BALANCE SHEET AND REPORTS AT 31 DECEMBER 2008
SUMMARY
Statutory details and executives
4
Management’s report
14
Balance sheet at 31 December 2008
43
Notes to the financial statements
48
Board of internal auditors’ report
97
Auditor’s report
101
STATUTORY DETAILS AND EXECUTIVES
STATUTORY DETAILS AND EXECUTIVES
Board of Directors
President:
Franco Susini
Honorary President:
Gian Luca Cerrina Feroni
Vice president:
Luigi Minischetti
Members of the Board:
Marco Bonciolini
Fabrizio Buzzatti (up to April 3rd, 2009)
Marco Fontanelli
Simone Montini
Mario Primicerio
Alessandro Sani
Antonio Terribile
Board of Internal Auditors (appointed on May 7th, 2009)
President:
Claudio Durazzi
Effective Auditors:
Andrea Conti
Matteo Busico
Substitute Auditors:
Gianpaolo Taverna
Antonino Restuccia
MANAGEMENT
CEO:
Fabrizio Pucciarelli
Financial and Administration Director:
Emanuele Noschese
Technical Directors:
Amedeo Andreini
Riccardo Petruzzelli
Fabrizio Pucciarelli
Auditor:
Price Water House Coopers
SHAREHOLDERS’ MEETING (ABSTRACT)
ORDINARY SHAREHOLDERS’ MEETING HELD ON 7 MAY 2009 (ABSTRACT)
Agenda
1) Balance Sheet as at Dec. 31, 2008: related and consequent resolutions.
2) Renewal of the Board of Auditors after mandate expiration: related and consequent resolutions.
3) Meeting’s determinations concerning the number of members of the Board of Directors: related and
consequent resolutions.
During the Ordinary Shareholders’ Meeting held on 7 May 2009:
a) the Balance Sheet as at December 31, 2008 was approved;
b) the year’s net profit – consisting of Euro 901,453 – was allocated as specified below:
- € 46,000 to the Legal Reserve
- € 855,453 to the item “Other Reserves”
c) the amount of Euro 3,283,966, previously allocated to the “Previous Years’ Profits”, was allocated to
the item “Other Reserves”.
When all the points in the Agenda had been discussed, the Meeting established that the Shareholders’
Equity (net worth of the company) was composed as follows:
Euro 15,000,000
Legal Reserve
Share Capital
371,000
Other Reserves
4,139,419
Total SNet Worth
19,510,419
d) the new Board of Auditors was appointed for the three-year period 2009-2011.
“QUALITY MANAGEMENT SYSTEM” CERTIFICATE
10
ITALIAN CERTIFICATE TO PERFORM PUBLIC WORKS
11
14
MANAGEMENT’S REPORT
Dear shareholders,
The financial year 2008 closes with a net profit of € 901,453, after absorbing – inter alias – charges
amounting to € 5,905,936 out of which € 331,902 for depreciation, € 756,922 for provisions of risks, €
835,611 for provisions of bad debts, € 3,152,576 for net financial charges and € 828,925 for company
income taxes.
The operating result shows a 18% growth in production as compared to the previous year, with a total
amount of Euro 147.8 million (see the section “Summary of economic data”). But production rises to
about Euro 168.8 million considering aggregate data, i.e. including the production of subsidiaries and
foreign SPVs (as commented on in the “Partnerships and collective works” section).
In 2008, a remarkable increase was recorded in the contribution margin in absolute terms (+16% vs
2007), although the net profit was at similar levels due to the greater provisions set aside and to increased financial charges.
These data look even more positive in the light of some additional significant factors, such as the increase
in the order portfolio and the reduction of the bonded debt recorded in the second part of the year. As for
the first factor, the order portfolio exceeded € 1,000 million (+57%), thus laying the basis for stable growth
trends for the next three-year period and positioning the company in countertrend against the global slump
that has been afflicting the world’s economy since the second half of 2008 with many key players lamenting decreasing orders. The latter factor, the reduction in the bonded debt, took place between the second
half of the year and the start of 2009, reaching a figure below € 30 million (about 20% of the turnover).
These results were reached by the Company with the constant implementation by all its corporate functions of the trade and industrial policies developed in compliance with the business plans of the last few
years, particularly focused on the Health sector. In spite of some fall due to the uncertainty and to the
increasing competitiveness of the national and international markets, the corporate mission was confirmed to be oriented towards the development of large PPPs (public-private partnerships) and medical
technologies in Italy and abroad.
The year was therefore characterised by an outstanding commercial activity both in Italy and abroad.
While two important contracts were signed for related project finance operations in the domestic market
(Empoli and Nuoro), three turn-key hospital contracts were awarded to our organisation in Romania
(Ploiesti, Neamnt, and Suceava) and one in the Saint Lucia island (Caribbeans), and medical supply
contracts were concluded in Syria and Greece.
The current scenario, the economic crisis, and the significant increase in the order portfolio call for a
consolidation of our growth, to be achieved with an even more selective look at the market. This implies
developing/selecting higher value-added PPP/PFI (public private partnerships) options in Italy, consolidating foreign markets where Inso is already operating (Greece, Syria, Malta, the Caribbean Area), and
developing the Mediterranean and Middle East markets, which are more financially sound and show
higher development rates (Algeria, Morocco, Libya, Tunisia, Syria, countries of the Gulf region).
Finally, during the period considered in this report Inso completed a reorganisation process that led to
full compliance with its own mission.
15
Commercial policy and job order portfolio
The total amount of orders procured during 2008 equals about € 720 million, almost € 300 million of
which referring to job orders procured abroad, while the remaining amount reflects Italian procurements. Some existing contracts were extended both in Italy and abroad, for a total amount of over € 120
million in procurement.
This important result significantly affected the net order portfolio, which has passed from € 669 million as of
Dec. 31, 2007 to € 1,048 million as of Dec. 31, 2008, as it already includes adjustments made to Venezuela
procurements (- € 80 million due to a political block of new works with foreign entities), the “Passante Ferroviario Alta Velocità” [High-Speed Railway Link] (- € 66 million for a different accounting criterion used to
record works in Ergon Consortium’s accounts), and the Osimo Hospital (- € 47 million due to the cancellation of the concession by the Marche Region, against which we have opposed an appeal).
The analysis of the portfolio shows how the commercial policy of the company successfully pursued
the objectives set in its industrial business plans by focusing on the sector of concessions and turnkey
projects, where the skills and know-how acquired by our Company is in the position to produce the best
results, including in terms of profitability.
16
Job Order Portfolio as at Dec. 31, 2007
€/mln 669.8
Order Portfolio as at Dec. 31, 2008
€/mln 1,048.8
Supplies
€/mln 8.7 (1%)
Supplies
€/mln 30.6 (3%)
Pfi/ppp €/mln
179.8 (27%)
Traditional
Contracts €/mln
481.3 (72%)
Traditional
Contracts €/mln
528.5 (50%)
Pfi/ppp
€/mln 489.3 (47%)
By Contract Type
By Contract Type
In particular, we point out the increasing weight of PFIs and concessions, which passed from 27% in the
2007 order portfolio to 47% in the portfolio of the period at issue. In such a framework, it is worthwhile
highlighting the importance of management, which represents almost 40% of the order portfolio and are
developed over periods that exceed two decades. As a consequence, these positions are a significant
driving force for the company, not to be exhausted within normal job order cycles.
Job Order Portfolio as at Dec. 31, 2007
€/mln 669.8
Building Construction
€/mln 116.5 (16%)
Turnkey €/mln
470.5 (72%)
Management of
Services €/mln
74.1 (11%)
Supplies
€/mln 8.5 (1%)
By Project Type
Order Portfolio as at Dec. 31, 2008
€/mln 1,048.8
Supplies
€/mln 41.5 (4%)
Building Constricion
€/mln 113.5 (11%)
Management
of Services
€/mln 407.6
(39%)
Turnkey €/mln
485.8 (46%)
By Project Type
The latter also significantly affected the portion of the portfolio related to the Health sector, which today
accounts for ¾ of the aggregate amount, with € 780 million.
Job Order Portfolio as at Dec. 31, 2008
€/mln 1,048.8
Other Sectors
€/mln 268.8
(26%)
Health
€/mln 780
(74%)
By Activity Sector
Although the main tenders held abroad have not yet reached the final outcome, the foreign portion
of the portfolio is still above 30%. However, in order to provide a correct picture of the incidence of
foreign orders on the portfolio, we should consider only the data regarding works, that is net of the
management works carried out under the four concession contracts held in Italy. Under this viewpoint,
the portion of foreign job orders reaches a percentage of 55% on the total amount.
Job Order Portfolio as at Dec. 31, 2008
€/mln 1,048.8
Order Portfolio as at Dec. 31, 2008
only works €/mln 640.8
Latin America & Caribbeans 15%
Latin America & Caribbeans 9%
Eastern
Europe 18%
Eastern
Europe 30%
Mediterranean 6%
Italy 45%
Italy 67%
Mediterranean 10%
By Geographical Area
By Geographical Area
It is important to highlight that the 2008 results are also due to the commercial activity carried out by
our Company over the previous year, since many of the campaigns conducted in Italy and abroad during
2007 were concluded with a positive outcome only in 2008, while others will be concluded in 2009,
as in the case of the significant campaigns in Algeria and Chile. The commercial activity was intensely
continued throughout the year considered not only in these last two countries, but also in the markets
where Inso already has a consolidated position (Syria, Greece and Malta) and in new countries, such as
Romania, Saint Lucia and Bahrain.
The main job orders obtained during the year are shown below, together with the major campaigns
developed by our commercial function.
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As regards PFI projects/Concessions in Italy, the Company was awarded two of the four projects submitted to tender inviting authorities in 2007:
• The “Completion of the New S. Giuseppe Hospital of Empoli”, with an expected turnover of about
€ 180 million including the management of services (Inso share),
• The “Restoration and completion of the San Francesco and C. Zonchello Hospitals of Nuoro, San
Camillo di Sorgono and the District Health Centers of Macomer and Siniscola”, with an expected
turnover of about € 150 million including the supply of medical equipment and clinical engineering
services (Inso share).
