Delta S p A Financial Statements at 31 12 2007 The Financial Statements have been translated from those issued in Italy from th

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Delta S p A Financial Statements at 31 12 2007 The Financial Statements have been translated from those issued in Italy from th Powered By Docstoc
					                                Delta S.p.A.
                             Financial Statements at 31.12.2007




The Financial Statements have been translated from those issued in Italy, from the Italian into the English language solely for the
convenience of international readers




Registered Office: Via Cairoli no. 9, BOLOGNA
Share Capital: Euro 106,372,000.00 fully paid-up
Fiscal Code and BOLOGNA Register of Companies no. 02308241203
BOLOGNA R.E.A. (Administrative Economic Register) no. 429239
U.I.C. General List no. 34684
Register of Banking Groups no. 20025
SHAREHOLDERS
                                                                          %
Sviluppo Investimenti Estero S.p.A. – S.I.E.                                    26.80
Onda S.p.A.                                                                     42.96
Banco Popolare S.c.a r.l.                                                       13.29
So.Pa.F. S.p.A.                                                                 15.95
Others                                                                           1.00
* Acal SpA was merged by incorporation into Sopaf Spa effective from 19 December




BOARD OF DIRECTORS

Chairman                             Mario Fantini
Managing Director                    Paola Stanzani
Directors                            Andrea Magri
                                     Luca Simoni
                                     Vladimiro Renzi
                                     Tommaso Borsellino
                                     Carla Casalini



BOARD OF STATUTORY AUDITORS

Chairman                             Mauro Morelli
Regular members                      Gian Luca Galletti
                                     Alberto Travaglini Diotallevi Vitale (*)


Substitute members                   Giuseppe Chieffo
                                     Giovanni Rosso

(*) in office from 26.09.2007




INDEPENDENT AUDITORS
PricewaterhouseCoopers S.p.A.




                                                                                        2
TABLE OF CONTENTS
Report on Operations                                       4

Adoption of IAS/IFRS                                      34

Financial statements at 31.12.2007                         41

 Balance Sheet                                            42

 Income Statement                                         43

 Statement of recognised income and expense               44

 Statement of Changes in Shareholders’ Equity             45

 Cash Flow Statement                                      46

 Notes to the Financial Statements                        47

 Part A) - Accounting policies                            48

 Part B) - Information on the Balance Sheet               60

 Part C) - Information on the Income Statement            79
 Part E) - Information on risks and the related hedging
                                                          87
 policies
 Part F) - Information on the Shareholders’ Equity        95

 Part H) - Transactions with related parties              96

Annexes:                                                  100
 Board of Statutory Auditors’ report                      101

 Independent Auditors’ report                             108

 Shareholders’ Meeting resolutions                        111




                                                                3
Report on operations

Dear Shareholders,

         before illustrating the Financial Statements being approved, showing a profit of €/mil. 5.3, we wish to
analyse the trend of the market where the Companies and its subsidiaries are active and to consider the major
events that marked 2007.


The relevant macro-economic scenario
In 2007, the international economic scenario stayed firm on its recovery track all in all, driven by the strong
performance of the emerging markets (mostly China and India), whereas the Euro-zone and the US began losing
steam.

The average increase in GDP calculated for 2007 in the Euro-zone was equal to 2.7% (2.9% in 2006). At a closer
glance, major countries like Italy and France had reasons for concern (an increase in GDP by +1.5% and +1.9%,
respectively), while Germany continued to strengthen (+2.5%). A stronger exchange rate undoubtedly helps
dampen price pressure in Europe, but, conversely, weakens competitiveness and forestalls exports. In 2007, the
strong global and domestic (investments) demand continued to spur GDP, countering the crunch from the
exchange rate and the new hikes in oil prices.

The US GDP rose by a five-year low of 2.2%, inching up just 0.6% in the fourth quarter (4.9% in the previous
quarter): alongside the sharp fall in residential investments (down about 25% compared to the previous quarter,
the biggest property market slump in 26 years), the significant meagre rise in GDP in real terms was associated
with stock adjustment, which took almost 1.3 percentage points off from GDP growth, with lower spending in
consumption and with a lower increase in foreign sales. At the same time, price indicators added more concern:
inflation on personal consumption went up 4.1%, while the core component of inflation remained at 2.7%, well
above the Fed’s ideal maximum ceiling of 2%.

In the emerging Asian countries, the economy continued to strongly expand, fuelled more and more by domestic
demand. At the same time, exports in several countries started losing pace, especially in the small open
economies, due to weaker foreign demand. Inflationary pressure still continued to push hard across most of the
region, mainly because of the high costs for food and raw materials.

The global outlook for 2008 sees domestic prices still on the rise, owing to the soaring costs especially of raw
materials, food and energy on the international markets. In the US, the bleaker figures in January and February
regarding trend indicators for households and businesses raise fears that point to a likely recession. Leading
analysts expect the EU GDP to be affected by the lower growth in the US, by a higher than initially forecasted
exposure of Europe’s banking system to US sub-prime mortgages, and by growing oil prices.



                                                                                                             4
The Italian economy
In 2007, Italy’s GDP rose by an average 1.5%, lower than the change posted in the previous year (+1.8%) and
far below forecasts at the beginning of the year. The gap with the Euro-zone (GDP +2.7%) remains
considerable and above one percentage point. The slower growth pace resides particularly in the GDP’s
domestic components (consumption and investments).

GDP was spurred by the domestic components of demand, meaning mostly household consumption (0.8%
contribution to growth), driven by the measures to boost spending in durable goods, despite widespread
deterioration of expendable income. On the contrary, foreign demand contribution (0.1%) was virtually
negligible, affected as it was by the appreciation of the Euro and the gradual slowdown on the main outlet
markets.

In 2007, the economy steadily slowed to reach a standstill in the last quarter. The hike in energy and food prices,
plus the effects of the credit squeeze, hurt domestic demand (private consumption and investments) in the
second part of the year. Quality indicators - from confidence to expectations on orders and production - then
corroborated the poor figures in the first two months of 2008.

Conversely, public accounts continued to recover: the net indebtedness/GDP ratio dropped to 1.9%, compared
to 3.4% posted in 2006, but includes a series of extraordinary (one-off) charges equal to about one percentage
point of GDP. The primary balance improved, increasing to 3.1% from 1.3% last year, thanks to the
considerable surge in tax revenues (+6%) which outstripped expenditure (+4.5%). Accordingly, the pressure of
taxation reached a new record high of 43.3% of GDP, the highest figure since 1997 (when the Euro-tax was
adopted). The ECB’s monthly bulletin of March hails the progress made in public accounts, but raises concerns
as to whether such improvements can still hold in the face of extremely weak growth in 2008 and the failure to
reduce public expenditure.

The Treasury Ministry’s latest outlook for 2008 shows in fact GDP growing between 0.6% and 0.8%, one
percentage point lower than the previously forecasted 1.5%. The revised forecasts for the year stem from the
sharp decline in industrial production in the last quarter of 2007 and from a heavier deterioration of confidence
indicators in the service industry.


The interest rate scenario
As for US interest rates, in the first 8 months of 2007, the Federal Reserve kept the target rate on Federal Funds
unchanged at 5.25%, at the same level as June 2006, after raising them for 17 consecutive times.

During the meeting held on 18 September 2007, soon after the first signs of the sub-prime crisis and its effects
on the financial markets, the Federal Reserve decided to slash rates by 50 basis points, opening a phase of quick
and strong cuts in the target rates.

The last and sixth consecutive cut, on 18 March 2008, brought the Fed Funds reference rate down to 2.25% (-
300 basis points over 6 months), widening the gap between the cost of money in USA and the Euro-zone at 175
basis points. In this meeting and the previous (16 March 2008), the Federal Reserve also chopped the discount

                                                                                                                5
rate by a total 100 basis points to 2.5%, and adopted extraordinary measures to strengthen market liquidity and
streamline their mechanisms, in an attempt to defuse the crisis that risks to destabilize the very foundations of
the world financial system and drag the United States into recession. In the intentions of the Federal Reserve, the
interest rate cut, plus the monetary policies adopted, should gradually give a moderate thrust to the economy and
reduce risks, countering the weak property market and the poor employment and consumption figures. On the
other hand, analysts do not rule out a further cut in money rates by the Federal Reserve in the upcoming
months, and believe it will focus more on risks related to the weakness of financial markets and domestic
demand rather than on inflation.

In the Euro-zone, the ECB, after the last hike in June 2007, ended the sequence of increases in refinancing rates.
In the following meetings of its Governing Council, the latest held on 6 March 2008, the ECB kept Euro-zone
reference rates unchanged at 4%, a decision taken after considering the growing risks of price stability in the
medium term, the Council’s commitment to prevent second-level effects and the looming risks of a rise in the
inflation rate. Analysts also believe that, given the slower economic growth, bank rates may be cut in 2008.

The analysis of the yield curve with maturity at December 2008 corroborates forecasts of a strong economic
slowdown, confirming a negatively sloped first stretch and modest yields in the medium-long term. The medium-
long term variation in the slope shows in any case that the weak cycle is strong, but may be short lived, also
thanks to greater credibility in the effectiveness of monetary policies adopted to stimulate a recovery.

                                                                                                                                                                Rate Curve


 5,5%                                                                                                               5,5

 5,0%
                                                                                                                    5,0
 4,5%

 4,0%
                                                                                                                    4,5
 3,5%

 3,0%                                                                                                               4,0


 2,5%
                                                                                                                    3,5
 2,0%

 1,5%                                                                                                               3,0
    dic-04 mar-05 giu-05   set-05   dic-05 mar-06 giu-06   set-06   dic-06 mar-07 giu-07   set-07   dic-07 mar-08         1 Wk 1 Mo 2 Mo 3 Mo 4 Mo 5 Mo 6 Mo 9 Mo   1 Yr 2 Yr     3 Yr 4 Yr   5 Yr   7 Yr   10Yr 15Yr 20Yr
                                    FED FUNDS (U.S.A.)     ECB BANK RATE (Euro-zone)                                                                   dic-06    dic-07      dic-08 Forward




The banking market
In 2007, the Italian banking system stepped up euro-denominated borrowing, represented by savings deposits,
current accounts, certificates of deposit and bonds. During the last year, the borrowing stock increased by about
€/bil. 91 (+6.9% compared to 2006). Bank bonds also showed a growth (+12.1%), while current account
deposits increased by 3.1% only.

Starting from August, financial market trading slowed substantially, whereas financial institutions opted to hold
liquidity more as a precautionary measure. Some of the world’s leading financial institutions suffered tremendous
losses, while market uncertainty drove inter-bank rates upwards on all main currencies.




                                                                                                                                                                                                                         6
As mentioned earlier, the market crisis sparked an unusual lack of confidence across the inter-bank system,
undermining its role as re-distributor of liquidity provided by the Central Bank. The differentials between
Euribor rates and the rate on the main ECB refinancing transactions rose to unprecedented levels: 3-month
Euribor reached a peak of 4.95% on 12 December; the 1-month rate rose from 4.17% to a maximum of 4.91%
on 29 November, down to 4.20% in early 2008 only. Some of the anomalies were partially removed thanks to
the ECB’s management of liquidity.

Furthermore, the sub-prime loans crisis mainly flattened securitization transactions involving residential loans,
while other forms of retail financing used other than for housing or for consumption were on the rise.

High risk aversion, caused by fears of a recession and, in particular, by a negative sentiment dogging financial
markets, hit asset management products - in particular investment funds - and affected the indirect borrowing
trend of banks (third parties’ securities under administration and management), which remained dull throughout
2007. Specifically, the managed asset component (asset management in securities and funds) saw its value drop
substantially. During the year, in fact, more and more savers opted to restructure their portfolio, directing their
investments toward government securities to the detriment of shares and investment fund units.

As far as businesses are concerned, in 2007, credit dynamics grew at a faster pace. More specifically, lending to
non-financial companies showed a stronger expansion trend for medium- and large-sized enterprises. In
particular, in the final part of the year, due also to the adverse conditions of borrowing on capital markets caused
by the sub-prime mortgages meltdown, large corporate sector resorted more for its needs to the banking system.
The lending trend to businesses then remained a notch higher than credit to families, although household
borrowing kept up a strong pace. In particular, total loans to households and non-financial companies (i.e. non-
financial companies, consumer households, one-man businesses) at end 2007 reached a trend growth rate of
+11.1%, settling to and in line with the figure recorded at end 2006 (+11.4%) and far higher than Italy’s current
nominal GDP growth and investment trend.

On average, Euro-zone loans to households and non-financial companies showed a growth rate of +9.7%, again
at end 2007, below the Italian market figure. In particular, in Italy the growth rate of loans to non-financial
companies was equal to +13.1% in 2007 compared to +12.4% at end 2006; a value higher than the annualised
development rate of the total loans to families (+7.8% at end 2007). From spring 2007, home loans and
consumer credit slowed down substantially.

Empirical data on lending dynamics can be gathered by also focusing on the bank credit trend for the various
sectors of economic activity: in particular, from this analysis it emerges that, in December 2007, the strongest
growth rates affected energy products (+71.4%), transport (+9.9%), hotels and public utilities (+9.5%),
agriculture and industrial machinery (+9.7%) and chemical products (+8.0). On the contrary, a negative change
in this indicator was recorded in the telecommunication services sector (-12.5%) at end 2007. At the end of
December 2007, doubtful loans, net of write-downs, were equal to €/mil. 16,285 (down €/mil. 405 compared to
December 2006). The net doubtful loans/total loans ratio was 1.11% (at end 2006, it was 1.25%). At end 2007,
the net doubtful loans/Regulatory Capital was 6.13% (compared to 7.71% at end 2006).


                                                                                                                 7
The hike across the entire spectrum of bank rates made in the months following the ECB’s credit squeeze in
June, continued throughout the rest of the year consequently to the sub-prime mortgages in the United States.
Italy’s rates continue to be higher than average rates reported in EMU countries, applied across almost all
business segments and more susceptible to variations in policy rates. In the final part of the year, interest rates
applied to new transactions on almost all dues to be paid by households and businesses, started decreasing on
average in Euro-zone countries, except for rates applied to consumer credit.

The increase in intermediation volumes was coupled in 2007 with a gradual widening of a further 18 basis points
of the banking spread., reaching 4.12% in December compared to 3.94% in December 2006.


The securities brokerage market
In the final part of the year, the trend in total funds showed a sharp drop in the round-trip segment (funds
incorporated under Luxembourg or Irish law and promoted by Italian brokers) and the funds promoted by
foreign brokers, while Italian funds were partly driven by the good performance of hedge products and liquidity
funds.
2007 showed a negative record of exits equal to €/bil. 43.6 against exits of €/bil. 17.4 in 2006. On the one hand,
funds were no longer spurred by the growth of compound products in funds (mainly asset management and
unit-linked policies), the privileged distribution channel of foreign funds; on the other, the on-going process to
restructure the offering picked up momentum, replacing lower added-value products with products specifically
designed for the current market climate. For the first time ever, round-trip funds ended up in negative territory (-
6.2 billion compared to +9.9 in 2006), and foreign products appeared drastically downsized (from 21.7 to +13
billion).
National funds dropped as in the previous year (close to €/bil. 55), while many underwriters opted to steer their
investments away again from bond products (-42.8 billion in 2007 compared to –35.7 throughout 2006) and the
“traditional” equity funds (from –11.7 to -24.4), only partly offset by the growth in flexible (+7.3 billion) and
hedge (+5.9 billion) products. Money market products (+3.7 billion of funds in 2007) did well, against a
backdrop of uncertainty over investment strategies particularly in the second part of the year. The restructuring
of funds led to a quick reshuffle in the portfolio mix of funds sold in Italy.
Compared to December 2006, bond funds went down 4 percentage points over the total assets, not much above
38%, while the flexible component reached 9% (+3.1% over 12 months) and the hedge component 7.4%
(+2.2% at end 2006). Funds incorporated under Italian law underwent heavier restructuring, inside which bond
funds now accounted for just over 33% of the round-trip class. In Italian funds, the exit from bond funds also
contributed to boosting the liquidity component, which still represents 24.3% of the assets at end 2007.




