With regards to the financings, during <strong>2011</strong> the pool of lenders of the loan agreementdenominated Senior Credit Agreement was extended to include two newlending banks, UBS Ltd and RBS UK: these banks took over EUR 21.1 million fromthe agent bank.The Senior Credit Agreement was signed in previous years by the Parent company,together with other Group companies, with a pool of banks in which The RoyalBank of Scotland plc acted as agent bank, in the framework of the purchase, atthat time, of the indirect controlling interest in <strong>Sisal</strong> S.p.A.At the end of the period the residual D3 line under the Senior Facility was fullydrawn, for about EUR 13.5 million, in order to provide partial financing for theacquisitions carried out during the year and particularly in December.During the period, the Group paid the lending banks about EUR 42.5 million ininterest and fees and repaid principal for approximately EUR 16.9 million, while theParent company paid to its sole shareholder about EUR 14.2 million interest on theoutstanding loan received at the time of the aforementioned purchase transactionand repaid principal for about EUR 2.2 million; an additional EUR 19 million, onthe other hand, was capitalised on the basis of the arrangements that had beenentered into with the lending shareholder.The key performance indicators relating to the net invested capital are summarisedin the table below (figures in thousands of euro):<strong>2011</strong> 2010 ChangeNet invested capital 1,126,138 1,163,228 (37,090)Funding from third parties 1,041,231 1,049,404 (8,173)Net equity 84,907 113,824 (28,917)Debt/equity ratio 12.26 9.22Normalised ROI (EBIT/CIN) 5% 6%Net invested capital is the sum of the statement of financial position items relatedto trade receivables and payables, inventories, fixed assets, employee severanceindemnities, provisions for risks and charges and other assets and liabilities, neutralisingthe effect of temporary mismatches in the settlement of the items relatedto working capital for gaming and services (including cash and cash equivalentsintended for the payment of winnings). Net invested capital totals about EUR 171million.23 DIRECTORS’ REPORT ON operations
The excellent level of operating profitability and constant attention to workingcapital cash flows enabled the Group to generate a strong operating cash flow in<strong>2011</strong>, so that it was able not only to meet its financial debt servicing obligations(scheduled repayments of principal included) but also, and above all, to financethe sizeable programme of investments and acquisitions, worth more than EUR 75million, which was carried out during the year.Consequently, the overall financial debt fell slightly, by about 0.8%, and, as inprior years, the Group complied with the financial covenants provided for in theaforementioned loan agreement in each of the four quarterly monitoring periods.The following are the main developments as regards gaming concessions.Concession for the operation and development of national totalisatornumber games (NTNG)• On April 2, 2008, <strong>Sisal</strong> S.p.A. was declared outright winner of the tender procedureheld in July 2007 for the award of the concession for the operationand development of national totalisator number games, including Enalotto,being chosen in preference to the bids submitted by Lottomatica S.p.A andSnai S.p.A.• On June 26, 2009, after a process lasting approximately two years and thefavourable outcome of the verification processes conducted by the State MonopoliesBoard (AAMS), relating in particular to <strong>Sisal</strong>’s bid, an agreement governingthe concession was entered into between AAMS and <strong>Sisal</strong>.• On the legal front, <strong>Sisal</strong> S.p.A. had to contend with appeals to the administrativetribunal filed by the other two companies participating in the selectionprocedure (namely Snai S.p.A. and Lottomatica S.p.A.) and by other companies(including Stanley International Betting Limited), mainly with a view to gainingaccess to all the documentation and having the provisional and final concessionawards overturned. They include the appeals filed by Snai S.p.A., whichcomplained that the specific points contained in its proposals had not beensufficiently taken into consideration compared with the evaluation of the samepoints described in <strong>Sisal</strong>’s proposals, and by Lottomatica S.p.A., objecting tothe failure of the Examining Commission to carry out the verification procedureon an ‘anomalous’ bid. With specific reference to this latter appeal, on March25, 2009, AAMS announced its decision to instruct the Examining Commissionto carry out a preliminary investigation to verify the suitability of the bidsubmitted by the company. The verification by the Examining Commission wascompleted on May 18, 2009, and established that the technical and economicbid submitted by <strong>Sisal</strong> was suitable and reliable, thus effectively removing thesubstance of the appeal made to the Regional Administrative Tribunal (TAR) byLottomatica S.p.A. against the outcome of the selection procedure.24 <strong>Sisal</strong> ANNUAL REPORT <strong>2011</strong>
- Page 2 and 3: Sisal Annual Report 2011
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During the course of the year, the
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Intangible assets (3)Intangible ass
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Deferred tax assets (5)The informat
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Inventories of finished goods and m
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Current financial assets (10)Curren
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Cash and cash equivalents (13)Cash
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The plans thus structured co-exist
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Sisal S.p.A.Amortisation PlanResidu
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Deferred tax liabilities (17)The in
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C) Current LiabilitiesTrade and oth
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Payables for winnings include jackp
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Taxation payable (25)Taxation payab
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Categories of financial assets and
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ReclassificationThe Group has not c
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• Other receivables include insur
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Market riskMarket risk is the risk
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Notes to the Statementof Comprehens
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Purchases of materials, consumables
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Lease and rent expenses (32)These e
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Finance income and similar (36)Fina
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Annex 1List of Companies Included i
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116 SISAL ANNUAL REPORT 2011
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Sisal Holding Istituto di Pagamento
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