total value of about Euro 131 thousand. 23,200 own shares have paid for Sitra purchase. In the first half of September Fidia Group attended the most important American trade fair in the industry, the Chicago IMTS. Furthermore, the attendance to Milan BIMU, and Frankfurt EUROMOLD have already been scheduled. The turnover, as at August 31, 2002 stood at Euro 16.6 million, with a reduction of the delay in respect of the same period 2001 from Euro 3.2 million, semester to semester, to Euro 2.6 million recorded in the first eight months. The orders portfolio, at the end of August stood at Euro 9,794 thousand, slightly down in respect of the 30th of June (Euro 10,192 thousand), but 23% higher than the figure as at 31st August 2001 (Euro 7,987 thousand). We stress once more that the Group, notwithstanding a semester objectively difficult, has not down sized its goals for the 2002 financial year, above all as far as the marketing strengthening and the product innovation, thus getting ready to catch the opportunities on the market that shall stronger materialise in the second half of the year. In the framework of the strategic lines defined upon listing, finally we add that preliminary contacts are being taken for possible hypotheses of acquisitions. For and on behalf of the Board of Directors The Chairman of the Board, and Managing Director ing. Giuseppe Morfino ASSESSMENT CRITERIA The half-yearly report, closed on 30th June 2002, refers to the financial period 1st January 2002/30th June 2002 and has been prepared in compliance with the regulations of the Civil Law, and according to the opinion of the Board of the Statutory Auditors as for the specific cases provided for in the Law, and is presented compared to the Balance Sheet data, closed on 31st December 2001, as for the financial statements, and the half-yearly report as at 30th June 2001, as for the Profit and Loss Account data. The items in the half-yearly report have been assessed based upon the Law regulations and the accounting principles issued by the National Committee of the Graduated Certified Accountants and Certified Accountants, and, if missing, upon criteria consistent with the international praxis. To complete the provisions of the specific law regulations, and in line with the past financial periods, with the aim to give a deeper analysis of the half-yearly data, the tables of the changes occurred to the financial statements and the Profit and Loss Account, and the accounts detail are hereto attached the better to read the accounting data. Based upon the norms and regulations implemented with the Law Decree DL 127/91, bringing into effect the VII EEC Directive, also the half-yearly Group’s consolidated situation has been prepared. Furthermore, to the best of our knowledge and belief, the half-yearly Balance Sheet is correct under the formal and substantial points of view, and gives the actual presentation of the economic, patrimonial, and financial position of the Company. The accounting principles, and the assessment criteria applied meet the goal to truly and correctly represent the patrimonial and financial position of the Company, as well as the economic result for the period. The principles for preparing the Balance Sheet have been applied in accordance to the guiding hypotheses provided for under art. 2423 bis C.C. The assessment criteria have been determined in compliance with art. 2426 C.C., and are in line with those adopted in the financial period ended on December 31, 2001. No calculation of income taxes was made for the financial period examined as allowed by comma 7, art. 81, of the Consob regulations approved with the resolution n. 11971 passed on 14th May 1999, and any modification thereof. The assessment criteria are presented hereinafter. Intangible assets The intangible assets are posted at the cost incurred for their acquisition or implementation, net of accumulated amortisation. R&D costs are posted to the Profit and Loss Account for the financial period. The advertising costs are fully posted to the Profit and Loss Account of the financial year they were incurred. The industrial patents, licenses, brands, and any other intangible assets rights are posted at cost, annually reduced according to the contractual duration, and, in any case, within the period of their assumed economic utilisation. Hereafter the amortisation criteria for each single item are presented: • Industrial patent, and intellectual property use intellectual property use 3 years • Concessions, licenses, and brands 2-5 years • Other intangible assets 5 years In this connection the following is pointed out: • The criteria adopted for the items Industrial patent, and intellectual property use intellectual property use is believed to be consistent with their residual use possibility. Tangible assets The tangible assets are posted, for certain assets, at a suitable purchase or production costs, the latter if produced within the Company, in application of the monetary revaluation law, and in compliance with the fiscal regulations. The presentation of the tangible assets is net of the related accumulated depreciation fund as at the end of the semester. The tangible assets are depreciated by equal instalments based upon the economic-technical rates believed to represent the anticipated useful life of the assets that refer to the maximum rate allowed by the ministerial coefficients. As for the assets purchased during the semester, the depreciation is calculated at a half of the anticipated yearly provisions, and the correspondent rate of depreciation reduced at 50% applies, to take into consideration the lesser temporal utilisation of the new assets. The ordinary maintenance costs are totally posted to the Profit & Loss Account. The maintenance costs of increasing value nature are allocated to the assets they refer to, and are depreciated according to the residual possibility of use of the same. The depreciation is calculated according to the following rates: Rate utilised Light constructions 10% Plant 10% Machinery 15.5% Facilities 25% Tools 25% Furniture and