The consumer credit market
During 2007 the new lending volumes of the consumer credit market were equal to €/mil. 59,834, showing a
9.5% growth compared to the same period of the previous financial year. Growth in 2007 was kept high by the


                                                                                                                 8
upswing in household spending, showing an improvement both in the durable goods component and in the
services.

After a decade of strong growth characterised by a CAGR97-07 equal to +17%, the Italian market gradually lost
pace in 2007 closing at +10%, with expectations in development rates further dented for 2008 (9%) and the
subsequent years. The trend remains, however, far stronger than the European average (4.5%), while the
incidence gap on GDP stays wide (6.4 against 8.3%).

From the second part of 2007, the reverberations of the sub-prime mortgage crisis were heavily felt by the
national and international consumer credit market, making securitization - its typical form of borrowing strongly
used - harder and more burdensome.

The higher market rates were not incorporated into the trend in lending rates applied by the segment, since
extreme competition which characterises the most fully-developed sectors sparked pricing pressure, thus
determining a further spread squeeze.

Accordingly, research analysts downgraded the value of sector companies, while share prices in the consumer
industry, which had been enjoying double-digit rises since 2006, due also to a flurry of speculation, plummeted
from the second half of 2007, and in some cases more than halved the value of their capitalization. Furthermore,
projects for a quick debut on the stock market had to be put off.

The breakdown by technical form of lending volumes confirms the trend in progress for some years now, with
direct financing boasting a brighter performance: personal loans, credit cards and salary-backed loans (cessione del
quinto dello stipendio or CQS).

In particular, the personal loans segment showed a strong growth equal to 21.3%, with lending volumes of
€/mil. 18,922, accounting for 31.6% of the total compared to 25.7% in the same period of the previous year.
Transactions effected were 1.669 million, up by 12.3% compared to 2006.

With regard to finalised loans, new lending volumes were equal to €/mil. 27,058, up by 3.6% compared to 2006,
confirming a more limited performance in 2007 compared to the remaining segments of the sector.

The analysis by product sectors showed an 8.6% increase relating to the “new car” segment and a 2.5% increase
for “motorcycles”, and a concurrent decrease of 3.8% for “used cars” and a 4.5% decrease in industrial vehicles.
The domestic appliances/electronics, furniture and moped sectors showed a drop in the range of 7.6%, 3.7%
and 18.8%, respectively, while the “other goods” sector grew by 5.8%.

The credit card segment showed a growth equal to 6.9%, which is however lower than 2006 (12.4%), with
lending volumes of €/mil. 9,263, accounting for 15.5% over the total compared to 16.4% in the same period of
the previous year. Transactions effected were 83,912 million, up by 9.9% compared to 2006. However, the
lending volumes recorded in the first two months of 2008 showed a slowdown in the sector. The first two
months of 2008 showed a +3.4% growth compared to +14.8% in the same period of the previous year.

The new lending volumes in the salary-backed loan segment reached €/mil. 3,816, up by 11.6% compared to
2007.

                                                                                                                 9
Within the sector, a particularly solid growth was recorded by loans granted to pensioners (+44.7%) equal to
€/mil. 801. The private sector employees segment continued to grow (+19.5%), but lower than in 2006 (28.5%),
equal to €/mil. 1,393, while the public sector employees segment showed a 3.4% drop, reaching €/mil. 1,623.


The leasing market
The leasing sector closed 2007 with a total volume of contracts entered into equal to €/bil. 48.9, up by 1.1%
compared to 2006. This change derives from the drop recorded in the real estate leasing segment (-3.9%) and the
stagnation in the car segment (+0.3%); instead, the capital goods sector showed a good performance, up by
7.6%.

2007 witnessed a two percentage points growth in the weight of the capital goods leasing with regard to the total
contracts entered into, thus accounting for 28.2% of the aggregate. In particular, the transactions of intermediate
amount (from € 50,000 to €/mil. 0.5 and from €/mil. 0.5 to 2.5) recorded the best performance, showing
growths exceeding 10% compared to the previous year.

In the car segment, car leasing fell significantly (-10.1%), adding to the market’s 3-year slump. Conversely, leasing
contracts for industrial vehicles (over 1.5 tons) went up 9.8%, tied as they are more, unlike cars, to the
production investments trend. Contracts for the latter segment came to € 3.4 billion, accounting for over 40% of
the entire car segment, and nearing the performance of car leasing in 2007. The volume of contracts entered into
in the commercial vehicles segment, representing about 15% of the leasing contracts entered into, was in line
with the values posted in the previous year (+0.5%). Unlike 2006, the best performance in 2007 was scored by
captive leasing companies (i.e. from industrial groups) in the various car leasing sub-segments, versus the poor
performance shown by the first fifteen operators (banks or financial intermediaries from banks).

Real-estate leasing, though sliding downwards, remained the leading business in terms of volumes (€/bil. 22.6,
representing 46.4% of the total contracts entered into) also in 2007. Breaking down the offering, real estate
continued to be the more concentrated segment, with over 50% of the volume of contracts entered into by the
first five operators. In 2007, however, spectacular performance was achieved by companies ranking from sixth to
tenth in the Assilea ranking, with growth rates above 20% compared to 2006.


The renting market
According to the data disclosed by Aniasa (Associazione Nazionale Industria dell’Autonoleggio e Servizi Automobilistici,
National Association for Car Hire Industry and Auto Services), the renting market continued to grow in 2007,
recording an 8% increase in turnover in the first half of the year compared to the same period of the previous
year. In absolute terms, the total turnover for the sector totalled €/bil. 2.33 from January to June 2007
(compared to €/bil. 2.16 at 30 June 2006). At the same time, people employed in the sector increased by 4%,
reaching 5,437 units.

The pre-final data for 2007 confirm the trend recorded in the first half, with an estimated turnover of about
€/bil. 4.5 (+8% p.a.) and a fleet increasing up to 660 thousand vehicles. Annual registrations should hover

                                                                                                                     10
around 340,000 vehicles (+5% over 2006), equal to 12% of the domestic market, but lower than expected
however, since, according to Aniasa sources, most of the clients found the latest regulatory amendments hard to
understand in relation to tax treatment of corporate cars.

Breaking down the sector, in the first half of 2007, long-term renting was the most dynamic segment, showing a
10% increase in outstanding fleet (almost 530 thousand vehicles). Registrations, however, fell to a 12-year low
growth rate (+3%), which goes to show how the decline in orders in the first four months of 2007 is the result
of a balanced structure of taxation for company cars still awaiting to be defined.

Turnover went up 9%, while the average fleet increased by 11%. The trend sees clients steering towards cheaper
models and opting more for an extension (+4% over 2006), rather than a renewal of their contracts.

Dealers continued to strengthen their role as they gradually expanded their business as “distributors” for long-
term renting operators; more strategic partnerships were forged with credit institutes, thus allowing the sector to
expand its customer base.

For the end of 2007, Aniasa expects a 9% increase in the business volume of long-term renting, up to €/mil.
3,362.

Short-term renting in the first half of 2007 posted a slower rise in turnover (+4% compared to the same period
in the previous year), with a 3% increase in the fleet, up to 107 thousand vehicles. Year-end forecasts estimate a
business volume of €/mil. 1,028, showing a growth in line with the first half-year.

The fleet management segment confirmed its expansion, showing a 10% growth in vehicles managed and 15% in
turnover in the first half of 2007. 2007 year-end forecasts expect a business volume of 171 million, compared to
148 in the previous year.



The factoring market
According to the most recent estimates of Assifact - Associazione italiana per il factoring (Italian Factoring
Association) -, the Italian factoring market showed a growth by +2.3% in terms of turnover, with volumes equal
to €/bil. 114.7. The outstanding share (credit stock), instead, showed a stronger growth, equal to 7.3%, reaching
€/bil. 38.3.




                                                                                                                11
                                                                                       Cumulative Turnover

                                 140.000.000

                                                                    119.197.379         118.704.516
                                                                                                                                                                114.684.598
                                 120.000.000                                                                                                     108.804.947
                                                    105.946.824                                           105.126.406
                                                                                                                                101.067.748
                                                                            32%               33%
                                 100.000.000
                                                                                                                                                      36%           36%
               Dati in €/1,000




                                                        40%                                                     35%                36%
                                  80.000.000


                                  60.000.000


                                  40.000.000             60%                68%               67%                                                   64%              64%
                                                                                                                 65%                64%


                                  20.000.000


                                         -
                                                       2001            2002                   2003              2004              2005             2006           2007
                                                  Without recourse (pro soluto)             With recourse (pro solvendo)               Cumulative Turnover




65% of turnover is represented by transactions without recourse (pro soluto), while the remaining 35% relates to
transactions with recourse (pro-solvendo). Currently, 87% of the factoring is intended for private companies, mainly
involving the following sectors: services to sale (22.4%), services to trade (17.2%), means of transport (11.9%),
building and public works (7.9%). The most part of the national customers is concentrated in a few regions. 31%
of demand is represented by businesses operating in Lombardy, followed by Lazio (17%), Campania (12%) and
Piedmont (7%).

The relevant factoring market is made up of 32 operators, mainly banks, who are members of Assifact. The
market has an extremely high degree of concentration, with the first 4 operators holding 70% of the total share.

Italian factoring companies are able to stand up to the major international players on the market. Over the past
five years, the average size of Italian factors has grown significantly, dwarfing competition by English, Spanish
and German operators, whereas they are still smaller than their French competitors. In Italy factoring represents
about 8% of the domestic GDP, against a European average of 6% (compared to a 13% share in the United
Kingdom, 6% in France, 7% in Spain).

                                                                                  % Factoring quota on Nominal GDP 2007


                                        15%

                                                      13%
                                        13%


                                        11%


                                             9%
                                                                    8%
                                                                                       7%
                                             7%
                                                                                                        6%              6%

                                             5%                                                                                           4%

                                             3%                                                                                                           3%


                                             1%
                                                     United         Italy             Spain          Media UE          France          Holland        Germany
                                                    Kingdom




                                                                                                                                                                              12
At world level, the last available data show a total turnover equal to €/bil. 1,020, with an average growth rate of
18%. Most of the growth is the result of the globalization of the economy and the increasingly prominent role of
several Asian countries. Mention must be made that, over the past few years – the five-year period 2002/2006 -,
factoring has achieved brighter results (from 90% to 150% against 10% in Italy) in the main European countries,
such as Great Britain, France and Spain, since businesses, particularly in the large corporate segment, have
resorted heavily to factoring in the form of final assignments without recourse to lighten their assets (such as in
the UK), and also because part of the traditional banking operations associated with the disposal of receivables
has been classified as factoring (Spain, France and Germany). Moreover, Japan is coming to the fore and
becoming the financial and credit engine in the Asian region.


The insurance market
In the first nine months of 2007, the insurance market as a whole recorded a 5.5% reduction in volumes
collected compared to the corresponding period in 2006, with a volume of premiums equal to €/bil. 72.14.

This figure confirms the slowdown affecting, in different ways, the insurance market: volumes collected for life
insurance (accounting for 63.5% of the total premiums issued for life and indemnity insurance) recorded a 9%
drop, while the indemnity insurance segment (accounting for 36.5% of the global portfolio) recorded a weak
growth (+1.3%).

During the first half-year, the indemnity insurance market already showed a modest growth in volumes (+1.6%),
with a different performance between the various segments. The car segment was stable (+0.2%), much brighter
instead on the non-automotive business side (+3.7%), above all with regard to the Health coverage; in the
Property segment, Pecuniary Losses kept up a dynamic pace, above all for the role of the Credit Protection
Insurance policies.

In the 2008-2009 period, the indemnity insurance segment is expected to show a slightly upward trend; leading
analysts predict no significant development in such period for non-automotive indemnity insurance segment,
although the segment has all it takes to increase penetration and driving force in the upcoming future.

During the first half of 2007, the life insurance market showed a 4.2% growth, thanks to the contribution given
by cross-border companies; excluding this contribution, the segment should have recorded a 4.7% drop
compared to the first half of 2006.

In the 2008-2009 period, forecasts show the life insurance market is in for a powerful rise, thanks to the growth
in unit-linked products, while index-linked products will remain stable.




                                                                                                                13
Significant events in the financial year
By order of the Bank of Italy of 17 August 2007, effective from 1 January 2007, the Company was entered in the
Register under Article 64 of the TULB (Testo Unico delle Leggi in materia Bancaria e Creditizia, Consolidation Act on
Banking and Credit Laws) and assumed the status of banking parent company.
The achievement of this prestigious goal, less than five years after its incorporation, opens up significant
opportunities and important scenarios for the Group and Delta S.p.A. (hereinafter also referred to as Delta).
Please note that the registration was also necessary due to the regulatory amendments introduced by the
following regulatory measures:
1. Decree Law no. 297/06, as amended and converted by Law no. 15 on 23 February 2007;
2. the urgent Decree issued by the Ministry of Economy and Finance on 27 December 2006 pursuant to
     Article 3, paragraph 2, of Legislative Decree no. 385/93, in its capacity of Chairman of the Interministerial
     Committee for Credit and Savings (Comitato Interministeriale per il Credito e il Risparmio);
3. Bank of Italy’s Circular Letter no. 263 of 27 December 2006 bearing “New prudential supervision
     provisions for banks” (Nuove disposizioni di vigilanza prudenziale per le banche) (which adopts the new “Basel II”
     Capital Accord).
In order to support the company’s business approach, the majority of the shareholders’ meeting approved a
significant capital increase by €/mil. 230 against payment and with a share premium of € 5.45 per share, with a
par value of € 1.00, subscribed by the private shareholder, by Sviluppo Investimenti Estero - SIE S.p.A. and
Onda S.p.A. for the respective share and fully subscribed by the latter ones for unoptioned shares. The
dissenting shareholder So.Pa.F. S.p.A. contested the capital increase resolution and summoned Delta, SIE and
Onda by a writ of summons served on the Company on 18 October 2007. The related proceedings are pending
before the Court of Bologna.
The misunderstandings generated by the aforementioned transaction led to the resignation of the majority of the
directors. As you know, the entire Board of directors was reappointed by the Shareholders’ Meeting of 18 July
2007.




Below are the companies forming part of the Delta Banking Group:

Parent Company:
    Delta S.p.A., holding company with registered office in Bologna, entered in the list under Article 113 of the
    TULB. On 17 August 2007, following the entry in the register of Banking Groups, the parent company was
    assigned code 20025, which also identifies the homonymous banking group.

Banking companies:
    SediciBanca S.p.A., banking company with registered office in Rome;

Finance companies:

                                                                                                                    14
    River Holding S.p.A., holding company with registered office in Rome, entered in the list under Article 113
    of the TULB;

    Holding Reti S.p.A, holding company with registered office in Bologna, entered in the list under Article 113
    of the TULB;

    Plusvalore S.p.A., consumer credit company with registered office in Bologna, entered in the list under
    Article 107 of the TULB;

    Carifin Italia S.p.A., consumer credit company with registered office in Faenza (RA), entered in the list under
    Article 107 of the TULB;

    Detto Factor S.p.A., factoring company with registered office in Bologna, entered in the list under Article
    106 of the TULB;

    Eunice Sim – Società di Intermediazione Mobiliare S.p.A., with registered office in Rome;

    Carirete S.p.A, finance company with registered office in Bologna, entered in the list under Article 106 of the
    TULB;

    Rete Plus S.p.A, finance company with registered office in Bologna, entered in the list under Article 106 of
    the TULB;

    Studio Europa S.r.l., a company entered in the register of Credit Brokers.