As regards the other two projects, while the Sassari project financing was cancelled, the one for the “Proton
Therapy Center” in the Mestre Hospital is presently undergoing an appeal process. The outcome of this process, as well as those of the other appeal process started in 2007 regarding the tender for the Concession for
the Development and Management of the Acute Care hospital of Lagonegro (PZ), are expected in 2009.
As for the traditional contracts in the domestic construction sector, we should highlight the awarding of
the contract for the development of electrical, mechanical, and special systems, as well as for a photovoltaic installation, in the warehouses of CNNA (National Non-Food Consortium) of “Coop Italia” in
Prato, for a value of € 7.3 million (Inso share).
The Company has also been engaged in defining already acquired contracts or works started in 2007,
namely:
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• The final definition of the Third Party Financing contract with the Municipality of Urbino for the
development of an RSA (health-care residence);
• The experimental project for the construction of a vegetal oil-powered plant for the generation of
power and heat for the company “Porto Energia” (Harbour Board) of Leghorn, which is still being
examined by the competent authorities.
As regards foreign activities, which significantly affected 2008 acquisitions, the following important
turnkey projects are described:
• The National Hospital of the island of Saint Lucia, in the Lesser Antilles, a project funded by the
European Union within the framework of community programmes aimed at supporting developing
countries, whose contract has been defined for an amount of € 36.5 million;
• The Hospitals of Ploiesti, Suceava, and Neamt in Romania, for an aggregate value of approximately
€ 193 million (Inso share);
while the following new supply contracts were signed for medical technologies:
• the Lattakia Hospital in Syria, for € 10 million;
• the Kerkira and Katerini Hospitals in Greece, for € 9.3 mln and € 8.8 mln, respectively.
Finally, the contracts for a Business Center in Martinique (€ 10.1 mln) and the Tigné Point project in
Malta (€ 9.6 mln) were extended.
As already pointed out, some international calls for tenders are still ongoing, whose outcome is expected in 2009.
In Chile, for the tender being held for the Concession Hospitals, the Inso-Dalkia consortium remained as one
of the four competitors admitted to take part in the final stage of the offer process. In Algeria, the evaluation
process regarding the offer submitted for the development of the “Hôpital de Jour” – a facility located within
the military hospital of Algiers – on account of the Ministry of Defence is still ongoing. In Malta, the offer sub-
mitted in 2007 for the Radiotherapy facility and two new offers submitted for the “Metropolis” and “Pentergarden” projects for the development of structures for residential buildings are currently being evaluated.
Finally, more medical supply offers are underway in Syria and Bahrain, while the monitoring of future
calls for tenders funded by the European Cooperation in Argentina, Uruguay, Mongolia, and China is
being continued.
Work in progress
Production in the course of 2008 amounts to € 147.8 million, with a significant increase as compared
to 2007 (+18%). However, the production of the local foreign subsidiaries, fully managed by Inso, and
particularly in Albania and Malta, amounted to € 21 million, so that the aggregate amount of production
reached € 168.8 million.
Work in progress details confirm the trend started in the past period, with a further consolidation of the
production amount derived from PFIs and Concessions, which passed from 21% to 24%, as well as
the one deriving from turnkey projects, which today represents no less than 66% of the total yield. In
addition, if we look at production from the point of view of the destination sector, we can see that our
Company realized 66% of its turnover in the Health sector.
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2007 Sales
€/mln 125.3
2008 Sales
€/mln 147.8
Supplies
€/mln 10.8 (7%)
Pfi/ppp
€/mln 26.9 (21%)
Pfi/ppp €/mln
35.4 (24%)
Traditional
Contracts €/mln
75,4 (60%)
Supplies
€/mln 23 (19%)
Traditional
Contracts €/mln
101.6 (69%)
By Contract Type
2007 Sales
€/mln 125.3
2008 Sales
€/mln 147.8
Management of Services €/mln 1.2 (1%)
Supplies €/mln
18.9 (15%)
By Contract Type
Building
Construction
€/mln 31 (25%)
Supplies €/mln 13.5 (9%)
Management
Building
of Services €/mln
Construction
0.9 (1%)
€/mln 36.2
(24%)
Turnkey €/mln
97.2 (66%)
Turnkey €/mln
74.3 (59%)
By Project Type
By Project Type
2008 Sales
€/mln 147.8
Other Sectors
€/mln 50.7 (34%)
Health
€/mln 97.1
(66%)
By Activity Sector
From a geographical point of view, the development of foreign activities was confirmed in 2008, with
32% of production realized abroad, considering statutory data, and over 40% if we consider aggregate
data, this being the first clear effect of the composition of the new order portfolio which is progressively
going towards a balance between Italy and foreign countries. We should also point out that the largest portion of the foreign turnover refers to development and turnkey projects which have required a
remarkable organizational and management effort as compared to supplies.
2007 Sales
€/mln 125.3
20
2008 Sales
€/mln 147.8
Latin America &
The Caribbeans 8.5%
Syria 3%
Malta 4%
Syria 1%
Malta 16%
Latin America &
The Caribbeans
4%
Greece 16.5%
Greece 8%
Italy 71%
Italy 68%
By Geographical Area
2007 Sales
€/mln 140 (Aggregate Data)
By Geographical Area
2008 Sales
€/mln 168.8 (Aggregate Data)
Latin America & The
Caribbeans 7%
Syria 2,5%
Latin America & The Greece 8%
Caribbeans 4%
Albania 3,5%
Malta 13%
Malta 21%
Albania 3%
Syria 1%
Greece 14%
Italy 59%
Italy 63%
By Geographical Area
By Geographical Area
The main works are listed below:
Domestic market
The main productions were carried out in the following projects:
• Vimercate Hospital (Milan): this construction and management concession is being developed since
2006; during the year considered, structural works were completed and architectural works and system
installations were started. The building activities carried out by the developers’ SPV have produced € 20
million over 2008 (Inso share).
• New Law Court of Florence (Palazzo di Giustizia): functional testing activities for the first lot were
implemented and completed, as a preparatory phase for the subsequent start of the three-year maintenance phase. For the second lot, the design development and subsequent validation of the executive
project phases were concluded, as well as the soil drilling and piling steps, reinforced concrete structures were implemented and curtain wall systems, plastering and systems were started only for the main
supply utilities. The aggregate production for the year was € 10.1 million.
• Centro Polifunzionale Sportivo di Biella (sport facilities): partnering with the CCC (cooperative construction consortium) of Bologna, works were concluded at the start of 2009 realizing a production of
€ 7.6 million.
• Antinori Wine Cellar in Bargino, Florence: an unforeseen landslide took place during the works for the
construction of these wine cellars near Florence, with the consequent reduction of the initial production
programme. After an extensive survey and monitoring of the landslide phenomenon, a new project was
designed as a necessary action to consolidate and drain the hillside. This project also required the global
review of the cellar design, which is still ongoing and which limited production to € 7 million.
• Cisanello Hospital (of Pisa): works for the construction of the new Emergency Care Department continued, for a total amount of € 6.6 million, although with a partial suspension caused by the adoption of
a number of project changes required by AOUP.
• Careggi Hospital of Florence: the DMO (Multi-zone Oncology Unit) is being developed, as well as
the new cogeneration plants, on account of the SPV “SENECA Srl”, with a 25% participation by INSO.
During the year, works for € 6.3 million have been carried out for the first project and € 6. million for
the second.
• New “S. Giuseppe” Hospital of Empoli: while the hospital was completed in 2007, a number of complementary works have been carried out, such as the completion of the foot-bridge connecting the new
building to the old hospital building, and some protection shelters, as well as temporary maintenance
works, waiting for the time when the management under the PF contract should be started. The total
amount of this production was € 5.8 million.
• Nuoro Project Financing: a job order was started for the restoration and completion of the San Francesco and C. Zonchello Hospitals of Nuoro, San Camillo of Sorgono and District Health Centers of
Macomer and Siniscola, and the first supplies to the San Francesco Hospital were executed, realizing
a production of € 2.9 million, while clinical engineering activities were also started at the beginning of
the current year.
• Livorno Hospital: external works and the new helicopter take-off and landing surface were completed
on the roof of the New Emergency Care Unit, for a production of € 1.9 million. In addition, a friendly
agreement was reached concerning the accounting reserves recorded in prior years.
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Foreign market
Malta
• At the end of 2008, the global progress of the Tignè Point – T2 Shopping Center reached 70% of
the works, with an annual production of € 15.7 million. The project carried out through Ergon
Projects Ltd, a subsidiary of the stable consortium Ergon, was continued regularly, in line with the
work programme. In particular, reinforced concrete structures and structural works were completed, while simultaneously installing mechanical and electrical systems, and finishing architectural
decoration.
Grecia
• At the Kavala Hospital (Greece), all the works scheduled in the contract were completed, except for
external layout and integrations which are currently being defined. An 80% of the medical equipment has been delivered and installed. The work, which has been developed in a refined environmental context, is characterised by a high technical and functional quality level, whose prestige is
undoubted for the Customer Depanom and for INSO. The year’s production was € 18.9 million.
• The building activities in the Zakynthos Hospital were resumed, with the completion of structural
work, external curtain walls, floors, insulation, waterproofiing and part of the internal plasterboard
partition walls. Mechanical, electrical and medical gas supply systems were started, with a aggre22
gate production of € 3 million.
• The works for the construction of the Kallikratia Outpatient Clinic in the province of Thessaloniki
were started and the related structural works were completed. A variation regarding the foundation
structures was awarded to INSO for a value of approximately 10% of the whole contract.
Albania
• During the year considered, the works for the construction of the main building and technological
unit of the “Mother Teresa” University Hospital in Tirana have had a 70% progress for civil works
and a 45% progress for mechanical, electrical, and medical systems installation works. In addition,
additional works for € 1.5 million were awarded and implemented to build two more floors to be
used as operating theatres in the subsequent project development phase. The aggregate production
realized by Inso Albania Shpk was € 5.3 million.
France-Martinique
• Centre d’Affairs Pointe de Simon à Fort de France (Martinique): during the summer, the yard works
for this important job orders were eventually started, for the evident satisfaction of the Customer and
economic players of the island. The demanding development of the special foundations for the entire building complex will take ten months. A production of € 8.9 million was reached at year-end.
