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GAMENET SPA Registered office: Corso dItalia 6 00198 ROME (RM) Share capital: Euro 2,520,000.

.00 (fully paid-up) Tax code 09160031002


Registered with the Rome Company Register no. 1143814

Unaudited Interim Condensed Consolidated Financial Statements

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

The following information is confidential and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Gamenet SpA or any of its subsidiaries or affiliates. Any such securities may not be offered or sold in the United States absent registration unless pursuant to an applicable exemption from the registration requirements of the U.S. Securities Act and other applicable securities laws. The information provided on the following pages is not intended for distribution into or within the United States of America or to U.S. persons other than to qualified institutional buyers as defined under Rule 144A of the U.S. Securities Act. Statements on the following pages which are not historical facts are forward-looking statements. All forward-looking statements involve risks and uncertainties which could affect Gamenet SpAs actual results and could cause its actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, Gamenet SpA.

Managements discussion and analysis of financial condition and results of operations


OVERVIEW
Gamenet SpA (Gamenet or the Company and together with its subsidiaries the Gamenet Group ) is one of the largest players in the gaming industry in Italy based on total bet and distribution network with 3.2 billion in bets collected in the six months ended June 30, 2013 across a network of approximately 13,000 points of sale. As of June 30, 2013, our distribution network included 662 gaming halls. Of the 662 gaming halls in our distribution network, we owned the leases and held the required authorizations for 37 gaming halls (of which 34 were operating under the Gamenet brand through contractual arrangements with third-party managers (gestori) responsible for the dayto-day operations of the gaming halls, including employment matters). In addition, in July 2013, we acquired the leases and are in the process of obtaining the required authorizations for 63 additional gaming halls. The Company and its subsidiaries operate in three main business areas: i) video lottery terminal (VLT), (ii) amusement with prize (AWP) and (iii) Betting and online. VLT VLTs offer a more attractive gaming proposition to players compared to traditional gaming products, due to the greater variety of games and higher average payout ratio, including the possibility to w in a jackpot of up to 500,000. VLTs were first introduced in Italy in August 2010 and represent todays most innovative gaming product. AWP AWPs are represented by the traditional slot machines that provide some level of player interaction employing a graphical reel containing pictures and provide games of controlled chance, paying cash to winners. AWPs were legalized in Italy in 2004. AWPs are primarily based in bars, cafs, tobacconists, gaming and bingo halls. Betting and online Gamenet operates in betting and online activities through 89 betting shop licenses, 96 betting corner licenses and the website Gamenet.it. In particular, we offer physical and online games such as online skill games including poker, casino games, bingo, sport and horse betting.

ECONOMIC TRENDS
The following tables set forth key information relating to the Italian economy trend for the three months ended March 31, 2012 and 2013, June 30, 2012 and 2013 and for the six months ended June 30, 2012 and 2013:
Three months ended March 31 and June 30, Q1 2012 Gross Domestic Product -1.4%
[1]

Q2 2012 [1] -2.6%

Q1 2013[1] -2.4%

Q2 2013[1] -2.1%

Six months ended June 30, 2012 Inflation rate Unemployment rate
(1)

2013(1) 1.2% 1.2%

3.3% 2.7%

In the second quarter of 2013, the Italian GDP decreased by 2.1% compared with the same period of last year. Despite this decrease, our total bet amounted 3,192 million for the six months of June 30, 2013, an increase of 129 million, or 4.2%, from 3,064 million for the six months ended June 30, 2012. ______________________________
(1)

Percentage changes from same period of the last year. Source: Istat

OPERATING INFORMATION
The following table sets forth key information for the VLT activities for the six months ended June 30, 2012 and 2013: VLT KPIs
Six months ended June 30,
2012 2013 ( in thousands, except percentages) 6,383 7,257 5,932 7,196 1,467 1,788 90.1% 89.7% 4.0% 5.0% 6.2% 5.5%

Number of VLTs in operation as of the period end Average number of VLTs in operation for the period Total bet (in millions) Payout (as a percentage of bet) VLT PREU (as a percentage of bet) 1) Revenue/bet ratio (

______________________________
(1)

Revenue/bet ratio is calculated as revenues divided by bet and is expressed as a percentage. Revenue/bet ratio represents the portion of the bet

that is converted into revenues.

As of June 30, 2013, we operated 7,257 VLTs, out of our 7,805 VLT rights, having rolled out approximately 93.0% of our total VLTs rights (88.0% as of June 30, 2012). Total VLT bet increased by 21.9% from 1,467 million for the six months ended June 30, 2012 to 1,788 million for the six months ended June 30, 2013. The following table sets forth key information for the AWP business for the six months ended June 30, 2012 and 2013: AWP KPIs
Six months ended June 30,
2012 2013 ( in thousands, except percentages) 46,939 41,175 45,930 43,291 1,591 1,398 75.0% 75.1% 11.8% 12.7% 14.1% 12.2%

Number of AWPs in operation as of the period end Average number of AWPs in operation for the period Total bet (in millions) Payout (as a percentage of bet) AWP PREU (as a percentage of bet) 2) Revenue/bet ratio (

______________________________
(2)

Revenue/bet ratio is calculated as revenues divided bet and is expressed as a percentage. Revenue/bet ratio represents the portion of the bet that is

converted into revenues.

As of June 30, 2013 we operated 41,175 AWPs, a decrease of 5,764 machines, or 12.3%, from 46,939 as of June 30, 2012 mainly as result of the certification of the AWPs requested by the Amministrazione Autonoma dei Monopoli di Stato (AAMS) in late 2012 which associated cost induced certain distribution managers to release some of their AWPs. Total AWP bet decreased by 12.1% from 1,591 million for the six months ended June 30, 2012 to 1,398 million for the six months ended June 30, 2013. The decrease in AWP bet is primarily attributable to the continued roll out of VLTs, a competitor product to the AWPs.

KEY FINANCIAL INDICATORS


Six months ended June 30, 2012 Revenues 1) EBITDA( 2) Adjusted EBITDA( Operating income Net income ( in thousands) 321,295 35,849 35,994 25,156 12,331 2013 276,177 37,630 38,748 25,726 13,056

___________________________
(1)

We define EBIDTA as profit for the period plus income tax, net finance expenses, impairment of financial assets, depreciation, amortisation and

impairments and extraordinary income / (expenses). EBITDA is a non-GAAP measure. The following is a calculation of EBITDA.