Instrumental companies:
    Adale Sistemi S.r.l., service management company, including IT services, with registered office in Bologna;

    E-stat S.r.l., service management company, including IT services, with registered office in Bologna;

    Quorum S.r.l., service management company, including IT services, with registered office in Brescia;

    Tarida S.r.l., debt collection company, with registered office in Bologna;

    Ydreia S.r.l., consulting and staff and human resources training company, with registered office in Bologna;

    Amalthea S.r.l., in liquidation, consulting and staff and human resources training company, with registered
    office in Bologna.

The banking group does not include the companies that, even if included in the scope of control, do not
perform instrumental activities as their exclusive or main business, pursuant to Article 59 of the TULB,
specifically:

    Bentos Assicurazioni S.p.A., insurance company, with registered office in Milan;

    Rent Autonoleggio S.r.l., motor vehicles hire company, with registered office in Faenza (RA);

    Mudi S.r.l., a company which offers packages of services and facilities to its own clients, with registered
    office in Bologna;



                                                                                                                  15
    Mudipoint S.r.l., a company active in the management of spaces and services, with registered office in
    Bologna;

    Web Quorum Romani S.r.l., a company which provides management software design and implementation
    services, with registered office in Timisoara (Romania);

    Kelp S.r.l., insurance products brokerage company, with registered office in Bologna;

    CBRs S.p.A., a company which provides process consulting and support services within the credit and
    finance structures, with registered office in Bologna;

    Home Società Agricola S.r.l., with registered office in Bologna.

The entry of the Group in the list of Banking Groups gave rise to the obligation on the part of Delta S.p.A. to
prepare the Statutory Financial Statements according to the “International Accounting Standards” (IAS/IFRS) issued by
the International Accounting Standard Board and the related interpretations issued by the International Financial
Reporting Interpretation Committee, as endorsed by the European Union throughout 31 December 2007, based
on the procedure established by Regulation (EC) no. 1606/2002. The Bank of Italy, whose powers already
referred to in Legislative Decree no. 87/92 have been confirmed by the abovementioned Decree, established, by
Circular Letter no. 262 of 22 December 2005, the formats for the Financial Statements and the related Notes,
requiring the Parent Companies of Banking Groups to apply the Financial Statement formats envisaged for
Banks.




Financial and economic position
As already illustrated, in 2007 the Company increased its equity passing from a Shareholders’ equity of €/mil. 114
at the end of the 2006 financial year to €/mil. 344, without taking account of the profit at 31 December 2007, in
order to meet requirements laid down in the Group Development Plan and to conform to the Regulatory ratios.
At the same time as the capital increase made for Delta, the completion of the process for the adjustment to the
changed scenario, even from a regulatory perspective, required Delta to initiate the capital strengthening of its
subsidiaries River Holding S.p.A., Plusvalore S.p.A., Carifin Italia S.p.A. and Detto Factor S.p.A..
In fact, the regulations issued in August 2007 and in force from 1 January 2008, provide, for the first time, for
prudential ratios requirements for finance companies registered in the special list under Article 107 of the TULB
as calculated on the basis of “equivalent” supervision rules (equivalent to the banking one). The Delta Group
companies concerned by these new regulations are Plusvalore S.p.A. and Carifin Italia S.p.A., as well as Detto
Factor S.p.A., which are still waiting to be authorised by the Bank of Italy to be entered in the special list under
Article 107 of the TULB.
As regards the breakdown of the most important financial and economic items, it should be noted that:
Receivables from banks, equal to €/mil. 175.2 (€/mil. 6.2 in 2006), represent cash on hand: the significant
increase is linked to the capitalisation transaction cited on more than one occasion.


                                                                                                                  16
Equity investments, equal to €/mil. 161.2 (€/mil. 81.6 in 2006) showed an increase due to the subscription of the
capital increase aimed at bringing the investee companies’ equity in line with the regulatory requirements. As
regards comments, reference is made to item “100 – Equity investments” in the Notes to the Financial
Statements. However, note that the overall cost of equity investments entered in the accounts at 31 December
2007 was lower than the equity value, including profits for the period, for the related ownership share.
Property, plant and equipment mainly represent the recognition of the properties acquired by Delta from the
investee company Carifin Italia S.p.A. under a finance lease.
Other assets, equal to €/mil. 18.5, are mainly made up of credit positions towards the Group Companies for
services and for the amount of €/mil. 11.9 for “Ires tax from fiscal consolidation” to be paid out to the Tax Office,
on behalf of the subsidiaries, based on the return which shall be filed in consideration of the option jointly
exercised for the Group taxation.
Likewise, tax liabilities, equal to €/mil. 5.2, included the payable for “Ires tax from fiscal consolidation” for €/mil. 3.3
to be paid out to the Tax Office, on behalf of the subsidiaries, based on the return that shall be filed in
consideration of the option jointly exercised for the Group taxation. The said amount (€/mil. 3.3) is equal to the
balance between the debt for “Ires tax from fiscal consolidation” (€/mil. 11.9) and the credit (€/mil. 8,6) recognised
to the investee companies which have contributed negative taxable income.
Other liabilities, equal to €/mil. 13.1, are mainly made up of payables to suppliers, payables to staff for deferred
remuneration and payables to subsidiaries for the recognition of revenues from the fiscal consolidation (€/mil.
8.6).
The Shareholders’ equity came to €/mil. 349.2, after the abovementioned capital increase resolved on 5 July 2007
and including profits for the period.
Interest earned (€/mil. 4.1) and commissions earned (€/mil. 3.4) constitute financial income for funds held with
credit entities and for loans granted and guarantees given to subsidiary Companies.
During the financial year dividends were recognised “by cash” for an amount of €/mil. 4.96 (already charged on
an accruals basis, based on the Italian GAAP, in 2006) compared to €/mil. 13.4 recognised in the previous
financial year (already charged on an accruals basis, based on the Italian GAAP, in 2005). The amount for the
period is made up as follows: €/mil. 2.9 from Holding Reti S.p.A., €/mil. 0.3 from E-stat S.r.l., €/mil. 0.5 from
Adale Sistemi S.r.l., €/mil. 1 from Tarida S.r.l. and €/mil. 0.1 from Ydreia S.r.l..
Other operating income, equal to €/mil. 9.5, include considerations for the remuneration of the centralised
functions.
Administrative expenses, equal to €/mil. 12.5, represent costs relating to the basic structure of the functions
responsible for the management, organisation, coordination and control of all the Group, as well as the recovery
and reimbursement of expenses for seconded staff.
Losses from equity investments, equal to €/mil. 1.06, recognise the write-down of the equity investment Rent
Autonoleggio S.r.l.; for the related comments, reference is made to the item “100 - Equity Investments” in the
Notes to the Financial Statements.
Net profit came to €/mil. 5.3, after a tax charge of €/mil. 1.6. The reduction was mainly due to the failure by
River Holding S.p.A. and its subsidiaries to distribute dividends.

                                                                                                                         17
The organisational structure and lines of action of Delta S.p.A.
The Group’s organizational structure sees Delta S.p.A. at the top, as a centre for the coordination and
governance of all subsidiaries, which operate in the market of financial and accessory services targeted at the
retail segment.

Delta S.p.A. makes use of two sub-holdings (River Holding S.p.A. and Holding Reti S.p.A.) to coordinate and
govern the activities of the subsidiaries operating in the Credit, Financial and Insurance sector and in the
Distribution (networks) sector, respectively, while the companies operating in the service chain remain under
direct control of the Parent Company.

Within the scope of its functions, Delta S.p.A., being the company through which subsidiaries are governed, as
Parent Company, has the responsibility of designing the product lines, defining market strategies and the
organisational paths, and guiding the monitoring activities, as well as managing relations with the investor
partners.

In addition to the update of the guidelines for the development of the business, in accordance with an integrated
and systemic view of the management levers, an appropriate scheme of organisational measures was also
implemented, to face the changes occurred in context and scenarios, and with the aim of providing conscious
support and guidance to the development of the group from Financial Conglomerate to Banking Group. This
plan is in fact aimed at supporting the repositioning process, to increase efficiency of the governance system of
the individual corporate vehicles and the Group, as well as at bringing the coordination and risk management
mechanisms in line with the regulatory provisions peculiar to banking groups.

Particular attention was also paid to the definition of actions aimed at strengthening the internal control system
of the Group and its components. For this purpose, specific activities were planned and started, designed at
reviewing the structure and the functioning of the control model adopted in relation to its sub-systems, as well
interaction and coordination procedures. The aim is to increase efficiency of the control system, to harmonise it
with the regulatory novelties introduced in relation to compliance and “prudential supervision”, as well as to
ensure its firm consistency with the complexity and size of activities carried out.

Below are the most important projects which are already in the process of being implemented:

    redefining the corporate Group model;
    optimising the governance and control Group processes;
    strengthening the control units of the parent company and the sub-holdings;
    strengthening the control units of the subsidiaries;
    redefining the role of the service companies;
    increasing efficiency of the inter-company processes and costs.
The activities of Delta S.p.A. are focused on the direction, governance, guidance and supervision of all the
individual entities of the Group, favouring the cross-selling, developing synergies, optimising scale economies,
thus maximising the creation of value within the Group.


                                                                                                               18
The group structure
Below is the table showing the Delta Group structure:




                                                        19
Group Companies business and data
Below are illustrated the activities carried out by the Companies in the Delta Group.

It should be noted that the economic and financial data, drawn from the Companies’ individual financial
statements, are shown according to the relevant accounting standards applied by the individual entity to its
accounts, since not all the companies prepare their individual financial statements according to international
accounting standards, as indicated below. For the purposes of a better understanding, the Group companies
which have drawn up the individual financial statements according to IAS/IFRS international accounting
standards are the Parent Company Delta, SediciBanca, Eunice Sim, Carifin Italia, Plusvalore and Detto Factor.
The other companies have drawn up their financial statements according to Italian accounting standards
(hereinafter also referred to as “Italian GAAP”).



River Holding S.p.A.

It is the sub-holding which coordinates the management of the Bank, the Sim, the finance Companies and the
Insurance companies.
At the balance sheet date, the Company owned the companies Sedicibanca S.p.A. (banking activity), Plusvalore
S.p.A., Carifin Italia S.p.A. (consumer credit, CQS and leasing), Detto Factor S.p.A. (factoring), Bentos
Assicurazioni S.p.A. (insurance) and Eunice Sim (securities brokerage). It also owns a 20% share in the capital of
Centax S.p.A, a leading company in financial services via remote connection. It has a Share capital of €/mil. 160
and a Shareholders’ equity of €/mil. 162.4 (€/mil. 82.9 million in 2006). The 2007 operating result was equal to
€/th. -434, and is linked to the non-distribution by subsidiaries of dividends, aimed at increasing the related
equity structures.
The Company draws up its Financial Statements according to the Italian GAAP.



SediciBanca S.p.A.

The Bank, which is wholly owned by River Holding S.p.A. and has a share capital of €/mil. 30, is intended to
become a reference point for the Group financial management.
At end 2007 the Shareholders’ equity (including profits for the period of €/th. 864 and the subordinated loan for
€/mil. 15) reached €/mil. 65 and recognised a Solvency Ratio equal to 10.73%.

Total receivables, amounting to €/mil. 514.9, showed a 35.7% increase compared to €/mil. 379.6 in 2006. This
increase was largely due to the growth in the inter-group loans which were made possible by the transformation
into a Banking Group. Consistently with the new role assumed by the Bank as a reference point in the Group
financial management, the borrowing structure showed a considerable increase.

Payables represented by securities were equal to about €/mil. 131 of which €/mil. 35.7 were made up of
certificates of deposit, €/mil. 15.2 of subordinated loans and about €/mil. 80 of bonds.


                                                                                                               20
The Company draws up its Financial Statements according to the IAS/IFRS standards.


Eunice Sim S.p.A.

This Stockbroking company is 100% owned by River Holding S.p.A.. The Company’s core business is the
traditional business of trading, placement and management of investment products.

The share capital of €/mil. 4 and the subordinated liabilities (included under payables) of €/mil. 2.5 remained
unchanged compared to the previous period.

At 31 December 2007 the Company had a Shareholders’ equity of €/mil. 4.9 (€/mil. 3.4 in 2006), excluding an
operating result of €/th. -972.6 (€/th. 633.6 in 2006), attributable to the replacement and strengthening of the
technology platform and the IT systems.

The Company has started a large project to expand its own network of financial promoters and its offer of
products, also envisaging the distribution of services mainly performed by the other financial, insurance and
banking companies in the Delta Group (insurance, mortgages and loans, credit cards, renting, leasing and
factoring), in view of the cross-selling activity within the Group itself.

The Company draws up its Financial Statements according to the IAS/IFRS standards.


Plusvalore S.p.A.

At 31 December 2007, Plusvalore S.p.A., a product company mainly operating in the consumer credit segment,
was 96.83% owned (compared to 84.17% in 2006) by River Holding S.p.A., the relevant sub-holding for the
financial segment in the Delta Group. The remaining share is owned by Faber Factor S.p.A. in liquidation.
The Company, which has entrusted Rete Plus S.p.A. with the organisation and development of its distribution
networks, made up of 137 Punti Plus offices, owns a Share Capital of € 62,499,341 (€ 12,499,868.15 in 2006) and
a Shareholders’ equity of €/mil. 74.9 (€/mil. 22.2 in 2006). At 31 December 2007, net operating results came to
€/mil. 4.0.
The Company draws up its Financial Statements according to IAS/IFRS standards.


Carifin Italia S.p.A.

The Company mainly operates in the consumer credit segment and has a longstanding experience in salary-
backed loans and salary-deductions loans (delegazione di pagamento). The Company has entrusted Carirete S.p.A.
with the organization and development of its distribution network across the whole country, including 122
Caripoint offices.
It is 100% owned by River Holding S.p.A. and has a Share Capital of €/mil. 40 (€/mil. 25 in 2006) and a
Shareholders’ equity of €/mil. 66.5 (€/mil. 52.4 million in 2006) .
At 31 December 2007, net operating results came to €/mil. 4.0 (€/mil. 9.7 in 2006).
The Company draws up its Financial Statements according to IAS/IFRS standards.


                                                                                                             21
Detto Factor S.p.A.

The company, which has a share capital of €/mil. 11 (€/mil. 2 in 2006) and is wholly owned by River Holding
S.p.A., specializes in the purchase of receivables abroad, on the strength of its track record and skills in seeking
and selecting factoring products.
At year-end, the Shareholders’ equity was equal to €/mil. 18.1 (€/mil. 5.0 in 2006), already taking account of the
net operating result of €/mil. 2.1, up compared to the same period in the previous year (+173.1%).
Detto Factor, which is active, within the Group, in the acquisition of non-performing loans, also for the purpose
of coping with the changed situation in the external market of the CQS, where it was traditionally present, made
significant innovations to its strategic plan, by increasing activities in the purchase of commercial invoices linked
to retail sectors and started a business development project in the sector of receivables deriving from non-
performing mortgage loans and commercial credits claimed from ASLs (Aziende Sanitarie Locali, Local Health
Units).
Purchases from the external market produced the following volumes: salary-backed loans of €/mil. 73 for a total of
4,227 files; finalised loans, deriving from extensions granted by commercial enterprises of €/mil. 23 for a total of
7,455 files; non-performing mortgage credits purchased from banks of €/mil. 12; receivables from ASLs and public agencies of
€/mil. 18; non-performing loans in relation to the purchase of receivables from commercial invoices of €/mil. 2.
The Company draws up its Financial Statements according to IAS/IFRS standards.


Centax S.p.A.

The Company, which is active in the sector of remote financial services for cheque guarantee and is 20% owned
by River Holding S.p.A., has a share capital of €/mil. 5.6 and a Shareholders’ equity of €/mil. 6.0 (€/mil. 4.7 in
2006) and ended its financial year with a result of €/th. 305.
The results obtained by the Company during the period are very important, with a number of requests for
transactions exceeding 1.5 million cheques for a counter-value exceeding €/bil. 1.1.