• Over the last quarter, the works for the development of the Emergency Care Unit – SAMU were
started within the framework of the Fort de France Hospital. The amount of works is € 2.2 million.
Syria
• In the job order for the supply of medical equipment to the Al-Marah Hospital, the equipment installation and testing phase was concluded, with a production of €4.3 million. The hospital will be
opened in 2009. As a consequence, the guarantee contract year is ongoing and INSO is presently
taking care of the relevant preventive and corrective maintenance.
Uruguay
• In the job order for the supply of medical equipment to Uruguay (€ 3.3 million), the equipment to be
installed during 2009 was shipped at the end of the corporate year considered, with a production of
€ 3 million.
Partnerships and collective works
Inso’s operations also include the indirect control of sectors and/or initiatives falling under the competence of associated companies. Among these, we will list those whose activities are particularly worthwhile noticing, subdivided by type:
1. Entities having a special strategic and synergic interest for Inso:
• Sof S.p.A. (a 60% subsidiary) is a global service and maintenance company operating especially in the
energy production and hospital sector, with a special focus on the opportunities connected with project
financing initiatives. This entity is currently going through an important period of development of its activities. In fact, the 2008 production reached € 10.0 million against € 5.9 million in 2007 (+69.2%), with
€ 535,277 profits. The order portfolio as at Dec. 31, 2008 was € 176.4 million, thus ensuring further
growth opportunities over the next few years, to progressively complete the variety of services offered by
Inso, especially in the health sector. SOF’s operations are developed in the global services and energy
sector in the health industry for 72%, about one half of which consist of licensed projects.
2. Entities taking care of job orders acquired and executed by Inso’s organisational structure, whose
results may be referred to Inso. In fact, if we ideally sum up the production carried out by these entities, the aggregate total of 2008 contract values would amount to € 168.8 million. They consist in
the following:
• Inso Albania Shpk, taking care of the job order for the “Mother Teresa of Calcutta” University Hospital in Tirana for a contract value of € 16.1 million and a 2008 production value of € 5.3 million.
• Ergon Project Ltd in Malta, an entity controlled by the stable Ergon consortium mentioned below,
which, in addition to the “Tigné Point T2 Shopping Center” job order, for a contract value of € 45
million and a 2008 production of € 15.7 million, is engaged in the development of further initiatives
in the island. Among these, the offer for the Radiotherapy unit and the real estate projects, Pendergardens and Metropolis.
Special Purpose Vehicles incorporated to manage concessions in the health sector for the development
of hospitals and for the management of long-term services. These projects are financed with the Project
Finance option to ensure Inso and its subsidiaries that, when the development work has been completed, they will be able to provide services and supplies for periods ranging from 15 and 25 years: We
point out the following, in particular:
• Vimercate Salute S.p.a.: as at Dec. 31, 2008, this company already carried out 67.5% of the works
for the construction of the Vimercate Hospital (Milan). At the end of 2007, it had completed the fi-
23
nancial structuring procedure for the operation. However in this moment there is an ongoing update
to the financial structuring procedure because of an adjustment to the Concession agreement. The
concession has a term of 25 years.
• Seneca S.r.l. (Servizi ENErgetici CAreggi): as at Dec. 31, 2008, this company had completed 25% of
the works for the construction of a cogeneration plant and for the supply of all the energy services for
the hospital of Careggi. The financial structuring of the operation is currently ongoing. The concession has a term of 18 years.
• Empoli Salute S.p.a.: this newly-incorporated entity was established in 2008 to sign the Concession
contract for the completion and reconversion of pre-existing buildings and for the new construction and
supply of many services to the entire Empoli hospital unit. A due diligence process has just been started
for the financial structuring of the related long-term facility. The concession has a term of 24 years.
• Pssc S.p.a. (Polo Sanitario Sardegna Centrale): this Special Purpose Vehicle signed the Concession
contract for the restoration and completion works for the Hospital Districts of Nuoro and its province, whose medical equipment, renovation and clinical engineering will be provided by INSO. The
preparatory activity for the financial structuring of the operation is about to be started. The concession has a term of 27.5 years.
• Osimo Salute S.p.a.: this entity was established for the construction of the Osimo Hospital and for
the management of its related services. For the time being, this operation has been suspended be24
cause the Marche Region deliberated on the cancellation of the concession contract due to changes
in the programme (i.e. site change), thus forcing the entity to start proceedings for the protection of
its rights. The legal procedure is still ongoing. The concession has a term of 14 years.
• R.s.a Sant’Antonino Fiesole S.p.a.: this entity was established to restore and manage the residence
for the elderly in the Municipality of Fiesole (Florence). This operation is still suspended and is waiting for further developments due to the second though of the Public Administration, which changes
its initial purpose. The concession has a term of 28 years.
4. Entities with their own specific industrial mission, but with an activity in synergy with Inso. While
managing their own independent business for their specific activities, these entities also carry out complementary activities in INSO projects:
• MMH S.p.A. (Mobile Modular Hospitals), is a company where INSO partnered with Swisel Italiana
with a 50% holding and whose mission is the construction and marketing of mobile hospital systems.
• Etruria Investimenti S.p.a.: company of the Consorzio Etruria Group devoted to operate in the real
estate sector.
• Aghito Tecnologie S.r.l.: this company produces and installs operating theatres and partners at 50%
with INSO and Malvestio S.p.A. from Padua. Since Aghito’s business sector is too much of a niche sector for a tangible synergy with INSO, in the first few months of 2009 the entire stake was sold to the
other partner. However, commercial relations will be retained for future mutual interest transactions.
5. Stakes aimed at acquiring job orders: These are consortia and consortium entities established to allow for aggregate cooperation with other companies, prevalently within the Group, to favour their
business activity:
• Ergon – Engineering and Contracting S.c.a.r.l.: The stable Consortium ERGON (Consorzio Stabile
ERGON), established between Consorzio Etruria (34%), INSO (33%) and Coestra S.p.A. (33%) from
Florence, whose main purpose is to develop large infrastructure works. The Consortium has been
certified as General Contractor pursuant to Leg. Decree #9 of Jan. 10, 2005 in list I for participation
in calls for tenders up to amounts of € 350 million. It owns the majority of Ergon project’s share capital in Malta for the job order managed by INSO. Some of the most significant job orders acquired
through Ergon we may mention the Prato-Signa motorway link (Bretella), the railway passage in
Florence and the high-speed train station, and the Tignè Point – T2 Shopping Center in Malta.
• HBT – Hospital Building & Technologies S.c.a.r.l. is a consortium entity established to allow Inso and
SOF to jointly carry out business operations of mutual interest. This entity was established to manage
services in Nuoro with project financing.
• Ccc – Consorzio Cooperative Costruzioni of Bologna is a consortium operating as a commercial
vehicle, also providing services to its partners, that is associated to the majority of the cooperatives
and entities controlled by it and operating in the building industry in Italy. Over the second half of
2008, Inso’s association was also established to ensure a greater penetration into the market through
the opportunities offered by the commercial network of this consortium, which extends in a capillary
manner over the entire domestic market. In addition, the CCC, which boasts an annual turnover of
over 1 billion Euro and is qualified for participating in any sort of call for tender, will allow Inso to
access those tenders that it cannot access today due to the lack of some specific requirement.
Company organization
25
The company’s employees as at Dec. 31, 2008 were 181 (12 directors, 24 managerial staff, 89 clerical
staff and 56 labourers), 63 of whom working abroad. Then we should add the 55 units of outsourced
professionals and infra-group staff, which take the total number of staff to 236 units and which, although
unchanged compared to 2007, represent 24% of the total personnel.
Break Down by Role
(Employees)
181
135
20
149
36
181
Executive And
Managerial Staff
135
White Collars
28
89
84
Break Down by Job Location
(Employees)
34
Workers
89
101
31
32
2006
2007
149
35
63
114
118
2007
2008
56
2008
2006
Break Down by Contract Type
204
205
69
56
135
149
2006
2007
236
55
181
2008
Outsourced
Professionals
And Intragroup
Personnel
Inso Spa
Employees
Abroad
Italy
A 31 units’ growth was recorded in 2008 as compared to 2007; it has to be connected to the increasing
number of employees and workers used in Greece for the completion of some works. Simultaneously,
the changes in the labour positions occupied have led to an increased number of Executives and Managers, which have passed from 28 to 36.
In line with a corporate policy strongly aimed at expanding to foreign markets, foreign subsidiaries (Inso
Albania Shpk, Ergon Projects Ltd, and Inso Malta Ltd) and the Greece and Martinique branches, today
employ a total of 106 units.
Inso’s Total Labour Force
Employees, Outsourced Professionals and Subsidiaries
Inso’s Total Labour Force
Employees, Outsourced Professionals and Subsidiaries
261
215
25
10
56
55
26
Abroad 106
Outsourced
Professionals
261
181
149
2007
Italy 155
Subsidiaries
Inso Spa’s
Employees
Greece 72
Martinique 9
Albania 3
Malta 22
2008
The education level and professional qualification of Inso’s labour force is still high, with 52% of graduates, 80% of whom in technical disciplines. On the other hand, the generational turnover favours an
increase in the number of graduates.
Personnel Educational Background
Accounting
Diploma 16%
Technical
Diploma 32%
Civil And Mechanical
Engineers 18%
Electronic,
Biomedical And
Chemical Engineers
14%
Architects 9%
Other Degrees 10%
During the year, 21 training processes were started, for a total of 3,197 training hours and a number of
hours per person of 20. The main areas of interest were the following:
Accounting and Finance
• Security
• Personnel (Human Resources)
• Languages
• Management
• Engineering
• Legal affairs.
Procurement
The need to reduce costs, rationalise expenditure, control policies and procurement sources, as well as
the need to ensure transparency and compliance with ethical and conduct codes have led, during the
year considered, to the definition of new kinds of buyer/seller relationships, more oriented to cooperation and synergy criteria.
