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as of 2018-12-31

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as of 2018-12-31

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FINANCIALSTATEMENTas of 2018-12-31

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INTERACTIVE FINANCIAL STATEMENTS

At the top of each online page of this interactive document, you will find the following

symbols

These will allow you to browse the PDF and quickly access some features of Acrobat

Reader®.

PRINT opens the print window

INFORMATION takes you to this instruction page at any time

SEARCH opens the Acrobat search feature in a dedicated window

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INDEX opens the page with the summary of the contents of the document Selecting each title, you access the relevant section

BACK by selecting this button, you can return to the previous page of the document

NEXT by selecting this button you can go to the next page of the document

NEXT CHAPTER Selecting this button allows you to go to the next chapter

PREVIOUS CHAPTER selecting this button, you can go to the previous chapter

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ALICE Student @ H-International School

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MORENOSenior Project Manager @ Strategy & Innovation culture

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HSTANDSFOR HUMAN

We have chosen to include in the pages of these financial statements

images that depict the faces of some of the people who are part

of our team, specifying the role each one plays in this ambitious

innovation process.

We wanted to include them all, but it was impossible, as today

there are more than six hundred of us. Any success and every goal

achieved in these first 14 years would not have been possible

without the contribution of each of the members of this great team,

a diverse group of innovation enthusiasts and ambitious

and motivated pioneers.

We are and we all feel farmers.

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Dear partners,

We are growing a lot, at the same pace as our corporate culture:

the number of clients, students, collaborators and projects is steadily increasing and poses

new challenges. Our mission to design the future through innovation has kept the same spirit

and vitality that have characterized our project since the beginning, even in an organization

that today counts almost 600 people who believe in the H-FARM values.

2018 was a year of strong progress, the best since the beginning of H-FARM and certainly

the most important of the post-IPO phase.

I say this with great enthusiasm because the economic results we achieved are very

significant: the production value has exceeded €60 million and for the first time we

recorded a positive EBITDA, even in the face of a major speed bump, which occurred last

year. In fact, the beginning of the Campus construction project, which, in our initial plans,

was to be inaugurated in the fall of 2018, has been postponed for two more years with

relative problems that have impacted costs, focus, energy and time, much more than initially

planned.

This is why I feel satisfied: above all, for the ability, strength and determination that

I have found in the team by my side, who has been able to react and has made the

impossible possible, continuing to push towards the realization of remarkable projects and

performance.

When we were listed and presented our business project on November 13, 2015, we told

you that it would take at least three years to transform the company into one of the leading

players in the digital transformation services and education fields, not just within national

borders. Our current size, thanks to large and small clients competing all over the world in

different sectors and the total number of students enrolled in less than 3 school years, is the

evidence of a correct path and of accomplishments that we have reached even earlier than

initially planned.

Letter to shareholders

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A long road has been traveled since some of you, along with me, motivated by the good

intention of investing in the talent of young people, believed in the idea of an incubator-

accelerator of companies that already in 2005 had put man at the center, an idea that has

anticipated many actors who then later replicated our model. Today, we have a H-FARM

that has managed to bring on board over 400 talents in 36 months on three business areas,

united by the common denominator of digital innovation, which is used to guide people and

companies towards the future.

The first area, Innovation, supports companies in the implementation of digital processes

and accompanies them towards new scenarios and the adoption of new business models

that will allow them to continue to be competitive in a rapidly evolving market.

This area employs over 340 people, with a sales value that has exceeded 40 million,

which is an increase of 15% year on year and of 80% in 2015. Our strong attraction on an

international level has brought customers such as Adidas, Lufthansa, Volkswagen and big

groups in the fashion world like Lvmh, Kering.

It is precisely due to this international expansion that, in our development planned for 2019,

we expect a large increase in new revenue, supported by an offer able to respond to very

complex customer requests, excellent managers leading talented teams that will allow us

achieve great results over the coming years.

The second area is Education. Here, three areas coexist.

The most developed today is definitely our H-International School network: a lot has been

accomplished in this area; beginning with a small school, acquired a few days before

Christmas 2015, that had 180 children from kindergarten to secondary school, which, today,

counts 882 children distributed across four schools in northern Italy.

What I am proud of most is, on the one side, the team formed of over 150 experienced

professionals, and on the other side the the educational model: the H-FARM Approach that

we have been able to develop, has become a reference point for important organizations

and companies, many of whom ask us to collaborate and develop new partnership projects.

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Finally, among our latest achievements, Apple, after having included us in September 2016

in their list of the 100 schools in the world to keep an eye on, in 2018 recognized us among

the 400 “Apple Distinguished” schools, the only IB school in Italy.

Never before had a school achieved this status in less than two years.

Our Education sector is not only international schools, but it is also our acclaimed University

program. The agreement signed two years ago with Ca’ Foscari has allowed us to develop a

degree in Digital Management, the first and only of its kind in Italy, which last year

ran out of space in just a few days with a request rate of four times higher than the number

of available places. The young people we are training are exceptional, curious and full

of enthusiasm and will represent new lifeblood for us and for the many companies of our

network.

Then we have our vocational school, a professional path on which we have important

development projects: BigRock, our magical school that has introduced, alongside its

computer graphics Masters programs, advanced courses in Augmented and Virtual Reality,

both major emerging trends in the business world.

Finally, I would like to remind you that H-FARM is also startups.

We have an important portfolio, which is not limited in terms of market segment or

nationality. Many actions were activated during the year:

the total exit from Depop, which generated a capital gain of €4,6 million, with a return equal

to 6 times the initial investment.

In the spring, we enhanced Travel Appeal with a sale of the secondary units in the capital

increase and made one million; finally, two mergers, Sellf with Force Manager and Antlos

with Sailogy, increased our presence on the international scene. We have a portfolio of

mature startups with a wide number of ongoing actions aimed at enhancing them.

In short, in 2018 we closed the second phase of our history: H-FARM today looks to the

future not only as an accelerator, but also as an aggregator of experiences and talents that

supports companies and many young minds in their training path.

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In the next two years we can also increase this value at an international level: we will enter a

new phase that will allow us to see the results of the great work we have done, able to face

the challenges of the third decade of this century.

In these 14 years we have grown and we have learned to evaluate dreams, pick good ideas

and understand which ones to let go. Thanks to this experience, today we are able to

understand and build projects that can become extraordinary in the coming years.

We want H-FARM to continue to be an inspiration for young minds who believe that our

Country can make an important contribution to innovation in the world and who want to write

the pages of history and where people remain dedicated to positive values for the good

of humanity and for our planet.

We believe that the greatest satisfaction we can give you is a company that is not only

profitable, but also works in a socially useful and authentic way, investing in the most

important thing we have: the education to knowledge and the awareness of change,

that do not concern only young people but everyone, whatever their role and position.

Love H-FARM.

Ca’ Tron,

2019-01-21

Riccardo Donadon

President & CEO of H-FARM

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IND

ICE

P A R T 1

H - F A R M L I F EVision and values

Resources

Data Summary

H-FARM Innovation

Reference Market

H-FARM Innovation

H-FARM Education

Reference Market

H-FARM Education

H-FARM Portfolio

Reference Market

H-FARM Portfolio

Portfolio Map

Description of subsidiaries

H-FARM Corporate e facility

Company organisation chart

Shareholders

Corporate officers and independent auditors

16

18

20

22

23

23

28

29

30

34

35

35

38

40

62

64

66

67

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P A R T 2

C O N S O L I D AT E D F I N A N C I A L S T AT E M E N TConsolidated Financial Statement Management Report

Contents

Key Events

Descriptions of reclassified results

Market risk management and uncertainties

Dealings with related parties

Other information

Allocation of profit for the financial year

Key events following the close of the financial statement

Foreseeable management trends

Consolidated financial statement schedules

Balance Sheet

Income Statement

Financial Accounts

Supplementary Note

P A R T 3

S T AT U T O R Y F I N A N C I A L S T AT E M E N T: H - F A R M S . P. A . Financial Statement Schedules

Balance Sheet

Income Statement

Financial Accounts

Supplementary Note

P A R T 4

B O A R D O F S T AT U T O R Y A U D I T O R S A N D E X T E R N A L A U D I T O R R E P O R T SRelazione della società di revisione

Relazione del collegio sindacale

70

71

71

74

82

85

86

88

90

92

93

98

102

105

142

143

147

150

152

188

196

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H-FARM LIFE

1

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NIN

O, Y

ANIN

A, A

LESS

AND

RO

, GIO

RG

IO, E

LEN

ASt

rate

gy &

Inno

vatio

n cu

lture

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Vision and values

For 14 years, we have been working in the field of innovation, and we make a strong

contribution to this change: we support businesses, working alongside them as part

of digital transformation processes; we prepare students for the new world

of employment through an international educational programme, which is enhanced

by digital resources, and we help the young by investing in their entrepreneurial ideas.

The “H” which forms our name stands for “HUMAN”, to underline the fact that

we attach great importance to the individual and the need to undertake initiatives

with human beings at the centre.

We believe that new technology must not be an end in itself,

but it must be designed around humans, to respond to their needs, and to satisfy

new requirements that are being defined.

Simplicity, curiosity, an ethical sense, ambition, enthusiasm: these values are

the basis of our business culture. They guide our daily approach to work,

and we want to share them with anyone who is or will be part of our network.

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Our staff

We are a team of professionals who are passionate about innovation, who strive

to express our values through our skills: 51% of us are women, 49% men,

our average age is 32.

The mix of our team is one of our strong points: we come from backgrounds with

experience in different fields, where digital has always been the principal driver.

Today we form a single large team able to guarantee the best solutions for our customers,

in whatever sector and in every country.

We are pioneers, passionate about innovation. We study digital change and we love

exploring new territories.

We have always paid close attention to the employment process, to integration into

the business ecosystem, to valuing individual attitudes, including through systematic

job rotation, to ensure that we have more skilled professionals

who fully share our vision and business objectives, and our working methods.

We care about the well-being of all our employees and about retaining the best talent:

we have integrated an innovative system of Welfare and Flexible Benefits, open to all

of us from the start, and, in some cases, also to our Education students and families.

During 2018, we set out the Innovation division’s strategic vision in organisational terms,

which translated into business objectives and integrated responsibilities for staff, all

aimed at a clearer and simpler offer to our target market.

In our Education division, following the acquisitions made in 2017, we have undertaken

a process aimed at finalising the unification of our educational line with the objective

of obtaining IB (International Baccalaureate) certification for all schools with essential

training updates and re-qualification work for our teaching body.

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From our foundation, our distinctive feature has been planning working spaces

to be welcoming. This is to stimulate dialogue and collaboration among colleagues.

Our strong growth has led us to identify a new location for H-FARM Milan,

of more than 2,000 m2, which has been set out to better welcome people, projects

and events, a key tool for creating dialogue with the surrounding area.

In 2018, around 19,000 people were involved in more than 300 events which we

organised, particularly in our headquarters in Ca’ Tron (Roncade).

We don’t just organise business events, developed ad hoc for the many brands

in our network, we also organise events that are open to the public, like Futureshots,

Tech It Easy or the Talks on Tomorrow series, in partnership with La Repubblica,

which confirmed our company’s role as being informative and a qualified opinion leader

on subjects surrounding innovation and digital technologies.

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Summary dataCONSOLIDATED FINANCIAL STATEMENT

RECLASSIFIED INCOME STATEMENT

SIGNIFICANT INCREASEIN ORGANIC REVENUE

IMPROVEMENT NET PROFIT

2017 2018

44,3

61,1

GROWTH

+ 37,9%

+ 1,3M

NET RESULT, MILLIONS OF €

20182017

- 4,9- 6,2

PROFITABILITY INCREASE

EBITDA, MILLIONS OF €

2018

2017

+ 1,1

- 2,1

+ 1,8%

- 4,7%

OPERATING INCOME, MILLIONS OF €

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CONSOLIDATED BALANCE SHEET (1)

- 4,1 - 5,7

20182017

NET FINANCIAL DEBT, MILLIONS OF €

WORKING CAPITAL, MILLIONS OF €

- 3,4- 5,9

20182017

20182017

34,736,0

NON-CURRENT ASSETS, MILLIONS OF €

20182017

2,5 3,1

TFR, MILLIONS OF €

20182017

24,7 21,3

CAPITAL, MILLIONS OF €

(1) Per la composizione di tali voci si rinvia alla relazione sulla gestione

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H-FARM

GROWTH+ 6,8

+ 19,9%

OPERATING INCOME, MILLIONS OF €

41,1

DECREASE- 0,5

- 10,6%

EBITDA, MILLIONS OF €

The strong growth in turnover was accompanied by strong investment

in the number of customers and large corporations that found in us

the spirit and DNA of a start-up alongside an evolved method

of planning innovation programmes.

The drop in EBITDA refers to the company’s efforts to expand

its presence abroad and the number of customers.

34,3

2017 2018

4,5 4,0

20182017

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TARGET MARKET

(1) Federazione Digitale

Through our Innovation business, we support national and international businesses and

brands to understand new economic scenarios and to carry out all activities connected

with digital transformation. We use a team of 300 trained professionals with a wide range

of experience.

We offer a complete range of services that draw upon more than ten years of experience

in this field and range from consultancy to design, from corporate education to creative

agency work, from digital marketing to creating highly technological solutions that use

artificial intelligence.

2018 saw us work to implement the unit’s strategic vision. Our focus for the year has

included providing an even clearer product line which meets market need and is based

H-FARM Innovation

IThe digital market in Italy is worth 3.7% of GDP and it’s a sector that shows year-on-year

growth of 11.6%. The value of this market, which has a limited scope, given that it only

refers to wholly digital investment, amounts to EUR 65bn,an increase of 11.6% compared

with 2017 and 22% compared with 2016.

E-commerce and online advertising are two elements that contribute greatly to growth,

and also generate an increase in employment: the number of workers in the sector has

grown from 253,000 in 2017 to 285,000 in 2018 (+12.7% year-on-year). The value of

digital in Italy considering its limited scope(1).

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FRANCESCAService Designer @ Strategy & Innovation Culture

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on business objectives and aimed at optimising the staff dedicated to the work.

Our plans for international growth have also seen rapid acceleration. We have increased

the product line of services that we offer outside Italy, and this has led to foreign turnover

making up 13% of overall turnover.

The first results of the time and resources used to scout for the best customers and

markets are already noticeable with H-FARM opening a new innovation hub in Barcelona

in the first half of 2019.

The divisions that make up the unit - Strategy & Innovation Culture, Enabling Solutions,

Digital Marketing, Artificial Intelligence and Brand Innovation - have worked in synergy,

recording a constant increase in the number and importance of projects commissioned

by globally recognised brands that have hired us as consultants and used our services.

Our Strategy & Innovation Culture division has supported the Kearing luxury group: thanks

to the results achieved by the projects begun in 2017, it has decided to extend the Gucci

Exploration Program innovation plan. We are supporting the German group, Henkel, in

defining and creating a transformation and innovation

programme, which studies the external scenario to produce

pilot or test projects with start-ups, to develop new concepts or products, everything

supported by an employee training programme.

Our VR team are also supporting Adidas with its

Digital Creation project and, for Enel, we have developed a solution that exploits virtual

reality to train its operators. It has already been implemented in Italian training centres,

and we are working to bring it online throughout South America.

We have worked to make communication with customers a key element, creatively

setting out a data-driven and omni-channel approach, as with the

re-branding of Direct Line - Verti or the project created for Sky Italy.

Italgas has asked us to create a new website, which has been named

among the winners of “Webranking Italy Listed”.

In 2018, Celi, our division in Turin that specialises in Artificial Intelligence, was chosen

by key global car makers to create vocal interaction systems, and has created predictive

models to allow luxury businesses to track their products’ potential to define their

selections.

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Celi has signed a partnership with Nuance to develop analytics systems based on the

automatic transcription of text and took part in the I-REACT project, co-financed

by the European Union as part of the Horizon-2020 programme, to develop a system

which uses artificial intelligence to improve how emergencies are managed and increase

civil resilience.

Our media company, SHADO, recognised as one of Italy’s most expert companies in

the field of new generation branding, has launched and managed various projects for

Intesa Sanpaolo including its palco.it platform, a portal used to publish original editorial

projects, which is an expression of the Bank’s values and designed to create

a community of users. Whilst, for Audi, we presented the We Generation project,

an editorial platform and a way of recruiting young innovators.

Since November, we incorporated our best technological skills into a new division,

Enabling Solutions, to better plan and create technological solutions to support business

innovation processes.

Its customers already include some very well-known names: OVS, EcorNaturasì,

Trussardi, Cucina Barilla, Telecom, Verona Fiere and Finantix. In December, it integrated

its product line with that of Diana Corp, following the acquisition of 10% of the share

capital of this e-commerce agency which specialises in the fashion sector.

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CHIARAAccount Manager @ Shado

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H-FARM

The growth in turnover is closely linked to the increase in the number

of students

Despite the costs incurred for the educational workshop in Treviso

and the conversion of the schools in Rosà and Vicenza, we have been able

to keep EBITDA in line.

GROWTH+ 4,1

+ 52,4%

2017 2018

11,9

+ 28,2%

2017 2018

7,8

- 1,4- 1,0

INCREASE+ 0,4

OPERATING INCOME, MILLIONS OF €

EBITDA, MILLIONS OF €

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This unit has entered into a target market with good potential for growth

and development since there are no innovative training programmes that are able

to respond adequately to economic transformations and the future needs

of the labour market.

On one side, it appears that the level of public education expenditure in Italy is amongst

the lowest in Europe: in the five-year period 2015-2018, Italy invested an average

of 3.6% of GDP (for 2019, the forecast is 3.5%), whilst the European average is 4.7%.

On the other side, there is a global trend that sees a strong expansion in spending

on private teaching and technology applied to education ($6.4bn in 2017, an annual

growth of 6% is expected, for the market to reach $11bn in 10 years’ time)(1).

Volume data also shows a growth of 70% (from 2016 to 2018) in the number

of students who relocate around the world to study internationally in higher education

courses. In absolute terms, this equates to 353,000 students, 37% of whom choose

to study in Europe(2).

Trends in the training market have a direct correlation with growing labour demand.

In fact, in Italy, there is a strong misalignment between demand and supply:

a recent study(3) highlights that 31% of businesses are encountering “difficulties

in recruiting” for 1.2 million contracts planned for the first quarter of 2019.

Businesses are making increased requests for digital skills:

in 2020, digital skills will be required for 85-90% of employment positions.

TARGET MARKET

(1) Source: OECD, IBIS Capital.

(2) Sources: The i-graduate ICEF Agent Barometer 2018.

(3) Carried out by Anpal and Unioncamere

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HAOMYP 5 Student @ H-International School

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Moreover, according to the World Economic Forum, 65% of students who are now

starting primary school will, at the end of their educational programme, perform work that

does not exist today.

(4) Jp Morgan

Italy has the third largest mismatch between the subjects chosen by students

and the needs of the labour market(4).

Aware of this “skill mismatch” and the continuous transformations in the labour

market, since 2015, through H-FARM Education, we have been planning and developing

international training programmes with increased digital focus for children and youths.

The objective is to provide the tools necessary to face the future economic scenario

and the new professions required, drawing, among other things, on the resources

from our ecosystem.

The school year began in September with 1,254 students, 15.4% more compared with

the previous year (1,087 students in 2017).

Particularly, in September, the H-International School in Ca’ Tron had 381 students,

double the number in 2016, the year in which we began operating.

Following the acquisitions in 2017, we have been concentrating on integrating

H-FARM Education

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the “H-FARM Approach” into all four international schools that make up our K-12 training

courses. This is a teaching method that is in tune with the specific characteristics

of the innovation environment in which the school works and aimed at developing

suitable skills for the new professions required by the labour market.

The H-International School in Ca’ Tron, thanks to its adoption of cutting-edge teaching

methods and teacher training methods, as well as adopting digital tools to create

educational courses, has obtained Apple Distinguished School certification.

It is the only institution in the world to receive this recognition in the second year

of using Apple devices.

In H-IS Vicenza and H-IS Rosà, in parallel with the work on teaching skills, important

technological changes were introduced to support teaching.

During the 2018-2019 school year, the process of obtaining IB certification began

for the PYP and MYP 1, 2, 3 courses.

Over the course of the year, renovation work was carried out at H-IS Monza to receive

the EYU course and the PYP1 class.

In 2018, we started the second year of our university course, the three-year degree

course in Digital Management in partnership with Università Ca’ Foscari, which again

saw three times as many people apply as there were places available: there were, in fact,

more than 300 applications for 90 positions, with a selection process which in two years

has seen just 30% of requests accepted.

From this year, the students, today numbering over 150, have their lessons in two

purpose-built pavilions at the heart of our headquarters in Ca’ Tron.

This layout facilitates a continuous exchange with farmers, managers and professionals.

In fact, there were more than 30 guest lectures open to students, featuring

key personalities from the economic world who are part of our network and around

20 meetings featuring start-ups and entrepreneurs.

Even entries for BigRock, our professional school that offers a master’s course

in computer graphics, concept art and virtual reality, have grown 15% compared with the

previous year, giving a total of more than 200 students who have taken our courses.

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ALICEProject Manager @ BA Degree

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ALICEProject Manager @ BA Degree

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To deal with the constant increase of registrations and projects, it has been necessary

to identify a new, bigger location, again in Ca’ Tron, where students, teachers and staff

were transferred last September.

Sparx, our summer workshops for children aged 5 to 16 have recorded a thousand

registrations, in line with previous editions.

In October, we began courses aimed at managers and professionals who need to update

their skills through short, efficient and vertical learning programmes.

The courses held in 2018 and 2019 have all fully booked with more than 200 registrations,

and new editions are being planned.

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H-FARM

2 exits were brought to a close during the year.

L’investimento complessivo di H-FARM nelle startup del portfaglio è stato

di € 2,3M di cui € 1,0M di follow-on.

Il 33% delle nostre startup è internazionale.

2018 RESULT

REVENUE

4,6DEPOP

MILLIONS OF €

TRAVEL APPEAL 0,9

CAPITAL GAIN

3,8

0,8

RETURN

6 X

12 X

EXIT2

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2018 was a year of turning points for start-up investments in this country,

with overall investment raised of around €600m and a jump of more than €260m

compared with 2017.

Half of this capital comes from Italian venture capital funds, whilst the quota of Italian

start-up investments coming from foreign investors finally reaches some significance.

Foreign investments have made a total of around €230m available, showing an 82%

increase compared with 2017.

This positive trend shows that the Italian start-up ecosystem is increasingly attractive

and ties in with a wider global picture which, in 2018, recorded capital investment

in start-ups of more than $250bn, a 44% increase compared with the previous year(1).

Moreover, a fund with a starting financial budget of around €1bn is expected

to be created, as set out in the 2019 Budget.

(1)Osservatorio Startup Hi-tech promoted by the Politecnico di Milano’s School of Management in collaboration with Italia

Startup; A study developed by KPMG and presented during AIFI’s annual convention - 11th March 2019.

TARGET MARKET

Since we were founded, support for innovative ideas and entrepreneurial initiatives

has been an important value: we were the first institution in Italy and in Europe

to invest in digital start-ups, totalling €27.3m over 127 activities.

Today, our Portfolio has 35 shareholdings in start-ups, mostly structured companies that

have acted on an international level, also thanks to activities to partner with and support

the business that we have developed in recent years.

H-FARM Portfolio

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From 2005 to today, we have brought a total of 11 exits to a close, cashing a total

of around €16m. 2 were concluded in 2018 alone, with overall revenue of more than €6m.

This is an evident sign of the quality of our investment strategy and the “maturity” of our

portfolio, which is attracting growing interest from national and international investors.

In particular, Sellf’s merger with Forcemanager – the Spanish scale-up which is amongst

the world’s leaders in the CRM sector – and Antlos’ merger with Sailogy – a leading

European business in the nautical charter sector – which both occurred in 2018, have

meant that the two start-ups now play a leading role in the European market.

There have been five capital increases, two of which were in the millions of Euros: Travel

Appeal, now a reference business for the Travel Industry, has closed a round of Series

A funding of €3m, underwritten by Indaco Ventures I and by the international fund,

Airbridge Equity Partners, and, simultaneously, saw H-FARM’s partial exit from capital,

recording a return of twelve times the investment made and revenue of €900,000.

Mio Assicuratore has, instead, closed a round of investment guided by Innogest Capital

with participation by Pi Campus, of a value of €1.5m.

With regard to exits, we should report the total exit from the share capital of Depop,

a globally consolidated business in the Fashion sector and with double-digit growth

in the American market, which generated for us a return of 6 times the amount invested,

and revenue of more than €4.5m.

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ALEIX E TIMManagers @ H-FARM Barcellona

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ADZUKI

AGRITECH BLOCKCHAINBIG DATA

ANALYTICSEDUCATION FASHION

FINTECH& INSURTECH

MIOAssicuratore.it

VENTURE CAPITAL

SETTORE

LATERSTAGE

EARLYSTAGE

SEEDSTAGE

CONVERTIBLENOTE

OTHERCOMPANIES

Portfolio Map

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Shapr3d

INDUSTRY4.0

LOGISTICMANAGEMENT

TOOLSTRAVEL

3DTECHNOLOGY

OTHERS

EVENT

SETTORE

LATERSTAGE

EARLYSTAGE

SEEDSTAGE

CONVERTIBLENOTE

OTHERCOMPANIES

ITALIA

AGENCY

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DESCRIPTION OF SUBSIDIARIES

DESIGNWINE S.R.L.

DesignWine is the promoter of the e-Commerce platform Vinitaly Wine Club, an

innovative project developed to promote and sell the excellence of Italian wine. The

mission is to offer visitors & clients the opportunity to discover amazing Italian wines to

buy online with exceptional value and great service.

Shareholding 36.53 %

Book Value: 1,050,404

AGRITECH

BIORFARM S.R.L.

Biorfarm allows anyone to create a digital farm adopting trees from Biorfarm’s organic

local farmers network. Users can monitor the organic cultivation and once products

will be ripe, they will receive fresh fruits at home in 24h or choose to pick on their own!

Thanks to such direct relationship between users and local organic farmers, Biorfarm not

only provides consumers with more information about the food, it also supports best local

organic farmers in the Country.

Shareholding 6.00 %

Book Value: 40,060

EATTIAMO S.R.L.

Eattiamo is the first startup that brings home a selection of the best Italian products and

all the information to cook them quickly and easily. In the United States the company has

launched the subscription food box: every month a different culinary discovery, in every

box the team selects 7 high quality products perfect to prepare a full meal for 4 people

following the recipe inside the box.

Shareholding 8.19%

Book Value: 64,551

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FOODY (1)

Foody developed a digital platform which allows travelers to live a true culinary experience with

locals and enjoy traditional dishes cooked directly by their host, for € 10.000;

AGROOP (1)

Portoguese startup that allows farmers to collect and analyze data to assess the quality

of the soil, thanks to a hardware solution, and then to estimate cost and quantity of the

harvest, for € 20.000;

STOPMYCRAVING (1)

English startup that created an e-commerce dedicated to families and young

professionals looking for healthy snacks, for € 20.000;

(1) Investments made in the start-ups selected during the “Industry Accelerator” programs are not reported above, since these are not

capital investments but convertible loans, which are reclassified under the “Other securities” section of the financial report.

CONVERTIBLE NOTE

CONVERTIBLE NOTE

CONVERTIBLE NOTE

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TRAITLY LTD

Traitly is a self-learning solution for recurring revenue driven companies. Traitly predicts

when customers are going to leave and why. Companies can create custom messages

and onboarding flows based on each of their users’ predicted behaviour.

Shareholding 2.15%

Book Value: 43,385

DISPELL MAGIC S.R.L. - COMPETITOOR

Competitoor is a B2B platform dedicated to online shops that allows store managers to

monitor the prices of the competition and to be notified each time a price changes thanks

to the real time price tracking. It allows to save time wasted to check all your competitors

and especially to increase revenue and profitability.

Shareholding 13.92%

Book Value: 182,827

QRIOUSLY INC

Qriously is a research platform that accesses the mindset of billions of people all over

the world by asking questions on mobile devices. Answers to those questions are used

to unearth valuable insights and engage relevant audiences.

Shareholding 0.75%

Book Value: 57,303

BIG DATA ANALYTICS

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SYNAPTA S.R.L.

Synapta is an innovative start-up focused on software development and data

integration projects using Linked Data technologies. Synapta is bringing on the market

ContrattiPubblici.org, a semantic search engine and a business intelligence tool on more

than 10 million public contracts between more than 1 million suppliers and almost 20

thousand Public Administrations.

Shareholding 14.88%

Book Value: 34,560

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LUCIAContent Designer @ Strategy Innovation Culture

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BLOCKCHAIN

ECOSTEER (1)

Startup that launched two key products for the success of industrial collaborative IoT

projects: EcoFeeder, a smart and secure IoT gateway to collect and send a continuous

stream of data, and EcoAggregator, a tool that can aggregate and store all stream of data

generated by many sources in order to simplify data analysis, for € 20.000

ORIGINTRAIL(1)

Prospeh, a startup from Slovenia, developed the product “Origintrail” delivering a

solution for the traceability of the food supply chain, dedicated to producers and

consumers worldwide, for € 20.000

LENDFLO (1)

Startup that provides SMEs with a more efficient and convenient access to working

capital, unlocking the value trapped in outstanding invoices, reducing fraudes and

creating a secondary market with a digital invoice financing marketplace,

for € 20.000

FINBOOT LTD

Finboot is an innovative startup creating Enterprise Blockchain applications.

The first product has been approved for scale-up by one of the largest oil & energy

groups globally (Repsol), and will allow users to interact with decentralized applications

(DApps) efficiently by bringing these solutions to the desk of every employee.