The company draws up its Financial Statements according to the Italian GAAP.


Bentos Assicurazioni S.p.A.

The company, which has been operating since January 2007, is wholly owned by River Holding S.p.A. and has a
share capital equal to €/mil. 6 and a start-up fund of €/mil. 3. At 31 December 2007, the operating result
showed a substantial balance (loss of €/th. 35).
The Company is authorised to carry out its activities in the following segments: 1 - Accident; 2 - Sickness; 3 -
Land vehicles; 7 - Goods in transit; 8 - Fire and natural forces; 9 - Other damage to property; 13 - Third-party
liability; 17 - Legal aid; 18 – Assistance; 16 - Pecuniary losses of various kinds.
In 2007, the Company completed the start-up of the following segments: Accident, Sickness and Pecuniary
losses of various kinds, launching the Creditor Protection Insurance products which represent the core business
of the Company.


                                                                                                                         22
At the end of the first year of insurance activities (2007), premiums reached €/th. 27,822 from subordinate
employment and €/th. 3 from non-subordinate employment. Premiums assigned amount to €/th. 5,488.
The Company draws up its Financial Statements according to the Italian GAAP.


Holding Reti S.p.A.

Holding Reti S.p.A. is the sub-holding responsible for directing and coordinating the Group distribution
networks, has a share capital of €/th. 600 and a Shareholders’ equity of €/mil. 4.8 (€/mil. 4.4 in 2006). The 2007
income statement shows a profit of €/mil. 3.4, after receiving the accrued dividends of Rete Plus S.p.A. and
Carirete S.p.A..

The Company draws up its Financial Statements according to the Italian GAAP.



Rete Plus S.p.A.

The company, which coordinates the sales network of Plusvalore, deals with both the distribution of financial
products and the promotion of products and services of the other Group Companies through a widespread
network of 137 Punto Plus offices all over the country.
The Company is 100% owned by Holding Reti S.p.A., has a share capital of €/th. 600 and a Shareholders’ equity
of €/mil. 4.2 (€/mil. 2.8 in 2006). The 2007 income statement shows a net profit of €/mil. 2.7.
The company draws up its Financial Statements according to the Italian GAAP.


Carirete S.p.A.

Carirete S.p.A. is the company which manages and coordinates the sales network of Carifin Italia S.p.A., made up
of 8 branches, 126 agents and 1 Mudi Point.
The Company is 95% owned by Holding Reti S.p.A. and is 5% owned by Carifin Italia S.p.A.; it has a share
capital of €/th. 630 and a Shareholders’ equity of €/mil. 2.0 (€/mil. 2.5 in 2006). The 2007 income statement
shows a net profit of €/mil. 1.2.
The Company draws up its Financial Statements according to the Italian GAAP.


Kelp S.r.l.

The Company is 100% owned (80% in 2006) by Holding Reti S.p.A., has a share capital of € 50,000 and a
Shareholders’ equity of €/th. 26, already excluding the operating result of €/th. -31.
Kelp S.r.l., which remained inactive in 2007, will start its own activity as insurance agent in 2008. For this
purpose, in December it submitted an application for registration with the Registro Unico Intermediari Assicurativi e
Riassicurativi (Single Register of Insurance and Reinsurance Brokers) under Article 109 of Legislative Decree no.
209/2005 in order to be able to intervene in the streamlining process arranged by Bentos Assicurazione S.p.A.
for the distribution of its own products.

                                                                                                                  23
The Company draws up its Financial Statements according to the Italian GAAP.


Studio Europa S.r.l.

The Company, which was acquired on 4 July 2007, is 100% owned by Holding Reti S.p.A. and has a share capital
of € 10,000. The 2007 income statement closed with a substantial balance (€/th. 4).
The Company, which is registered with the register of credit brokers pursuant to Article 16 of Law no. 108/96, is
specialised in consulting and information-gathering activities in the execution of administrative procedures,
including with public agencies, in relation to applications submitted for the granting of credit lines and loans,
including soft loans, which are mainly linked to the agricultural and food production process.
The Company draws up its Financial Statements according to the Italian GAAP.


Adale Sistemi S.r.l.

Adale Sistemi S.r.l. is the Group company specialist in innovative IT services and facility management.
The Company is wholly owned by Delta S.p.A., has a share capital of € 10,000 and a Shareholders’ Equity of
€/mil. 1.6 (€/mil. 1.5 in 2006), including 2007 net profits for the period.
The 2007 profit for the period amounts to €/th. 659 (€/th. 662 in 2006).
The Company draws up its Financial Statements according to the Italian GAAP.


Quorum S.r.l.

Quorum, which is 100% owned by Adale Sistemi S.r.l. and has a share capital of € 10,000, designs and
implements integrated IT systems for data management in the financial sector.
The Company has a Share Capital of €/th. 65 (€/th. 55 in 2206), including the operating result of €/th. 10.
The Company draws up its Financial Statements according to the Italian GAAP.


Web Quorum Romania S.r.l.

The company, which was incorporated under Rumanian laws, is 100% owned by Adale Sistemi S.r.l., has a share
capital of € 9,999 and provides management software design and implementation services.
The 2007 income statement closed with a profit of €/th. 27.7.


Consulting Board Rooms – CBRs S.p.A.

The Company, which is 100% owned by Delta S.p.A.., specialises in application solutions, and finance projects
consulting and integration. It has a share capital of €/th. 120 and a Shareholders’ Equity of €/th. 161 (€/th. 150
in 2006), including the operating result of €/th. 11.

The company draws up its Financial Statements according to the Italian GAAP.


E-St@t S.r.l.

                                                                                                               24
E-St@t S.r.l., which is 100% owned by Delta S.p.A. and has a share capital of €/th. 50 and a Shareholders’ equity
of €/th. 481 (€/th. 627 in 2006), including a result for the period of €/th. 192, is specialised in data bases
management, in the implementation of scoring charts, and offers specialist consulting services and integrated
solutions for corporate risk management. It assists credit institutes, finance and commercial companies, in
creating rating systems, develops tools to define business and customer marketing strategies, selects and manages
external databases, designs in-house databases and offers specialist consulting services for the review of lending
processes.
The company draws up its Financial Statements according to the Italian GAAP.


Tarida S.r.l.

The Company is specialised in the integrated management of debt collection, offering consultancy and services
in outsourcing to private businesses and public bodies. Its services include: debt management and collection,
cash flow management service, call center service, legal aid and consultancy services in the due diligence process.
The Company is 100% owned by Delta S.p.A., has a share capital of € 10,000 and a Shareholders’ equity of
€/mil. 2.5 (€/th. 1.8 million in 2006), including the 2007 result for the period equal to about €/mil. 1.7 (€/mil. 1
in 2006).
The company draws up its Financial Statements according to the Italian GAAP.


Mudi S.r.l.

The company is 100% owned (80% in 2006) by Delta S.p.A. and has a share capital of € 77,360, and offers a
wide range of services and facilities to its clients-owners of a personal card.
The Company has a Shareholders’ equity of €/th. 140 (€/th. 225 in 2006), including the 2007 loss for the period
equal to €/th. 103.
The company draws up its Financial Statements according to the Italian GAAP.


Rent Autonoleggio S.r.l.

Rent Autonoleggio S.r.l., which had a share capital of € 250,000 at 31 December 2007 and is 80% owned by
Delta S.p.A., is specialised in long-term vehicle renting.
In 2007 Rent increased its own long-term renting volumes, which is the Company’s core business, by 12%
compared to a 10% growth market . Notwithstanding increased volumes, the Company closed with a loss of
€/mil. 1.4 which determined a financial deficit of €/th. 616 in December 2007. On 30 January 2008, the
controlling company Delta S.p.A. recapitalised the investee company covering the loss and replenishing the share
capital up to €/th. 250. The minority shareholder did not participate in the capitalisation transaction: for this
reason, the company is 100% owned by Delta S.p.A. from January 2008.
The decision to go ahead with the capitalisation is based on the knowledge that the development project of Rent
shall bring positive results, given that the objectives underlying the Business Plan for the three-year period 2007-
2009 are currently being attained in the core area, although not according to the expected schedule, through

                                                                                                                 25
increases in volumes, which led to increases in the sales staff and agreements have been entered into with the
product distributors, while in the area of the lease of capital goods other than motor vehicles, the first promotional
transactions are being started, in test areas, regarding direct offerings to retail customers through the channels of
the Group.
The company draws up its Financial Statements according to the Italian GAAP.


Ydreia S.r.l.

The company is specialised in the integrated Human Resources Management and in the organization and
coordination of refresher courses and special training.
The Company has a share capital equal to € 25,000 wholly held by Delta S.p.A. and has a Shareholders’ equity of
€/th. 312.5 (€/th. 197.0 in 2006). The 2007 income statement closed with a result of €/th. 259.
The company draws up its Financial Statements according to the Italian GAAP.


Mudi Point S.r.l.

Mudi Point S.r.l. is specialised in the management of spaces and services inside hypermarkets and large
commercial areas, aimed at providing services to the shopping centres, their clients and promotion services to
businesses.
The Company has a share capital of € 10,000 and a Shareholders’ equity of €/th. 19.0 (€/th. -54.0 in 2006), and
closed the financial year with a result of €/th. 8.
The company draws up its Financial Statements according to the Italian GAAP.


Home Società Agricola S.r.l.

At the closing date of the financial statements, the Company, which has a share capital of €/th. 30,000 and is
100% owned by Delta S.p.A., was not operational. The income statement closed with a result of €/th. -3 due to
pure operating costs.
The company draws up its Financial Statements according to the Italian GAAP.


Amalthea S.r.l. in liquidazione

The Company is wholly held by Delta S.p.A. and is in liquidation. The financial year closed with a result of €/th.
-8 due to pure operating costs.




                                                                                                                   26
Relations with subsidiaries and companies controlled by the latter and
companies subject to a significant influence
The debit/credit relations with the Group companies are explained in greater detail in the Notes to the Financial
Statements, Part D) – Other information, Section 4 - Transactions with related parties.
At 31 December 2007, there were no directly-owned Companies subject to a significant influence.
In 2007 the main relations with the subsidiaries concerned the supply of organisation, planning, administration,
consultancy services and a number of the functions of the subsidiary Companies. Note that inter-group services,
as well as interest and financial fees, are regulated at market prices.

As a result of the entry of the Group in the list of Banking Groups effective from 1 January 2007, the rule
applying VAT exemptions for inter-group invoicing relating to auxiliary and instrumental services remained in
force for the entire financial year




Relations with related entities
In addition to relations with directors, Statutory Auditors, executives and other Companies in the Delta Group,
financial and economic relations have been reported with the following entities:
    Cassa di Risparmio della Repubblica di San Marino S.p.A.
    Estuari Holding S.p.A.
    Banco Popolare S.c.a.r.l.
For more details, reference is made to part H of the Notes to the Financial Statements.




Projects and research and development activities
As previously explained in greater details, the Company developed, in accordance with an integrated and
systemic view of the management levers, an appropriate scheme of organisational measures to face the changes
occurred in context and scenarios, and with the aim of providing conscious support and guidance to the
development of the group from Financial Conglomerate to Banking Group. This important development
entailed an intense training activity promoted by Delta S.p.A., even more than in the past.
Given the nature of the business conducted, the Company doe not carry out research and development activities
in the real sense.




                                                                                                              27
Objectives and policies in relation to financial risk taking, management and
hedging
Delta S.p.A., as banking holding, only assesses risks arising from inter-group relations. The Delta Group
objectives and policies on financial risk management, including hedging policies for each category of transaction,
as well as any other information relating to the Company’s exposure to credit, liquidity, interest rate and
exchange rate risks, are reported in detail in the Consolidated Financial Statements.




Auditing activities
Since its incorporation, the Delta Group has always been considering the reliability of the control system as
indispensable to assure the steady growth of all the Group Companies, as well as the conformity of their
organisational/operational set-up to the risks that they assume/manage.
For this purpose, all the Group Companies have developed and adopted a “Governance Model” which defines
the procedures for interaction among corporate players, provides a shared method for interpreting processes and
risks, clarifies the distinction between first- and second-level controls, indicates the “Corporate Vitality” as the
primary objective of governance action, in the sense of the Company’s capacity to continue to play a profitable
role in its relevant markets owing to its qualities of “Strategies”, “Performance” and “Machine”, and specifies the
conceptual categories to employ for its appraisal.
In the framework of the “Governance Model”, the Auditing department has been made responsible for assessing
the “Reliability” of the “Machine” in order to ensure that management (strategic, managerial and operating)
activity develops in a way that is aware of and appropriate to the expected results and in compliance with the
corporate standards and the provisions of law.

Under this perspective, for the purposes of optimising internal operational processes, pursuing cost economies
and sharing the specific expertises of the Parent Company in the management and conduct of internal audit
activities, all the Group companies have outsourced to the Auditing and Controls function of Delta S.p.A. their
Auditing activities, governing the mutual relations through pre-set contracts, subject to the prior approval of the
competent Supervisory Authorities in all cases governed by the reference regulations.

The effectiveness of the verification activity was pursued developing an “Audit Methodology” which, in
accordance with the Governance model, allows for the assessment of the reliability of the object being audited.
The objectivity of the assessment process is monitored thanks to a decision tree with pre-defined articulations.

The outcome of the assessments is disclosed through a report, whose “multiple-step” structure makes
increasingly more detailed information available, capable of satisfying the needs for information of every reader
and immediately presenting the indications for the enhancement of the operations.
The assessments are transmitted to the Managing Director and to the Chairman of the Board of Statutory
Auditors of the company being audited and, periodically, they are reviewed by the Audit Committee of the


                                                                                                                   28
Parent Company which is also called to examine the corrective measures implemented in order to remove the
weaknesses highlighted in the reports.
Assessments are scheduled at Group level through a structured three-year and annual Planning activity, which,
moving from the delimitation for each company of the scope of control made up of the risk families and the
functions /processes, defines the intervals at which verifications are to be carried out during the three-year
period and annually lists the individual activities to be carried out.
During 2007 the Auditing activities concerned:

    the processes of importance for the companies and the main risks managed by them (credit risk, operating
    risk, reporting risk) in order to assess the suitability of the monitoring units and the compliance with the
    relevant regulations;
    the Relation Points of Rete Plus and Carirete in order to check that operating procedures were correct and
    the internal rules were complied with, with particular attention to the provisions concerning “transparency”,
    “anti-money laundering”, “privacy”, “usury”.
The audit activities performed confirmed that the control systems of the individual entities audited appears,
overall, to be adequate to support the growth process of the Group members. The focus of the management on
the corrective measures proposed in the audit also favours the enhancement process strategically pursued by the
Parent Company.




Inspections and checks
On 6 February 2007, the Italian Exchange Office (Ufficio Italiano Cambi) started inspections at Detto Factor
S.p.A., pursuant to and for the purposes of Articles 106, paragraph 6, and 128, paragraph 2, of Legislative Decree
no. 385/93, as amended by Legislative Decree no. 342/99, which were completed on 16 March 2007. The
inspection did not give rise to any criticism.
On 12 February 2007, the Revenue Office’s (Agenzia delle Entrate) general assessment of Delta S.p.A.’s accounts
for the 2004 taxable year , which was started on 6 November 2006, was closed. The higher taxable income
assessed amounts to € 94,058 and is due to convention costs and other non-pertaining charges subject to
taxation. The assessment was settled by agreement and entailed an overall disbursement of €/th. 22.8.

On 16 April 2007 the Bank of Italy started inspections at Eunice Sim which were completed on 7 June 2007. The
inspection findings, which were submitted to the corporate bodies on 5 September 2007, did not lead to any
administrative sanctions, but highlighted the need to intensify the global organisational restructuring, already
started subsequent to the acquisition of the Sim and, accordingly, to review the basic assumptions of the
corporate re-launch plan.