In addition to that, thanks to the Leonardo procurement portal, the web-based negotiation technology
was combined with the support of specialists with a specific purchasing expertise in the different procurement fields. This allowed our Company to successfully pursue a progressive path in using computerised methods (from the first spot negotiations to the systematic adoption of eSourcing integrated with
crucial processes, such as the management of relationships with Suppliers) and present our Suppliers
with a set of significant advantages, such as:
• Transparency and equal opportunities,
• Increased business opportunities (the possibility to take part in negotiation events is ensured by the
fact that the Supplier can become a member of the corporate vendor list),
• Verification of the competitive positioning (in the event of a dynamic negotiation, the simultaneous
competition allows the player to evaluate the competitiveness level of its company on the market).
Another aspect worthwhile commenting, as regards the Office operations during the year, is connected
with the continuous expansion of the Company in the foreign markets, which involves increasing synergies with the resources to be used for procurement activities to be carried out by the different Branches
and Foreign entities. These, while operating in full autonomy and as totally independent entities, always
remain under the functional control of the Headquarters, which coordinates and controls expense decisions at central level, thus eliminating the problems of a decentralised layout.
This required the presence of the Headquarters’ personnel in the different local branches in order to
maximise all the improvement objectives in the fields of quality, costs and timing.
Quality
Our company continues to consider Quality as the best and safer way to ensure full customer satisfaction and achieve the goals set by the Management. Our Quality Assurance System (QAS) is certified by
Lloyd’s Register in compliance with UNI EN ISO 9001, edition 2000, standards (better known as Vision
2000). In November 2008, Lloyd’s Register tested our QMS for the second three-yearly renewal audit
for certification purposes: Turnkey design and construction of civil and industrial buildings. Turnkey engineering, supply, installation of electromedical equipment packages and relevant maintenance. Turnkey
design, construction and maintenance of civil and industrial systems.
Today, our corporate Quality Management System is a mature and tested tool to:
• contribute with even more targeted and effective means to the growth of our organization;
• allow us to appropriately define, as a Company mainly working with job orders, the activities carried
out by the organization and measure with appropriate Quality Indicators (QIs) whether the goals set
in terms of efficiency and effectiveness have been fulfilled.
27
For the current year, the current certification will be maintained: Lloyd’s Register will carry out two more
maintenance audits, one in May and one in November; during the November inspection, we are planning to complete our early passage to the new edition of the UNI EN ISO 9001/2008 standard.
Health, Safety, and Environment (HSE)
Inso promotes the respect for the Environment, Health and Safety of its employees, and is committed to
maintain a constant quality level of its products and services over time, in compliance with service and
Customer contract requirements.
Being convinced that the road followed until now is the right one, our Company is presently implementing an Integrated Management System (Quality, Environment and Safety) in compliance with the
international standards UNI EN ISO 9001, UNI EN ISO 14001, OHSAS 18001, in order to:
• Fully meet Customer expectations;
• Comply with the applicable legislation, with its own Integrated Management System, and with contract commitments;
• Pursue continuous improvement in Quality, Environment and Safety issues;
• Ensure the efficiency and efficacy of outsourced processes, in compliance with the contract terms
and conditions defined with customers, and with its own quality, safety and environment protection
28
standards;
• Undertake actions aimed at minimising risks and at removing the causes that may jeopardise the
safety and health of its own personnel and of the other employees in the workplace;
• Favour improvements in its own performances in the environmental field through the control of
emissions into the air, water and soil, as well as of the production and hazard of waste, and with a
responsible and wise use of natural resources;
• Adopt effective accident prevention measures and reduce the consequences that may be harmful for
the workers and the environment.
• Ensure an effective system to monitor the quality of its products/services, environmental issued
connected to its own activities, industrial injury and occupational diseases which may involve its
personnel;
• Disseminate and make this Corporate Policy available to all the Company personnel and, more generally, to the stakeholders, and raise the Company personnel’s awareness on environmental, quality
and safety issues by involving them in pursuing objectives and targets.
On December 29, 2008, the document “Assessment of all the risks existing for the health and safety of employees” was drawn up pursuant to Legislative Decree no 81, dated 09.Apr.08, Art.17, paragraph 1, letter a).
During 2008, as a result of the Company’s focus on occupational health & safety issues, no significant
accident event or case of professional disease was recorded. Summarised data are provided below,
referred to the personnel working in Italy, which can be compared to a total number of paid work days
of 42,197:
Number of absence days
Males
Females
Total
For accidents
197
10
207
For diseases
4255
1472
5727
Total absences
4452
1482
5934
Accidents reported
7
1
8
Professional diseases reported
0
0
0
Finally, for the sake of complete information, we point out that the Company was not found to be guilty
of any damage caused to the environment, no penalty was inflicted or final judgement rendered for any
crime or damage against the environment.
Ethical Code of Conduct
With the adoption of a Corporate Ethical Code since 2004, subsequently amended and supplemented
with a Code of Conduct, our Company defined its ethical principles in connection with the behaviours that may integrate the crimes described in Legislative Decree no. 231/2001, aimed at defining
the need to:
• Comply with the applicable legislation, with the Ethical Code, corporate procedures, internal regulations and, where applicable professional ethics rules;
• Conduct relationships with third parties and particularly with the Public Administration on the basis
of principles of correctness and transparency;
• Recall the employees’, outsourced professionals’, suppliers’, contractors’ and sub-contractors’, and,
in general, all partners’ and players’ attention on the fullest compliance with the regulations set forth
in the Ethical Code of conduct of the Company, as well as on the procedures established to ensure
that these values are respected;
• Define an appropriate system of measures to inflict penalties in case of non compliance with the
principles described in the model.
In compliance with Art. 6, paragraph 1, letter b) of the abovementioned Decree, INSO established a
Surveillance Body, which is entrusted with the task of supervising the implementation of the behaviours
and conducts required by the Code, as well as with its necessary updates.
Research & Development
During the final part of the year, some studies were taken into consideration in order to develop research
surveys for a subsequent use in executive projects in the sectors where the Company is focusing its
developments, both in the field of medical technologies in connection with proton therapy, and in the
sector of renewable energies and co-generation.
In particular, as regards proton therapy, research activities essentially focused on the development of its
design.
As is well-known, proton radiotherapy is one of the most recent targets aimed at by research in oncology, because accelerated proton radiation allows healthy tissue damage to be minimized around the tu-
29
mour mass (which was a typical adverse effect of conventional radiotherapy), including when a tumour
is treated with high radiation doses.
This kind of research aimed at creating equipment capable of:
• ensuring the best possible performance/cost ratio,
• ensuring the largest possible flexibility of treatment of the various types of cancer,
• being open to future treatment development using heavy ions (adrotherapy).
Summary of profit & loss account
For a more explicit disclosure of corporate economic events, we are going to provide a different classification of the profit and loss account, by adopting management accounting principles, as compared to the
statutory accounts required by the law (see Profit & Loss Account and Notes to the Financial Statement).
Considering the need for the reader to be enabled to more immediately compare the management
picture and the statutory accounts, we are now going to display, to allow for a consistent comparison,
the entire production of the Company by rearranging the data shown in the same sheets used for the
previous years’ accounts.
The increased production involves a considerable increase in the margins in absolute terms, which has
30
been partly allocated to greater provisions, partly absorbed by the increase in financial charges essentially accrued over the first two thirds of the year.
2006 Balance
Sheet
2007 Balance
Sheet
2008 Balance
Sheet
Value of production (Revenue accounts)
note (1)
124.415
100,0%
125.387
100,0%
147.847
100,0%
Direct production (Revenue accounts)
note (2)
(109.072)
87,7%
(109.381)
87,2%
(129.156)
87,4%
Contribution margin
15.343
12,3
16.006
12,8
18.690
12,6
Cost of labour
(7.377)
5,9%
(8.999)
7,2%
(10.058)
6,8%
(3.025)
2,4%
(2.077)
1,7%
(2.250)
1,5%
4.940
4,0%
4.929
3,9%
6.383
4,3%
General indirect costs
note (3)
EBITDA
Depreciations
Accruals
(456)
0,4%
(453)
0,4%
(332)
0,2%
note (4)
(418)
0,3%
(520)
0,4%
(1.336)
0,9%
4.066
3,3%
3.957
3,2%
4.715
3,2%
note (5)
(1.080)
0,9%
(2.201)
1,8%
(3.613)
2,4%
EBIT
Net financial charges and services
Operating result
2.986
2,4%
1.756
1,4%
1.102
0,7%
Net extraordinary income/charges
note (6)
(291)
0,2%
(566)
0,5%
239
0,2%
Income from share holdings
note (7)
167
0,1%
403
0,3%
389
0,3%
Gross profit
2.863
2,3%
1.594
1,3%
1.730
1,2%
Income taxes
(1.753)
1,4%
(343)
0,3%
(829)
0,6%
1.110
0,9%
1.251
1,0%
901
0,6%
Net profit
Note 1: As compared to the Value of Production (item A of Income Statement), this item takes into account dividends granted by SPVs, particularly Ergon Scarl (for €K 705.6) and Inso Albania Shpk (for €K
212.3). Since the Company is not required to submit consolidated statements, these proceeds are considered as contract margins, which are therefore reclassified as a direct increase of the production value.
The other proveeds and revenues and cost recovery items are not included, as they are considered as
revenue items regarding individual cost centres included in the overheads, for about €K 5.350.
Note 2: This includes items B) 6 Raw Materials; B) 7 Services; B) 8 Leased assets; B) 11 Variation in raw
materials inventory; and B) 14 Sundry operating charges, except for the values regarding overhead cost
centres classified among indirect general costs, as specified in Note 3 below.
Note 3: This includes items B) 6 Raw Materials; B) 7 Services;, B) 8 Leased assets; and B) 14 Sundry
operating charges, regarding only overhead cost centres (net of other proceeds and revenues and cost
recovery as per Note 1).
Note 4: Provisions set aside include items B) 10d Bad debt; and B) 12 Provisions for risks.
Note 5: This includes items C) 16 and C) 17 (excluding the items regarding production contracts, which,
as such, are classified as direct production costs), including the value of bank charges which, in the
statutory balance sheet, are considered as services provided (B 7 Costs for services).