Shareholding 1.01%

Book Value: 22,824

CONVERTIBLE NOTE

CONVERTIBLE NOTE

CONVERTIBLE NOTE

(1) Investments made in the start-ups selected during the “Industry Accelerator” programs are not reported above, since these are not

capital investments but convertible loans, which are reclassified under the “Other securities” section of the financial report.

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EDUCATION

CLOUD ACADEMY INC

Cloud Academy strives to be the main guide for companies worldwide to understand,

implement and embrace cloud technologies for their businesses. Cloud Academy

helps enterprises stay up to date with their cloud skills and take advantage of cloud

technologies at scale to continuously improve their efficiency.

Shareholding 0.26 %

Book Value: 21,834

TUTORA LTD - TUTORFUL

Tutorful is an online education company helping parents and students of all ages find

their perfect private tutor. With more than 6,000 tutors across the whole of the UK,

rigorously vetted before they’re allowed to join the team.

Shareholding 0.75 %

Book Value: 60,932

H-INTERNATIONAL SCHOOL MONZA S.R.L.

H-IS Monza is a company established in 2017, with a group of entrepreneurs from Monza.

Since September 2018 it started a new educational institution with nursery school,

kindergarten and primary school.

Shareholding 45.00 %

Book Value: 230,951

HUMAN TALENT SCHOOL S.R.L.

International School of Talents – Multicampus is the new established boarding school

born from the partnership between GSO and the network of H-FARM schools that delivers

the International Baccalaureate Diploma Programme in two distinct campuses with two

different fields of study: economic-entrepreneurial-technological on the Ca’ Tron Campus

and artistic-humanistic in Oderzo.

Shareholding 40.00 %

Book Value: 425,000

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HABACUS S.R.L.

Habacus is the startup that supports university students and believes providing access

to financial resources and offering educational solutions and services tailored to the

needs of students. Habacus collaborates with Intesa Sanpaolo being in charge of the

certification of the performance-based criteria to access the new financial product “per

Merito”: the first loan accessible to all students without guarantee.

Shareholding 40.00 %

Book Value: 590,796

EDUCATION

HOLSYS (1)

Startup that developed olOne, a software based on Artifical Intelligence capable of

analyze in real time data coming from sensors, enabling solutions such as predictive

mantainance, for € 20.000;

CONVERTIBLE NOTE

(1) Investments made in the start-ups selected during the “Industry Accelerator” programs are not reported above, since these are not

capital investments but convertible loans, which are reclassified under the “Other securities” section of the financial report.

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FASHION

GET APP S.R.L. - TEESER

Teeser is the first Social commerce that allows anyone to create, share, sell or buy a

personalized t-shirt made by users for the users. Thanks to the website and mobile App

users can upload a custom design to be printed on a t-shirt or sweatshirt and receive

the creation or sell the item on the platform. Teeser also offers merchandising services

tailored for influencers and companies.

Shareholding 9.03 %

Book Value: 46,110

ADZUKI IVS

Adzuki is the first open style monetization platform on social networks for influencers

hidden in the long tail. Adzuki offers a tool that automatically connects fashion items

shown in posts on social networks to points of sale.

Shareholding 10.00 %

Book Value: 20,000

ADZUKI

DIANA E-COMMERCE CORPORATION S.R.L.

Diana is an international agency based in Venice, Milan and NYC specialized in the

creation, management and promotion of e-commerce for fashion brands.

Shareholding 10.00 %

Book Value: 1,080,983

THE CURRENT INC

The Current is an innovation consultancy transforming how consumer retail brands

intersect with technology.

Shareholding 10.00 %

Book Value: 1,092

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FINTECH & INSURTECH

SOLDO LTD

Soldo is the world’s first multi-user spend control solution, which helps businesses of

all sizes to manage company spending in a smarter, more efficient way. Through the

combination of Soldo Mastercard cards, a mobile app and a web app Soldo enables the

finance team to manage users and track spending in real time.

Shareholding 0.42 %

Book Value: 206,908

MIO ASSICURATORE S.R.L.

MIOAssicuratore is an online insurance broker that gives anyone the opportunity to

compare, buy and manage over 125 insurance types on the same platform with real

time quotation. Thanks to a proprietary algorithm and the centralized quotation system,

MIOAssicuratore is the first online player able to effectively and instantly quote all

Non-Motor risks of any company, allowing customers to compare and understand easily

insurance products, directly buy and renew their policies.

Shareholding 7.50 %

Book Value: 150,000

ALLBLOCK (1)

Società che ha sviluppato il suo primo prodotto commerciale, Verifyed, sfrutta

un sistema di verifica visiva per estrarre gli elementi caratterizzanti di documenti digitali

e fisici, trasformandoli in una stringa di dati, per € 20.000;

MIOAssicuratore

CONVERTIBLE NOTE

(1) Investments made in the start-ups selected during the “Industry Accelerator” programs are not reported above, since these are not

capital investments but convertible loans, which are reclassified under the “Other securities” section of the financial report.

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INDUSTRY 4.0

GENLOTS SA

GenLots developed an artificial intelligence technology to discover the optimal way

to place an industrial company’s orders, based on its material requirements forecasts

(generally output of MRP), while taking into account real parameters and complexity

as to systematically minimize the Total Cost of Ownership.

Shareholding 3.00 %

Book Value: 22,533

THINKINSIDE S.R.L. - THINKIN

ThinkIN is an Internet of Things platform, which allows businesses operating indoors

to optimise their operations by (i) monitoring in an unobtrusive and privacy-preserving

manner the position & behaviour of people and assets indoors (ii) offering location-based

value-added services to end users (iii) providing actionable KPIs to effectively support

business decisions. ThinkIN delivers end-to-end solutions for specific vertical markets

such as retail, healthcare and industry 4.0.

Shareholding 2.00 %

Book Value: 21,250

KONTENA OY

Kontena provides the most easy-to-use, fully integrated solutions for DevOps and

software development teams to deploy, run, monitor and operate containers on the cloud.

Shareholding 1.19 %

Book Value: 66,136

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SATOSHI SYSTEM

Società che digitalizza la commodity supply chain, il commodity trading e la commodity

trade finance utilizzando tecnologie emergenti come blockchain, IoT e machine learning,

per € 20.000.

TECHMASS (1)

Società che ha sviluppato una piattaforma digitale per accompagnare le aziende

verso la manifattura lean e incrementare la produttività, per € 20.000;

SENSEFINITY (1)

Società portoghese che ha sviluppato un hardware ed un software per monitorare

la logistica della catena del freddo, per € 20.000;

ZENODYS (1)

Società slovena che ha sviluppato una piattaforma che permette alle aziende

del manifatturiero di testare alcune automazioni delle macchine e andando ad analizzare

il risultato ottenuto, per € 20.000;

CONVERTIBLE NOTE

CONVERTIBLE NOTE

CONVERTIBLE NOTE

CONVERTIBLE NOTE

(1) Investments made in the start-ups selected during the “Industry Accelerator” programs are not reported above, since these are not

capital investments but convertible loans, which are reclassified under the “Other securities” section of the financial report.

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ELISAProject Manager @ Habacus

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LOGISTIC

PONYU S.R.L.

PonyU offers an on-demand urban delivery service, enabling merchants to serve their

customers with same-hour delivery. Merchant partners request a deliverer when the

order is ready to ship, and the system will alert the nearest “Pony”, calculating the best

track in order to reduce time and costs.

Shareholding 10.00 %

Book Value: 40,810

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MANAGEMENT TOOLS

TRITIUM SOFTWARE S.L. - FORCEMANAGER

ForceManager is a mobile optimized field sales CRM. ForceManager helps sales reps by

equipping them with a smart personal assistant app empowered with relevant geo-spatial

data and leveraging all available contextual information to assist them being much more

efficient in the field and therefore close more sales.

Shareholding 0.19 %

Book Value: 79,901

RESPONSA S.R.L.

Responsa develops a ChatBot, a virtual assistant available 24/7 that can answer

automatically customers’ questions providing a more efficient service. Responsa

redefines the web self-service experience with the aid of a simple, intuitive Virtual

Assistant available on demand 24/7, it increases Customer Satisfaction and Conversion

Rate.

Shareholding 28.25 %

Book Value: 106,926

WETHOD

Wethod is a lean multi-project management platform that fosters the autonomy and

ownership of every team member at any level. Wethod is a software that helps to

manage all of the project’s information from beginning to end – manage across sales

opportunities (sales pipeline), activity details and resource planning and billing with ease.

Shareholding 15.00 %

Book Value: 50,015

GLARTEK (1)

Società portoghese che ha creato una piattaforma che attraverso la realtà aumentata

permette a tutti i manutentori di impianti produttivi di avere i dati reali su ogni loro singolo

macchinario, riuscendo così ad effettuare eventuali riparazioni nel minor tempo possibile,

per € 20.000;

CONVERTIBLE NOTE

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TRAVEL

TRAVEL APPEAL S.R.L.

Travel Appeal developed a platform based on Artificial Intelligence and Data Science to

help travel professionals manage and interpret huge amounts of data on the web, such

as reviews or conversations on social media, turning it into valuable information, smart

suggestions and ready-to-use solutions to improve business.

Shareholding 9.00 %

Book Value: 56,000

SAILOGY SA

Sailogy is the only boat charter agency that allows for real-time online bookings, it

selects the best charter companies around the world and provides them with a seamless

web integration allowing them to sell their services online. Offers from charter companies

are aggregated and normalized by Sailogy’s software and presented to end users with

guaranteed availability and final price.

Shareholding 0.35 %

Book Value: 13,363

INSIGHT S.R.L. - INRECEPTION

inReception is the one-stop shop for vacation rentals, a web and mobile application

to manage, promote and distribute hotel and non-hotel accommodations.

A single app to take care of all property’s daily activities, from bookings and payments

to report and finance.

Shareholding 15.89 %

Book Value: 151,434

H-UB S.R.L. - TICKETSY

Ticketsy is a source and price comparator for tours and activities around the world,

users can start looking for attractions tickets ranging from visiting the unfailing

museums, sightseeing tours to the most unique activities provided by different online

booking websites.

Shareholding 51.00 %

Book Value: 20,000

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3D TECHNOLOGY

LUMI INDUSTRIES S.R.L.

Lumi Industries allows everyone to have access to 3D printing technologies, providing

different models of 3D printers, for professionals or amateurs. Lumi Industries is also one

of the Italian leader in the production of 3D printing accessories, made with the most

innovative techniques and with affordable prices.

Shareholding 25.00 %

Book Value: 120,876

SHAPR3D LTD

Shapr3D is the only truly mobile CAD app. It offers a quick but precise way to create 3D

models. Fueled by the same geometric modeling engine as SolidWorks, we bring you

the power of MCAD and the ease of Sketchup, right on your iPad.

Shareholding 1.25 %

Book Value: 55,701

Shapr3d

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ALTRE

GEK S.R.L.

GEK develops high level diagnostic services, aiming at the growth of social and individual

awareness regarding health and well being, in particular regarding the measurement

and control of body inflammation.

GEK aims to a democratization of high-level medical care, achievable through the sapient

use of technology, industrialization and communication.

Shareholding 1.05 %

Book Value: 150,000

ZOOPPA.COM INC

Zooppa is a decentralized creative production company, which partners with clients

across industries and markets to produce amazing content through a global network

of creatives. Zooppa is the Uber of creative talent: using technology to build custom

platforms in order to engage a global creative department composed by thousands of

professional filmmakers, photographers, designers and storytellers.

Shareholding 47.90 %

Book Value: 4,664,993

FUBLES S.R.L.

Fubles is a social network that allows anyone to organize sports matches saving time

and money. Connecting players, matches and sports centers in the same area, Fubles

allows users to sign up for free and organize matches or to join matches organized

by someone else.

Shareholding 3.00 %

Book Value: 50,325

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FISHWOODCO GMBH - LOOTS

Loots builds platforms and applications that help live streamers on Twitch, YouTube

Gaming or Facebook Live to attract huge audiences and make a living from streaming

their favorite games. Loots provides the top tier monetization infrastructure for live

broadcasters in more than 50 countries.

Shareholding 0.77 %

Book Value: 71,941

DIGITAL KEYS (1)

Australian company which developed a smart lock solution that can be unlocked from the

mobile app with no need for a physical key. It is focused on hospitality sector (hotel and

b&b), for € 20.000;

ALTRE

CONVERTIBLE NOTE

(1) Investments made in the start-ups selected during the “Industry Accelerator” programs are not reported above, since these are not

capital investments but convertible loans, which are reclassified under the “Other securities” section of the financial report.

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MARTAContent specialist @ H-International School

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AGENCY & EVENT

AKQA S.R.L.

AKQA is a digital agency delivering the imaginative application of art and science to

create a better future and innoative experience. AKQA is home to 2,100 professionals in

23 studios across the US, Europe, Asia, and Australia.

Shareholding 9.00 %

Book Value: 14,712

ITALIA

LEADE.RS INC

Leade.rs is built by and for event organizers. Leaders eliminates the pain of searching

for diverse voices and cold-calling new leads, matching each event with speakers who

are interested, qualified, and available.

Shareholding 0.21 %

Book Value: 21,444

SMAU SERVIZI S.R.L. - SMAU

Smau is a platform that creates events chosen each year by over 50,000 entrepreneurs,

managers of companies and public administrations to grow and update on topics such as

innovation, technology, digital and internationalization.

Shareholding 4.50 %

Book Value: 245,947

MOKU S.R.L.

Moku is a software house adopting agile methodologies and using innovative tools

to develop quality driven software. Easy to maintain and extend.Moku creates iOS

and Android Apps (native and hybrid) as well as web applications and API services.

Shareholding 10.00 %

Book Value: 37,273

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FONDI DI INVESTIMENTO

INREACH DATA LTD

InReach Ventures, the “AI-powered” venture capital firm based in London and founded

by former Balderton Capital General Partner Roberto Bonanzinga, along with Ben Smith,

uses firm’s proprietary software to generate and evaluate deal-flow more efficiently than

traditional venture firms.

Shareholding 15.27 %

Book Value: 3,130,147

CLUB ITALIA INVESTIMENTI 2 S.P.A. - CII2

Club Italia Investimenti 2 is a vehicle that facilitates access to risk capital by startups.

These are selected by the Partner Accelerators and supported in the search for seed

capital

Shareholding 6.77 %

Book Value: 400,000

P101 SICAF S.P.A. - P101

P101 is a venture capital firm focused on early-stage investments in the digital sector,

working closely with the leading Italian accelerators and university-based incubators.

P101 has been launched by Andrea Di Camillo, who has over 15 years of experience

as a venture capital investor and is among the founders of Banzai and Vitaminic.

Shareholding 0.75 %

Book Value: 322,317

VENETWORK S.P.A.

VeNetWork Spa is a listed company with private capital that is a promoter of productive

and financial opportunities. It brings together 59 entrepreneurs from Veneto animated by

the will to do more for their territory, supporting and developing high potential projects.

Shareholding 0.75 %

Book Value: 20,000

65

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H-FARM

GROWTH+ 1.4

+ 61%

2017 2018

3.7

2017 2018

2.3

- 5.2 - 6.2

INCREASE- 1.0

OPERATING INCOME, MILLIONS OF €

EBITDA, MILLIONS OF €

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This area includes income and costs for general services to which we add costs relating

to management, administration, management control, staff management, organisation,

marketing and communication activities, financial management and compliance.

Over the course of the year, boarding and catering activities, which are necessary

and required to start the Campus, were strengthened. Due to the postponement of the

start of expansion works, costs were paid in advance to ensure that the structure

was suitable to satisfy growing needs despite the lack of space.

It’s really the optimisation of space that is one of the principal reasons for the increase

in costs for the area.

CORPORATE & FACILITY

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Organization chartFA

CIL

ITIE

S

100,0%H-Osteria Srl

100,0%H-Ouse Srl

100,0%H-FARM

Talent Srl

100,0%Shado Srl

100,0%Celi Srl

INN

OV

ATI

ON

EDU

CA

TIO

N

100,0%H-FARM Education

100,0%H-International School Srl

40%Human TalentSchool Srl

100,0%H-International School Vicenza Srl

99,00%BigRock Srl

FONDAZIONEH FOR HUMAN

100,0%H-International School Rosà Srl

45,00%H-International School Monza Srl

H-FARM SPA

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PO

RTF

OLI

O IN

VES

TMEN

T

62,50%Galgo Srl

28,25%Responsa Srl

13,87%Pubcoder Srl

15,00%Wethod Srl

15,89%Insight Srl

13,30%Deswag Srl

10,00%Mobile1st Srl

10,00%Moku Srl

10,00%PonyU Srl

9,00%Travel Appeal Srl

8,19%Eattiamo Srl

7,50%Mio Assicuratore Srl

6,00%Biorfarm Srl

5,00%The Amazing F.C. Srl

10,00%Aromapass Ltd

10,00%Drinkout Srl

3,00%Genlots SA

1,05%Gek Srl

0,35%Sailogy SA

0,75%Venetwork Spa

1400azHenable S. Coop.

51,00%H-UB Srl

40,00%Habacus Srl

36,53%DesignWine Srl

25,00%Lumi Industries Srl

13,92%Dispell Magic Srl

3,00%Fubles Srl

10,00%Onering Srl

9,00%Akqa Srl

9,03%Get App Srl

7,90%Fannabee Srl

6,77%CII2 Spa

5,90%Tikly Srl

4,50%Smau Servizi Srl

10,00%12,00%Digital Rights Srl

2,00%ThinkInside Srl

1,01%Finboot Srl

0,75%P101 Sicaf SpA

0,19%Tritium Softw S.L.

0,42%Soldo Ltd*

1,19%Kontena Oy*

1,25%Shapr3d Ltd*

2,15%Traitly Ltd*

0,77%Fishwoodco Gmbh*

0,75%Tutora Ltd*

2,40%Klappo Ltd

15,27%Inreach Data Ltd

*tramite AngelList SPVsQriously Inc*0,75%

100,0%H-FARM Uk Ltd

14,88%Synapta Srl

99,0%Cross Library Service Srl

100,0%H-FARM US Inc

100%Zooppa Europe Srl

0,21%Leade.rs Inc

0,26%Cloud Academy Inc

3,00%Wishpot Inc

10,00%The Current Inc

47,90%Zooppa.com Inc

100,0%H-FARM India Pvt Ltd

100,0%Brandpotion Ltd

Diana e-com Corp Srl

10,00%Adzuki IVS

9,10%Interiobe Srl

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H-FARM’s share capital is currently made up of 89,241,650 shares, with a nominal value of €0.10 each.

At 31st December 2018, the Company holds a portfolio of 418,115 treasury shares (corresponding to around

0.47% of the total), including 255,000 shares to be transferred to the shareholders of H-International School

Rosà S.r.l., through the use, in accordance with the guarantees requested by them, of an escrow bank account.

It should be noted that shareholders representing 49.22% of the share capital have a shareholders’ agreement

in place regarding, among other things, the Company’s governance.

Details are contained in the admission document, published on the Company’s official website.

The following shareholders hold more than 5% of the share capital at 31st December 2018:

E-FARM S.R.L. (Riccardo Donadon - Founder, President and Chief Executive Officer)with a quota equal to 11,45%;

RED CIRCLE INVESTMENTS S.R.L. (Renzo Rosso)with a quota equal to 11.42%

GIUSEPPE MIROGLIOwith a quota equal to 8,65%

GIOL FAMIlYwith a quota equal to 6,39%

Shareholding

11,42%Red Circle

Investments Srl

8,65%GiuseppeMiroglio

6,39% 45,39%11,45%E-Farm

Srl

16,23% 0,47%

RICCARDO DONADONPRESIDENT

MAURIZIO ROSSIVICE PRESIDENT

TO BE APPOINTED

GIUSEPPE MIROGLIODIRECTOR

CARLO FERRARESIDIRECTOR

MARIACRISTINA GRIBAUDIINDEPENDENT DIRECTOR

MASSIMILIANO BENEDETTIDIRECTOR

BOARD OF DIRECTORS 1

EXTERNAL AUDITOR

BOARD OF STATUTORY AUDITORS

ANDREA DUODOPRESIDENT

LISA FEDRIGOSTANDING AUDITOR

GIANLUCA PIVATOSTANDING AUDITOR

TO BE APPOINTEDALTERNATE AUDITOR

TO BE APPOINTEDALTERNATE AUDITOR

GiolFamily

Market Ownshares

OtherInvestors

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RICCARDO DONADONPRESIDENT

MAURIZIO ROSSIVICE PRESIDENT

TO BE APPOINTED

GIUSEPPE MIROGLIODIRECTOR

CARLO FERRARESIDIRECTOR

MARIACRISTINA GRIBAUDIINDEPENDENT DIRECTOR

MASSIMILIANO BENEDETTIDIRECTOR

BOARD OF DIRECTORS 1

EXTERNAL AUDITOR

BOARD OF STATUTORY AUDITORS

ANDREA DUODOPRESIDENT

LISA FEDRIGOSTANDING AUDITOR

GIANLUCA PIVATOSTANDING AUDITOR

TO BE APPOINTEDALTERNATE AUDITOR

TO BE APPOINTEDALTERNATE AUDITOR

Company rolesat 2019/03/26

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CONSOLIDATED FINANCIAL STATEMENTS

2

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SAB

RIN

A E

NIC

OLA

Mai

ze M

agaz

ine

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MANAGEMENT REPORTFOR THE CONSOLIDATED FINANCIAL STATEMENTS AT THE YEAR END as of 2018.12.31

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INTRODUCTION

This management report of H-FARM SpA as at June 31, 2018 (the "Report") has been prepared in accordance with the Italian Civil Code and according to the Italian Accounting Principles formulated by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (national council of certified auditors and accounting professionals) and by the Organismo Italiano di Contabilità - (OIC) (Italian accounting board).

SIGNIFICANT EVENTS

The 2018 financial year can be summarised as follows:

• 23/01/2018: Depop increases the capital by 20 million dollars and plans a consolidation in the USA and in the same transaction H-FARM sells part of its participation obtaining a cash return with a multiple of about 6 times compared to the initial investment; 17/01/2019: Total exit from Depop for H-FARM generating a return of over € 2.6 million and a capital gain of over € 2.5 million;

• 26/02/2018: Cerved Rating Agency SpA assigns the public rating B1.1, requested by H-FARM

itself, on a voluntary basis;

• 26/03/2018: the Board of Directors approves the consolidated financial statements and the draft financial statements as at 31 December 2017 which recorded a production value up 47% to € 47.9 million and negative EBITDA for € 1,6m, a strong improvement compared to 2016;

• 26/04/2018: the Shareholders' Meeting approves the financial statements of H-FARM and the consolidated financial statements of the Group as at 31 December 2017 and appoints the new Board of Directors and the new Board of Statutory Auditors until the approval of the financial statements at December 31, 2020, confirming Riccardo Donadon Chairman of the Board of Directors;

• 15/05/2018: Partial exit for H-FARM from Travel Appeal with a return of 12 times the initial investment;

• 13/07/2018: the director Paolo Cuniberti resigns from the Board of Directors to focus on Habacus, a new startup linked to finance in the Education area;

• 27/09/2018: The Board of Directors approves the consolidated half-year report which shows a production value up 33% to € 29.5 million with a net improvement in the period;

• 23/10/2018: H-FARM concludes the plan for the purchase and sale of treasury shares (BuyBack Plan), implemented in execution of the resolution of the shareholders' meeting of 21 April 2017 by carrying out operations for a total of 99,000 treasury shares at an average price of € 0.7939 per share for a total amount of € 78,837;

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• 21/11/2018: Intermonte SIM Spa takes on the role, which will last one year, starting from 29 November 2018, taking over from Mediobanca - Banca di Credito Finanziario SpA, in the role of Specialist;

• 13/12/2018: The Board of Directors of H-FARM approves the acquisition of a first 10% of Diana E-Commerce Corporation Srl, an agency specialised in the creation, management and online sale of some of the most important fashion brands on the national and international scene;

• 21/12/2018: Managing director Maurizio Rossi announces that he has fallen below the shareholder threshold of 5%.

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RAYGardener @ H-Ouse

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REPRESENTATION OF RECLASSIFIED BALANCE SHEET ECONOMIC RESULTS The reclassified Income Statement based on management criteria at December 31, 2018 is shown below: 2018 2017 PRODUCTION VALUE1 61,139 44,344

OPERATING COSTS (60,030) (46,441)

EBITDA 1,109 (2,097)

AMORTISATION AND WRITE-DOWNS 4,171 3,086

EBIT (3,062) (5,183)

Non-recurring income (expenses)2 (784) -

Net financial income (expense) (442) (229)

Valuation adjustments to financial assets3 (294) (627)

PRE-TAX PROFITS (4,582) (6,039)

Taxes on income for the financial year (275) (200)

PROFIT/ (LOSS) FOR THE YEAR (4,857) (6,239) Values in € '000

For a more correct representation of the result of ordinary operations, starting from this year, the performance of the SBU Investment is also reflected in the EBITDA. In particular, the income such as capital gains on disposals and dividends, and costs such as capital losses and write-downs of the H-FARM Portfolio business unit are classified, in the item "Production Value" 2018 did not record any extraordinary M&A transactions falling within the scope of the consolidation, unlike 2017 which includes the results of the companies acquired during the year: Big Rock Srl, H-International School Rosà Srl, H-International School Vicenza Srl and Celi Srl.

For an in-depth analysis of the results at the business unit level, please refer to "Part 1 - H-FARM Life" of this Financial Statements Report. The Production Value amounted to € 61.1 million, with an increase of +37.9% compared to 2017, driven by an increase in volumes on a constant basis. If the results for 2018 are compared to those for 2017, there is a significant increase in the production value (+ € 16.7 million), or the Company's organic growth capacity which, together with the results deriving from the accrual of the portfolio (+ € 4.5 million), generated a positive EBITDA value (+ € 1.1 million).

Operating costs for the year, compared to the previous year, are proportionally in line with the impact on Production Value.

The total value of amortisation, depreciation and write-downs amounted to € 4.2 million and is mainly due to the amortisation of goodwill (€ 1.7 million) of which € 637 thousand was generated by the newly acquired companies just listed above and for € 1.1 million for amortisation of development costs.

1 The reclassification also includes H-Farm Portfolio's financial management result in the Production Value, equal to € 4,468 thousand. 2 Costs of a non-management and non-recurring nature are included here. 3 In 2018, adjustments to the value of financial assets are included in the Production Value for consistency in operating results.

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In the item income and expenditure, amounting to € 442 thousand in 2018 compared to € 229 thousand in 2017, only the financial items not related to the startup portfolio's management are classified.

Taxes, totalling € 275 thousand, consist solely of the Regional Tax for Productive Activity (IRAP) for which it is not possible to adhere to consolidated reporting. The improvement in the net result of the period a negative result for € 4.9 million, compared to € 6.2 million in 2017, completely transfers the improvement in EBITDA. The Income Statement as at 31 December 2018 prepared pursuant to Article 2424 of the Italian Civil Code, is shown in the specific section of the Financial Statements.

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FRANCESCAFacilities Manager @ H-International School

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BALANCE SHEET The Balance Sheet as at 31 December 2018 prepared pursuant to Article 2424 of the Italian Civil Code, can be summarised as follows:

BALANCE SHEET 31st December, 2018 31st December, 2017

Intangible fixed assets 18,381 18,820

Tangible fixed assets 2,349 2,058

Financial fixed assets 15,312 13,835

Fixed Assets 36,042 34,714

Inventory 806 244

Trade receivables from subsidiaries and associates 20,346 18,925

Financial assets 263 352

Liquid assets 4,627 5,531

Accrued income and prepayments 1,761 1,813

Short term current assets 27,804 26,865

Current assets 63,846 61,580

Payables 32,252 28,945

Accrued expenses and deferred income 7,135 5,329

Provisions for liabilities and expenses 62 72

Short-term liabilities 39,449 34,346

Employee severance indemnities 3,093 2,529

Net equity 21,303 24,704 Values in € '000

Since no extraordinary transactions took place during 2018, the comparison is clear and easy to read. In order to better understand the balance sheet items, the following reclassification is proposed:

31st December, 2018 31st December, 2017

FIXED CAPITAL 36,042 34,713

NET WORKING CAPITAL (5,929) (3,392)

TOTAL INVESTED CAPITAL 30,113 31,321

NET FINANCIAL PAYABLES 5,717 4,088

SEVERANCE INDEMNITIES 3,093 2,529

NET EQUITY 21,303 24,704

TOTAL FUNDS 30,113 31,321 Values in € '000

In detail:

FIXED CAPITAL 31st December, 2018 31st December, 2017 Intangible fixed assets 18,381 18,820

Tangible fixed assets 2,349 2,058

Financial fixed assets 15,312 13,835

TOTAL FIXED CAPITAL 36,042 34,713 Values in € '000

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In particular, the incremental change in fixed assets is due to the increase in financial fixed assets of approximately € 1.5 million, mainly attributable to investments in new investments, including in the Diana E-commerce Corporation.