On 21 January 2008, the Revenue Office notified to Carifin Italia S.p.A. a notice of assessment related to fiscal
year 2003, raising two objections, both deemed ungrounded by our advisors on the basis that the first objection,
related to direct taxes, is to be considered illegal and unfounded due to the groundlessness of the claim (alleged

                                                                                                               29
non-deductibility of the write-down of receivables arising from CQSs covered by life risk insurance) also in the
light of a pro-veritate opinion issued to the company by Prof. Lorenzo Del Federico, Esq.; the second objection
relating to VAT is considered illegal and unfounded as it is based on an interpretation error of the Office; such
notice of assessment shall be appealed, according to the procedures and within the deadlines laid down by law,
before the Commissione Tributaria Provinciale (Provincial Tax Commission) of Ravenna.

At the end of February, the Revenue Agency of Bologna started two audits on Adale Sistemi S.r.l. and Tarida
S.p.A. which fall within the regular program of assessments for the year 2008. These audits are still in progress
but, as of today, they have not led to any negative remark yet.



Accomplishments concerning personal data protection
In compliance with the provisions laid down in the Codice in materia di dati personali (Privacy Code) (Legislative
Decree no. 196 of 30 June 2003 and related Annex B – Disciplinare tecnico [Technical specifications]), the
Company took steps to review the “Documento Programmatico sulla Sicurezza” (DPS, Security Policy
Statement) and the related annexes.
In order to proceed with such audit, a general review was started of any possible novelties related to the
treatment of personal data carried out in the company or outsourced, both by electronic means and on data
contained in paper acts and documents.
For this purpose, checks were carried out on:
    the accuracy of the registered data banks reported in the 2007 Security Policy Statement;
    any possible new processing carried out in-house;
    any implementation of new security measures for data protection adopted with respect to the previous
    financial year;
    all changes related to persons, both natural and legal, who handle data and the purposes of these treatments.
The outcome of the above listed checks is reported in the review of the Company’s DPS for 2008.




Ownership structure
Below is the breakdown of the share capital following the completion of the capitalisation transaction already
referred to above during the 2007 financial year:
                                                                             %
Sviluppo Investimenti Estero S.p.A. – S.I.E.                                      26.80
Onda S.p.A.                                                                       42.96
Banco Popolare S.c.a r.l.                                                         13.29
So.Pa.F. S.p.A.*                                                                  15.95
Others                                                                             1.00
* Acal SpA was merged by incorporation into Sopaf Spa effective from 19 December




                                                                                                               30
Shares issued by the Company
At 31 December 2007, the share capital amounted to € 106,372,700.00 (106,372,700 shares, with a par value of €
1.00), and is fully paid-up.
During the financial year no. 35,672,000 ordinary shares were issued with a unit par value of € 1.00.
The Company does not hold, nor has it purchased or sold in the year, treasury shares.
The detailed breakdown of the Shareholders’ Equity is reported in the Notes to the Financial Statements, Section
14 “Shareholders’ equity” in the balance sheet liabilities.




The outlook
In 2008, together with the development of the business of SediciBanca, Eunice Sim, Bentos Assicurazioni and
Detto Factor, there shall also be the centralisation into SediciBanca of the funding activities. This will allow the
entire Group to benefit from better terms for funding in both domestic and international markets, emphasizing
business policies based on cross selling targets, including for the borrowing products of SediciBanca and the
investment products of Eunice Sim. This will prove that the Group’s decision to start new strategic Businesses –
specifically, the development of the Bank and of the Sim, and the start-up of the Insurance Company, will
produce benefits in terms of profitability, especially in light of the current liquidity crisis on the inter-bank
markets and the higher cost of funding and the reduced margins.
Following the scenario considerations previously referred to (persisting tensions in the funding market, increased
competition in the consumer credit market and spread squeezes in the most traditional sectors), the 2008 Plan is
characterised by a commercial and distribution policy aimed at curbing the loss of profitability through a review
of the portfolio products and a more accurate pricing strategy. In particular, as regards the consumer division, the
aim to reach a decisive growth in profitability shall lead to the increase in the lending rates. It is acknowledged
that the lending volumes target is higher than the 2007 final figures, but significantly lower compared with the
expectations for 2008 set in the Three-Year Business Plan.
Furthermore, the changed scenario of the financial and relevant market will induce the sector operators to
choose products intended for direct clients both in the personal loan sector and in the typical sector of salary-
backed loans and salary-deductions loans to limit the impact of distribution charges as much as possible.

In this context for the CQS and salary-deductions loans product, important agreements were signed by the financial
companies with the Social Security Institutions, Inps (Istituto Nazionale della Previdenza Sociale, National Social
Security Institute) and Inpdap (Istituto Nazionale di Previdenza per i Dipendenti dell’Amministrazione Pubblica, National
Social Security Institute for Employees of Public Administrations), which will allow to access a potential market
of over 20 million clients. These agreements will integrate all the others, already entered into with the major
Public / Government Agencies, with the specific aim of allowing the end client to benefit from a direct relation
with our Companies through a number of “points” which shall be opened, in a more widespread manner, on
the entire national territory.



                                                                                                                      31
Delta also expects a growth in the weight on traded 2008 volumes and on the contribution by the new businesses
to consolidated Group profits. At the level of individual corporate plans, the business policies are increasingly
focusing on the cross-selling objectives, including those concerning borrowing products of SediciBanca and
investment products of Eunice Sim.




Significant events after the end of the year
After the closing of the 2007 financial year, several significant events concerned the definition of the corporate
structure of some subsidiaries, the start of authorisation projects and procedures to support business
development, the adoption of new procedures and the creation of new organisational entities within the process
of transformation of the Banking Group. Furthermore, with the approval by the Parent Company of the
Consolidated 2008 Plan, the commercial and organisational actions, both consolidated and individual, were
rapidly started which had been the result of the process of inter-group definition and sharing of the follow up of
the strategic guidelines stated in the 2007-2009 Three-Year Plan.
On 17 January 2008 the subsidiary Tarida was transformed into a joint-stock company, subject to a prior
adequate increase, free of charge, of the Share Capital from Euro 10,000.00 to Euro 120,000.00.
On 30 January 2008 the recapitalisation was concluded of the investee company Rent Autonoleggio S.r.l.,
following the replenishment of the Share Capital pursuant to Article 2482-ter of the Italian Civil Code. The
recapitalisation was approved by Delta S.p.A. only, since the minority Shareholder did not exercise its option
right. At the same time as the balance of the loss, Delta also took steps to replenish the share capital of the
Investee Company, which is now 100% held, to Euro 250 thousand.
Following the positive conclusion of the equity strengthening of the Group, the authorisation process for the
opening in Bologna of a branch of SediciBanca was resumed, after the rejection of the original application, filed
on 8 August 2007, due to the level of capital of the Group at the time, considered to be inadequate. The
procedure started by the subsidiary Detto Factor for the registration in the Special List under Article 107 of the
TULB are also in the process of being completed.
In March 2008 a contract was signed with a leading national operator for the supply by the Delta Group of a
wide range of services relating to the distribution and management of financial products.
In compliance with the specific relevant provisions issued by the Bank of Italy in July 2007, and with the
intention of promoting and strengthening a corporate culture focused on the principles of integrity, fairness and
respect of the rules, both literally and in spirit, in February 2008 the process was completed for the
implementation at the Parent Company Delta S.p.A. of the Group Compliance Function aimed at ensuring the
strict compliance with regulatory and self-governance provisions. Furthermore, within the scope of the “Banking
Group project”, the strengthening of the Group governance is also supported by the definition of the new
Group Strategic Planning procedure: based on the new structure of the Group, procedures, responsibilities and
sequence of the activities necessary to guarantee the orderly involvement of all the investee companies to the
definition and update of consistent and shared strategic plans, were re-defined.


                                                                                                               32
Allocation of economic results for the period
Dear Shareholders,

we hereby submit for your approval the Financial Statements relating to the 2007 financial year, as prepared in
accordance with the current rules and formats and audited by PricewaterhouseCoopers S.p.A..

Below is the proposed distribution of net profits equal to € 5,267,780:
    to allocate € 263,390 to Legal Reserve (5% of € 5,267,780);
    to allocate € 5,004,390 to Extraordinary Reserve.


After the allocation of the 2007 profits, the Company’s Shareholders’ equity will be made u as follows:




At the end of this Report on Operations for the 2007 financial year, we deem it appropriate to thank the Bank of
Italy for its cooperation and willingness on all occasions, the Trade Associations for the support activities carried
out to the benefit of the entire sector, the Statutory and Independent Auditors for their support.


To all of our collaborators, sales and management department staff, employees, agents and consultants, we
hereby express our greatest appreciation for the results achieved, with the wish that even more important
objectives will be attained thanks to the commitment, loyalty and honesty they have always demonstrated.




                                                                       The Chairman of the Board of Directors


Bologna, 28 March 2008




                                                                                                                  33
Adoption of IAS/IFRS accounting standards
The entry of the Group in the register of Banking Groups gave rise to the obligation on the part of Delta S.p.A.
to prepare the Financial Statements according to the “International Accounting Standards” and according to the
provisions laid down for the preparation of the banks’ accounts in the current regulations and legislation.

It should be noted that the “International Accounting Standards” applied to the preparation of the Financial
Statements at 31.12.2007, the first ones drawn up according to these standards, are the International Accounting
Standards (IAS), the International Financial Reporting Standards (IFRS) and the related interpretations (SIC and
IFRIC) as endorsed by the European Commission at the balance sheet date.


The European regulations
To this end, in 2002 the Commission issued a regulation (no. 1606/02 of 19 July 2002) to implement the
accounting harmonisation and lead the listed companies in the European Union to apply the IAS/IFRS
international accounting standards in the preparation of their financial statements starting from 2005.
The aim of this process is to make the accounting disclosures provided by listed companies comparable and of
high quality in order to meet the growing need for increased competition, market growth and to provide
investors with a higher degree of protection.
The international accounting standards are issued by the IASB (International Accounting Standards Board®), a
private independent body that sets itself the task of drawing up high-quality accounting rules in the public
interest. Community Regulation 1606/02 provides for these standards to be endorsed by the European
Commission and to be published in the Official Journal of the European Union.
The process for the endorsement of the current standards has been completed.


The Italian regulations
At a national level, the Government approved the Legislative Decree for the transposition of the new standards
(Legislative Decree no. 38 of 28 February 2005). In accordance with the powers delegated to it by the
Parliament, this Decree also extended the scope of application of the IAS/IFRS standards to the individual
financial statements of listed companies, banks and the other financial entities subject to supervision and to the
consolidated financial statements of banks and the financial entities subject to supervision and unlisted insurance
companies (this was optional for 2005 and mandatory from 2006 onwards). Furthermore, it will be permitted to
apply the new standards to all companies which must prepare consolidated accounts and to the companies
controlled by the latter, by listed companies, by banks and by the entities subject to supervision.
This law also took the harmonisation of statutory and tax provisions into consideration, a necessary measure in
order to apply the new standards to individual accounts.
Statutory provisions were accordingly laid down in relation to distribution of profits and reserves, while tax
provisions were laid down that hold down the mechanisms for the determination of the taxable base, founded
on the principle of the origin from the income statement result, safeguarding the neutrality of taxation as far as
possible with respect to the different previous criteria laid down for the preparation of annual accounts.
                                                                                                                34
With regard to the accounts of banks and financial entities subject to supervision, the decree confirmed the Bank
of Italy’s powers, already envisaged in Legislative Decree no. 87/92, governing definition of accounting
statements and the contents of the notes to the financial statements.
Following this provision, the Bank of Italy published Circular Letter no. 262 of 22 December 2005, “Financial
statements of Banks: formats and rules for compilation” (I bilanci delle banche: schemi e regole di compilazione) and the
measure of 14 February 2006 bearing “Instructions for the preparation of the financial statements of Financial
Intermediaries registered in the Special list, of the Electronic Money Institutes, the Asset Management
Companies and the Securities Brokerage Companies” (Istruzioni per la redazione dei bilanci degli Intermediari finanziari
iscritti nell’Elenco speciale, degli Istituti di moneta elettronica (IMEL), delle Società di gestione del risparmio (SGR) e delle Società
di intermediazione mobiliare (SIM)).
This appendix to the Financial Statements provides information on the transition to IAS/IFRS as required by
IFRS.1 “First-time Adoption of International Financial Reporting Standards”.


Reconciliation statements and explanatory notes
Information on transition is disclosed according to the following scheme:
      Accounting standards of transition to IAS/IFRS. This section describes the accounting policies used by Delta in
      adopting the new accounting standards, as well as, where they exist, the exemptions from and the
      exceptions to the general rule on transition of which Delta took advantage on first-time adoption of
      IAS/IFRS.
      Reconciliation statements and explanatory notes. This section reports the reconciliations envisaged for the
      shareholders’ equity at 1 January 2006 and 31 December 2006, as well as of the 2006 economic result.


Accounting standards of transition to IAS/IFRS
The general provisions on transition to IAS/IFRS, as sanctioned by IFRS 1, provides for the restatement of all
the accounting balances on the date of transition, retrospectively applying the international accounting standards
used to prepare the first IAS-compliant financial statements as if they had always been adopted. Adjustments
deriving from the retrospective application of international accounting standards at the date of transition are
directly charged to equity reserves.
IFRS 1 provides for some exemptions from the general principle of retrospective application of international
accounting standards. Below is reported the list of exemptions used by Delta on first-time adoption of
IAS/IFRS standards.
      Business combinations: Delta did not apply IFRS 3 retrospectively to the business combinations that took
      place before 1 January 2005, the transition date for the major Group companies; therefore, at the time of
      transition, goodwill was confirmed which had been entered according to the accounting rules previously in
      force.




                                                                                                                                      35
     Application of the fair value as deemed cost to the book value of property, plant and equipment: Delta
     S.p.A. did not make use of the power to use the fair value at the date of transition (1 January 2006) deemed
     cost of property, plant and equipment.


Reconciliation statements
Below are reported the reconciliation statements of the Shareholders’ Equity items at 1 January 2006 and 31
December 2006, as well as of the Company’s economic result at 31 December 2006.
Balance sheet reconciliations at 31 December 2006 and 2006 income statement reconciliations are provided line
by line in the financial statements schedules in order to allow better understanding of previous results reported as
comparative figures in the 2007 financial statements schedules. Finally, reconciliation statements are
accompanied by methodological and explanatory notes.


Reconciliation statement of the Shareholders’ Equity pursuant to IFRS1




                                                                                                                 36
Reconciliation statement of the Balance Sheet - Assets




                                                         37
Reconciliation statement of the Balance Sheet – Liabilities




                                                              38
Reconciliation statement of the Income Statement




                                                   39
Explanatory notes to the reconciliation statement of the shareholders’ equity pursuant
to IFRS 1
Below are summarised the explanatory notes to the adjustments included in the abovementioned reconciliation
statements:


Dividends (IAS 18)
The change reflects the receipt of dividends in the financial year in which the entitlement to receive the payment
accrued.
As a result of the changed time of recognition of dividends (from “on an accruals basis” to “by cash”), the 2006
income statement 2006, according to the Italian GAAP, showed the dividends relating to profits accrued in 2006,
while, according to IFRS, it shows dividends relating to profits accrued in 2005 and resolved and paid out in
2006.


Properties for non-instrumental use (IAS 40)
The change mainly relates to the recognition of the economic components relating to land and buildings of non-
instrumental properties held under finance leases.


Intangible assets (IAS 38)
The change reflects the reversal of long-term charges and the other intangible assets that do not meet the
requirements to be recognised based on IAS/IFRS.


