GRUPPO DE ECCHER 2009 · 2010-07-02 · Rizzani de Eccher S.p.A. Via Buttrio, ... Elevated Light...

Rizzani de Eccher S.p.A.

Via Buttrio, Frazione Cargnacco

33050 Pozzuolo del Friuli (UD) Italy

Tel. +39 0432 6071

Fax +39 0432 522336

[email protected]

Joint Stock Company incorporated in Italy

Share Capital

Euro 20,000,000.00 fully paid up

Member, Udine Chamber of Commerce

Registration no.115684

Department of Foreign Trade UD 002577

Companies Register of Udine

Tax ID & VAT Number IT00167700301

rizzanideeccher.com

GRUPPO DE ECCHER 2009

GR

UPPO

DE ECCH

ER2009

1

Consolidated Financial Statements and Independent Auditors’ Report for the Year Ended 31st December 2009(all amounts in European Currency: Euro)

During the Financial Year 2009 no material changes have occurred, so no corrections or amendments are requiredto the information provided in the 2008 Annual ReportThe 2009 Annual Report was approved by the Shareholders’ Meeting of the Company held in Udine on the 14th June 2010.

This Annual Report was printed in 3000 copies in June and circulated to shareholders and the public, including the financial community, company employees and main customers and suppliers.

For further information:[email protected]

Table of Contents

3 Letter from the Chairman

4 2009 at a glance

10 History

13 Strategies

15 Organisation

19 Quality and Innovation

20 Sustainable Development

22 Areas of business Activity

25 General Building

28 Infrastructures

30 Services and Special Equipment for Bridges and Viaducts

32 Real Estate Development

33 Focus

45 Management Report

49 Notes to the 2009 Annual Report

51 Contents of the ConsolidatedFinancial Statements

56 Balance Sheet Analysis

68 Income Statement Analysis

71 Report enclosed with the Financial Statements

72 Independent Auditor’s Report

73 Consolidated Financial Statements

81 Appendices

89 Statutory Financial Statements of the Parent Company

3

LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS

Dear Shareholders,

The global economic and financial crisis currently under way has naturally

led to a temporary slow-down in production. However this has taken place

without impacting Group’s profitability and financial solidity.

In fact, as opposed to the 2008 results, consolidated turnover contracted by

17% to ¤ 409 million. However, the financial year in review also witnessed

an improvement in the bottom line, with net profits over the same period

increasing from ¤ 11.5 million to ¤ 15.5 million.

Furthermore, the size and diversification of the order backlog, which has

been strengthened by the recent acquisition of new and very significant

projects, indicate that already from 2010 onward the Group shall resume on

its trend of relentless growth.

With a view to strengthening the Group Balance Sheet, during the course of

the 2009 financial year the paid up capital of Rizzani de Eccher Spa has been

increased from ¤ 10 million to ¤ 20 million by capitalizing a portion of the

retained earnings reserve.

The Financial Statements enclosed with this Annual Report have been

drafted according to principles of transparency, independence, accuracy,

completeness and reliability. These principles will provide any reader

(whether members of the public, the financial community, customers,

suppliers or Group employees) with a fair and accurate picture of results

achieved.

In closing, I would like to convey my sincere thanks to our employees and

staff for their commitment and hard work. I would also like to thank all our

customers, suppliers and business partners for their continued support

and contributions towards the Group's success.

Chairman

Marco de Eccher

Preceding page: Elevated Light Railway, Dubai (UAE)

4

As evidenced by the foregoing financial information, the

Group’s performance in 2009 has continued to be fairly

positive, as confirmed by a net cash position (current

assets + short term financial position – current liabilities)

at year end of € 22.5 million and a current ratio between

these aggregates of 1.08. Net financial position (short term

financial position – net medium/long term debt) is a

positive € 63.0 million, in line with the previous year’s

result. This bears testimony to the Group’s ability to

negotiate construction contracts that allow for operational

and financing needs to be funded directly by payments

from clients (advance and progress payments).

It is important to remark that notwithstanding a slight

revenue contraction, profitability in absolute and relative

terms has improved as opposed to FY 2008. Ratios such as

2009 AT A GLANCE

ROI (EBIT on gross invested capital inclusive of cash and

contingency funds) and ROE (net earnings on net capital

inclusive of profit for the year) have remained high and in

line with FY 2008. Furthermore, the incidence of interest

expense and financial charges on revenues has remained

next to zero.

Generally in 2009, notwithstanding the contraction in

revenues for the first time after 5 years of relentless

growth, the Group has nevertheless been able to remain

highly profitable and competitive, particularly in

international markets, and to consolidate the market share

gained over the past few years.

The backlog of orders at the year end, which has remained

above € 1 billion, continues to consist of an ever high share

of overseas contracts

2005 2006 2007

418,205

(405,740)12,464(5,012)

7,452(2,330)

5,122(2,216)

2,906615

2,290

70%7,302

34,27938,618

178,380216,999155,093

45,561200,654

16,3456,999

11,25718,257

32,36731,349

9,874(8,855)32,367

403,071

(389,918)13,153(5,580)

7,573(863)6,710

(3,739)2,972(155)3,127

70%8,707

38,00756,277

181,984238,261177,113

66,625243,738

(5,476)6,481

13,75520,236

12,29433,73613,589

(35,031)12,294

488,618

(444,089)44,529(7,653)36,876

9536,971

(13,268)23,703

53123,172

70%30,825

38,77252,084

239,188291,272201,720

84,032285,752

5,5205,695

16,53722,232

22,06053,454

7,500(38,894)

22,060

492,628

(463,386)29,243(6,773)22,470(4,738)17,732(5,286)12,446

98111,465

74%18,238

31,59576,652

194,949271,601178,031122,559300,591

(28,990)5,5042,1687,672

(5,067)58,762

9,100(72,929)

(5,067)

2008

408,668

(377,270)31,398(5,460)25,938(2,355)23,583(7,387)16,196

69915,497

74%20,957

70,86061,332

156,276217,608160,956106,207267,163

(49,555)4,9793,3308,309

12,99676,031

9,034(72,069)

12,996

2009

economic and financial indicators[Euro thousand]

Total Revenues (*)

Cost of Goods and Services Gross Operating Margin (EBITDA)Depreciation and AmortizationEBITInterest and other financial chargesEarnings before Tax (EBT)TaxNet Earnings before Minority InterestsMinority InterestsNet Earnings after Minority Interests

Share of Revenue from OverseasCash Flow (**)

Net Fixed AssetsInventory and Works in ProgressReceivablesCurrent AssetsPayablesAdvances paymentsCurrent Liabilities

Net Current Assets (NCA)Employees’ Severance IndemnityProvision for contingencies and risks Long/Medium Term Liabilities

Net Capital InvestedNet EquityMedium & Long Net Term DebtNet Financial Position (Short Term)Net Equity + Net Financial Position

(*) included extraordinary income(**) Net Earnings + Depreciation & Amortization

5

2005

7.5

2.3

2006

7.6

23.2

36.9

3.1

2007 2008 2009

22.5

25.9

11.5

15.5

Revenues (millions of Euros) Income from operations (millions of Euros)

= revenues = percentage generated abroad

= net profit= EBIT

70%74%

74%

488.6

2007

492.6

2008

408.7

20092005 2006

70% 70%

418.2 403.1

9.311.7

19.5 20.4

48.3

43.4

7.3

30.8 29.4

12.8

2006 2007 2008 20092005 2007 2008 20092005 2006

= ROI= ROE

0.1 0.1

0.3 0.3

0.4

Profitability [%] Financial charges as a % of revenues

2007 2008 20092005 2006

2160

364 349

1219 793

1583

1142

525432

957

3961017

1413

3771783

2006 2007 2008 20092005

1030

11691081 1072

894,8

73%

92%

77%

70%

82%

= order book= percentage abroad

Order book (millions of Euros)

= employees abroad= employees in Italy

Number of employees

6

50.00% 50.00% 49.00%

50.00%

20.00%

15.00% 16.99%

20.00%33.33%

Treviso Maggiore Srl

RIZZANI DE ECCHER SPA

Sicea Spa

Consorzio CodestEngineering

Codruss Zao

Borgo PadovaScarl

Consorzio GRA

Consaro Scarl

Futura Srl

Deal Srl

CodestKazakhstanLLP

Rizzanide EccherIreland Ltd

CodestInternationalSrl

75.00%

25.00%

Portocittà Srl

Rizzani de EccherUSA Inc

50.00%

Cortelicini Srl Sinedil Srl

Store 26 Scarl

Palladio Srl Athesis Srl

50.00% 51.00% 60.00%50.00%98.00%

Iride Srl

Rizzani de EccherRAK FZ-LLC

VFR LtdRizzanide EccherMATTA Sarl

100.00%100.00% 51.00%

98.00% 98.42%

100.00% 51.00% 33.33%31.00%98.00%

EQUITY INVESTMENTS IN GROUP’S COMPANIES

7

26.60% 15.13% 35.08% 10.00%

100.00%

75.00%

20.00%

59.33%

28.00%

49.99%

64.92%

100.00%

10.00%

RSL JVConsorzio RdEAmerica Centrale

Rizzani de EccherUK Ltd

Codest Srl

Borgo Sole Spa

MetrobusScarl

de Eccher Interiors Srl

VSL - RdE JV

ConsorzioNo. Mar

Consorzio Mantegna

Domex SviluppoImmobiliare Srl

10.00%

Gabi Srl

San Giorgio Srl de Eccher Agricola Srl

Rizzani de EccherCanada Inc

SafauIniziative Srl

50.00%

100.00% 98.42% 100.00%

100.00% 45.00% 90.00%

Rizzani de EccherDoo

Companies operating mainly in Companies operating mainly in

[Companies being liquidated have been excluded]

de Eccher Group's interest

Third-parties' interests

de Eccher Group's interest

Companies operating mainly in the Italian market

Companies operating mainly in foreign markets

Third-parties' interests

The tables in the pages show the main economic andfinancial indicators of the Group’s parent company and itsmost representative subsidiares and associated companies under financial consolidation.

PARENT COMPANY AND ITS MAIN OPERATING UNITS: 2009 AT A GLANCE

2009

269,945

63,485

15,103

18,176

11,666

2005

272,262

24,458

1,611

5,127

5,183

2006

243,856

27,071

2,614

4,297

14,222

2007

285,020

37,594

14,523

16,850

30,036

2008

322,469

48,382

15,788

18,113

15,187

Rizzani de Eccher

Revenues

Shareholders’ equity

Net profit (loss)

Cash flow (*)

Operating income (EBIT)

2005

28,485

2,589

1,242

1,345

2008

7,654

3,499

12

141

(61)

2009

14,550

3,548

49

163

2452,133

2006

19,199

2,839

250

363

207

2007

19,196

3,487

648

772

1,177

Deal

Revenues


Net profit (loss)

Cash flow (*)


2009

65,850

2,345

931

1,641

975

2005

80,908

1,396

(4,397)

(3,340)

(5,378)

2006

53,310

1,784

(7,885)

(6,871)

(11,330)

2007

70,952

1,919

(1,905)

(1,090)

(7,118)

2008

93,299

1,061

152

984

(2,878)

Codest International

Revenues


Net profit (loss)

Cash flow (*)


8

9

2008

12,390

1,625

740

891

1,538

2009

4,537

1,541

(84)

(24)

109

2005

19,398

792

39

93

283

2006

22,321

820

28

278

258

2007

14,427

884

63

203

301

Sicea

Revenues


Net profit (loss)

Cash flow (*)


* defined as net profit + depreciation & amortization & write-off

2008

91,952

9,671

9,494

13,666

9,679

2009

39,545

2,120

10,594

19,275

8,778

2006

15,577

1,322

1,320

2,436

1,256

2007

53,850

5,213

3,689

4,533

4,096

VFR Ltd

consolidated with proportional method

Revenues


Net profit (loss)

Cash flow (*)


2009

16,341

3,029

2,431

3,881

3,781

2008

12,381

3,787

1,946

3,847

2,465

2007

30,442

1,845

1,985

3,321

2,607

2009

7,668

1,569

150

322

67

Revenues


Net profit (loss)

Cash flow (*)


Revenues


Net profit (loss)

Cash flow (*)


Rizzani de Eccher USA Inc

Codest Kazakhstan LLP

10

1831 Rizzani is established in Udine, as a general

contracting and construction company. Within a few years,

it earns a prestigious reputation for carrying out large

engineering projects in Italy and in several countries in

Africa, Asia and Latin America. 1948 Riccardo de Eccher

establishes a construction company bearing his name, in the

North Eastern Italian region of Trentino Alto Adige; The

Company begins to develop real estate. 1970 Riccardo de

Eccher takes over Rizzani, combining the track records and

capabilities of the two firms into a new company, Rizzani de

Eccher, managed by the de Eccher family. The merger and

integration process of these two companies is completed in

the early 1970s, laying the foundations for today’s corporate

structure. 1976 The second generation of the de Eccher

family joins the management and the Company expands its

focus and market share in infrastructure projects and public

works. Following a devastating earthquake in the Friuli

region in the same year, the Company’s resources are

immediately devoted to the reconstruction process,

including the careful restoration of historical landmarks

such as the medieval town of Venzone. This prestigious

recovery and rehabilitation project required the meticulous

and identical reconstruction of ancient architectural

features. 1980 The construction of two large sections of the

Carnia-Tarvisio highway provides the Company with the

opportunity to develop innovative construction techniques for

the prefabrication and erection of pre-cast concrete

segments. The latter technology is further developed in the

following years, as the Group completes many important

highway and motorway projects. This invaluable

technological expertise is eventually consolidated with the

establishment of Deal, a company dedicated to vanguard

technologies for the construction of elevated bridges and

viaducts, utilising mass-production industrialised systems.

1982 Towards the end of this year, Rizzani de Eccher wins

its first large international tender for the construction of five

school complexes in Algeria. Two years later, the Company

is awarded a further five projects for the construction of two

tanneries and three shoe factories in the former Soviet

Union. This initial success ushers in a period of significant

growth in Russia, which continues to this day. 1986 Thanks

to the courage and commitment of the de Eccher family,

aided by a bright and talented management team, the Group

posts an extraordinary growth in turnover, topping revenues

of 228 billion Italian liras in 1990, up from 37 billion liras in

1986. 1994 Difficult conditions in the domestic infrastructure

market in the mid-90s - partly caused by the high profile

anti-graft or ‘clean hands’ campaign - shift the Company’s

focus towards overseas markets. Revenues from

international projects exceed 50% of total turnover for the

first time. 2004 Rizzani de Eccher consolidates its success

at home and abroad. It becomes one of the ten leading

construction companies in Italy, and is also listed among the

Top 100 International Contractors by Engineering New Record

magazine. 2005 Thanks to its established presence in many

countries (Russia and other CIS countries, Middle East,

Mediterranean Basin and North and Central America) the

share of revenue from overseas operations tops 70% for the

first time and will remain above this mark ever since.

Today, the Group is one of the world’s premier construction

businesses and a market leader in its field. It operates in

four areas of activity, where it consistently demonstrates its

expertise and flair for innovation as a contractor for: general

building, infrastructure development, equipment

manufacturing and specialized engineering solutions for

bridges and viaducts and real estate development.

HISTORY

Right: Treviso Maggiore multi-purpose complex designed by renowed architect Mario Botta (Italy)

13

The Group’s continuous expansion in new geographic areas

with high potential and the consolidation of its position in

those areas where it already operates are objectives that are

achieved through improvements in management efficiency

and effectiveness of production methods, so as to guarantee

quality and reliability in delivering products to customers.

To achieve these objectives, the Group focuses on its

organization (people and processes) as the key driver. In an

industry, such as general contracting, that is characterized

by markedly tangible aspects, the Group instead leverages

its intangible assets, that is to say the effectiveness of its

processes and the skills of its human resources, in order to

provide customers with fast response times and significantly

higher quality standards than the industry average.

In particular, the Group places strong emphasis on two

critical aspects:

Human resources development, which focuses on the

organic development of resources internally, with the aim of

developing the specific skill-sets to deal with the particular

markets where the Group operates. This policy hinges on a

careful process of search and selection, the offering of

career advancement opportunities (such as the Master

course jointly organized with the University of Trieste) and

the constant investment in internal training programs. Over

the past few years, the Group has actively hired human

resources directly in the countries where it operates, so as

to integrate more effectively with the local environment.

Process optimization, aimed at securing better

coordination within project teams as well as between

project teams and head office.

STRATEGIES

Preceding page: Perfetti confectionery plant, Lainate (Italy)

15

Directorate, Business Development Directorate, Central Operations Directorate, Administration and General Affairs

Marco de Eccher Chairman

Marina Bonazza de Eccher

Fabio Asquini

Renato Fabbro

Franco Asquini Chairman

Ferruccio di Lenardo

Luciano Longhi

ORGANISATION STRUCTURE

The overall management structure is horizontally aligned along three management cores or Central Directorates,

which in turn branch out into Functional Directorates and Departments.

Board of Directors Internal Board of Auditors

Project managementStaff support services

Report to this Directorate:Technical Departments and AreaDepartments, as well asTechnical Support ServicesDepartment and PurchasingDepartment

Administration, Finance andAccounting, Real estatedevelopment and managementSpecial engineering servicesand equipment for bridges

Report to this Directorate:Finance and Administration,Back Office and I.T. Department,Real Estate, Operations andEquipment and all AssociatedCompanies

Business developmentStrategic planning

Report to this Directorate:Commercial and BusinessDevelopment units, organizedalong product segments orgeographical areas

The Group’s organisational structure, which includes members of the founding family in key management positions,

ensures versatility and a swift decision-making process. Combined, these qualities provide a crucial competitive edge

in continuously-evolving business environments, and facilitate a fast and flexible response to any market opportunity.

At the same time, this streamlined profile ensures strict operational and ethical standards throughout the Group’s

companies. In short, the Group’s structure has helped it to earn a reputation not only for sharp business acumen,

but also for the highest levels of quality, safety and efficiency, as required by the most rigorous market standards.

16

Human Resources

The Group’s success is due to its organization and

particularly to its human resources, who constantly strive

with passion, dedication and professionalism to ensure that

the Group has the competitive edge it needs to meet all

market challenges.

The Group’s human resources comprise of well prepared,

dedicated professionals who are capable of dealing with

different environments and solve any type of problems,

balancing the pursuit of efficiency and effectiveness with

the overarching goal of delivering quality to clients. The

Group’s priority in respect of its human resources is to

attract only the best candidates and to nurture their growth

and development on a professional, ethical and technical

level, with strong emphasis on merit and performance-

based incentives.