NET WORKING CAPITAL 31st December, 2018 31st December, 2017 Inventories 806 244

Receivables 20,346 18,897

Assets other than fixed assets 234 46

Accrued and deferred assets 1,761 1,813

Short term current assets 23,147 21,000

Payables 21,879 18,991

Accrued and deferred liabilities 7,135 5,329

Provisions for liabilities and expenses 62 72

Current liabilities 29,076 24,392

TOTAL NET WORKING CAPITAL (5,929) (3,392) Values in € '000

With regard to Net Working Capital for comparative purposes, it should be noted that the major deviations refer to:

- Inventory: includes contract work in progress for services relating to orders not yet completed at December 31, 2018 which have been valued based on the percentage of completion. The greater incidence of medium/long-term projects has led to an increase in final inventories;

- receivables: the increase is directly connected to the greater amount of turnover;

- payables: the increase in debt positions is connected both to the higher costs connected to the increase in turnover and to the use of the payment of tax debts accrued during the year pursuant to Article 3-bis of Legislative Decree No. 462 of 1997;

- the change in deferred income amounting to € 1.806 million is mainly attributable to fees for the

2018/2019 school year. In detail, the credit and debit positions can be represented as follows:

RECEIVABLES 31st December, 2018 31st December, 2017 From clients 18,575 16,972

From subsidiaries - 377

From associates 778 362

Tax receivables 284 636

Short-term receivables - (28)

Receivables for prepaid taxes 321 369

Receivables from others 388 209

TOTAL RECEIVABLES 20,346 18,897 Values in € '000

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PAYABLES 31st December, 2018 31st December, 2017 To suppliers 10,412 8,590

To associated companies - 40

Taxes within 12 months 2,956 1,961

Taxes over 12 months 1,347 -

Social security 1,241 884

Other 5,923 7,516

TOTAL ACCOUNTS PAYABLE 21,879 18,991 Values in € '000

NET FINANCIAL PAYABLES 31st December, 2018 31st December, 2017 Cash and cash equivalents (4,627) (5,531)

Short-term receivables - (28)

Short-term financial liabilities 11 -

Short-term financial assets (29) (307)

Short-term payables to banks 4,875 4,137

Net short term financial debt 230 (1,729)

Medium and long term payables due to banks 5,487 5,817

Net medium and long term financial debt 5,487 5,817

TOTAL NET FINANCIAL DEBT 5,717 4,088 Values in € '000

At December 31, 2018, H-FARM had a negative Net Financial Position of € 5.7 million, slightly down compared to December 31, 2017.

SEVERANCE INDEMNITIES 31st December, 2018 31st December, 2017 Severance indemnities 3,093 2,529

TOTAL SEVERANCE INDEMNITIES 3,093 2,529 Values in € '000

OWN FUNDS (EQUITY) 31st December, 2018 31st December, 2017

Share capital 8,924 8,924

Share premium reserve 27,159 31,204

Treasury shares reserve - -

Legal reserve 4 4

Other reserves 315 124

Reserves for expected income hedging operations (49) (37)

Profits (losses) b/f (9,869) (7,677)

Operating profit/(loss) (4,857) (6,238)

Reserve for treasury shares (held in portfolio) (326) (1,601)

Third-party net equity 2 1 TOTAL EQUITY 21,303 24,704 Values in € '000

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The share capital is composed of 111,552,062 ordinary shares issued, of which: • 89,241,650 shares are already fully approved, signed and paid-up;

• 22,310,412 shares are approved, but not subscribed or paid-up and reserved for the Stock Option Plan 2019.

The nominal value of each share is € 0.10.

The negative reserve for treasury shares in the portfolio represents the average purchase price of the remaining shares at December 31, 2018 of the Company, equal to 418,115, of which 255,000 are set aside in an escrow bank account as a service to M&A transactions concluded in June 2017.

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JACOPOStudent @ H-International School

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MARKET RISK MANAGEMENT AND UNCERTAINTIES

Risks related to management Although fundamental for the success of H-FARM, and also in particular due to the network of relationships maintained, commercial potential, acquired credibility and relevant professional experience in the sector, the figures of the founders and other key persons in charge of the various areas, have now been joined by new executives who can be assigned top management positions in the future, even replacing existing management.

It should be noted that the Company pays particular attention to the training and growth of its personnel to develop internally the skills necessary to supervise each corporate function and intends to adopt adequate remuneration, loyalty and incentive systems for top management and other personnel who hold key positions.

Tax risks. During the course of its business, the Company and its subsidiaries are part of legal proceedings pending regarding the tax commissions. On the basis of the information currently available, as far as the Company is aware, such disputes are not able to generate significant unfavourable effects regarding the companies involved; however, it is not possible to exclude the possibility that the outcome of such disputes may in the future have negative effects on the economic, equity and financial situation of the Company and its subsidiaries. There could be a risk in the event of non-payment within the time allowed by instalments, following the use by the Company of the rescheduling of tax liabilities accrued during the year 2018, pursuant to Article 3-bis of Legislative Decree No. 462 of 1997.

Ongoing court proceedings and settlement agreements The judicial, legal and tax proceedings against the Company and its subsidiaries are, in the opinion of the Company, to be considered physiological in relation to the activity performed, to the operational dimensions of the Company and its subsidiaries, and are adequately covered by the provision of a specific risk fund.

Going concern From the analysis of the financial situation of H-FARM as a whole at December 31, 2018, having regard to the development plan and once having prepared a detailed cash forecast plan for a period of 12 months, the company is quite capable of coping with the ordinary management of the Company even taking into account the accrual of additional startups in the portfolio and the use of existing credit lines.

Risks related to the economic situation The Company operates mainly in Italy and is therefore exposed to the risk that any phenomena of economic recession may continue and/or recur in the country even though the share of turnover towards other European customers during 2018 has significantly increased.

Financial risks The Company has underwritten two hedging derivative financial instruments both linked to the loans obtained by Friuladria and Mediocredito pooled with Unicredit.

The first derivative financial instrument is a hedging IRS on the Mediocredito/Unicredit loan and has the following main features:

• Reference notional amount: € 5,000 thousand;

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• Bank parameter rate: floating;

• Floating rate parameter: 6-month Euribor;

• Customer parameter rate: fixed;

• Fixed rate parameter: 0.40%.

The second derivative financial instrument is a CAP purchase option exercised by the Company with the payment of a single premium of € 31 thousand. The main features of the financial instrument are as follows:

• Reference notional amount: € 1,600 thousand;

• Bank parameter: Euribor 6 months;

• Strike price CAP: 0.25;

• Premium: € 31 thousand.

Guarantees issued As of December 31, 2018, the Company issued guarantees totalling € 8.5 million, including an insurance guarantee for € 4.4 million due from the University Ca 'Foscari for commitments deriving from the contract relating to the three-year degree course in Digital Management, an insurance guarantee of € 2.7 million and a bank guarantee of € 993 thousand, regarding Finanziaria Internazionale Investment SGR SpA, as manager of the "Ca 'Tron H-CAMPUS Fund" to guarantee the preliminary and existing contract of leases relating to H-CAMPUS.

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GIUSEPPEVR Specialist @ Enabling Solution

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RELATIONSHIPS WITH RELATED PARTIES

With the exception of the transactions that will be shown below, in 2018, the Company and its subsidiaries did not engage in any transactions with Related Parties in the course of their business, pointing out that:

• the relationships of H-FARM with the subsidiaries whose share is less than 20% have not been reported;

• the relationships of H-FARM with companies of which the managing directors of H-FARM directly or indirectly hold shares of less than 20% are not shown;

• the relationships of H-FARM with companies directly or indirectly related to directors without proxies are not shown;

• the data relating to the remuneration of the directors of H-FARM are not shown, as already indicated in the specific section of the Notes to the relative companies.

The Company believes that the conditions envisaged and actually applied in relations with Related Parties are in line with normal market conditions, or the conditions that would be applied between two independent parties.

Personnel related to management

Ca' Tron Real Estate Srl referring to the directors Riccardo Donadon and Maurizio Rossi.

E-Farm Srl: referring to the director Riccardo Donadon and Giulia Franchin (wife).

Company Receivables 31/12/2018

Payables 31/12/2018

Invoices from to be

Revenue 31/12/2018

Costs 31.12. 2018

received 31/12/2018

CTRE 41 1,233 2 3 13 E-Farm 6 - - 5 - TOTAL 47 1,233 2 8 13 Values in € '000

Associated companies

Companies in which a share of more than 20% is held.

Values in € '000

Startup investments

Receivables 31.12.2018

Payables 31.12.2018

Invoices from to issue

31.12.2018

Turnover from to be received

31.12.2018

Notes deposits receive

31.12.2018

Notes deposits to be issued

31.12.2018

Revenues 31.12.2018

Costs 31.12.2018

Responsa 2 - - - 13 27 Habacus 40 - - - 5 37 - Human T. S. 100 - - 0,8 82 - Design Wine - 1 - - - - H-IS Monza 18 - 5 - 12 - Zooppa Europe 273 - 264 - 5 88 11 TOTAL 433 1 269 0,8 5 5 232 38

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OTHER INFORMATION

Participation held by the company in innovative startups At December 31, 2018 the Company's investments in innovative startups pursuant to Article 25, paragraphs 2 and 3, Decree Law 197/2012 amounted to € 1,615 thousand, this is 10.36% of the total portfolio value (net of the consolidated equity investments) which amounts to € 15,585 thousand.

Owning, buying and/or selling own shares; possession or purchase and/or disposal of shares or stakes in parent companies At 31 December 2018, the Company held 418,115 treasury shares in its portfolio, with a nominal value of € 0.10 each, including the 255,000 shares to be transferred to the shareholders of H-International School Rosà Srl, through the use of an escrow bank account in compliance with the guarantees requested.

The Company's shareholders holding more than 5% at December 31, 2018 are the following:

• E-Farm Srl with a share of 11.43%;

• Red Circle Investment Srl with a share of 11.42%;

• Giuseppe Miroglio with a share of 8.65%;

Secondary offices/local units of H-FARM SpA As of December 31, 2018, the Company has secondary offices or local units in the following locations: • Via Sile 6 - Roncade (TV) cap 31056 number REA TV - 310625;

• Via G. Borsi 9 - Milan (MI) cap 20121 number REA MI - 2071308;

• Via San Marco 26 - Milan (MI) cap 20121 number REA MI - 2071308;

• Via Rivaldi Ascanio 8 - Rome (RM) cap 00151 REA number RM - 1507944;

• Viale Artale Alagona 39 int. B, 44, 45, 46 - Catania (CT) cap 95126 REA number CT - 367351;

• Via Panciatichi 10-14 - Florence (FI) cap 50127 number REA FI - 651485.

Management and coordination activities The Company is not subject to management and coordination by companies or entities and defines its general and operational strategic guidelines in full autonomy. Pursuant to Article 2497 of the Italian Civil Code, directly and indirectly controlled companies as at 31 December 2018 are: • H-FARM US Inc.;

• H-FARM UK Limited,

• H-FARM Digital Media Private Limited,

• Brandpotion Ltd,

• Shado S.r.l.;

• CELI S.r.l;

• H-Farm Talent Srl;

• H-UB Srl;

• H-Farm Education S.r.l.;

• H-International School S.r.l.;

• H-International School Vicenza S.r.l.;

• H-International School Rosà S.r.l.;

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• BigRock S.r.l..

• H-Osteria Srl;

• H-Ouse Srl.

These listed companies have identified the Company as the entity that exercises management and coordination activity.

Tax consolidation Starting from the 2018 financial year, the scope of the national tax consolidation regime has expanded and includes all the companies that are part of the financial consolidation area except for the foreign subsidiaries and H-Farm Talent Srl and of H-UB Srl (established during 2018). Through this option it is allowed to determine the IRES (Corporate Tax) on a taxable basis corresponding to the algebraic sum of the positive and negative taxable amounts of the individual participating companies. The option, furthermore, pursuant to the last paragraph of the Article 117, has a duration of three financial years and is irrevocable.

Development Activities Pursuant to Article 2428, paragraph 2, number 1 of the Italian Civil Code, in 2018, development activities were carried out in many of the business units falling within the scope of H-FARM. Within the Education SBU:

- the development and promotion of the "H-CAMPUS" project; - the creation of a platform that meets both the needs of teaching and administrative and

communication with all the players in the school community with the aim of improving the involvement of the stakeholders;

- programming and design of new educational and masters' courses with workshops not only for children, teens and university students but also for adults;

- the planning and development of a platform designed primarily for training, through a virtual multi-presence system or rather digital-enhanced lesson.

Other activities have also been carried out within the Innovation SBU, for the development of innovative and increasingly functional platforms that allow better management of the corporate organisational processes; for the development of distance learning platforms; for the development and planning of both digital and paper publications on issues related to technological impact on people, companies and organisations.

Environmental health and safety The type of activity carried out by the Company does not involve risks or the occurrence of situations that could reasonably lead to environmental damage.

Information on personnel relations No significant events occurred during 2018.

Cà Tron (Roncade - TV), 26 March 2019 The Chairman of the Board of Directors

Riccardo Donadon

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ALLOCATION OF THE PROFIT FOR THE YEAR

Dear Shareholders, for the reasons set out above we propose that you approve the financial statements as at 31 December 2018 and to fully hedge the loss for the year of € 1,085,551.87 through the use of the Share Premium Reserve for the same amount.

Cà Tron (Roncade - TV), 26 March 2019 The Chairman

of the Board of Directors Riccardo Donadon

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CAMERON O SUBASHATeacher @ H-International SchoolLORENZOCreative Director @ BigRock

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SIGNIFICANT EVENTS AFTER 31st DECEMBER 2018 AND BUSINESS OUTLOOK

The first quarter of 2019, in addition to the normal management of ordinary activities, mainly saw:

• confirmation by the agency Cerved Rating Agency SpA of the public rating B1.1, requested by H-FARM itself, on a voluntary basis;

• the addition of Gianluca Pivato and Lisa Fedrigo to the Board of Statutory Auditors, following the resignation of Michele Furlanetto and Carlo Pesce, both of whom resigned from the office of Statutory Auditors of the Company, with immediate effect and for personal and professional reasons;

• the resignation of Dr. Stefania Baruffato as a Company Director, as a result of her recent departure from RED CIRCLE Investments;

• the creation of H-FARM Barcelona, the first international growth-oriented HUB on Spanish territory that aims to be a reference point in Spain to support the evolution of business models for Spanish companies through Open Innovation & Corporate Innovation that will enable increased competitiveness in the market and innovation in business models employing a greater focus on digitisation and emerging technologies.

For the following months, further growth is expected in the Innovation SBU both in terms of revenues and margins, as well as international development, while SBU Education is expected to obtain administrative authorisation to follow up the H-CAMPUS project. Our Portfolio has now matured and is particularly dynamic: various measures are underway to be completed within a short time, contributing to its further enhancement. We also expect the positive effect generated by the creation of new investment funds and the recapitalisation of some of the main Italian funds that we hope will significantly increase the resources available to startups (approximately € 900 million) (source: StartupItalia). Particular mention should be made of the forthcoming creation of a Fund with a start-up budget, provided for in the 2019 Budget Law, of approximately € 1 billion.

These consolidated financial statements provide a true and fair view of the balance sheet and financial position, as well as the consolidated result for the year as at 31 December 2019 and correspond to the accounting records.

Cà Tron (Roncade - TV), 26 March 2019 The Chairman of the Board of Director Riccardo Donadon

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LUISSStudent @ BA Degree

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CONSOLIDATED FINANCIAL STATEMENTS as of 2018.12.31

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H-FARM S.P.A.

Registered office in Via Sile No. 41 - 31056 RONCADE (TV) Approved share capital € 11,155,206.20 - subscribed and paid up € 8,924,165.00 Treviso

Companies Register - Tax Code and VAT No. 03944860265 Registration UIC 6566

www.h-farm.com

Consolidated Financial Statements as at 31/12/2018 Prepared according to the OIC Principles

Balance Sheet Assets 31/12/2018 31/12/2017

(of which already called up)

I. fixed assets 1. Formation costs 404,450 733,640 2 Development costs 4,032,681 2,617,660 3 Industrial Patents and Intellectual property 16,065 16,957

rights

4) Concessions, licences, trademarks and similar rights 145,457 195,724 5 Goodwill 12,082,195 13,737,713 6 Fixed assets in progress and advances 668,488 630,354 7. Others 1,032,168 888,335

Total 18,381,504 18,820,383

II. Materials 1. Land and Buildings

6,056

7,159 2 Plant and machinery 316,932 352,374 3 Industrial and commercial equipment 46,425 67,326 4. Other assets 1,335,609 1,301,768 5. Fixed assets in progress and advances 643,582 329,813

Total 2,348,604 2,058,440

III. Financial 1. Shareholdings in:

a) Unconsolidated subsidiaries 66,280 58,818 b) Associated companies c) Controlling companies

d) Companies under the control of the parent companies

d - bis) other companies

7,189,946

7,274,220

9,522,972

3,641,493 2. Receivables:

a) From subsidiaries

40,500 b) From associated companies 21

d - bis) from others 460,219 246,110 Due within the next financial year 460,219 246,110

Total receivables from others 460,219 246,110 Total receivables 460,219 246,110

3. Other securities 320,550 319,551 4. Derivative financial instruments (assets) 838 5,863

Total 15,312,053 13,835,328

A) Receivables from shareholders for payments still due

B) Intangible

Total fixed assets (B) 36,042,161 34.714.151

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C) Current Assets

I. 1.

Inventories Raw, auxiliary and consumable materials

26,309

6,565

3. Works in progress for orders 700,282 109,073 4. Finished products and goods 79,817 128,146

Total 806,408 243,784

II. Receivables 1. From clients

Due within the next financial year 18,575,287 16,972,184 Total receivables from customers 18,575,287 16,972,184

2 From subsidiaries

Due within the next financial year 51 376,870 Total receivables from subsidiaries 51 376,870

3 From associated companies

Due within the next financial year 778,741 361,969 Total receivables from associated companies 778,741 361,969

4. From parent companies 5. From companies subject to the control of

holding companies 5- bis. Tax receivables

Due within the next financial year

283,583

636,016 Total tax receivables 283,583 636,016

5-ter. Pre-paid taxes 320,520 368,623 5-quater. From others

Due within the next financial year

388,298

209,184 Total receivables from others 388,298 209,184 Total 20,346,480 18,924,846

III. Current financial assets that are not fixed assets

1) Investments in associated companies

262,844

351,943 Total 262,844 351,943

IV. Cash and cash equivalents 1) bank and postal deposits

4,610,060

5,519,019 3) Cash and equivalents in hand 17,375 12,430 Total 4,627,435 5,531,449

Total current assets (C) 26,043,167 25,052,022

D) Accruals and prepayments 1,761,138 1,813,332

Total assets 63,846,466 61,579,505

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Balance Sheet Liabilities 31/12/2018 31/12/2017

A) Net Equity

I. Capital 8,924,165 8,924,165 II. Share premium reserve

III. Revaluation reserve IV. Legal Reserve

27,159,072

4,054

31,204,178

4,054 V. Statutory reserve

VI. Other reserves, indicated separately

Extraordinary reserve 1 1 Other reserves 831,258 834,027 Translation difference reserve Capital account payments Difference from rounding to unit of euros

(516,068) (709,822)

315,191 124,206 VII. Reserve for hedging of anticipated

cash flows VIII. Profit (loss) carried forward

(48,841)

(9,869,291)

(36,975)

(7,676,949) IX. Profit (loss) for the year (4,856,543) (6,238,356) X. Negative reserve for treasury shares

(held in portfolio) (325,724) (1,601,470)

Total Net Equity of the Group 21,302,083 24,702,853

Third party result (225) (48)

Total Third Party Net Equity 1,994 1,425

Total Net Equity 21,303,852 24,704,230

B) Provisions for liabilities and charges

1) for payment of pensions and similar obligations 11,831 29,193 3) financial liabilities' derivatives 82 141 4) Others 49,679 42,838

Total provisions for risks and charges 61,592 72,172

C) Severance indemnities 3,093,958 2,529,000

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2. Convertible bonds issued 3. To shareholders 4. To Banks

Due within the next year 4,747,505 4,136,725 Due after the next financial year 5,487,082 5,816,679 Total amounts due to banks 10,234,587 9,953,404

5. To other lenders Due within the next financial year 127,073 920 Total payables to other lenders 127,073 920

6. Advances 7. Payables to suppliers

Due within the next year 10,411,413 8,591,366 Total payables to suppliers 10,411,413 8,591,366

9. Payables to parent companies 10. Payables to associated companies

Due within the next financial year 12,382 38,720 Total payables to associated companies 12,382 38,720

11. Payables to parent companies 11-bis. Amounts due to companies subject to the

control of parent companies 12. Tax payables

Due within the next financial year 2,956,225 1,960,745 Due after the next financial year 1,347,369

Total tax payables 4,303,594 1,960,745 13 Payables to social security institutions; 1,240,521 883,541 14 Other payables

Due within the next financial year

5,922,629

7,208,663 Due after the next financial year 307,957

Total other payables 5,922,629 7,516,620

D) Payables

Total Payables 32,252,199 28,945,286

E) Accruals and prepayments 7,134,865 5,328,817

Total liabilities 63,846,466 61,579,505

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DENNYLiving Experience @ H-Osteria

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Income Statement 31/12/2018 31/12/2017

A) Production value

1 Revenues from sales and services 51,959,272 40,980,333 2. Change of product inventories 568,134 (4,425)

in progress, semi-finished and finished

3 Change in orders being processed 31,121 4 Fixed asset increases for internal work 2,573,420 2,435,617 5 Other revenues and income

- Various 775,981 409,486 - Grants for current expenses 765,484 480,813 - Capital grants 28,840 11,190

Total other revenues and income 1,570,305 901,489

6. For raw materials, ancillary materials, consumables and goods

11,214,249 7,554,447

7. For services 16,414,828 15,066,416 8 For leased assets of third parties 4,313,999 3,497,364 9 For staff

a) Wages and salaries 20,117,724 14,689,901 b) Social security contributions 5,528,663 3,702,894 c) Employee severance indemnities 1,432,754 987,026 d) Employee pensions and similar obligations

e) Other costs 485,060 57,320 Total personnel costs 27,564,201 19,437,141

10. Amortisation/depreciation and write-downs

a) Amortisation of intangible assets tangible

3,514,939

2,552,614

b) Depreciation of fixed assets 374,328 253,221 c) Other write-downs of fixed assets 42,824 d) Write-downs of receivables included in current assets cash and cash equivalents

282,003 236,715

Total amortisation/depreciation and write-downs 4,171,270 3,085,374

11. Change in inventories of raw, ancillary and consumables materials and goods

12. Provisions for risks

9,523 1,048

13 Other provisions

14. Other operating expenses 1,297,086 884,824

Total production costs 64,985,155 49,526,614

Difference between value and production costs (A-B) (8,314,025) (5,182,479)

B) Production costs

Total production value 56,671,131 44,344,135

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15. Income from investments - from subsidiaries

- from associated companies 822,428 166,000 - others 3,939,477

Total income from investments 4,761,905 166,000

16. Other financial income a) from receivables held under fixed assets

from subsidiaries from affiliated companies - from parent companies others

b) from non-current securities 583 7,666 c) from current securities d) income other than previously mentioned

from subsidiaries from affiliated companies from parent companies from companies under the control of the parent companies

- others 8,513 22,474 Total income other than the above 8,513 22,474

Total other financial income 9,096 30,140 17. Interest and other financial charges:

from subsidiaries from associated companies

- from parent companies

- others 701,008 391,211 Total interest and other financing costs 701,008 391,211

17.bis) foreign exchange gains and losses (43,946) 33,850

C) Financial income and charges

Total financial income and charges 4,026,047 (228,921)

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18. Revaluation

a) of investments b) of financial fixed assets

c) of current securities d) financial derivatives

124,889

Total revaluations 124,889

19. Write-downs: a) of investments

b) of financial fixed assets c) of current securities d) financial derivatives

(293,654)

(751,696)

Total write-downs (293,654) (751,696)

Total value adjustments of financial assets (18 - 19) (293,654) (626,807)

Pre-Tax profit (loss) (A-B+-C+-D) 20. Current, deferred and pre-paid income taxes

(4,581,632)

(6,038,207)

Current taxes 232,220 214,375 Taxes related to previous financial years (5,127)

Prepaid and deferred taxes 48,044 (14,178) Total Income taxes, current, deferred and pre-paid

275,137 200,197

21. Profit (loss) for the year (4,856,543) (6,238,404) Result pertaining to third-parties (225) (48) Group's share of net result (4,856,768) (6,238,356)

Cà Tron (Roncade - TV), 26 March 2019 The Chairman

of the Board of Director Riccardo Donadon

D) Valuation adjustments of financial assets

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MARCOTeam Leader @ Sparx

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Cash flow statement

As provided by the OIC accounting standard No. 10, the financial information is shown below

Values in € 000 31/12/2018 31/12/2017 A) Financial flows deriving from the management operat. (indirect method)

Profit (loss) for the year (4,857) (6,238) Income taxes 275 200 Interest liabilities/(assets) 692 391 (Dividends) (153) (126) (Capital gains)/Capital losses from sale of assets (4,609) (40) 1. Profit (loss) for the year before tax on income, (8,652) (5,813)

interest, dividends and surplus/minus from sale Adjustments for non-monetary items that have not been offset in the net working capital

Provisions 847 1,489 Depreciation of fixed assets 3,889 2,806 Write-downs for long-term value losses 371 43 Other adjustments for non-monetary assets 17

Total non-cash item adjustments 5,108 4,355

2. Cash flow before changes in net working capital Changes in net working capital (3,544) (1,458)

Decrease/(Increase) in inventories 29 (26) Decrease/(Increase) in trade receivables (2,476) (2,656) Increase/(Decrease) in payables to suppliers 1,820 1,991 Increase of other assets and other liabilities 2,912 8,972

Total changes in net working capital 2,285 8,281

3. Cash flow after changes in net working capital Other adjustments (1,259) 6,823

Interest received/(paid) (692) (391) Dividends and capital gains collected 153 166 Income taxes paid (199) (459) Use of funds (17) 297)

Total other adjustments (755) (980) Cash flows from operations (A) (2,014) 5,842

B. Cash flows arising from investment activity

Tangible fixed assets (Investments)

(728)

(450)

Investment realisation price Intangible fixed assets

64

(Investments) (3,189) (9,610) Investment realisation price

Financial fixed assets 244

(Investments) (3,065) (1,658) Investment realisation price 5,794 83

Non-fixed financial assets

(Investments) (12) (66) Realisation price of business investments net of cash at bank and on hand

101 -

Acquisition or disposal of subsidiaries or other business units net of cash and cash equivalents

(2,376)

Cash flows from investing activities (B) (791) (14,079)

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Third-party financing

Increase/(Decrease) in short-term bank payables (810) 169 Convertible debenture loan New financing

2,287

6,052

Repayment of loans (1,070) (877) Equity

Other changes in net equity 221 799 Sale/(purchase) of own shares (Dividends paid)

1,273 (1,601)

Cash flows from financial activities (C) 1,901 4,542 Increase (decrease) in cash and cash equivalents (A ± B ± C) (904) (3,695) Cash and cash equivalents at 1 January 5,531 9,226 Cash and cash equivalent at 31 December 4,627 5,531

Cà Tron (Roncade - TV), 26 March 2019 The Chairman

of the Board of Directors Riccardo Donadon

C. Cash flows arising from financing activities

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MEGANSchool Office Assistant @ H-International School

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EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS as of 2018.12.31

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H-FARM S.P.A.

Registered office in Via Sile No. 41 - 31056 RONCADE (TV) Approved share capital € 11,155,206.20 - subscribed and paid up € 8,924,165.00 Treviso

Companies Register - Tax Code and VAT No. 03944860265 Registration UIC 36566

www.h-farm.com

Explanatory Notes to the consolidated financial statements as at 31/12/2018

Introduction H-FARM S.p.A. (the "Company") is a Company listed on 13 November 2015 on the AIM Italia/Alternative Capital Market organised and managed by Borsa Italiana SpA (Italian stock exchange) ("AIM"). The Company, together with its subsidiary companies described in more detail below, form the H-FARM group, hereinafter referred to as "H-FARM".

As of 31/12/2018, the portfolio consists of a total of 75 equity investments:

• 13 companies included in the scope of consolidation;

• 4 subsidiaries not included in the scope of consolidation;

• 58 startups;

• 3 vehicle companies that invest directly in startups;

• 1 foundation.

For the graphical representation of the company organisation chart, see "Part 1 - H-FARM Life" of the Financial Statements.

These consolidated financial statements have been prepared by consolidating with the full consolidation method of the financial statements of the parent company (H-FARM SpA), as well as those of all the companies in which it directly or indirectly holds the majority of the shares or quotas in the capital, with the exception of investments in subsidiaries held since the beginning, for the specific purpose of a subsequent sale, as required by letter d) of Article 28, Legislative Decree 127/91.

The subsidiaries included in the consolidation area are:

• H-FARM S.p.A. (Parent Company);

• H-FARM Digital Media (India) Pvt Ltd;

• H-FARM UK Ltd;

• H-FARM US Inc.;

• Shado S.r.l.;

• Celi S.r.l;

• H-Farm Talent Srl;

• H-Farm Education S.r.l.;

• H-International School S.r.l.;

• H-International School Vicenza S.r.l.;

• H-International School Rosà S.r.l.;

• BigRock S.r.l.;

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• H-Ouse Srl;

• H-Osteria Srl.

The following companies have not been included in the consolidation (though they are subsidiaries):

Brandpotion Ltd, as it is being held for the specific purpose of its subsequent sale (Article 28, Legislative Decree No. 127/91, paragraph (d);

Cross Library Services Srl, a subsidiary of Celi Srl, has been excluded from the scope of consolidation as it is irrelevant for the purposes of a true and correct representation of the equity, financial position and the economic result of the H-FARM group (OIC 17, paragraph 39, letter a);

Zooppa.com Inc., a subsidiary of "H-Farm US Inc", since the fully diluted shareholding held (including all stock options issued by the Company and under way) is 47.90%. Furthermore, this shareholding is being held for the specific purpose of its disposal.

H-Ub Srl, as it was established in November 2018 and therefore will produce the first financial statements at 31 December 2019.

For an analysis of the significant facts that occurred during the 2018 financial year as well as for historical notes regarding H-FARM, please refer to the Management Report of these consolidated financial statements and to "Part 1 - H-FARM Life".

Potential membership of a Group The Company, as mentioned, is the parent company of the entire H-FARM project and therefore exercises the direction and coordination of the various subsidiary companies.