furnishings 12% Office machines 20% Vehicles 25% Goods with value less than Euro 516 100% Holdings The holdings in subsidiaries and associated companies are posted at the adjusted cost under art. 2426 n.1, 2, 3 C.C. If the value of the holdings have undergone a long term diminution, the specific adjustments to their value has been done. Such criteria, agreed upon with the Board of the Statutory Auditors, is believed to represent the value and the possibility to achieve the economic goals pursued. Fixed accounts receivable The fixed accounts receivable are posted at face value. Inventories The inventories are posted at the lesser between the purchase or production costs and the fair market value. The criteria adopted are the following: • For raw materials, purchased semi-finished products, subsidiary raw materials, and finished products, the criteria of the annual average cost; • For the working-in-progress products, the cost incurred during the financial year, inclusive of the raw materials, labour, and indirect production costs. Accounts receivable and payable The accounts receivable are totally posted at face value. Such value is reduced to the one of the assumed collection by the specific write-down fund. The accounts payable are posted at face value. Accounts receivable and payable denominated in foreign currency The accounts receivable and payable denominated in foreign currency are posted to the accounting at face value, and at the foreign exchange rate of the day of the transaction. At the end of the period such account receivable and payable in currencies other than Euro were adjusted at the exchange rate current at the date of the Balance Sheet; any gain or losses from the conversion have been posted to the Profit and Loss Account as components of the financial income. Accruals and deferrals The accruals include the share of costs and revenues pertaining to several financial periods, partially matured during the current financial year, and that shall be collected during the following financial years. The deferrals represent the share of costs or income incurred or received during the financial year but pertinent to the following financial year(s). Risks and charges fund The risks and charges fund include the fund for the products warranty. Such fund relates to the assumed costs that the Company has to meet on sold products, and that, at the end of the semester, still fall into the warranty period. For the numerical controls and the milling systems, it is calculated based upon the historic data, and is equal to 2.5% of the sale price. Employees severance fund The employees severance fund is calculated according to the provisions in art. 2120 C.C., and it updated according to the current law and contractual provisions governing the employment in Italy. Recognising purchase income and costs The revenues for the sales and the purchase costs are accounted for according to the pertinence principle, and are recognised upon the transfer of the ownership that in general coincides with the shipment or receipt of the goods. The revenue for services are posted in connection with the period when the service is rendered. Allowances The state and EEC allowances received against research projects are posted to the Profit and Loss Account on the basis of the temporal pertinence as these are allowances for the financial period. Current income taxes No calculation of taxes was has been made in the semester: therefore, the result for the semester is before taxes. Deferred taxes No calculation of deferred taxes was has been made in the semester. The receivable deferred taxes posted to “Sundry Creditors”, and the payable deferred taxes posted to “Sundry Debtors” refer to the financial period ended on 31st December 2001. Infra-group transactions The Company holds relationships of productive, commercial, financial, and of services type with the Group companies. Such relations are settled at market conditions. The Group’s operations do not provide for direct operations between the Italian and foreign subsidiaries, except for the products bearing the Meccanica Cortini S.p.A., and Sitra Automazione S.r.l. brands; any and all other operations have the holding company Fidia S.p.A. as counterpart. OTHER INFORMATION Derogation under 4° comma art. 2423 C.C. It is pointed out, also, that no derogation under comma 4° art. 2423 C.C. has been made. According to art. 10, Law 72/83 it is pointed out that the tangible assets include assets re-valued under said Law. However, such re-valuations are for non-significant amount, and are highlighted in the specific table. RECLASSIFICATIONS In preparing this Balance Sheet, some items have been better classified. In such cases, the changed classification modality in respect of the past financial year has been appropriately commented at the bottom of the single Balance Sheet items. INFORMATION ON THE FINANCIAL STATEMENT ASSETS INTANGIBLE ASSETS The book value of the intangible assets, divided into categories, is the following: Balance Balance Balance 30th June 2002 31st December 2001 30th June 2001 Industrial patents and intellectual property rights 52 103 207 Concessions, licenses, trademarks and similar rights 118 143 179 Others: Leashold building works on third party premises 32 32 14 Long term costs on loans 3 5 7 Total others 35 37 21 Total 205 283 407 The changes in intangible assets are on the table attached hereto. TANGIBLE ASSETS The changes in tangible assets, and any other related information, under art. 2427 n. 2 C.C., inclusive also of the information under art. 10 Law 19th March 1983, n.72 in relation with the patrimonial assets as at June 30, 2002, standing at Euro 24 thousand are on the table attached hereto. The details of the tangible assets as at 30th June 2002 are the following : Assets value Depreciation Balance as at Balance as at Balance as at fund 30/06/02 31/12/01 30/06/01 Land and buildings 291 (11) 280 280 280 Plants and machinery 941 (672) 269 189 213 Industrial and commercial equipment 1,327 (1,116) 211 195 106 Other assets 2,238 (1,947) 291 307 280 Total 4,797 (3,746) 1,051 971 879 The increase in value of the assets recorded during the 1st half 2002, amounting to Euro 230 thousand, may be allocated to the physiologic investments for the productive structure and demo centres, and is mainly divided between investments in plant and machinery for Euro 131 thousand, in sundry equipment for Euro 39 thousand, in electrical and electronic tools for Euro 19 thousand, and in investment in hardware for Euro 37 thousand. The sales during the first half of the financial year stood at Euro 46 thousand, and mainly refer to hardware for Euro 21 thousand, and to company’s cars for Euro 16 thousand. The ordinary depreciation during the semester stood at Euro 137 thousand, and were calculated based upon rates believed to represent the residual use of the tangible assets. As a whole, the adjustment to the value of the assets amount to Euro 3,746 thousand, and include the advance depreciation, under 3° comma art. 67, TUIR, made over the past financial years for Euro 432 thousand. FINANCIAL ASSETS Holdings In detail, they are the following: Balance as at Balance as at Increases Decreases Balance as at 30th June 2001 31st December 2001 30th June 2002 Subsidiaries Fidia Gmbh 1,199 1,208 - - 1,208 Fidia Co. 0,3 9 - - 9 Fidia Iberica S.A. 171 171 - - 171 Fidia S.a.r.l. 222 222 - - 222 Beijing Fidia Co. Ltd. 1,185 1,185 - - 1,185 Fidia Do Brasil Ltda 184 184 - - 184 Meccanica Cortini S.p.a. 1,472 1,472 - - 1,472 Sitra Automazione S.r.l. 424 424 - - 424 Simav S.p.a. 475 475 - - 475 Total subsidiaries 5,333 5,351 - - 5,351 Associated companies Consorzio Prometec 0,2 2,1 - - 2,1 Consorzio Co.Ge.F. 3,4 5,2 - - 5,2 Total associated companies 4 7 - - 7 Other companies M.L.T.A. S.p.a. 34 34 - - 34 Probest Service S.r.l. 10 10 - - 10 Consorzio Poliedra 7 7 - - 7 Total other companies 51 51 - - 51 Total holdings 5,388 5,410 - - 5,410 The holdings in subsidiaries and associated companies are posted to the Balance Sheet at the purchase or underwriting cost adjusted by the depreciation applied in the past financial years. The list of the holdings owned, and the information required under article 2427 C.C, is given on the table attached hereto. Long term accounts receivable The detail is as follows: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 From Subsidiaries Meccanica Cortini S.p.a. 794 794 794 Simav S.p.a. 335 335 335 Total accounts receivables from subsidiaries 1,129 1,129 1,129 The accounts receivable from subsidiaries refer to non-interest bearing loans from shareholders granted to said subsidiaries over the past financial years. Such loans are collectable within the next 12 months. Own shares Starting 19th June 2002, the Company has purchased n. 9,338 own shares for a value of Euro 76 thousand. CURRENT ASSETS Inventories Such item, at the end of the financial period, consisted of the following : Balance as at Balance as at Balance as at 30th June 2002 31th December 2001 30th June 2001 Raw, subsidiary, and consumption materials 2,449 2,184 2,446 Raw materials depreciation fund (103) (103) (103) Products being manufactured and semi-finished prod 517 373 505 Finished products and goods 1,392 733 612 Advance payments 310 155 181 Total inventories 4,565 3,342 3,641 The changes in inventories, equal to Euro 1,223 thousand, may be brought back to the fact that the Company, though late as for the turnover, has not significantly scaled down its sale and production targets. The raw materials depreciation fund, equal to Euro 103 thousand, is provided for to face phenomenon of slow turnover of the components, deriving from the need to ensure the availability of spare parts for technical assistance for several years. The item advance payments refer to advances granted to our subsidiary Simav S.p.A. to purchase high-speed milling systems. ACCOUNTS RECEIVABLE Accounts receivables from customers Such item, at the end of the financial period, consisted of the following : Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 From Customers 6,451 8,554 6,123 Accounts receivable write-down fund (568) (225) (216) Net value 5,883 8,329 5,907 The decrease of the accounts receivable from customers in respect of the balance as at 31st December 2001, was due to sizeable collections related to the turnover recorded in the last quarter of the 2001 financial year that, as usual, represents a seasonal peak. The movements in the Accounts receivable write-downs funds was the following: Balance as at 31st December 2001 225 Provisions in the semester 343 Utilisation - Balance as at 30th June 2002 568 During the semester Euro 343 thousand were provided for to adjust the fund to the assumed collection value of accounts receivables. In particular such amount refers for Euro 156 thousand to the beginning of the judicial composition procedure (prior agreement for the composition) of the company Rambaudi Industriale S.p.A., an important customer of the company’s electronic division. For a better presentation, and for homogeneity with 30th June 2002, the accounts receivable write- downs without recourse was reclassified by the item accounts receivable write-downs fund in the item accounts receivable write-downs without recourse for Euro 154 thousand as at 31st December 2001, and as at 30th June 2001. Account receivable from subsidiaries Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Fidia Co. 5,092 3,763 2,952 Fidia S.a.r.l. 1,449 1,170 345 Fidia Iberica S.A. 931 392 218 Fidia Gmbh 660 894 804 Meccanica Cortini S.p.a. 827 651 430 Beijing Fidia Co. Ltd. 2 - 159 Fidia Do Brasil Ltda 144 155 124 Simav S.p.a. 242 240 89 Total accounts receivable from subsidiaries 9,347 7,265 5,121 Said item includes the trade receivables. It is stressed again that the supplies to the subsidiaries are at normal market conditions. Account receivables from associated companies Such item, at the end of the semester, amounted to Euro 302 thousand and relates to receivables from Consorzio Co.Ge.F. or allowances on research projects. Account Receivables from others The accounts receivables maturing within the following 12 months may be summarised