As at 31 December 2009, the Group employs 1,142

personnel in different locations worldwide, from a variety

of ethnic backgrounds, cultures and religions. This

diversity is actively encouraged as it contributes towards

shaping the Group’s entire modus operandi and competitive

edge in all sectors and countries where it operates.

Overseas-based employees (i.e. outside Italy) are 793, of

which 721 hired locally. Italian personnel are 421 of which

17% are based overseas. Educational qualifications are

very high on average, with 40% possessing university

degrees and 54% holding secondary school diplomas.

2007

36

140

201

377

12

424

1,347

1,783

2,160

62,262

2008

37

143

184

364

21

305

894

1,219

1,583

53,385

2009

35

147

167

349

16

252

525

793

1,142

45,687

Italy-based employees

Management

Staff

Workers

Total Italy

Overseas-based employees

Management

Staff

Workers

Total overseas

Total Group

Total employees’ costs(thousand of Euros)

17

Safety and Health

2009 has witnessed the implementation of a new health and

safety management system conforming to OHSAS 18001,

which seamlessly integrates with the quality system ISO

9001:2008 already well in place. This has been achieved

with a thorough system audit involving all levels from top

hierarchy to building sites in order to define the appropriate

channels through which all operating procedures have been

re-engineered and re-formulated.

The categorical imperative dictated by our corporate policy is:

‘The elimination or minimisation of all safety and health risks

to all employees of the Group and any company operating

under the umbrella of the same organization’

This is the inspiring principle for the Group, which is

implemented by thorough training and education

programmes. Over 1500 hours in safety training courses

were held all throughout 2009 for site personnel and safety

engineers in Italy, with the aim of further reducing the

occurrence of accidents.

The entire supervision process of all working activities has

been redesigned so as to allow continuous and redundant

monitoring of health and safety procedures by site

engineers, health and quality superintendents and outside

consultants hired for the purpose.

The Group continues to invest extensively in this area.

Performance is monitored against benchmarks and

indicators, shown in the table in respect of the past three

years, which point to a marked improvement towards the

goals set by the Group. The intent is to maintain this trend

in 2010 by achieving the necessary certification through

training activities and through implementation of the new

2008

AFI ASI ASI AFI

2007

0.462.18

2009

AFI ASI

0.462.16 0.582.94

Ay = number of accidents in the year under reviewDLA = days lost to accident Mh = cumulative man-hours during the year under review

Where:

Group consolidated dataCalculation based on the following algorithms:

Accident Frequency Index (AFI):AFI = (Ay x 100,000) / Mh

Accident Severity Index (ASI):ASI = (DLA x 1,000) / Mh

18

The Group continues to place strong emphasis on

professional training and career development, promoting in

particular the advancement of young people in the

workplace.

Furthermore, Rizzani de Eccher, in conjunction with the

University of Trieste, is the sponsor and initiator of a

Masters Degree in Project Management focusing on

‘Integrated Project Management in the ConstructionSector’, which was launched in 2004. The Masters is now at

its fifth edition with a growing number of applicants each

year. Course topics are taught by university professors and

reputed professionals from relevant sectors in the

engineering and construction fields. Senior professionals

from Rizzani de Eccher account for about 50% of the

teaching body. The course curriculum has been expanded,

allowing students to complement theory with practice, in

the form of internships on construction sites in Italy and

abroad. The success of this initiative is underscored by the

fact that 18 master graduates are today working with the

Group on a path to brilliant careers.

The experience of the Group’s senior managers has been

brought to some of the most prestigious universities of the

North East of Italy, where they give lectures and hold

classes on a regular basis at the Faculty of Architecture of

Udine University and the Engineering Faculty of the

University of Padua.

Very strong emphasis is placed upon career development

from within the organization, and dedicated training

programmes have been put in place with the following

objectives:

_development of technical engineering skills

_development of management and organizational skills

_team-building and group bonding

Accredited education bodies and external consultants are

employed to assess and formulate policies in this direction.

Furthermore, in 2009 Rizzani de Eccher qualified for funding

from the European Union Social Fund (FSE) for its language,

project management and engineering software IT courses.

Training and Career Development

Internship ProgrammesDuring 2009 the Group offered 20 internship programmes in

the following departments: administration (1), construction

sites (8), cost control (1), real estate (1), business

development (1), general affairs (1), technical office (5),

tender department (1) and purchasing department (1).

The programmes were successfully concluded: 8 interns

were subsequently hired to permanent positions within the

Group and 12 have continued their studies with their

endorsing universities.

safety system. This will be followed by the enactment of

new benchmarks on hazards (particularly on noise and

vibrations).

19

To compete in the field of complex construction work requires thorough planning of all activities, careful optimisation

of resources and strict quality control. The main factors contributing to Rizzani de Eccher’s success are continuous

investment in innovation, stringent quality control systems and the professionalism and dedication of its employees.

Through careful emphasis on quality control, the Group

consistently meets stringent engineering and architectural

specifications, ensures constantly high quality standards

and achieves optimal levels of clients’ satisfaction. Rizzani

de Eccher is also a long time member of UNI (the Italian

national Agency for the unification of production standards)

which positions it at the forefront of all new developments

in production and quality control techniques. The Group’s

long term commitment to high standards has won it

numerous plaudits and financial bonuses.

The Group’s constant focus on innovation and its rich pool

of technical knowledge in the infrastructure sector has

allowed the Group to become a world leader in the design

and manufacturing of special hi-tech equipment for the

construction of bridges and viaducts. Thanks to the

continuous research & development effort of its

engineering team, Deal was able in 2009 to consolidate its

presence in the off-shore sector. After successfully

delivering an underwater cable reel-driver system last year,

Deal has acquired an important order for an underwater

trencher machine for laying cables.

A wide range of successful partnerships and affiliations

with other major international contractors testify to the

status of Rizzani de Eccher as a robust and reliable partner.

These links also represent solid stepping stones towards

the future growth of the Group in the global arena.

Significant examples of the Group’s international joint

ventures during 2009 include:

_SNC Lavalin: for the mass transit railway in Calgary,

Canada, following the successful cooperation on the mass

transit railway in Vancouver

_Kiewit: for the supply of a complete package of all special

equipment required for the construction of Port Mann

Bridge in Vancouver, Canada.

Group’s philosophy and pursuit of total quality has brought

the following certifications and attestations:

Rizzani de Eccher Spa

_ISO 9000, certified 12 February 1999, attested by Bureau

Veritas Italia Spa in relation to design and construction of

civil engineering works, industrial buildings, bridges,

viaducts and transport infrastructure works.

_SOA Certification no. 6462/16/00 attested by SOA North East.

_ Accreditation as pre-qualified General Contractor no.

191/09 of 5 March 2009 with the Italian Ministry of

Transportation and Infrastructure.

Deal Srl

_ISO 9000, certified 21 April 2005, attested by Bureau Veritas

Italia Spa in respect of all activities and production processes

for the design, construction, installation and operation of

heavy lifting equipment, including special equipment for the

construction of bridges, such as overhead gantry cranes, pre-

cast girder launching equipment, special elevated formwork

and caissons, cable-stayed erection equipment, tensioning

systems and other suspended structures and equipment for

roads, railways and urban light railways.

Sicea Spa

_ISO 9001. Certified 30 July 2002, attested by IGQ in respect

of all activities and production processes for the construction,

restoration and recovery of civil and industrial buildings;

architectural restoration of heritage sites; construction and

maintenance of roads; general urbanization works.

_SOA Certification no. 6490/16/00. Attested by SOA North East.

Codest International Srl

_GOST P ISO 9001. Certified 28 September 2006, attested

by Tektoplan - MosCert CMK, in respect of all activities and

processes for the provision of technical and design services,

site preparation and all construction of buildings of any

category; general civil and building works; finishing and

rendering; consulting and design services for architectural

and building purposes.

QUALITY AND INNOVATION

20

The Environment

With the aim of achieving operational excellence and at the

same time developing organizational models supported by

effective audit and internal control systems, Rizzani de

Eccher has embarked on a process of renewal of all

corporate procedures in tune with the most stringent

environmental protection goals.

Shareholders and management have decided to develop

and implement an ISO 14001-compliant system for

environment protection and to obtain the relevant

certification in short order.

SUSTAINABLE DEVELOPMENT

The key areas of intervention have been identified in power

consumption, carbon emissions, organic and inorganic

waste, acoustic pollution and effluents. To this end, Rizzani

de Eccher is committed to operating in full compliance with

all relevant laws and regulations in the matter of

environment protection, and it works in close cooperation

with the public administration and local authorities to

minimize the effects of its activities on the environment.

The Group is strongly committed to delivering high quality

competitive products through the development and

implementation of production processes that prevent

pollution and consumption of resources.

21

Value Creation and Distribution

The integration between the traditional business values -

economic values expressed by production and profitability -

and the system of socio-political values - the centrality of

the individual, integrity, quality of life – which are at once

present inside and outside the organization, poses new

problems of consensus and legitimacy.

The emergence of the stakeholder’s view has raised the

urgency to have systems in place that are capable of

measuring and evaluating the ability of the firm to balance

the information disclosure needs of business partners,

whether internal or external (staff, shareholders, lenders,

customers, suppliers, public administration and the

community at large).

To this end, the parameter of ‘value added’, determined by

reclassifying the items in the income statement of this

Annual Report, is so as to identify the ‘wealth’ generated by

the company in respect of the surrounding territory and its

stakeholders, thus giving an expression to the relationship

between the company and the socio-economic system with

which the company interacts.

The value added is shown in two different levels:

_determination of value added, which emerges from

comparing income versus costs at intermediate levels;

_distribution of value added identified as the sum of the

remunerations received by stakeholders.

Calculation of value added (thousand of Euros)

400,513

324,539

75,974

76,373

(5,460)

70,913

2009

398

490,849

408,245

82,604

79,048

(4,643)

74,405

2008

(3,556)

value of production (revenue)

cost of goods and services sold

value added from operations

overall gross value added

amortisation and depreciation

overall net value added

extraordinary items

47,085 66%

%

8,002 11%

237 0%

644 1%

16,196 23%

37 0%

70,913 100%

73%

%

8%

2%

0%

17%

0%

100%

54,455

6,122

1,281

41

12,446

60

74,405

employees’ remuneration

Distribution of value added (thousand of Euros)

remuneration of the public administration

remuneration of debt capital

remuneration of equity capital

retained earnings

charitable donations

overall net value added

2009 2008

The value added to stakeholders is identified as follows:

_remuneration of human resources: it includes direct and

indirect remunerations of all those who have a working

relationship with the Group;

_remuneration of the public administration: it includes

direct and indirect taxes paid by the Group;

_remuneration of debt capital: it includes net interest paid

to the banking system;

_remuneration of equity capital: it includes dividends paid

out to the company;

_remuneration of the enterprise: it includes any income set

aside as reserve or retained earnings to finance future growth;

_liberalities: they include distributions of benefits for

charity purposes.

Thus it emerges that the most substantial portions of value

added go towards the remuneration of human resources

and to the society at large through taxation. This underpins

the central role of the enterprise as a contributor to human

welfare.

The value added was determined by reclassifying the items

in the income statement of this Annual Report, using the

methodology proposed by Gruppo Bilancio Sociale (GBS), an

association which promotes ethical standards and

principles of social responsibility in accounting practices.

22

AREAS OF BUSINESS ACTIVITY

Over the years, the Group has consolidated its leading position in four main areas: General Building Contracting,Infrastructure Development, Engineering and Special Equipment for bridges and Real Estate Development. Apart from

the specific circumstances of certain individual markets, the Group is generally involved in all the above areas, in every

country where it is active. The Group’s well-established presence in Russia and CIS countries of Central Asia, Middle East,

the Mediterranean Basin and Central and North America has generated a long list of satisfied clients around the world.

This impressive track record underpins a dominant market position, pointing to strong growth and a stable future.

The following table illustrates the main projects underway during the period under review, according to the four areas

outlined above.

23

Project Business Area Country Amount Share %

Railway LineOued Tlelat - Tlemcen

Infrastructure Algeria 1,208,000,000 25.00

Grand Central Station Milan

General Building Italy 112,700,000 67.06

Technological Building for Central Hospital Udine


Mixed Use Real Estate Development Corso Sardegna - Genoa

Real Estate Development Italy 100.0060,000,000

State Motorway 16 Adriatica Ferrara

Infrastructure 23,000,000 100.00Italy

General Building 14,800,000 100.00Tergesteo Palace Trieste

Italy

Engineering and Equipment

Deck Launching Equipment for Penang Second Bridge

7,600,000 100.00Malaysia

Bridge Construction Equipment for Lagos Osborne Bridge


Nigeria 3,600,000 100.00

Parmalat FactoryMoscow

General Building Russia 5,900,000 100.00

Perfetti Confectionery FactoryMilan


General Building KazakhstanResidential Complex Atyrau

14,000,000 100.00

17,000,000 50.00Road and Bridges at Jebel Hafeet Al Ain

Infrastructure United Arab Emirates

18,000,000 100.00RussiaGeneral BuildingSea Plaza Hotel Sochi

Dulles Metrorail Elevated LineWashington DC

Infrastructure USA 34,000,000 100.00

Inalca Food Processing FactoryMoscow

General Building Russia 46,000,000 100.00

Summerland Hotel & Resort Beirut

General Building Lebanon 65,000,000 100.00

Infrastructure works at Marjan Island Ras Al Khaimah

Infrastructure United Arab Emirates 74,000,000 100.00

Four Seasons Hotel Baku

General Building Azerbaijan 94,000,000 100.00

Central Hospital for Spedali Civili di Brescia Brescia


Multifunction complex Treviso Maggiore Treviso

Real Estate Development Italy 162,000,000 33.33

Al Udeid Air Force Base Doha

General Building and Infrastructure

Qatar 1,175,000,000 100.00


Bridge Construction Equipment for MIC Miami Intermodal Centre

1,700,000 100.00USA

Deck Launching Equipment for Dulles MetrorailWashington DC


USA 5,000,000 100.00

2525

In general building contracting, the Group is well positioned in market segments which demand increasingly high standards

of technology and quality. Since each building is unique and construction site conditions differ greatly, each project requires

specific technical skills. Over the past few years, energy conservation has become the underlying theme of every new project.

This is accomplished through a vast range of design solutions including purpose-built volumes, the adoption of materials

and technologies that facilitate heat transmission with the outside, the installation of energy-efficient heating/cooling

systems and the recourse to renewable energy sources. Furthermore, in order to compete within high-level market niches

and to maintain quality control in the design and construction process, the Group has established a number of vertically-

integrated dedicated subsidiaries, each of which specialises in particular steps of the production and delivery process.

These steps include design, prefabrication, plant engineering and interior decoration and furnishing. These companies work

in synergy within the framework of the Group’s general contracting business. The main sectors of activity in this area are:

office buildings, hospitals, schools, luxury hotels, large-scale renovations and recovery of heritage sites and finally military

infrastructures.

Residential BuildingsThe Group has always performed well in this area, leveraging

off the market knowledge of its real estate development unit

and the track record in high-quality construction projects. In

this segment, the Group focuses on large and complex

projects. Among the most important projects in this area is

the prestigious Amphitheatre Residences, a 45,000 m3

complex in via De Amicis in the heart of Milan.

Office BuildingsThe construction of modern office buildings, which is

rapidly developing in many markets, is a key focus area for

the Group, characterized by a high level of sophistication.

Each office building project requires close cooperation with

highly qualified designers to achieve an effective

convergence of technical requirements and functionality.

The Group designs and builds the headquarters of banks

and multinational companies, as well as government

buildings and offices in Italy and abroad, with a wide offer

range, from the ‘shell and core’ formula to the total ‘fit out’

project, which provides the complete construction and

furnishing of any building.

2009 witnessed the completion of the prestigious

multifunctional headquarters of SIPRO, a leading company

in the provision of security services, which commissioned a

184,000 m3 building in the Tecnopolo Tiburtino in Rome.

During the same year works have commenced for the

restoration of a historical building belonging to BancaNazionale del Lavoro (BNP Paribas Group) in via San

Fedele in Milan.

Industrial Buildings The Group’s track record in this field dates back to large

industrial projects in Italy and abroad in the second half of

1800s. Recently, such wealth of experience has contributed

to the successful completion of industrial buildings in Italy

and abroad in several industries and sectors, such as steel

plants, textile factories, mechanical workshops, tanneries,

shoe factories, food processing and several other industrial

buildings.

During the course of 2009, works have been completed at

the 10,000 m2 Marr Russia (Cremonini Group) food

processing plant in the outskirts of Moscow. At the same

time works have commenced for yet another 13,500 m2 food

processing plant in Podolsk (Moscow Region) commissioned

by Forum (Parmalat Group).

HospitalsThis is an area characterized by the development of

functional requirements, an increasingly sophisticated MEP

component and ever more specific medical equipment. This

puts the Group’s experience to the test while requiring a

major involvement in the stages of design and construction.

During 2009 preparation works have proceeded apace for

the project-financing in respect of the expansion of the

facilities of Spedali Civili di Brescia. A project SPV Futura

Areas of business Activity. General Building Contracting

27

has been established, while the concession contract has

been signed and the financing package is being finalised

with major lenders. The provision of no-core services (€ 17

million per annum) has begun, while design activities have

reached near completion allowing for the € 100 million

construction works to commence in the spring of 2010.

On a similar note, in late 2009 a similar concession contract

has been signed between hospital operator S. Maria dellaMisericordia di Udine and a consortium including Siram

(Veolia Group), Rizzani de Eccher and others. This calls for

the project financing and construction of several new

hospital facilities. The new 14,000 m2 Service Centre and

Laboratory buildings will include a cogeneration plant with

excess capacity to feed a remote heating network for the

North-West section of the city of Udine.

Luxury HotelsThe experience in the field of industrialization combined

with traditional craftsmanship has enabled the Group to

compete effectively in the luxury hospitality segment.

The end of 2009 and the beginning of 2010 witnessed the

successful completion of a number of hotel projects inKazakhstan, while works continue apace at Four SeasonsHotel in Baku (Azerbaijan). Again in 2009 a new hotel

project was acquired in Lebanon for the construction of the

Summerland Hotel in Beirut, a 150 rooms and 52 suites

luxury property on the waterfront of South Beirut, which

shall be operated by Kempinski.