Formation criteria The financial statements as at 31/12/2018, which show all the transactions carried out by the Company, were prepared in compliance with the criteria established by the Italian Civil Code according to the articles 2423 to 2426. In compliance with the standards dictated by the Legislative Decree 139/2015, which implemented the European Directive 34/2013/EU, the financial statements have been drawn up according to the new regulations dictated by articles 2424 and 2425 and in compliance with the accounting principles issued by the National Council of Chartered Accountants and the Italian Accounting Body. Except for the necessary adjustments made to the schedules provided for the financial statements for the purposes of preparing the consolidated financial statements, the structure and content of the consolidated balance sheet and income statement are those prescribed for the financial statements of the parent company H-FARM SpA . These explanatory notes contain all the information required by the Article 38 of the legislative decree No. 127/91 and subsequent amendments. The explanatory notes are intended to provide an illustration, analysis, and in some cases supplement the financial statements' data and contain the information required by article 2427 of the Italian Civil Code and by other legislative requirements. Moreover, the financial statements provide all information deemed necessary to give a true and fair view, even if not specifically required by law.

Consolidation principles applied in the preparation of the consolidated financial statements The consolidated financial statements have been prepared by consolidating on a line-by-line basis the financial statements of the Company, as well as those of all the companies in which it directly or indirectly holds the majority of the shares or quotas of the capital with the exception of investments in irrelevant or owned subsidiaries which were intended from the beginning to be subsequently sold, as required by letters a) and d) of Article 28, Legislative Decree 127/91. The subsidiaries included in the consolidation are those indicated in the introduction.

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Equity investments in associated companies and other investments are recorded at the lower of the cost and the presumed realisable value, since they were held from the beginning for the specific purpose of their subsequent sale.

In preparing these consolidated financial statements, the assets, liabilities and income and expenses of companies included in the consolidation area have been included in full (line by line).

We then proceeded to eliminate:

• the book value of the investments held by the parent company in the subsidiaries included in the consolidation and of the corresponding fractions of the shareholders' equity of the companies;

• intra-group financial trade receivables and payables;

• charges and income relating to transactions between consolidated companies;

• receivables and payables, charges and income deriving from the tax consolidation;

• of intra-group guarantees;

• any higher carrying amount of equity investments with regard to the pertinent shareholders' equity at the time of acquisition was allocated to the item "Goodwill" and is included in intangible assets.

The tax effects deriving from consolidation adjustments made to the financial statements of the consolidated companies are accounted for, where necessary, in the provision for deferred taxes or in assets for prepaid taxes.

The consolidated financial statements refer to the same date of closure of the financial statements of the Company. It should be noted that the annexed consolidated interim financial statements have not been subject to derogations pursuant to Article 2423, paragraph 4, of the Italian Civil Code. The reconciliation between the shareholders' equity and the net profit shown in the Company's financial statements as of December 31, 2018 and the shareholders' equity and the profit for the year of the consolidated financial statements at the same date is presented in the comment on the shareholders' equity section.

Application of uniform accounting principles The companies included in the consolidation have applied correct accounting principles that are substantially compliant with Italian legislation and are sufficiently homogeneous with the principles adopted by the parent company. Consequently it was not necessary to make changes in the accounting records of the investee companies.

Reference date: area and method of consolidation The Consolidated Financial Statements at 31.12.2018 of the Company include, in addition to its own financial statements, the financial statements, again referring to 31.12.2018, of the subsidiaries of which the Company holds control pursuant to the I and II paragraph of the Article 2359 of the Civil Code with the exception of the investments held for the specific purpose of their subsequent sale and of the investments deemed irrelevant pursuant to the OIC 17. Subsidiaries have been consolidated using the full consolidation method. The companies included in the consolidation area are indicated in the first part of this explanatory note.

Financial statements used The financial statements used for consolidation are the financial statements of the individual companies already approved by the shareholders' meetings or prepared by the respective administrative bodies for approval.

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Conversion criteria for financial statements not prepared in Euro The conversion of the financial statements of foreign subsidiaries: H-Farm US Inc., H-Farm UK Ltd, H-Farm Digital Media (India) Pvt Ltd, expressed in a currency other than the Euro, has been carried out by adopting the following procedures: • the assets and liabilities of the foreign subsidiaries have been converted on the basis of the current

exchange rates at 31/12/2018;

• the components of the income statement have been converted based on the average exchange rates for the 2018 financial year;

• the emerging exchange differences have been debited or credited to a specific reserve in the consolidated shareholders' equity denominated “Reserve for translation differences”.

The exchange differences arising from the translation of the shareholders' equity items are allocated to a specific item in the shareholders' equity together with those deriving from the conversion of the income statement at average exchange rates with respect to the final exchange rate for the year. The exchange rates used when preparing these consolidated financial statements for the purpose of converting the financial statements expressed in another currency into euros are as follows (source Bank of Italy):

Currency Exchange

rate at Exchange

rate at Average

exchange rate Average

exchange rate 31/12/2018 31/12/2017 2018 2017

US Dollars 1.145 1.1993 1.181 1.1297 Pound Sterling 0.89453 0.88723 0.88471 0.87667 Indian Rupee 79.7298 76.6055 80.7332 73.5324

Going concern The company closed 2018 with a net loss of € 4,857 thousand, which reduced the consolidated shareholders' equity at December 31, 2018 to a value of € 21,302 thousand. The net financial position at December 31, 2018 is negative for € 5,717 thousand. The financial and treasury management led during the year to the payment of tax debts, for which in-depth reference is made in the description in the subsequent paragraphs. For this reason, the Directors have prepared a budget for the 2019 financial year approved at the same time as the draft financial statements, which also provides, against a maturity of the portfolio deemed attractive by counterparties of a different nature, the financial balance regarding the sale of some subsidiaries. In any case, even in the absence of such transactions, through the use of existing credit lines, it is deemed that the conditions for the continuation of the business activity exist. Taking into account the situation of such prospective, the Board of Directors, after a careful evaluation, considered that the conditions for the continuation of the company activity exist and therefore they drafted the financial statements with a view to business continuity.

Valuation criteria Financial statement items were evaluated based on the general criteria of prudence and accrual, and on a going concern basis. The application of the principle of prudence led to the individual assessment of the elements comprising single entries or items for assets or liabilities, to avoid offsetting losses that should have been included and profits not to be recognised insofar as they are as yet unrealised. In compliance with the principle of accrual, the effect of transactions and other events has been noted in the accounts and assigned to the financial year to which these transactions and events relate, and not to that in which the relative movements of the cash flow (receipts and payments) materialise. The continuity of application of the valuation criteria over time is necessary to ensure the comparability of the company's financial statements for the different financial years. However, in view of the changes made to the financial statement formats required by the articles 2424 and 2425 of the Italian Civil Code by Legislative Decree 139/2015,

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as well as the national accounting standards OIC, the corresponding items of the previous year have been reclassified, relative to the income statement only, in order to make the data provided completely comparable. Taking into account the economic function of the assets and liabilities which expresses the principle of substance over form - obligatory unless otherwise explicitly inconsistent with other specific rules on financial statements - the evaluation permits representation of the transactions according to the economic situation underlying the formal aspects.

Derogations There were no exceptional circumstances that would require the use of derogations under Article 2423 paragraph 4 of the Italian Civil Code. In particular, the evaluation criteria adopted in drafting the financial statements were as follows.

Fixed Assets

Intangible These are entered at the original purchase cost and are shown net of amortisation over the fiscal years and directly attributed to the individual items. The item of start-up and expansion costs consists of charges with multi-year utility and has been amortised over a period of 5 years. "Concessions, licences and similar rights" have been amortised at the rate of 33.33%, while "trademarks" have been amortised based on their estimated useful life of 10 years (equal to 10%). Development costs have been amortised in accordance with the provisions of Article 2426, paragraph 1. No. 5 of the Italian Civil Code, over a period not exceeding 5 years.

Goodwill (consolidation difference), which originates from the elimination of investments in consolidated companies, has been amortised over a period of 10 years as it is considered that this is the period necessary to internally acquire the competitive advantage achieved thanks to the acquisitions made.

Materials

These are entered at purchase cost and adjusted by the equivalent depreciation provisions. The financial statements' value takes into account any ancillary expenses and costs incurred for the use of fixed assets, leading to a reduction of any significant trade discounts and cash discounts. The depreciation charged to the income statement is calculated according to the use, allocation and economic life of the assets, based on the criteria of residual possibility of use, criteria we deemed representative of the following rates, unchanged with respect to previous year and reduced by half in the year of entry into operation of the asset. Regardless of previously recorded depreciation, should there be a permanent impairment of value, the asset is written down. If in subsequent years the reasons for the write-down no longer exist, the original value net of accumulated depreciation is restored. No discretionary or voluntary revaluations were made and the valuations made have a maximum value-in-use limit of said fixed asset, objectively determined.

Financial

The equity investments excluded from the consolidation are recorded under financial fixed assets,

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valued with the criterion of cost including any additional charges, net of write-downs relating to those losses deemed capable of lastingly influencing the value of said investments. The book value is determined on the basis of the purchase or subscription price and subsequent further monetary contributions.

Any lasting losses in the value of the investments have been determined by submitting the individual investments to Impairment Tests, only if significant, and comparing the value in use (value of the investment) with the recoverable value determined by applying valuation criteria in line with those recommended by the International Private Equity and Venture Capital Valuation Guidelines issued by the IPEV Board.

Treasury shares Treasury shares are recorded under shareholders' equity in the item "Negative reserve for treasury shares in portfolio", in application of the changes introduced following the issue of Legislative Decree No. 139 of 18/08/015. Treasury shares, as they are destined to be kept in the portfolio for a long time, have been valued at purchase cost. No write-down was made for permanent losses in value.

Inventories Inventories for contract work in progress are recognised to the extent corresponding to the revenue accrued at the end of each financial year determined with reference to the state of progress of the work based on the costs incurred of the total costs envisaged. Inventories of raw materials, ancillary materials and consumables as well as finished products and goods are valued on the basis of the average purchase cost.

Receivables With reference to the payables recorded in the financial statements prior to the financial year beginning on or after 1 January 2017, they are posted at face value since, as required by the OIC 15 standard, it was decided not to apply the amortised and discounted cost criterion. The adjustment of the nominal value of the receivables to the presumed realisable value is obtained through a specific provision for bad debts, established to estimate losses due to non-collection at the date of preparation of the financial statements, taking into account general economic and sector conditions and also country risk. The amortised cost criterion for receivables arising from 1 January 2017, has also not been applied as the effects are irrelevant for the purpose of a true and correct representation. Therefore these receivables are also shown at their presumed realisable value. Receivables originally due within the year and then transformed into long-term receivables have been posted in the balance sheet as financial fixed assets.

Accruals and deferrals These were calculated based on the actual accrual period of the financial year. For multi-year accruals and deferrals, the conditions that led to the original entry were verified, with appropriate changes adopted where necessary.

Cash and cash equivalents These are recorded at nominal value, verified on the basis of a specific reconciliation table and consist of cash, checks and bank current accounts.

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Provisions for risks and charges These are allocated to cover losses or liabilities that are certain or probable, but whose amount or date of occurrence could not be established at the end of the financial year. In evaluating these provisions, the general criteria of prudence and competence were respected and no generic risk funds without economic justification were established. Contingent liabilities were recognised in the financial statements and recorded in the provisions insofar as they are considered likely and the amount of the related burden can be reasonably estimated.

Provision for employee severance indemnities (TFR) This represents the effective debt accrued towards employees in accordance with the law and any work contracts in force, taking into account any form of remuneration having a continuous character. The fund represents the total indemnities due to employees at the date of the financial statements, net of advances paid, and is equal to what would have been paid to employees in the event of termination of employment on that date.

Payables With reference to the payables recorded in the financial statements prior to the financial year beginning on or after 1 January 2017, they have been recorded at face value since, as required by the OIC 19 standard, it was decided not to apply the amortised and discounted cost criterion. For payables arising from 1 January 2017, with reference only to payables due to banks for loans, the amortised cost criterion was applied whereas for all other payables, the same criterion was not applied since the effects are irrelevant for the purpose of a true and correct representation and therefore these payables are shown at nominal value.

Payables for holidays accrued by employees and for deferred remuneration, including the amount due to social security institutions, are allocated based on the amount that should be paid in the event of termination of the employment relationship at the balance sheet date.

Income taxes The taxes are allocated in accordance with the accrual principle; therefore, they represent:

• provisions for taxes paid or to be paid for the year, determined in accordance with current rates and regulations;

• the deferred or prepaid amounts in respect of temporary differences arising or reversed during the year.

Starting from the 2018 financial year, all the companies that are part of the financial consolidation scope except for the foreign subsidiaries and H-Farm Talent Srl (established in February 2018) fall under the national tax consolidation regime. Through this option it is allowed to determine the IRES (Corporate Tax) on a taxable basis corresponding to the algebraic sum of the positive and negative taxable amounts of the individual participating companies. The option, furthermore, pursuant to the last paragraph of the Article 117, has a duration of three financial years and is irrevocable. The economic relations, as well as the mutual responsibilities and obligations, between the consolidating company and its aforementioned subsidiaries are defined in the consolidated agreement to which reference is made. IRAP (Regional Tax), if due, current, deferred and prepaid is determined with reference to the companies included in the scope of consolidation.

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It should be noted that the assets relating to prepaid taxes on the tax losses generated have not been prudently accounted for as it is considered appropriate to postpone this possible recording once the economic profitability envisaged by the business plan has been reached.

Recognition of revenue and costs Revenues for the provision of services are recognised on the basis of their completion and/or accrual, in particular, the projects that were still in progress at the end of the year were recognised under inventories based on the percentage of completion as envisaged by the OIC 23. Therefore, Inventories for contract work in progress have been recognised to the extent corresponding to the revenue accrued at the end of each financial year determined with reference to the state of progress of the work based on the costs incurred of the total costs predicted. Revenues from the sale of products are recognised at the time of transfer of ownership, which generally coincides with shipment, net of returns, discounts, allowances and rebates. Transactions with related parties took place at normal market conditions. Financial income and expenses are recorded on an accrual basis. Revenues and income, costs and charges related to foreign currency transactions are calculated at the exchange rate prevailing on the date the transaction is completed.

Conversion criteria for values expressed in currency Monetary assets and liabilities in foreign currency are entered at the spot exchange rate at the year-end date; the resulting profits or losses on exchange rates must be charged to the income statement and any net profit is allocated to a specific non-distributable reserve until realisation. Non-monetary assets and liabilities in foreign currency must be entered at the exchange rate in effect at the time of their purchase.

Guarantees, commitments, third-party assets and liabilities The risks relating to personal or real guarantees granted for another party’s debts has been shown in the specific paragraph of the explanatory notes for an amount equal to the amount of the guarantee granted. The amount of another party's debt guaranteed on the financial statement's reference date, if less than the guarantee granted, is shown in this explanatory note. The commitments have been shown in the explanatory notes at their nominal value, taken from the relative documentation. Risks for which the appearance of a liability is probable are described in the notes, and allocated to the appropriate provision criteria in risk provisions. Risks for which the manifestation of a liability is only possible are described in the notes, without making provisions for risks according to relevant accounting standards. No account was taken of any remote risks.

Items that fall under more items of the financial statements In the explanatory notes if an asset or liability item falls under more than one item of the schedule, it must be noted that it also belongs to items other than those under which it is recorded if it is necessary for the understanding of the financial statements.

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NICOLADeveloper @ Enabling solution

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ASSETS

B) Fixed Assets

I. Intangible fixed assets

Balance at 31/12/2018

Balance at 31/12/2017

Changes

18,381,504 18,820,383 (438,879)

The change in the item intangible assets is generated by decreases due to amortisation for € 3,515 thousand and increases due to acquisitions for € 3,320 thousand mainly recognised following new capitalisation for development costs of € 2,190 thousand, concessions for licences and trademarks for web platforms for € 79 thousand, set-up and expansion costs for € 11 thousand and for intangible assets in progress for € 470 thousand. Goodwill is generated by the accounting difference between the shareholders' equity of the company being acquired and the price paid for the acquisition. The following is the detail of the net goodwill accounting value divided by the reference SBUs.

Formation costs

Costs of

development

Industrial patent

rights and rights of

use of intellectual

property

Grants, licences,

trademarks and similar

rights

Goodwill

Fixed assets

Intangible in

progress and

advance payments

Other intangible

fixed assets

Tot. intangible

fixed assets

Value at beginning of year

Cost 1,901,383 4,011,802 26,214 522,112 16,695,441 630,354 2,391,522 26,178,828

Revaluations - - - - - - - - Amortisation. (F. amor.) (1,167,743) (1,394,153) (9,257) (342,906) (2,936,763) - (1,486,674) (7,337,495)

Write-downs - - - - (20,965) - - (20,965) Value of financial statements 733,640 2,617,670 16,958 179,206 13,737,713 630,354 904,849 18,820,389 Changes during the financial year

Incr. for purchase 10,813 2,189,576 - 78,550 - 571,268 469,626 3,319,833 Riclass (of finan. Stat. value) 4,992 331,001 - 15,592 - (331,001) (20,584) - Decrease for sales and disposals (from cal of finac. Stat.)

- - - - - (202,134) (41,581) (243,715)

Revaluations - - - - - - - -

Amort. ror year (344,995) (1,105,556) (893) (127,890) (1,655,517) - (280,141) (3,514,991) Write-downs for year - - - - - - - -

Other changes - - - - - - - -

Tot changes (329,190) 1,415,022 (893) (33,748) (1,655,517) 38,134 127,321 (438,872) Value of financial statement

Cost 1,742,036 6,737,588 26,214 460,329 16,695,441 668,488 2,587,012 28,917,108

Revaluations - - - - - - - -

Amort. (F. amort) (1,337,586) (2,704,908) (10,149) (314,872) (4,592,280) - (1,554,843) (10,514,638)

Write-downs - - - - (20,965) - - (20,965) Value of financial statement 404,450 4,032,680 16,065 145,457 12,082,195 668,488 1,032,169 18,381,504

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Goodwill 31/12/2017 31/12/2018 SBU innovation 8,451,293 7,365,154

SBU Education 5,098,974 4,548,340

SBU Corporate & Services 187,446 168,702 TOTAL 13,737,713 12,082,195

Start-up and expansion costs, whose net book value amounts to € 404 thousand, mainly refer to expenses incurred in previous years for the stock exchange listing transaction totalling € 1,538 thousand historical cost. Development costs, whose net book value amounts to € 4,033 thousand, had, among other things, an increase during the year of € 2,190 thousand mainly relating to the “Strategy Innovation Culture” projects included in the SBU Innovation for € 400 thousand and the development of the "Diploma Programme" project for € 299 thousand within the SBU Education.

II. Tangible fixed assets

Balance at 31/12/2018

Balance at 31/12/2017

Changes

2,348,604 2,058,440 290,164

Land and Buildings

Plant and machinery

The item tangible fixed assets mainly refers to electronic office machines for a net carrying amount of € 513 thousand, to furniture and furnishings for a net carrying amount of € 749 thousand, to computers

Industrial Equipment and trade

Other intangible tangible

Fixed assets Intangible in progress and

advance payments

Tot. fixed assets

Value at the start of the year Cost 13,600 511,648 166,118 2,553,241 329,813 3,574,419

Revaluations - - - - - -

Amortisation (F. amortisation)

(6,441) (159,274) (98,793) (1,251,472) - (1,515,980)

Write-downs - - - - - -

Financial statement value 7,159 352,374 67,325 1,301,769 329,813 2,058,439 Changes in the financial year Incr. for purchases - 23,883 15,011 336,194 353,024 728,112 Reclassifications (of the financial statements' value)

- 627 (19,225) 18,444 - (154)

Decrease for sale and disposals (from val of finan. stat.) - - (2,338) (21,824) (39,255) (63,417)

Revaluations - - - - - -

Amortis. for the finan. year (1,103) (59,951) (14,348) (298,986) - (374,389)

Deval. carried out in finan. year

- - - - - -

Other changes - - - - - -

Total changes (1,103) (35,441) (20,900) 33,828 313,769 290,152

Value at year end

Cost 13,600 537,514 152,466 2,817,959 643,582 4,165,120

Revaluations - - - - - -

Amortisation (F. amortisation)

(7,543) (220,581) (106,041) (1,482,350) - (1,816,528)

Write-downs - - - - - - Financial statem. value 6,055 316,933 46,424 1,335,608 643,582 2,348,604

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and printers for a net carrying amount of € 113 thousand, mobile phones for a net carrying amount of € 53 thousand, as well as vehicles, plant and machinery and other goods of modest value.

III. Financial fixed assets

Financial fixed assets are recorded at cost, decreased by permanent losses in value, as required by accounting standard OIC 21. This criterion does not make it possible to highlight, for some equity investments, their current market value (fair value) but only the amount directly invested by H-FARM, significantly affecting the result and the main equity and economic performance indices.

In light of the above, the overall market value of the portfolio is therefore not accurately reflected in the value of the investments at December 31, 2018, which is detailed in the following table.

Balance at 31/12/2018

Balance at 31/12/2017

Changes

15,312,053 13,835,328 1,476,725

In detail:

Description 31/12/2017 Increase Decrease 31/12/2018 Subsidiaries not consol. 58,818 20,000 12,538 66,280 Associated companies 9,522,972 1,505,564 3,838,589 7,189,947 Other companies 3,641,492 5,691,472 2,058,741 7,274,220 Receivables due from subsidiaries 40,500 2,000 42,500 - Receivables due from associated companies

21 21 -

Receivables from others 246,110 214,109 460,219 Other securities 319,551 81,000 80,000 320,551 Asset derivative financial instruments

5,863 5,026 838

TOTAL 13,835,328 7,514,145 6,037,415 15,312,053

Reclassifications are included in the incremental and decreasing changes. The item Other securities includes convertible loans granted to start-ups best described in the Management Report while in the item Asset Derivative financial instruments the positive fair value of the derivative linked to the loan that the company signed with the credit institution Friuladria has been recorded.

Unconsolidated subsidiaries

The details of the investments in unconsolidated subsidiaries are shown below with the indication of the historical cost, the 2018 write-down provision and the 2018 net carrying amount.

Description Net Value Increase Decrease Cost historical Write-downs Net Value 31.12.2017 31.12.2018 31.12.2018 31.12.2018 H-Ub - 20,000 - 20,000 - 20,000

Galgo - - - 8,854 8,854 -

Cross L.S. 46,280 - - 121,280 75,000 46,280 Habacus 12,538 - 12,538 - - -

TOTALE 58,818 20,000 12,538 150,134 83,854 66,280

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The investment in H-Ub Srl was not consolidated as it was established in November 2018 and therefore will complete the first financial statements at December 31, 2019. The investment in Galgo Srl was completely written down in previous years following the liquidation of the companies. The investment in the company Cross Library Services Srl has not been consolidated as it is not relevant pursuant to the OIC 17, paragraph 39 letter a). The decrease in the investment in Habacus Srl has been generated by the reclassification of the investment among the Associated Companies following a capital increase operation (residual shareholding of 40%).

The following are the company data of investments in unconsolidated subsidiaries with indication of the latest available financial statement data:

Name Registered Office Capital Result

2017 Net Equity

31/12/2017 % Share of N.E.

Value at Finanacial Statement

H-Ub * Roncade 100 N.D. N.D. 51.00 N.D. 20,000 Galgo Milano 14,000 (2,469) 9,341 62.50 5.838 - Cross Library Ser. Trento 72,000 (1,343) 49,957 99.00 49.457 46,280 TOTAL 66,280

* The company has not yet completed the first financial statements

Investments in associated companies

The following is a breakdown of investments in associated companies with an indication of the historical cost:

Description Net value 31/12/2017 Increase Decrease

Historic cost 31/12/2018

Write-downs

31/12/2018

Net value 31/12/2018

Habacus - 590,796 - 590,796 - 590.796 InReach Data 3,155,901 3,155,901 - - - InReach Ventures

225,421 225,421 - - -

Travel Appeal 132,641 132,641 - - - GoodAppetito - 121,763 121,763 - - - Lumi Industr. 120,876 120,877 - 120.877

Responsa 106,926 - - 106,926 - 106,926 D-Still - 51,790 51,790 - - - Zooppa.com 4,453,778 211,215 - 4,664,993 - 4,664,993 Designwine 1,050,404 - - 1,050,404 - 1,050,404 Synapta 26,000 - 26,000 - - - The Current 125,073 125,073 - - - H-IS Monza 125,951 105,000 - 230,951 - 230.951 Human Tal. S. - 425,000 - 425,000 - 425,000 TOTAL 9,522,972 1,505,564 3,838,589 7,189,947 - 7,189,947

The main increases in equity investments refer to:

• Zooppa.com: refers to the exchange rate adjustment between U$D and Euro;

• Habacus: is generated by the reclassification of the equity investment among the associated companies and by the investments made by the same during the year;

• Human Talent School: this is a new stake acquired in 2018 (40.00% stake).

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The main decreases in the holdings have been generated by:

• The Current: this decrease has been generated by the reclassification of the investment among Other Companies following the sale of a share (residual share held of 10%);

• Travel Appeal: this decrease has been generated by the reclassification of the investment among Other Companies, following the sale of 15.00% of the shares (residual portion held 9.00%);

• Good Appetito: this decrease has been generated by the closure of the company following its liquidation;

• InReach Data and InReach Ventures: has been generated by the reclassification of the investments among Other Companies (residual quota held 15.27%);

• Synapta: this decrease has been generated by the reclassification of the investment among Other Companies, following a capital increase there was a dilution of the share held (residual portion held 14.88%).

The following are the company data of investments in subsidiaries with an indication of the latest available financial statement data:

Name Registered Office Capital Result

2017 Net Equity

31/12/2017 % Share of N.E.

Value at Finanacial Statement

Zooppa.com New York (NY) $ 3,380,712 $ (1,045,545) * $ (918,834) * 47.90 $ (440,121) * 4,664,993 H-IS Monza Monza 100,000 (33,237) 196,764 45.00 88,544 230,951 Habacus Roncade 10,000 (1,660) (8,340) 40.00 3,336 590,796 Human T. Sch. Oderzo 10,000 Not Available Not Available 40.00 Not Available 425,000 Designwine Sav. on R. (FC) 130,860 (487,190) 901,574 36.53 329,345 1,050,404 Responsa Roncade (TV) 4,720 (34,182) 94,513 28.25 26,700 106,926 Lumi Indus. Roncade (TV) 116,280 276 54,681 25.00 13,670 120,876 TOTAL 7,189,947

* data refer to 31/12/2016

It is considered appropriate to value at cost all the equity investments for which the purchase cost is higher than the amount of the net equity, given the absence of lasting value losses, also given the existence of latent capital gains, as these are companies in the startup phase with high income potential in future years.

Investments in Other companies

The details of the investments in other companies are shown below with an indication of the historical cost, the 2018 write-down provision and the 2018 net carrying amount.

Description Net value Increase Decrease Historic cost Write-downs Net value 31/12/2017 31/12/2018 31/12/2018 31/12/2018

Sellf 132,728 - 132,728 - - - Mobile 1st - - - 801 801 - Wethod 50,015 - - 50,015 - 50,015 Hopstock - 117,821 117,821 - - - Deswag - - - 45,811 45,811 - Get App 46,110 - - 46,110 - 46,110 Pubcoder 170,500 - 170,500 170,500 170,500 - Antlos 34,447 230,147 264,594 - - - Depop 792,026 - 792,026 - - - Digital Rights * - - - 61,630 61,630 -

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Moku 37,273 - - 37,273 - 37,273 PonyU 40,811 - - 40,811 - 40,811 Glix 63,281 31,091 94,372 - - - Drinkout - - - 26,339 26,339 - Pinktrotters - 42,871 42,871 - - - AKQA 14,712 - - 14,712 - 14,712 Tykli 4,012 - 4,012 100,000 100,000 - CII 2 400,000 - - 400,000 - 400,000 Amaz F. Comp. - - - 156,766 156,766 - Pathflow - 51,273 51,273 - - - Fannabee - - - 39,273 39,273 - Onering - - - 9,180 9,180 - Makoo - 58,697 58,697 - - - Fubles 50,325 - - 50,325 - 50,325 Wishpot - 2,966 2,966 65,502 65,502 - Klappo - 772 772 94,570 94,570 - Venetwork 20,000 - - 20,000 - 20,000 P101 SICAF 361,443 12,637 51,763 322,317 - 322,317 GeK 150,000 - - 150,000 - 150,000 Henable C.S. - - - 140,000 140,000 - Aromapass - - - 40,810 40,810 - Insight 131,434 20,000 - 151,434 - 151,434 Eattiamo 64,551 - - 64,551 - 64,551 Adzuki 20,000 - - 20,000 - 20,000 InteriorBe 20,000 - 20,000 20,000 20,000 - Loyaly - 20,000 20,000 - - - Mio Assicurat. 150,000 - - 150,000 - 150,000 Soldo 173,922 34,406 1,420 206,908 - 206,908 Smau Servizi 229,199 16,748 - 245,947 - 245,947 Disp. Magic Srl 182,827 - - 182,827 - 182,827 Biorfarm 40,000 60 - 40,060 - 40,060 Cloud Accad. 16,676 791 - 17,467 - 17,467 Leade.rs 20,845 989 - 21,834 - 21,834 Qriously 57,774 - 471 57,303 - 57,303 Kontena 66,680 - 544 66,136 - 66,136 Shapr3D 56,159 - 458 55,701 - 55,701 Traitly 43,742 - 357 43,385 - 43,385 Travel Appeal - 132,641 76,641 56,000 - 56,000 InReach Data - 3,157,741 27,594 3,130,147 - 3,130,147 InReach Ven. - 225,421 1,840 223,581 - 223,581 The Current - 125,073 123,981 1,092 - 1,092 Synapta - 35,600 1,040 34,560 - 34,560 Fishwoodco - 71,941 - 71,941 - 71,941 Tutora - 60,932 - 60,932 - 60,932 Thinkinside - 21,250 - 21,250 - 21,250 Genlots - 22,533 - 22,533 - 22,533 Finboot - 22,824 - 22,824 - 22,824 Diana E-C.C. - 1,080,983 - 1,080,983 - 1,080,983 Tritium Softw. - 79,901 - 79,901 - 79,901 Sailogy - 13,363 - 13,363 - 13,363 TOTAL 3,641,492 5,691,472 2,058,741 8,245,405 971,182 7,274,220

The increases for the year mainly derive from the investments made in 2018:

• Diana E-Commerce Corporation: the increase was generated following a share capital increase and led to a holding of a 10% stake in the company;

• Sailogy: the increase was generated following the merger of the company Antlos (new shareholding in Sailogy post merger equal to 0.35%);

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• Tritium Software: the increase was generated following the exchange of the shares held in Sellf with a share of 0.19% in the company Tritium Software (Forcemenager).

