Annual Accounts and Report as at 30 June 2011 Draft - Mediobanca

Equity investments and AFS shares— this portfolio brings togetherthe Group’s investments in equities and convertible bonds held as availablefor sale, plus its equity investments in Gemina, Pirelli & C. and BurgoGroup. As at 30 June 2011 the portfolio was worth €1,882.6m (€1,792.9m),following purchases of €180.1m, disposals worth €111.3m yielding gains of€10.1m (including €3m in reserves accrued in previous years), impairmentcharges on AFS equities totalling €30.7m, upward adjustments to reflect fairvalue at the reporting date of €43.9m and pro-rata downward adjustments tonet equity amounting to €12.1m (€1.2m of which recorded through the profitand loss account) after booking the dividend on Pirelli & C. (€13.1m). Thenet equity reserve for AFS equities returned to positive territory, at €45.6m,from minus €13.2m at 30 June 2010.As for the equity-accounted companies:Gemina: the 12.53% stake owned in this company is recognized inconsolidated net equity at €196.4m; the twelve months under reviewreflect a loss of €5.1m – connected with the first time adoption of the newIFRIC 12 accounting standard on service concession agreements – plusupward asset adjustments totalling €1.8m.Pirelli & C.: the 4.49% stake owned in this company is recognized at€107m, after profit for the period totalling €2.9m (reflecting the nonrecurringloss incurred in connection with the Prelios spinoff), €13.1m individends reversed, and writedowns to assets totalling €0.1m.Burgo Group: the 22.13% stake in this company is recognized pro-rata tothe Group’s share in the net equity at €82.2m, after profits for the periodtotalling €0.9m and €0.6m in asset adjustments, linked to the positiveperformance of the valuation reserves.Investment banking — during the twelve months Mediobanca retainedits position of leadership in the domestic Italian market, and consolidatedthe flow of cross-border operations in those countries where it has openedbranch offices, which translated to fee income totalling €65m, more thandouble the figure recorded last year, and equal to more than one-third ofthe total for this item. This performance helped net fee and commissionincome, which totalled €190m, to remain near last year’s level (€196)mdespite the weak reference market conditions, due in particular to animpressive performance in M&A (up 35%), and to offset the 25%36 –