Large Scale Building Renovations and Recovery ofHeritage SitesRizzani de Eccher is highly skilled at complex restoration

and recovery projects on heritage buildings and monuments,

a capability rooted in the experience gained from the

extensive post-earthquake reconstruction of the Friuli region

in 1976. Works have continued in 2009 on Palazzo Tergesteoin Trieste, a historical building of 82,000 m2 traversed by a 8

m height gallery in the heart of the town. Works have been

completed in respect of the restoration and recovery project

for the monumental and prestigious Milan’s Grand CentralStation, and Magazzino 26 in Trieste, a harbour-side

140,000 m3 warehouse built in the 1800s. Following its

recovery project, the building will become a prime cultural

centre for exhibitions, events and conferences.

Military InfrastructureInfrastructure projects for the armed forces are

characterised the world over by their sheer size and

complexity. They usually include the construction of a

number of independent structures, each designated for

highly specialised functions. Military projects also require

thorough and complex plant-engineering over vast areas,

but need practical infrastructure for rapid and easy

connections. In all these projects, planning schedules and

delivery times are notoriously inflexible, since they are

tightly linked to the movement of troops and armaments,

which are in turn classified information. In this context, the

Al Udeid Air Force Base, in Qatar continues to be the

Group’s flagship project in this field, with billed works at the

end of 2009 topping € 995 million. Construction is set to be

completed in 2010 for a total billed amount of € 1.2 billion.

28

Highway Networks, Railways, Subways and Mass TransitLight RailwaysAfter playing a leading role in the construction of the

second generation of Italy’s extensive network of highways

and motorways, Rizzani de Eccher is increasingly engaged

in the construction of railways and in particular mass

transit light railway systems in Italy and abroad.

Among the most important projects in this field is the

Dubai (UAE) Mass Rapid Transit, a project that involves the

construction of two elevated lines for a total length in

excess of 58 km, which entered into service at the end of

the year. Worth mentioning are also the Urban TramwaySystem SIR 1 in Padua, Italy, which entered into full

service in 2009, and the highway works, which began in

2007, for the Motorway 16 Adriatica near Argenta(Ferrara), a road characterised by technical and design

difficulties due to the nature of the marshy soil it

traverses.

In Algeria works have commenced on the double trackrailway line from Oued Tlelat to Tlemcen, which develops

over 130 km of which 20 km on an elevated.

During the course of 2009 works have commenced on two

important projects in the USA: completion of the OrangeMetro Line in Miami, a 1.7 km track linking the existing

metro line with Miami International Airport; and DullesCorridor Metrorail Project, an elevated metro line of 8 km

linking Washington DC with Dulles International Airport.

The latter project sees the involvement of Deal for the

supply of all special erection equipment. Both projects will

be completed within 2011.

Energy SectorIn terms of construction, Italy’s energy sector has been

relatively quiet for the past few years. Nevertheless, the

Group has won a number of contracts for selected works

on power stations and large-section gas pipelines.

The Group excels at infrastructure building and transport engineering in particular, thanks to more than one hundred

years’ experience on the job. At the moment, most of the Group’s infrastructure projects are abroad, as the Italian market

is experiencing a period of recession due to funding shortages and competitive pressures on costs. Drawing on its

unparalleled experience in the field, Rizzani de Eccher is also actively involved in evaluating and securing project finance

for infrastructure projects. At home and abroad, emphasis is placed on Design & Build tenders where competitive pricing

is just one aspect of the overall offer, and where design and engineering solutions play an important role.

Areas of business Activity. Infrastructures

30

Engineering ServicesThe Group’s technical personnel have gained invaluable

experience during direct construction activities in projects

led by the parent company. This has enabled our engineers

to develop unrivalled skills in engineering and consulting

services. The integration by Deal of all technical office staff

from the ‘Ponti e Viadotti’ (Bridges and Viaducts) division,

which was hitherto under the control of the parent Rizzani

de Eccher, has resulted in a more streamlined and seamless

utilisation of the Group’s human resources, allowing the

Group to position itself on the infrastructure market as a

provider of a wide range of services, from initial design to

custom engineering. Their combined expertise is pro-

actively cross-marketed by other units within the Group and

made available on a commercial basis to all customers of

Rizzani de Eccher. The consulting services offered include

design, project planning, site planning and selection of

construction technologies, budgeting and costing, logistics

and optimisation of production cycles.

EquipmentDeal can design and custom-build equipment for any type of

construction system and supply a wide range of machinery

suited for a specific project. Deal continues to raise the bar

for standards across the sector and has a hard-earned

reputation for technological innovation and ingenuity with its

state-of-the art formwork for precast segments. Deal is also

able to produce any type of overhead launching equipment,

including the most innovative self-launching gantry cranes

of any type and size. Notable in this respect is the well

consolidated working relationship with SAIPEM (Eni Group),

which has allowed Deal to apply its infrastructure

technology to the Oil & Gas industry with success. Most

recently Deal has successfully delivered an innovative

custom-built underwater TRS trenching machine.

Areas of business Activity. Engineering Services and Special Equipment for Bridges and Viaducts

Rizzani de Eccher’s wealth of experience in infrastructure has allowed the Group to develop a specific area of expertise on

engineering services and the design and construction of special equipment for the construction of long-span elevated bridges.

In 1992, these activities were consolidated in a new, special-purpose, wholly-owned subsidiary called Deal Srl. In a few years Deal

has become a world leader in this highly specialised market, serving large international contractors. Deal provides design services

and custom-built special heavy equipment for the construction of bridges and viaducts of any complexity and size. Its machinery

and equipment capabilities include caissons, gantry cranes, large rubber-tired beam launching carriers, launching girders and

self-launching ribs, as well as pre-stressing systems, supports, joints and anti-seismic retentions. More recently, the Group’s wealth

of experience in the infrastructure sector has allowed Deal to apply its specific know-how to different and very promising areas,

such as special equipment for the offshore Oil & Gas industry and special gantry equipment for shipping and port operations.

32

Areas of business Activity. Real Estate Development

The Group has always been actively engaged in prestigious real estate development projects acting as a principal, or on

behalf of select customers, from the public and private sector. Capitalising on its successful track record in real estate

development, the Group positions itself on the market as the reliable partner to large developers as well as real estate

investors and financial institutions. The Group has further strengthened and improved its organization and resources in the

dedicated Real Estate Development segment, with emphasis on project management and value-enhancement of property

portfolios. Particular emphasis is being placed on ‘project finance’, where the Group has demonstrated the ability to

structure and arrange tailor-made packages. Among these it is worth mentioning the complex project financing related to

the development of the former Fruit & Vegetable Market area in Corso Sardegna, Genoa. Furthermore, the Group is a 25%

shareholder in Portocitta’ Srl, a joint venture company with other important construction groups and financial institutions.

The joint venture has been selected to negotiate exclusively with the Port Authority of Trieste for the concession over the

highly valued areas of the Old Port of Trieste.

Among the most important real estate projects under way

we point out the following: the reconversion of the formerUPIM department store in Udine, with a total built up area

of 11,000 m2, which calls for the demolition and

reconstruction of the building with the design of a famed

international architect. This is a project which will reshape

the heart of the historic city.

Still in Udine, the Group has acquired a building situated

next to the ‘Giovanni da Udine Theatre’, which will be

reconverted into a mixed use (residential and commercial)

complex with volumes of about 20,000 m3.

Subsidiary Iride Srl has completed in Trieste the scenic

residential complex Riflessi, consisting of 29 units of

approximately total 3,000 m2, with luxury fittings and very

broad windows, and 36 garage boxes two levels underground,

developed on the 2,550 m2 area of a former convent.

In Pordenone, the mixed use complex Citypark is nearing

completion. This has been developed in conjunction with

another real estate developer and consists of a luxury

development in the city centre on an area of 7,000 m2

comprising of 4 buildings of 5,350 m2 in total for office,

retail and residential use. The buildings surround a vast

green area of 3,550 m2 and a small lake.

Immediately after financial year end, a prime property was

also acquired in Udine. The building is currently leased to

energy utility company ENEL and is located on the fringe of

the city historical centre. At the end of the lease, the 40,000

m3 building will be converted into a residential complex.

Focus

1 Milan Grand Central Station

2 SIPRO Headquarters - Rome

3 Special Equipment for Dulles CorridorMetrorail Project - Washington DC

35

The restoration and recovery of Milan Grand CentralStation (which was originally built in 1930 on the projectby renowned architect Ulisse Stacchini) is based on themodern and functional reconversion of non-monumentalareas, which had earlier been used as storage rooms andtunnels, as well as the careful restoration of monumentalareas through the elimination of dirt, stains and materialdecay and the reconstruction of the original decorations,paving and stone cladding.

The project aims to conjugate the restoration of themonumental building to its old glory with themodernisation and improvement of the servicefunctionality to passengers.

design phase begins: 8 June 2005

contract amount (incl. Design) 112,700,000

total Built Up Area 100,000 m2

passenger Traffic per day 320,000

CCTV Cameras 300

new Lifts installed 14

tread mills 10

restored pavements and mosaics 6,700 m2

dimensions of the restored galleries (length x width x height):

galleria delle Carrozze 90 x 24 x 28

galleria Biglietteria 65 x 33 x 42

galleria di Testa 215 x 22 x 25

Rizzani de Eccher. Focus 1

Milan Grand Central Station

Milan (Italy)

Client: Grandi Stazioni Spa

36

Worth noting is the restoration and structural recovery of theoverhead vaults in the three galleries (Galleria delle Carrozze,Galleria Biglietteria and Galleria di Testa – for train access)which have heights of 28, 42 and 25 m respectively. The recovery has taken place through an articulatedconsolidation system, requiring the impregnation of the vaultsurfaces with thin epoxy resins and corrosion inhibitors. At thesame time the main body was reinforced with carbon fibrespositioned across the vault beams.

Because the works took place while the station was fully open, withan unhindered flow of 320,000 passengers per day, there was thespecific need to cause minimum disruption to the underlying areas.This has been achieved by using ultra light aluminium scaffoldingsuspended on steel cables and sliding on special tracks laid ontrellis columns parallel to the retaining walls. Another importantarea of intervention has been the restoration of the Royal Pavilion,which represents one of the major feats in the recovery andrestoration of the monumental side of the Grand Central Station.

39

Rizzani de Eccher. Focus 2

SIPRO Headquarters

Technological Pole TiburtinoRome (Italy)

Client:SIPRO Sicurezza Professionale Srl

Contract amount 29,500,000

Commencement of works February 2007

Completion of works May 2010

Volume above Cycle 0 52,000 m3

Volume below Cycle 0 132,000 m3

Total built up area 50,000 m2

The project involves the construction of a new specialisedoffice building destined for the headquarters of a leadingnational company involved in security services.

The building consists of three underground levels and fourabove ground levels for a total built up area of about50,000m2. The lowest underground level is reserved to operationrooms and three large armoured vaults (caveaux). The other two underground levels consist of parking lots.

The entire complex will be the workplace for about 500highly skilled personnel.

The volumes above-ground form an impressive multi-shapedbody, emphasized by three alternate cladding motifs:limestone slabs, terracotta panels and ribbon-shaped metalframes.

40

The ground floor accommodates personnel training roomsand a 200-seat conference hall.

The second and third floors, featuring diverse functionallayouts, accommodate laboratories, workshops, archivesand store-rooms, a secured money-counting area as wellas monitoring and control centres.

Furthermore, senior management offices and a guest-house complete of high quality finishing have beenaccommodated on the top floor.

42

For the execution of the Dulles Corridor Metrorail, Deal has designed and assembled all special equipmentfor the deck segments prefabrication plant, as well asall the launching and assembling equipment.

The following equipment was designed and supplied:

_five ‘short line’ formwork for typical segments_two formwork for pile head segments_three ‘long line’ formwork for station segments_two ‘span by span’ launching trusses

In addition, in respect of the stretch over-passingInterstate-495 (which was originally planned to be asteel structure), this equipment was furthercomplemented by two balance cantilever formwork andone cantilever launching girder. The launching equipment was assembled entirely fromexisting equipment, retrofitted and modified to adapt tothe project specific requirements.

Deal. Focus 3

Special Equipment for Dulles CorridorMetrorail Project

Washington DC (USA)

Client:Rizzani de Eccher USA Inc.

contracts:

span by span formwork 1,707,000

balance cantilever formwork 360,000

launching equipment 4,397,000

engineering services 602,000

MANAGEMENT REPORT

47

Economic and Financial Position

The Consolidated Financial Statements for the accounting

period ending on 31 December 2009 show total revenues of

€ 405 million, posting a 18% reduction in respect of FY 2008

as a result of a generalised slow-down and the cancellation

of certain projects amidst the global financial crisis.

Despite a decrease in revenues, net profit for the year has

improved, from € 11.5 million (2008) to € 15.5 million

during the year under review. This bears testimony to the

Group’s ability to react effectively and efficiently to adverse

market conditions.

The share of revenue from overseas operations

consolidates at around 74%, confirming the Group’s

positioning in the global arena and its strategy of focusing

on markets and project types where it can compete

effectively with its specialized know how.

On the operating front, Rizzani de Eccher has continued on

its policy of coordination and centralised management of

the Group and its units, which include companies operating

in different areas such as general building, infrastructure,

mechanical and electrical and high end interior

decorations.

Notwithstanding the bleak international outlook, some

important contracts were acquired during the course of

2009: the construction of a luxury hotel in Beirut for

approximately € 65 million, the complete infrastructure

works for an artificial island in the UAE for € 74 million,

the erection of significant viaducts for the urban light

railways in Miami and Washington DC for € 78 million and

the expansion of the services and laboratory buildings of

Udine central hospital for € 38 million.

The relentless business development action aimed at

reintegrating the order backlog, which had suffered as a

result of the crisis, is bearing fruit. The outlook for 2010

calls for a return to pre-crisis levels of business activity,

marked by the further acquisition of large projects both in

Italy and abroad.

Prospects for the current year underpin the Group’s growth

in overseas markets and in the high margin niches offered

by complex buildings, bridges and viaducts, supported by

the Group’s significant investments in its organization and

human resources, which were not in the least affected by

the current crisis.

For further details and an overview of the Group’s

performance, we refer the reader to section ‘2009 at a

glance’.

Ownership of shares in the Parent Company

Rizzani de Eccher Spa does not hold beneficial ownership

of any of its own shares, either directly or indirectly,

through affiliated entities, trustees, nominees and parties

acting in concert.

Research and Development

No expenditure for research and development is reported

for FY 2009.

Financial Position: Objectives, Policies and RiskHighlights

Pursuant to the provisions of art 40, section 2, sub-section

d bis of Legislative Decree 127/1991 we report that the

financial transactions, securities and instruments in which

the Group is engaged or has open positions consist of net

cash and quasi cash instruments, trade payables and

receivables, advance payments from customers and bank

debt. We also report that as at 31 December 2009 the

Group has two IRS in place as a hedge over parent

company financing and certain forward contracts as a

hedge over receivables and payables denominated in

foreign currency.

Credit and Country Risk

The Group operates in environments that might require

pro-active management of credit and country risks, albeit

as a matter of policy the Group is prudently engaged in

transactions solely with credit-worthy counterparties with

the back-to-back support of leading credit institutions.

Liquidity Risk

Management believes that the Group generates good cash

flow and has ample liquidity to meet its operating

requirements. Management also believes that the maturity

profile of short and medium-to-long term liabilities is well

balanced and matches the corresponding maturity profile

on the asset side of its balance sheet. Management further

believes that this risk is non-existent in consideration of a

net financial position for the Group at year end of (positive)

€ 63 million.

Management Report

48

Management Report

Interest Rate Risk

The structures and maturities of outstanding loans vary in

accordance with specific project requirements, with a break

down at year-end of 24% and 76% between short term debt

and medium-long term debt respectively. Interest rate on

outstanding facilities is on average 4%. As described, two

IRS are in place as at 31 December 2009 as a hedge over

parent company financing. To this purpose, the Group’s

policy is to engage in derivative transactions solely for the

purposes of hedging underlying risks in so far as these

remain within the scope of the ordinary course of business

and have no speculative connotations. In keeping with the

Group’s general aversion to risk, financial transactions are

only dealt with prime financial institutions, which meet

stringent credit-worthiness and liquidity tests.

Exchange Rate Risk

In respect of projects with payment currencies other than

the euro, the Group’s policy and overriding objective is to

match the currency of revenues with the currency of

payments to local subcontractors and suppliers. However

the Group does consider currency hedging transactions in

the event that currency mismatches arise. As reported

before, as at year end the Group is engaged in certain

forward contracts over receivables and payables

denominated in foreign currency

Price Escalation Risk

In consideration of current trends in the markets in which it

operates, Management considers the risk of fluctuations in

the price of materials and consumables to be negligible.

Notes concerning personnel, the environment andorganization

In connection with the statutory disclosure in the matters of

personnel, the environment and organization, we refer the

reader to the sections titled ‘Human Resources”, ‘Safety

and Health’ and ‘Sustainable Development’.

Significant events occurring after closing of the Financial Year

Management reports no significant events occurring after

closing of the Financial Year, which may have an impact on

these Consolidated Financial Statements.

Foreseeable Keynote Events

FY 2010 point to a recovering of the positive rising trends in

terms of both revenues and profitability of the last years.

NOTES TO THE 2009 ANNUAL REPORT

51

The consolidated financial statements as of 31 December

2009 provide a clear picture of the assets and liabilities

position, the financial position and the profit-and-loss result

of the Group, and in particular of the following Group

companies:

_Rizzani de Eccher Spa

_Its subsidiaries (as listed in Appendices ‘A’ and ‘B’ to this

Annual Report)

The consolidated financial statements were drafted in

accordance with the following Legislative Decrees:

no.127/1991; no.213/1998; no.006/2003; and no.037/2004.

The Group waived the exemption right contemplated by Art

27 of Legislative Decree 127/1991 in the matter of

Corporate Disclosure. For the purposes of consolidation,

the financial statements as at 31 December 2009 of the

subsidiaries and associated companies forming the Group,

as drafted by their Boards and approved by their respective

Shareholders’ Meetings, have been used. These Financial

Statements are truthfully derived from the corresponding

entries in the ledgers and books of the Group duly kept and

properly maintained in full compliance with the provisions

of Art. 2423 et seq. of the Italian Civil Code, save for

consolidation adjustments for the sake of consistency with

Group policies.