With regards to the decreases in particular, we would point out:

• Travel Appeal: the decrease was generated by the sale of a share of 15.00% (residual amount of 9.00%);

• Depop: the decrease was generated by the total sale of the stake;

• The Current: the decrease was generated by the sale of a share (residual amount of 10.00%);

• Synapta: the decrease was generated by the sale of a share (residual amount of 14.88%).

• Hopstock, Loyaly, Glix and Makoo the decreases were due to the closure of the companies. The following are the company data of investments in subsidiaries with an indication of the latest available financial statement data:

Name Registered Office Capital Result

2017 Net Equity

31/12/2017 % Share of N.E.

Value at Finanacial Statement

Insight Ascea (SA) 15,000 (18,415) 74,067 15.89 11,769 151,434

InReach London (UK) £ 2,800,070 £ (585,367) £ 2,053,034 15.27 £ 313,498 3,130,147 InReach Vent. London (UK) £ 200,203 £ (300,588) £ 183,810 15.27 £ 28,068 223,581 Wethod Roncade (TV) 100 1,561 47,077 15.00 7,062 50,015 Synapta Turin (TO) 64,500 33,057 106,569 14.88 15,857 34,560 Dispell Magic Srl Carpi (MO) 37,035 22,520 596,816 13.92 83,077 182,827 Pubcoder Roncade (TV) 13,741 (27,966) 76,985 13.87 10,678 - Deswag Roncade (TV) 113 (33,185) 44,238 13.30 5,884 - Digital Rights Milan (MI) 50,000 (292,767) * (230,906) * 12.00 (27,709)* - Mobile1st Roncade (TV) 10,000 2,334* 26,497 * 10.00 2,650* - Onering Montegrotto 10,000 2,812 1,900 10.00 190 - Moku Roncade (TV) 10,000 4,354 48,041 10.00 4,804 37,273 PonyU Roncade (TV) 100 3,646 12,365 10.00 1,237 40,810 Drinkout Correggio 10,000 1,871 16,598 10.00 1,660 - Aromapass London (UK) £ 100 Not Available Not Available 10.00 N.A. - Adzuki§ Slagelse (DK) DKK 1.00 Not Available Not Available 10.00 N.A. 20,000 The Current Wilmington (DE) Not Available Not Available Not Available 10.00 N.A. 1,092 Diana E-C. Corp.§ Torreglia (PD) 10,838 Not Available Not Available 10.00 N.A. 1,080,983 InteriorBe Roncade (TV) 110 (169,553) (5,704) 9.10 519 - Get App Pistoia (PT) 55,853 (36,458) 250,965 9.03 22,662 46,110 Travel Appeal Roncade (TV) 114 (145,393) 387,297 9.00 34,857 56,000 AKQA Roncade (TV) 56,000 1,708,167 1,989,805 9.00 179,082 14,712 Eattiamo La Spezia 13,853 (9,326) 173,268 8.19 14,191 64,551 Fannabee Milan (MI) 49,100 (91,520) (139,052) 7.90 (10,985) - Mio Assicuratore Rome 10,000 (188,040) 65,387 7.50 4,904 150,000 CII 2 Milan (MI) 5,640,821 (373,496) ** 5,377,585 ** 6.77 364,063 ** 400,000 Biorfarm Rossano (CS) 350 3,913 28,322 6.00 1,699 40,060 Tykli Turin (TO) 17,400 (89,095) (4,746) 5.90 (280) - Amaz. Food C. Vitt. Veneto 40,000 (83,934) (54,199) 5.00 (2,710) - Smau Servizi Padua 100,000 23,695 148,926 4.50 6,702 245,947 Wishpot Seattle (WA) Not Available Not Available Not Available 3.00 N.A. - Fubles Milan (MI) 63,676 56,777 254,891 3.00 7,647 50,325 Genlots Chexbres (CH) Not Available Not Available Not Available 3.00 N.A. 22,533 Klappo London Not Available Not Available Not Available 2.40 N.A. - Traitly Berlin (DE) Not Available Not Available Not Available 2.15 N.A. 43,385 Thinkinside Bolzano BZ 62,500 47,766 369,730 2.00 7,395 21,250 Shapr3D Budapest (HU) Not Available Not Available Not Available 1.25 N.A. 55,701

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Kontena Helsinki (FI) Not Available N.A. Not Available 1.19 N.A. 66,136 Gek Milan (MI) 100,100 248,627 2,176,687 1.05 22,855 150,000 Finboot London (UK) Not Available N.A. Not Available 1.01 N.A. 22,824 Fishwoodco Berlin (DE) Not Available N.A. Not Available 0.77 N.A. 71,941 Venetwork Venice (VE) 2,407,800 (125,362) 1,658,769 0.75 12,441 20,000 P101 SICAF Milan (MI) 333,500 (3,619,693) 35,565,839 0.75 266,744 322,317 Qriously London (UK) Not Available N.A. Not Available 0.75 N.A. 57,303 Tutora London (UK) Not Available N.A. Not Available 0.75 N.A. 60,932 Soldo London (UK) Not Available N.A. Not Available 0.42 N.A. 206,908 Sailogy Switzerland Not available N.A. Not Available 0.35 N.A. 13,363 Cloud Accademy S. Franc. (CA) Not Available N.A. Not Available 0.26 N.A. 21,834 Leade.rs Dover (DW) Not Available N.A. Not Available 0.21 N.A. 21,444 Tritium Software Barcelona (ESP) Not Available N.A. Not Available 0.19 N.A. 79,901 Henable CS Roncade (TV) Not Available N.A. Not Available 1.400az N.A. - TOTAL 7,274,220

§The company has not yet completed the first financial statements * data refer to 31/12/2016 ** data refer to 30/06/2018

It is considered appropriate to value at cost all the equity investments for which the purchase cost is higher than the amount of the net equity, given the existence of latent capital gains, as these are companies in the startup phase with high income potential in future years. Provision for impairment losses on investments In compliance with accounting principles and with a prudential perspective, it was deemed appropriate to allocate a further provision to the fund for impairment losses of investments in compliance with the principle of prudent representation of financial statement data, which does not allow the exposure of any latent surplus values of the investee companies. The following gives details of the fund for impairment losses on investments:

Description 31/12/2017 Increase Decrease 31/12/2018 Galgo 8,854 - - 8,854 Cross Library Service 75,000 - - 75,000 Wishpot 62,536 2,966 - 65,502 Good Appetito 121,763 - 121,763 - Onering 9,180 - - 9,180 Mobile 1st 801 - - 801 Makoo 58,697 - 58,697 - D-Still 42,728 - 42,728 - Digital Rights 61,630 - - 61,630 Pathflow 51,273 - 51,273 - Fannabee 39,273 - - 39,273 Pinktrotters 42,871 - 42,871 - Tykli 95,988 4,012 - 100,000 Hopstock 117,821 - 117,821 - The Amazing F.C. 156,766 - - 156,766 Antlos 230,147 - 230,147 - Drinkout 26,339 - - 26,339 Aromapass 40,810 - - 40,810 Loyaly 20,000 - 20,000 - Deswag 45,810 - - 45,810 H-Enable Cooperat. com. 140,000 - - 140,000 Klappo 93,798 772 - 94,570 Pubcoder - 170,500 - 170,500

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Interiorbe - 20,000 - 20,000 TOTAL 1,542,085 198,250 685,300 1,055,035

Decreases in the provision for impairment losses on investments concerned the following equity investments: - Good Appetito, Makoo and Hopstock: following the closure of the companies after liquidation; - Antlos, following the merger of the company with Sailogy SA; - Loyaly, D-Still, Pinktrotters and Pathflow: following the sale of the shares.

Increases in the provision for impairment related to write-downs for the year.

Receivables from others

Description 31/12/2017 Increase Decrease 31/12/2018 Other receivables 34 528 562 Security deposits 216,099 62,480 1,650 276,929 Fixed current account 29,977 36 29,941 Financial fixed assets in progress - 152,787 152,787 TOTAL 246,110 215,795 1,686 460,219

Security deposits have been generated by the lease contracts for the properties of H-International School Rosà Srl, H-International School Vicenza Srl and mainly by H-FARM SpA for € 245 thousand. It was decided not to apply the amortised cost method given the insignificance of the amounts.

Other securities

Not reported above are investments made in start-ups selected as a result of the "Industry Accelerator" programmes, since these are not investments in shares but convertible loans that are classified under the item" Other securities "in the consolidated financial statements. For a description of the startups and companies that have benefited from the convertible loans, see "Part 1 - H-FARM Life" of the Financial Statements.

Asset derivative financial instruments

For a comment on this item, see the final part of these consolidated explanatory notes.

C) Current assets

I. Inventories

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

806,408 243,784 562,624

This item mainly consists of € 700 thousand for work in progress on orders principally referring to € 418 thousand for the Company and € 195 thousand for Celi. Revenues for the provision of services have been recognised on the basis of their completion and/or accrual, in particular, the projects that were still in progress at the end of the year were recognised under inventories based on the percentage of completion as envisaged by the OIC 23. Therefore, inventories for ongoing projects have been recognised to the extent corresponding to the revenue accrued at the end of each financial year determined with reference to the state of progress of the work based on the

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costs incurred of the total costs provided for.

II. Receivables

III. Balance at 31/12/2018 Balance at 31/12/2017

Changes

20,346,480 18,924,846 1,421,634

In detail:

Description Within 12 months

After 12 months After 5 years Total

From clients 18,575,287 18,575,287 From subsidiaries 51 51 From associates 778,741 778,741 Tax receivables 283,583 283,583 Pre-paid taxes 320,520 320,520 From others 388,298 388,298 TOTAL 20,346,480 20,346,480

Receivables from customers, associated companies and subsidiaries are recorded net of the allowance for impairment losses amounting to € 727 thousand. Tax receivables mainly consist of VAT credits for € 40 thousand and IRES/IRAP credits for € 71 thousand. Receivables from others include, among others, suppliers for advances of € 36 thousand and INPS (Social Security) credits for € 74 thousand. Deferred tax credits relate to H-FARM SpA, H-Farm Education Srl, H- International School Srl, H-International School Vicenza Srl, H-International School Rosà Srl and H- Osteria Srl. Prudentially, the assets relating to prepaid taxes have not been deferred with respect to this year and previous years' losses for all the companies included in the scope of consolidation.

III. Financial assets that do not constitute fixed assets

This item includes € 263 thousand in receivables from the associated company Zooppa.com.

IV. Cash and cash equivalents

Balance as of 31/12/2018 Balance at 31/12/2017 Changes 4,627,435 5,531,449 (904,014)

In detail:

Description

31/12/2017

31/12/2018

Bank and postal deposits 5,519,019 4,610,060 Cash-in-hand and cash equivalents 12,430 17,375 TOTAL 5,531,449 4,627,435

The balance represents the cash and cash equivalents and the existence of cash as at 31/12/2018.

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D) Accruals and deferrals

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

1,761,138 1,813,332 (52,194)

These measure income and expenses whose accrual period is advanced or delayed with respect to the actual cash and/or documentation; they are excluded irrespective of the date of payment or collection of the related income and expenses, usually for two or more years and divisible over time. They consist of accrued income for € 268 thousand and prepaid expenses for € 1,493 thousand.

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SIGRIDJunior Consultant @ Enabling Solution

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LIABILITIES

A) Net Equity

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

21,302,083 24,702,853 (3,400,770)

The composition of shareholders' equity is as follows:

Description 31/12/2017 Increases Decreases Reclassifications

31/12/2018

Capital 8,924,165 8,924,165 Share premium reserve 31,204,178 (4,045,105) 27,159,072 Legal reserve 4,054 4,054 Negative reserve own shares (1,601,470) 1,275,746 (325,724) Extraordinary reserve 1 1 Other reserves 834,027 (2,769) 831,258 Foreign currency translation reserve (709,822) 195,280 (1,526) (516,068) Res.expected cover of finan. flows (36,975) (11,866) (48,841)

Diff. from rounding unit of € Past loss (7,676,949) (617) 1,526 (2,193,251) (9,869,291) Profit (loss) for the year (6,238,356) (4,856,544) (6,238,356) (4,856,543) Total net equity of Group

24,702,853

(3,386,135)

(14,635)

(1)

21,302,083

Third party result (48) (225) 48 (225) Tot Net Equity From third parties 1,425 617 (48) 1,994 TOT NET EQUITY 24,704,230 (3,385,743) (14,635) (1) 21,303,852

The subscribed and paid-up share capital as at 31/12/2018 is divided into 89,241,650 shares with a nominal value of € 0.10 each.

Treasury shares At 31 December 2018, the Company held 418,115 treasury shares in its portfolio, with a nominal value of € 0.10 each, including the 255,000 shares to be transferred to the shareholders of H-International School Rosà Srl, through the use of an escrow bank account in compliance with the guarantees requested.

The company transferred a total of 1,478,817 treasury shares to the transferors of the companies acquired during the first half of 2017 (Big Rock Srl, Celi Srl and H-International School Vicenza Srl including the 255,000 transferred to the members of the H-International School Rosà through the use of the escrow bank account) and to the transferors of the company Diana E-Commerce Corporation Srl acquired in the second half of 2018.

In compliance with the OIC criteria, the treasury shares recorded under assets have been reversed with the negative reserve for treasury shares offset. Finally, it should be noted that in 2018 the Company did not acquire any treasury shares relating to the buy-back plan which ended in October 2018.

The following table reconciles the net result and the net equity of the parent company and the corresponding consolidated figures.

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Description N.E. 31.12.2018 Result 31.12.2018

N.E. 31.12.2017

Result 31.12.2017

Data of the parent company H-Farm 32,075,607 (1,085,552) 31,900,048 (4,045,105) Elimination of book value of consolidated investments (29,145,564) (22,260,086) 3,050 Consolidation adjustments on the NE and on the result 11,011,085 (2,401,338) 6,538,217 (1,420,336)

Consolidation difference 9,538,519 9,538,521 - Amort. consolidation difference (1,738,184) (865,695) (872,488) (537,774) Reversal of Intercompany exchange rate difference 13,416 56,420 444 169,267

Dividends - (250,000) - - Other consolidation differences 1,873 1,873 - (2,332) Reversal from tax consolidation (452,900) (312,477) (140,426) (405,575) NET EQUITY and OPERATING RESULT OF CONSOLIDATED FINANCIAL STATEMENTS 21,303,852 (4,856,769) 24,704,230 (6,238,404)

B) Provisions for risks and charges

Balance as of 31/12/2018 Balance at 31/12/2017 Changes

61,592 72,172 (10,580)

In detail:

Description

31/12/2017

Increases

Decreases

31/12/2018

For pensions and similar obligations 29,193 - 17,362 11,831 For taxes, including deferred taxes 141 82 141 82 Liabilities derivative financial instruments 42,838 6,841 - 49,679 TOTAL 72,172 6,923 17,503 61,592

The provision for risks for pensions and similar obligations is mainly related to a practice that ended in early 2019. The provision for risks deriving from liabilities derivative financial instruments instead refers to the negative fair value relating to the derivative linked to the pooled loan between Mediocredito and Unicredit.

C) Employee severance indemnities

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

3,093,958 2,529,000 564,958

The provision allocated represents the actual debt of the company at 31/12/2018 to employees in service on that date, net of advances paid.

D) Payables

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

32,252,199 28,945,286 3,306,913

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In detail:

Description

Within 12 months

After 12 months

Total

Payables to banks 4,747,505 5,487,082 10,234,587 Payables to other lenders 127,073 127,073 Payables to suppliers 10,411,413 10,411,413 Payables to associated companies 12,382 12,382 Tax payables 2,956,225 1,347,369 4,303,594 Payables to social security institutions; 1,240,521 1,240,521 Other payables 5,922,629 5,922,629 TOTAL 25,417,748 6,834,451 32,252,199

Two loan agreements were signed in 2017, the first granted by Friuladria for a nominal value of € 1,600 thousand and the second granted in a pool by Mediocredito and Unicredit for a nominal € 5,000 thousand. The loan with Friuladria, signed on 27/06/2017 and lasting until 31/12/2022, provided for a pre-amortisation period until 30/06/2018 and therefore the first principal amount of € 160 thousand was paid plus interest. The loan with Mediocredito Unicredit underwritten on 27/06/2017 with a duration up to 30/6/2023 provided for a pre-amortisation period until 31/12/2018 and therefore the first principal amount of € 500 thousand was paid plus interest. Both loans were recorded at amortised cost, deducting the administrative fees of € 24 thousand and € 150 thousand from the nominal debt respectively. In addition, two hedging derivative financial instruments were underwritten on the aforementioned loans: an IRS on the Mediocredito Unicredit loan and an Option CAP on the Friuladria loan, details of which can be found in the specific paragraph of these explanatory notes. A loan agreement was signed on 19/03/2018 with Banca Sella for the amount of € 1.0 million repayable in 48 monthly instalments expiring on 31/03/2022 and 8/10/2018, a contract was signed for a loan of € 1.0 million from Banca Ifis repayable in 12 monthly instalments falling due on 30/03/2020. The Company has also activated a cash credit limit of up to € 300 thousand with Friuladria from 14/09/2018 until 30/04/2019 and subsequently, up to 30/19/2019, by instalments up to a maximum of € 50 thousand. The amounts due to banks also include € 433 thousand in loans granted to the subsidiary Celi Srl. Trade payables to suppliers include, among other things, invoices to be received for € 2,282 thousand. Tax payables mainly refer to withholdings relating to the remuneration of directors, interns, apprentices and collaborators for about € 896 thousand, IRAP payables for about € 129 thousand and VAT receivables overdue for about € 3,255 thousand, of which € 1,652 thousand is due following the procedure for the payment of the same. Payables to social security institutions refer to fees paid to directors, employees, collaborators, interns and apprentices. The item other payables includes, among other things, payables to directors, interns and apprentices and the payable to employees for wages, holidays and allowances.

E) Accruals and deferrals

Balance at 31/12/2018

Balance at 31/12/2017

Changes

7,134,865 5,328,817 1,806,048

This item represents the connected items for the financial year calculated on a timely accrual basis and is made up of € 42 thousand from accrued liabilities and € 7,092 thousand from deferred income. Deferred income mainly refers to the deferred income for the registration fees for the 2018/2019 school year of H-International School Srl, H-International School Vicenza Srl and H- International School Rosà Srl and H-FARM SpA.

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Guarantees, commitments, third-party assets and liabilities As of December 31, 2018, the Company issued guarantees totalling € 8.5 million, including an insurance guarantee for € 4.4 million for the University Ca 'Foscari for commitments deriving from the contract relating to the three-year degree course in Digital Management, an insurance guarantee of € 2.7 million and a bank guarantee of € 993 thousand, regarding Finanziaria Internazionale Investment SGR SpA, as manager of the "Ca' Tron H-CAMPUS Fund" to guarantee the preliminary and existing contract of leases relating to H-CAMPUS.

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VITTORIOCEO @ CELI

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INCOME STATEMENT

These Explanatory Notes compare the 2017 and 2018 data on the basis of the financial statements prepared in accordance with the OIC accounting principles.

A) Production value

The strong growth in Production Value has demonstrated H-FARM's ability to generate new activities, acquire new customers and expand the offer on existing ones. For a detailed comment on revenues, please refer to the Management Report.

Balance as of 31/12/2018 Balance at 31/12/2017 Changes 56,671,131 44,344,135 12,326,996

In detail:

Description

31/12/2018

31/12/2017

Changes

Revenues from sales and services 51,959,272 40,980,333 10,978,939 Inventory changes 568,134 (4,425) 572,559 Changes in work in progress on ord. - 31,121 (31,121) Increments for internal work 2,573,420 2,435,617 137,803 Other revenues and income 1,570,305 901,489 668,816 TOTAL 56,671,131 44,344,135 12,326,996

The item Revenues from sales includes € 267 thousand in income generated by contracts with the public administration. Increases in fixed assets for internal work of € 2,573 thousand mainly refer to the costs incurred for the development of "H-Campus" projects and to other training and functional platforms to better manage company organisational processes. The item "other revenues and income" includes € 449 thousand for ordinary contingent assets, € 126 thousand for revenues for fees for the canteen service and € 765 thousand for contributions in the financial year (among other things) referring to € 207 thousand to contributions pursuant to Article 1, paragraph 125 et seq., Law No. 124/2017 and for € 455 thousand received by the Ca 'Foscari University of Venice for the degree course in Digital Management).

B) Production costs

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

64,985,155 49,526,614 15,458,541

In detail:

Description 31/12/2018 31/12/2017 Changes Purchase of Goods 11,214,249 7,554,447 3,659,802

Services 16,414,828 15,066,416 1,348,412

Use of third party assets 4,313,999 3,497,364 816,635

Staff costs 27,564,201 19,437,141 8,127,060

Amort. intangible fixed assets 3,514,939 2,552,614 962,325

Amortisation Tangible fixed assets 374,328 253,221 121,107

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Other fixed asset write-downs - 42,824 (42,824)

Write-down of current asset receivables 282,003 236,715 45,288

Change in inventory 9,523 1,048 8,475

Other management costs 1,297,086 884,824 412,262 TOTAL 64,985,155 49,526,614 15,408,541

The most significant change relates to personnel costs, for which a comment can be found in the management report which also includes non-recurring costs of € 308 thousand.

Costs for services These costs mainly include technical consultancy for € 5,887 thousand, expenses for the organisation of events and meetings for customers for € 445 thousand, directors' fees for € 1,193 thousand, tax and administrative consultancy for € 191 thousand, commercial services for € 187 thousand, legal and notary consulting for € 185 thousand, canteen service for € 639 thousand, travel, hotel and business expenses for € 763 thousand, transport costs for schools of € 276 thousand, entertainment expenses for € 210 thousand, expenses for fees for the use of equipped spaces for € 62 thousand, expenses for maintenance of third-party assets for € 295 thousand and various insurance policies for € 159 thousand.

Amortisation/depreciation of tangible and intangible fixed assets Amortisation of intangible fixed assets refers mainly to the amortisation of goodwill generated by the merger and consolidation of subsidiaries for € 1,656 thousand, amortisation of development costs for € 1,106 thousand and amortisation of formation costs for € 344 thousand, mostly made up of the costs for the IPO transaction. Depreciation of tangible fixed assets mainly refers to the depreciation of furniture and fittings for € 116 thousand, depreciation of electronic office machines for € 73 thousand and depreciation on computers and printers for € 34 thousand.

Staff costs The following table shows the breakdown by category of employees and directors. For a better representation of the employment data with respect to personnel costs, it is considered appropriate to exclude the category of interns, to exclude directors without compensation and to include the category of executives in that of employees, therefore, the occupational data as at 31/12/2017 is different compared to that indicated in the consolidated explanatory notes of the previous year. Lastly, it should be noted that for a better comparison with the previous year, it is considered appropriate to indicate the exact number of employment data divided by category rather than the average figure.

Categories 31/12/2018 31/12/2017 Senior managers 12 13 Employees and apprentices 554 465 Workers and apprentices 49 18 Total Employees 615 496 Administrators 9 11 Collaborators 12 3 TOTAL 636 510

Other management costs This item includes, among other things, administrative fines of € 234 thousand, pro-rata charges for € 581 thousand, donations of € 88 thousand and association fees and subscriptions for € 64 thousand.

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C) Financial income and expenses

Balance as of 31/12/2018 Balance at 31/12/2017 Changes

4,026,047 (228,921) 4,254,968

In detail:

Description

31/12/2018

31/12/2017

Changes

Income from investments 4,761,905 166,000 4,595,905

From securities recorded in fixed assets 583 7,666 (7,083)

Income other than that previously mentioned

8,513 22,474 (13,961)

Interest and other financial charges (701,008) (391,211) (309,797)

Profit and loss on foreign exchange (43,946) (33,850) (10,096)

TOTAL 4,026,047 (228,921) 4,254,968

Investment income During the 2018 financial year, returns from the investment in Oberlo were recorded, capital gains deriving from other investments following the sale of the investment Depop Ltd and Travel Appeal Srl in addition to the dividends received from the investee AKQA Srl for € 153 thousand. For management purposes, this result has been reclassified to operations and therefore before EBITDA.

Income other than that previously mentioned Other income refers to interest on bank current accounts.

Interest and other financial charges The charges relate to interest on bank loans for € 274 thousand, interest expense on current accounts for € 79 thousand, availability funds for € 63 thousand and commissions on guarantees for € 42 thousand.

D) Adjustment in value of financial assets

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

(293,654) (626,807) (333,153)

This item includes the write-downs of the investee companies that for management purposes have been reclassified to operations and therefore before the EBITDA.

Income taxes for the year

Balance as of 31/12/2018 Balance at 31/12/2017

Changes

275,137 200,197 74,940 In detail:

Taxes

Balance as of 31/12/2018

Balance at 31/12/2017

Changes

Prepaid and deferred taxes 48,044 (14,178) 62,222 Taxes relating to prev. year (5,127) - (5,127) IRES - 127,446 (127,446) IRAP 232,220 86,929 145,291 TOTAL 275,137 200,197 74,940

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The taxes for the year are attributable to the Company and derive from the application of the national tax consolidation contract mentioned above, in addition to the taxes of the company H-Farm Talent as it will enter into the tax consolidation contract starting from 2019.

Deferred/prepaid taxes Prepaid tax assets are generated for the consolidated companies and refer to deductible temporary differences that can be used in subsequent years, or to those of previous years used in the year. It should be noted that the prepaid taxes on tax losses have not been prudently calculated falling within the scope of consolidation as it is considered appropriate to postpone this allocation to the current year once the income capacity of H-FARM has been settled.

Information regarding financial instruments issued by the company The Company has underwritten two hedging derivative financial instruments both linked to the loans obtained by Friuladria and Mediocredito pooled with Unicredit. The first derivative financial instrument is a hedging IRS on the Mediocredito/Unicredit loan and has the following main features:

• Reference notional amount: € 5,000 thousand;

• Bank parameter rate: floating;

• Floating rate parameter: 6-month Euribor;

• Customer parameter rate: fixed;

• Fixed rate parameter: 0.40%.

The second derivative financial instrument is a CAP purchase option exercised by the Company with the payment of a single premium of € 31 thousand. The main features of the financial instrument are as follows:

• Reference notional amount: € 1,600 thousand;

• Bank parameter: Euribor 6 months;

• Strike price CAP: 0.25;

• Premium: € 31 thousand.

Information relating to fair value of the derivative financial instruments The two derivative financial instruments underwritten with Mediocredito and Friuladria respectively showed a negative fair value of € 49.7 thousand and a positive value of € 0.8 thousand. The net effect on equity was therefore negative for € 48.9 thousand.

Relationships with related parties With the exception of the transactions that will be shown below, in 2018, the Company and its subsidiaries did not engage in any transactions with Related Parties in the course of their business, pointing out that: • the relationships of H-FARM with the subsidiaries whose share is less than 20% have not been

reported;

• the relationships of H-FARM with companies of which the managing directors of H-FARM directly or indirectly hold shares of less than 20% are not shown;

• the relationships of H-FARM with companies directly or indirectly related to directors without proxies are not shown;

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• the data relating to the remuneration of the directors of H-FARM are not shown, as already indicated in the specific section of the Notes to the relative companies.

The Company believes that the conditions envisaged and actually applied in relations with Related Parties are in line with normal market conditions, or the conditions that would be applied between two independent parties.

Ca' Tron Real Estate Srl referring to the directors Riccardo Donadon and Maurizio Rossi. E-Farm Srl: referring to the director Riccardo Donadon and Giulia Franchin (wife).

Company Receivables

Payables Invoices from

Revenue Costs

31/12/2018 31/12/2018 to be received

31/12/2018 31/12/2018 31/12/2018

CTRE 41 1,233 2 3 13 E-Farm 6 - - 5 - TOTAL 47 1,233 2 8 13 Values in € '000

Associated companies

Companies in which a share of more than 20% is held.

Startup investments

Receivables 31/12/2018

Payables 31/12/2018

Invoices from

31/12/2018

Turnover from To be

received 31/12/2018

Notes Deposits Receive

Notes Deposits to be issued

Revenues 31/12/2018

Costs 31/12/2018

Reply 2 - - - 13 27 Habacus 40 - - - 5 37 - Human TS 100 - - 0.8 82 - Design Wine - 1 - - - - H-IS Monza 18 - 5 - 12 - Zooppa Europe 273 - 264 - 5 88 11 TOTAL 433 1 269 0.8 5 5 232 38

Values in € '000

Stock Option Plan 2019 As highlighted in the AIM admission document, the Company has a stock option plan in place, issued in order to allow greater involvement of all parties involved in the development of H-FARM, which provides, among other things, for the issue, by 31 December 2024, of 22,310,412 shares of the Company reserved for subscription to those who will be identified at the discretion of the Board of Directors. At December 31, 2018, options had been assigned to top managers, management and employees for a total amount of 19,307,397, therefore there are still 3,003,015 options to be assigned.

Agreements not disclosed in the balance sheet Pursuant to Article 2427 point 22-ter, please note that there were no undisclosed agreements in the balance sheet that present risks or significant benefits or which are necessary to assess the equity, financial and economic situation of the company.