Note 6: This item does not include extraordinary proceeds and charges which, for the part that can be
connected to contract cosrs, are classified among direct production costs.
Note 7: It includes the dividends of entities that are not controlling production contracts, which, as mentioned in Note 1, are reclassified in the Value of Production/Revenue Accounts.
The data disclosed above show constant income results. As regards income taxes, see details in the
Notes to the financial statement.
The commercial portfolio acquired and the abovementioned activity programmes herald growing volumes and profitability trends in the future evolution of 2009 and the following years.
31
Summary of balance sheet
We are providing below a reclassification of the items of the Statement of Assets and Liabilities to reflect
investments against the sources.
Reclassified assets & liabilities as at Dec. 31, 2008 (values shown in Euro/K)
31/12/2006
32
31/12/2007
31/12/2008
A
Customers
63.146
86.267
75.398
A
Suppliers
(65.205)
(86.312)
(92.726)
A
Net inventories (after deducting advances)
44.857
43.053
40.583
A
Current assets
42.798
43.008
23.255
B
Miscellaneous short-term receivables
6611
7542
3910
B
Accrued income and prepaid expenses
601
652
834
B
Miscellaneous short-term payables
(1500)
(1750)
(1265)
B
Tax payables/Amounts due to social security inst
(4328)
(4346)
(.708)
B
Accrued expenses and deferred income
A+B
Total current assets
C
C
C
Long-term investment
C
C
C
Other medium-term provisions
(2978)
(1885)
(2113)
A+B+C
Total net invested capital
61.161
65.936
50.386
D
Cash on hand and Banks (liquidity)
(4280)
(5021)
(19.348)
D
Banks and other backers
19.561
27.659
41.117
D
Banks and other medium-term provisions
28.522
24.689
9.107
D
Net financial position
43.803
47.327
30.876
E
Share capital
15.000
15.000
15.000
E
Reserves
206
262
325
E
Profits carried forward
1042
2096
3284
E
Year’s income
1110
1251
901
E
Shareholder’s equity
17.358
18.609
19.510
(339)
(876)
(630)
43.843
44.230
22.396
Intangible fixed assets
540
796
960
Net tangible fixed assets
739
712
544
6354
9192
13232
Miscellaneous medium-term receivables/payables
13946
14062
16433
Termination Indemnity
(1283)
(1171)
(1066)
Comments on the financial and equity management
The year-end Net Financial Position is € 30.8 million, with a considerable increase as compared to the
previous year (€ 16.5 million, equalling –35% as compared to the € 47.3 million resulting as at Dec. 31,
2007). The Financial Report with all the details of the factors determining variations is available amidst
the financial statement documents.
This decrease is the effect of the strong focus of the Company on the optimisation of financial implications in all the initiatives and activities promoted, as well as on the constant monitoring and strong commitment shown in the management of its creditors. As a matter of fact, since mid last year, the Company
emphasised its methodological rigour at the first signals of a reduced liquidity of the credit market,
which later worsened in autumn with the unforeseeable financial crisis, still ongoing.
The effects of this approach, which was confirmed in the first few months of 2009 (at the end of February, the net shareholders’ equity was about € 27 million), were clearly seen in the third quarter of 2008,
while for the rest of the year the net bank indebtedness fluctuated between € 50 and € 60 million, with
the related financial charges.
However, these periodic fluctuations of the borrowing requirements are typical of the sector where
the Company operates, due to the peculiar aspects of long-term contracts, which are physiologically
exposed to project changes, administrative delays, anticipated execution of certain works with respect
to the related formal contracts.
On the other hand, undoubtedly the marked propensity of the Company to work abroad and with project
financing is starting to produce results, as the specific requirements of these operations are expected to lead
to a lower need for financial support as compared to the structure of certain job orders acquired in the past.
The financial situation is affected by long-lasting negotiations and litigation proceedings initiated against
some customers for the recognition of contract increases accrued and some significant long-term investments (see judicial proceedings in Greece). The recognition and new accrual trends led, at the end of
2008, to a slight net decrease in estimated reserve values (€ 0.4 million), price revisions, appraisals in
the course of being defined, etc., but accrued when a positive settlement was reached in certain positions for € 7.9 million and the recognition of new accruals for € 7.5 million. Considering the progress of
negotiations, we can reasonably expect an important reduction in 2009.
To maintain the correct correlation achieved in previous years between uses and sources, the Company
is continuing its policy of promotion of medium-long term loans as a replacement and in combination
with those existing as at Dec. 31, 2008. As a matter of fact, medium/long-term loans at year-end were
€ 25 million, of which € 9 million due beyond the following year. As a consequence, more credit lines
should be opened in 2009 to replace those expiring during the period considered.
Among the objectives aimed at with medium/long-term loans we should indicate capital assets immobilized in SPVs incorporated to manage multi-year concessions acquired with the project financing formula, whose purpose is to design, build, supply and manage services for the Vimercate, Nuoro, Empoli
and Florence (Careggi) hospitals. The Company shall contribute liquidity to the SPVs in the form of share
capital and shareholders’ loan, with repayment upon expiry of the concession period (fluctuating between 15 and 25 years) and with annual instalments within the expiry of the concession, respectively.
In connection with the features characterising its activities, the company is constantly pursuing its business purpose in the development of new loan agreements and in the rotation of general bank credit
lines, to fulfil the peaks of demand that inevitably characterize the sector where the Company operates.
At the end of 2008, in the same report of the previous period, a partial use (about 63%) of the deliberated bank credit was recorded which, however, due to the presence of huge current account deposits
(approximately € 19 million) corresponding to significant collections at year-end, would have been 38%
lower if the technical time for the closing of the corresponding debt accounts had elapsed.
33
Policies for the management of the main financial risks and uncertainties
For the nature of its operations, the Company is exposed to the following financial risks and uncertainties, the most significant of which are explained below:
Price risk: related to the variations in the cost of raw materials and manpower, normally immunized by
adding special price revision and adjustment clauses to contracts.
Currency risk: the Company operates internationally, therefore foreign currency transactions are common.
Exchange rate trends affect the value of the contracts received and operating costs assessed in the foreign
currency. Your Company uses hedge financial instruments, such as: forward, currency forward purchase
and sale, and domestic currency Swaps,in order to minimize the risk related to the exchange rate fluctuation. Our exchange rate risk management policy is based on an industrial and non-speculative logic,
aimed at limiting risks within the borders of a careful evaluation of all foreign currency records.
Country risk: this is faced, after a very careful evaluation of the customer and product, by using insurance instruments or more appropriate types of payment available on the market.
Liquidity risk: the continuous work carried out by the Company in order to create a sufficient volume of
credit lines to face contingent unfavourable cash flow periods allows us to evaluate this risk as one of
no particular significance for Your Company.
Interest rate risk: since it has to use third party financial resources to face the commitments generated by
34
its cash flow, the Company is subjected to the fluctuation of interest rates. Financial hedging instruments
such as IRS and Cap are used to minimize risks connected with interest rate fluctuations. Even concerning the risk examined, the Company has adopted a risk management policy based on an industrial and
non-speculative philosophy.
Credit collection risk: The Company constantly monitors its credit accounts to always express an amount
of receivables in line with the presumable collection value. The greater amount of provisions set aside
in 2008 also takes into account the present difficult domestic and international financial and economic
situation.
Construction defect risk: The Company constantly monitors the industrial process through the quality
procedures largely described in the previous chapters. In spite of this, in order to hedge potential risks
deriving from construction defects (Art. 1669 It. Civil Code), the Company has entered into an appropriate insurance policy with a primary insurance company.
We inform Shareholders that the Company has bad debt and risk provisions for approximately € 7 million, which, as at Dec. 31, 2008, are allocated to the Assets and Liabilities as follows:
Statement
Item
Provision
Amount set aside
Assets
C - II - 1)
Provision for bad debt
1.563.109
Assets
C - II - 1)
Provision for interest on arrears risk
3.332.411
Liabilities
B - 3)
Provision for future risk of litigation
1.215.777
Liabilities
B - 3)
Provision for employee expenses
133.306
Liabilities
B - 3)
Provision for risks on derivative contracts
256.922
Liabilities
B - 3)
Provision for contract completion risk
400.000
Total provisions set aside as at Dec. 31, 2008
6.901.525
As regards all the above and the actions implemented by the Company, we can state that no significant
exposure exists in connection with these types of risk.
Intragroup relationships
A summary is given below of the economic and equity relationships held in 2008 with Shareholders and
the parent company (a), subsidiaries (b), associated companies (c), and entities under the control of the
parent company (other stakes – d; other relationships e):
(values expressed in EuroK)
FINANCIAL STATEMENT RELATIONSHIP
Entity
Sharehol (a)
Consorzio Etruria Soc. Coop. A.r.l. (Controllante)
Sici Sviluppo Imprese Centro Italia S.G.R. S.p.A.
Cassa di Risparmio di S. Miniato S.p.A.
Consorzio Toscano Cooperative
Selp S.p.A.
Financial
receivables
(recorded among
fixed assets)
Trade and Financial
receivables
(recorded among
current)
Trade and Financial
payables
-
2895
1
16
-
2775
4
647
126
Parent Company (b)
Consorzio Inso-Verdot
Palagiustizia S.c.a.r.l.
R.S.A. Sant’Antonino Fiesole S.p.A.
Consorzio Inso-Themeliodomi S.c.a.r.l.
H.B.T. S.c.a.r.l.
Inso Malta Ltd
ICI Inso Contracting International Ltd
Cisanello 2005 S.c.a.r.l.
Inso Albania Ltd
S.o.f. S.p.A.
L’Annunziata S.c.a.r.l.
Novoli S.c.a.r.l.
Il Padiglione S.c.a.r.l.
76
55
101
1.600
-
2119
6
444
194
25
167
1854
640
2.710
12
5115
842
1325
3422
153
13
49
210
351
1349
453
233
4333
15
Associated ( c)
Ergon S.c.a.r.l.
Consorzio RI.TE.D. (in liquidazione)
Aghito S.r.l.
Esserresse S.r.l.
M.M.H. Mobile Modular Hospitals S.p.A.