Six months ended June 30, 2012 Profit for the period Income tax Net finance expenses Depreciation, amortisation and impairments Extraordinary (income)/expenses EBITDA ( in thousands) 12,331 7,792 5,063 10,489 174 35,849 2013 13,056 7,840 5,002 12,129 (397) 37,630

___________________________
(2)

We define Adjusted EBITDA as EBITDA adjusted for the effect of the extraordinary items and accruals to provisions for risks and charges. Six months ended June 30, 2012 ( in thousands) 2013 37,630 225 893 38,748

EBITDA Extraordinary items Accruals to provisions for risks and charges Adjusted EBITDA

35,849 (204) 349 35,994

As of December 31, 2012 ( in thousands) Net debt(


(3)

As of June 30, 2013 44,434

3)

61,485

___________________________
See Indebtedness for the breakdown of the net debt.

RESULTS OF OPERATIONS
Six months ended June 30, 2013 compared to the six months ended June 30, 2012
2012 For the six months ended June 30, % of 2013 revenues Change % of revenues (amount) %

(In thousands, except percentages) Revenues Other income Total revenues and income Cost of services Other operating costs Personnel expenses Accruals and provisions Purchases of materials, consumables and merchandise Depreciation, amortisation and impairments Operating profit Finance income Finance expenses Extraordinary Income/(Expenses) Profit Before Tax (PBT) Income tax Profit for the period 321,295 3,469 324,764 (264,753) (17,526) (4,755) (2,030) (55) (10,489) 25,156 560 (5,623) 30 20,123 (7,792) 12,331 -82.4% -5.5% -1.5% -0.6% 0.0% -3.3% 7.8% 0.2% -1.8% 0.0% 6.3% -2.4% 3.8% 100.0% 1.1% 276,177 3,879 280,056 (214,069) (18,761) (5,754) (3,247) (370) (12,129) 25,726 402 (5,404) 172 20,896 (7,840) 13,056 -77.5% -6.8% -2.1% -1.2% -0.1% -4.4% 9.3% 0.1% -2.0% 0.1% 7.6% -2.8% 4.7% 100.0% 1.4% (45,118) 410 (44,708) 50,684 (1,235) (999) (1,217) (315) (1,640) 570 (158) 219 142 773 (48) 725 -14.0% 11.8% -13.8% -19.1% 7.0% 21.0% 60.0% 15.6% 2.3% -28.2% -3.9% 3.8% 0.6% 5.9%

Revenues The following table sets forth an analysis of our revenues by business activity for the six months ended June 30, 2012 and 2013.
For the six months ended June 30, 2012 % total 2013 revenues (In thousands, except percentages) 28.3% 70.0% 1.7% 0,0% 100.0% 99,644 170,225 6,080 228,0 276,177 % total revenues Change (amount) %

VLT revenues AWP revenues Betting and online Gaming halls Total

90,838 224,792 5,654 11,0 321,295

36.1% 61.6% 2.2% 0.1% 100.0%

8,806 (54,567) 426 217 (45,118)

9.7% -24.3% 7.5% -14.0%

Revenues amounted to 276.2 million for the six months ended June 30, 2013, a decrease of 45.1 million, or 14.0%, from 321.3 million for the six months ended June 30, 2012, primarily driven by a decrease in AWP revenues which was partially offset by an increase in VLT revenues, as further discussed below. VLT revenues VLT revenues amounted to 99.6 million for the six months ended June 30, 2013, an increase of 8.8 million, or 9.7%, from 90.8 million for the six months ended June 30, 2012, driven by the continued roll out of the VLTs. In particular, the average number of VLTs increased to 7,196 for the six months ended June 30, 2013 from 5,932 for the six months ended June 30, 2012. VLT revenues did not increase with the same order of magnitude as total bet, due to a decrease in the revenue/bet ratio, from 6.2% for the six months ended June 30, 2012 to 5.5% for the six months ended June 30, 2013, attributable to the
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increase in VLT PREU from 4% in 2012 to 5% from January 1, 2013 which was partially offset by a decrease in payout, from 90.1% for the six months ended June 30, 2012 to 89.7% for the six months ended June 30, 2013. AWP revenues AWP revenues amounted to 170.2 million for the six months ended June 30, 2013, a decrease of 54.6 million, or 24.3%, from 224.8 million for the six months ended June 30, 2012. The decrease in AWP revenues is in part attributable to a decrease in AWP bet, which amounted to 1,398 million for the six months ended June 30, 2013, a decrease of 193 million, or 12.1%, from 1,591 million for the six months ended June 30, 2012, and in part attributable to a decrease in revenue/bet ratio from 14.1% for the six months ended June 30, 2012, to 12.2% for the six months ended June 30, 2013 driven primarily by an increase in AWP PREU from 11.8% in 2012 to 12.7% in 2013. Betting and Online Betting and online revenues were substantially unchanged amounting to 6.1 million for the six months ended June 30, 2013 and 5.7 million for the six months ended June 30, 2012. Other income Other income amounted to 3.9 million for the six months ended June 30, 2013, an increase of 0.4 million, or 11.8%, from 3.5 million for the six months ended June 30, 2012. In particular, other income mainly relates to charge back of penalties to clients which amounted to 1.7 million for the six months ended June 30, 2013 and 1.0 million for the six months ended June 30, 2012, VLT service revenues amounting to 0.9 million for the six months ended June 30, 2013 and 1.0 million for the six months ended June 30, 2012 and other sundry income. Cost of services Cost of services amounted to 214.1 million for the six months ended June 30, 2013, a decrease of 50.7 million, or 19.1%, from 264.8 million for the six months ended June 30, 2012. As a percentage of revenues, costs of services have decreased from 82.4% for the six months ended June 30, 2012 to 77.5% for the six months ended June 30, 2013, driven by the change in the composition of revenues, with a larger contribution from VLTs, which have lower costs of services than the AWPs. In particular, cost of services mainly relates to the compensation paid to the distribution network, which amounted to 201.0 million for the six months ended 2013, a decrease of 51. 1 million, or 20.3%, from 252.1 million for the six months ended June 30, 2012. Cost of services also includes betting winnings which were substantially unchanged, amounting to 4.5 million for the six months ended June 30, 2013 and 4.3 million for the six months ended June 30, 2012. Other operating costs Other operating costs amounted to 18.8 million for the six months ended June 30, 2013, an increase of 1.2 million, or 7.0%, from 17.5 million for the six months ended June 30, 2012. The increase of other operating costs is primarily related to the acquisition of 37 gaming halls in late 2012, for which the Company incurred 0.7 million in gaming hall rental expenses for the six months ended June 30, 2013 compared to 0.1 million for the six months ended June 30, 2012 and an increase in VLT platform licenses driven mainly by an increase in VLT bet, from 1,467 million for the six months ended June 30, 2012 to 1,788 million for the six months ended June 30, 2013. Personnel expenses Personnel expenses amounted to 5.8 million for the six months ended June 30, 2013, an increase of 1.0 million, or 21.0%, from 4.8 million for the six months ended June 30, 2012, and as a percentage of revenues increased from 1.5% to 2.1%. The increase in personnel expenses is primarily related to an increase in the number of people employed by us, from 159 as of June 30, 2012 to 194 as of June 30, 2013, to support the growth in the business. Accruals and provisions Accruals and provisions amounted to 3.2 million for the six months ended June 30, 2013, an increase of 1.2 million, from 2.0 million for the six months ended June 30, 2012, primarily related to accruals to the provision for doubtful receivables, which amounted to 1.6 million for the six months ended June 30, 2013, compared to 1.0 million for the six months ended June 30, 2012 and to the provision for other accruals which amounted to nil for the six months ended June 30, 2012, compared to 0.6 million for the six months ended June 30, 2013. Depreciation, amortisation and impairments Depreciation, amortisation and impairments amounted to 12.1 million for the six months ended June 30, 2013, an increase of 1.6 million, or 15.6%, from 10.5 million for the six months ended June 30, 2012. The increase of depreciation, amortisation and impairments is mainly attributable to the continued roll out of VLTs and increase in
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other tangible and intangible asset amortisation, and in particular, relating to the investment in AWP NOEs (Nulla Osta desercizio) performed in 2012. Operating profit Operating profit amounted to 25.7 million for the six months ended June 30, 2013, an increase of 0.6 million, or 2.3%, from 25.2 million for the six months ended June 30, 2012. Operating profit as a percentage of revenues increased from 7.8% for the six months ended June 30, 2012 to 9.3% for the six months ended June 30, 2013. Finance expenses Finance expenses amounted to 5.4 million for the six months ended June 30, 2013, a decrease of 0.2 million, or 3.9%, from 5.6 million for the six months ended June 30, 2012. In both periods, finance expenses primarily include interest on borrowings. Profit before tax Profit before tax amounted to 20.9 million for the six months ended June 30, 2013, an increase of 0.8 million, or 3.8%, from 20.1 million for the six months ended June 30, 2012. As a percentage of revenues, our profit before tax increased from 6.3% for the six months ended June 30, 2012 to 7.6% for the six months ended June 30, 2013. Income tax Income tax amounted to 7.8 million for the six months ended June 30, 2013 and June 30, 2012. Profit for the period As a result of the factors explained above, profit for the period amounted to 13.1 million for the six months ended June 30, 2013, an increase of 0.7 million, or 5.9%, from 12.3 million for the six months ended June 30, 2012.