as follows: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Receivables from Treasury 2,718 2,165 1,186 Receivables from teasury for advance taxes on sever 79 83 - Tax credit on dividends 154 154 - Receivables for foreign VAT 11 90 - Allowances on research projects 1,353 1,158 1,006 Receivables from employees 49 32 50 Down payments for placement fees 37 37 37 Receivables from third parties 500 700 - Credit / Debit on currencies adjustments 128 140 - Down payments to Suppliers 32 21 13 Others 64 57 126 Total 5,125 4,637 2,418 the accounts receivable from others collectable beyond 12 months may be summarised as follows: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Receivables for receivable assignment without recou 516 516 516 Write-downs on receivables assigned without recours (516) (154) (154) 0 362 362 Accounts receivable from Treasury 4 4 4 Tax credit for foreign VAT 195 137 182 Contribution on research projects 1,321 1,548 2,943 Receivables for deferred taxes 75 75 79 Others 6 6 31 Total 1,601 2,132 3,601 As for the accounts receivable for assignments without recourse, we remind you that on 28th June 1999 the Company had assigned some receivables without recourse for an amount of Euro 516,000 to Intermedia S.r.l. getting back, as a consideration, a receivable of equal face value. Such assignment concerned accounts receivable from Rambaudi Industriale S.p.A., a company that was undergoing a restructuring plan that anticipated, among the others, the participation of Intermedia to Rambaudi capital through the conversion of the assigned receivables into capital stock. As it was the intention of Intermedia to sell such participation in due course and at the best conditions, the consideration for the accounts receivable had been fixed at an amount equal to the price Intermedia would have received for the sale of its participation in Rambaudi capital stock, less 10%. In connection with such operation our Company had provided for, in the Balance Sheet as at 31st December 1999, Euro 154,000 in the Trade Accounts Receivable Write-downs Fund. Keeping into consideration that, on 24th July 2002, Rambaudi Industriale S.p.A. entered into the prior composition proceedings with assignment of assets, our Company has, prudentially, written-down the entire amount. For a better presentation, and for homogeneity with 30th June 2002, the accounts receivable write- downs without recourse was reclassified by the item accounts receivable write-downs fund in the item accounts receivable write-downs without recourse for Euro 154 thousand as at 31st December 2001, and as at 30th June 2001. The accounts receivable from the Treasury consisted of VAT tax credits for an amount of Euro 1,848 thousand, of IRPEG tax credit for Euro 627 thousand, advances on IRAP for Euro 140 thousand, and withholdings equal to Euro 103 thousand. The receivables for the research projects are represented by allowances at venture paid by the European Union and the Ministry for University, and Scientific and Technological Research (MURST) against project addressing the development of new products and technologies in the various application sectors where the company operates. The receivables from third parties include a loan paid, in 2001, to a software company, bearing a market interest rate, partially repaid during the first semester. OTHER SECURITIES Such item consist of an insurance policy with one advance payment only entered into with Monte Paschi Vita S.p.A., on 1st February 2002, with the possibility to cash it immediately without any penalties. CASH AND BANK DEPOSITS Balance as at Balance as at Balance as at 30th June 2002 31st Decem ber 2001 30th June 2001 Bank and Post Office deposits 1,330 6,349 7,849 Cash at hand and other valuables 4 13 10 Total 1,334 6,362 7,859 The item Bank and Post Office deposits decreased by Euro 5,028 thousand in respect of December 31, 2001. The decrease was, mainly, due to the loss for the semester, to the dividends paid, and to the investments in the financial period. ACCRUALS AND DEFERRALS Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Accrued income 0 3 5 Deferred Liabilities 127 40 161 Long Term Deferred Liabilities 379 353 355 Total 506 396 521 The deferred liabilities mainly refer to insurance policies amounting to Euro 53 thousand, to the specialist activity for Euro 18 thousand, to commissions for Euro 9 thousand, to expenses for the yearly registration of patents for Euro 9 thousand, and to telephone costs for Euro 9 thousand. The long term deferred liabilities refer to the share pertaining to the following financial periods of the interests related to commercial transactions carried out through the Sabatini Law (Law 1329/1965). LIABILITIES NET EQUITY The movements of the classes the Net Equity consists of is hereto attached. We comment, hereinafter, on the main classes making up the Net Equity, and related changes. CAPITAL STOCK The capital Stock, as at 30th June 2002, fully underwritten and paid up, consists of n. 4,700,000 ordinary shares with a face value of Euro 1 each, for a total amount of Euro 4,700,000. PREMIUM ON SHARES RESERVE Such reserve has been generated by the premium on the issuance of new 1,200,000 shares, at the face value of Euro 1 each, placed on the market at Euro 14 upon the listing on 27th November 2000. LEGAL RESERVE The total amount has increased by Euro 80 thousand in respect of the past financial period, as resolved by the ordinary Shareholders’ meeting held on 29th April 2002, due to the provisions to reserve of the Balance Sheet 2001 Net Profit. OWN SHARES RESERVE This reserve has been set up by utilising the extraordinary reserve following the purchase of n.9,338 own shares for a value of Euro 76 thousand on 19th June 2002. We remind you that the authorisation to purchase the company’s own shares was resolved by the Shareholders’ meeting held on 14th November 2001. OTHER RESERVES The following is the related detail: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Extraordinary reserve 3,367 2,590 2,590 The extraordinary reserve shows a net increase of Euro 