Consorzio Ospedale di Osimo
Società consortile Ospedale Empoli A.r.l. Ospem S.r.l.
Osimo Salute S.p.A.
Mediat S.c.a.r.l.
Vimercate Salute S.p.A.
Vimercate Salute Costruzione S.c.a.r.l.
S.ene.ca S.r.l.
Consortile Magazzini Prato Scarl
Empoli Salute S.p.A.
Polo Sanitario Sardegna Centrale S.p.A.
20
286
60
300
49
1038
720
-
1804
23
18
417
3
1451
386
999
4.704
70
5.637
410
-
6874
498
461
2.705
11.045
0
496
853
36
-
312
265
50
-
Other stakes (d)
Etruria Investimenti S.p.A.
Consorzio Syntek S.c.a.r.l.
35
(continued from previous page)
FINANCIAL STATEMENT RELATIONSHIP
Entity
Financial
receivables
(recorded among
fixed assets)
Consorzio Toscana Salute
Consorzio Cooperative Costruzioni
Consorzio Cooperativo Finanziario per lo Sviluppo Scrl
Consorzio Edinca
Other relationships (e)
Agorà S.r.l.
Aretium S.r.l.
Bretella S.c.r.l.
Caldana S.r.l.
Coestra S.p.A.
Dirpa S.c.r.l.
Ergon Projects Ltd
M.C.C. S.r.l.
Maisis S.r.l.
Total
Trade and Financial
receivables
(recorded among
current)
Trade and Financial
payables
-
42
-
6
420
-
4305
1484
26
35.091
232
39.134
Financial receivables booked as fixed assets are described in detail in the Notes, financial receivables
36
booked as current assets essentially concern dividends (analytically commented in the Notes), while
financial payables concern short-term loans.
(values expressed in EuroK)
ECONOMIC RELATIONSHIP
Entity
Sharehol (a)
Consorzio Etruria Soc. Coop.
A.r.l. (Controllante)
Income from
Divestments
services
Costs for
Purchases or
services
Financial
income
Financial
charges
Extraordin
income
Extraordin
charges
748
2041
-
-
1
-
Sici Sviluppo Imprese Centro
Italia S.G.R. S.p.A.
-
-
-
-
-
-
Cassa di Risparmio di S. Miniato S.p.A.
-
-
-
-
-
-
Consorzio Toscano Cooperative
Selp S.p.A.
-
-
-
-
231
-
52
5
47
-
1019
2676
4
-
-
-
-
5
-
49
399
351
25
64
-
-
-
20
309
109
-
2178
516
912
213
319
-
-
-
6
-
Parent Company (b)
Consorzio Inso-Verdot
Palagiustizia S.c.a.r.l.
R.S.A. Sant’Antonino Fiesole S.p.a.
Consorzio Inso-Themeliodomi S.c.a.r.l.
H.B.T. S.c.a.r.l.
Inso Malta Ltd
ICI Inso Contracting International Ltd
Cisanello 2005 S.c.a.r.l.
Inso Albania Ltd
S.o.f. S.p.A.
L’Annunziata S.c.a.r.l.
(continued from previous page)
ECONOMIC RELATIONSHIP
Entity
Novoli S.c.a.r.l.
Il Padiglione Scarl
Associated ( c)
Ergon S.c.a.r.l.
Consorzio RI.TE.D. (in liquidazione)
Aghito S.r.l.
Esserresse S.r.l.
M.M.H. Mobile Modular Hospitals S.p.A.
Income from
Costs for
Financial Financial Extraordin
Divestments Purchases or
income
charges
income
services
services
2
6505
656
8
Extraordin
charges
-
10
5
10
1116
317
-
705
18
4
20
243
-
-
-
6
20
3
1962
-
-
-
-
194
3313
24
1108
10.177
17.283
42
266
-
-
-
-
68
970
-
-
22
-
-
-
-
Other stakes (d)
Etruria Investimenti S.p.A.
Consorzio Syntek S.c.a.r.l.
Consorzio Toscana Salute
Consorzio Cooperative Costruzioni
Consorzio Cooperativo
Finanziario per lo Sviluppo Scrl
-
1
104
-
-
4
-
-
1
-
Consorzio Edinca
-
-
-
-
-
-
3.885
-
308
3
-
-
-
-
-
11.580
48.856
2183
335
234
127
Consorzio Ospedale di Osimo
Società consortile Ospedale
Empoli A.r.l. Ospem S.r.l.
Osimo Salute S.p.A.
Mediat S.c.a.r.l.
Vimercate Salute S.p.A.
Vimercate Salute Costruzione
S.c.a.r.l.
S.ene.ca S.r.l.
Consortile Magazzini Prato Scarl
Empoli Salute S.p.A.
Polo Sanitario Sardegna Centrale S.p.A.
Other relationship (e)
Agorà S.r.l.
Aretium S.r.l.
Bretella S.c.r.l.
Caldana S.r.l.
Coestra S.p.A.
Dirpa S.c.r.l.
Ergon Projects Ltd
M.C.C. S.r.l.
Maisis S.r.l.
Total
We are giving below a short description of the nature of the main significant relationships during the
year:
Consorzio Etruria S.c.a.r.l. (a): relationships with this entity mainly concerned:
• INSO’s intervention in the remaining works regarding the execution of “Centro Commerciale Unicoop” of S. Lorenzo a Greve, a job order for which the Holding acts as assignee of the principal;
37
• the execution by the Holding of the contract works for the residential building construction in Massarosa;
• the management services rendered by INSO for the construction of the Antinori wine cellars; services rendered by the Holding, consisting in operations, in addition to some yard works;
Cassa di Risparmio di San Miniato (a); for bank current account and/or financing relationships.
Consorzio Toscano Cooperative (former Consorzio Toscano Costruzioni) (a): relationships with this entity consist in shared commercial initiatives and some projects managed with Special Purpose Vehicles
(in Italian ATI or temporary association of companies).
Selp spa (a): the remaining relationships are connected with old supply contracts whose financial conditions have partly been defined and partly currently being defined.
Consorzio Inso/Verdot (b): this entity carries out the Tatoi contract in Greece on account of INSO.
Società consortile Palagiustizia (b): this company is taking care of the “Palazzo di Giustizia – Firenze”
(Court of Florence) job order on account of INSO and reverses consortium charges to the Holding. Testing processes are currently ongoing, therefore the purpose of this entity will expire in 2009, with the
liquidation of the same.
38
Rsa S. Antonino Fiesole Spa (b): this entity outsourced INSO for the restoration of the hospital of S.
Antonino.
Consorzio Inso Themeliodomi S.c.a.r.l. (b): this entity completed the Kavala job order in Greece on account of INSO and the conditions for its winding up are about to be fulfilled.
Hbt – Hospital Building & Technologies Scarl (b): this company ordered INSO to supply medical equipment for several hospitals in Syria and during the year purchased a 1% share in PSSC Spa to be awarded
the performance of some services under the concession contract.
Inso Malta Ltd (b): this company has been incorporated for the management in the Malta territory of
services connected with the execution of the supply and installation contract for the medical equipment
in the Mater Dei hospital of Malta. The activity is approaching its completion and is currently managing
the post-sale maintenance period.
I.C.I. L.t.d. (b): INSO uses commercial services provided by this subsidiary for the Irish activities and for
the commercial activity in some European, South-Eastern Asia and Latin America countries.
Cisanello 2005 scarl (b): it is the consortium that univocally manages works at the “Pronto Soccorso Cisanello” (Cisanello Hospital Emergency Ward, Pisa), which reverses consortium charges to the Holding.
Inso Albania Shpk (b): this company manages activities in Albania. At the moment, it is developing
building works for the University Hospital of Tirana. Its economic relationships are regulated by service
contracts for the commercial activity guaranteed during the tender and afterwards, in addition to all the
administrative, financial, materials purchase and engineering services.
Sof spa (b): relationships with the Holding, which is the natural completion of INSO’s commercial offer,
have mainly focused in the project financing field and to support certain job orders.
Annunziata Scarl (b): it is the company incorporated with SOF S.p.A. for the management of the project
for the S. Maria Annunziata hospital of Florence. Works have been assigned to SOF Spa and costs are
reversed on its shareholders.
Novoli Scarl (b): incorporated with the shareholders Cofathec for the unitary management of the contract for the development of the “Palazzo di Giustizia” (Court of Florence)” job order – Lot II -, this entity
entrusted INSO with the execution of the work and reverses consortium charges on the Shareholders.
ERGON – Engineering and Contracting Scarl: (c): while the road development job in Malta has been
completed, the development of the “Bretella Prato-Signa” (road connection between Prato and Signa)
and of the High-Speed Hub of Florence have just started. INSO performs administrative services in the
favour of Ergon. Since this company is a cost/revenue reversal consortium, relationships were mainly
of a commercial nature. Ergon granted INSO a short-term loan, which has been described in the Notes,
concerning the supply contract signed with Ergon Projects Ltd (a subsidiary of Ergon’s).
Consorzio RI.TE.D (c): the research activity ordered to INSO for the transport of natural light in blind
environments was concluded and the consortium was liquidated.
39
Aghito Tecnologie S.r.l (c): synergies here were developed in the consignment of operating theatres. As
pointed out above, this entity was sold during 2009.
Esserresse (c): relationships with this entity regard terms and conditions defined in the system installation sector. INSO also has a loan with this associated company.
M.M.H. S.p.a. (c): INSO has ongoing job orders for the construction of field mobile hospitals. INSO also
has an interest-bearing loan contract in place with this entity.
Consorzio Ospedale di Osimo (c): this Consortium, created for the management of the Osimo project
financing, has exhausted its activity with the completion of the procedures concluded with the signature of the concession with the Customer. It will be wound-up as soon as the last pending bureaucratic
procedures have been completed.
Società Consortile Ospedale di Empoli A.r.l. (c): this company was incorporated at the beginning of
2005 for the coordinated implementation of the building activities required for the expansion and restoration of the hospital of Empoli (Presidio Ospedaliero di Empoli), Customer USL 11 – Empoli. Job order
activities were completed and testing is currently ongoing before the winding up of the entity.
