gruppo de eccher 2009 · 2010-07-02 · rizzani de eccher s.p.a. via buttrio, ... elevated light...
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Rizzani de Eccher S.p.A.
Via Buttrio, Frazione Cargnacco
33050 Pozzuolo del Friuli (UD) Italy
Tel. +39 0432 6071
Fax +39 0432 522336
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
Rizzani de Eccher S.p.A.
Via Buttrio, Frazione Cargnacco
33050 Pozzuolo del Friuli (UD) Italy
Tel. +39 0432 6071
Fax +39 0432 522336
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
Shareholders’ equity
Net profit (loss)
Cash flow (*)
Operating income (EBIT)
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
Shareholders’ equity
Net profit (loss)
Cash flow (*)
Operating income (EBIT)
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
Shareholders’ equity
Net profit (loss)
Cash flow (*)
Operating income (EBIT)
* 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
Shareholders’ equity
Net profit (loss)
Cash flow (*)
Operating income (EBIT)
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
Shareholders’ equity
Net profit (loss)
Cash flow (*)
Operating income (EBIT)
Revenues
Shareholders’ equity
Net profit (loss)
Cash flow (*)
Operating income (EBIT)
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)
11
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)
14
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
General Building Italy 89,800,000 42.00
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
Engineering and Equipment
Nigeria 3,600,000 100.00
Parmalat FactoryMoscow
General Building Russia 5,900,000 100.00
Perfetti Confectionery FactoryMilan
General Building Italy 14,000,000 100.00
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
General Building Italy 102,400,000 57.39
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
Engineering and Equipment
Bridge Construction Equipment for MIC Miami Intermodal Centre
1,700,000 100.00USA
Deck Launching Equipment for Dulles MetrorailWashington DC
Engineering and Equipment
USA 5,000,000 100.00
2424
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
26
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
29
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.
31
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
34
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.
37
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
43
44
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
Notes to the 2009 Annual Report
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
Balance Sheet Analysis
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):
Peloritani Scarl (being liquidated)
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
Notes to the 2009 Annual Report
59
Balance Sheet Analysis
31.12.2009
3,418
108,700
196,967
-
309,085
31.12.2008
2,559
-
108,137
23,480
134,176
de Eccher Interiors Srl
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
Peloritani Scarl (being liquidated)
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:
Notes to the 2009 Annual Report
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:
Balance Sheet Analysis
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.
.
Balance Sheet Analysis
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
Middle East & Africa
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
Peloritani Scarl (being liquidated)
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
Middle East & Africa
North and Central America
Far East
Total
45.124
18,769
73,281
1,383
595
139,152
Notes to the 2009 Annual Report
10. Payables to associated companies. These items include
payables to non-consolidated associated companies as a
consideration for works executed.
de Eccher Interiors Srl
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
Balance Sheet Analysis
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-
Balance Sheet Analysis
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
Notes to the 2009 Annual Report
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
ChangeYear 2009 Year 2008 YoY
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%
Pozzuolo del Friuli (UD) Euro 53,000 98.42% 98.42%
Pozzuolo del Friuli (UD) Euro 100,000 75.00% 75.00%
Vigonza (PD) Euro 600,000 75.00% 75.00%
Pozzuolo del Friuli (UD) Euro 98,000 98.00% 98.00%
Pozzuolo del Friuli (UD) Euro 10,200 60.00% 60.00%
Pozzuolo del Friuli (UD) Euro 46,800 98.00% 98.00%
Pozzuolo del Friuli (UD) Euro 10,000 64.92% 64.92%
Vancouver (CDN) CAD 100 100.00% 100.00%
Rijeka (HR) HRK 20,000 90.00% 90.00%
Pozzuolo del Friuli (UD) Euro 10,000 51.00% 51.00%
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%
Pozzuolo del Friuli (UD) Euro 42,702 100.00% 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
de Eccher Interiors Srl
Associated company through Deal Srl
Futura Srl
Based in Currency Share Direct Groupcapital ownership % ownership %
Pozzuolo del Friuli (UD) Euro 100,000 20.00% 20.00%
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
Pozzuolo del Friuli (UD) Euro 10,000 64.15% 64.15% 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
Pozzuolo del Friuli (UD) Euro 10,000 100.00% 100.00% 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
Pozzuolo del Friuli (UD) Euro 10,000 60.00% 60.00% 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
Situation as of 31st December 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
Situation as of 31st December 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
ChangeYear 2009 Year 2008 YoY
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
ChangeYear 2009 Year 2008 YoY
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