777 thousand in respect of 31st December 2001. Such increase was due to the retained net profit for the financial year 2001 amounting to Euro 853 thousand, following the resolution of the ordinary Shareholders’ meeting held on 29th April 2002, and by the use to set up the own shares portfolio reserve. RISKS AND CHARGES FUND There was non change to such item during the financial period examined. It consists of the warranty fund for Euro 430 thousand, and of the deferred taxes fund for Euro 20 thousand. EMPLOYEES SEVERANCE BENEFITS The changes over the period were the following: Balance as at 1st January 2002 1,455 Amount due and provided for in financial period 197 Payments during the financial period (76) Balance as at 30th June 2002 1,576 The balance as at 30th June 2002 is net of the advances paid to the employees on the severance payments, and gross of the withholdings paid to the Treasury, according to the Law, posted to the current assets. It represents the gross debit matured in favour of the total of the workforce based upon the domestic regulations in force at the closing date. DUES Hereinafter, we comment on the breakdown, and related movements, in the financial period, of the items making up such group. DUE TO BANKS The amounts due to Banks within the following 12 months (Current) consisted of the following: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Overdrawn accounts 861 20 14 Sanpaolo Imi loan 567 1,674 1,184 Interbanca loan 258 516 516 IntesaBCI loan 258 775 775 Credito Italiano loan 182 360 351 Totale 2,126 3,345 2,840 Such loans are not guaranteed with pledges over corporate assets. The main feature of the loans are the following: Amount of Residual Bank Opened on Maturity the loan Reimbursement Annual value as at date (Euro modalities Rate % 06/30/2002 thousand) ) (Euro thousand) San Paolo IMI (1) 12/27/2001 07/31/2002 567 Upon maturity 2.70% 567 Interbanca 09/22/1999 09/30/2002 1,549 Biannually 4.70% 258 Credito Italiano 10/07/1999 11/01/2002 1,033 Quarterly 3.939% (2) 182 Intesa BCI 09/29/1999 09/30/2002 1,033 quarterly 3.387% (2) 258 (1) Loan to cover the exchange risks; original maturity date 02/28/2002. (2) By floating rate: the rate indicated above represent the average quarterly rate of the first half 2002. OTHER FINANCIERS Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Ministry of Industry, Commerce, and Handicraft 74 74 178 of which payable beyond 12 months 57 57 74 Total 74 74 178 This is a loan under Law 46 dated 02/17/82, amounting to Euro 151 thousand, for 15 years, of which ten years amortisation at the rate of 8.67%, and a grace period of five years and utilisation at the yearly rate of 2.1675%. The reimbursement is in 10 annual instalments the first maturing after six years from the signing of the contract. (19th December 1990). DOWN PAYMENTS Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 From Customers 563 348 166 For reasearch projects within 12 months 96 86 230 For reasearch projects beyond12 months 819 886 1,183 Total 1,478 1,320 1,579 The down payments received from the European Union and MURST concern contribution at venture related to the research project as at June 30, 2002. DUE TO SUPPLIERS The due to the suppliers are basically unchanged in respect of the balance as at 31st December 2001 (Euro 3,591 thousand against Euro 3,433 thousand at the closing of the past financial year). DUE TO SUBSIDIARIES Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Fidia Co. 66 82 97 Fidia S.a.r.l. 79 39 38 Fidia Iberica S.A. 32 - 81 Fidia Gmbh 270 285 516 Meccanica Cortini S.p.a. 1,621 1,447 1,154 Beijing Fidia Co. Ltd. 492 298 472 Simav S.p.a. 1,961 1,626 1,782 Sitra Automazione S.r.l. 22 28 19 Total 4,543 3,805 4,159 These represent trade dues payable within the following 12 months. The dues to Meccanica Cortini S.p.a. and Simav S.p.a. concern the purchase of high speed milling systems commercialised with Fidia brand. DUE TO ASSOCIATED COMPANIES The dues to Consorzio Prometec, Euro 226 thousand, relates to services rendered. TAXATION The dues for taxes refer to IRPEF withholdings concerning the debt matured in June and duly paid in July, for withholdings on compensation paid to employees, professionals, and collaborators. DUE TO PENSION AND SOCIAL SECURITY INSTITUTIONS Such item, Euro 324 thousand, refers to dues matured at the end of the semester for the share due by the Company and the employees on wages and salaries related to June. OTHER DUES The following is the breakdown: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Due for licenses - - 22 Adjustments of receivables/payables in foreign curren 48 44 - Interest to be paid 4 6 9 Due to employees for wages and salaries deferred and others 679 369 663 Sundry 29 32 45 Total 760 451 739 ACCRUED EXPENSES AND DEFERRED INCOME The following is the breakdown: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Accrued expenses 61 91 33 Deferred income 51 84 80 Long term deferred income 378 371 360 Total accrued expenses and deferred income 490 546 473 The accrued expenses mainly refer to cost for research projects for Euro 49 thousand. The deferred income refers to revenues for maintenance contracts not pertinent to the semester. The long term deferred income refer to interests for sales made under Law 1329/1965 (Sabatini Law). INFORMATION REQUIRED UNDER LAW N.72 DATED 03/19/1983 With reference to the provisions in art. 10, Law n.72, dated 03/19/83, it is pointed out that the Company has made the revaluation under such Law which amount was posted to the corresponding reserve in the net equity Such revaluation affected the following items: sundry equipment and tools, and electronic office machines. The revaluation of those assets still posted to the Financial Statement as at today amounts to Euro 24 thousand. The following is the related breakdown (Euro thousand): Category Historic cost Revaluation Total Sundry equipment and 34,182.18 22,895.88 57,078.06 tools Electronic 1,337.65 710.22 2,047.87 office machines Total 35,519.83 23,606.10 59,125.93 OFF BALANCE SHEET ITEMS The following is the related breakdown: Balance as at Balance as at Balance as at 30th June 2002 31st December 2001 30th June 2001 Commitments Sale Commitments - - 1,300 Risk Accounts Discounted Bills of Exchange 3,066 3,392 2,817 Others Goods with third parties 842 1,428 1,194 Third parties goods 140 99 146 Third parties guarantees given on our behalf 1,207 1,417 1,454 Treasury for deferred taxes 121 121 122 Our Security depositaries - - 2,669 Total others 2,310 3,065 5,585 Total off Balance Sheet items 5,376 6,457 9,702 Risks account The Bills of Exchange, discounted with recourse, from sales under the Sabatini Law are posted to such account. Goods with third parties These are finished goods with third parties on approval and bare use basis, and outworks. Third parties guarantees in our favour Equal to Euro 1,207 thousand, it consists of guarantees covering commercial transactions with foreign customers issued in the amount of Euro 505 thousand by COMIT, and for Euro 58 thousand by BNL against the leasehold of the Parent Company office, and by a guarantee issued by COMIT in favour of Consorzio 2000, in the interest of Fidia, amounting to Euro 639 thousand to guarantee a contract related to the research and training activities of the domestic research program on innovative production systems. INFORMATION ON THE PROFIT AND LOSS ACCOUNT VALUE OF THE PRODUCTION REVENUES FROM SALES AND SERVICES The revenues from sale of goods and services rendered stand at Euro 12,834 thousand, down from Euro 15,977 thousand recorded on 30th June 2001. The turnover, broken down by product typology, and by geographic area, is given below: Turnover by product typology 30th June 2002 30th June 2001 Numerical controls and software 3,218 4,261 After sale service 1,193 1,305 Total for numerical controls line 4,411 5,566 High speed milling systems 8,227 10,255 After sale service 196 156 Total for the milling systems line 8,423 10,411 Total turnover 12,834 15,977 Turnover by geographic area 30th June 2002 30th June 2001 Italy 3,674 5,075 Germany 3,182 4,692 Spain/Portugal 947 879 France/Belgium 1,641 708 PR China 701 1,436 Brazil 155 80 Usa/Canada 2,235 1,382 Rest of the world 299 1,725 Total turnover 12,834 15,977 CHANGES IN INVENTORIES OF WORK-IN-PROGRESS, SEMI-FINISHED, AND FINISHED PRODUCTS The positive change standing at Euro 802 thousand indicates that the Company has not scaled down its sale and production goals, notwithstanding that the turnover is back in respect of the schedule. INCREASE IN FIXED ASSETS FOR INTERNAL WORKS The item equal to Euro 145 thousand, basically, refers to the construction of a medium-small milling system prototype utilising the linear engine technology. OTHER INCOME AND REVENUES Such item consists of the following: 30th June 2002 30th June 2001 Allowance towards research projects 435 646 Sundry income and revenues 163 228 Total 598 874 The allowances towards research projects, posted by pertinence to the Profit and Loss Account as at 30th June 2002, are disbursed by the European Union and MURST. The research carried out, both of application and development, represents a structural component, and is carried out, continuously, by Fidia S.p.A. The R&D costs are posted to the debit of the Profit and Loss Account without taking into consideration neither the possibility of their implementation nor their commercial exploitation of the project. The sundry income and revenues, amounting to Euro 163 thousand, consist of the following: 30th June 2002 30th June 2001 Gains 1 6 Contingent income and revenues 32 178 Recovery of costs incurred 100 27 Reimbursement from insurance companies 28 1 Sundry income and revenues 2 16 Total 163 228 COSTS OF THE PRODUCTION COSTS FOR THE PURCHASE OF RAW, SUBSIDIARY, AND CONSUMPTION MATERIALS These may detailed as follows: 30th June 2002 30th June 2001 Production materials 7,397 8,177 Materials for technical assistance 428 327 Consumption materials 70 63 Equipment and software 6 20 Packaging 16 15 Others 35 30 Total 7,952 8,632 The decrease of the purchase cost of raw, subsidiary, and consumption materials amounting to Euro 680 thousand was caused by the decrease of the turnover. COST FOR SERVICES These may detailed as follows: 30th June 2002 30th June 2001 Third parties works 263 373 First supply services 387 429 Fixing and intervention costs 322 217 Research projects costs 133 169 Costs for patents 46 52 Travelling expenses 404 379 Technical, legal, and administrative advice 667 522 Maintenance 41 53 Transport 139 158 Commissions 211 653 Advertising, trade fairs, and other commercial costs 360 322 Utility bills 153 126 Insurance 139 113 Administrators and Auditors compensation 200 141 Labour costs 83 96 Stock Exchange costs 111 121 Others 118 200 Total 3,777 4,124 The costs for services recorded a slight diminution, mainly, caused by less production outworks, and by the reduction of the commissions paid following the decrease of the milling systems turnover. COSTS FOR THE USE OF THIRD PARTIES ASSETS These may detailed as follows: 30th June 2002 30th June 2001 Rents 147 144 Leases 169 128 Total 316 272 The leases, mainly, refer to corporate cars increasingly replacing the cars owned by the company. LABOUR COSTS The labour costs for the 1° semester 2002, stand at Euro 3,798 thousand, up from Euro 3,490 thousand in the 1° semester of the past financial period, and consist of the following: 30th June 2002 30th June 2001 Wages and salaries 2,744 2,526 Contributions 857 787 Employees severance benefits 197 177 Total 3,798 3,490 The increase of the cost of labour was generated by the increase of the average workforce and the wages and salaries increases. Such increase is, on the other hand, diminished by the presence, in the first half 2001, of the share of the bonus for the company’s performance. Hereinafter, it is evidenced the movement, recorded in the period, related to the number of the staff divided by category: Average for the 30th June 2001 31.12.2001 In Out 30th June 2002 period Senior Managers 12 13 13 13 Supervisors 16 17 2 19 18 Clerks 115 118 6 (4) 120 119 Workers 2 2 1 (1) 2 2 Total 145 150 9 (5) 154 