Information by business activity The following table sets forth business activity information for the periods indicated.
Business activity reporting for the six months ended June 30, 2012 and 2013
(In thousands, except percentages)

VLT 2012 2013 2012

AWP 2013

Betting and Online 2012 2013

Gaming halls 2012 2013

Eliminations 2012 2013 2012

Total 2013

Bet VLT and Slot payout Net bet

1,466,686 (1,321,656) 145,030

1,788,016 (1,603,464) 184,552

1,591,170 (1,193,100) 398,070

1,398,180 (1,050,386) 347,794

5,654 5,654

6,080 6,080

3,063,510 (2,514,756) 548,754

3,192,276 (2,653,850) 538,426

PREU Bet based revenues Non-bet based revenues Total revenues Other income Total revenues and income Distribution network costs Other direct costs Contribution margin

(58,667) 86,363 4,475

(89,502) 95,050 4,594

(173,278) 224,792 -

(177,569) 170,225 -

5,654 -

6,080 -

(231,945) 316,809 4,475

(267,071) 271,355 4,594

90,838 1,012 91,850

99,644 2,131 101,775

224,792 2,367 227,159

170,225 1,475 171,700

5,654 5,654

6,080 6,080

32 90 122

2,013 622 2,635

(21) (21)

(1,785) (349) (2,134)

321,295 3,469 324,764

276,177 3,879 280,056

(51,952) (8,675) 31,223

(55,233) (9,873) 36,669

(209,310) (1,029) 16,820

(156,839) (628) 14,233

(4,969) (1,264) (579)

(5,315) (1,484) (719)

(117) 5

(2,298) 337

22 1

1,787 424 77

(266,209) (11,085) 47,470

(215,600) (13,859) 50,597

Contribution margin/net bet

21.5%

19.9%

4.2%

4.1%

-10.2%

-11.8%

n.a.

n.a.

8.7%

9.4%

Contribution margin/total revenues and income

34.0%

36.0%

7.4%

8.3%

-10.2%

-11.8%

n.a.

12.8%

14.6%

18.1%

Indirect costs Depreciation, amortisation and impairments Operating profit

(11,825) 2,587 15.4% (10,489)

(12,742) (12,129)

25,156

25,726

VLT VLT business activity results for the six months ended June 30, 2013 have been mainly driven by an increase in bet from 1,467 million for the six months ended June 30, 2012, to 1,788 million for the six months ended June 30, 2013, which was partially offset by an increase in PREU, from 4% in 2012 to 5% in 2013. The increase in bet was supported by the continued roll out of VLTs, in particular, the average number of VLTs increased to 7,196 for the six months ended June 30, 2013 from 5,932 for the six months ended June 30, 2012. Distribution network costs increased from 52.0 million for the six months ended June 30, 2012, to 55.2 million for the six months ended June 30, 2013, as a percentage of total bet, distribution network costs amounted to 3.5% for the six months ended June 30, 2012, compared to 3.1% for the six months ended June 30, 2013. As the majority of distribution network costs are based on bet less payout and PREU, an increase in PREU results in a decrease in distribution network costs. Accordingly, the decrease in distribution network costs, as a percentage of bet was largely attributable to the increase in PREU.

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Contribution margin amounted to 36.7 million for the six months ended June 30, 2013, an increase of 5.4 million, or 17.4%, from 31.2 million for the six months ended June 30, 2012, primarily attributable to the increase in total bet. AWP AWP business activity results for the six months ended June 30, 2013 have been mainly driven by a decrease in AWP bet, which amounted to 1,398 million for the six months ended June 30, 2013, a decrease of 193 million, from 1,591 million for the six months ended June 30, 2012, and by an increase in AWP PREU from 11.8% in 2012 to 12.7% in 2013. Distribution network costs decreased from 209.3 million for the six months ended June 30, 2012, to 156.8 million for the six months ended June 30, 2013, and as a percentage of total bet, amounted to 13.2% for the six months ended June 30, 2012, compared to 11.2% for the six months ended June 30, 2013. Such decrease is primarily attributable to the previously described decrease in total bet and to an increase in AWP PREU. Contribution margin amounted to 14.2 million for the six months ended June 30, 2013, a decrease of 2.6 million, or 15.4%, from 16.8 million for the six months ended June 30, 2012, primarily attributable to the decrease in total bet. Betting and online Betting and online revenues amounted to 6.1 million for the six months ended June 30, 2013, an increase of 0.4 million, or 7.5%, from 5.7 million for the six months ended June 30, 2012, whilst the contribution margin amounted to a loss of 0.6 million for the six months ended June 30, 2012, and a loss of 0.7 million for the six months ended June 30, 2013.