Other information In accordance with the law, the overall remuneration, at a consolidated level, due to the directors, members of the Board of Statutory Auditors and auditors is highlighted as shown.

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Position Remuneration Board of Statutory Auditors 32,007 Administrators 1,272,849 Auditors 51,100

It should be noted that, with reference exclusively to the parent company, H-FARM SpA, the remuneration is instead:

Position Remuneration Board of Statutory Auditors 26,807 Administrators 485,349 Independent Auditors 45,900

The consolidated financial statements have been audited by BDO Italia SpA.

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EVENTS AFTER 31 DECEMBER 2018

The first quarter of 2019, in addition to the normal management of usual activities, mainly saw:

• confirmation by the agency Cerved Rating Agency SpA of the public rating B1.1, requested by H-

FARM itself, on a voluntary basis; • the addition of Gianluca Pivato and Lisa Fedrigo to the Board of Statutory Auditors, following the

resignation of Michele Furlanetto and Carlo Pesce, both of whom resigned from the office of Statutory Auditors of the Company, with immediate effect and for personal and professional reasons;

• the resignation of Dr. Stefania Baruffato as a Company Director, as a result of her recent departure from RED CIRCLE Investments;

• the creation of H-FARM Barcelona, the first international growth-oriented HUB on Spanish territory that aims to be a reference point in Spain to support the evolution of business models for Spanish companies through Open Innovation & Corporate Innovation that will enable increased competitiveness in the market and innovation in business models employing a greater focus on digitisation and emerging technologies.

Allocation of the profit for the year For the reasons set out above we propose that you approve the financial statements as at 31 December 2018 and to fully hedge the loss for the year of € 1,085,551.87 through the use of the Share Premium Reserve for the same amount.

These Financial Statements, comprising a Balance Sheet, Income Statement, Statement of Cash Flows and Explanatory Notes, represent a true and correct view of the equity and financial situation as well as the profit for the financial year and correspond to the figures reported in the accounting records.

Cà Tron (Roncade - TV), 26 March 2019 The Chairman

of the Board of Directors Riccardo Donadon

-

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DANIELEInstitutional Relational Manager @ Fondazione H for Human

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ANNUAL FINANCIAL STATEMENT:H-FARM SPA

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FINANCIAL STATEMENTSOF THE COMPLETED FINANCIAL YEAR as of 2018.12.31

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H-FARM S.P.A.

Registered office in Via Sile No. 41 - 31056 RONCADE (TV)

Approved share capital € 11,155,206.20 - subscribed and paid up € 8,924,165.00 Treviso Companies Register - Tax Code and VAT No. 03944860265

Registration UIC 36566 www.h-farm.com

Financial Statements as at 31/12/2018

Balance Sheet Assets 31/12/2018 31/12/2017

(of which already called up)

I. fixed assets 1. Formation costs 385,415 725,879 2 Development costs 1,155,394 793,879 3 Industrial Patents and Intellectual property rights 16,065 16,958

rights

4) Concessions, licences, trademarks and similar rights 108,246 171,658 5 Goodwill 4,583,281 5,284,947 6 Fixed assets in progress and advances 404,908 366,948 7. Others 354,234 184,930

Total 7,007,543 7,545,199

II. Materials

1. Installations and machinery 104,947 126,679 4. Other assets 839,138 848,698 5. Fixed assets in progress and advances 497,541 329,813

Total 1,441,626 1,305,190

III. Financial 1. Shareholdings in:

a) subsidiary companies 23,045,541 17,197,600 b) Associated companies c) Controlling companies d) Companies under the control of the parent companies

d - bis) other companies

1,869,002

3,283,235

1,410,849

3,205,694 Total equity investments 28,197,778 21,814,143

2. Receivables:

d - bis) from others Due within the next financial year

275,611

214,295

Total receivables from others 275,611 214,295 Total receivables 275,611 214,295

3. Other securities 472,338 319,551 4. Derivative financial instruments (assets) 838 5,863

Total 28,946,565 22,353,852

A) Receivables from shareholders for payments still due

B) Fixed assets

Total fixed assets (B) 37,395,734 31,204,240

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C) Current Assets

I. 1.

Inventories Raw, auxiliary and consumable materials

-

6,565

3. Works in progress for orders 418,037 - 4. Finished products and goods 42,341 53,916

Total 460,378 60,481

II. Receivables 1. From clients

Due within the next financial year 14,187,550 15,022,237 Total receivables from customers 14,187,550 15,022,237

2 From subsidiaries

Due within the next financial year 1,848,225 5,241,555 Total receivables from subsidiaries 1,848,225 5,241,555

3 From associated companies

Due within the next financial year 685,981 331,968 Total receivables from associated companies 685,981 331,968

4. From parent companies 5. From companies subject to the control of

holding companies 5- bis. Tax receivables

Due within the next financial year

812,824

1,394,005 Total tax receivables 812,824 1,394,005

5-ter. Pre-paid taxes - 46,080 5-quater. From others

Due within the next financial year

291,476

160,947 Total receivables from others 291,476 160,947 Total 17,826,056 22,196,792

III. Financial assets that do not constitute fixed assets 1) Investments in subsidiaries

4,976,795

4,835,428 Total 4,976,795 4,835,428

IV. Cash and cash equivalents 1) bank and postal deposits

3,265,144

2,667,124 3) Cash and equivalents in hand 2,062 (3,542)

Total 3,267,206 2,670,666

Total current assets (C) 26,530,435 29,763,367

D) Accruals and deferrals 1,335,760 1,311,825

Total Assets 65,261,929 62,279,433

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Balance Sheet Liabilities 31/12/2018 31/12/2017

A) Net Equity

I. Capital 8,924,165 8,924,165 II. Share premium reserve

III. Revaluation reserve IV. Legal Reserve

24,643,210

4,054

28,688,315

4,054 V. Statutory reserve

VI. Other reserves, indicated separately Extraordinary reserve

1

1

Other reserves Translation difference reserve Capital account payments Difference from rounding off to the nearest euro

831,257 834,029

831,258 834,030 VII. Reserve for hedging of anticipated cash flows

VIII. Profit (loss) carried forward (48,841)

(866,965)

(36,975)

(866,965) IX. Profit (loss) for the year (1,085,552) (4,045,105) X. Negative reserve for treasury shares (held in

portfolio)

(325,724) (1,601,470)

B)Provisions for liabilities and charges

1) For pensions and similar obligations 331 0 3) financial liabilities' derivatives 49,679 42,838 4) Others 0 29,193

Total Net Equity 32,075,605 31,900,049

Total provisions for risks and charges 50,010 72,031

C) Employee severance indemnities 1,526,813 1,179,313

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2. Convertible bonds issued 3. To shareholders 4. To Banks

Due within the next financial year 4,545,833 3,900,282 Due after the next financial year 5,181,325 5,660,116 Total payables to banks 9,727,158 9,560,398

5. To other lenders due within one year - 920 Total payables to other lenders - 920

6. Advances 7. Payables to suppliers

Due within the next year 8,747,475 6,894,348 Total payables to suppliers 8,747,475 6,894,348

9. Payables to parent companies Due within the next year 1,882,737 4,850,984 Due after the next financial year 0 307,957 Total payables to subsidiaries 1,882,737 5,158,941

10. Payables to associated companies Due within the next financial year 12,382 8,720 Total payables to associated companies 12,382 8,720

11. Payables to parent companies 11-bis. Amounts due to companies subject to the

control of parent companies 12. Tax payables

13.

14.

Total Payables 29,596,855 27,864,128

E) Accruals and deferrals 2,012,646 1,263,912

Total liabilities 65,261,929 62,279,433

D) Payables

Due within the next financial year 2,748,555 2,171,395 Due after the next financial year 1,347,369 Total tax payables 4,095,924 2,171,395 Payables to social security institutions Due within the next financial year 753,198 532,151 Total payables due to social security companies 753,198 532,151

Other payables due within next financial year 4,377,981 3,537,255 Total other payables 4,377,981 3,537,255

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Income Statement 31/12/2018 31/12/2017

A) Production value

1 Revenues from sales and services 39,169,056 32,914,223 2. Change of product inventories (11,574) (1,757)

in progress, semi-finished and finished

3. Change in orders being processed 418,037 0 4. Increase of fixed assets for internal work

5. Other revenues and income - Grants for current expenses

496,908

745,014 673,096

142,190

- Others 832,236 190,850 Total other revenues and income 1,329,144 333,040

B) Production costs

6. For raw materials, ancillary materials, consumables and goods

545,170 476,096

7. For services 22,752,496 18,546,970 8. For the use of third-party assets 9. For payroll

a) Salaries and wages

12,453,218

3,322,696 2,391,934

10,181,087 b) Social security contributions 3,391,466 2,571,555 c) Severance indemnities d) Provis. for pensions and similar entitlem. e) Other costs

869,593

400,333

668,139

44,070 Total staff costs 17,114,610 13,464,851

10. Amortisation/depreciation and write-downs a) Amortisation of intangible assets 1,596,060 1,418,303 b) Depreciation of tangible fixed assets 184,858 161,869 c) Other write-downs of fixed assets

d) Write-downs of receivables included in current assets cash and cash equivalents

251,326 212,463

Total amortisation/depreciation and write-downs 2,032,244 1,792,635

11. Change in inventories of raw, ancillary and consumables materials and goods

6,565 1,048

12. Allocations for risks 13. Other provisions

13,095

14. Other operating expenses 839,318 476,837

Total production costs 46,626,194 37,150,371

Difference between value and production costs (A-B) (4,976,517) (3,231,769)

Total production value 41,649,677 33,918,602

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del Consiglio di Amministrazione Riccardo Donadon

15. Income from investments from subsidiaries 250,000 - from associated companies 822,428 - others 3,929,546 166,000

Total income from investments 5,001,974 166,000

16. Other financial income a) from receivables held under fixed assets

from subsidiaries from affiliated companies - from parent companies others

b) from securities held under fixed assets c) from current securities d) income other than previously mentioned

from subsidiaries from affiliated companies from parent companies from companies under the control of the parent companies

- Others 79,815 51,019 Total income other than the above 79,815 51,019

17. Interest and other financial charges: - from subsidiaries

-

107,847

from associated companies from parent companies others

688,763

280,717

Total interest and other financing costs 688,763 388,564

17-bis) profits and losses on foreign exchange (4,197) (1,249)

Total financial income and charges 4,388,829 (172,794)

D) Valuation adjustments of financial assets

18. Revaluations:

a) of shareholdings b) of financial fixed assets c) of current securities d) financial derivatives

- 124,889

Total revaluations

- 124,889

19. Write-downs:

a) of investments (306,119) (754,746) b) of financial fixed assets c) of current securities d) financial derivatives

(34,177)

0

(17,292) Total write-downs (340,296) (772,038)

Total value adjustments of financial assets (18 - 19) (340,296) (647,149)

Pre-Tax profit (loss) (A-B+-C+-D) 20. Current, deferred and pre-paid income

(927,984)

(4,051,712)

taxes Current taxes

112,997

0

Taxes related to previous financial years (1,509) 0 Deferred and prepaid taxes 46,080 (6,607) Total taxes on income for the year 157,568 (6,607) current, deferred and pre-paid

Cà Tron (Roncade - TV), 26 March 2019

The Chairman of the Board of Directors

Riccardo Donadon

ure

21. Profit (loss) for the year (1,085,552) (4,045,105)

C) Financial income and charges

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del Consiglio di Amministrazione Riccardo Donadon

ELENASenior Manager @ Strategy & Innovation Culture

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Cash flow statement As provided by the OIC Accounting Standard No. 10 - Financial Statement below shows the information of a financial nature. 31/12/2018 31/12/2017 A) Financial flows deriving from operational management

(indirect method)

Profit (loss) for the year (1,085,552) (4,045,105) Income taxes

157,568 6,607

Interest expenses/(income) 493,882 388,564

(Dividends) (403,000) 126,000 (Capital gains)/Capital losses from divestment of activities (4,479,710) (40,000) 1. Profit (loss) for the year before income taxes, interest,

dividends and gains/losses on disposals (5,316,812) (3,815,934)

Adjustments to non-monetary items that were not offset in the net working capital

Provisions 862,013 1,422,885 Depreciation of fixed assets 1,779,331 1,580,172 Write-downs for long-term value losses 306,119 Other adjustments for non-monetary assets 17,292

Total non-cash item adjustments 2,947,463 3,020,349 2. Cash flow before changes in net working capital (2,369,349) (795,585)

Changes to net working capital Decrease/(Increase) in inventories 18,139 (13,026) Decrease/(Increase) in receivables from customers 163,216 (4,082,754) Increase/(Decrease) in payables to suppliers 1,853,127 1,458,414 Decrease/(increase) in accruals and prepaid expenses (155,067) (1,016,764) Increase/(Decrease) in accrued expenses and deferred

income 748,734 1,073,975

Other decrease/(other increase) in the net working capital 3,092,242 3,305,925 Total changes to net working capital 5,720,391 725,770 3. Cash flow after changes to net working capital 3,351,042 (69,815)

Other adjustments Interest received/(paid) (493,882) (388,564) Dividends collected/paid 166,000 Income taxes paid 403,000 (208,822) Use of funds (289,941) (112,605)

Total other adjustments (380,823) (543,991) Cash flows from financial operations (A) 2,970,219 (613,806)

B) Cash flows from investment activities Tangible fixed assets

(Investments) (376,223) (275,309) Disinvestments 54,929

Intangible fixed assets (Investments) (1,147,939) (7,193,824) Disinvestments 222,255

Financial fixed assets (Investments) (7,993,151) Disinvestments 5,569,004 6,522,144

Non-fixed financial assets (Investments) (141,367) (71,643) Realisation price of company investments

Acquisition or disposal of subsidiaries or other business units net of cash - 2,485,844

Cash flows from investment activities (B) (3,812,492) 1,467,212

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C) Cash flows from financing activities

Third-party funding Increase/(Decrease) in short-term bank loans (182,810) 1,237,146 Convertible debenture loan New loans

2,487,000 5,816,591

Repayment of loans (2,138,351) (803,527)

Equity Other changes in net equity - (6,390,277) Sale/(purchase) of own shares 1,272,974 (1,601,470) (Dividends paid)

Cash flows from financing activities (C) 1,438,813 (1,741,537) Increase (Decrease) in available cash (A ± B ± C) 596,540 (888,132) Cash available on January 1 2,670,666 3,558,798 Cash at December 31 3,267,206 2,670,666

Cà Tron (Roncade – TV), 26th March 2019 The President of the Board of Directors Riccardo Donadon

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EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS as of 2108.12.31

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H-FAR H-FARM SPA

Registered office in Via Sile No. 41 - 31056 RONCADE (TV) Approved share capital € 11,155,206.20 - subscribed and paid up € 8,924,165.00

Treviso Companies Register - Tax Code and VAT No. 03944860265 Registration UIC 36566

www.h-farm.com

Explanatory Notes to the financial statements for the year ended 31/12/2018

Introduction H-F H-FARM SpA, hereinafter also the Company, is a company listed on 13 November 2015, on the AIM Italia/Alternative Capital Market, organised and managed by Borsa Italiana SpA On the financial year ended December 31, 2015, the Company prepared, as an issuer of AIM Italia, the consolidated financial statements including the related financial statements, the cash flow statement and the explanatory notes, accompanied by the Management Report. Therefore, for a more detailed analysis, please refer to these documents which are able to give much more detailed information, representative of the Company and its subsidiaries. H-FARM has been acting, with effect from 1 July 2015, as an innovative Certified start-up Incubator, (under the Decreto Crescita (Growth Decree) 2.0 - of Decree Law No. 179/2012, converted with amendments into Legislative Decree No. 221/2012 and subsequent amendments) and has, inter alia, the objective of promoting the emergence of innovative entrepreneurial initiatives in the digital and the new media sectors, in particular in sectors of recognised Italian excellence. For an analysis of the significant facts that occurred during the 2018 financial year, as well as for historical notes concerning H-FARM, please refer to the Management Report to the Consolidated Financial Statements.

Potential membership of a Group The Company, as mentioned, is the parent company of the entire H-FARM project and therefore exercises the direction and coordination of the various subsidiary companies. • H-FARM US Inc.;

• H-FARM UK Limited,

• H-FARM Digital Media Private Limited,

• Brandpotion Ltd,

• H-Farm Education S.r.l.;

• H-International School S.r.l.;

• CELI S.r.l;

• H-International School Vicenza S.r.l.;

• H-International School Rosà S.r.l.;

• BigRock S.r.l..

• H-Osteria Srl;

• H-Ouse Srl.

• H-Ub Srl;

• H-Farm Talent Srl;

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Formation criteria The financial statements as of December 31, 2018 have been prepared in accordance with the Italian Civil Code legislation, interpreted and integrated by accounting principles and criteria developed by the Italian Accounting Board (O.I.C.). The financial statements comprise the balance sheet, the income statement (prepared in accordance with the format respectively under Articles 2424, 2424 bis of the Italian Civil Code, and of Articles 2425 and 2425 bis of the Italian Civil Code), these explanatory notes and the statement of cash flows. The explanatory notes can be used to illustrate, analyse and, in some cases supplement the financial statement data and contain the information required by Article 2427 of the Italian Civil Code, along with other provisions of the Italian Civil Code with regards to the financial statements and from other applicable statutes. Moreover, all the information deemed necessary to give a representation in the most transparent and complete manner is provided, even if not specifically required by law. The amounts are expressed in euro unless otherwise indicated.

Valuation criteria The criteria used in the preparation of the financial statements for the year ended 31/12/2018 do not differ from the same used for the preparation of the financial statements for the previous year, which reflect the application of the changes introduced following the issue of Legislative Decree No. 139 of 18/08/2015, as well as of the national OIC accounting principles updated based on the provisions contained therein. Financial statement items were evaluated based on the general criteria of prudence and accrual, and on a going concern basis. The application of the principle of prudence led to the individual assessment of the elements comprising single entries or items for assets or liabilities, to avoid offsetting losses that should have been included and profits not to be recognised insofar as they are as yet unrealised. In accordance with the principle of accrual, the effect of transactions and other events have been accounted for and attributed to the financial year to which such transactions and events refer, and not to the financial year in which the related cash transaction (receipts and payments) occurred. Continuity in the application of the evaluation criteria over time is necessary to ensure the comparability of the company's financial statements from the different financial years. The recording and presentation of the items was carried out taking into account the substance of the transaction or contract, in application of the principle of the prevalence of the substance over the form, as reformulated by Legislative Decree 139/2015.

Group business continuity The company closed 2018 with a net loss of € 4,857 thousand, which reduced the consolidated shareholders' equity at December 31, 2018 to a value of € 21,302 thousand. The net financial position at December 31, 2018 is negative for € 5,717 thousand. The financial and treasury management led during the year to the payment of tax debts, for which in-depth reference is made in the description in the subsequent paragraphs. For this reason, the Directors have prepared a budget for the 2019 financial year approved at the same time as the draft financial statements, which also provides, in respect of a maturity of the portfolio deemed attractive by counterparties of a different nature, the financial balance in the light of the sale of some subsidiaries. In any case, even in the absence of such transactions, through the use of existing credit lines, it is deemed that the conditions for the continuation of the business activity exist. Taking into account the situation of such prospective, the Board of Directors, after a careful evaluation, considered that the conditions for the continuation of the company activity exist and therefore they drafted the financial statements with a view to business continuity.

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Derogations There were no exceptional circumstances that would require the use of derogations under Article 2423 paragraph 4 of the Italian Civil Code. In particular, the evaluation criteria adopted in drafting the financial statements were as follows.

Fixed Assets

Intangible

These are entered at the original purchase cost and are shown net of amortisation over the fiscal years and directly attributed to the individual items. The item of formation costs consists, with the consent of the Board of Statutory Auditors, of charges with multi-year utility and are amortised over a period of 5 years.

The costs for registering the trademark are amortised at a rate of 5%. The other intangible assets consist of the website, amortised at an annual rate of 20% and the web platform amortised over a period of 3 years.

Goodwill (difference from cancellation), which originates from the elimination of investments in incorporated companies, is amortised over a period of 10 years as it is considered that this is the period necessary to internally acquire the competitive advantage achieved thanks to the transaction carried out.

Materials

These are entered at purchase cost and adjusted by the equivalent depreciation provisions. The financial statements' value takes into account any ancillary expenses and costs incurred for the use of fixed assets, leading to a reduction of any significant trade discounts and cash discounts. The depreciation charged to the income statement is calculated according to the use, allocation and economic life of the assets entered into operation, based on the criterion of residual possibility of use. If, regardless of the depreciation already recorded, there is a lasting loss of value, the asset concerned is written down accordingly. If in subsequent years the reasons for the write-down no longer exist, the original value net of accumulated depreciation is restored. No discretionary or voluntary revaluations were made and the valuations made have a maximum value-in-use limit of said fixed asset, objectively determined. With regard to the "Other assets" category, the Directors believe that the overall amount of depreciation calculated is appropriate for making the assets fit the production process adequately, according to the deterioration and consumption of the individual categories and taking into account their residual possibility of use.

The following table shows the values: • computers and printers: 20%

• mobile telephones: 20%

• furniture and furnishings: 12%

• other assets: 20%

• vans: 25%

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The "other assets" also include works of art that by their nature cannot be amortised. Financial Investments in subsidiaries, recorded as financial assets, are valued at purchase or subscription cost. Equity investments classified as financial assets represent a long-term, strategic investment by the Company. Any lasting losses in the value of the investments have been determined by submitting the individual investments to Impairment Tests, only if they are significant, and comparing the net accounting value of the investment with the recoverable value determined by applying valuation criteria in line with those recommended by the International Private Equity and Venture Capital Valuation Guidelines issued by the IPEV Board. Financial fixed assets consisting of receivables, guarantee deposits due to utilities and restricted current accounts are recorded at their presumed realisable value since the application of the amortised cost for the values arising after 1 January 2018 is scarcely significant. Treasury shares Treasury shares are recorded under shareholders' equity in the item "Negative reserve for treasury shares in portfolio", in application of the changes introduced following the issue of Legislative Decree No. 139 of 18/08/2015. Treasury shares, as they are destined to be kept in the portfolio for a long time, have been valued at purchase cost. No write-down was made for permanent losses in value. Finance lease (leasing) transactions Financial leasing transactions are recognised in the financial statements using the equity method, and recorded in the income statement as fees paid on an accrual basis.

Inventories Inventories for contract work in progress are recognised to the extent corresponding to the revenue accrued at the end of each financial year determined with reference to the state of progress of the work based on the costs incurred of the total costs envisaged. Inventories of raw materials, ancillary materials and consumables as well as finished products and goods are valued on the basis of the average purchase cost. Receivables With reference to the receivables recorded in the financial statements, these are recorded at their presumed realisable value since, as envisaged by the accounting standard OIC 15, it was decided not to apply the amortised cost criterion and discounting, as the effects are irrelevant for the purpose of a truthful and correct representation. The adjustment of the nominal value of receivables to their estimated realisable value is obtained through a specific provision for doubtful debts, taking into account the general and sectoral economic conditions. The overall fund is considered to be adequate in relation to any difficulties in collecting the receivables in the financial statements. Cash and cash equivalents Cash and cash equivalents represent the balances of bank current and are recorded for the amounts actually available at the financial statements' date.

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Provisions for risks and charges These are allocated to cover losses or liabilities that are certain or probable, but whose amount or date of occurrence could not be established at the end of the financial year. In evaluating these provisions, the general criteria of prudence and accrual were respected and no generic risk funds without economic justification were established. Contingent liabilities were recognised in the financial statements and recorded in the provisions insofar as they are considered likely to be effective and the amount of the related charge can be reasonably estimated. Severance indemnities The item severance indemnities was recorded when the employees would have the right to receive them in the event of termination of the employment relationship at the closing date of the financial statements. The seniority allowances constituting the aforementioned item, that is the allocated portion accruing in the year and the annual revaluation of the pre-existing fund, are determined in compliance with the regulations in force. Payables The amortised cost criterion was applied only with reference to payables to banks for loans arising from 1 January 2017, while for other debts, since the effects of the valuation on the amortised cost criterion are not relevant, they were recorded at nominal value. Payables for holidays accrued by employees and for deferred remuneration, including the amount due to social security institutions, are allocated based on the amount that should be paid in the event of termination of the employment relationship at the balance sheet date. Financial assets that do not constitute fixed assets In accordance with the provisions of Accounting Principle 14, the part of financial liquidity assigned to the centralised management of the parent company (cash pooling), is entered under item CIII) 7 "Financial assets for centralised treasury management". Accruals and deferrals These were calculated based on the actual accrual period of the financial year. For multi-year accruals and deferrals, the conditions that led to the original entry were verified, with appropriate changes adopted where necessary. Income taxes Taxes are allocated according to the accruals principle, thus representing:

• provisions for taxes paid or to be paid for the year, determined in accordance with current rates and regulations;

• the deferred or prepaid amounts in respect of temporary differences arising or reversed during the year.

Starting from the 2018 financial year, all the companies that are part of the financial consolidation scope except for the foreign subsidiaries and H-Farm Talent Srl (established in February 2018) fall under the national tax consolidation regime. Through this option it is allowed to determine the IRES (Corporate Tax) on a taxable basis corresponding to the algebraic sum of the positive and negative taxable amounts of the individual participating companies. The option, furthermore, pursuant to the last paragraph of the Article 117, has a duration of three financial years and is irrevocable. The economic relations, as well as the mutual responsibilities and obligations, between the consolidating company and its aforementioned subsidiaries are defined in the consolidated agreement to which reference is made

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The tax payables include the Ires payable resulting from the sum of the positive and negative taxable amounts of the subsidiary that adhered to the national tax consolidation, the advances paid, the withholding taxes and the tax credits of the companies; the corresponding payables of the consolidating company to the companies of the group for the tax credit corresponding to the amounts transferred within the national tax consolidation have been recorded. Current, deferred and prepaid IRAP is determined exclusively with reference to the company. It should be noted that the assets relating to prepaid taxes on the tax losses generated were not prudently accounted for since it is considered appropriate to postpone this eventual recognition to when the organisational structure has been settled. Recognition of revenue and costs Revenues for the provision of services are recognised on the basis of their completion and/or accrual, in particular, the projects that were still in progress at the end of the year were recognised under inventories based on the percentage of completion as envisaged by the OIC 23. Therefore, Inventories for contract work in progress have been recognised to the extent corresponding to the revenue accrued at the end of each financial year determined with reference to the state of progress of the work based on the costs incurred of the total costs predicted. Revenues from the sale of products are recognised at the time of transfer of ownership, which generally coincides with shipment, net of returns, discounts, allowances and rebates. Transactions with related parties took place at normal market conditions. Financial income and expenses are recorded on an accrual basis. Revenues and income, costs and charges related to foreign currency transactions are calculated at the exchange rate prevailing on the date the transaction is completed. Grants Operating grants are recorded directly in the income statement according to the accrual principle, in the year in which the right to the grant was certain. Conversion criteria for values expressed in currency Receivables and payables originally expressed in foreign currency, recorded at the exchange rates in effect on the date on which they occurred, are aligned with the exchange rates prevailing at the closing financial statements' date. In particular, assets and liabilities that do not constitute fixed assets as well as fixed asset financial receivables are recognised at the spot exchange rate at year-end. The profits and losses that derive from conversion of receivables and payables are respectively credited and debited to the Income Statement under item 17 bis Profit and Loss on currency exchange. Any net gain arising from the adjustment to year-end rates of foreign currency contributes to the formation of the operating profit and, at the time of the financial statements' approval and consequent allocation of the legal reserve profit, is recorded, for the part not absorbed by any loss for the year, in a non-distributable reserve until the gain matures. Guarantees, commitments, third-party assets and liabilities The commitments and risks relating to guarantees with collateral or securities given, for debts of others have been indicated in the explanatory notes in the specific paragraph for an amount equal to the amount of the guarantee given;

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the amount of the other party's debt guaranteed at the balance sheet date, if lower than the guarantee given, is indicated in these explanatory notes. Risks for which the appearance of a liability is probable are described in the notes, and allocated to the appropriate provision criteria in risk provisions. Risks for which the manifestation of a liability is only possible are described in the notes, without making provisions for risks according to relevant accounting standards. No account was taken of any remote risks.

of Academic Programme

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CARLOHead of Academic Program

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ASSETS

B) Fixed assets

I. Intangible fixed assets

Formation costs, whose total net value amounted to € 385,415, consisted mainly of the costs for changes to the articles of association and capital operations incurred including the AIM listing operation. The item "trademarks and patents" refers, among other things, to the expenses incurred in 2017 and 2018 relating to the filing of new trademarks both nationally and internationally. The item "Other intangible assets" includes, among other things, the costs incurred for the website, for the purchase of a web platform and for improvements to third-party assets. The item "Goodwill" has not undergone incremental changes compared to the previous year. The Company has also incurred the costs of developing innovative platforms that allow it to better manage company organisational processes; for the development of distance learning platforms; for the development and planning of both digital and paper publications on issues concerning technological impacts on people, companies and organisations.

Formations

costs Development

costs Rights of

Indus patent and

intellectual property

rights

Concessions grants, licences,

trademarks and similar

rights

Goodwill

Fixed assets

Intangible in

progress and

advance payments

Other intangible fixed assets

Tot. fixed assets fixed assets

Value at the start of the financial year Cost 1,881,073 1,314,969 26,214 484,285 7,156,920 366,948 790,697 12,021,106 Amortisation (F. Amortis.)