Scope of Consolidation

The scope of consolidation includes the companies and

consortia listed in:

_Appendix ‘A’: i.e. companies consolidated using the full or

line-by-line consolidation method

_Appendix ‘B’: i.e. companies consolidated using the

proportional method

In accordance with Article 28 (subsections 2) of Legislative

Decree no. 127/1991, the subsidiaries and associated

companies listed in Appendix ‘C’ are not consolidated.

As opposed to the Consolidated Financial Statements as at

31 December 2008, during FY 2009 the following

subsidiaries have been added to the scope of consolidation

with the full or line-by-line method: Rizzani de Eccher USA

Inc., Rizzani de Eccher-Matta Sarl, de Eccher Agricola Srl

and Gabi Srl. Instead, consortium company Volturno Scarl

is no longer consolidated because it’s being liquidated.

Consolidation Principles

The financial statements of foreign subsidiaries and

associated companies are converted into Euro using year-

end spot exchange rates for balance sheet items and year-

average exchange rate for income statement items; the

foreign currency-denominated ending balances of overseas

branches of the companies included in the consolidation

were converted using the year-end spot rate. The following

exchange rates were adopted (rounded to the nearest

decimal):

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS

52

Currency

USD

CAD

HRK

RUR

UAH

AED

KZH

PHP

QAR

TJS

AZN

DZD

CHF

LBP

Average exchange rate

2009

US Dollar

Canadian Dollar

Croatian Kuna Russian Ruble

Ukrainian Hryvnia

UAE Dirham

Kazakhstan Tenge

Philippines Peso

Qatari Riyal

Tajikistan Somoni

Azerbaijan Manat

Algerian Dinar

Swiss Franc

Lebanese Pound

1.39

1.58

7.34

43.90

11.56

5.12

206.03

67.70

5.32

6.39

1.17

105.86

1.51

2100.19

Exchange rate31.12.2009

1.44

1.51

7.30

43.15

11.56

5.29

213.77

66.51

5.25

6.30

1.16

104.17

1.48

2167.60

The following principles were adopted in consolidating

financial statements with the line-by-line consolidation

method:

a. substitution of book value of equity investments held by

the parent company and by other companies included in the

consolidation with the net asset value as resulting at the date

of consolidation; while at the same time assets and liabilities

of the investee companies are consolidated to the parent

company. If any gains arise as a result, these are booked to

the assets of the subsidiary as a consolidation balance item.

Conversely, if a negative item arises, this is booked to the

parent’s net equity under the entry ‘consolidation reserve’;

b. related-party transactions giving rise to intra-group

payables-receivables and revenues-expenses are offset

against each other;

c. unrealised gains and losses arising from related-party

transactions are offset against each other in the

consolidated financial statements;

d. minority interests in the equity of consolidated

companies and their income are indicated as such in the

consolidated financial statements;

e. dividend payouts from consolidated companies to other

consolidated companies are offset against each other.

Participations in joint ventures and other companies

included in the consolidation process over which the Group

does not exercise significant control as defined by the Italian

Civil Code were consolidated using the proportional method,

booking their assets and liabilities and share of net income

to the parent’s consolidated financial statements pro-rata in

proportion to the percentage of ownership detained.

Accounting standards and valuation principles

The consolidated financial statements were drafted with the

aim of providing a fair and accurate picture of the assets,

the liabilities, the net financial position and the profit and

loss statements for all the consolidated companies.

In the consolidated accounts, unrealised currency

translation gains from overseas branches are offset against

corresponding unrealised losses, including any tax liability

or tax credit that may arise, and then booked to the parent’s

equity content. Conversely, unrealised translation losses

from subsidiaries and other consolidated entities are

booked as accruals in the statutory accounts.

Save for the above, valuation criteria and accounting

standards are the same as adopted in the parent’s financial

statements and there have been no changes as opposed to

previous financial years. With a view to improving financial

disclosure, starting from FY 2009 bank commissions and

bank guarantee charges are grouped under ‘Other

Operating Expenses’, while in the preceding financial year

they were booked as financial charges. In order to facilitate

year on year comparison, an identical reclassification has

been made in respect of FY 2008 aggregates. Therefore, the

accounting entries of FY 2009 are fully comparable to those

of FY 2008. There follows an analysis of the main valuation

criteria adopted in the consolidated financial statements.

Intangible AssetsIntangibles are booked at historical cost and amortised in

proportion to their useful life. In the event of depreciation,

loss of market value or other diminutions of value that

exceed the accounting depreciation, intangible assets are

written down based on prudent principles. With the

exception of goodwill, depreciated assets may in future

financial years be reinstated at their original value (solely

reduced by amortization charges) if the circumstances

warrant it. Goodwill, that is any excess of acquisition cost

over net book value and originating from the acquisition of

business units of other companies, is booked (with the prior

consent of the Board of Auditors) on the basis of the actual

cost incurred and is amortised on a straight-line basis over

Notes to the 2009 Annual Report

53

Contents of the Consolidated Financial Statements

Annual RateAsset Category

3%

15%

20%

10%

25%

25%

20%

40%

12.5%

12%

20%

Buildings

Operating machinery and special equipment

Excavators and mechanical shovels

General systems

Formwork and scaffolding

Light vehicles

Heavy vehicles

Miscellaneous equipment

Light constructions

Office furniture and equipment

Electronic and electromechanical office equipment

a period of 10 years, in accordance to what is deemed as its

useful life. Incorporation, start up and development

expenses are capitalised (with the prior consent of the

Board of Auditors) on the basis of the actual cost incurred

and amortised on a straight-line basis over a period of 5

years. Project acquisition expenses, project planning, plant

erection and site mobilisation expenses are expensed

(booked to the income statement) in proportion to the

progress payment certificates (revenues) of the specific

project to which they refer.

Fixed AssetsTangible assets are entered in the financial statements at their

purchase cost or in-house production costs. Tangible fixed

assets are depreciated during each accounting period at

assigned rates that vary according to category and are

indicated below. The depreciation rates are determined on the

basis of their useful life and residual value, taking into account

economic and technical factors. The assigned depreciation

rates are reduced by 50% for new assets in their first year, in

accordance to the average degree of their utilisation.

All goods of value not exceeding € 516.46 and unless

independently valued otherwise, are expensed in their year

of purchase, provided that their useful life is within the

same year. In the event of permanent depreciation, long-

term loss of market value or other permanent diminution of

value that exceed the accounting depreciation, the assets

are written down based on prudent principles. Depreciated

assets may in future financial years be reinstated at their

original value (solely reduced by depreciation charges) if the

circumstances warrant it. Recurrent maintenance charges

are booked as expenses in the income statement.

Extraordinary maintenance and recurrent capital

expenditure are booked as incremental value to the assets

they refer to and depreciated pro-rata in accordance to the

assets’ residual useful life.

Long-Term InvestmentsInvestments in shares of companies and entities that are of

strategic importance to the Group but are not fully

consolidated are carried at their pro-rata share of net asset

value (NAV). Other investments in companies and entities

that are of minor relevance are carried are carried at cost,

based on purchase price or share subscription price.

Equity investments are written down in the event of long-

term loss or diminution of value, specifically in the event

that the investee incurs substantial losses that are unlikely

to be reinstated by the subsequent generation of earnings.

Written down investments may be reinstated at a higher

value in future fiscal years if the circumstances warrant it.

Other long-term investments such as loans and debentures

are valued at the net realisable value at maturity.

Investment in securities are booked at cost and adjusted for

any long-term loss of value.

InventoriesRaw materials are valued at the lower of purchase cost and

market value. Works in progress that have duration of more

than 12 months include works that have been completed

but have not yet received final commissioning and are

valued on the basis of their physical progress, with the

exception of works in progress by Rizzani de Eccher USA

Inc., whose valuation is made on a ‘cost to cost’ basis, as

this method offers a better representation of the specific

contracts involved.

Works in progress, as attested by approved progress

certificates, are booked net of any advances already paid by

clients. Works in progress with duration of less than 12

months are booked on the basis of the cumulative costs and

expenses incurred to date in connection with them.

Allocations to risk reserves, general prudential provisions

and write downs arising from running projects or which are

likely to arise from completed projects under guarantee

schemes are classified as provisions to general risk

reserves. Works in progress of own real estate

developments are conservatively valued with reference to

their replacement or production cost calculated by adding

all imputable direct costs, and excluding indirect costs such

as selling, general, administration and interest expenses.

Completed portions of own real estate developments are

valued at the lower of replacement cost and market value.

54

Receivables and PayablesTrade receivables are entered at their presumed realisation

value. Overdue customer receivables with interests

accruing until 31 December 2002 are carried at their

nominal value, integrated by penalty interest accruals in the

corresponding tax exempt fund over the same period.

Overdue customer receivables with interests accruing in

subsequent periods are posted at their assumed net

realisation value, while any corresponding penalty or

default interest is booked on an accrual basis only as a

result of warranting circumstances such as serving of a

default notice, favourable arbitration and court verdicts, etc.

Payables and other debts are booked at their face value.

Employee Severance IndemnityAccruals to the Employee Severance Indemnity are made on

the basis of the amounts actually owed to employees at the

end of each accounting period, calculated in accordance with

relevant legislation and the applicable employment contracts.

Management reports that pursuant to the modifications to

the Employee Severance Indemnity by Law 296 of 27

December 2006 and ensuing regulations, the accruals to the

Employee Severance Indemnity from 1st January 2007

onward (or any successive date) can be placed, at the option

of the employee, with the Treasury Fund at INPS (Social

Security Agency) or with private sector funds.

Accruals and DeferralsAccruals and deferrals are calculated on the basis of the

accounting periods to which they refer.

Revenue and Cost RecognitionRevenues from the sale of materials, semi-finished and

finished goods are recognised as of the time of delivery of

goods. Revenues from the sale of services are incurred as

of the time of the completion or delivery of service.

Revenues from works in progress under contract terms

equal to or exceeding twelve months are recognised as of

the time of formal attestation in a progress payment report

endorsed by customer, as normally set out in the relevant

provisions of contract. Revenues from works in progress

under contract terms of less than twelve months are

booked as of the time of completion or delivery.

Claims toward the clients are included in revenues only in

the event of favourable sentences or arbitration awards,

provided furthermore that objective circumstances warrant

the positive outcome of the request.

Costs and expenses for the purchase of goods and services

are booked with reference to the corresponding revenue

items as described above.

Income TaxIncome tax for the accounting period is calculated on a time

accrual basis. Tax charges are determined on the basis of

relevant tax regulations during the accounting period.

Deferred tax assets and liabilities are calculated in

accordance with Chapter 25 of the GAAP issued by CNDCR

(Italian National Board of Accountants and Auditors) as

amended by OIC (the Italian National Accounting body).

Deferred tax assets and liabilities are calculated on the

basis of any mismatch (provisional difference) between

accounting and fiscal valuations of assets and liabilities,

applying the projected tax rate presumed to be in effect as

of the time when such differences arise. Deferred tax

assets are recognised only if management is of the

reasonable opinion that they will be refunded. Deferred tax

liabilities are recognised with respect to taxable amounts

arising from accounting and tax valuation mismatches,

except in the event that management is of the reasonable

opinion that such liabilities are unlikely to arise. For this

reason, no deferred tax liabilities were set off against the

corresponding tax-exempt reserves in net equity, in

consideration that no transactions giving rise to deferred

tax liabilities are likely to occur. The net balances between

tax assets and liabilities are offset against each other as

and whenever permitted by relevant laws.

Memorandum AccountsMemorandum Accounts include back-to-back guarantees

provided by the Group on behalf of non-consolidated

subsidiaries, associated companies and third party

beneficiaries, in compliance with Art. 2424 of the Italian

Civil Code. They also include bank and insurance

guarantees in the form of performance bonds, retention

money guarantees and bid bonds in which the Group is an

obligor. To avoid duplications and uphold the principle of

clarity of these Financial Statements, bank and insurance

guarantees on contract advances are not included in the

memorandum accounts, but are discussed in the

Supplementary Notes to this Annual Report as a comment

on the relevant items of the financial statements.

Derivative ContractsDerivative contracts on interest rates and foreign

currencies are booked in accordance to whether they meet

the relevant regulatory requirements which qualify

derivative contracts as a hedging position.

For derivative contracts on interest rates which qualify as

hedging, only the portion of interest associated with the

periodic liquidation of the maturing contract differential is

booked. The contract fair value is indicated in a


55

Contents of the Consolidated Financial Statements

supplementary note but it’s not reflected in the balance

sheet. For interest rate derivative contracts which do not

qualify as hedging positions and whose fair value is out of the

money, an allocation corresponding to the exposure towards

the counterparty is made in the balance sheet. If fair value is

in the money, no gain is booked in the financial statements.

For foreign currency derivative contracts qualifying as

hedging positions, the differential between spot rate and

forward rate at year-end is booked in the accounts.

Fair value is indicated in a supplementary note.

Non-hedging foreign currency derivative contracts are

instead booked as a counterparty payable if out of the

money, or counterparty receivable if in the money.

The determination of fair value of derivative contracts is

made in accordance with generally accepted valuation

methods and models. Besides fair value of derivative

contracts, the supplementary note to these financial

statements also includes in the memo accounts section the

notional amount of open derivative contracts as at year end.

Assets and Liabilities in Foreign CurrenciesAssets and liabilities denominated in foreign currencies are

converted in Euro at the year-end spot exchange rate.

Any gains or losses arising from exchange rate differential

are booked to the income statement.

Foreign Currency TransactionsForeign currency-denominated transactions are converted

in Euro at the spot exchange rate as of the date of the

transaction.

Additional information

The disclosure required under the provisions of Article 38

of Legislative Decree no. 127/1991 is provided along with

supplementary comments item by item in the same order

as they appear in the financial statements.

The Group has not exercised its waivers under the

provisions of Article 29, subsection 4, of Legislative Decree

no. 127/1991 and Article 2423, sub-section 4, of the Italian

Civil Code.

Audited Financial Statements

Pursuant to Article 2409-bis of the Italian Civil Code (now

art. 14 of Legislative Decree no. 27.01.2010, no. 39), these

Consolidated Financial Statements have been audited by

Reconta Ernst & Young Spa.

56

Balance Sheet Analysis

B. Fixed Assets

I. Intangible Assets: Intangible Assets amount

to € 2,150,472. Details of the breakdown and the changes in

the accounting period are provided in Appendix ‘D’.

1. Incorporation and start-up expenses. Incorporation and

start-up expenses amount to € 4,445 and consist mainly of

capitalised extraordinary expenses incurred in previous

accounting periods carried over to the current year and

amortised.

5. Goodwill. Goodwill, in the amount of € 300,000 arises

from the parent’s acquisition of a business unit of Bipielle

Real Estate, formerly Basileus Spa. Goodwill is amortised in

a straight line over a period of 10 years in relation to what

is considered the economic life of the investment.

5 bis. Consolidation difference. This amounts to € 287,500 in

connection with the new consolidation of Rizzani de Eccher

USA Inc. in FY 2009. This difference is amortised over 10

years, which fairly represents the future value of such asset.

7. Other intangible assets. Other intangibles amount

to € 1,558,527 and relate to site mobilisation and project

and design expenses for works with duration of more than

12 months. These expenses are amortised pro-rata in

proportion with the progress payment certificates of the

projects they refer to.

II. Tangible fixed assets: These include land and buildings,

plant and machinery, equipment and other assets for a total

net book value of € 59,608,850. The relevant transactions

concerning changes in tangible fixed assets are highlighted

in Appendix ‘E’ to these financial statements.

The significant net increase over the preceding year

(€ 35,057,041) is attributable to the purchase of a

substantial building in downtown Udine, the purchase of

equipment for a large project in Algeria and the new

consolidation of de Eccher Agricola Srl, a company

endowed with significant farm land and machinery.

III. Long Term Investments: Investments comprise of equity

investments, loans and securities.

1. Equity investments. Equity investments amount

to € 3,097,270. A detailed breakdown of equity investments

in associated companies and companies whose accounts

are not consolidated in these financial statements is shown

in the next table.

As at year end, the Group holds other equity investments

for an aggregate € 561,892 (as opposed to € 1,975,269 as of

31 December 2008). Among these, the most important is a

stake in Cantina Bertiolo valued at € 389,781. The decrease

is mainly related to the purchase of the majority part of the

corporate capital of de Eccher Agricola Srl; the company,

now fully consolidated, in the previous years was classified

among ‘Other equity investments’.

Assets

57


Ownership %2009

98.42%

100.00%

64.15%

99.97%

60.00%

100.00%

99.00%

99.00%

100.00%

60.00%

Book Value asat 31.12.2009

1,608

10,000

6,549

52,162

502

42,500

114,734

2

-

6,000

234,057

Book Value asat 31.12.2008

1,608

10,000

6,549

52,162

4,168

49,434

114,734

17,957

1

-

256,613

Codruss

Safau Iniziative Srl

Peloritani Scarl (being liquidated)

Cons. RdE America Centrale

Prospettive Immobiliari Srl (being liquidated)

Rizzani de Eccher UK Ltd

Palladio Srl

Sinedil Srl

Gabi Srl (1)

Volturno Scarl (being liquidated) (2)

Total

Subsidiaries

31.20%

37.50%

20.00%

50.00%

33.33%

33.33%

20.00%

25.00%

1,719,276

5,000

49,316

5,000

27,340

27,463

442,926

25,000

2,301,321

5,165

45,504

1,058,756

5,000

60,856

5,000

27,566

28,020

-

-

1,185,198

Associated Companies through Deal Srl (3)

Associated Companies through Sicea Spa

de Eccher Interiors Srl (3) Store 26 Scarl

Variante di Valico Scarl (being liquidated)

Risalto Srl (being liquidated)

Futura Srl (3)

Portocittà Srl

Total

Associated Companies

(1) Has become a consolidated subsidiary during 2009(2) De-consolidated during 2009(3) Company valued through the net equity method

58

Consistently with the accounting principles described in the

introduction section to these Notes, total works in progress

are offset by cumulative advance payments received from

customers against regularly attested and duly invoiced

progress certificates in the amount of € 944,093,925

(€ 954,702,034 as of 31 December 2008).

The decrease in proprietary work in progress and the

ensuing increase in finished products and goods are

associated with the completion of real estate projects for

the company’s own account and intended for sale. For a

good portion of these, sale and purchase deeds have been

signed in 2010.