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Cash Flows The table below sets forth a summary of our consolidated statement of cash flows for the periods indicated.
Six months ended June 30, 2012 2013 Cash flows provided by operating activities Cash flows provided by (used in) investing activities Of which: movements in restricted cash Other investing activities Cash flows provided by (used in) financing activities Total increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period ( in thousands) 9,665 32,395 (9,761) 513 (195) 11,247 (9,566) (10,734) 527 (33,012) 431 (104) 1,042 3,310 1,473 3,206

Cash provided by operating activities amounted to 9.7 million for the six months ended June 30, 2012 compared to 32.4 million for the six months ended June 30, 2013. The increase in cash provided by operating activities is principally related to the cash generated from working capital due to the different timing in receiving the payment of AAMS guarantee deposit receivable compared with the previous period. In particular, 2012 AAMS guarantee deposit amounting to 31.4 million was received on June 18, 2013 whilst 2011 AAMS guarantee deposit amounting to 27.5 million was received on July 13, 2012. Cash flows used in investing activities amounted to 9.8 million for the six months ende d June 30, 2012 compared to 0.5 million generated for the six months ended June 30, 2013. The increase in cash provided by investing activities is mainly related to the release of cash which as of December 31, 2012 was held in the UniCredit restricted cash account as part of the guarantees given to AAMS, and released in January 2013. Other investing activities for the six months ended June 30, 2012 amounted to 9.6 million and mainly included: Investments in property, plant and equipment amounting to 6.5 million, primarily related to 5.9 million for the investment to support the roll out and growth in the VLT business. Investments in intangible assets amounting to 2.1 million, relating primarily to 1.0 million to the leasehold improvements for the Company head office and 0.4 million to the purchase of on-line gaming licenses. Other investing activities for the six months ended June 30, 2013 amounted to 10.7 million and mainly included: Investments in property, plant and equipment amounting to 4.7 million, primarily related to 2.3 million as investment to support the roll out and growth in the VLT business and associated equipment, cash desks and update of the hardware supporting the network of AWP machines and 2.4 million for the increase of assets under construction and payments on account due mainly to the payment on account for the purchase of the new gaming halls which was concluded in July 2013. Investments in intangible assets amounting to 1.7 million, relating primarily to the certification costs for new NOEs amounting to 0.8 million and 0.4 million for leasehold improvements for the Company head office. Cash flows used in financing activities amounted to 0.5 million for the six months ended June 30, 2012 and 33.0 million for the six months ended June 30, 2013. The cash used in financing activities during the six months ended June 30, 2013 mainly related to the scheduled repayment of the Existing Senior Secured Credit Facility of 22.6 million and decreases in overdraft balances from UniCredit credit facilities.

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Capital Expenditure The table below sets forth a breakdown of total capital expenditure incurred by the Group for the six months ended June 30, 2012 and 2013.
Six months ended June 30, 2012 % of total ( in thousands, expect percentages) Plant and machinery Industrial and commercial equipment and hardware Other assets Assets under construction and payment on account Property, plant and equipment Intangible assets Total capital expenditures 72 6,401 18 6,491 2,120 8,611 0.9% 74.3% 0.2% 0.0% 75.4% 24.6% 100.0% 56 2,187 18 2,453 4,714 1,724 6,438 0.8% 34.0% 0.3% 38.1% 73.2% 26.8% 100.0% 2013 % of total

Investments in industrial and commercial equipment and hardware in the six months ended June 30, 2013 amounted to 2.2 million and mainly related to investments to support the roll out and growth in the VLT business and update of the hardware supporting the network of AWP machines. Assets under construction and payment on account in the six months ended June 30, 2013 amounted to 2.5 million and mainly related to the payment on account for the purchase of the new gaming halls. Investments in intangible assets in the six months ended June 30, 2013 amounted to 1.7 million and mainly related to the NOEs amounting to 0.8 million, which we capitalised in 2013, 0.4 million related to the update of the accounting system and leasehold improvements for our head office amounting to 0.4 million.

Indebtedness Our main sources of financing have historically been the Existing Senior Secured Credit Facility, Shareholder Loans and overdraft facilities primarily related to financing PREU. The following table sets forth our total debt and net debt as of December 31, 2012 and June 30, 2013.

As of December 31, 2012 (in thousands) Cash at banks Financial assets (


1)

As of June 30, 2013 3,206 4,685 7,891

3,310 16,950 20,260

Bank borrowings Existing Senior Secured Credit Facility UniCredit credit facility 74,474 6,888 81,362 Total Bank Borrowings Other financial liabilities Shareholder Loans Other shareholder loans Total debt Net debt
(2)

51,944 111 52,055

383 56,418 3,600 141,763 61,485

270 57,848 110,173 44,434

____________________________
(1)

As of June 30, 2013, represents investments in bonds amounting to 0.8 million and financial assets related to restricted cash in connection with concession agreements amounting to 3.0 million.

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(2)

Net debt is a Non-GAAP Financial Measure and is calculated as the total consolidated debt of the Company excluding amounts due under the Shareholder Loan and amounts due to other shareholders and net of cash at banks, investments in bonds and financial assets related to restricted cash in connection with concession agreements.

Net debt amounted to 44.4 million as of June 30, 2013, a decrease of 17.1 million, from 61.5 million as of December 31, 2012. Such decrease was primarily attributable to (i) 12.4 million decrease in financial assets due to the release in January 2013 of a restricted cash account with UniCredit fo r an amount of 12.0 million which was used to partially repay the Senior Secured Credit Facilities and (ii) 3.6 million decrease in other shareholder loans mainly due to the repayment of shareholder loan to Romagna Giochi Srl as result of the acquisition by Gamenet SpA of the remaining 40% shares in Gamenet Entertainment Srl. On August 1, 2013 the Company issued 200 million of senior secured notes, the proceeds of which were partially used to refinance our existing debt and in particular, to repay the senior secured credit facilities, bank overdraft and shareholder loans. The notes bear fixed rate interest of 7.25% per annum and mature in 2018.