152 AMORTISATION AND DEPRECIATION The amortisation and depreciation criteria are commented on the specific sections. CHANGES IN RAW, SUBSIDIARY, AND CONSUMPTION MATERIALS INVENTORY The increase of the raw, subsidiary, and consumption materials inventory stands at Euro 265 thousand, down from Euro 297 thousand recorded in the first half 2001. MISCELLANEOUS BUSINESS MANAGEMENT CHARGES In detail: 30th June 2002 30th June 2001 Loss on sale of assets 9 11 Contingent liabilities 133 189 Income taxes 9 20 Postage 4 3 Associations 8 16 Others 16 22 Total 179 261 FINANCIAL INCOME AND CHARGES INCOME FROM NON-FIXED ASSETS SECURITIES POSTED TO THE CURRENT ASSETS Such item includes the interest receivable related to an insurance contract, by capitalisation, in force for an amount of Euro 14 thousand. OTHER FINANCIAL INCOME The income, other than the preceding ones, are the following: 30th June 2002 30th June 2001 Interest receivable from banks 22 229 Interest receivable under Sabatini Law 37 29 Gains on foreign exchange 174 280 Other interests receivable 25 42 Total 258 580 INTERESTS AND OTHER FINANCIAL CHARGES The item breakdown is as follows: 30th June 2002 30th June 2001 Interest due on loans from Banks 2 103 Interest due on medium-long term loans 48 80 Interest due on loans under Sabatini Law 37 29 Loss on foreign exchange 97 55 Banking fees and charges 1 10 Loss on securities - 41 Total 185 318 for and on behalf of the Board of the Directors the Chairman of the Board and Managing Director ing. Giuseppe Morfino ANNEXES These annexes include additional information in respect of those presented in the Half-yearly Report, of which they constitute an integral part. Such information are included into the following annexes: - Table of the changes in the net equity accounts for the semesters ended on 30th June 2002 and 2001. - Table of the changes in intangible assets for the semester ended on 30th June 2002. - Table of the changes in tangible assets for the semester ended on 30th June 2002. - Table of the changes in financial assets for the semester ended on 30th June 2002. - List of the holdings directly owned - Summarised table of the main data in the last Balance Sheet of the subsidiaries and associated companies (art. 2429 C.C.) - 1° semester 2002 and 2001 Financial Statement. FIDIA S.p.A. CHANGES IN NET EQUITY FOR THE SEMESTERS ENDED ON 30th JUNE 2002 AND 2001 (Euro thousand) Premium on Own Shares Extraordinary Profit for the Description Capital Stock Shares Reserve Legal Reserve Reserve Reserve financial year Total Net Equity Balance as at 31st December 2000 4,700 15,600 138 - 2,229 1,070 23,737 Allocation of the profit for the year 2000 and dividends - - 54 - 361 (1,070) (655) Result for the first half 2001 - - - - - 966 966 - Balance as at 30th June 2001 4,700 15,600 192 - 2,590 966 24,048 Balance as at 31st December 2001 4,700 15,600 192 - 2,590 1,591 24,673 Allocation of the profit for the year 2001 and dividends 80 853 (1,591) (658) Purchase of own shares 76 (76) - Result for the first half 2002 (2,220) (2,220) Balance as at 30th June 2002 4,700 15,600 272 76 3,367 (2,220) 21,795 FIDIA S.p.A. CHANGES IN INTANGIBLE ASSETS FOR THE SEMESTER ENDED ON 30th JUNE 2002 (Euro thousand) MOVEMENTS PRIOR TO THE MOVEMENTS OPENING OF THE SEMESTER IN THE SEMESTER Opening Closing balance Amortisation Fund balance Purchase Amortisation as at Decreases Ammortisation as at cost Fund 1.1.2002 Purchases Decreases Re-classification Total in the semester 06.30.2002 Industrial patents and intellectual property use rights Intellectual property use 620 (517) 103 - - - - - (51) 52 620 (517) 103 - - - - - (51) 52 Concessions, licenses, trademarks, and similar rights Licenses 243 (243) - - - - - - - - Software and others i 412 (269) 143 3 - 3 - (28) 118 655 (512) 143 3 0 0 3 0 (28) 118 Others Building works on third party assets and others 107 (70) 37 6 - - 6 - (8) 35 107 (70) 37 6 - - 6 - (8) 35 Total intangible assets 1,382 (1,099) 283 9 0 - 9 0 (87) 205 FIDIA S.p.A. CHANGES IN TANGIBLE ASSETS FOR THE SEMESTER ENDED ON 30th JUNE 2002 (Euro thousand) Industrial and Land and Plants and Commercial Other assets buildings machinery facilities Total MOVEMENTS PRIOR TO THE OPENING OF THE SEMESTER Purchase cost 291 819 1,246 2,233 4,589 Accumulated revaluation - - 23 1 24 Accumulated depreciation - - - - - Total 291 819 1,269 2,234 4,613 Depreciation funds (11) (630) (1,074) (1,927) (3,642) Opening balance as at 1.1.2002 280 189 195 307 971 MOVEMENTS IN THE SEMESTER Increases - 131 58 41 230 Decreases - (9) - (37) (46) Reclassification - - - - - Revaluation - - - - - Depreciation - - - - - Total - 122 58 4 184 Utilisation of Depreciation Funds - 6 - 27 33 Amortisation for the semester - (48) (42) (47) (137) Closing balance as at 06.30.2002 280 269 211 291 1,051 FIDIA S.p.A. CHANGES IN FINANCIAL FIXED ASSETS FOR THE SEMESTER ENDED ON 30th JUNE 2002 (Euro thousand) MOVEMENTS PRIOR TO MOVIMENTS IN THE MOVEMENTS UPON ASSESSMENTS THE OPENING OF THE SEMESTER SEMESTER AT THE CLOSING OF THE SEMESTER Accumulated Accumulated Opening Closing Acquisition Revaluation Depreciation balance as at balance as at cost 1.1.2002 Increases Decreases Re-classification Revaluation Depreciation 06.30.2002 Holdings Subsidiaries Fidia Gmbh 1,208 1,208 1,208 Fidia Co. 1,119 (1,109) 9 9 Fidia Iberica S.A. 171 171 171 Fidia S.a.r.l. 222 222 222 Beijing Fidia Co. Ltd. 1,185 1,185 1,185 Fidia do Brasil Ltda 350 (166) 184 184 Meccanica Cortini S.p.A. 3,058 253 (1,839) 1,472 1,472 Sitra Automazione S.r.l. 424 424 424 Simav S.p.A. 475 475 475 8,212 253 (3,114) 5,351 - - - - - 5,351 Associated companies Consorzio Co.Ge.F. 5 2 (2) 5 - - - - - 5 Consorzio Prometec 2 2 (2) 2 - - - - - 2 7 4 (4) 7 - - - - - 7 Other companies M.L.T.A. S.r.l. 34 - - 34 - - - - - 34 Probest Service S.p.A. 10 - - 10 - - - - - 10 Consorzio Poliedra 7 - - 7 - - - - - 7 51 - - 51 - - - - - 51 Total holdings 8,269 257 (3,118) 5,410 - - - - - 5,410 Accounts receivable From Subsidiaries Meccanica Cortini 794 - - 794 - - - - - 794 Simav S.p.A. 335 - - 335 - - - - - 335 1,129 - - 1,129 - - - - - 1,129 Total