Employee termination indemnities (Staff Severance Pay or TFR) (IAS 19)
The Staff Severance Pay is deemed to be a defined-benefit fund according to IFRIC interpretations and was
therefore subjected to actuarial calculation according to the projected unit credit method under IAS 19, an
actuarial criterion that allows an estimate to be made of the present value of the future obligation, which may
incur variations on the basis of demographic and financial assumptions (career path forecasts, labour agreement
renewals, inflation index trend and the determination of the presumed settlement date, all discounted at present
market rates (future rate forecast curve)). As permitted by IAS 19, actuarial gains and losses are charged directly
to the Shareholders’ Equity (SoRIE method),




                                                                                                                40
Financial Statements at 31.12.2007




                                     41
Balance sheet
(Euro units)




                42
Income statement
(Euro units)




                   43
Statement of recognised Income ad expenses
(Euro units)




                                             44
Statement of Changes in Shareholders’ Equity
(Euro units)




                                               45
Cash flow statement
(Euro units)




                      46
Notes to the Financial Statements

The entry of the Delta Group in the register of Banking Groups gave rise to the obligation on the part of Delta
S.p.A. to prepare the individual Financial Statements and the consolidated Financial Statements as required by
the current laws and regulations for the preparation of the banks’ accounts.


The Notes to the Financial Statements are divided into the following parties:
          Part A - Accounting policies

          Part B - Information on the balance sheet

          Part C - Information on the income statement

          Part D - Segment reporting

          Part E - Information on risks and the related hedging policies

          Part F - Information on the shareholders’ equity

          Part G - Combination transactions concerning businesses or branches of business

          Part H - Transactions with related parties

          Part I - Payment agreements based on own equity instruments


Each part in the Notes to the Financial Statements is composed of sections illustrating each individual aspect of
the corporate management. The sections contain information of both a qualitative and quantitative nature.
Quantitative information generally includes items and tables.
The tables have been prepared complying with the formats envisaged in the current provisions, including when
values have only been entered for some items contained therein.


Below are the parts which have not been reported as they are not relevant to Delta S.p.A.:
Part D:           Segment reporting (for listed Banks)
Part I:           Payment agreements based on own equity instruments




                                                                                                              47
Part A) - Accounting policies
A.1 - General part
Section 1 - Statement of compliance with international accounting standards
The Financial Statements at 31 December 2007, of which these Notes to the Financial Statements form an
integral part, were prepared for the first time according to the “International Accounting Standards” issued by
the “International Accounting Standards Board (IASB)” and based on the related interpretations of the
“International Financial Reporting Interpretations Committee (IFRIC)”, endorsed by the European
Commission, as established in Community Regulation no. 1606 of 19 July 2002, by Legislative Decree no. 38 of
28 February 2005 and in compliance with the Circular Letter no. 262 of 22 December 2005 “Financial
statements of Banks: formats and rules” (I bilanci delle banche: schemi e regolamenti).
The closing Balance Sheet at 31 December 2005 was then restated applying the criteria laid down for the First
Time Adoption and, accordingly, the 2006 Balance Sheet and Income Statement were redefined according to
IAS/IFRS.

Pursuant to IAS 1, paragraph 18, it is hereby declared that no exceptions to IAS/IFRS were made.



Section 2 - General principles for the preparation of financial statements
These notes, which have been drawn up in Euros, are based on application of the following general principles
for the preparation of financial statements, as laid down by IAS 1:



Going concern

“Off-balance sheet” assets, liabilities and transactions are measured in accordance with the value of the
Company’s operations as a going concern.


Accruals basis

Costs and revenues are recognised, independently of the time of their monetary settlement, on an accrual basis
and according to the correlation criteria ;


Fair presentation

The presentation and the classification of the items are kept constant over time in order to ensure that the
information is comparable, unless their variation is required by an International Accounting Standard or an
Interpretation or makes the representation of the amounts more appropriate in terms of significance and
reliability. If a presentation or classification criterion is changed, the new one, where possible, is applied
retrospectively, and in this case the nature and the reason for the change, as well as the items concerned, are also
                                                                                                                 48
specified. For the presentation and classification of the items, formats have been adopted which are the same as
those arranged for by the Bank of Italy for the Financial Statements of the Banks.


Comparative information

The comparative information from the previous financial year is reported for all the data contained in the
accounting statements, unless otherwise prescribed or permitted by an International Accounting Standard or an
interpretation. The opening Balance Sheet at 1 January 2006 was then restated applying the criteria laid down for
the First Time Adoption and, accordingly, the Balance Sheet at 31 December 2006 and the 2006 Income
Statement were redefined according to IAS.


Other information

Pursuant to the provisions under Articles 2497 and ff. of the Italian Civil Code, it should be noted that all the
Group companies are subjected by the Company to direction and coordination; it is also pointed out that the
Company, together with the Subsidiaries, has been exercising, over time, the three-year option for fiscal
consolidation under Article 117 and ff. of the Tuir (Testo Unico delle Imposte sui Redditi, Consolidation Act on
Income Taxes), and that the basic rules in the Group regulations, governing relations arising from such institute,
provide for:

    deferred tax assets and liabilities to remain with Subsidiaries;
    the taxes relating to consolidation adjustments, either positive or negative, made to the consolidated taxable
    income to be acknowledged by the Consolidating company to the subsidiaries which produced them;
    the losses produced during the period of effectiveness of the Group taxation to be transferred to the
    consolidating company and to be deducted by the latter on a definitive basis and to be recognised for an
    amount equal to the Ires tax rate in force in the year when they are produced (33% for 2007).
Below are listed the Group companies which opted for the fiscal consolidation together with Delta S.p.A.:

    River Holding S.p.A.

    Plusvalore S.p.A.

    Carifin Italia S.p.A.

    Detto Factor S.p.A.

    Rete Plus S.p.A.

    Adale Sistemi S.r.l.

    Quorum S.rl.

    Tarida S.r.l.

    Estat S.r.l.

                                                                                                               49
    Mudi S.r.l.

    Amalthea S.r.l.

    Holding Reti S.p.A.

    Sedicibanca S.p.A.

    Home Società Agricola S.r.l.

    Rent Autonoleggio S.r.l.

    Kelp S.r.l.

    Carirete S.p.A.

    Mudi Point S.r.l.

    Ydreia S.r.l.

    Bentos Assicurazioni S.p.A.

Furthermore, note that the company prepares consolidated accounts as it holds controlling interests.

The Financial Statements are made up of the Balance Sheet, the Income Statement, the Statement of
Income/Charges in the Financial Statements, the Statement of Changes in Equity, the Cash Flow Statement, IAS
Reconciliation Statements and the Notes to the Financial Statements, and are also accompanied by the Directors’
Report on the company’s financial and economic position, and the economic results achieved.




Section 3 – Events after the balance sheet date
No events likely to have appreciable consequences on the economic results and such as to be reported in the
Notes to the Financial Statements according to the accounting standards occurred during the period between the
closing date of the Financial Statements and the date of their approval.

However, reference is made to what is illustrated in the Report on Operations in relation to the Events after the
balance sheet date and the outlook.



Section 4 – Other aspects
No further circumstances arose requiring disclosure under IAS 1, paragraph 116, IAS 8, paragraphs 28, letters a),
b), c), d), e) h), 29, letters a), b), e), 30, 31, 39, 40, 49, letters a), e), d).




                                                                                                              50
Use of estimates and assumptions in the preparation of annual accounts
The preparation of annual accounts also involves recourse to estimates and assumptions that may have material
effects on the values entered in the balance sheet and the income statement, as well as on disclosures related to
potential assets and liabilities reported in the accounts. The making of such estimates involves the use of
available information and the adoption of subjective assessments, also based on historic data, which are used in
order to formulate reasonable assumptions to recognise management events. By their nature, the estimates and
assumptions utilised may vary from one period to another and it can therefore not be ruled out that in
subsequent periods the present values entered in the accounts may differ, even to a significant extent, as a result
of the changes in the subjective assessments that have been made.

The main cases mainly entailing the use of subjective assessments on the part of the corporate management are:

     quantification of losses due to the impairment of receivables and, in general, of the other financial assets;

     the determination of the fair value of the financial instruments to be used for the purposes of the
     disclosures to be made in the financial statements;

     the use of measurement models for the recognition of the fair value of the financial instruments not listed
     on active markets;

     the assessment of the fairness of goodwill and of other intangible assets;

     the quantification of the provisions for personnel and provisions for risks and charges;

     the estimates and assumptions on the recoverability of deferred tax assets.

      The description of the accounting policies applied to the main aggregates in the financial statements
provides the detailed information necessary to identify the main assumptions and subjective assessments used in
the preparation of annual accounts. For further detailed information concerning the breakdown and the related
entry values of the items involving the estimates in question, reference is made to the specific sections in the
Notes to the Financial Statements.




                                                                                                                     51
A. 2 - Part related to the main aggregates in the financial statements
The description is made with reference to the phases of classification, entry, valuation, recognition of income
components and derecognition of the different asset and liability entries.
1 – Financial assets held for trading
2 – Financial assets available for sale
3 – Financial assets held to maturity
Delta did not classify financial assets under such categories.



4 - Receivables
Criteria for classification

Receivables fall within the wider category of non-derivative financial assets providing for fixed or determinable
payments, which are not listed on an active market. They originate when Delta provides money, goods and
services directly to the debtor without any intention to trade the related receivable.



Criteria for recognition

Receivables are entered in the accounts only when Delta becomes a party to the loan agreement. Initial
recognition of receivables takes place on the date of payment or, as is the case with debt securities, the date of
settlement, based on the related fair value, which generally corresponds to the amount paid out or the
subscription price, including the costs/income directly connected with, and measurable from the time of the
origin of, the transaction, even if it is settled at a later time. Costs are excluded that have the above characteristics
but are repayable by the debtor.



Criteria for measurement and recognition of income components

After initial recognition, receivables are measured at amortised cost equal to the initial entry value decreased by
capital repayments and value adjustments and increased by write-backs, if any, and amortisation (as calculated
based on the actual interest rate method), of the difference between the amount paid out and the amount
repayable on expiry, attributable to the costs/income charged directly to the individual receivable.
Amortised cost method is not used for short-term receivables and for receivables with no definite term or on
revocation, which accordingly are valued at historical cost .
Before each closing date of the accounts or interim positions, the receivables are tested for objective evidence of
impairment as a result of events that have occurred after their recognition. Essentially, this category includes
receivables that have been attributed the status of doubtful, non-performing or restructured loans according to
the present Bank of Italy rules. Such impaired (non-performing) loans are the object of an analytical valuation


                                                                                                                      52
process and the amount of the value adjustment to each loan is equal to the difference between its book value at
the time of valuation (amortised cost) and the present value of the expected future cash flows.
The expected cash flows take account of the expected recovery time and the presumed realisable value of any
guarantees. The value adjustment is entered in the income statement. The adjustment’s component attributable
to discounted cash flows is released on an accruals basis according to the actual interest rate mechanism.
The original value of a receivable may be restored in subsequent periods to the extent to which the reasons that
led to its adjustment no longer apply, provided that this valuation is objectively related to an event occurring
after the adjustment itself. The write-back is entered in the income statement and may in no event exceed the
amortised cost that the receivable would have had if there had not been any previous adjustments.
Receivables for which no individual objective evidence of impairment has been found - usually regular loans - are
subjected to a collective impairment test carried out by homogeneous receivables categories in terms of credit
risk, and the related loss percentages are estimated taking historic data into account, based on factors that are
observable on the date of measurement and that allow the amount of the latent loss in each receivables category
to be estimated. Value adjustments collectively determined are charged to the income statement.
Interest on receivables are classified under “Interest earned and similar income from receivables from banks and
customers” and are entered on an accruals basis.


Criteria for derecognition

Receivables are derecognised when the entitlement to receive cash flows from financial activities cease to apply,
when all risks and rewards connected with holding of that determined asset have substantially been transferred
or when the receivable is considered definitively irrecoverable after all the necessary collection procedures have
been completed. On the other hand, if the risks and rewards attached to the receivables assigned have been
retained, these continue to be entered under the balance sheet assets even if title to them has effectively been
legally transferred.



5 – Financial assets measured at fair value
Delta did not classify financial assets under this category.




6 – Hedging transactions
Delta did not classify financial assets under this category.




                                                                                                               53
7 – Equity investments
Criteria for classification

This item includes the interests held in subsidiary companies. By subsidiaries are meant the companies in which
Delta holds the power to determine administrative, financial and management decisions, and in which it generally
holds more than half of the voting rights.


Criteria for recognition

The Equity investments portfolio includes equity investments in subsidiary companies.
On initial recognition, the differences between the cost of the equity investments and the corresponding portions
held in the equity of the investee companies are included in the entry value of the equity investments themselves
and are not amortised if they are positive (goodwill). If negative, the differences are recognised under revenues.


Criteria for measurement

The equity investments in subsidiary companies are entered at cost, as adjusted when any impairment losses are
assessed.
Value adjustments to the equity investments for impairment are entered under item 210 in the income statement.


Criteria for derecognition

Financial assets are derecognised when the contractual right to the cash flows from the assets themselves expire
or when they are sold, substantially transferring all the risks and rewards attached to them.




8 – Property, plant and equipment
Criteria for classification

This item includes properties held for instrumental use or for investment purposes. Land and buildings are
separable assets and, as such, are treated separately for accounting purposes. Land has an indefinite life and then
it cannot be depreciated; on the contrary, buildings have a definite life and can be depreciated.


Criteria for recognition

Property, plant and equipment are initially recognised at purchase or production cost, including any additional
charges directly attributable to the purchase and the bringing of the asset to working condition.
Extraordinary maintenance costs are included in the asset’s book value or accounted for as a separate asset, as
appropriate, only when the related future economic benefits are likely to arise in favour of the company and the

                                                                                                                 54
cost may be reliably measured. Costs for repairs, maintenance or other actions aimed at ensuring the functioning
of the assets are charged to the income statement of the period when they are incurred.


Criteria for measurement and recognition of income components

Subsequent to initial recognition, property, plant and equipment, including property investments, are entered at
cost, net of the overall amounts of accumulated depreciation and impairment losses. Property, plant and
equipment are systematically depreciated over their useful life, according to the straight-line method, in relation
to the asset’s useful life. Any land incorporated in the value of the buildings is not subject to depreciation as it
has an indefinite useful life. Depreciation commences when the asset is available and ready for use, or when it is
located in the place where it shall operate and in the necessary conditions for it to operate. In the first financial
year, depreciation is recognised proportionally to the period of effective use of the asset.
Assets subject to depreciation are adjusted for impairment losses, if any, whenever events or changes in
circumstances occur that indicate that the book value might not be recovered. An impairment is recognised for
an amount equal to the excess book value compared to the recoverable value. The recoverable value of an asset
is equal to the lower of the fair value, excluding any selling costs, and the related value in use, to be intended as
the present value of the future flows originated from the asset. Adjustments, if any, are charged to the income
statement. If the reasons for the recognition of the impairment no longer apply, there may be a write-back,
which may not exceed the value that the asset would have had net of the depreciation that has been calculated if
there had been no previous impairment.


Criteria for derecognition

Fixed assets are derecognised from the balance sheet when they are disposed of or when they are permanently
withdrawn from use and accordingly no future economic benefits are expected from its disposal or use. Capital
gains and losses arising from the disposal or sale of property, plant and equipment are determined as the
difference between the net transfer price and the book value of the asset and are recognised in the income
statement at the same date as their derecognition from the accounts.




9 – Intangible assets
Criteria for classification
Intangible assets are entered as such if they are identifiable and originate in legal or contractual rights. Intangible
assets include application software for long-term use and goodwill, if any.


Criteria for recognition
Intangible assets are entered at cost, adjusted by any additional charges only if it is likely that the future economic
benefits attributable to the assets will be realised and if the cost of the asset itself can be reliably measured.