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GAMENET SPA CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2013 SHEET

AS OF JUNE 30, 2013

(in thousand of Euro) As of December 31, 2012 As of June 30, 2013

Assets

Property, plant and equipment Goodwill Intangible assets Investments Deferred tax assets Non-current financial assets Other non-current receivables Non-current trade receivables Total non-current assets Deferred tax assets Inventories Trade receivables Current financial assets Other current receivables Cash at banks Total current assets Total assets

note 6 note 7 note 8 note 9 note 10 note 11 note 12

29,354 21,471 124,805 1,160 8,875 12,428 2,541 5,695 206,329 1,686 23 51,665 12,781 52,264 3,310 121,729 328,058

30,440 20,188 118,585 283 9,911 16,718 2,683 5,523 204,331 1,345 31 40,140 1,894 22,680 3,206 69,296 273,627

note 12 note 10 note 11 note 13

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GAMENET SPA CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2013 SHEET

AS OF JUNE 30, 2013

(in thousand of Euro) Shareholders Equity As of December 31, 2012 2,520 504 23,125 5,865 (14,180) 21,757 39,591 500 (206) 294 39,885 As of June 30, 2013 2,520 504 23,125 5,865 7,577 13,056 52,647 52,647

Share capital Legal reserve Share premium reserve Other reserves Retained earnings (losses) Net income for the period Total shareholders equity attributable to the Group Equity attributable to minority interest Loss for the period attributable to minority interest Total shareholders equity attributable to minority interest Total Shareholders Equity Liabilities Non-current financial liabilities Employee benefit liability Deferred tax liabilities Provisions for risks and charges Trade payables Tax payable Other non-current liabilities Total non-current liabilities Current financial liabilities Trade payables Other current liabilities Tax payable Total current liabilities Total liabilities Total liabilities and shareholders equity note 14

note 14

note 15

101,390 1,126 137 6,792 1,398 3,704 25,816 140,363 40,373 20,513 21,107 65,817 147,810 288,173 328,058

88,714 1,360 103 6,433 320 23,036 119,966 21,459 15,418 17,276 46,861 101,014 220,980 273,627

16

GAMENET SPA CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2013

(in thousand of Euro) For the six months ended June 30, 2012 Revenues Other income Total revenues and income Cost of services Other operating costs Personnel expenses Accruals and provisions Purchases of materials, consumables and merchandise Depreciation, amortisation and impairments Operating profit Finance income Finance expenses Extraordinary income/(expense) Profit before tax Income tax Net income for the period note 25 note 23 note 23 note 24 note 22 note 18 note 19 note 20 note 21 note 17 321,295 3,469 324,764 (264,753) (17,526) (4,755) (2,030) (55) (10,489) 25,156 560 (5,623) 30 20,123 (7,792) 12,331 June 30, 2013 276,177 3,879 280,056 (214,069) (18,761) (5,754) (3,247) (370) (12,129) 25,726 402 (5,404) 172 20,896 (7,840) 13,056

17

GAMENET SPA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2013

(in thousand of Euro)


Share Capital Share Premium Reserve Other reserves Retained losses Total Group Equity Non Controlling Interest Equity NonControlling Interest Profit (Loss)

Description

Legal Reserve

Total Consolidated Equity

Balance as of December 31, 2011 Allocation of the result for the 2011 period Net income for the period Balance as of June 30, 2012

2,520 2,520

240 264 504

23,125 23,125

5,865 5,865

(13,916) (264) 12,331 (1,849)

17,835 12,331 30,166 -

17,835 12,331 30,166

(in thousand of Euro)


Share Capital Legal Reserve Share Premium Reserve Other reserves Retained earnings Total Group Equity Non Controlling Interest Equity NonControlling Interest Profit (Loss)

Description

Total Consolidated Equity

Balance as of December 31, 2012 Allocation of the result for the 2012 period Increase of the investment in Gamenet Entertainment Srl Net income for the period Balance as of June 30, 2013

2,520 2,520

504 504

23,125 23,125

5,865 5,865

7,577 13,056 20,633

39,591 13,056 52,647

500 (206) (294) -

(206) 206 -

39,885 (294) 13,056 52,647

18

GAMENET SPA CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2013

(in thousand of Euro) For the six months ended June 30, 2012 Net income for the period Adjustments to reconcile the net income for the period to the cash flow from operating activities: Amortisation and depreciation Change in provisions for risks and losses Change in Employees termination pay Net change in deferred tax assets Impairment of receivables Adjustment accrued interest Change in net working capital Cash flows from operating activities (A) Cash flow from investing activities Investments net, in property, plant and equipment Investments net, in intangible assets Acquisition of investments Change in receivables and other financial assets Cash flows from (used in) investing activities (B) Cash flow from financing activities Net change in financial liabilities Cash flows from (used in) financing activities (C) Total cash flows (D = A + B + C) Cash at banks at the beginning of the period (E) Cash at banks at the end of the period (F = D + E) 527 527 431 1,042 1,473 (33,012) (33,012) (104) 3,310 3,206 (6,491) (2,120) (842) (308) (9,761) (4,714) (1,724) (677) 7,628 513 10,489 365 180 1,013 1,961 (16,674) 9,665 12,129 (392) 234 (695) 1,581 1,430 5,052 32,395 12,331 June 30, 2013 13,056

19

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

1. General information Gamenet SpA (the Company and together with its subsidiaries the Group) operates in the Italian gaming industry. The Group is a concessionaire for i) the creation and management of the online network to manage legal public games by AWP and VLT machines, the concession for which has been renewed for nine years on March 20, 2013; ii) betting operations through the activation and management of the distribution network and iii) on-line gaming operations. Furthermore, Gamenet SpA directly manages through one of its subsidiaries small-medium size gaming halls. The registered office of the Company is Corso dItalia 6, Rome, Italy. 2. Basis of preparation These unaudited interim condensed consolidated financial statements of and for the six months ended June 30, 2013 (the Unaudited Interim Condensed Consolidated Financial Statements) have been prepared in accordance with OIC 30, Interim financial reporting, which governs interim financial reporting. OIC 30 permits a significantly lower amount of information to be included in interim financial statements from what is required for annual financial statements prepared in accordance with the accounting principles established by Organismo Italiano di Contabilit (O.I.C.). The Interim Condensed Consolidated Financial Statements are prepared in condensed form and should be read in conjunction with the Companys consolidated financial statements as of and for the year ended December 31, 2012 (the 2012 Consolidated Financial Statements). Unless otherwise stated, all amounts are disclosed in thousands of Euro. The Unaudited Interim Condensed Consolidated Financial Statements were approved by the Companys Board of Directors on September 20, 2013. 3. Change in scope of consolidation In March 2012 we incorporated Gamenet Entertainment Srl, for which we held 60% shareholding, as part of our strategy to expand our concession based business into the retail segment. Gamenet Entertainment Srl was incorporated to manage small to medium size gaming halls and has been consolidated in our financial statements since August 2012. In February 2013 we acquired 10% of Gamenet Entertainment Srl and in April 2013 we acquired the remaining 30% shareholding held by Romagna Giochi Srl. Gamenet Entertainment Srl is therefore now 100% owned by Gamenet SpA. 4. Accounting policy The accounting policies adopted are consistent with those applied in the 2012 Consolidated Financial Statements, that is the law governing the preparation of consolidated financial statements, as interpreted and integrated by the accounting principles established by O.I.C.. Reclassifications were made to certain lines of the consoalidated financial statements at December 31, 2012 for purposes of comparison. In particular, the effect of the reclassifications are summarised below:
(in thousand of Euro) Assets Other non-current receivables Trade receivables Other current receivables As of December 31, 2012 4,065 51,642 52,588 As of December 31, 2012 (reclassified) 2,541 51,665 52,264