accounts receivable 1,129 - - 1,129 - - - - - 1,129 Own shares - - 0 76 - - - - 76 Total financial fixed assets 9,398 257 (3,118) 6,539 76 - - - - 6,615 FIDIA S.p.A. LIST OF THE HOLDINGS DIRECTLY OWNED (in Euro) Difference between Pertinent pertaining Capital Net equity Profit (loss) Profit (loss) Holding Net accounting Book net book value and Name and registered office stock book value as at 06.30.2002 as at 06.30.2001 % equity value net value SUBSIDIARIES Fidia Gmbh – Germania 520,000.00 1,578,095.03 198,248.74 253,018.92 100% 1,578,095.03 1,207,753.87 370,341.16 Voltastrasse, 08-10 - Dreiech (Germania) Fidia Co. (*) - Stati Uniti 401,002.51 (273,247.58) (281,954.35) (248,237.89) 100% (273,247.58) 9,854.31 (283,101.89) 5817 North Merrimac, Chicago - (Illinois, Stati Uniti d'America) Fidia Iberica S.A. – Spagna 180,300.00 1,317,494.90 70,476.23 336,165.19 99.99% 1,317,402.68 171,439.98 1,145,962.70 Parque Tecnologico de Zamudio - Edificio 208 - 48016 Zamudio (Bilbao) Fidia S.a.r.l. – Francia 300,000.00 484,962.00 (79,066.74) 94,690.90 93.19% 451,936.09 221,434.03 230,502.06 47 bis, Avenue de l'Europe - 77184 Emerainville (Paris) Beijing Fidia Machinery & Electronics Co. Ltd. (*) - Cina 1,551,521.27 1,749,301.40 124,749.68 273,059.97 92.00% 1,609,357.29 1,185,045.78 424,311.51 n. 16 North Hongda Road - Beijing Development Area - Pechino (R.P.C) Fidia Do Brasil Ltda (*) – Brasile 140,373.12 97,187.00 (83,393.93) 113,636.44 99.75% 96,944.03 184,485.19 (87,541.16) Rua Ribeirao Branco 357 - Vila Bertioga - 03188- 50 Sao Paulo - SP - CEP Meccanica Cortini S.p.A. – Italia 1,040,000.00 1,363,858.18 (52,945.69) 315,034.12 100% 1,363,858.18 1,472,403.14 (108,544.96) Via Gorizia, 162 - 47100 Forlì Sitra Automazione S.r.l. – Italia 44,200.00 1,054,290.62 20,226.63 102,169.96 73% 769,632.15 423,720.74 345,911.41 Via Depetris 1/E - 15100 Alessandria Simav S.p.A. – Italia 183,040.00 452,320.32 97,931.58 273,429.93 100% 452,320.32 475,140.35 (22,820.03) Corso Re Umberto, 56 – Torino ASSOCIATED COMPANIES Consorzio Co.Ge.F. (***) – Italia 15,492.00 15,493.71 0,00 33.33% 5,164.05 5,164.57 0.52 Corso Lombardia, 11 – San Mauro Torinese (Torino) Consorzio Prometec (***) – Italia 10,329.00 10,329.14 0,00 20.00% 2,065.83 2,065.83 0.00 Strada Statale del Moncenisio, 25 - Km 42,2 - Bruzolo di Susa (Torino) (*) the values shown are converted into Euro at the rate current on 30.06.2001 and 30.06.2002. (***) the values shown refer to the balance sheet ended on 31st December 2001. OTHER HOLDINGS Capital % Boohs net Name and registered office stock owned value (2) M.L.T.A. S.r.l. - Nichelino (To) – Italia 34 (1) 13.85% 34,086.16 Probest Service S.p.A. - Milano - Italia 1,330 (1) 0.157% 10,308.48 Consorzio Poliedra- Torino - Italia 103 (1) 7.25% 6,500.31 (1) : datum referring to the Balance Sheet for the period ended on 31st December 2001. Amounts in thousand Euro (2) : amounts in Euro FIDIA S.p.A. TABLE RECAPITULATING THE ESSENTIAL DATA IN THE LAST BALANCE SHEET OF THE COMPANY'S SUBSIDIARIES AND ASSOCIATED COMPANIES (ART.2429 C.C.) Beijing Consorzio Subsidiaries Meccanica Sitra Fidia do Fidia M&E. Consorzio Generazione Cortini S.p.A. Simav S.p.A. Automazione Srl Fidia GMBH Fidia Co Fidia Sarl Fidia Iberica Brasil Ltda Co Ltd Prometec Forme Currency Euro thousand Euro thousand Euro thousand Euro thousand US$ thousand Euro thousand Euro thousand Reais thousand RMB thousand Euro thousand Euro thousand Period of reference of the Balance Sheet information 06.30.2002 06.30.2002 06.30.2002 06.30.2002 06.30.2002 06.30.2002 06.30.2002 06.30.2002 06.30.2002 12.31.2001 12.31.2001 Entering into the consolidation area YES YES YES YES YES YES YES YES YES NO NO (line by line) ASSETS Fixed assets 226 235 24 418 296 89 301 94 1,795 58 2 Current assets 6,589 4,700 1,677 3,055 4,515 2,194 3,108 620 9,087 561 2,381 Accrued income and deffered 76 - 2 12 105 28 4 4 5,746 - 1 Total assets 6,891 4,935 1,703 3,485 4,916 2,311 3,413 718 16,628 620 2,384 LIABILITIES Net equity 1,364 452 1,054 1,578 (273) 485 1,318 277 14,448 10 15 Risks and charges Fund 129 - 5 138 - - 76 1 434 - - EMPLOYEES SEVERANCE BE 556 159 235 - - - - - - - - Accounts payable 4,793 4,324 402 1,743 4,959 1,767 1,993 440 1,746 605 2,368 Accrued costs and deferred i 49 - 7 26 230 59 26 - - 4 - Total liabilities 6,891 4,935 1,703 3,485 4,916 2,311 3,413 718 16,628 620 2,384 PROFIT & LOSS ACC.T Turnover 4,007 3,456 595 2,489 2,469 2,120 1,776 532 5,293 76 1,557 Value of the Production 3,681 3,834 606 2,779 3,278 2,130 1,935 545 5,715 76 1,557 Costs of the production (3,732) (3,711) (593) (2,586) (3,558) (2,207) (1,857) (727) (4,599) (60) (1,565) Difference between value and cost of the production (51) 123 13 193 (280) (77) 78 (182) 1,116 16 (8) Financial assets managemen (2) (25) 7 5 (1) (2) (8) (55) (86) (15) 9 Extraordinary items managem - - - - - - - - - - - Taxation - - - - - - - - - (1) (1) Result for the period (53) 98 20 198 (281) (79) 70 (237) 1,030 - - FIDIA S.p.A. FINANCIAL STATEMENT FOR THE 1^ SEMESTER 2002 AND 2001 (Euro thousand) 30th June 2002 30th June 2001 A) Opening net financial position 2,943 8,504 B) Cash flow from self-financing 1,799 1,430 Result for the financial year (2,220) 966 Ammortisation and depreciation 224 296 Provisions for employees severance benefits 197 153 Net change in sundry risk funds - 15 C) Cash flow from changes in current assets 32 (182) Change in trade receivables 334 1,686 Change in inventories (1,223) (566) Change in sundry receivables and accrued income and deferred (67) (289) Change in trade payable to suppliers 893 (1,052) Change in sundry payables and accrued costs and deferred inco 95 39 D) Cash flow from changes in fixed assets (1,036) (951) Purchase of own shares (76) - Dividends (658) (655) Net investments in tangible assets (217) (147) Net investments in intangible assets (9) (85) Employees severance benefits and payments (76) (64) E) Closing net financial position 140 8,801 Due to Banks (2,126) (3,540) Due to other financiers (74) (178) Cash and valuables available 1,334 7,859 Financial assets not included among fixed assets 1,006 4,660