1,155,194 521,090 9,257 312,627 1,852,593 -

605,767 4,456,528

Write-downs - - - - 19,379 - - 19,379 Financial statement value

725,879 793,879 16,958 171,658 5,284,947 366,948 184,930 7,545,199

Changes during the year Incr. for purchases - 723,129 - 122,475 - 307,688 333,305 1,486,597 Reclass (of the value of the financial statements)

176,400 -

-

(222,930) -

(269,728) (292,527) (608,785)

Amortis. for the finan. year

340,464 361,614 893 113,137 703,252 - 88,236 1,607,596

Deval. carried out in finan. year

-

-

-

-

(1,586)

-

-

(1,586)

Other changes (176,400) - - 150,180 - - 216,762 190,542 Total changes (340,464) 361,515 (893) (63,412) (701,666) 37,960 169,304 (537,656) Value at end of year Cost 1,704,673 2,038.098 26,214 383,830 7,156,920 404,908 831,474 12,546,117 Amortisation (F. Amortis.)

1,319,258

882,704

10,149

275,584

2,555,845

-

477,241

5,520,781

Write-downs - - - - 17,793 - - 17,793 Financial statement value

385,415 1,155,394 16,065 108,246 4,583,281 404,908 354,234 7,007,543

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II. Tangible fixed assets

The category is composed, among other things, of the following sub-categories (net of accumulated depreciation): computers and printers for € 65,713, mobile phones for € 30,237, furniture and furnishings for € 527,093 and other assets for € 121,341. A large part of the increase in tangible assets is the result of acquisitions during the year.

III. Financial fixed assets

Financial fixed assets are recorded at cost, decreased by permanent losses in value, as required by accounting standard OIC 21. This criterion does not make it possible to highlight, for some equity investments, their current market value (fair value) but only the amount directly invested by H-FARM, significantly affecting the result and the main equity and economic performance indices.

Description Plant and

machinery Other fixed

assets tangible Tangible fixed

assets in course of construction

Total fixed assets tangible

Value at beginning of year Cost 147,431 1,218,444 329,813 1,695,688 Depreciation (depreciation provision)

20,752 369,745 - 390,497

Financial statement value 126,679 848,698 329,813 1,305,190 Changes during the financial year Increases due to acquisitions 414 226,603 241,611 468,628 Reclass (of the financial statements' value)

- - (73,883) (73,883)

Decrease for sale and disposals (of the financial statements' value)

- 126,816 - 126,816

Depreciation for the year 22,146 162,712 - 184,858 Other changes - 53,365 - 53,365 Total changes (21,732) (9,560) 167,728 136,436 Value at year-end Cost 147,845 1,318,231 497,541 1,963,617 Depreciation (depreciation provision)

42,897 479,093 - 521,990

Financial statement value 104,947 839,138 497,541 1,441,626

Equity investments In subsidiaries

Equity investments in associates

Equity Inv. in other companies

Total Equity investments

Other financial securities

Derivative assets

Value at beginning of year Cost 18,155,102 1,575,340 4,343,103 24,073,545 319,551 5,863 Appreciation - 542,053 41,893 583,946 - - Write-downs 957,502 706,545 1,179,302 2,843,349 - - Financial statement value 17,197,600 1,410,849 3,205,694 21,814,143 319,551 5,863 Changes during the financial year

Incr. for purchases 6,431,051 1,423,214 5,166,994 13,021,259 232,787 - Reclassifications (of the financial statements' value)

(574,936) (956,000) - (1,530,936) - -

Decrease for disposals (of the financial statements' value) - 173,551 5,415,750 5,589,301 80,000 5,025

Write-downs 8,174 - 194,512 202,686 - - Other changes - 164,490 520,809 685,299 - - Total changes 5,847,941 458,153 77,541 6,383,635 152,787 (5,025) Value at year-end Cost 24,011,217 2,411,056 4,136,240 30,558,513 472,338 838 Write-downs 965,676 542,054 853,005 2,360,735 - - Financial statement value 23,045,541 1,869,002 3,283,235 28,197,778 472,338 838

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Equity investments in subsidiaries

Description 31/12/2017 Increase Decrease Write-downs 31/12/2018 H-Farm USA Inc 6,181,017 - - 6,181,017 H-FARM Digital Media (India) - 8,174 8,174

H-FARM UK Ltd 195,000 - - 195,000 Shado Srl 985,893 - - 985,893 H-Farm Education Srl 5,004,151 5,003,036 - - 10,007.18 Celi Srl 2,188,007 - - 2,188,007 BigRock Srl 2,399,027 - - 2,399,027 Habacus Srl 12,538 562,398 574,936 -

H-Ouse Srl 17,538 382,462 - 400.00 H-Osteria Srl 214,429 385,571 - 600 00 Galgo Srl - - -

H-Ub Srl; - 20,000 - 20,000 H-Farm Talent Srl - 69,409 - 69,409 TOTAL 17,197.60 6,411,050 574,936 8,174 23,045.54

For a description of the company, see the Management Report of the consolidated financial statements.

Name Registere

d office Capital Result 2018 Net Equity at

31/12/2018 % Share of

the N.E. Value at Financial Statement

H-Farm USA * Delaware $ 8,037,014 $ 19,078 $ 5,086,024 100 4,441,942 6,181,017 H-Farm UK ** London £ 1,000 £ (62,138) £ (1,031,327) 100 (1,132,804) 195,000

H-Farm Ind. *** Mumbai INR 358,000 INR (17,186) INR

5,319,478 100 66,719 -

Shado Roncade 50,000 118,983 547,646 100 547,646 985,893 H-Farm Educ. Roncade 56,000 (1,052,571) 4,340,257 100 4,340,257 10,007,187 Galgo * Milan 14,000 (2,345)**** 11,810**** 62.50 11,810 - Celi Turin 10,500 49,235 837,768 100 837,768 2,188,007 BigRock Verona 10,000 (42,797) 156,582 99 156,582 2,399,027 H-Ouse Roncade 10,000 (202,412) 194,559 100 194,559 400,000 H-Farm Talent Milan 25,000 (7,749) 69,409 100 69,409 69,409 H-Ub Roncade 100 Not Available Not Available 51 Not Available 20,000 H-Osteria Roncade 10,000 (325,463) 87,090 100 87,090 600,000 TOTAL 23,045,541

* exchange rate of 1.145 ** exchange rate of 0.89453 *** exchange rate of 79.7298 **** date as at 31/12/2017

Investments in associated companies

Description 31/12/2017 Increase Decrease Write-downs 31/12/2018 Travel Appeal 132,642 823,358 956,000 - - GoodAppetito - - 121,763 (121,763) - Lumi Industries 120,876 - - - 120,876 D-Still - 9,061 51,789 (42,728) - Responsa 106,926 - - - 106,926 Designwine 1,050,404 - - - 1,050,404 Habacus - 590,796 - - 590,796 TOTAL 1,410,848 1,423,215 1,129,552 (164,491) 1,869,002

The main increases in the equity investments refer to Habacus as it has been generated by the reclassification of the investment among the associated companies;

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The main decreases in the holdings have been generated by:

• Travel Appeal: this decrease has been generated by the reclassification of the investment among Other Companies, following the sale of 15.00% of the shares (residual portion held 9.00%);

• Good Appetito: this decrease has been generated by the closure of the company following its liquidation;

The following are the company data of investments in associated companies with an indication of the latest available financial statement data:

Name Registered Office

Capital 2017 Result N.E. as at 31.12.2017

% Share of N.E.

Financial statements

Value Habacus Roncade 10,000 (1,660) (8,340) 40.00 3,336 590,796 Designwine Sav. on R. (FC) 130,860 (487,190) 901,574 36.53 329,345 1,050,404

Responsa Roncade (TV) 4,720 (34,182) 94,513 28.25 26,700 106,926 Lumi Indus. Roncade (TV) 116,280 276 54,681 25.00 13,670 120,876 TOTAL 1,869,002

For a description of the associated companies, see the Management Report of the consolidated financial statements.

Investments in Other companies The following is a breakdown of investments in other companies with an indication of the historical cost:

Description 31/12/2017 Increase Decrease Write-downs 31/12/2018 Travel

Appeal - 56,000 - - 56,000

Akqa 14,712 - - - 14,712 1RING - - - - - Venetwork 20,000 - - - 20,000 Pubcoder Srl 170,500 - - 170,500 - Depop LTD 792,027 3,782,192 4,574,219 - - Moku Srl 37,273 - - - 37,273 Mobile 1st - - - - - Tykli Srl 4,012 - - 4,012 - Pathflow Srl - - 51,273 (51,273) - Fubles Srl 50,325 - - - 50,325 P101 SpA 361,443 20,049 59,175 - 322,317 Fannabee - - - - - CII 2 400,000 - - - 400,000 Digital Rights - - - - - Amaz. F.C. Srl - - - - - Antlos Srl 34,447 - 264.594 (230,147) - Sellf Srl 132,728 - 132.728 - - Makoo Srl - - 58,697 (58,697) - Pinktrotters Ltd - - 42,871 (42,871) -

Wethod Srl 50,015 - - - 50,015 Drinkout Srl - - - - - Gek Srl 150,000 - - - 150,000 Get App Srl 46,110 - - - 46,110 Hopstock Srl - - 117,821 (117,821) -

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Deswag Srl - - - - - PonyU Srl 40,810 - - - 40,810 Glix Srl 63,281 31,091 94,372 - - Insight Srl 131,434 20,000 - - 151,434 Eattiamo Srl 64,551 - - - 64,551 Aromapass Ldt - - - - - Adzuki Ivs 20,000 - - - 20,000 Interiorbe Srl 20,000 - - 20,000 - Loyaly Srl - - 20,000 (20,000) - Mio Assicurat Srl 150,000 - - - 150,000 Smau Servizi Srl 229,199 16,748 - - 245,947

Dispell M. Srl 182,827 - - - 182,827 Biofarm Srl 40,000 60 - - 40,060 Henable Soc. Coop. Soc. - - - - -

Thinkinside Srl - 21,250 - - 21,250 Genlots SA - 22,533 - - 22,533 Finboot - 22,824 - - 22,824 Diana e-com. Corpor - 1,080,983 - - 1,080,983

Tritium Software - 79,901 - - 79,901

Sailogy SA - 13,363 - - 13,363 TOTALE 3,205,694 5,166,994 5,415,750 (326,297) 3,283,235

The increases for the year mainly derive from the investments made in 2018: • Diana E-Commerce Corporation: the increase was generated as a result of two transactions that saw

the Company become a shareholder and take a 10% stake in the same;

• Sailogy: the increase was generated following the merger of the company Antlos (new shareholding in Sailogy post merger equal to 0.35%); • Tritium Software: the increase was generated following the exchange of the shares held in Sellf with

a share of 0.19% in the company Tritium Software (Forcemenager). With regards to the decreases in particular, we would point out: • Depop: the decrease was generated by the total sale of the stake;

• Hopstock, Loyaly and Makoo were due to the closure of the companies.

The following are the company data of investments in other companies with an indication of the latest available financial statement data:

Name Registered Office

Capital 2017 Result

N.E. as at 31.12.2017

% Share of N.E.

Financial statement

s Value Insight Ascea (SA) 15,000 (18,415) 74,067 15.89 11,769 151,434 Wethod Roncade (TV) 100 1,561 47,077 15.00 7,062 50,015 Dispell Magic Srl Carpi (MO) 37,035 22,520 596,816 13.92 83,077 182,827 Pubcoder Roncade (TV) 13,741 (27,966) 76,985 13.87 10,678 - Deswag Roncade (TV) 113 (33,185) 44,238 13.30 5,884 - Digital Rights Milan (MI) 50,000 (292,767) * (230,906) * 12.00 (27,709)* - Mobile1st Roncade (TV) 10,000 2,334* 26,497 * 10.00 2,650* - Onering Montegrotto 10,000 2,812 1,900 10.00 190 - Moku Roncade (TV) 10,000 4,354 48,041 10.00 4,804 37,273 PonyU Roncade (TV) 100 3,646 12,365 10.00 1,237 40,810

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Drinkout Correggio 10,000 1,871 16,598 10.00 1,660 - Aromapass§ Londra (UK) £100 Not Available Not Available 10.00 N.A - Adzuki§ Slagelse (DK) DKK 1,00 Not Available Not Available 10.00 N.A 20,000 Diana E-C. Corp.§ Torreglia (PD) 10,838 Not Available Not Available 10.00 N.A 1,080,983 InteriorBe Roncade (TV) 110 (169,553) (5,704) 9.10 519 - Get App Pistoia (PT) 55,853 (36,458) 250,965 9.03 22,662 46,110 Travel Appeal Roncade (TV) 114 (145,393) 387,297 9.00 34,857 56,000 AKQA Roncade (TV) 56,000 1,708,167 1,989,805 9.00 179,082 14,712 Eattiamo La Spezia 13,853 (9,326) 173,268 8.19 14,191 64,551 Fannabee Milano (MI) 49,100 (91,520) (139,052) 7.90 (10,985) - Mio Assicuratore Roma 10,000 (188,040) 65,387 7.50 4,904 150,000 CII 2 Milano (MI) 5,640,821 (373,496)** 5,377,585** 6.77 364,063** 400,000 Biorfarm Rossano (CS) 350 3,913 28,322 6.00 1,699 40,060 Tykli Torino (TO) 17,400 (89,095) (4,746) 5.90 (280) - Amaz. Food C. Vitt. Veneto 40,000 (83,934) (54,199) 5.00 (2,710) - Smau Servizi Padova 100,000 23,695 148,926 4.50 6,702 245,947 Fubles Milano (MI) 63,676 56,777 254,891 3.00 7,647 50,325 Genlots Chexbres (CH) Not Available Not Available Not Available 3.00 N.A. 22,533 Thinkinside Bolzano (BZ) 62,500 47,766 369,730 2.00 7.395 21,250 Gek Milano (MI) 100,100 248,627 2,176,687 1.05 22,855 150,000 Finboot Londra (UK) N. A. Not Available Not Available 1.01 N.A. 22,824 Venetwork Venezia (VE) 2,407,800 (125,362) 1,658,769 0.75 12,441 20,000 P101 SICAF Milano (MI) 333,500 (3,619,693) 35,565,839 0.75 266,744 322,317 Sailogy Svizzera Not A. Not Available Not Available 0.35 N.A. 13,363 Tritium Software Barcellona (ESP) Not A. Not Available Not Available 0.19 N.A. 79,901 Henable C. S. Roncade (TV) Not A. Not Available Not Available 1.400az N.A. - TOTALE 3,283,236

§The company has not yet completed the first financial statements * data refer to 31/12/2016 ** data refer to 30/06/2018

For a description of other companies, see the Management Report of the consolidated financial statements. Information on financial assets recorded at a value higher than the fair value In the financial statements there are no financial assets recorded for a value greater than their fair value. Other securities

Description 31/12/2017 Increase Decrease 31/12/2018

Other securities 319,551 232,787 80,000 472,338

This item also classifies investments, in the form of convertible loans, made in startups selected in the "Industry Acceleration" programmes.

Description Long-term receivables from others

Total long-term receivables

Value at beginning of year 214,295 214,295 Changes during the financial year 61,316 61,316 Value at year-end 275,611 275,611 Amount due within the year 275,611 275,611

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This item refers to security deposits on rents relating to the Milan office, as well as the restricted current account to guarantee the surety of € 61,000 issued for the rental of the property in Catania.

Asset derivative financial instruments

Description 31/12/2017 Increase Decrease 31/12/2018

Asset derivative financial instrument

5,863 - 5,025 838

For a comment on this item, see the final part of these explanatory notes.

C) Current assets

I. Inventories

This item is mainly composed of work in progress on order insofar as revenues for the provision of services have been recognised on the basis of their completion and/or accrual, in particular, the projects that were still in progress at the end of the year were recognised under inventories based on the percentage of completion as envisaged by the OIC 23. Therefore, Inventories for contract work in progress have been recognised to the extent corresponding to the revenue accrued at the end of each financial year determined with reference to the state of progress of the work based on the costs incurred of the total costs predicted.

II. Receivables

Changes and maturity of receivables included in current assets

Value of

Beginning of the year

Changes in the year

Year-end value

Quota due

The Company, as indicated in the introduction of these explanatory notes, has made use of the option not to use the amortised cost criterion since, on the one hand, these are receivables with a duration of less than 12 months and on the other hand, the effects are irrelevant for the purpose of giving a truthful and correct representation; therefore the receivables have been valued at the presumable realisable value. Trade receivables from customers refer, among other things, to invoices to be issued for € 2,370,690.

Description materials

Raw and ancillary and

cons.

Work in progress to order

Finished products and goods

Total inventories

Value at beginning of year 6,565 - 53,916 60,481 Changes in the year (6,565) 418,037 (11,575) 399,897 Value at year-end - 418,037 42,341 460,378

Description within the year Receivables from clients recorded in current assets 15,022,237 (834,687) 14,187,550 14,187,550 Receiv. from subsidiaries included in current assets 5,241,555 (3,393,330) 1,848,225 1,848,225 Receiv. from associated cos. incl. in current assets 331,968 354,013 685,981 685.981 Tax credits included in current assets 1,394,005 (581,181) 812,824 812,824 Prepaid tax assets incl in current assets 46,080 (46,080) 0 Other receivables recorded in current assets 160,947 130,529 291,476 291,476 Total receivables included in current assets 22,196,792 (4,370,736) 17,826,056 17,826,056

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Receivables from subsidiaries and from associated companies refer to trade receivables and receivables deriving from the national tax consolidation option. For more details, see the specific part of the explanatory notes. Receivables from customers have been allocated an impairment provision of € 492,502 for impaired receivables. Tax credits comprise, inter alia, the IRES credit for € 35,405 and the fiscal consolidation credits transferred from the consolidated companies for a total of € 761,196, as required by the fiscal consolidation agreements. The item other receivables refers inter alia to advances for confirmatory deposits for € 70,600, INPS credit for € 64,568, from the company welfare deposit for € 16,626, and from the Adyen temporary deposit account for € 11,000. Breakdown of receivables recorded under current assets by geographical area. The receivables as at 31/12/2018 are divided in such a way according to geographical area:

Receivables by geo area. ITALY EU NON-EU TOTAL From clients 12,621,729 1,145,666 420,155 14,187,550 From subsidiaries 1,848,225 - 1,848,225 From associates 685,981 - 685,981

Financial assets that do not constitute fixed assets

Changes in financial assets other than fixed assets

Description Value at beginning of year

Changes in the year

Value

at year end

Equity investments in subsidiaries 4,835,428 141,367 4,976,795 Tot. financial assets other than fixed asset 4,835,428 141,367 4,976,795

This item refers to a non-interest bearing loan paid to the subsidiary H-FARM UK.

IV. Cash and Cash Equivalents

Change in cash and cash equivalents

Description

Value at beginning of

year

Changes in the year

Value at end of year

Bank and postal deposits 2,667,124 598,020 3,265,144 Cash-in-hand and cash equivalents (3,542) (1,480) 2,062 TOTAL 2,670,666 596,540 3,267,206

The balance represents available liquid assets, as well as the existence of cash on hand and cash equivalents at the closing date of the financial year. For a comment on this item, please refer to the Management Report of the consolidated financial statements.

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D) Accruals and deferrals

Description

Value at beginning of year

Changes in the year

Year-end value

Accrued income 440,409 (235,313) 205,096 Deferred expenses 871,416 259,248 1,130,664 TOTAL 1,311,825 23,935 1,335,760

These measure income and expenses whose accrual period is advanced or delayed with respect to the actual cash and/or documentation; they are excluded irrespective of the date of payment or collection of the related income and expenses, usually for two or more years and divisible over time. As at 31/12/2018, € 11,927 with a duration of more than five years has been recorded under prepayments. On the other hand, there is no accrued income due beyond five years.

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CAMERONTeacher @ H-International School

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LIABILITIES

A) Net Equity

Changes in shareholders' equity items

Description Value at

beginning of year

Increases Decreases

Operating

Results for year

Year-end value

Capital 8,924,165 - - 8,924,165 Share premium reserve 28,688,315 - 4,045,105 24,643,210 Legal reserve 4,054 - - 4,054 Other reserves

Extraordinary reserve 1 - - 1 Other miscellaneous reserves 834,029 137,013 139,783 831,257 Tot. other reserves 834,030 137,013 139,783 831,258 Operational reserve for cover of expected flows

(36,975) (11,866) - (48,841)

Profits (losses) carried forward (866,965) - - (866,965) Profit (loss) of the financial year (4,045,105) - (4,045,105) (1,085,552) (1,085,552) Neg. Res. for treas. shares in portf. (1,601,470) - (1,275,746) (325,724) TOTAL 31,900,049 125,147 (1,135,963) (1,085,552) 32,075,605

The accounting loss for the year amounts to € 1,085,551.87. It should be remembered that the difference between the accounting loss of € 1,085,551.87 and the loss resulting from the financial statements, drawn up per unit of Euro, equal to € 1,085,552, has been fully allocated to the item Reserve for rounding off in Euro. The loss for the previous year, amounting to € 4,045,105, was covered through the use of the share premium reserve, as resolved by the shareholders' meeting to approve the financial statements on 26/04/2018. Treasury shares At 31 December 2018, the Company held 418,115 treasury shares in its portfolio, with a nominal value of € 0.10 each, including the 255,000 shares to be transferred to the shareholders of H-International School Rosà Srl, through the use of an escrow bank account in compliance with the guarantees requested. The company transferred a total of 1,478,817 treasury shares to the transferors of the companies acquired during the first half of 2017 (Big Rock Srl, Celi Srl and H-International School Vicenza Srl including the 255,000 transferred to the shareholders of the H-International School Rosà through the use of the escrow bank account) and to the transferors of the company Diana E-Commerce Corporation Srl acquired in the second half of 2018. The share capital as at 31/12/2018 has been divided into 111,152,062 ordinary shares with a nominal value of € 0.10 each, of which:

• 89,241,650 shares are already fully authorised, subscribed and paid;

• 22,310,412 shares authorised but not subscribed, neither paid nor reserved for the SOP2019 service and, therefore, subject to the regulation of the same SOP2019.

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Availability and use of net equity

The origin of the possibility of use and distribution of net equity items

Description Amount

Possibility of use Quota available Summary of actual in

the three previous years for hedging losses

Capital 8,924,165 - - Share premium reserve 24,643,210 A, B, C 24,643,210 14,685,882 Legal reserve 4,054 B - - Other inventories

Extraordinary reserve 1 A, B, C 1 - Other miscellaneous reserves 831,257 - - Total other reserves 831,258 1 - Reserve for hedging operations

of expected cash flows (48,841) A, B, C - -

Profits carried forward (866,965) A, B, C - - Neg.res. for treas.shares in portf.

(325,724) - -

Total 32,329,900 24,643,211 14,685,882 Quota not distributed 3,321,587

Residual quota distributed 21,321,624

A: for capital increase; B: for covering losses; C: for distribution to shareholders

Reserves or other provisions, which, in case of distribution, do not contribute to form corporate taxable income, regardless of the period of creation.

Reserve Value Share premium reserve 24,643,210

Changes of the reserve for hedging operations of expected cash flows

Description Reserve for hedging operations of expected cash flows Start value of the period (36,975) Changes during the financial year

Increase due to changes in fair value (11,866) Value at year-end (48,841)

The reserve for expected cash flow hedging transactions includes changes in the fair value of the effective component of derivative financial instruments to hedge cash flows, underwritten by the company against interest rate hedging on the two different bank loans.

B) Funds for Risks and Charges

Description Provisions for pensions and similar obligations

Derivative financial instruments liabilities

Total provisions for risks and charges

Other funds Start value of the period - 42,838 29,193 72,031 Changes during the financial year

Provision for the year 331 6,841 - 7,172 Utilisation during the year - - 29,193 29,193

Total changes 331 6,841 (29,193) (22,021) Value at year-end 331 49,679 0 50,010

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These are set up against charges or payables of a specific nature and of probable or already certain existence at the financial statements' date, but of which, on the date itself, are not specific regarding either the amount or date of occurrence. The item "pensions and similar obligations" refers to the provision for additional indemnities of customers allocated through an agent. The "other" item of the provision for risks and charges relates to a pending dispute won at first instance against which the plaintiff brought an appeal, which was finished during the year. The item "Derivative financial instruments liabilities" includes potential liabilities for financial charges deriving from the management of derivative contracts.

C) Employee severance indemnities

Information on employee severance indemnities

Description Employee severance indemnities Value at beginning of year 1,179,313 Changes during the financial year

Provision for the year 890,174 Utilisation during the year 542,674 Total changes 347,500

Value at year-end 1,526,813

The sum allocated represents the liability for severance indemnities of the company at the end of the year to the employees at that date, net of advances paid.

D) Payables

Changes and maturity of payables

Two loan agreements were signed in 2017, the first granted by Friuladria for a nominal value of € 1,600 thousand and the second granted in a pool by Mediocredito and Unicredit for a nominal € 5,000 thousand. The loan with Friuladria, signed on 27/06/2017 and lasting until 31/12/2022, provided for a pre-amortisation period until 30/06/2018 and therefore the first principal amount of € 160 thousand was paid plus

Value at Description start year

Changes in the year

Value at year end

Quota maturity within the year

Quota maturity after the year

Payables to banks 9,560,398 166,760 9,727,158 4,545,833 5,181,325 Payables to other finance. 920 (920) 0 0 - Payables to suppliers 6,894,348 1,853,127 8,747,475 8,747,475 - Payables to subsid. 5,158,941 (3,276,204) 1,882,737 1,882,737 0

Payables to coll. 8,720 3,662 12,382 12,382 - Payables to assoc. tax. 2,171,395 1,924,529 4,095,924 2,748,555 1,347,369 Payab. to soc security inst. 532,151 221,047 753,198 753,198 - Other payables 3,537,255 840,726 4,377,981 4,377,981 - TOTAL 27,864,128 1,732,727 29,596,855 23,068,161 6,528,694

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interest. The loan agreement with Mediocredito/Unicredit signed on 27/06/2017 with a duration up to 30/6/2023 provided for a pre-amortisation period until 31/12/2018 and therefore the first principal amount of € 500 thousand was paid plus interest. Both loans were recorded at amortised cost, deducting the administrative fees of € 24 thousand and € 150 thousand from the nominal debt respectively. Furthermore, two hedging derivative financial instruments were taken out on the aforementioned loans: an IRS on the Mediocredito/Unicredit loan and an Option CAP on the Friuladria loan. A loan agreement was signed on 19/03/2018 with Banca Sella for the amount of € 1.0 million repayable in 48 monthly instalments expiring on 31/03/2022 and 8/10/2018, a contract was signed for a loan of € 1.0 million from Banca Ifis repayable in 12 monthly instalments falling due on 30/03/2020. The Company has also activated a cash credit limit of up to € 300 thousand with Friuladria from 14/09/2018 until 30/04/2019 and subsequently, up to 30/19/2019, by instalments up to a maximum of € 50 thousand. Finally, payables to banks also include € 2,231,173 of advances on invoices. Trade payables include invoices to be received net of credit notes for € 1,811,406. Payables to subsidiaries refer to trade payables, financial payables concerning the remuneration of the transferred tax loss and and current accounts in existence. The item tax payables refers to VAT expired debts for about € 3,255 million of which € 1,652 thousand is the procedure in progress for their payment by instalments as well as the IRES payable for € 112,762 transferred to the consolidating H-Farm SpA due to the option of tax consolidation, IRAP payable for € 108,097, and withholding at source for € 619,005. Payables to social security institutions refer to fees paid to directors, employees, collaborators, interns and apprentices. The item other payables includes, among other things, payables to employees for holidays and allowances for € 1,219,712, payables for premiums for € 996,907, payables to employees for salaries for € 727,950, amounts due to directors for € 18,323 paid by 12/01/2019, payables to interns for € 7,773 and to collaborators with fees for € 7,433. Breakdown of payables by geographical area The payables as at 31/12/2018 are thus divided according to geographical area:

Payables by geo area. ITALY EU NON-EU TOTAL To suppliers 7,258,621 1,400,640 88,214 8,747,475 From subsidiaries 1,882,737 1,882,737 From associates 12,382 12,382

E) Accruals and Deferrals

These have been determined in accordance with the principles of economic and timely accrual, having care to charge the costs and revenues to the relevant closing financial year.

Description

Value at the beginning of

year Changes in the

year Value at year-

end

Accrued expenses 119,641 (109,543) 10,098 Deferred income 1,144,271 858,277 2,002,548 TOTAL 1,263,912 748,734 2,012,646

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These measure income and expenses whose accrual period is advanced or delayed with respect to the actual cash and/or documentation; they are excluded irrespective of the date of payment or collection of the related income and expenses, usually for two or more years and divisible over time. As of 31/12/2018 there were no accruals and deferrals of more than five years.