Osimo Salute S.p.a. (c): it is the Special Purpose Vehicle dedicated to the construction and management
of the Osimo hospital under project financing, under art. 37 bis of Law 109/94 and subsequent amendments and integrations. INSO was designated, together with other SPV entities, companies, to design
and build the hospital. As already said above, at the beginning of 2008 the Marche Region deliberated
on cancelling this concession contract, with the consequent initiation of a litigation procedure, whose
hearing will be held in June 2009.
Mediat Scarl (d): this entity has been entrusted with the construction of the Bargino Antinori wine cellar.
Vimercate Salute S.p.a. (c): owner of the concession for the development and management of the new
Hospital of Vimercate, this company entrusted a SPV led by INSO, as Agent, with the development and
building contract.
Vimercate Salute Scarl (c): it manages development and building works for the Hospital of Vimercate,
on account of the developers’ SPV led by INSO, as Agent, and consortium charges are reversed onto its
shareholders. The year’s relationships concern the management activities assigned to INSO.
S.ene.ca. srl (c): this SPV incorporated for the Careggi project receives administrative services from
INSO. INSO was contracted to carry out design and building works for the co-generation plant and
related appurtenance.
Caldana S.r.l. (e): this company is a strategic partner in the prefabricated product sector. Relationships
with this company are related to supply contracts.
Ergon Projects ltd (e): indirect subsidiary of Consorzio Etruria, this company has signed an important contract
for the development of a Shopping Mall in Malta. The contract has been acquired by means of an INSO sales
facility by agreeing a remuneration for the activity carried out. INSO also provides all the administrative,
40
financial, purchase and engineering support, and holds a supply contract for yard materials and equipment.
Etruria Investimenti Spa (d): no significant economic or financial relationships were recorded in the
year. However, the commercial relationships regarding Industrial and Commercial Building works are
very important.
Events that took place after the close of the corporate year
In addition to the transfer of the Aghito stake, already commented above, no significant event is worthwhile mentioning.
Foreseeable management trends
In January 2009, the Company approved its three-year industrial plan. The first 2009 projections seem
to confirm its predictions.
Safety Plan
Pursuant to Annex B, point 26, of Legislative Decree no. 196/2003 concerning personal data protection, the Directors hereby acknowledge that the Company adopted personal data protection measures in compliance with the provisions introduced by Legislative Decree no. 196/2003 as indicated
herein. In particular, we point out that the Safety Plan, which was filed at the Company’s headquarters and is available for consultation, was prepared and updated in compliance with the applicable
legislation.
In compliance with reporting requirements, we also point out that:
• Our Company did not purchase and does not hold own shares or parent company’s own shares,
either directly or through intermediaries or a trust;
• The Company, having its registered office in Montelupo Fiorentino, has branch offices in Rome, Milan and Naples, in Italy, as well as in Greece, Iraq and Egypt. In 2007 it opened a new branch office
in Martinique (French Overseas Possessions).
Dear shareholders,
We invite You to approve the financial statements as proposed, allocating the year’s profits of € 901.453
to the legal reserve for € 46,000 and to other reserves for € 855,453. Simultaneously, we propose that
the amount of € 3,283,966, previously allocated to “Previous years’ profits”, be allocated to the “Other
reserves” item.
If you confirm our proposals, the net worth of the Company will be as follows:
Share capital
Euro
15.000.000
Legal reserve
Euro
371.000
41
Other reserves
Euro
4.139.419
Total net worth
Euro
19.510.419
For the Board of Directors
The President
(Franco Susini)
Vimercate Hospital, Milan, Italy
Business Centre Pointe de Simon, (Martinique) - Special foundations
BALANCE SHEET AT 31 DECEMBER 2008
43
FINANCIAL STATEMENT - ASSETS
A) Subscribed capital, unpaid
B) Fixed assets, with separated indication of leased assets
I – Intangible fixed assets
1) Plant and improvement costs
4) Industrial patent and intellectual property rights
7) Other costs
Total intangible fixed assets
II – Tangible fixed assets
1) Land and buildings
2) Plant and machinery
4) Other assets
Total tangible fixed assets
III – Financial fixed assets
1) stakes held in:
a) Subsidiaries
b) Associated companies
d) Other entities
2) Accounts receivable
a) from Subsidiaries
-due beyond the year
b) from Associated companies
-due beyond the year
d) from others
-due beyond the year
Total financial fixed assets
Total Fixed Assets
44
C) Current assets
I – Inventories
3) Job orders in progress
4) Finished products and goods
5) Payments on account:
Total inventories
II – Accounts receivable
1) from Customers
-due within the year
-due beyond the year
Total receivables from Customers
2) from Subsidiaries
-due within the year
-due beyond the year
Total receivables from Subsidiaries
3) from Associated companies
-due within the year
-due beyond the year
Total receivables from Associated companies
4) from Parent companies
-due within the year
-due beyond the year
Total receivables from Parent companies
4-bis) Tax credits
-due within the year
-due beyond the year
Total tax credits
4-ter) Taxes paid in advance
-due within the year
-due beyond the year
Total taxes paid in advance
5) from other entities
-due within the year
-due beyond the year
Total receivables from other entities
Total accounts receivable
III – Financial assetst, not included among fixed assets
6) other securities
Total financial assets
IV – Liquid assets
1) Bank and postal deposits
3) Cash and cash equivalents
Total liquid assets
Total Current Assets
D) Accrued income and prepaid expenses
TOTAL ASSETS
Dec. 31, 2008
Dec. 31, 2007
0
0
16.850
179.843
33.700
232.927
763.000
959.693
529.669
796.296
88.006
223.060
233.397
544.463
128.407
295.560
287.591
711.558
1.787.850
5.043.741
1.351.570
1.778.050
3.853.466
1.326.042
1.831.700
351.700
2.471.837
1.778.327
745.032
13.231.730
14.735.886
104.836
9.192.421
10.700.275
479.802.673
1.186.040
1.311.724
482.300.437
411.768.436
1.736.018
0
413.504.454
44.622.575
11.651.656
56.274.231
53.696.293
10.949.534
64.645.827
11.958.375
2.169.476
14.127.851
12.416.084
1.740.000
14.156.084
15.921.484
0
15.921.484
17.935.410
0
17.935.410
2.895.177
0
2.895.177
2.220.196
0
2.220.196
2.802.637
1.671.784
4.474.421
6.289.502
1.034.927
7.324.429
133.025
1.107.972
1.240.997
52.421
504.602
557.023
972.506
0
972.506
95.906.667
1.197.739
0
1.197.739
108.036.708
2220
2220
2220
2220
19.315.151
33.048
19.348.199
597.557.523
5.000.152
20.619
5.020.771
526.564.153
833.916
651.789
613.127.325
537.916.217
FINANCIAL STATEMENT - liabilities
Dec. 31, 2008
Dec. 31, 2007
15.000.000
0
0
325.000
0
0
0
3.283.966
901.453
19.510.419
15.000.000
0
0
262.000
0
0
0
2.095.725
1.251.241
18.608.966
B) Provision for risks and charges
2) for taxes, including deferred taxes
3) other
Total provision for risks and charges
107.187
2.006.005
2.113.192
35.602
1.849.875
1.885.477
C) Employee termination indemnity
1.066.471
1.171.383
41.117.275
9.107.000
50.224.275
441.717.603
27.658.671
24.689.462
52.348.133
370.451.912
55.073.619
0
55.073.619
46.434.827
0
46.434.827
11.906.843
0
11.906.843
13.852.931
0
13.852.931
22.969.349
0
22.969.349
23.986.749
0
23.986.749
2.775.068
0
2.775.068
2.036.496
0
2.036.496
2.994.212
0
2.994.212
3.576.377
0
3.576.377
714.084
0
714.084
769.138
0
769.138
1.264.614
168.016
1.432.630
589.807.683
1.749.641
168.016
1.917.657
515.374.220
629.560
876.171
613.127.325
537.916.217
A) Shareholders’ equity
I – Share capital
II – Share premium reserve
III – Revaluation reserves
IV – Legal reserve
V – Statutory reserves
VI – Treasury stock reserves
VII – Other reserves
VIII – Profit (loss) carried forward
IX – Profit (loss) for the year
Total Shareholders’ Equity
D) Accounts payable
4) due to banks
-due within the year
-due beyond the year
Total due to banks
6) Payments on account
7) due to suppliers
-due within the year
-due beyond the year
Total due to suppliers
9) due to Subsidiaries
-due within the year
-due beyond the year
Total due to Subsidiaries
10) due to Associated companies
-due within the year
-due beyond the year
Total due to Associated companies
11) due to Parent companies
-due within the year
-due beyond the year
Total due to Parent companies
12) taxes payable due taxes
-due within the year
-due beyond the year
Total due taxes
13) due to welfare and social security agencies
-due within the year
-due beyond the year
Total due to welfare and social security agencies
14) other payables
-due within the year
-due beyond the year
Total other payables
Total accounts payable
E) Accrued expenses and deferred income
TOTAL LIABILITIES
45
mEMORANDUM ACCOUNTS
Guarantees furnished
Commitments
Other
Total MEMORANDUM ACCOUNTS
46
Dec. 31, 2008
Dec. 31, 2007
193.262.033
141.784.881
9.899.380
12.440.207
5.100.000
5.100.000
208.261.413
159.325.088
PROFIT & LOSS ACCOUNT
Dec. 31, 2008
Dec. 31, 2007
73.604.203
68.034.238
10.641.343
152.279.784
130.936.167
(14.247.948)
11.662.959
128.351.178
38.666.797
92.476.745
3.239.860
24.775.480
88.419.727
2.979.544
7.042.180
2.616.165
361.903
37.699
10.057.947
6.240.400
2.292.131
350.444
116.308
8.999.283
114.271
217.631
835.611
1.167.513
549.978
500.000
0
1.727.113
148.385.953
196.392
256.111
0
452.503
(1.736.018)
620.000
0
1.319.656
125.830.175
3.893.831
2.521.003
601.986
705.375
0
1.307.361
450.175
0
312.432
762.607
0
351.439
0
322.201
673.640
0
745.469
172.768
495.385
1.413.622
0
(243.049)
0
(3.840.089)
(4.083.138)
(17.469)
(2.119.606)
0
(74.992)
(51.819)
(2.941.061)
(3.067.872)
50.194
(841.449)
0
0
563.511
0
426.583
0
(607.358)
(511.536)
0
(43.847)
0
(84.953)
1.730.378
1.594.601
22) Current, deferred and advanced taxes
828.925
343.360
PROFIT (LOSS) FOR THE YEAR
901.453
1.251.241
A) Value of production
1) Revenues from sales and services
3) Changes in jobs made to order in progress
5) Other revenues
Total Value of production
B) Production costs
6) Raw and ancillary materials, consumables and goods
7) Cost for services
8) Leases and rentals
9) Labour costs
a) Salaries & wages
b) Social security fees
c) Employee termination indemnity
e) Other labour costs
Total labour costs
10) Amortization and depreciation
a) Amortization of intangible assets
b) Depreciation of tangible assets
d) Write-down of receivables booked as current assets
Total amortization and depreciation
11) Changes in the stock of raw & ancillary materials, consumables and goods
12) Provision for risks
13) Other provisions
14) Sundry operating expenses
Total cost of production
DIFFERENCE BETWEEN PRODUCTION VALUE AND COST (A – B)
C) Financial income and expenses
15) Income from shareholdings:
a) in Subsidiaries
b) in Associated companies
c) in other companies
Total income from shareholdings
16) Other financial income
d) income other than specified above
– from Subsidiaries
– from Associated companies
– from Parent companies
– from others
Total other financial income
17) Interest and other financial expenses
a) due to Subsidiaries
b) due to Associated companies
c) due to Holdings
d) due to others
Total interest and other financial expenses
17-bis) Exchange gains and losses
Total financial income and expenses
D) Value adjustments of financial assets
Total adjustments
E) Extraordinary income and charges
20) Income with separated indication of capital gains from disposals
whose revenues cannot be included in item no. 5
a) Income
b) Capital gains from disposal of fixed assets
21) Charges with separate indication of capital losses from disposals, whose accounting effects cannot be included in item no. 14, and of previous years’ taxes
a) Charges
b) minusvalenze da alienazioni immobilizzazioni
Total extraordinary items
RESULT BEFORE TAX
47
48
NOTES TO THE FINANCIAL STATEMENTS
General principles applied in drawing up the financial statements
The financial statement for the year ended on December 31, 2008, includes the Statement of Assets and
Liabilities, the Income Statement, and these Notes. It has been prepared in accordance with the provisions contained in the Italian Civil Code, supplemented by the accounting principles established by the
National Council of Chartered Accountants.