(in thousand of Euro) Liabilities As of December 31, 2012 As of December 31, 2012 (reclassified)

Provisions for risks and charges Current trade payables Current financial liabilities

9,305 1,256 39,827

6,792 1,398 40,373

20

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

5. Information on transactions with related parties The following table shows information relating to transactions with related parties as of December 31, 2012 and June 30, 2013 and for the six months ended June 30, 2012 and 2013. The commercial transactions are mainly related to operations with the distribution network. The financial transactions are related to the loans granted by the shareholders and other related entities. Tax transactions relate to the effects of the tax consolidation mechanism applied in prior years, in which Criga was the tax consolidation Group parent.
(in thousand of Euro) As of December 31, 2012 Nature of transaction Shareholders: TCP Eurinvest Lux S. rl Criga Receivables Payables As of June 30, 2013 Receivables Payables

Financial Commercial / Tax

3,925 3,925

56,418 4,939 61,357

57,848 2,017 59,865

Non-consolidated subsidiaries: Verve SpA Gamenet Formazione Srl Financial Commercial / Compensation 10 10 Other related entities: Romagna Giochi Srl (1) Italgiochi 2001 Srl C.N.G. Srl (1) Extra Games Srl (1) M Group di Minopoli Pietro Sas (1)
(1)

16 18 34

8 8

Commercial / Financial Commercial Commercial Commercial Commercial

5,642 524 63 917 399 7,545

4,358 14 4,372

3,973 452 49 563 354 5,391

792 9 18 8 827

Total

11,480

65,729

5,425

60,700

21

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

(in thousand of Euro) For the six months ended June 30, 2012 Nature of transaction Shareholders: TCP Eurinvest Lux S. rl Criga Revenues Expenses For the six months ended June 30, 2013 Revenues Expenses

Financial Commercial / Tax

7 7

1,961 1,961

503 503

2,098 6 2,104

Key Management Personnel: Antonini Casalone

Compensation Compensation

189 200 389

100 100

Non-consolidated subsidiaries: Gamenet Formazione Srl Commercial 2 2 Other related entities: Romagna Giochi Srl (1) Italgiochi 2001 Srl C.N.G. Srl
(1) (1)

7 7

7 7

2 2

Commercial Commercial Commercial Commercial Commercial

33,566 2,834 796 2,400 1,493 41,089

164 1 165

27,002 1,636 601 1,308 1,352 31,899

Extra Games Srl (1) M Group di Minopoli Pietro Sas (1)

Total

43,446

675

34,105

During the first half of 2013 Gamenet SpA bought the remaining stake in Gamenet Entertainment Srl from Romagna Giochi Srl. The cost of the acquisition was offset with the receivable from Romagna Giochi Srl. ____________________________
(1)

It should be noted that the revenues generated by these counterparties are not included in table above as these proceeds, despite being collected by such counterparties, originate directly from the collection generated by the customers.

6. Property, plant and equipment


(in thousand of Euro) Industrial and commercial equipment and hardware 39,408 (14,064) 25,344 2,262 (79) (3,139) 4 24,392 Assets under lease Assets under construction and payments on account 198 198 2,453 2,651

Buildings

Plant and machinery

Vehicles

Other assets

Total

Historical cost Prior-year accumulated depreciation Net book value as of December 31, 2012 Additions for the period Disposals for the period Depreciation for the period Use of accumulated amortisation Net book value as of June 30, 2013

884 (144) 740 (13) 727

1,872 (628) 1,244 56 (138) 1,162

8,199 (7,680) 519 (171) 348

47 (47) -

1,820 (511) 1,309 18 (167) 1,160

52,428 (23,074) 29,354 4,789 (79) (3,628) 4 30,440

22

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

Additions to property, plant and equipment mainly relate to the purchase of new VLT machines (Spielo type), related cash desks (Spielo type) and update of the hardware supporting the network of AWP machines (particularly related to GPS equipment). These investments are mainly driven by planned VLT roll out, increased capacity and the change of AWP network technology. The increase of assets under construction and payments on account is mainly related to the payment on account for the purchase of gaming halls which was concluded in July 2013. The transfer of the gaming halls was effective starting from August 1, 2013. 7. Goodwill
(in thousand of Euro) As of June 30, 2013 (1,490) 20,188 (1,490) 20,188

Goodwill

As of December 31, 2012 21,471 21,471

Increases 207 207

Amortisation

Goodwill includes: Euro 1,981 thousand, from the transfer of the business branch from Citec-Criga, holder of the concession until 2006 to Gamenet SpA; Euro 4,351 thousand, for the acquisition of 37 gaming halls on August 4, 2012; Euro 13,660 thousand, for the acquisition of Gamenet Arcades Srl on November 25, 2010; Euro 196 thousand, for the purchase of an additional 40% investment in Gamenet Entertainment Srl. The increase of the period is related to the acquisition of the remaining 40% interest in Gamenet Entertainment Srl. 8. Intangible assets
(in thousand of Euro) Research, Formation, development start-up and and similar costs marketing costs Historical cost Prior-year accumulated amortisation Net book value as of as of December 31, 2012 Additions for the period Disposals for the period Amortisation for the period Use of accumulated amortisation Reclassification Net book value as of June 30, 2013 7,553 (5,445) 2,108 (518) 1,590 1,074 (660) 414 (107) 307 Industrial patents Assets under construction and payments on account Other intangible assets