Advances to suppliers and subcontractors shown

at € 10,984 thousand relate to down payments to suppliers

and similar above the line transactions.

Management would like to highlight the substantial amount

of contingent revenues associated with pending variation

claims initiated by the parent company and several

subsidiaries. As indicated earlier, any variation claims,

liquidated damages and extra-fees are recognised as

revenues upon their final ratification, provided furthermore

that objective circumstances warrant the positive outcome

of the request.

31.12.2009

5,718

8,330

25,220

11,079

10,984

61,332

31.12.2008

5,457

22,536

27,152

5,386

16,588

77,120

Raw materials and consumables

Proprietary works in progress and semi-finished goods

Works in progress on order

Finished products and goods

Advances to suppliers and subcontractors

Total

C. Current Assets

I. Inventories. Total inventories at year end amount to

€ 61,332,472 (as opposed to € 77,119,635 in 2008) and are

broken down as follows (amounts in thousands of Euro):


Gabi Srl

Total

31.12.2008

249,129

498,499

747,628

31.12.2009

250,129

-

250,129

Borgo Sole Spa

Total

360,402

360,402

360,402

360,402

31.12.200831.12.2009

b. Loans to non-consolidated associated companies

d. Loans to third parties and other credits: Loans to third

parties and other credits amount to € 560,165 (as opposed to

€ 752,038 as of 31 December 2008). This item includes

security deposits for € 429,390 and other loans for € 130,761.

3. Securities and other debentures. Securities and other

debentures amount to € 4,832,775 (€ 241,114 as of 31

December 2008) and consist of securities issued by top

rated financial institutions.

2. Long-term receivables/loans. Long-term receivables

and loans amount to € 1,170,696 (as opposed to € 1,860,068

as of 31 December 2008). They consist of term loans to

non-consolidated subsidiaries, associated companies and

third parties. Their breakdown is as follows:

a. Loans to non-consolidated subsidiaries


59


31.12.2009

3,418

108,700

196,967

-

309,085

31.12.2008

2,559

-

108,137

23,480

134,176


Portocittà Srl

Borgo Padova Scarl

Others

Total

31.12.2009

6,291

60,787

67,078

31.12.2008

40,361

60,787

101,148

Consorzio RdE America Centrale


Total

4,743,438

4,270,465

(500,145)

8,513,758

Balance at the beginning of year

Provisions

Write-offs

Balance at year-end

1,768,000

-

-

1,768,000

Balance at the beginning of year

Provisions

Write-offs

Balance at year-end

41,412

19,125

77,783

5,391

143,711

Italy and Europe

Russia and CIS

Middle East & Africa

North & Central America

Total

Changes in provisions for bad and doubtful debts during2009 are summarised below:

The amounts allocated to contingencies for bad and

doubtful debts at year end reflect management’s most

conservative assessment on credit risk for the current year.

Provisions for interest on overdue receivables amount to

€ 1,768,000 as of 31 December 2009, unchanged from 2008.

Commencing in 2003 default interest (statutory penalty

interest set by law), previously accrued to this special

reserve fund for tax purpose, is booked with the underlying

principal on a time-accrual basis.

2. Receivables due by subsidiary companies. At year-end

on 31 December 2009, related-party receivables amount to

€ 67,078 (as opposed to € 101,148 as of 31 December 2008)

and are all due within 12 months and are broken down as

follows:

3. Receivables due by associated companies. At year-end

on 31 December 2009, these receivables amount to €

309,085 (as opposed to € 134,176 as of 31 December 2008),

are all due within 12 months and refer to related-party

transactions such as the sale of goods and services between

different Group units. They are broken down as follows:

II. Accounts Receivable. Accounts receivable at year-end amount

to € 153,475,134 (€ 193,377,419 as of 31 December 2008).

1. Receivables due from customers. Total trade receivables

amount to € 143,711,380 (€ 182,716,866 as of 31 December

2008) net of provisions for bad and doubtful debts equal to €

8,513,758 and after deducting € 1,768,000 booked into a special

reserve fund for default and penalty interest. The breakdown of

accounts receivables is as follows: net receivables due within

12 months € 139,220,936; net receivables due beyond

12 months € 4,490,444. Receivables over 12 months relate to

retention monies held in connection to project works not yet

formally commissioned. The geographical break-down of

receivables is as follows (amounts in thousands of Euro):

60

31.12.2008

4,310,634

2,378,773

6,689,407

31.12.2009

2,300,777

2,908,233

5,209,010

Corporate Income Tax and Withholding Tax

VAT Receivables

Total

4-bis. Tax Credits. At year end on 31 December 2009 tax

credits amount to € 5,209,010 (as opposed to € 6,689,407 as

of 31 December 2008) and are broken down as follows:


Tax rate

27.5%

31.4%-27.5%

31.4%

27.5%

27.5%-34%

27.5%

31.4%

31.4%

31.4%

27.5%

27.5%

34.1%

34%

Deferred Tax Liabilities

Deferred Tax Assets

Differences on valuation of Works in Progress

Contingency Reserves

Public Relation Expenses

Provision for Bad and Doubtful Debts

Fiscal Losses Italy – RdE USA

Foreign Currency Translation Losses

Goodwill Amortisation

Consolidation Adjustments

Total Deferred Tax Assets

Capital gains (accruals)

Penalty Interest (accruals)

Foreign Currency Translation Gains

Pro-Forma Tax Computation RdE Canada Inc

Accellerated Depreciation RdE USA

Total Deferred Tax Liabilities

Balance2008

15,485

-

15,621

125,797

22,721

1,287,817

65,537

416,888

1,949,867

172,647

333,547

1,750,506

705,506

-

2,962,206

(Decrease)2009

-

-

(11,303)

(125,797)

(31,640)

(1,254,903)

(7,958)

(216,113)

(1,647,714)

(85,036)

(159,363)

(1,741,681)

(705,506)

-

(2,691,586)

Increase2009

26,698

347,604

-

-

844,995

312,196

13,956

275,838

1,821,287

11,628

13,704

450,116

-

447,038

922,486

Balance2009

42,183

347,604

4,317

-

836,076

345,110

71,535

476,613

2,123,438

99,238

187,888

458,941

-

447,038

1,193,105

Net Deferred Tax Assets /(Deferred Tax Liabilities)

(1,012,339) 1,043,872 898,801 930,333

consolidation of net tax credit/debit position of consolidated

subsidiaries.

4-ter. Deferred Tax Assets. Deferred tax assets, net of any

deferred tax liabilities, are € 923,088 (as opposed to a net

payable of € 1,025,339 in FY 2008).

The net balance includes a provision against fines for

€ 7,245 set aside by subsidiary Sicea Spa in respect of a tax

assessment from previous years and for which a favorable

resolution was obtained in 2010.

The following table illustrates the net balance between

deferred tax assets and deferred tax liabilities.

The above balances are posted net of any debt due in

connection with the same tax and are inclusive of the

D. Accrued Income and Pre-paid Expenses

Accrued income and pre-paid expenses amount to an

aggregate € 2,801,101 as of 31 December 2009 (as opposed

to € 1,570,721 as at 31 December 2008). Accrued income is

€ 26,485 and relates chiefly to accruals of interest on bond

coupons.

Pre-paid expenses are broken down as follows:

61

31.12.2008

125,765

332,589

3,277,468

3,735,822

31.12.2009

63,929

399,003

2,769,967

3,232,899

Employees

Welfare and social security

Other

Total

Employees

Welfare and social security

Other

Total

31.12.2008

1,107,963

218,192

203,366

1,529,521

31.12.2009

1,597,547

305,437

871,632

2,774,616

Insurance premiums and guarantees Rents

Other prepaid expenses

Total

Other receivables of € 2,769,967 include € 592,735 in

earnest deposits for arbitrations, € 1,000,000 as down

payments on property transactions, € 168,716 arising from

claim receivables owed to Sicea Spa, and € 1,008,516

arising from other credits.

IV. Cash and Cash Equivalents. Cash, cash-equivalent,

quasi-cash instruments and bank deposits amount to

€ 74,866,003 and are broken as follows:

5. Other Receivables. Other receivables amount to

€ 3,232,899 and are broken down as follows:


31.12.2008

76,994,150

263,628

77,257,778

31.12.2009

74,635,341

230,662

74,866,003

Bank deposits

Cash in hand

Total

The Group’s net financial position as of 31 December 2009,

taking into account cash and other liquid instruments at-

hand, net of bank debt, is a positive € 63,034 thousand as

opposed to € 63,830 thousand million in 2008.

62

A. Shareholders’ Equity

Liabilities

Paid up capital, increased from € 10 million to € 20 million

by capitalising retained earnings in 2009, is composed of

4,000,000 preferred shares (with privileged claim over

dividend distribution) with a nominal value of € 1,00 each

and 16,000,000 ordinary shares with a nominal value of

€ 1,00 each.

Whereas balance sheet items of overseas subsidiaries and

associated companies are converted in Euro at the spot

exchange rate as at 31 December, the corresponding

income statement items are converted at the average

exchange rate for the year, the reserve for foreign currency

translation gains (losses) shows any gain (or loss) arising

from any difference between spot exchange rate and the

average exchange rate.

3,634,318

698,561

76,031,228

524,756

980,635

58,762,069

Minority share of equity

Minority share of net profit / (losses)

Total consolidated shareholders’ equity, Group and minority interests

31.12.2009

20,000,000

2,000,000

67,105

20,197

34,113,422

15,497,625

71,698,349

31.12.2008

10,000,000

1,999,498

32,180

21,367

33,738,569

11,465,065

57,256,678

I. Share capital

IV. Legal Reserves

VII. Other Reserves: Consolidation reserve Reserve for foreign currency translation gain / (losses) Others (retained earnings)

IX. Group profit (losses) for the Year

Total Group shareholders’ equity

Shareholders’ equity includes certain reserves, which in the

event of distribution would form part of the Group’s taxable

income, regardless of the period in which they arise.

These are:

_reserve for 6% increase according to Law 64/86,

amounting to € 10,466;

_capital subscription reserves pursuant to Law 64/86

amounting to € 417,896;

_reserve for subsidised interest according to Law 904/77

amounting to € 2,644,521;

_revaluation reserve according to Law 72/83 amounting to

€ 11,092.

Changes in shareholders’ equity of the Group are shown in

Appendix ‘F’.

Reconciliations of balances between shareholders’ equity

and net profit of the parent and the Group respectively, are

detailed in Appendix ‘G’.

B. Provisions for Contingencies and Risks.

1. Provisions for severance payments and related charges.Provisions for severance payments amount to € 349,466 as

of 31 December 2009 (as opposed € 318,479 as at 31

December 2008), mainly in relation to severance payments

to the directors of subsidiary Deal Srl.

2. Provisions for tax. Tax provisions are down to zero, as

described before, because deferred tax liabilities have been

set off against deferred tax assets. Provisions for deferred

tax were € 1,025,339 as of 31 December 2008.

As regards the tax audits carried out by the Guardia di

Finanza – Udine Precinct on the parent company in 2008,

no formal assessment has yet been levied. However, the

impact of the objections raised is negligible. Therefore,

upon advice of tax counsellors, no provisions have been

made against possible liabilities.

63

3. Other Provisions. Other provisions amount to € 2,980,878

and consist of provisions for contractual contingencies and

future charges associated with works. Changes in

provisions for contractual and default risks are highlighted

below:

The increase in FY 2009 is due to amounts set aside by

VFR Ltd (€ 1,822,734), Treviso Maggiore Srl (€ 650,802) and

Codest International Srl (€ 520,918) against future risks

and charges arising from completed projects.

.


824,520

2,994,454

(838,096)

2,980,878

Initial Balance

Provisions

Draw downs (utilisation) and write offs

Ending Balance

Rizzanide Eccher Spa

Deal Srl

Sicea Spa

CodestInternational Srl

Metrobus Scarl

Codest EngineeringConsortium TrevisoMaggiore Srl

de Eccher Agricola Srl

VFR Ltd

Rizzani de Eccher USA Inc.

Total

31.12.2009

2,977,761

1,050,056

303,089

462,547

-

50,812

28,429

46,446

24,832

34,970

4,978,942

Change YoY

(27,629)

(91,455)

(211,286)

(50,319)

(45,983)

4,914

10,847

46,446

(195,188)

34,970

(524,683)

31.12.2008

3,005,390

1,141,511

514,375

512,866

45,983

45,898

17,582

-

220,020

-

5,503,625

C. Employee Severance Indemnity

Provisions to the Employee Severance Indemnity are

calculated for each employee pursuant to the labour and

employment contracts (by category) currently in effect.

The following table highlights changes in provisions made

during the current year:

The accrued payable is posted net of any advance already paid

to employees. Following the enactment of Law No. 296 of 27th

December 2006 and subsequent legislative decrees issued in

2007 in the matter of Employee Severance Indemnity, the

amounts accruing to the statutory severance fund for each

employee are – upon instruction of each employee –

deposited with the specific treasury fund with INPS (Social

Security Agency) or are placed in private sector investment

funds.

D. Accounts Payable

3. Amount due to shareholders for loans. Shareholders’

loans amount to € 250,000 and consist of a loan from third

party shareholders of Domex Sviluppo Immobiliare Srl.

4. Amounts due to banks. Total bank loans outstanding

amount to € 11,831,796 and consist of short term debt (due

within 12 months) for € 2,797,316 and long term debt

(beyond 12 months but within 5 years) for € 9,034,480.

At financial year closing, the weighted average cost of debt

was 4%, marking a slight decrease compared to the

previous financial year. Total credit lines from the banking

system as at 31 December 2009 amount in aggregate to

about € 536 million, of which € 87 million in cash credit

lines and € 449 million in the form of guarantees and

surety bonds. As at year-end, their utilisation reached

€ 228 million in guarantees issued and outstanding.

6. Advance Payments. Advance payments as at year end in

2009 amount to € 106,207,362 (€ 123,026,581 as at 31

December 2008). These consist of advance payments on

works in progress (as provided in relevant project contract

terms) for € 103,911,277 and advance payments received in

connection with the sale of real estate for € 2,296,085.

Guarantees or sureties issued against such advance

payments amount to € 92,735,171 as of 31 December 2009

as opposed to € 79,052,466 as at 31 December 2008.

The geographical breakdown of advance payments is as

follows (in thousand Euro):

Italy

Russia and CSI


North and Central America

Far East

Total

25,109

16,777

58,350

5,280

691

106,207

64

9. Payables to subsidiaries companies. These amount to

€ 555,171 and are broken down as follows:

The previous financial year Volturno Scarl (being liquidated)

was consolidated: the payable indicated above refers to the

assignment of VAT receivables in the ‘IVA Group Offsetting’.

31.12.2008

4,136

7,679

-

6,668

18,483

31.12.2009

4,749

8,028

535,726

6,668

555,171


Rizzani de Eccher UK (being liq.)

Volturno Scarl (being liquidated)

Sinedil Srl

Total

31.12.2009

956,195

1,885,634

229,064

316,570

801,664

811,285

301,658

24,151

5,326,221

31.12.2008

963,279

110,217

115,884

303,650

3,275,537

2,557,378

703,565

148,837

8,178,347

Tax c/IRPEF (Personal Income Tax)

Tax c/IRES (Corporate Income Tax)

Tax c/IRAP (Regional Revenue Tax)

Tax c/IVA Italy – (Domestic VAT)

Tax c/IVA Overseas – (Cross Border VAT)

Overseas tax

Substitution Tax

Other tax payables

Total

12. Tax payables. Tax payables amount to € 5,326,221and

are broken down as follows:

7. Trade Payables. Trade payables as at 31 December 2009

amount to € 139,152,173 marking a decrease by

€ 12,406,225 as opposed to 2008. Their geographical

breakdown is as follows (in thousand Euro):

Italy

Russia and CSI


North and Central America

Far East

Total

45.124

18,769

73,281

1,383

595

139,152


10. Payables to associated companies. These items include

payables to non-consolidated associated companies as a

consideration for works executed.


Variante di Valico Scarl

Store 26 Scarl

Palladio Srl

Borgo Padova Scarl

Others

Total

31.12.2009

131,050

23,770

103,050

36,006

907,122

51,232

1,252,230

31.12.2008

139,907

23,770

682,871

35,339

727,024

93,100

1,702,012

65

The payable for Substitution Tax refers to the balance payable

in respect of the release of certain funds carried out in 2008.

13. Payables to Social Security Agencies. These mainly

consist of amounts owed to social security agencies in

connection with salaries and emoluments pertaining to the

month of December 2009 and associated year-end bonuses.

These payables are liquidated within the following month in

January 2010.

14. Other Payables. Other payables amount to € 12,478,016

(as compared to € 10,525,449 in financial year 2008) and

consist of the following items:

_ € 3,816,952 in employees’ salaries and wages for the

month of December 2009, paid in January 2010, and the

corresponding allocation to holiday entitlements;

_ € 8,661,064 in other payables, including among others:

€ 1,420,029 in connection with the parent company’s

acquisition of a business unit of Bipielle Real Estate;

€ 1,965,023 in connection with amounts received from

clients but payable to certain consortium partners; and

€ 900,796 for deposits held as a surety.

31.12.2009

898,320

272,904

274,383

1,445,607

31.12.2008

934,650

92,421

235,217

1,262,288

INPS payables (Social Security)

INAIL payables (Workers’ Health Insurance)

Other Social Security Payables

Total


E. Accrued Expenses and Deferred Income

Accrued expenses and deferred income amount to

€ 237,649 (as compared to € 157,788 in financial year 2008)

and include adjustments to items of the income statement

(revenues and costs) pursuant to the timing accrual

method. These adjustments mainly comprise of accrued

commissions on bank guarantees paid in FY 2010 but

pertaining to FY 2009.

66

97,953,091

27,395,400

6,655,925

4,876,123

136,880,539

4,856,469

5,161,919

426,801

4,228,798

14,673,987

151,554,526

151,804,526

100,027,173

8,072,560

2,085,214

1,622,068

111,807,015

4,942,469

2,176,748

1,202,867

1,552,896

9,874,980

121,681,995

122,191,375

31.12.2009 31.12.2008

B1. Issued by Banks:

Performance Guarantees

Bid Bonds

Against release of retention monies

Other Guarantees

Total B1

B2. Issued by insurance companies:

Performance Guarantees

Bid Bonds

Against release of retention monies Other Guarantees

Total B2

Total B

Total Memorandum Accounts

31.12.2009

-

250,000

-

250,000

31.12.2008

-

509,380

-

509,380

A1. In favour of subsidiary companies

A2. In favour of associated companies

A3. In favour of other companies

Total A

As of 31 December 2009, Memo Accounts amount to

€ 151,804,526 posting an increase by € 29,613,151 as

opposed to comparable figures in 2008. The increase is

mainly ascribed to bid bonds issued in connection with

international tenders, such as Jahara Road in Kuwait,

Hamad Hospital in Qatar and in Algeria. There follows a

detailed breakdown.