                                                                                                                    55
Otherwise, the cost of the intangible asset is recognised in the income statement in the period when it is
incurred.


Criteria for measurement
Intangible assets with a definite life are valued at amortised cost and are amortised over their useful life and on a
straight-line basis.
If an asset has an indefinite useful life, amortisation is not carried out, but only the periodical assessment of the
fairness of the entry value of the fixed assets. On each closing date of the accounts, the asset’s recoverable value
is estimated if there is any evidence of impairment. The loss amount, which is recognised in the income
statement, is equal to the difference between the asset’s book value and the recoverable value.


Criteria for derecognition
An intangible asset is derecognised from the balance sheet when it is disposed of and when it has totally
exhausted its economic function.




10 - Non-current assets being disposed
Delta does not hold non-current assets and liabilities being disposed of.




11 - Current and deferred taxes
Criteria for classification

Current taxes include the excess amounts of payments (current assets) and obligations yet to be discharged
(current liabilities) for income taxes accrued in the period.
On the contrary, deferred taxes represent income taxes recoverable in future periods in relation to temporary
deductible differences or tax losses not used (deferred tax assets) and income taxes payable in future periods as a
result of temporary taxable differences (deferred tax liabilities).


Criteria for recognition

Tax assets and liabilities for current taxes are recognised at the value due or recoverable against tax profit (loss),
applying the current tax rates and regulations.
The current taxes that at the balance sheet date have not yet been paid, in whole or in part, are entered under the
balance sheet liabilities. In the event of excess payments giving rise to a recoverable credit, this is accounted for
under the balance sheet assets.
Deferred tax assets are only recognised if future income has the full capacity to absorb the temporary deductible
differences, while generally deferred tax liabilities are always accounted for.
                                                                                                                   56
Criteria for measurement of income components

Tax assets and liabilities are entered in the income statement (under the item “Income taxes for the year on
current operations”), unless they arise from transactions whose effects must be attributed directly to equity (in
this case they are charged to equity), using the tax rates that, based on a law already approved at the balance sheet
date, shall be applied in the financial year when the asset will be sold or the liability discharged.




12 – Employee termination indemnities (Staff severance pay or “TFR”)
The liability relating to the staff severance pay is entered in the accounts based on its actuarial value, as it can be
qualified as an employee benefit due based on a defined benefit plan. The actuarial valuation of the staff
severance pay is made based on the “accrued benefit” method through the Projected Unit Credit Method, as
required by Sections 64-66 of IAS 19. This method consists of assessments which express the average present
value of the pension liabilities accrued on the basis of the actual period of service of the employee up to the
moment when such assessment was realised, without projecting the remunerations of the employee according to
the regulatory changes introduced by the social security reform.
The Group has opted to recognise actuarial gains and losses in a special Equity item without recognising them
through profit and loss.
Following the supplementary pension reform under Legislative Decree no. 252/05, the portions of TFR accrued
up to 31.12.2006 will remain with the company, while the portions of TFR accruing starting from 1 January 2007
shall be destined, at the choice of the employee, to supplementary pension schemes or maintained with the
company; this means a change in the accounting treatment of the TFR. Specifically, in the event that the
employee has elected to pay out the TFR into external pensions schemes, the accounting treatment under IAS
19, Employee benefits for defined benefit plans, shall continue to apply to the TFR accrued as at 31 December
2006 (it is understood that, following the reform, the liabilities connected to the TFR accrued shall be re-
calculated in accordance with the actuarial method, without applying the pro-rata calculation on the service
rendered, given that the benefit to be assessed may be considered as fully accrued), while for the portions of
TFR accruing from 1 January 2007 the accounting treatment required for defined contribution plans shall apply.
In the event of defined contribution plans, the company pays some fix contributions and is not required to make
any further payments other than those provided for in the agreement in case the fund does not have sufficient
assets to ensure the payment of the benefit to the employee. Therefore, the obligation of the company towards
the employee is satisfied with the payment of the contributions into the fund.
If the employee has not elected for the payment of the TFR into external pension funds, the portions accrued,
including after 1 July 2007, shall be actually transferred to INPS as Delta is a Company with more than 50
employees, and shall not be maintained within the company, as is the case for the companies with fewer than 50
employees.

                                                                                                                    57
13 – Provisions for risks and charges
Provisions for risks and charges includes appropriations regarding present obligations originating in a past event
in relation to which it is likely that there will be an outflow of economic resources to meet the obligation itself,
provided the related amount can be reliably measured. Where the time element is significant, provisions are
discounted by using current market rates. Appropriations are recognised in the income statement and include
increases to the provision arising from the passage of time. This item also includes any long-term benefits whose
charges are determined according to actuarial criteria.




14 – Payables and outstanding securities
Criteria for classification

Payables fall within the wider category of financial instruments and are made up of those relations for which
there is an obligation to pay certain amounts to third parties at fixed dates.
Outstanding securities include borrowing through certificates of deposit and outstanding bonds, net of
repurchases, if any.


Criteria for recognition

Initial recognition takes place at the time of receipt of sums collected or the issue of debt securities, on the basis
of the fair value of liabilities, which is generally equal to the amount collected or the issue price, as increased by
additional costs/income, if any, directly attributable to the individual borrowing or issue transaction and not
reimbursed by the creditor counterparty.


Criteria for measurement and recognition of income components

After initial recognition, financial liabilities are measured at amortised cost using the actual interest rate method.
This criterion is not applied to short-term liabilities.
Interest expense for debt instruments is classified under interest on payables represented by securities issued.


Criteria for derecognition

Financial liabilities are derecognised from the accounts at the time of discharge of the obligation specified in the
contract. The repurchases of own liabilities are considered as a discharge of the liability or a part of the same.
The difference between the book value of the liability discharged and the amount paid to purchase it is
recognised in the income statement.
In case of repurchase of securities previously issued, the related asset and liability items are derecognised from
the accounts. Should own securities be replaced on the market subsequently to repurchase, this transaction is
considered as a new issue.

                                                                                                                   58
15 – Financial liabilities held for trading and Financial liabilities measured at fair
value
Delta does not hold financial liabilities held for trading, nor financial liabilities measured at fair value.




16 - Foreign exchange transactions
Foreign exchange transactions are recorded at the time of their initial recognition, in money of account, by
applying the exchange rate prevailing at the date of the transaction to the amount expressed in foreign currency.
At each closing date of the accounts, the balance sheet items denominated in foreign currency are measured by
translating them at the exchange rate prevailing at the closing date. Exchange differences arising from the
settlement or translation of monetary elements at exchange rates other than the initial translation rates are
recognised in the income statement of the period when they arise.




                                                                                                                59
Part B) - Information on the Balance Sheet
ASSETS
Section 1 - Cash and cash equivalents - Item 10




Tabella 1: O101000|1 - Individuale



Section 6 - Receivables from banks - Item 60




6.2 Receivables from banks: assets subject to specific hedge

                                                               60
Delta does not recognise receivables from banks subject to specific hedge.




Section 7 - Receivables from customers - Item 70




This item is represented by loans granted, at market rates, to the subsidiaries Adale Sistemi S.r.l. (€/mil. 2.4),
Rent Autonoleggio S.r.l. (€/mil. 6), Quorum (€/th. 250), River Holding S.p.A.(e/mil. 750 uro).




                                                                                                               61
7.3 Receivables from customers: assets subject to specific hedge

Delta does not recognise receivables from banks subject to specific hedge.

Section 10 - Equity investments - Item 100




                                                                             62
It should be noted that the book value of the equity investment held in Rent Autonoleggio S.r.l. (hereinafter
referred to as Rent) was fully written-down at 31 December 2007 against a durable operating loss of €/mil. 1.3
accrued for the subsidiary company.

During the period, the value of the equity investment held in Rent increased by € 500,000 following the payment
made on account of future capital increases in June 2007. On 30 January 2008, the process of recapitalisation of
the investee company Rent was completed following the replenishment of the share capital for an amount of €
250,000 pursuant to Article 2482-ter of the Italian Civil Code.

The recapitalisation transaction was effected by Delta S.p.A. (hereinafter referred to as Delta) only as the
minority shareholder did not exercise its option right.
The financial loss was balanced through the use of reserves made up of profits (€/th. 15.6), capital reserves made
up of payments made by Delta in June 2007, the share capital (€/th. 250) and further contributions from Delta
(€/th. 616).
Given the value of the entrepreneurial project of Rent at the time of the loss balance, Delta took steps to
replenish the Investee Company’s share capital to €/th. 250.
The entry value of the equity investments held in the subsidiaries Amalthea, Home Società Agricola, Mudi and
Mudi Point is higher than the respective portions of shareholder’s equity at 31 December 2007. In any case, no
write-down was made as this negative difference is not to be deemed durable in light of the future forecasts.




The increases for the 2007 financial year relate to the following companies:
    River Holding S.p.A.: for transactions of capital strengthening (€/mil. 80);
    Mudi S.r.l.: for acquisition of minority interests (+ €/th. 36). The company is now wholly owned by Delta;


                                                                                                                 63
    Home Società Agricola S.r.l. and Mudi Point S.r.l.: for balance of the 2006 operating loss (amounting to €/th.
    6.5 and €/th. 64.7, respectively);
    Rent:: payment of €/th. 500 on account of future capital increases.
As previously described in greater detail, the reduction by €/mil. 1.06 relates to the write-down of the equity
investment held in Rent that zeroed the value of the equity investment in the accounts.




                                                                                                               64
Section 11 - Property, plant and equipment - Item 110




                                                        65
Instrumental properties means those properties owned by Delta (as owner or lessor through a finance lease
agreement) and used in the production and provision of services, or for administrative purposes, with a useful
life beyond the financial year.

Property investments means those investments owned by Delta (as owner or lessor through a finance lease
agreement) to earn rents and/or held for the appreciation of the invested capital.

The assets for own use are tangible assets, held to be used in the production or provision of goods and services, or
for administrative purposes, and which are deemed to be used in more than one period.

This item also recognises the assets used by Delta as lessor under finance lease agreements.

In fact it should be noted that the company has available 3 buildings acquired in 2005 and 2006 by finance lease
agreements entered into with the subsidiary Carifin Italia S.p.A.. These properties are located in the municipal
areas of Bologna, Faenza and Ostellato and are leased to Adale Sistemi S.r.l..




                                                                                                                 66
In the absence of new valuations of land and buildings, the value of the leasing agreement was indicated net of
depreciation accounted for up to now.

Section 12 - Intangible assets - Item 120




                                                                                                            67
Section 13 - Tax assets and liabilities - Item 130 of assets and Item 80 of liabilities




                                                                                          68
69
70
Section 15 - Other assets




                            71
LIABILITIES
Section 1 - Payables to banks - Item 10




Section 8 - Tax liabilities - Item 80

This item includes (deferred and current) tax liabilities.
Reference is made to Section 13 of assets “Tax assets and liabilities”.




Section 10 - Other liabilities - Item 100




                                                                          72
Section 11 – Employee termination indemnities - Item 110




11.2 OTHER INFORMATION

Law no. 296 of 27 December 2006 (2007 Budget Law) introduced new rules on staff severance pay (TFR)
accruing from 1 January 2007. The Decree issued by the Ministry of Labour and Social Security on 30 January
2007 laid down the rules implementing the supplementary pension fund reform (the “Implementing Decree”).
The INPS circular letter no. 70 of 3 April 2007 provided instructions for contributing the TFR to the new
Treasury Fund held with the INPS.
As a result of the supplementary pension scheme reform:
           the portions of TFR accrued up to 31 December 2006 shall be maintained within the company;
           the portions of TFR accruing as from 1 January 2007 shall, at the option of the employee, and according
           to the explicit election or implied election procedures:
      a.   be allocated to specific forms of supplementary pension;
      b. be maintained within the company, and the latter shall transfer such portions of the TFR to the Treasury
           Fund held with the INPS.
As regards point b) above, the new regulations do not apply to employers with fewer than 50 employees; for
these companies, the regulations previously in force shall continue to apply.
Therefore, the balance of the staff severance pay for employees present as at 31 December 2007, is comprised
of:
           portions of TFR accrued up to 31 December 2006, for all the employees, regardless of their election for
           the allocation of the respective TFR;
           portions accrued as from 1 January 2007 and up to the date of the election, for the employees who
           elected to allocate their TFR to forms of supplementary pension.
As Delta is a company with more than 50 employees, the portions accrued, including after 1 July 2007, are
actually transferred to INPS and are not maintained within the company, as is the case with companies with
fewer than 50 employees.
                                                                                                               73
Section 12 - Provisions for risks and charges - Item 120




                                                           74
The fund relates to the balance of financial losses of the equity investment held in Rent Autonoleggio S.r.l..
Section 14 - Company’s shareholders’ equity - Items 130, 150, 160, 179, 180, 190 and 200




During the Extraordinary Shareholders’ Meeting of 5 July 2007, Delta resolved a capital increase in divisible
form against payment - with share premiums – for a total of € 230,084,400 and then from € 70,700,000 to €
106,372,000, which was effected according to the following characteristics:
1. through the issue of no. 35,672,000 new ordinary shares, with a par value of € 1.00 each;
2. against payment, and then through cash payment up of the shares subscribed to;
3. with a total share premium of € 194,412,400 and then with a share premium of € 5.45 for each share
    subscribed to;
4. to be subscribed by 30 June 2008 or an earlier date should the same be fully subscribed to previously;
5. effective from the deadline of 30 June 2008 for all subscribers, or an earlier date should the same be fully
    subscribed to before 30 June 2008.
Below are the Shareholders who at the time of the shareholders’ meeting subscribed to the respective share and
exercised their pre-emption right as to any unoptioned shares:
    “Sviluppo Investimenti Estero S.p.A.” (no. 7,491,120 shares for a total par value of € 7,491,120 – total share
    premium of € 40,826,604);

    “Onda S.p.A.” (no. 12,128,480 shares for a total par value of € 12,128,480 – total share premium of €
    66,100,216);

                                                                                                                 75
   “Private shareholder” (no. 356,720 shares for a total par value of € 356,720 – total share premium of €
   1,944,124).

After the expiry of the deadline within which the other Shareholders could have exercised their option right in
December 2007, in the exercise of their pre-emption right, the shareholders Onda S.r.l. and Sviluppo
Investimenti Estero S.p.A. (“SIE S.p.A.”) subscribed to the shares which had remained unoptioned by paying
out the amounts of € 61,465,404.00 and € 39,771,732.00, respectively.
The transaction was closed within the said date of 19 December 2007. At 31 December 2007 the share capital
had then a nominal value of € 106,372,700.00, and was broken down as follows:




                                                                                                            76
77
Other information




                    78
PART C – Information on the income statement
Section 1 - Interest - Item 10 and 20




                                               79
Section 2 - Commissions - Item 40 and 50




                                           80
Section 3 - Dividends and similar income - Item 70




Section 9 - Administrative expenses - Item 150




                                                     81
82
Section 10 - Net provisions for risks and charges - Item 160




                                                               83
The provision recognised in the period represents the charge that shall be borne by the Parent Company towards
the investee company Rent.




Section 11 - Net value adjustments/write-backs to property, plant and equipment – Item
170




Section 12 - Net value adjustments/write-backs to intangible assets - Item 180




Section 13 - Other operating charges and income - Item 180




                                                                                                           84
Section 14 - Profits (Losses) from equity investments - Item 210




Section 18 - Income taxes for the year on current operations - Item 260




                                                                          85
Section 21 - Earnings per share




Tabella 2: O531020|1 - Individuale




                                     86
PART E - Information on risks and the related hedging policies
SECTION 1 - CREDIT RISK
QUALITATIVE INFORMATION

    General aspects

As a bank holding, Delta S.p.A. does not recognise risks on credits, as these are represented only by inter-group
relations, which are considered not significant.