Concessions

Total

1,645 (1,001) 644 38 (97) 585

133,529 (17,817) 115,712 42 (5,778) 109,976

118 118 811 (69) 860

7,913 151,832 (2,104) (27,027) 5,809 124,805 1,265 (1,378) (510) 12 69 5,267 2,156 (1,378) (7,010) 12 118,585

In 2012 due to a new legislation, we were required to pay an one-off fee for each license declared to AAMS and for each new NOE (certification costs) for AWPs requested to AAMS starting from December 2012. A portion of the cost incurred was capitalised in intangible assets in 2012. In 2013 we re-charged a portion of such cost to the distribution network. Disposals of Euro 1,378 thousand relates for Euro 1,372 to the portion of the previously capitalised cost which we re-charged to the distribution network of TIR. Additions to assets under construction and payments on account is mainly related to the capitalisation of the costs for the update of the accounting system (SAP). Additions of Euro 1,265 thousand in other intangible assets is mainly related to the certifications costs for new NOEs for Euro 805 thousand as explained above and for Euro 429 thousand to the leasehold improvements for the Company head office. 9. Investments Investments amount to Euro 283 thousand as of June 30, 2013 and relate to the investments in Verve SpA and Gamenet Formazione Srl, both non-consolidated subsidiaries. The decrease of Euro 877 thousand from Euro 1,160 thousand as of December 31, 2012 is mainly related to the reclassification of the investment in Criga as a current financial asset considering the decision of the Company to dispose of it, subject to the market conditions.

23

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

10. Financial assets


(in thousand of Euro) As of June 30, 2013 1,054 1,054 11,954 840 4,500 147 63 54 1,054 18,612

As of December 31, 2012 Restricted cash Bonds Own shares Other guarantee deposits Certificate of deposit Investment fund Other investments 23,201 1,260 500 185 63 25,209

Increases

Decreases

Reclassification

1,056 4,000 7 54 5,117

(12,303) (420) (45) (12,768)

Financial assets amount to Euro 18,612 thousand as of June 30, 2013, a decrease of Euro 6,597 thousand from Euro 25,209 thousand, as of December 31, 2012. The decrease in financial assets is primarily related to cash which had been held in a restricted account by UniCredit from October 2012 whilst the re-negotiation of certain guarantees was in progress. The negotiation was completed in January 2013 and the restriction was released. On May 30, 2013 in order to clarify some conditions to the transactions between Gamenet SpA, Criga scarl, Trilantic Capital Partners Lux Eurinvest SA, the aforementioned partners signed the final agreement to settle previous outstanding disputes which has resulted, among other things, in the acquisition by Gamenet SpA of n. 200,000 shares for a total of Euro 4 million. The reclassification of Euro 1,054 thousand, relates to the investment in Criga, following the decision taken by the Company to dispose of it, subject to the market conditions. 11. Other receivables
(in thousand of Euro) As of June 30, 2013 15,621 1,269 2,541 2,208 1,113 2,611 25,363

As of December 31, 2012 AAMS guarantee deposits Tax payments on account Receivables from tax authorities for refund application Receivables from Criga Other prepaid expenses Prepaid expenses for commission on guarantees Other 31,439 12,319 2,541 3,635 2,380 353 2,137 54,804

The AAMS guarantee deposits includes a portion equal to 0.5% of the turnover on the devices connected to the telematic network. This deposit will be returned to the Company on the basis of the achievement of specific levels of service. Historically the Company has complied with the levels of service requested by AAMS. It should be noted that in June 2013, AAMS has returned the 2012 guarantee deposits for a total amount of Euro 31,420 thousand. As part of the agreement among Gamenet SpA, Criga Scarl and Trilantic Capital Partners Lux Eurinvest SA discussed above, receivables from Criga have been settled in May, 2013. The agreement provides, among other things, the sale of Gamenet's shares to Gamenet itself which payment primarily was made settling outstanding trade receivables to Criga. The provision for doubtful other receivables amounts to Euro 75 thousand as of June 30, 2013, an increase of Euro 56 thousand from Euro 19 thousand as of December 31, 2012.

24

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

12. Trade receivables


(in thousand of Euro) As of June 30, 2013 53,739 10,568 5,756 5,210 4,441 1,738 1,413 528 83,393 45,168 9,264 4,641 4,424 6,253 1,852 1,157 462 73,221

As of December 31, 2012 PREU tax Concessionaire's remuneration Concession Fee Guaranteed by formal commitments Other receivables from TIR Penalties Interest on delayed payment Other

The provision for doubtful trade receivables amounts to Euro 27,558 thousand as of June 30, 2013, an increase of Euro 1,525 thousand from Euro 26,033 thousand as of December 31, 2012. 13. Cash at banks
(in thousand of Euro) As of June 30, 2013 2,802 392 12 3,206

As of December 31, 2012 Bank deposits Cash from direct gaming facilities Cash on hand and cheques 2,862 427 21 3,310

14. Financial liabilities


(in thousand of Euro) As of June 30, 2013 53,600 6,417 60,017 74,474 6,888 81,362 83 301 384 Total 141,763 50,000 7,848 57,848 51,944 111 52,055 3 267 270 110,173

As of December 31, 2012 Shareholder Loans Due to shareholders for loans Due to shareholders for interest Bank borrowings Bank loans Bank overdrafts Other financial liabilities Finance leases Banca Italease mortgage

The decrease in shareholders loans is related to the acquisition by Gamenet SpA of 10% of Gamenet Entertainment Srl in February 2013 and the remaining 30% shareholding in April 2013 held by Romagna Giochi Srl. Shareholders loans as of June 30, 2013 relate entirely to amounts due to Trilantic Capital Partners Lux Eurinvest SA. On August 1, 2013, the Company issued senior secured notes with a principal amount at Euro 200 million. Part of the proceeds from the issuance of the notes were used to repay the senior secured credit facilities, the bank overdraft and the shareholder loans.