A. Guarantees provided in favour of third parties:

B. Guarantees issued by third parties on behalf of GroupCompanies:

MemorandumAccounts

67

Forward Currency ContractsAs discussed in the general principles section, the objective

of the Group is to hedge against exchange fluctuations in

respect of both receipts and payments in foreign currency.

The following table provides details of the Group’s exposure

to foreign exchange derivatives (forward currency sale and

purchase contracts). It must be noted that while these are

pure hedging contracts, they do not qualify as such from an

accounting/regulatory point of view. Therefore, the marked-


Amount

2,400,000

13,631,212

8,088,056

8,088,056

1,090,351

1,090,351

851,951

851,951

Currency

USD

MYR

MYR

MYR

MYR

MYR

MYR

MYR

MtM

69,516

(12,650)

(72,742)

(76,571)

(10,743)

(10,961)

(8,690)

(9,209)

Start Date

26.11.09

21.12.09

30.09.09

30.09.09

30.09.09

30.09.09

30.09.09

30.09.09

Euro

1,606,425

2,764,223

1,573,889

1,569,552

211,153

210,944

164,711

164,197

Rate

1,4940

4,9313

5,1389

5,1531

5,1638

5,1689

5,1724

5,1886

Maturity Date

28.04.10

18.01.10

15.03.10

30.04.10

30.06.10

16.08.10

30.09.10

15.11.10

Forward Purchase

Forward Sale

Forward Sale

Forward Sale

Forward Sale

Forward Sale

Forward Sale

Forward Sale

Notional Amount

3,000,000

3,000,000

Start Date

29.05.09

04.06.09

Interest Rate

2.12%

Euribor 3m max 2.6%

Maturity Date

01.06.12

08.06.12

Interest Rate Swap

Interest Rate Swap with cap

Type of Contract MtM

(24,837)

18,948

to-market value (negative or positive) is posted in the

balance sheet.

Interest Rate Derivative ContractsThe lowest table provides details of the Group’s exposure to

interest rate swaps intended to hedge the company’s underlying

bank debt against a rise in interest rates. It must be noted that

such IRS contracts qualify as hedging instruments. Therefore,

no marked-to-market value is posted in the balance sheet.

68

104,469

84,208

200,271

15,365

1,037

405,350

25.8%

20.8%

49.4%

3.8%

0.3%

100%

Italy

Russia & CIS

Africa & Middle East

Central & North America

Far East

Total

1,095,699

769,340

157,399

540,527

67,556

3,743,143

6,373,663

Sale of materials

Rents and ancillary revenues

Insurance compensation

Capital Gains

Contributions booked as income

Other revenues

Total

A. Revenues (or Value of Production)

The Group’s total revenues (or as occasionally hereinafter

referred to as ‘value of production’, to reflect certain

accounting peculiarities of general contractors operating

on a project by project basis) for the year 2009 amount to

€ 405,349,931 as opposed to € 492,628,292 in 2008.

Revenue breakdown in geographical terms is as follows (in

thousands of Euro):

1. Revenues from sales and services. Revenues from sales

and services amount to € 412,247,372 and consist of ‘above

the line’ revenues from works in progress attested by

progress payment certificates and duly invoiced inclusive of

approved claims, revenues from the sale of real estate and

units thereof, service fees and revenues from the sale of

special equipment and machinery.

2. Changes in proprietary works in progress and semi-finished and finished products. This item consists of

the algebraic sum of beginning and end-balances of stock

of proprietary works in progress, semi-finished and finished

products and amounts to a negative aggregate

of € 11,527,417.

3. Changes in works in progress on order. This item shows

a negative balance for € 2,889,510.

Other revenues include € 485,018 in draw downs from bad

and doubtful debts provision and € 972,173 from the

collection of contractual penalties.

B. Cost of Goods and Services Sold (or Cost of Production)

Total costs of goods sold and services rendered amount to

an aggregate of € 382,243,556. A detailed breakdown of

these items is included in the income statement enclosed

with this Annual Report.

6. Raw and ancillary materials, consumables and goods.Total costs amount to € 33,489,191 and can be broken down

in raw materials, semi-finished products, finished products

and sundry consumables

4. Increments in fixed assets arising from in-house works.This item amounts to € 1,145,823 and consists for the most

part of the capitalisation of site mobilisation, preparation

and erection expenses as well as design and engineering

costs for projects with duration of more than 1 year

(amortised in proportion to the progress of works).

5. Other revenues and income. Other revenues amount to

€ 6,373,663 and include the following:

IncomeStatement

Income Statement Analysis

made by group companies against future risks and charges

associated with completed projects.

14. Other Operating Expenses. Other operating expenses

amount to € 5,457,906 and include sundry management

expenses, registry fees and stamp duties, write downs on

receivables, penalties and charges from customers. In

addition, from 2009 they also include bank commissions

and fees for bank and insurance guarantees, which were

booked as financial charges in the previous year (Section C).

In order to facilitate year on year comparison, an identical

reclassification has been made in respect of FY 2008 for an

aggregate of € 1,658,359.

Pursuant to Art, 38 paragraph o) of Legislative Decree no,

127/91, we report that the aggregate amount of directors’

compensations of the parent company is € 767,953 while

the aggregate amount of compensations to the internal

board of auditors is € 72,492. These amounts include

compensations for all positions in other Group subsidiaries

and associated companies.

C. Financial income and expenses

Net financial charges are € 2,979,936 posting a reduction of

€ 59,051 from 2008. They are analytically described in the

following tables.

15. Income from equity investments. Income from equity

investments as at 31 December 2009 is € 18,260 and

consists of income from portfolio investments and dividend

distributions from subsidiaries and associated companies

that are not consolidated in these financial statements.

16. Other financial income. This includes the following

items:

Income Statement Analysis

69

Employees - Italy

- Management

- Staff

- Workers

Sub total - Italy

Employees - Overseas

- Management

- Staff

- Workers

Sub total – Overseas

31.12.2009

35

147

167

349

16

252

525

793

31.12.2008

37

143

184

364

21

305

894

1,219

Average2009

35

150

170

355

18

270

686

974

Total 1,142 1,583 1,329

10. Amortisation, depreciation and write-downs.Depreciation charges amount to € 8,687,226 of which

€ 718,812 pertaining to amortization of intangible assets

and € 4,741,301 pertaining to depreciation of fixed assets.

Furthermore, provisions for bad and doubtful debts have

been made for € 3,227,113.

For further details on depreciation and amortisation we refer

readers to Appendices ‘D’ e ‘E’ to these Financial Statements.

12. Provisions for risks, contingencies and other charges.These amount to € 2,994,454 in connection with provisions

7. Services. Total expenses for services amount to

€ 284,221,189 and consist of expenses incurred in

connection with services rendered by third parties for sub-

contracts, design and technical consulting services, legal

and financial consulting services, and transportation.

8. Rents and leases. This item shows an aggregate

€ 3,425,044 in connection with rents and leases.

9. Salaries, wages and employees’ remunerations.Employee remuneration expenses amount to € 45,686,672

as of 31 December 2009. The breakdown of employees by

category is as follows:

46,999

373,696

49,832

55,932

526,459

Interest on customer receivables

Interest on bank deposits

Penalty interest received

Interest on other receivables and credits

Total

70

17. Interest expenses and financial charges. These include:

17-bis. Foreign currency translation gains (losses).During the period under review, the management of cross

currency positions has resulted in a net loss of € 2,810,623

as opposed to a net loss of € 4,978,024 in 2008. Such loss

includes a foreign exchange loss incurred in a transaction

with a client for € 386,352 and € 724,756 as translation loss

realised on dividends declared in the previous consolidated

financial statements but paid to the parent company in 2009.

D. Valuation Adjustments on Investments

18. Revaluations. They amount to € 847,719 and arise from

the valuation following the equity method of associated

companies.

19. Write-downs. During the 2009 financial year, an

aggregate € 222,562 was written down in relation to the

diminution of value of certain equity participations in

associated companies that are not fully consolidated.

E. Extraordinary Items

20. Extraordinary Income. Extraordinary income in the

2009 financial year is € 3,317,927 of which € 864,721 in

capital gains arising from the sale of equipment in Canada

and Dubai (VFR Ltd) following project completions,

€ 1,475,000 arising from the settlement of disputes with

clients and suppliers and € 146,254 in the IRES tax refund

pursuant to Legislative Decree 185/2008.

21. Extraordinary charges. These consist of:

22. Income tax. Corporate Income tax for 2009 amount in

aggregate to € 7,387,192 (as opposed to € 5,286,203 in

2008) and consist of € 9,140,361 in current tax and

€ 1,753,169 in deferred tax. Tax payable is commensurate

with taxable income, as derived from the fiscal accounting

profit for the financial year and adjusted in relation to the

applicability of tax laws and regulation in effect at the time

of drafting of these Consolidated Financial Statements.

Related Party Transactions (pursuant to Art 38, 1stparagraph, letter o, subsection V of Legislative Decree127/1991)

The following table provides details of payables, receivables,

revenues and costs associated with related parties having

relevance in the context of these Financial Statements.

We further report that the transactions herein contemplated

are conducted on an arm’s length basis with reference to

current market rates.

Information in respect of commitments notdisclosed in the Consolidated Balance Sheet(pursuant to Art 38, 1st paragraph, letter o, subsection VIof Legislative Decree 127/1991)

The Company is not involved in any commitments that are

not disclosed in the Consolidated Balance Sheet.

195,992

290,153

486,145

Tax settlements from previous years

Other losses

Total

334,077

334,077

5,748

5,748

258,036

258,036

22,593

22,593

CostsRevenuesPayablesReceivables

Marienberg SA*

Total

* Parent company of Rizzani de Eccher Spa


610,793

103,239

714,032

Bank interest

Interest on other payables

Total

REPORT ASSOCIATED WITH THE CONSOLIDATED FINANCIAL

STATEMENTS

72

Report Associated with the Consolidated financial statements

CONSOLIDATED FINANCIAL STATEMENTS

74

Assets

A Subscribed capital unpaidShares not called upShares already called up

Total receivable from shareholders for capital stock

B Fixed assets

I) Intangible assets1 Start-up and expansion expenses2 R&D and advertising costs3 Industrial patent rights and intellectual property rights4 Concessions, licenses, trademarks and similar rights5 Goodwill5bis Consolidated differences 6 Intangible fixed assets under construction and advances7 Others

Total intangible assets

II) Tangible fixed assetsLand and buildings- land and buildings accumulated depreciation

1 Land and buildingsPlant and machinery- plant and machinery accumulated depreciation

2 Plant and machinery Industrial and commercial equipment- industrial and commercial equipment accumulated depreciation

3 Industrial and commercial equipmentOther assets- other assets accumulated depreciation

4 Other assets5 Fixed assets under construction and advances

Total tangible fixed assets

III) Long term investments1 Equity investments in:

a) subsidiary companiesb) associated companiesc) parent companiesd) other companiesTotal

2 Long term receivables/loans due from:a) subsidiary companiesb) associated companiesc) parent companiesd) othersTotal

3 Securities and debentures4 Treasury shares

Total long-term investments

Total fixed assets

Change31.12.2009 31.12.2008 YoY

0 0 00 0 0

0 0 0

4,445 4,011 4340 0 00 1,705 (1,705)0 0 0

300,000 431,900 (131,900)287,500 0 287,500

0 0 01,558,527 1,086,861 471,6662,150,472 1,524,477 625,995

38,425,728 10,144,312 28,281,416(2,757,152) (2,207,650) (549,502)35,668,576 7,936,662 27,731,91434,841,670 30,143,550 4,698,120

(16,255,673) (16,262,248) 6,57518,585,997 13,881,302 4,704,695

9,536,306 6,775,760 2,760,546(4,670,207) (4,599,929) (70,278)4,866,099 2,175,831 2,690,2682,341,159 2,560,067 (218,908)

(1,852,981) (2,002,053) 149,072488,178 558,014 (69,836)

0 0 059,608,850 24,551,809 35,057,041

234,057 256,613 (22,556)2,301,321 1,185,198 1,116,123

0 0 0561,892 1,975,269 (1,413,377)

3,097,270 3,417,080 (319,810)

250,129 747,628 (497,499)360,402 360,402 0

0 0 0560,165 752,038 (191,873)

1,170,696 1,860,068 (689,372)4,832,775 241,114 4,591,661

0 0 09,100,742 5,518,262 3,582,479

70,860,064 31,594,549 39,265,515

CONSOLIDATED BALANCE SHEET

75

Assets

C Current assets

I) Inventories1 Raw and ancillary materials and consumables2 Works in progress and semi-finished products3 Works in progress on order4 Finished products and goods 5 Advances

Total inventories

II) Accounts receivable1 Receivables due from customers

a) amounts falling due within 12 monthsb) amounts falling due beyond 12 monthsTotal

2 Receivables due by subsidiary companies3 Receivables due by associated companies4 Receivables due by parent companies4bis Tax credits4ter Deferred tax assets5 Others

Total accounts receivable

III) Short-term financial assets1 Investments in subsidiary companies2 Investments in associated companies3 Investments in parent companies4 Other investments5 Treasury shares6 Other securitiesTotal short term financial assets

IV) Cash and cash equivalents1 Bank and postal deposits2 Cheques3 Cash in hand

Total cash and cash equivalent

Total current assets

D Accrued income and pre-paid expenses

Total assets

Change31.12.2009 31.12.2008 YoY

5,718,377 5,457,036 261,3418,330,875 22,536,417 (14,205,542)

25,220,466 27,152,167 (1,931,701)11,079,018 5,386,301 5,692,71710,983,737 16,587,714 (5,603,977)61,332,472 77,119,635 (15,787,163)

139,220,936 173,322,441 (34,101,505)4,490,444 9,394,425 (4,903,981)

143,711,380 182,716,866 (39,005,486)67,078 101,148 (34,070)

309,085 134,176 174,90922,593 0 22,593

5,209,010 6,689,407 (1,480,397)923,088 0 923,088

3,232,899 3,735,822 (502,923)153,475,134 193,377,419 (39,902,285)

0 0 00 0 00 0 00 0 00 0 00 0 00 0 0

74,635,341 76,994,150 (2,358,809)0 0 0

230,662 263,628 (32,966)74,866,003 77,257,778 (2,391,775)

0289,673,609 347,754,832 (58,081,223)

2,801,101 1,570,721 1,230,380

363,334,774 380,920,102 (17,585,328)

76

Liabilities

A Shareholders’ equityI Share capitalII Additional paid-in capitalIII Revaluation reserveIV Legal reserveV Statutory reservesVI Reserve for treasury sharesVII Other reserves:

- consolidation reserve- reserve for foreign currency translation gains (losses)- others

VIII Profits (losses) carried forwardIX Group profit (losses) for the year

Total Group shareholders' equity

Minority share of equity Minority share of net profit (loss)Total minorities’ equity

Total consolidated shareholders' equity, Group and minority interests

B Provision for contingencies and risks1 Provisions for severance payments2 Provision for tax, incl. deferred tax.3 Other provisions

Total provisions for contingencies and risks

C Employees' severance indemnity

D Accounts payable1 Bonds maturing within current year2 Convertible bonds maturing within current year3 Amounts due to shareholders for loans4 Amounts due to banks

a) falling due within 12 monthsb) falling due beyond 12 monthsTotal

5 Amounts due to other financial companies6 Advance payments7 Trade payables8 Promissory notes9 Payables to subsidiary companies10 Payables to associated companies11 Payables to parent companies12 Tax payables13 Payables to social security agencies14 Other payables

Total accounts payable

E Accrued expenses and deferred income

Total shareholders' equity and liabilities

Change31.12.2009 31.12.2008 YoY

20,000,000 10,000,000 10,000,0000 0 00 0 0

2,000,000 1,999,498 5020 0 00 0 0

67,105 32,180 34,92520,197 21,367 (1,170)

34,113,422 33,738,569 374,8540 0 0

15,497,625 11,465,065 4,032,56071,698,349 57,256,678 14,441,671

3,634,318 524,756 3,109,562698,561 980,635 (282,074)

4,332,879 1,505,391 2,827,488

76,031,228 58,762,069 17,269,159

349,466 318,479 30,9870 1,025,339 (1,025,339)

2,980,878 824,520 2,156,358

3,330,344 2,168,339 1,162,006

4,978,942 5,503,625 (524,683)

0 0 00 0 0

250,000 628,464 (378,464)0

2,797,316 4,328,495 (1,531,179)9,034,480 9,099,764 (65,284)

11,831,796 13,428,259 (1,596,463)0 0 0

106,207,362 123,026,581 (16,819,219)139,152,173 151,558,399 (12,406,225)

0 0 0555,171 18,483 536,688

1,252,230 1,702,012 (449,782)258,036 4,000,000 (3,741,964)

5,326,221 8,178,347 (2,852,126)1,445,607 1,262,288 183,319

12,478,016 10,525,449 1,952,567

278,756,611 314,328,281 (35,571,670)

237,649 157,788 79,860

363,334,774 380,920,102 (17,585,328)

CONSOLIDATED BALANCE SHEET

77

Memorandum accounts

1 Guarantees a) Guarantees provided in favour of third parties

a1) in favour of subsidiaries companiesa2) in favour of associated companiesa3) in favour of other companiesTotal

b) Guarantees issued by third parties on behalf of Group companies b1) banksb2) insurance companiesTotal

Total Guarantees

Total memorandum accounts

Change31.12.2009 31.12.2008 YoY

0 0 0250,000 509,380 (259,380)

0 0 0250,000 509,380 (259,380)

136,880,539 111,807,015 25,073,52414,673,987 9,874,980 4,799,007

151,554,526 121,681,995 29,872,531

151,804,526 122,191,375 29,613,151

151,804,526 122,191,375 29,613,151

78

A Revenues1 Revenues from sales and services2 Changes in proprietary works in progress,

semi-finished and finished products3 Changes in works in progress on order4 Increases in fixed assets from in-house works5 Other revenues and income