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KAROLASocial Media @ Digital Marketing

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INCOME STATEMENT

A) Production value

Description 31/12/2018 31/12/2017 Changes Revenues from sales and services 39,169,056 32,914,223 6,254,833 Changes in invent. Prod. In progress (11,574) (1,757) (9,817) Works in progress for orders 418,037 - 418,037 Incr. fix.assets internal works 745,014 673,096 71,918 Other revenues and income 1,329,144 333,040 996,104 TOTAL 41,649,677 33,918,602 7,731,075

The item Revenues from sales includes € 189,582 in income generated by contracts with the public administration. Increases in fixed assets for internal works of € 745,014 mainly refer to the costs incurred for the development of new projects including "Progetto Barilla" and "Progetto Welfare aziendale". The item other revenues and income is, inter alia, made up of € 496,908 from grants in the financial year, of which € 455 thousand was received from the Ca 'Foscari University of Venice for the degree course in Digital Management, from other intercompany revenues € 374,887, from ordinary contingent assets for € 195,453, revenues for canteen service fees for € 106,298, use of the allowance for impairment of € 60,267, revenues other than third parties for € 15,960 and insurance reimbursements for € 10,760. Breakdown of revenues from sales and services by business category

Category of assets Goods Services Total Value for current financial year 304,666 38,864,390 39,169,056

Breakdown of revenues from sales and services by geographical area

Geographic area Italy EU NON-EU Total Value for current financial year 33,960,945 1,651,557 3,556,554 39,169,056

B) Production costs

Description 31/12/2018 31/12/2017 Changes Raw materials, ancillary materials, consumables and goods

545,170 476,096 69,074

Services 22,752,496 18,546,970 4,205,526 Use of third party assets 3,322,696 2,391,934 930,762 Salaries and wages 12,453,218 10,181,087 2,272,131 Social security contributions 3,391,466 2,571,555 819,911 Severance indemnities 869,593 668,139 201,454 Other staff costs 400,333 44,070 356,263 Amort. intangible fixed assets 1,596,060 1,418,303 177,757 Amortisation Tangible fixed assets 184,858 161,869 22,989 Write-downs of payables 251,326 212,463 38,863 Change in inventories raw mat., cons 6,565 1,048 5,517 Provision for risks 13,095 0 13,095 Other management costs 839,317 476,837 362,480 TOTAL 46,626,193 37,150,371 9,475,822

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Raw materials, consumables and goods The item refers, among other things, to purchases for resale for € 179,539, production purchases for € 128,132, fuels and lubricants for € 72,772, purchases of goods to be recharged for € 58,753, stationery and printed materials for € 53,192, purchase of goods less than € 516.46 for € 18,932, consumables for € 13,279, purchase of computer equipment for € 11,691. Costs for services Costs for services mainly include: online advertising for € 9,835,594 related to digital marketing, technical consultancy for € 4,982,402, intercompany consultancy for € 1,014,124, expenses for conferences, fairs and meetings for € 908,942 , costs for services to be charged back for € 689,098, travel expenses for € 340,368, security costs for € 293,663, canteen services for € 291,974, fee for online service for € 258,758, electricity for € 253,514, maintenance on third party assets for € 240,826 and cleaning costs for € 232,380. Costs for use of third party assets This item includes, among other things, rental charges for € 2,309,263, leasing of other assets € 346,949, hire of employee cars for € 161,890, hardware rental for € 109,688 and leases for administrator cars for € 26,284. Staff costs This item includes all costs for employees, including merit increases, changes of category, automatic cost of living increases, payment of untaken leave, and legal and collective bargaining provisions. Amortisation/depreciation of tangible and intangible fixed assets Please refer to the above regarding intangible and tangible fixed assets. Write-downs and provisions Please refer to the above regarding receivables from customers, subsidiaries and associated companies. Other management costs This item is composed, among other things of contingent liabilities for € 295,937, administrative fines for € 232,852, donations for € 86,461, miscellaneous expenses for € 32,758, registration tax for € 19,970, association fees and subscriptions for € 16,850.

C) Financial income and expenses

Description 31/12/2018 31/12/2017 Changes Income from investments in subsidiaries 250,000 - 250,000

Income from investments in associated companies 822,428 - 822,428

Income from investments in other companies 3,929,546 166,000 3,763,546

Income other than that previously mentioned 79,815 51,019 28,796 Interest and other financial payables from subsidiaries - (107,847) (107,847) Interest and other financial charge payables from others (688,763) (280,717) (408,046)

Profits (losses) on foreign exchange (4,197) (1,249) (2,948)

TOTAL 4,388,829 (172,794) 4,561,623

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Income from equity investments consists of dividends from the subsidiary Shado Srl for € 250 thousand, from capital gains from investments in associated companies, deriving from the partial sale of Travel Appeal S.rl, and from income from investments in other companies for the sale of the investment Depop Ltd and dividends received from AKQA Srl for € 153 thousand. Financial income includes, among other things, interest receivable from a current correspondence account signed with the subsidiaries for € 78,841, interest accrued on loans for € 319 and bank interest income for € 133. Interest and other financial charges relate, among other things, to capital losses on the sale of investments in other companies totalling € 118,582, to interest on bank loans in the medium term for € 273,730, to interest expenses on a bank current account for € 64,311, funds availability commissions for € 52,861, commissions on guarantees for € 41,372, interest expense from correspondent current account transactions for € 45,751 and interest expense to the tax authorities for € 18,741. The exchange rate differences realised refer to positive differences of € 492 and negative differences of € 4,688.

D) Adjustment in value of financial assets

Description 31/12/2018 31/12/2017 Changes Revaluations of investments 0 124,889 (124,889) Write-downs. of financial fixed assets (306,119) (754,746) 448,627

Write-downs. of finan. instrument derivatives (34,177) (17,292) (16,885) TOTAL (340,296) (647,149) 306,853

For a comment on the write-downs of financial fixed assets, see the section on Financial Fixed Assets. Write-downs of derivative financial instruments relate to the adjustment of the value of financial instruments outstanding as at 31/12/2018.

Current, deferred, and pre-paid income taxes

Current, deferred, and prepaid taxes

Taxes Value at 31/12/2018 Value at 31/12/2017 Changes Current taxes 112,997 - 112,997 Taxes related to prev. years (1,509) - (1,509) Deferred and prepaid taxes 46,080 (6,607) 52,687

Accrued taxes for the year have been recorded. The following table shows the reconciliation between theoretical charges resulting from financial statements and the theoretical tax charge: - Reconciliation between actual tax charge from the financial statements and the theoretical tax charge (IRES)

Description Value Taxes Pre-tax profit (927,984)

Theoretical tax burden (24% rate) - - Differences that do not reverse in subsequent years (2,111,038)

TAXABLE INCOME (3,037,513)

CURRENT TAXES ON INCOME FOR THE YEAR -

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Calculation of taxable IRAP

Description Value Taxes Difference between positive and negative components (4,976,517)

Interest income and similar revenues 5,081,788

Interest expense and similar charges (688,763)

Costs that are relevant for IRAP purposes 17,379,031

Theoretical tax charges (5.57%) 16,795,539 654,476 Difference that is not reserved in the following years 2,302,825

Gross value of production 19,098,364

Deductions (17,028,355)

NET VALUE OF PRODUCTION 2,070,009

CURRENT IRAP FOR THE YEAR (5.57%) 112,997

Pursuant to Article 2427, paragraph 1, No. 14 of the Italian Civil Code, the required information on deferred and prepaid taxes is highlighted as follows:

Deferred/prepaid taxes Prepaid taxes have been reported according to the reasonable certainty of the existence, in the years in which the temporary differences are deductible, against which prepaid taxes were reported, of a taxable income not lower than the amount of the differences that would be cancelled out. Deferred taxes for the year are expressed by the reversal of prepaid taxes due to the payment of employee bonuses in 2017, amounting to € 46,080. The temporary differences existing at December 31, 2018 which led to the recognition of deferred tax assets are the following:

Taxes Value Taxes Reversal of premiums not paid to employees (H-Farm SpA) (192,000) (46,080)

It should be noted that the assets relating to prepaid taxes on the tax losses generated were not prudently accounted for since it is considered appropriate to postpone this eventual recognition to when the organisational structure has been settled. In particular, it should be noted that the Company has a basket of € 15,443,689 for tax losses that can be used to offset future years.

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ACHILLELearning Designer @ Strategy & Innovation Culture

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OTHER INFORMATION

Employment data as at 31/12/2018

Description Exact number Senior managers 12 Employees and apprentices 306 Workers 3 Term contract workers 1 TOTAL 322

Fees and advances to directors and statutory auditors

In accordance with the law, the total remuneration due to the directors is shown, net of INPS and INAIL contributions, to the members of the Board of Statutory Auditors and to the Independent Auditors.

Description Value Directors' fees 485,349 Compensation for statutory auditors 26,807

Compensation to the Statutory Auditor or Auditing Firm

The appointment as statutory auditor of the financial statements is entrusted to the auditing company BDO Italia SpA. The fee for the statutory audit disbursed in 2018 was € 45,900 net of expenses.

Securities Issued by the Company The company has not issued any securities.

Details of other financial instruments issued by the company The Company does not have participatory financial instruments.

Commitments, guarantees and potential liabilities not appearing on the balance sheet As of December 31, 2018, the Company issued guarantees totalling € 8.5 million, including an insurance guarantee for € 4.4 million for the University Ca 'Foscari for commitments deriving from the contract relating to the three-year degree course in Digital Management, an insurance guarantee of € 2.7 million and a bank guarantee of € 993 thousand, regarding Finanziaria Internazionale Investment SGR SpA, as manager of the "Ca' Tron H-CAMPUS Fund" to guarantee the preliminary and existing contract of leases relating to H-CAMPUS.

Relationships with related parties Except for the transactions that will be presented below, in 2018, the Company did not engage in relationship activities with related parties in the course of their business, specifying that for Related Parties: • the Company's relations with the investee companies whose share is less than 20% has not been

taken into consideration;

• no reports of the Company have been reported of which the Company's managing directors directly or indirectly hold shares of less than 20%;

• the relationships of the Company with companies directly or indirectly related to directors without proxies are not shown;

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• the data relating to the remuneration of the directors of the Company are not shown, as already indicated in the specific section of the Explanatory Notes on the relative companies.

The Company believes that the conditions envisaged and actually applied in relations with Related Parties are in line with normal market conditions, or the conditions that would be applied between two independent parties. Given the above, the following is a breakdown of the transactions with: Parties related to management: Ca' Tron Real Estate Srl referring to the directors Riccardo Donadon and Maurizio Rossi. E-Farm Srl: referring to the director Riccardo Donadon and Giulia Franchin (wife).

Company Receivables

Payables Invoices from

Revenue Costs 31/12/2018

31/12/2018 31/12/2018 to be received

31/12/2018 31/12/2018

CTRE 9,056 961,156 1,646 2,561 12,736 E-Farm 5,856 - - 4,800 - TOTAL 14,912 961,156 1,646 7,361 12,736 Values in €

Subsidiary Companies

Company Receivable trade

Payables trade

Invoices to be

received

Credit note

received

Invoices from

issue

Direct cost

capital Revenues Costs

Shado Srl 77,170 169,409 27,423 1,342 12,000 219,316 295,472 H-Farm Educat Srl 194,117 8,351 215,101 491,557 188,316

H-IS Srl 23 10,033 117,971 637,615 19 Big Rock 6,912 193,838 Celi 5,956 132,858 13,425 20,566 271,962 H-IS Vicen. 12,161 33,590 21,305 H-IS Rosà 6,244 22,082 31,862 22,428 H-Ouse 15,000 6,316 169,791 381,389 167,466 H-Osteria 24,861 4,197 92,434 469,769 H-F. Talent 78,440 5,210 7,359 7,835 H-UB FondazH for Hum 29,287 288 3,600 16,842 944

TOTAL 145,818 355,837 330,350 8,351 582,664 12,000 2,104,650 1,401,783

Associated companies Companies in which a share of more than 20% is held.

Company Receivables trade

Payables trade

Credit notes

Invoices To be issued

Credit notes to issue

Revenues Costs

Responsa Srl 1,830 12,549 27,000 Habacus Srl 40,434 4,607 37,067

Human T. Sc. Srl 100,040 82,000

Designwine Srl 1,035

H-IS Monza Srl 12,146 52 7,956

Zooppa Eur. Srl 272,311 5,000 263,775 87,336 10,500 TOTAL 426,761 1,035 5,000 263,827 4,607 226,909 37,500

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Information on agreements not disclosed in the Balance Sheet Pursuant to Article 2427 point 22-ter, please note that there were no agreements not disclosed in the balance sheet that present risks or significant benefits or which are necessary to assess the equity, financial and economic situation of the company. Information about significant events occurring after the end of the year For a comment on the events following the close of the 2018 financial year, please refer to the Explanatory Notes to the Consolidated Financial Statements.

Information concerning derivative financial instruments under Article 2427-bis of the Italian Civil Code The following is information (referring to the current fair value period) on the entity and nature of each category of derivative financial instruments entered into by the company, divided by class, taking into consideration aspects such as the characteristics of the instruments themselves and the purpose of their use. Contract 270617-0016 Unicredit SpA:

• type of derivative contract Interest rate swap 5 years; • Purpose: hedging;

• notional value EUR 5,000,000;

• underlying financial risk: interest rate risk;

• fair value of the derivative contract EUR - 49,678.53.

Contract No. 46447/2017 Crédit Agricole Friuladria SpA • type of derivative contract Interest rate swap 5 years;

• Purpose: hedging;

• notional value EUR 1,600,000;

• underlying financial risk: interest rate risk;

• fair value of the derivative contract EUR 837.59.

Allocation of the profit for the year For the reasons set out above we propose that you approve the financial statements as at 31 December 2018 and to fully hedge the loss for the year of € 1,085,551.87 through the use of the Share Premium Reserve for the same amount.

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Dear Shareholders, These Financial Statements, comprising a Balance Sheet, Income Statement, Statement of Cash Flows and Explanatory Notes, represent a true and correct view of the equity and financial situation as well as the profit for the financial year and correspond to the figures reported in the accounting records.

Cà Tron (Roncade - TV), 26 March 2019 The Chairman of the Board of Directors

Riccardo Donadon

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REPORT OF THE AUDITING COMPANY OF THE BOARDS OF STATUTORY AUDITORS

4

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GIA

NVI

TO E

CH

RIS

TIAN

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@ H

-FAR

M

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Tel: +39 0422 17.60.177 www.bdo.it

Viale Giuseppe Verdi, 1 31100 Treviso

Bari, Bergamo, Bologna, Brescia, Cagliari, Firenze, Genova, Milano, Napoli, Padova, Palermo, Pescara, Roma, Torino, Treviso, Trieste, Verona, Vicenza BDO Italia S.p.A. – Sede Legale: Viale Abruzzi, 94 – 20131 Milano – Capitale Sociale Euro 1.000.000 i.v. Codice Fiscale, Partita IVA e Registro Imprese di Milano n. 07722780967 - R.E.A. Milano 1977842 Iscritta al Registro dei Revisori Legali al n. 167911 con D.M. del 15/03/2013 G.U. n. 26 del 02/04/2013 BDO Italia S.p.A., società per azioni italiana, è membro di BDO International Limited, società di diritto inglese (company limited by guarantee), e fa parte della rete internazionale BDO, network di società indipendenti.

Pag. 1 di 3

Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39 To the shareholder of H Farm S.p.A. Report on the financial statements

Opinion

We have audited the financial statements of H Farm S.P.A. (the Company), which comprise the balance sheet as at December 31,2018, the income statement and the cash flow statement for the year then ended and the explanatory notes.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as at December 31,2018, and of the result of its operations and its cash flows for the year then ended in accordance with the Italian regulations and accounting principles governing financial statements.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of this report. We are independent of the company in accordance with ethical requirements and standards applicable in Italy that are relevant to the audit of financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

Without modifying our opinion, we draw attention on the “Group business continuity” note to the financial statements that describes that H Farm Group closed the period ending December 31, 2018 with a net loss of Euro 4.857 thousand and a net negative financial position at December 31, 2018 of Euro 5.717 thousand. The financial and treasury management led during the year to the payment of tax debts, as described in paragraph D) Payables of the explanatory notes. For this reason, the Directors have prepared a budget for the 2019 financial year approved at the same time as the draft financial statements, which also provides, against a maturity of the portfolio deemed attractive by counterparties of a different nature, the financial balance regarding the sale of some subsidiaries. In any case, even in the absence of such transactions, through the use of existing credit lines, management deemed that the conditions for the continuation of the business activity exist.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Italian regulations and accounting principles governing financial statements and, within the limits of the law, for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

Pag. di 3

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our ob ectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of the audit in accordance with International Standards on Auditing (ISA Italia), we exercise professional udgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risk of material misstatement of the financial statements, whether due to fraud or error design and perform audit procedures in response to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of non detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control

• Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control;

• Evaluate the appropriateness of accounting principles used and the reasonableness of accounting estimates and related disclosures made management

• Conclude on the appropriateness of management’s use of the going concern and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions in a manner that achieves fair presentation.

We communicate with those charged with governance, identified at the appropriate level as required by the ISA Italia, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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193193

Tel: +39 0422 17.60.177 www.bdo.it

Viale Giuseppe Verdi, 1 31100 Treviso

Bari, Bergamo, Bologna, Brescia, Cagliari, Firenze, Genova, Milano, Napoli, Padova, Palermo, Pescara, Roma, Torino, Treviso, Trieste, Verona, Vicenza BDO Italia S.p.A. – Sede Legale: Viale Abruzzi, 94 – 20131 Milano – Capitale Sociale Euro 1.000.000 i.v. Codice Fiscale, Partita IVA e Registro Imprese di Milano n. 07722780967 - R.E.A. Milano 1977842 Iscritta al Registro dei Revisori Legali al n. 167911 con D.M. del 15/03/2013 G.U. n. 26 del 02/04/2013 BDO Italia S.p.A., società per azioni italiana, è membro di BDO International Limited, società di diritto inglese (company limited by guarantee), e fa parte della rete internazionale BDO, network di società indipendenti.

Pag. 1 di 3

Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39 To the shareholder of H Farm S.p.A. Report on the financial statements

Opinion

We have audited the financial statements of H Farm S.P.A. (the Company), which comprise the balance sheet as at December 31,2018, the income statement and the cash flow statement for the year then ended and the explanatory notes.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as at December 31,2018, and of the result of its operations and its cash flows for the year then ended in accordance with the Italian regulations and accounting principles governing financial statements.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of this report. We are independent of the company in accordance with ethical requirements and standards applicable in Italy that are relevant to the audit of financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

Without modifying our opinion, we draw attention on the “Group business continuity” note to the financial statements that describes that H Farm Group closed the period ending December 31, 2018 with a net loss of Euro 4.857 thousand and a net negative financial position at December 31, 2018 of Euro 5.717 thousand. The financial and treasury management led during the year to the payment of tax debts, as described in paragraph D) Payables of the explanatory notes. For this reason, the Directors have prepared a budget for the 2019 financial year approved at the same time as the draft financial statements, which also provides, against a maturity of the portfolio deemed attractive by counterparties of a different nature, the financial balance regarding the sale of some subsidiaries. In any case, even in the absence of such transactions, through the use of existing credit lines, management deemed that the conditions for the continuation of the business activity exist.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Italian regulations and accounting principles governing financial statements and, within the limits of the law, for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

Pag. di 3

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our ob ectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of the audit in accordance with International Standards on Auditing (ISA Italia), we exercise professional udgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risk of material misstatement of the financial statements, whether due to fraud or error design and perform audit procedures in response to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of non detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control

• Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control;

• Evaluate the appropriateness of accounting principles used and the reasonableness of accounting estimates and related disclosures made management

• Conclude on the appropriateness of management’s use of the going concern and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions in a manner that achieves fair presentation.

We communicate with those charged with governance, identified at the appropriate level as required by the ISA Italia, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

Pag. 3 di 3

Report on other legal and reg lator re irements

Opinion p rs ant to article 1 paragraph letter e of egislative Decree n. 3 1 .

The directors of H-FARM S.p.A. are responsible for the preparation of the report on operations of H-FARM S.p.A. as at December 31,2018, including its consistency with the financial statements and the compliance with the applicable laws and regulations.

We have performed the procedures required under audit standard (SA Italia) n. 720B in order to express an opinion on the consistency of the report on operations, with the financial statements of H-FARM S.p.A. as at December 31,2018 and on its compliance with the applicable laws and regulations, and in order to assess whether it contain material misstatements.

In our opinion, the report on operations is consistent with the financial statements of H-FARM S.p.A. as at December 31,2018 and is compliant with applicable laws and regulations.

With reference to the assessment pursuant to article 14, paragraph. 2, letter e), of Legislative Decree n. 39/10 based on our knowledge and understanding of the entity and its environment obtained through our audit, we have nothing to report.

Treviso, April,5 2019 BDO Italia S.p.A. Signed by Stefano Bianchi Partner his report has been translated into n lish from the ori inal hich as prepared in talian

and represents the onl authentic cop solel for the con enience of international readers

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195

FRANCESCAPayroll Specialist @ H-FARM

H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

Pag. 3 di 3

Report on other legal and reg lator re irements

Opinion p rs ant to article 1 paragraph letter e of egislative Decree n. 3 1 .

The directors of H-FARM S.p.A. are responsible for the preparation of the report on operations of H-FARM S.p.A. as at December 31,2018, including its consistency with the financial statements and the compliance with the applicable laws and regulations.

We have performed the procedures required under audit standard (SA Italia) n. 720B in order to express an opinion on the consistency of the report on operations, with the financial statements of H-FARM S.p.A. as at December 31,2018 and on its compliance with the applicable laws and regulations, and in order to assess whether it contain material misstatements.

In our opinion, the report on operations is consistent with the financial statements of H-FARM S.p.A. as at December 31,2018 and is compliant with applicable laws and regulations.

With reference to the assessment pursuant to article 14, paragraph. 2, letter e), of Legislative Decree n. 39/10 based on our knowledge and understanding of the entity and its environment obtained through our audit, we have nothing to report.

Treviso, April,5 2019 BDO Italia S.p.A. Signed by Stefano Bianchi Partner his report has been translated into n lish from the ori inal hich as prepared in talian

and represents the onl authentic cop solel for the con enience of international readers

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196196

Tel: +39 0422 17.60.177 www.bdo.it

Viale Giuseppe Verdi, 1 31100 Treviso

Bari, Bergamo, Bologna, Brescia, Cagliari, Firenze, Genova, Milano, Napoli, Padova, Palermo, Pescara, Roma, Torino, Treviso, Trieste, Verona, Vicenza BDO Italia S.p.A. – Sede Legale: Viale Abruzzi, 94 – 20131 Milano – Capitale Sociale Euro 1.000.000 i.v. Codice Fiscale, Partita IVA e Registro Imprese di Milano n. 07722780967 - R.E.A. Milano 1977842 Iscritta al Registro dei Revisori Legali al n. 167911 con D.M. del 15/03/2013 G.U. n. 26 del 02/04/2013 BDO Italia S.p.A., società per azioni italiana, è membro di BDO International Limited, società di diritto inglese (company limited by guarantee), e fa parte della rete internazionale BDO, network di società indipendenti.

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Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39 To the shareholder of H Farm S.p.A. Report on the financial statements

Opinion have audited the consolidated financial statements of H Farm Group (the “Group”), which comprise the consolidated balance sheet as December 31, 2018, the consolidated income statement and the consolidated cash flow statement for the year then ended and the explanatory notes.

In our opinion the consolidated financial statements give a true and fair view of the financial position of the Group as at December 31, 2018 and of its financial performance and its cash flows for the year then ended in accordance with Italian regulations and accounting principles governing financial statements.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the consolidated financial statements section of this report. We are independent of the company H Farm S.p.A. in accordance with ethical requirements and standards applicable in Italy that are relevant to the audit of financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

Without modifying our opinion, we draw attention on the “Going concern” note to the financial statements that describes that H Farm Group closed the period ending December 31, 2018 with a net loss of Euro 4.857 thousand and a net negative financial position at December 31, 2018 of Euro 5.717 thousand. The financial and treasury management led during the year to the payment of tax debts, as described in paragraph D) Payables of the explanatory notes. For this reason, management have prepared a budget for the 2019 financial year approved at the same time as the draft financial statements, which also provides, against a maturity of the portfolio deemed attractive by counterparties of a different nature, the financial balance regarding the sale of some subsidiaries. In any case, even in the absence of such transactions, through the use of existing credit lines, Directors deemed that the conditions for the continuation of the business activity exist.

Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Italian regulations and accounting principles governing its preparation and, within the limits of the law, for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

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In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the holding H farm S.p.A. or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the A dit of the inancial Statements Our ob ectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of the audit in accordance with International Standards on Auditing (ISA Italia), we exercise professional udgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risk of material misstatement of the consolidated financial statements, whether due to fraud or error design and perform audit procedures in response to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of non detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control

• Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control;

• Evaluate the appropriateness of accounting principles used and the reasonableness of accounting estimates and related disclosures made management

• Conclude on the appropriateness of management’s use of the going concern and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions in a manner that achieves fair presentation

• Obtained sufficent appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision

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Tel: +39 0422 17.60.177 www.bdo.it

Viale Giuseppe Verdi, 1 31100 Treviso

Bari, Bergamo, Bologna, Brescia, Cagliari, Firenze, Genova, Milano, Napoli, Padova, Palermo, Pescara, Roma, Torino, Treviso, Trieste, Verona, Vicenza BDO Italia S.p.A. – Sede Legale: Viale Abruzzi, 94 – 20131 Milano – Capitale Sociale Euro 1.000.000 i.v. Codice Fiscale, Partita IVA e Registro Imprese di Milano n. 07722780967 - R.E.A. Milano 1977842 Iscritta al Registro dei Revisori Legali al n. 167911 con D.M. del 15/03/2013 G.U. n. 26 del 02/04/2013 BDO Italia S.p.A., società per azioni italiana, è membro di BDO International Limited, società di diritto inglese (company limited by guarantee), e fa parte della rete internazionale BDO, network di società indipendenti.

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Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39 To the shareholder of H Farm S.p.A. Report on the financial statements

Opinion have audited the consolidated financial statements of H Farm Group (the “Group”), which comprise the consolidated balance sheet as December 31, 2018, the consolidated income statement and the consolidated cash flow statement for the year then ended and the explanatory notes.

In our opinion the consolidated financial statements give a true and fair view of the financial position of the Group as at December 31, 2018 and of its financial performance and its cash flows for the year then ended in accordance with Italian regulations and accounting principles governing financial statements.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the consolidated financial statements section of this report. We are independent of the company H Farm S.p.A. in accordance with ethical requirements and standards applicable in Italy that are relevant to the audit of financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

Without modifying our opinion, we draw attention on the “Going concern” note to the financial statements that describes that H Farm Group closed the period ending December 31, 2018 with a net loss of Euro 4.857 thousand and a net negative financial position at December 31, 2018 of Euro 5.717 thousand. The financial and treasury management led during the year to the payment of tax debts, as described in paragraph D) Payables of the explanatory notes. For this reason, management have prepared a budget for the 2019 financial year approved at the same time as the draft financial statements, which also provides, against a maturity of the portfolio deemed attractive by counterparties of a different nature, the financial balance regarding the sale of some subsidiaries. In any case, even in the absence of such transactions, through the use of existing credit lines, Directors deemed that the conditions for the continuation of the business activity exist.

Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Italian regulations and accounting principles governing its preparation and, within the limits of the law, for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

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In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the holding H farm S.p.A. or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the A dit of the inancial Statements Our ob ectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of the audit in accordance with International Standards on Auditing (ISA Italia), we exercise professional udgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risk of material misstatement of the consolidated financial statements, whether due to fraud or error design and perform audit procedures in response to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of non detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control

• Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control;

• Evaluate the appropriateness of accounting principles used and the reasonableness of accounting estimates and related disclosures made management

• Conclude on the appropriateness of management’s use of the going concern and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions in a manner that achieves fair presentation

• Obtained sufficent appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision

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H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

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and performance of the Group audit. We remain solely responsible for our audit opinion on the consolidated financial statements.

We communicate with those charged with governance, identified at the appropriate level as required by the ISA Italia, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and reg lator re irements

Opinion p rs ant to article 1 paragraph letter e of egislative Decree n. 3 1 . The directors of H FARM S.p.A. are responsible for the preparation of the Group’ report on operations of H FARM S.p.A. as at December 31,2018, including its consistency with the consolidated financial statements and the compliance with the applicable laws and regulations.

We have performed the procedures required under audit standard (SA Italia) n. 720B in order to express an opinion on the consistency of the report on operations, with the consolidated financial statements of H FARM Group as at December 31,2018 and on its compliance with the applicable laws and regulations, and in order to assess whether it contain material misstatements.

In our opinion, the report on operations is consistent with the consolidated financial statements of H FARM Group as at December 31,2018 and is compliant with applicable laws and regulations.

With reference to the assessment pursuant to article 14, paragraph. 2, letter e), of Legislative Decree n. 39/10 based on our knowledge and understanding of the entity and its environment obtained through our audit, we have nothing to report.

Treviso, April,5 2019 BDO Italia S.p.A. Signed by Stefano Bianchi Partner his report has been translated into n lish from the ori inal hich as prepared in talian

and represents the onl authentic cop solel for the con enience of international readers

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SUBHASHGroup Academic Coordinator @ H-International Scool

H-Farm S.p.A. Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39

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and performance of the Group audit. We remain solely responsible for our audit opinion on the consolidated financial statements.

We communicate with those charged with governance, identified at the appropriate level as required by the ISA Italia, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and reg lator re irements

Opinion p rs ant to article 1 paragraph letter e of egislative Decree n. 3 1 . The directors of H FARM S.p.A. are responsible for the preparation of the Group’ report on operations of H FARM S.p.A. as at December 31,2018, including its consistency with the consolidated financial statements and the compliance with the applicable laws and regulations.

We have performed the procedures required under audit standard (SA Italia) n. 720B in order to express an opinion on the consistency of the report on operations, with the consolidated financial statements of H FARM Group as at December 31,2018 and on its compliance with the applicable laws and regulations, and in order to assess whether it contain material misstatements.

In our opinion, the report on operations is consistent with the consolidated financial statements of H FARM Group as at December 31,2018 and is compliant with applicable laws and regulations.

With reference to the assessment pursuant to article 14, paragraph. 2, letter e), of Legislative Decree n. 39/10 based on our knowledge and understanding of the entity and its environment obtained through our audit, we have nothing to report.

Treviso, April,5 2019 BDO Italia S.p.A. Signed by Stefano Bianchi Partner his report has been translated into n lish from the ori inal hich as prepared in talian

and represents the onl authentic cop solel for the con enience of international readers

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RICCARDO E MAURIZIOFounders

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H-FARM SPA

TENUTA CA’ TRON

Via Sile, 41

31056 – Roncade (TV)

ITALIA

+39 0422 78 96 11

hfarmspa

hfarmspa

hfarmspa

company/h-farm

hfarmsite

[email protected]

http://h-farm.com

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www.h-farm.com

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www.h-farm.com