25

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

15. Provision for risks and charges


(in thousand of Euro) As of June 30, 2013 1,894 2,509 2,030 6,433

As of December 31, 2012 Provision for other legal disputes Provision for prior-year penalties and interest Other provisions 2,253 2,509 2,030 6,792

Increases 260 260

Decreases (619) (619)

As of June 30, 2013 provisions for risks and charges relate to: Provision for other legal disputes mainly relating to restructuring provisions amounting to Euro 1,120 thousand; Provision for penalties and interest relating to estimated penalties due to AAMS for the delayed payment of the PREU tax for the years prior to 2011; Other provisions mainly relating to provision for penalties due to AAMS amounting to Euro 1,416 thousand for exceeding the number of gaming units per square meter established by AAMS. With respect to the ongoing dispute with the State of Court of Auditors refer to Note 26 Subsequent Events. Regarding the AAMS "fourth penalty", amounting to Euro 6.5 million, against which Gamenet SpA had appealed to the TAR (Regional Administrative Court), on June 19, 2013 the Company received the favourable resolution issued by TAR which annulled the penalty originally imposed. 16. Memorandum accounts
(in thousand of Euro) As of December 31, 2012 Guarantees issued by third parties to AAMS for gaming concession to AAMS for betting concession other guarantees As of June 30, 2013

57,217 5,677 694

53,119 11,347 802

Guarantees given to third parties to UniCredit 6,688

Guarantees received from third parties from the distribution network 22,888 23,298

Guarantees issued by third parties Guarantees provided to AAMS mainly relate to bank guarantees indemnifying AAMS in the event that we fail to adequately perform our gaming tax obligations under the concession. The decrease compared to December 31, 2012 mainly relates to the expiry of guarantees linked to the former concession. Other guarantees primarily relate to the guarantee relating to the lease of our headquarters and the guarantee provided relating to the payment of the mortgage obligation of Gamenet Arcades Srl.

26

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

Guarantees given to third parties Guarantee issued by Gamenet SpA in favour of UniCredit relating to a counter-guarantee for the guarantee issued by Unicredit on behalf of Gamenet Scommesse SpA for the participation to the AAMS tenders. Guarantees received from third parties Guarantees issued from the distribution network in favour of Gamenet SpA in relation to the guarantees issued by UniCredit to AAMS.

17. Revenues
(in thousand of Euro) Six months ended June 30, 2012 Slot machine revenue VLT revenue Betting revenue Online gaming Other 224,828 89,754 4,982 671 1,060 321,295 2013 170,097 97,885 5,964 116 2,115 276,177

18. Cost of services


(in thousand of Euro) Six months ended June 30, 2012 Distribution network compensation Betting and online game winnings Other (252,088) (4,307) (8,358) (264,753) 2013 (201,049) (4,493) (8,527) (214,069)

19. Other operating costs


(in thousand of Euro) Six months ended June 30, 2012 Concession Fee Fee on VLT platform licenses Other (9,251) (6,190) (2,085) (17,526) 2013 (9,623) (6,687) (2,451) (18,761)

20. Personnel expenses


(in thousand of Euro) Six months ended June 30, 2012 Remuneration Social security contributions Employees' termination pay Other (3,524) (1,009) (220) (2) (4,755) 2013 (4,166) (1,272) (283) (33) (5,754)

21. Accruals and provisions Accruals and provisions amount to Euro 3,247 thousand for the six months ended June 30, 2013, an increase of Euro 1,217 thousand from Euro 2,030 thousand for the six months ended June 30, 2012. Accrual and provisions primarily relate to accruals to the provision for doubtful receivables amounting to Euro 1,581 thousand for the six months ended June 30, 2013 and Euro 1,013 thousand for the six months ended June 30, 2012.

27

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

22. Depreciation, amortisation and impairments


(in thousand of Euro) Six months ended June 30, 2012 2013 Amortisation of VLT concession fee Amortisation of goodwill Amortisation of other intangible assets Depreciation of tangible assets (5,094) (1,051) (1,534) (2,810) (10,489) (5,270) (1,490) (1,741) (3,628) (12,129)

23. Net finance expenses


(in thousand of Euro) Six months ended June 30, 2012 2013 Finance income Interest income charged to distribution network Interest income on securities held as financial assets Interest income on bank current accounts Other interest income Finance expenses Interest expenses and bank commissions Interest expenses on shareholder loan Commissions on sureties Other interest expenses (1,936) (1,961) (729) (997) (5,623) (5,063) (1,753) (2,098) (643) (910) (5,404) (5,002) 344 1 42 173 560 266 19 93 24 402

Net finance expenses

24. Extraordinary income / (expense) Extraordinary income amounts to Euro 172 thousand for the six months ended June 30, 2013, an increase of Euro 142 thousand from an income of Euro 30 thousand for the six months ended June 30, 2012. The following table sets forth an analysis of extraordinary income (expense) for the periods indicated.
(in thousand of Euro) Six months ended June 30, 2012 Prior years adjustment Personnel expenses tax refund Others (280) 310 30 2013 (368) 142 398 172

25. Income tax


(in thousand of Euro) Six months ended June 30, 2013 (10,348) 2,556 (7,792) (8,570) 730 (7,840)

2012 Current Deferred tax

28

GAMENET SPA NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

For the six months ended June 30, 2013 deferred tax assets is mainly related to the difference between i) partial utilization of deferred tax assets for the 2012 employees bonus and partial utilization of the provisions for risks and charges accrued in 2012 and ii) 2013 deferred tax as result of the provision for doubtful accounts and the benefit arising from tax losses of the subsidiary Gamenet Entertainment Srl. 26. Subsequent events On July 11, 2013 Gamenet Entertainment Srl has signed the final agreement with Romagna Giochi Srl and Riviera Giochi Srl for the acquisition of 63 additional gaming halls. The effects of the contract have started from August 1, 2013. On July 8, 2013 the merger by incorporation of Gamenet Arcades Srl in Gamenet SpA has been finalized by notarial deed. On August 1, 2013 the issuance of Euro 200 million senior secured notes was completed. The notes bear fixed rate interest of 7.25% per annum and mature in 2018. The proceeds from the issuance of the senior secured notes were used to repay the senior secured credit facilities, the bank overdraft and shareholder loans and to provide the Company with the resources necessary to pursue growth and development projects. Subsequent to June 30,2013, the Italian Revenue Agency - Lazio Regional Office - notified to Gamenet SpA the results of a tax audit carried out on some specific issues mainly relating to the deductibility of losses on receivables for the purposes of direct taxes. This notification represents a procedural step that following further analysis of the competent tax office could lead to the formalisation of a definitive notice for the years 2008, 2009 and 2010. The analysis of the merits of the notification by the Company is still in progress. As explained in the 2012 Consolidated Financial Statements, on February 17, 2012, the Lazio Regional Section of the State Court of Auditors, condemned Gamenet SpA- and to a different extent also all the other concessionaires - to pay Euro 235 million by way of administrative liability arising from alleged breaches to the original concession agreement for the management of the online gaming network of legal gaming. As stated in the 2012 Consolidated Financial Statements the judgment presents several erroneous profiles, making it likely that the appeal can be upheld in whole or in part. On this basis, the Company has decided not to apply for facilitated definition of the judgment under art. 14 of Legislative Decree 102 of August 31, 2013. Therefore, considering only possible an adverse outcome, as indicated by the lawyers involved, it was decided not to accrue any provision, thus confirming the approach applied in previous years.

29