Total revenues

B Cost of goods and services 6 Raw and ancillary materials, consumables and goods7 Services8 Rents and leases9 Salaries, wages and employees’ remunerations:

a) wages and salariesb) social security c) employee severance indemnityd) pensions and similare) other costsTotal employees' expenses

10 Amortization, depreciation and write-downs:a) amortization of intangible assetsb) depreciation of tangible fixed assetsc) other write-downs of fixed assetsd) write-downs of current receivables and liquid instrumentsTotal amortization, depreciation and write-downs

11 Changes in raw and ancillary materials, consumables and goods inventories

12 Provisions for risk, contingencies and other charges13 Other provisions14 Other operating expenses

Total cost of goods and services

Operating income (EBIT) (A-B)

C Financial income and expenses15 Income from investments16 Other financial income from:

a) receivables held as financial fixed assetsb) securities held as financial fixed assetsc) securities held as current assetsd) income other than aboveTotal

17 Interest expenses and financial charges 17bis Foreign currency translation gains and losses

Total financial income and expenses

ChangeYear 2009 Year 2008 YoY

412,247,372 469,585,127 (57,337,756)

(11,527,417) 7,108,874 (18,636,292)(2,889,510) 11,560,690 (14,450,200)

1,145,823 801,367 344,4566,373,663 3,572,233 2,801,430

405,349,931 492,628,292 (87,278,361)

(33,489,191) (44,271,010) 10,781,819(284,221,189) (356,448,467) 72,227,278

(3,425,044) (5,231,778) 1,806,734

(32,863,928) (39,356,739) 6,492,810(6,572,507) (6,669,737) 97,230(1,461,209) (1,611,393) 150,184

0 0 0(4,789,027) (5,747,490) 958,463

(45,686,672) (53,385,358) 7,698,686

(718,812) (672,671) (46,141)(4,741,301) (6,005,807) 1,264,506

0 (94,088) 94,088(3,227,113) (808,955) (2,418,158)

(8,687,226) (7,581,521) (1,105,705)

1,718,125 594,085 1,124,039(2,994,454) (733,065) (2,261,389)

0 0 0(5,457,906) (4,595,363) (862,542)

(382,243,556) (471,652,476) 89,408,920

23,106,374 20,975,816 2,130,559

18,260 39,604 (21,344)

0 0 018,281 0 18,281

0 0 0508,178 3,210,066 (2,701,888)526,459 3,210,066 (2,683,607)

(714,032) (1,310,632) 596,600(2,810,623) (4,978,024) 2,167,401

(2,979,936) (3,038,986) 59,051

CONSOLIDATED INCOME STATEMENT

79

D Valuation adjustment of investment18 Revaluations:

a) equity investmentsb) financial fixed assetsc) securities held as current assetsTotal revaluations

19 Write-downs:a) equity investmentsb) financial fixed assetsc) securities held as current assetsTotal write-downs

Total valuation adjustments of investment

E Extraordinary items20 Income

a) realised gains on divestments and disposalsb) other extraordinary incomeTotal extraordinary income

21 Expensesa) realised losses on divestments and disposalsb) other extraordinary losses and expensesTotal extraordinary expenses

Total extraordinary items

Earnings before income tax

22 Income taxes for the yeara) current taxesb) deferred taxesTotal

Profit for the year including minority interests

Minority share of profit for the year

Consolidated net profit for the year, Group


847,719 427,747 419,9720 0 00 0 0

847,719 427,747 419,972

(222,562) (468,566) 246,0040 0 00 0 0

(222,562) (468,566) 246,004

625,157 (40,819) 665,976

864,721 208,915 655,8062,453,206 678,175 1,775,0313,317,927 887,090 2,430,838

0 (470,842) 470,842(486,145) (580,355) 94,210(486,145) (1,051,197) 565,052

2,831,782 (164,107) 2,995,890

23,583,378 17,731,903 5,851,475

(9,140,361) (10,106,356) 965,9951,753,169 4,820,153 (3,066,984)

(7,387,192) (5,286,203) (2,100,989)

16,196,186 12,445,700 3,750,486

(698,561) (980,635) 282,074

15,497,625 11,465,065 4,032,560

a) Cash Flow from OperationsNet Profit for the Year

+/- Liquidity generated (utilised) by operating activities:Minority InterestsDepreciation and AmortizationAllocations to Severance Payment and Social Security FundsDrawings from Severance Payment and Social Security FundsAllocations to (Drawings from) Tax Reserve Fund Allocations to (Drawings from) Risk and Contingencies Reserve FundWrite-downs of fixed assetsProvisions against bad and doubtful receivablesDividendsCapital losses from divestment of assetsCapital gains from divestment of assetssub total

Changes in Working Capital Decrease (Increase) in Trade Receivables and Other ReceivablesDecrease (Increase) in Inventory and Works in ProgressDecrease (Increase) in Prepaid Expenses and Accrued IncomeIncrease (Decrease) in Trade Payables and Other PayablesIncrease (Decrease) in Advance Payments receivedIncrease (Decrease) in Deferred Income and Accrued ExpensesTotal Cash Flow from Operations

b) Cash Flow from Investing ActivitiesInvestments in Fixed AssetsChanges in Consolidation PoliciesDivestment of Fixed AssetsInvestment in Intangible AssetsChanges in Consolidation PoliciesDivestment of Intangible AssetsDividendsInvestment in Financial AssetsDivestment of Financial AssetsTotal Cash Flow generated (utilised) by Investing Activities

c) Cash Flow from Financing ActivitiesIncrease (Decrease) in Shareholders' LoansIncrease (Decrease) of medium/long term debt from banksDividends paidIncrease (Decrease) of Minorities' share of Net EquityTotal Cash Flow utilised by Financing Activities

d) Increase (Decrease) in currency translation reserves with overseas branchese) Increase (Decrease) in currency translation reservesf) Increase (Decrease) in consolidation reserve

Total Cash Flow

Cash available at beginning of financial yearCash available at end of financial yearChanges (+/-) in available cash during the year (net cash generation)

80

CASH FLOW STATEMENT

Year 2009 Year 2008

15,497,625 11,465,065

698,561 980,635 5,460,113 6,678,478 1,492,196 1,642,378

(1,985,892) (1,802,585)(1,025,339) (5,077,923)

2,156,358 (9,321,939)0 94,088

3,227,113 808,955 (18,260) (39,604)257,380 1,271,383

(1,405,248) (499,275)24,354,607 6,199,656

36,675,172 43,236,32415,787,163 (24,568,407)(1,230,380) 194,494

(16,777,524) (24,342,450)(16,819,219) 38,527,187

79,860 (139,961)42,069,679 39,106,843

(39,794,341) (6,763,743)(7,655,919) 0

8,800,447 4,764,036 (961,456) (866,875)(384,012) 0

0 018,260 39,604

(5,116,661) (1,183,000)1,534,182 3,682,320

(43,559,499) (327,658)

(378,464) (6,138)(1,596,463) (4,813,127)

0 (4,200,000)2,128,927 (592,874)

154,000 (9,612,139)

(1,093,708) (1,407,831)(1,170) (136,703)38,924 0

(2,391,775) 27,622,511

77,257,778 49,635,267 74,866,003 77,257,778

(2,391,775) 27,622,511

APPENDICES

83

APPENDIX A

List of consolidated companies adopting the line-by-line method Pursuant to Art. 26 of Legislative Decree 127/91(Art. 38, sub-section 2, point a) of Leg. Decree 127/91)

Corporate Name

Rizzani de Eccher Spa

Codest International Srl

Consorzio Codest Engineering

Domex Sviluppo Immobiliare Srl

Sicea Spa

Cortelicini Srl

Iride Srl

Deal Srl

Metrobus Scarl

Rizzani de Eccher Canada Inc.*

Rizzani de Eccher Doo

Athesis Srl

Codest Kazakhstan LLP **

Rizzani de Eccher Ireland Ltd ***

Codest Srl

Rizzani de Eccher RAK FZ-LLC

Gabi Srl

Rizzani de Eccher Matta Sarl

Rizzani de Eccher Usa****

de Eccher Agricola Srl

* The 50% participation in RSL JV is consolidated in the financial statements of Rizzani de Eccher Inc. (Canada)** Subsidiary company of Codest International Srl*** Subsidiary company of Codest International Srl**** Subsidiary company controlled with Deal Srl

Based in Currency Share Direct Direct capital ownership % ownership %

2009 2008

Pozzuolo del Friuli (UD) Euro 20,000,000 parent company parent company

Pozzuolo del Friuli (UD) Euro 10,400 98.00% 98.00%



Vigonza (PD) Euro 600,000 75.00% 75.00%





Vancouver (CDN) CAD 100 100.00% 100.00%

Rijeka (HR) HRK 20,000 90.00% 90.00%


Almaty (KZ) KZT 1,000,000 100.00% 100.00%

Dublin (IRL) Euro 100,000 51.00% 51.00%

Pavia di Udine (UD) Euro 15,600 100.00% 66.67%

Ras al Khaimah (EAU) AED 10,000,000 100.00% 100.00%


Beirut (LIB) LP 150,000,000 51.00% -

Miami (USA) USD 3,010,090 50.60% -

Rivignano (UD) Euro 27,375 59.33% 6.13%

APPENDIX B

List of consolidated companies adopting the proportional methodPursuant to Art. 37 of Legislative Decree 127/91(Art. 38, sub-section 2, point b) of Leg. Decree 127/91)

Corporate Name

VSL - Rizzani de Eccher JV

Consorzio Mantegna

Treviso Maggiore Srl

San Giorgio Srl

VFR Ltd

Based in Currency Share Direct Direct capital ownership % ownership %

2009 2008

Berna (CH) CHF 100,000 45.00% 45.00%

Vigonza (PD) Euro 50,000 28.00% 28.00%

Ponzano Veneto (TV) Euro 12,000 33.33% 33.33%

Mogliano Veneto (TV) Euro 10,000 50.00% 50.00%

Cipro CYP 5,000 33.33% 33.33%

84

APPENDIX C

List of subsidiary and associated companies consolidated by the equity method(Art. 38, sub-section 2, point c) of Leg. Decree 127/91)

Corporate Name


Associated company through Deal Srl

Futura Srl

Based in Currency Share Direct Groupcapital ownership % ownership %


Padova Euro 100,000 - 30.58%

Brescia Euro 2,500,000 20.00% 20.00%

List of subsidiary and associated companies under the cost method(Art. 38, sub-section 2, point d) of Leg. Decree 127/91)

Corporate Name

Consorzio RdE America Centrale

Peloritani Scarl (being liq.)

Palladio Srl

Codruss

Borgo Padova Scarl

Store 26 Scarl

Safau Iniziative Srl

Prospettive Immobiliari Srl (being liq.)

Variante di Valico Scarl (being liq.)

Borgo Sole Spa

Sinedil Srl

Risalto Srl (being liq.)

Rizzani de Eccher UK Ltd

Volturno Scarl in liquidazione

Portocittà Srl

Based in Currency Share Direct Group Reference jurisprudencecapital ownership ownership

% %

Pozzuolo del Friuli (UD) Euro 53,000 98.42% 99.97% Art. 28 sub. 2 point a) Leg. Decree 127/91


Udine Euro 10,200 50.00% 99.00% Art. 28 sub. 2 point a) Leg. Decree 127/91

Moscow RUB 55,000 - 98.42% Art. 28 sub. 2 point a) Leg. Decree 127/91

Padova Euro 10,000 - 37.50% Art. 28 sub. 2 point a) Leg. Decree 127/91

Vicenza Euro 10,000 50.00% 50.00% Art. 28 sub. 2 point a) Leg. Decree 127/91


Trieste Euro 50,000 60.00% 60.00% Art. 28 sub. 2 point a) Leg. Decree 127/91

Rome Euro 90,000 33.33% 33.33% Art. 28 sub. 2 point a) Leg. Decree 127/91

Padova Euro 2,000,000 10.00% 17.50% Art. 28 sub. 2 point a) Leg. Decree 127/91

Trento Euro 50,000 50.00% 99.00% Art. 28 sub. 2 point a) Leg. Decree 127/91

Rome Euro 88,917 33.33% 33.33% Art. 28 sub. 2 point a) Leg. Decree 127/91

London GBP 50,000 100.00% 100.00% Art. 28 sub. 2 point a) Leg. Decree 127/91


Trieste Euro 100,000 25.00% 25.00% Art. 28 sub. 2 point a) Leg. Decree 127/91

85

APPENDIX D

Schedule of intangible assets

Start-up and expansion expensesAthesis Srlde Eccher Agricola SrlDomex Sviluppo Immobiliare SrlIride SrlSan Giorgio SrlTreviso Maggiore SrlSub- total

R&D and advertising costsDeal SrlSub- total

Industrial patent rights and intellectual property rightsSicea SpaSub- total

Concessions, licenses, trademarks and similar rightsSub- total

GoodwillRizzani de Eccher SpaSub- total

Others Athesis SrlCodest Kazakhstan LLPde Eccher AgricolaRizzani de Eccher SpaRizzani de Eccher Matta - SarlRizzani de Eccher Rak FZ LLCRizzani de Eccher USA Inc.San Giorgio SrlSicea SpaTreviso Maggiore SrlSub- total

Total intangibles assets Start-up and expansion expensesR&D and advertising costsIndustrial patent rights and intellectual property rightsConcessions, licenses, trademarks and similar rightsGoodwillOthers

Total

31.12.2008 Changes in Increments Currency Amortisation 31.12.2009consolidation (decreases) translation

gains (losses)

880 - 1,200 - (740) 1,340 - 2,540 - - (508) 2,032

1,326 - - - (663) 663 680 - - - (340) 340 465 - - - (465) -

- - 140 - (70) 70 4,011 2,540 1,340 - (2,786) 4,445

- - - - - - - - - - - -

1,705 - - - (1,159) 546 1,705 - - - (1,159) 546

- - - - - -

431,900 - (31,900) - (100,000) 300,000 431,900 - (31,900) - (100,000) 300,000

1,200 - (1,200) - - - 1,443 - (537) - - 906

- 478 - - (239) 239 609,994 319,444 806,855 - (308,315) 1,427,978

- 14,225 - - - 14,225 133,507 - 46,303 4,018 (113,560) 70,268

- 47,325 - - - 47,325 1,172 - - - (578) 594

17,610 - - - (17,610) - 321,933 - 136,577 - (174,565) 283,945

1,086,859 381,472 987,998 4,018 (614,867) 1,845,480

4,011 2,540 1,340 - (2,786) 4,446 - - - - - -

1,705 - - - (1,159) 546 - - - - - -

431,900 - (31,900) - (100,000) 300,000 1,086,859 381,472 987,998 4,018 (614,867) 1,845,480

1,524,477 384,012 957,438 4,018 (718,812) 2,150,472

86

APPENDIX E

Schedule of fixed assets

Land and buildingsRizzani de Eccher SpaSicea Spade Eccher Agricola SrlRizzani de Eccher USA Inc.Sub-total

Plant and machineryCodest International SrlCodest Kazakhstan LLPConsorzio Codest EngineeringDeal Srlde Eccher Agricola SrlGabi SrlMetrobus ScarlRizzani de Eccher SpaRizzani de Eccher USA Inc.Sicea SpaTreviso Maggiore SrlVFR LtdSub-total

Industrial and commercial equipmentCodest International SrlConsorzio Codest EngineeringDeal Srlde Eccher Agricola SrlGabi SrlMetrobus ScarlRizzani de Eccher - RdE Matta SarlRizzani de Eccher SpaRizzani de Eccher USA Inc.Sicea SpaTreviso Maggiore SrlSub-total

Other assetsCodest International SrlConsorzio Codest EngineeringDeal Srlde Eccher Agricola SrlGabi SrlMetrobus ScarlRizzani de Eccher Rak FZ LLCRizzani de Eccher - Matta SarlRizzani de Eccher SpaRizzani de Eccher USA Inc.Sicea SpaTreviso Maggiore SrlVFR LtdSub-total

Fixed assets under construction and advance paymentsDeal SrlRizzani de Eccher Spa Sub-total

Total tangible fixed assets Land and buildingsPlant and machineryIndustrial and commercial equipmentOther assetsFixed assets under construction and advances

Total

31.12.2008 Changes in Increases Decreases 31.12.2009consolidation

9,665,523 1,795,573 21,636,866 - 33,097,962 478,789 - - - 478,789

- 4,031,297 209,783 - 4,241,080 - - 607,897 - 607,897

10,144,312 5,826,870 22,454,546 - 38,425,728

5,282,005 - 1,989,809 (1,803,798) 5,468,016 9,676,532 - 165,191 (4,073,583) 5,768,140

155,839 - - (47,601) 108,238 1,741,063 - 33,075 (285,882) 1,488,256

- 2,139,098 29,815 - 2,168,913 - 371,184 (322,855) - 48,329

13,318 - 1,100 - 14,418 10,074,624 - 6,765,586 (1,475,320) 15,364,890

- - 3,783,845 (614,109) 3,169,736 3,149 - 562 (1,070) 2,641

795,399 - 75,168 - 870,567 2,401,620 - - (2,032,096) 369,524

30,143,550 2,510,282 12,521,296 (10,333,459) 34,841,670

2,320,704 - 183,821 (894,654) 1,609,871 29,647 - 48,449 (10,546) 67,550 99,604 - 9,974 - 109,578

- 12,621 18,058 (12,621) 18,058 - 8,000 - - 8,000

34,203 - - - 34,203 - 60,343 - - 60,343

4,190,885 - 3,972,169 (956,228) 7,206,826 - 41,702 309,458 - 351,160

22,628 - - - 22,628 48,090 - - - 48,090

6,775,760 122,666 4,541,929 (1,874,049) 9,536,306

364,513 - 8,567 (130,578) 242,502 17,471 - 2,079 (913) 18,637 62,623 - - - 62,623

- 3,711 - - 3,711 - 178 - - 178

6,630 - - - 6,630 27,974 - 17,899 (937) 44,936

- 10,230 - - 10,230 1,616,316 - 219,555 (202,633) 1,633,238

- 8,703 27,915 - 36,618 290,257 - - (33,575) 256,682

24,620 - 555 - 25,175 149,664 - - (149,664) -

2,560,068 22,822 276,570 (368,636) 2,341,159 - - - -- - - -- - - - - - - - - - - - - - -

10,144,312 5,826,870 22,454,546 - 38,425,728 30,143,550 2,510,282 12,521,296 (10,333,459) 34,841,670