QUANTITATIVE INFORMATION

A.1. Impaired and regular exposures: values, value adjustments, dynamics, economic and local
    distribution




                                                                                                              87
88
89
90
RISK DISTRIBUTION AND CONCENTRATION




                                      91
Relations relate to loans granted to Group companies:
   Adale Sistemi S.r.l. (Innovative IT services and facility management) for € 2,400,000;
   Quorum S.r.l. (Integrated IT data management systems) for € 250,000;
   Rent Autonoleggio S.r.l. (Long-term vehicle renting) S.r.l. for € 6,000,198.




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Tabella 3: O180030|1 - Individuale



Tabella 4: O180040|1 – Individuale




                                     93
SECTION 2 - MARKET RISK
There are no market risks as there are no listed debt and equity securities.


2.2 Interest rate risk - Bank portfolio
Interest rate risks, as measured on the basis of the classification of assets and liabilities by classes of residual
duration (repricing date) are not present given the short-term of variable rate entries.




SECTION 3 - LIQUIDITY RISKS
QUALITATIVE NATURE

        General aspects, process for managing and methods for measuring liquidity risks

QUANTITATIVE INFORMATION




                                                                                                                 94
PART F – INFORMATION ON THE SHAREHOLDERS’ EQUITY
SECTION 1 - The Company’s shareholders’ equity
SECTION 2 - The regulatory capital and requirements
The Company is not subject to supervision and then part F was not compiled.




                                                                              95
Part H - Transactions with related parties
Transactions with related parties
Related parties are the Shareholders and, if any, the Shareholders’ direct and indirect controlling companies, the
directors, the statutory auditors, the executives with strategic responsibilities and their close relatives. All
transactions with related parties are effected at market conditions.


Information on fees due to directors and statutory auditors
Below are the fees for 2007:
Directors’ Fees                            € 431,189
Statutory Auditors’ Fees                   € 136,550
Executives with strategic responsibilities € 928,337




Receivables and guarantees issued in favour of directors and statutory auditors
There are no credit relations and guarantees in favour of directors and statutory auditors.




Information on transactions with related parties
The table below shows all the transactions in being at 31 December 2007 with reference to individual balance
sheet items and all the costs and revenues deriving from the transactions carried out during the financial year and
taken to profit and loss, again by individual item.
Below is reported the breakdown of relations with related parties:
Debit and credit relations mostly relate to current account relations.




                                                                                                               96
97
98
99
Annexes




          100
Board of Statutory Auditors’ Report




                                      101
                                                 DELTA S.p.A.

                                    Parent Company of the Delta Group

                                   Register of Banking Groups no. 20025

                               Share Capital: Euro 106,372,000 fully paid-up

                            Registered Office in Bologna, at Via Cairoli no. 9

                 Fiscal Code and Bologna Register of Companies no. : 02308241203

Bologna R.E.A. (Repertorio Economico Amministrativo, Administrative Economic Register) under no.

429239

                                                      *****

                              BOARD OF STATUTORY AUDITORS’ REPORT

                                on the financial statements at 31 December 2007

Dear Shareholders,

         the Board of Directors has made the financial statements for the financial year ended 31.12.2007

available to us, together with the report on operations, within the deadlines laid down by law in order to make

the necessary checks for the preparation of this report.

The 2007 financial statements represent the first accounts prepared by applying the International Accounting

Standards – IAS and the International Financial Reporting Standards – IFRS issued by the International

Accounting Standard Board – IASB and endorsed by the European Commission pursuant to Regulation (EC)

no. 1606 of 19.7.2002. The financial statements were prepared by also complying with the Bank of Italy’s

Circular Letter no. 262 of 22.12.2005 which defined the formats and rules for the compilation of the financial

statements of the banks, as prepared according to international accounting standards.

The checks on the correct keeping of accounts and the preparation of the financial statements are carried out by

the independent auditors, while it is the responsibility of the Board of Statutory Auditors to fulfil the other duties

under Article 2403 of the Italian Civil Code. During the 2007 financial year, the regular member of the Board

Mr. Federico Caputi resigned. The vacant post was first held by Mr. Giovanni Rosso, while starting from

18.7.2007 Mr. Alberto Travaglini Diotallevi Vitale took office and is still holding office.

Our work complied with the current relevant laws and, pursuant to Article 2429 of the Italian Civil Code, please

                                                                                                                  102
find below our report.

a) Considerations on the annual accounts

The financial statements were audited by the independent auditors PricewaterhouseCoopers S.p.A. which issued

their report with no remarks.

Below are briefly reported the results of the accounts in Euro units:



                                         BALANCE SHEET

Assets                                                                                     368, 247,545

Liabilities (net of results for the period)                                                 362,979,764

Profit for the period                                                                          5,267,781

Total assets                                                                                368,247,545

                                     INCOME STATEMENT

Revenues                                                                                     21,861,037

Costs                                                                                        16,593,256

Profit for the period                                                                          5,267,781

The notes to the financial statements were prepared as required by the current regulations and the legislation

governing the preparation of the financial statements of the banks and mention the capital increase resolved by

the Extraordinary Shareholders’ Meeting of 5.7.2007.

The report on operations, among significant events for the period, mentions the new status of parent company

of a Banking Group acknowledged by the Bank of Italy by order of 17.8.2007.

As to the financial statements at 31 December 2007, we inform you that the same have been checked for

compliance with the current provisions of law, in collaboration with the independent auditors who are

responsible, as said, for the specific auditing activities under letter b) of Article 2409-ter of the Italian Civil Code.;

We share the accounting policies governing the measurement of asset and liability items adopted by the Board of

Directors, as detailed in the Notes to the Financial Statements, as they comply with legal obligations.

                                                                                                                      103
We hereby certify that the financial statement items correspond to the data resulting from the corporate

accounts, also based on the information obtained from the independent auditors and even if we did not carry out

analytical checks of the same.

b) Supervising compliance with the laws, the by-laws and the regulations

We supervised compliance with the law and the by-laws, including by regularly participating in the fourteen

meetings of the Board of Directors’ and the three meetings of the Audit Committee, and we can reasonably

ensure that the relevant resolutions were passed in compliance with the law and the company’s by-laws

During the 2007 financial year, we held meetings with the independent auditors responsible for auditing for the

mutual exchange of significant data and information, and no elements emerged which should be included in this

report.

c) Supervising compliance with the principles of correct management

We obtained information from the directors on the general performance of operations and its outlook, as well as

on the most significant transactions in size or for their characteristics, carried out by the company and we can

reasonably ensure that the relevant actions were undertaken in compliance with the law and the company’s by-

laws and were not clearly imprudent, thoughtless or in conflict with the resolutions passed by the shareholders’

meetings or such as to compromise the integrity of the corporate assets.

Transactions with controlling, subsidiary and Group companies were effected at market conditions.

No complaints were made pursuant to Article 2408 of the Italian Civil Code.

d) Supervising the adequacy of the organisational structure and of the internal control system

We acquire information on and supervised, within the sphere of our responsibilities, the adequacy of the

company’s organisational structures and the actions undertaken to improve its efficiency, also taking account of

the new regulations. During the financial year, the Board of Directors approved a system of corporate delegated

powers based on specific organisational responsibilities which forms part of an operating structure consistent

with the principles laid down by the relevant Authority in relation to corporate governance.

During the period, the conditions under Article 60 of Legislative Decree no. 385 of 1.9.1993 were fulfilled for

the transformation of the Delta group into a Banking Group. Therefore, on 10.7.2007, Delta S.p.A., in its qualify


                                                                                                             104
of parent company, declared the existence of a Banking Group to the Bank of Italy and submitted a request for

its entry in the list under Article 64 of Legislative Decree no. 385 of 1.9.1993. The registration was authorised

effective from 1.7.2007. Given the new status of Banking Group, the Board of Directors approved (i) the structure

of the Delta Group to reach the best equilibrium between production and distribution resources; and (ii) the Group

regulations aimed at ensuring a unitary path. In particular, this second document represents the set of rules

allowing the parent company to carry out direction and coordination activities. The Board of Directors also

approved the regulations of Delta S.p.A. which establish the company’s organisational structure so as to allow the

different functions to provide advice and support to the other Group companies according to responsibilities

assigned by issue and in view of their coordination. The Board of Statutory Auditors is paying particular

attention to the implementation of the plan of organisational actions - promoted by Delta in its quality of Parent

Company and named “Banking Group programme” - aimed at bringing the coordination and risk management

mechanisms in line with the sector regulations peculiar to banking groups, to adopt the regulatory novelties

concerning “compliance” and ”prudential supervision”, as well as to increase efficiency and efficacy of the

control system of the individual Group corporate vehicles.

During the Audit Committee’s meeting of 31 January 2008, a report was submitted on the audit activities carried

out in the three-year period 2005-2007 from which it emerged that, notwithstanding the checks were carried out

in some cases according to time intervals less than scheduled, as a result of the use of the resources dedicated to

them both in extraordinary activities and in the assistance to the inspectors of the Supervisory Authority during

the several meetings held in relation to the Group companies, it is possible to give the opinion that the Auditing

department is generally able to monitor risk areas.

During the financial year, the company’s management continued its activities to complete the internal audit

system which is deemed to be a fundamental element in the Group growth process. These activities are also

carried out on behalf of the sub-holding River Holding and its subsidiaries Sedicibanca, Plusvalore and Carifin,

as well as of Holding Reti and Adale Sistemi.

During the financial year, we were informed that the company has already started “Progetto 231” aimed at

working out an original organisational model with respect to the provisions under Legislative Decree no. 231 of

8.6.2001. The project experienced a slowdown compared to the initial forecasts as it converged into the more

general “Banking Group programme” started following the entry of the company in the list of Banking Groups

                                                                                                               105
which occurred, as said, by the Bank of Italy’s order of 17.8.2007.

Dear Shareholders,

        we deem it appropriate to briefly indicate the most significant events which concerned the company

during the 2007 financial year.

During the Board of Directors’ meeting of 28.2.2007, the 2007-2009 business plan was approved which is based

on the following basic assumptions: (i) the achievement of an adequate capitalisation and (ii) the approval of the

Regulatory Authority’s instructions. The first assumption is strictly connected with the application of the so-

called Basel 2 rules, requiring the Group to increase the capital requirement of the individual group companies

up to achieve an adequate equity level within the time span indicated in the business plan. The proposed capital

increase was submitted to the shareholders during the extraordinary Shareholders’ Meeting of 5.7.2007 which

resolved a capital increase against payment, with share premiums, from € 70,700,000 to € 230,084,000 and then

for a total of € 230,084,000. During the meeting, some shareholders subscribed the new shares allocated to them

and expressed their intention to exercise their pre-emption right to unoptioned shares. This occurred on

19.12.2007 and therefore the capital increase was fully implemented. Following this transaction, the ownership

percentages were modified; the new ownership percentages are reported in the notes to the financial statements.

The dissenting shareholder opposed the shareholders’ meeting resolution bringing an action against Delta S.p.A.

and the shareholders SIE and Onda by a writ of summons served on 18.10.2007.


Dear Shareholders,

        on the basis of the above, we believe that the draft 2007 financial statements, as a whole, were clearly

drawn up and give a true and correct representation of the economic and financial position of Delta S.p.A. at

31.12.2007.

We then express a favourable opinion, with no reservations and exceptions, on the approval of the financial

statements submitted to your attention, made up of the Report on Operations, the Balance Sheet, the Income

Statement, the Statement of Changes in Equity, the Cash Flow Statement, the Notes to the Financial Statements

and the related annexes, as well as on the allocation of profits proposed by the directors.

We thank the Chairman, the Managing Directors and the other Board members for the high level of

professionalism, the constant commitment and the corporate feeling demonstrated in pursuing the considerable

                                                                                                              106
growth of the Company and of the Group.

We thank you for your trust and sincerely wish a prosperous future for the company and the Group.

Bologna, 14 April 2008

THE BOARD OF STATUTORY AUDITORS




(Mr. Mauro Morelli)




(Mr. Gianluca Galletti)




(Mr. Alberto Travaglini Diotallevi Vitale)




                                                                                                    107
Independent Auditors’ report




                               108
 AUDITORS’ REPORT IN ACCORDANCE WITH ARTICLE 2409-TER OF CIVIL
 CODE



 To the Shareholders of
 Delta SpA




 1          We have audited the financial statements of Delta SpA as of 31 December
            2007, which comprise the balance sheet, income statement, statement of
            recognised income and expense, statement of changes in shareholders’
            equity, cash flow statement and the related notes. These financial
            statements are the responsibility of Delta SpA’s Directors. Our responsibility
            is to express an opinion on these financial statements based on our audit.
            The aforementioned financial statements have been prepared for the first
            time in accordance with the International Financial Reporting Standards as
            adopted by the European Union.

 2          We conducted our audit in accordance with Italian standards on auditing. In
            accordance with those standards, the audit has been planned and
            performed to obtain the necessary assurance about whether the financial
            statements are free of material misstatement and, taken as a whole, are
            reliable. An audit includes examining, on a sample basis, evidence
            supporting the amounts and disclosures in the financial statements, as well
            as assessing the appropriateness of the accounting principles used and the
            reasonableness of the estimates made by the Directors. We believe that
            our audit provides a reasonable basis for our opinion.

            The financial statements present, for comparative purpose, the prior year
            corresponding figures prepared in accordance with the same accounting
            principles. Furthermore, the section “Adoption of IAS/IFRS accounting
            standards” explains the effects of the transition to International Financial
            Reporting Standards as adopted by European Union. The information
            presented in the aforementioned section has been examined by us to
            provide a reasonable basis for our opinion on the financial statements as of
            31 December 2007.




Sede legale e amministrativa: Milano 20149 Via Monte Rosa 91 Tel. 0277851 Fax 027785240 Cap. Soc. 3.754.400,00 Euro i.v., C.F. e
P.IVA e Reg. Imp. Milano 12979880155 Iscritta al n. 43 dell’Albo Consob – Altri Uffici: Bari 70125 Viale della Repubblica 110
Tel. 0805429863 – Bologna 40122 Via delle Lame 111 Tel. 051526611 – Brescia 25124 Via Cefalonia 70 Tel. 0302219811 – Firenze
50129 Viale Milton 65 Tel. 0554627100 – Genova 16121 Piazza Dante 7 Tel. 01029041 – Napoli 80121 Piazza dei Martiri 30
Tel. 08136181 – Padova 35137 Largo Europa 16 Tel. 0498762677 – Palermo 90141 Via Marchese Ugo 60 Tel. 091349737 – Parma
43100 Viale Tanara 20/A Tel. 0521242848 – Roma 00154 Largo Fochetti 29 Tel. 06570251 – Torino 10129 Corso Montevecchio 37
Tel. 011556771 – Trento 38100 Via Grazioli 73 Tel. 0461237004 - Treviso 31100 Viale Felissent 90 Tel. 0422696911 – Trieste 34125 Via
Cesare Battisti 18 Tel. 0403480781 - Udine 33100 Via Poscolle 43 Tel. 043225789 – Verona 37122 Corso Porta Nuova 125 Tel.0458002561
3      In our opinion, the financial statements of Delta SpA as of 31 December
       2007 comply with International Financial Reporting Standards as adopted
       by the European Union, as well as with the Italian regulation issued to
       implement Article 9 of Law Decree no. 38/2005; accordingly, they give a
       true and fair view of the financial position, the results of operations, the
       changes in shareholders’ equity and cash flows of Delta SpA for the year
       then ended.

4      As illustrated in the Report on operations, with order of the Bank of Italy of
       17 August 2007, effective from 1 January 2007, the company was entered
       in the Register under Article 64 of the Combined Banking Regulations
       (Testo Unico Bancario) and assumed the status of banking parent
       company.

Florence, 14 April 2008

PricewaterhouseCoopers SpA

Signed by

Lamberto Tommasi
(Partner)


This report has been translated from the original which was issued in accordance with
Italian legislation. References in this report to the Financial Statements refer to the
Financial Statements in original Italian and not to their translation.




                                                                                          (2)
Shareholders’ Meeting Resolutions




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