6,775,760 122,666 4,541,929 (1,874,049) 9,536,306 2,560,067 22,822 276,570 (368,636) 2,341,159

- - - - -

49,623,692 8,482,640 39,794,341 (12,576,144) 85,144,865

Note: the effect of currency translation is included in the Increase/Decrease columns

87

APPENDIX E

Schedule of fixed assets

Land and buildingsRizzani de Eccher SpaSicea Spade Eccher Agricola SrlRizzani de Eccher USA Inc.Sub-total

Plant and machineryCodest International SrlCodest Kazakhstan LLPConsorzio Codest EngineeringDeal Srlde Eccher Agricola SrlGabi SrlMetrobus ScarlRizzani de Eccher SpaRizzani de Eccher USA Inc.Sicea SpaTreviso Maggiore SrlVFR LtdSub-total

Industrial and commercial equipmentCodest International SrlConsorzio Codest EngineeringDeal Srlde Eccher Agricola SrlGabi SrlMetrobus ScarlRizzani de Eccher - RdE Matta SarlRizzani de Eccher SpaRizzani de Eccher USA Inc.Sicea SpaTreviso Maggiore SrlSub-total

Other assetsCodest International SrlConsorzio Codest EngineeringDeal Srlde Eccher Agricola SrlGabi SrlMetrobus ScarlRizzani de Eccher Rak FZ LLCRizzani de Eccher - Matta SarlRizzani de Eccher SpaRizzani de Eccher USA Inc.Sicea Spa

Treviso Maggiore SrlVFR LtdSub-total

Fixed assets under construction and advance paymentsDeal SrlRizzani de Eccher Spa Sub-total

Total tangible fixed assets Land and buildingsPlant and machineryIndustrial and commercial equipmentOther assetsFixed assets under construction and advances

Total

Accumulated Changes in Depreciation Draw-down Accumulated Net depreciation consolidation for the 2009 depreciation total

31.12.2008 year 2009 31.12. 2009 2009

(2,069,044) - (523,488) - (2,592,532) 30,505,430 (138,606) - (12,040) - (150,646) 328,143

- - - - - 4,241,080 - - (13,974) - (13,974) 593,923

(2,207,650) - (549,502) - (2,757,152) 35,668,576

(2,206,622) - (426,485) 557,358 (2,075,749) 3,392,267 (3,288,209) - (1,192,631) 1,349,695 (3,131,145) 2,636,995

(50,536) - (10,824) 18,213 (43,147) 65,091 (872,034) - (106,148) - (978,182) 510,074

- (773,975) (101,518) - (875,493) 1,293,420 - - - - - 48,329

(10,674) - (1,589) - (12,263) 2,155 (7,905,214) - (795,931) 399,476 (8,301,669) 7,063,221

- - (114,782) - (114,782) 3,054,954 (2,110) - (369) 941 (1,538) 1,103

(256,368) - (95,812) - (352,180) 518,388 (1,670,481) - (184,762) 1,485,719 (369,524) -

(16,262,248) (773,975) (3,030,851) 3,811,402 (16,255,672) 18,585,997

(1,433,015) - (182,932) 493,378 (1,122,569) 487,302 (21,386) - (14,944) (14,450) (50,780) 16,770 (77,551) - (7,849) - (85,400) 24,178

- (2,366) (1,128) 2,366 (1,128) 16,930 - - - - - 8,000

(24,818) - (2,682) - (27,500) 6,703 - - - - - 60,343

(2,970,309) - (697,921) 407,976 (3,260,254) 3,946,572 - (39,966) (30,195) - (70,161) 280,999

(20,611) - (1,367) - (21,978) 650 (22,239) - (8,199) - (30,438) 17,652

(4,599,929) (42,332) (947,217) 889,270 (4,670,208) 4,866,099

(254,091) - (28,274) 105,964 (176,401) 66,101 (8,390) - (2,605) 437 (10,558) 8,079

(62,111) - (146) - (62,257) 366 - (2,927) (112) - (3,039) 672 - - - - - 178

(5,375) - (837) - (6,212) 418 (466) - (7,766) - (8,232) 36,704

- - - - - 10,230 (1,272,540) - (156,260) 102,325 (1,326,475) 306,763

- (7,487) (5,113) - (12,600) 24,017 (264,335) - (9,225) 33,575 (239,985) 16,698

(3,829) - (3,394) - (7,223) 17,952 (130,916) - - 130,916 - -

(2,002,053) (10,414) (213,732) 242,301 (1,852,982) 488,178

- - - - - - - - - - - - - - - - - -

(2,207,658) - (549,502) - (2,757,152) 35,668,576 (16,262,248) (773,975) (3,030,851) 3,811,402 (16,255,672) 18,585,997

(4,599,929) (42,332) (947,217) 889,270 (4,670,208) 4,866,099 (2,002,053) (10,414) (213,732) 242,301 (1,852,982) 488,178

- - - - - -

(25,071,881) (826,721) (4,741,301) 4,942,972 (25,536,015) 59,608,850

88

APPENDIX G

Reconciliation between parent company and consolidated accounts

Thousand of Euro

Statutory Financial Statements of the Parent Company

Consolidation off-set of equity investment difference between net assets value and book value of investments pro rata share of profit of consolidated companieswrite-downs / write-ups on investments in consolidated companiescurrency translation gains (losses)

Off-set of related-party transactionsoff-set of intercompany capital gain and profit dividend distribution including currency translation gain or losses

Adjustment due to consolidation accounting principlestranslation gains (losses) on foreign branch balances

Other adjustmentsvaluation of investments due to application of equity method

Shareholder's equity and net profit for the Group

Minorities

Consolidated shareholders' equity and profit for the financial period

Shareholders' Profit Shareholders' Profitequity (losses) equity (losses)

2009 2009 2008 2008

63,485 15,103 48,382 15,788

4,048 (31) 1,979 -6,057 6,057 7,763 7,763

- (2,719) - (2,693)20 (161) 21 -

(1,052) (129) (917) (194)- (3,215) - (9,532)

(2,530) - (1,048) -

1,670 593 1,077 333

71,698 15,498 57,257 11,465

4,333 699 1,505 981

76,031 16,197 58,762 12,446

APPENDIX F

Schedule of changes in shareholders' equity

Situation as of 31st December 2007

Allocation of profit for the year 2007 Dividend and distributionChanges in consolidation Translation gains (losses) on foreign branch balances Gains (losses) on foreign currency translationProfit (losses) for the financial year 2008


Allocation of profit for the year 2008 Increase in Share Capital Dividends distribution Change in consolidation Translation gains (losses) on foreign branch balances Gains (losses) on foreign currency translation Profit (losses) for the financial year 2009


Currency Profit Share Legal Consolidation translation Other (Losses) Total

Capital Reserve Reserve reserve Reserves for the year

10,000,000 1,273,366 32,180 158,070 17,700,549 23,171,982 52,336,147

- 726,132 - - 22,445,850 (23,171,982) - - - - - (5,000,000) - (5,000,000)- - - - - - - - - - - (1,407,830) - (1,407,830)- - - (136,703) - - (136,703)- - - - - 11,465,065 11,465,065

10,000,000 1,999,498 32,180 21,367 33,738,569 11,465,065 57,256,678

- 502 - - 11,464,563 (11,465,065) - 10,000,000 - - - (10,000,000) - -

- - - - - - - - - 34,925 - 3,999 - 38,924 - - - - (1,093,708) - (1,093,708)- - - (1,170) - - (1,170)- - - - - 15,497,625 15,497,625

20,000,000 2,000,000 67,105 20,197 34,113,423 15,497,625 71,698,349

STATUTORY FINANCIAL STATEMENTS OF THE PARENT COMPANY

90

Assets

A Subscribed capital unpaidShares not called upShares already called up

Total receivable from shareholders for capital stock

B Fixed assets

I) Intangible assets1 Start-up and expansion expenses2 R&D and advertising costs3 Industrial patent rights and intellectual property rights4 Concessions, licenses, trademarks and similar rights5 Goodwill6 Intangible fixed assets under construction and advances7 Others

Total intangibles assets

II) Tangible fixed assetsLand and buildings- land and building accumulated depreciation

1 Land and buildingsPlant and machinery- plant and machinery accumulated depreciation

2 Plant and machinery Industrial and commercial equipment- industrial and commercial equipment accumulated depreciation

3 Industrial and commercial equipmentOther assets- other assets accumulated depreciation

4 Other assets5 Fixed assets under construction and advances

Total tangible fixed assets

III) Long term investments1 Equity investments in:

a) subsidiary companiesb) associated companiesd) other companiesTotal

2 Long term receivables/loans due from:a) subsidiary companiesb) associated companiesc) parent companyd) othersTotal

3 Securities and debentures4 Treasury shares

Total long-term investments

Total fixed assets

Change31.12.2009 31.12.2008 YoY

0 0 00 0 0

0 0 0

0 0 00 0 00 0 00 0 0

300,000 431,900 (131,900)0 0 0

1,140,478 609,994 530,4841,440,478 1,041,894 398,584

31,302,389 9,665,523 21,636,866(2,592,532) (2,069,044) (523,488)28,709,857 7,596,479 21,113,37815,629,471 10,233,784 5,395,687(8,480,650) (7,955,429) (525,221)7,148,821 2,278,355 4,870,4667,206,826 4,187,361 3,019,465

(3,260,254) (2,966,785) (293,469)3,946,572 1,220,576 2,725,9961,633,238 1,616,315 16,923

(1,326,475) (1,272,539) (53,936)306,763 343,776 (37,013)

0 0 040,112,013 11,439,186 28,672,827

11,497,241 5,833,089 5,664,1521,692,102 506,153 1,185,949

230,712 1,884,559 (1,653,847)13,420,055 8,223,801 5,196,254

1,951,085 2,065,495 (114,410)69,605 569,605 (500,000)

0 0 0542,103 754,014 (211,911)

2,562,793 3,389,114 (826,321)240,414 240,414 0

0 0 016,223,262 11,853,329 4,369,933

57,775,753 24,334,409 33,441,344

STATUTORY BALANCE SHEET

91

Assets

C Current assets

I) Inventories1 Raw and ancillary materials and consumables2 Works in progress and semi-finished products3 Works in progress on order4 Finished products and goods5 Advances

Total inventories

II) Accounts receivable1 Receivables due from customers

a) amounts falling due within 12 monthsb) amounts falling due beyond 12 monthsTotal

2 Receivables due by subsidiary companies3 Receivables due by associated companies4 Receivables due by parent company4bis Tax credits4ter Deferred tax assets5 Others

Total accounts receivable

III) Short-term financial assets1 Investments in subsidiary companies2 Investments in associated companies3 Investments in parent company4 Other investments5 Treasury shares6 Other securitiesTotal short term financial assets

IV) Cash and cash equivalents1 Bank and postal deposits2 Cheques3 Cash in hand

Total cash and cash equivalent

Total current assets

D Accrued income and pre-paid expenses

Total assets

Change31.12.2009 31.12.2008 YoY

1,056,269 772,984 283,2854,375,304 10,434,126 (6,058,822)5,021,884 5,562,335 (540,451)3,741,055 4,312,830 (571,775)3,831,675 3,401,680 429,995

18,026,187 24,483,955 (6,457,768)

104,287,258 123,026,583 (18,739,325)0 0 0

104,287,258 123,026,583 (18,739,325)2,867,444 8,216,040 (5,348,596)5,604,616 7,043,299 (1,438,683)

2,028 0 2,0281,903,476 4,023,498 (2,120,022)

0 0 01,324,009 1,418,492 (94,483)

115,988,831 143,727,912 (27,739,081)

0 0 00 0 00 0 00 0 00 0 00 0 00 0 0

50,916,843 49,583,302 1,333,5410 0 0

92,473 87,692 4,78151,009,316 49,670,994 1,338,322

185,024,334 217,882,861 (32,858,527)

1,652,728 1,016,302 636,426

244,452,815 243,233,572 1,219,243

92

Liabilities

A Shareholders’ equityI Share capitalII Additional paid-up capitalIII Revaluation reserveIV Legal reserveV Statutory reservesVI Reserve for treasury sharesVII Other reservesVIII Profits (losses) carried forwardIX Group profits (losses) for the year

Total shareholders' equity

B Provision for contingencies and risks1 Provisions for severance payments2 Provision for tax, incl. deferred tax.3 Other provisions

Total provisions for contingencies and risks

C Employees' severance indemnity

D Accounts payable1 Bonds maturing within current year2 Convertible bonds maturing within current year3 Amounts due to shareholders for loans4 Amounts due to banks

a) falling due within 12 monthsb) falling due beyond 12 monthsTotal

5 Amounts due to other financial companies6 Advance payments7 Trade payables8 Promissory notes9 Payables to subsidiary companies10 Payables to associated companies11 Payables to parent companies12 Tax payables13 Payables to social security agencies14 Other payables

Total accounts payable

E Accrued expenses and deferred income

Total shareholders' equity and liabilities

Change31.12.2009 31.12.2008 YoY

20,000,000 10,000,000 10,000,0000 0 00 0 0

2,000,000 1,999,498 5020 0 00 0 0

26,382,017 20,594,392 5,787,6250 0 0

15,102,626 15,788,126 (685,500)

63,484,643 48,382,016 15,102,627

0 0 0241,362 464,319 (222,957)

0 0 0

241,362 464,319 (222,957)

2,977,761 3,005,390 (27,629)

0 0 00 0 00 0 0

926,782 1,764,655 (837,873)4,704,135 2,630,437 2,073,6985,630,917 4,395,092 1,235,825

0 0 043,333,461 44,392,907 (1,059,446)

104,140,463 112,454,274 (8,313,811)0 0 0

10,378,535 13,606,032 (3,227,497)1,143,088 1,030,684 112,404

195,359 4,000,000 (3,804,641)2,161,447 4,075,649 (1,914,202)1,077,747 869,130 208,6179,536,496 6,514,499 3,021,997

177,597,513 191,338,267 (13,740,755)

151,536 43,580 107,956

244,452,815 243,233,572 1,219,243

STATUTORY BALANCE SHEET

93

Memorandum accounts

1 Guarantees a) Guarantees provided in favour of third parties b) Guarantees issued by third parties on behalf of Group companies

Total memorandum accounts

Change31.12.2009 31.12.2008 YoY

95,251,321 73,593,777 21,657,544132,383,171 105,069,579 27,313,592

227,634,492 178,663,356 48,971,136

94

A Revenues1 Revenues from sales and services2 Changes in proprietary works in progress,

semi-finished and finished products3 Changes in works in progress on order4 Increases in fixed assets from in-house works5 Other revenues and income

Total revenues

B Cost of goods and services 6 Raw and ancillary materials, consumables and goods7 Services8 Rents and leases9 Salaries, wages and employees’ remunerations:

a) wages and salariesb) social securityc) employee severance indemnityd) pension and similare) other costsTotal employees' expenses

10 Amortization, depreciation and write-downs:a) amortization of intangible assetsb) depreciation of tangible fixed assetsc) other write-downs of fixed assetsd) write-downs of current receivables and liquid instrumentsTotal amortization, depreciation and write-downs

11 Changes in raw and ancillary materials, consumables and goods inventories

12 Provisions for risk, contingencies and other charges13 Other provisions14 Other operating expenses

Total cost of goods and services

Operating income (EBIT) (A-B)

C Financial income and expenses15 Income from investments16 Other financial income from:

a) receivables held as financial fixed assetsb) securities held as financial fixed assetsc) securities held as current assetsd) income other than aboveTotal

17 Interest expenses and financial charges 17bis Foreign currency translation gains and losses

Total financial income and expenses


276,288,495 313,827,453 (37,538,958)(6,630,597) 1,192,651 (7,823,248)

(3,206,542) 5,092,684 (8,299,226)778,803 568,934 209,869

2,715,160 1,787,194 927,966

269,945,319 322,468,916 (52,523,597)

(8,387,096) (11,821,578) 3,434,482(218,097,315) (266,412,875) 48,315,560

(1,175,714) (779,668) (396,046)

(16,363,203) (15,196,781) (1,166,422)(4,685,274) (4,730,927) 45,653

(964,002) (968,573) 4,5710 0 0

(2,685,074) (2,554,074) (131,000)(24,697,553) (23,450,355) (1,247,198)

(376,371) (382,598) 6,227(2,196,947) (1,292,609) (904,338)

0 0 0(500,000) (650,000) 150,000

(3,073,318) (2,325,207) (748,111)

345,525 649,947 (304,422)0 0 00 0 0

(3,193,710) (3,599,166) 405,456

(258,279,181) (307,738,902) 49,459,721

11,666,138 14,730,014 (3,063,876)

6,204,037 8,355,286 (2,151,249)

18,625 37,623 (18,998)0 0 00 0 0

256,398 1,729,020 (1,472,622)275,023 1,766,643 (1,491,620)

(381,058) (806,441) 425,3831,999,644 (3,568,369) 5,568,013

8,097,646 5,747,119 2,350,527

STATUTORY INCOME STATEMENT

95

D Valuation adjustments on investment18 Revaluations:

a) equity investmentsb) financial fixed assetsc) securities held as current assetsTotal revaluations

19 Write-downs:a) equity investmentsb) financial fixed assetsc) securities held as current assetsTotal write-downs

Total valuation adjustments of investment

E Extraordinary items20 Income21 Expenses

Total extraordinary items

Earnings before income tax

22 Income taxes for the yeara) current taxesb) deferred taxesTotal

Net profit for the year


0 0 00 0 00 0 00 0 0

(90,788) (353,496) 262,7080 0 00 0 0

(90,788) (353,496) 262,708

(90,788) (353,496) 262,708

1,774,912 144,176 1,630,736(178,711) (849,959) 671,248

1,596,201 (705,783) 2,301,984

21,269,197 19,417,854 1,851,343

(6,361,309) (5,904,269) (457,040)194,738 2,274,541 (2,079,803)

15,102,626 15,788,126 (685,500)

96

© Rizzani de Eccher SpaGraphic design: PolystudioFrancesco Messina with Francesca ZucchiPhotos: Archive Rizzani de Eccher, Printed: GFP.it June 2010

GRUPPO DE ECCHER 2009 · 2010-07-02 · Rizzani de Eccher S.p.A. Via Buttrio, ... Elevated Light...

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Transcript of GRUPPO DE ECCHER 2009 · 2010-07-02 · Rizzani de Eccher S.p.A. Via Buttrio, ... Elevated Light...