The Statement of Assets and Liabilities and the Income statement have been prepared by taking into
consideration the changes introduced by the reform of the law regulating joint-stock companies with
Legislative Decree # 6 of 17 January 2003.
In compliance with art. 2423 bis of the Civil Code, the following principles were observed in drawing
up the balance sheet:
- the items have been valuated according to caution principles and with the perspective of continuing
operations, as well as taking into account the economic function of the assets and liabilities elements considered;
- only those results achieved at year-end closing date have been reported;
- income and expenses have been booked and attributed on an accrual basis, irrespective of actual
collection and payment dates;
- risks and losses have been entered on an accrual basis, even if they were recognised after the yearend closing date;
- heterogeneous items included under single headings were subject to individual valuation;
- the valuation criteria were not changed compared to those used for the previous year.
No exceptional events occurred during the year necessitating application of the regulations set out in
art. 2423, sub-section 4, of the civil code providing for recourse to waivers.
The company is not required to draw up a Consolidated Balance Sheet pursuant to art. 27 sub-sections
3 and 4 of Legislative Decree 127/91 since this is drawn up by the controlling company.
Evaluation criteria
The valuation criteria adopted comply with the provisions in art. 2426 of the civil code and have been
integrated, where not specifically provided by law, with the accounting principles laid down by the Italian Accounting Organization (Organismo Italiano di Contabilità).
The most significant valuation criteria adopted, in agreement with the Board of Auditors for those cases
required by law, are as follows:
Intangible fixed assets
Intangible assets were booked at their purchase cost, inclusive of any directly attributable accessory
charges. Amortisation, calculated by the straight-line method, based on the criterion of residual possibility of use of the asset to which it refers, is deducted directly from specific items.
49
Amortization allowances were entered in the income statement under the item “Amortization of intangible fixed assets” and set against relative items in the assets.
The period of amortization is indicated in the comment to the items entered in the assets.
Tangible fixed assets
Tangible fixed assets are entered at purchase or production cost, and include any directly attributable
accessory charges (transport, hire, customs, insurance, etc.), duly revalued in accordance with the monetary revaluation law.
Amortisation, calculated by the straight-line method, based on the criterion of residual possibility of use
of the asset to which it refers, is deducted directly from specific items.
Depreciation allowances were entered in the income statement under the item “Depreciation of intangible fixed assets” as a contra-entry to the accumulated depreciation items..
Ordinary maintenance and repair costs were charged directly to the income statement in the year in
which they occurred, while extraordinary costs of an incremental nature were posted in the assets and
50
amortized in relation to the residual possibility of use of the assets concerned.
The period of amortization is indicated in the comment to the items entered in the assets.
Both tangible and intangible fixed assets were written down in the presence of durable value impairment. Subsequently, should this impairment cease to exist, they will be written up for an amount not
greater than the value they would have had with continued depreciation.
Financial fixed assets, receivables from subsidiaries, associates and other companies
Financial fixed assets comprise shareholdings and receivables from subsidiaries, associates and other
companies.
Shareholdings are entered at purchase cost and are inclusive of directly allocable accessory costs adjusted to account for durable losses of value, determined by referring to the equity of the associated
companies, appearing in the last balance sheet available at the time of drawing up this financial statement. Adjustments are entered as write-downs in the income statement.
In the year in which the reasons for the write-downs cease to exist, the shareholdings are revalued and
value write-backs are posted in the income statement.
Receivables are recorded at face value.
Inventories
The following criteria were adopted in the valuation of inventories:
• raw and ancillary materials, consumables and goods for re-sale were recorded at the lesser between
their purchase or production cost and their market value (the specific purchase cost is the cost determinant).
• materials in transit and materials with third parties, not yet made available to the client, are entered
at actual purchase cost;
• multi-annual job orders in progress, destined to continue for several years, are entered on the basis
of agreed contracted payments, determined by applying the cost-to-cost method or the physical
measurement method, depending on the specific job order. When the physical measurement method is used and in line with the requirements of the selected accounting principles, the Company
makes a comparison of the value obtained as specified above with the same value derived from the
use of the cost-to-cost method, making the necessary adjustments where appropriate.
In determining job orders in progress, account is also taken, for the part for which collection of payment
can reasonably be expected, of claims accrued for:
• higher charges for work processes which were unforeseen but necessary to execute the order;
• non-recording or erroneous recording (at the work site) of contractually planned work;
• higher charges for events falling within the client’s sphere of responsibility;
• higher charges due to client behaviours not complying with contractual plans;
• higher amounts paid to review the prices of construction materials.
These elements are taken into account in the valuation of job order costs. Requests for interest on delayed payments do not come under the heading of claims and are treated separately under the “Due
from Clients” heading.
Receivables and payables
Receivable and payable items are entered in the balance sheet at face value.
The value of receivables has been reduced to the presumed value of realization with adjustments of the
face value in a dedicated fund for doubtful receivables.
Values expressed in foreign currency
Values expressed in a currency differing from the Euro, if any, except for those currency fixed assets that
are booked at cost considering the purchase exchange rate or the lower exchange rate at year-end if the
reduction is deemed to be durable, are analytically adjusted to the exchange rate as at Dec. 31, 2008,
with direct allocation of the effects of the adjustment to the P&L Account. In compliance with the applicable legislation, and in the event that the result of the conversion is a net profit, an unavailable reserve
is created until the corresponding net profit is realized on valuation.
Hedging
Exchange: the forward currency buy/sell transactions that fulfil the hedging requirements established by
accounting principles were booked by debiting or crediting the differential of hedging exchange rates
51
pro-rata temporis to the income statement. The exchange rate difference regarding the renegotiation of
contracts was credited/debited to the Income Statement upon reception of the goods whose purchase
was the object of the hedge contracts.
The transactions not fulfilling the abovementioned requirements were valued at fair value at balance sheet
date and any charge was set aside in a special fund. The exchange rate difference regarding the renegotiation of contracts was credited/debited to the Income Statement upon performing the transaction.
Interests: as regards Interest Rate Swaps (hereinafter IRS), in compliance with the hedging criteria set
forth by accounting principles, the Company booked the exchange rate difference as at the balance
sheet date on an pro-rata temporis basis. IRS not fulfilling the abovementioned hedging requirements
were valued at fair value at balance sheet date. Any charge recorded at year-end was set aside in a
special fund.
Liquid assets
Liquid assets were entered at face value.
Accruals and deferrals
Since accruals and deferrals relate to two or more successive years, they are determined on a strict ac52
crual basis.
Provision for liabilities and charges
The provision for liabilities and charges covers certain or probable liabilities or charges, for which the
amount or actual date of occurrence could not be determined at the close of the fiscal year.
These provisions were valued on the basis of economic competence, according to a reasonable estimate
of the charge.
The criterion used to set aside the provision for job completion risks is based on the average work in
progress utilizations recorded over the last three accounting periods. The ratio is therefore applied to
work in progress at year end to determine the amount of the provision necessary to face future risks.
Employee Termination Indemnity
This item reflects the indemnity accrued by single employees at the close of the fiscal year, in accordance with the law and labour contracts in force at that date.
Income tax
Income tax was determined on the basis of a calculation of taxable income and the relative debt is
entered in “Tax debts”.
Advance tax paid in excess during the year was entered under “Sundry Debtors” in the assets.
In compliance with the Italian Civil Code and the Accounting Principle #25 issued by the Italian Accounting Organization, deferred or anticipated taxes are determined based on the total amount of all
temporary differences between the value of an asset or liability, according to statutory criteria, and the
value given to that asset or liability for tax purposes. Taxes that are deferred or paid in advance are calculated on the basis of the taxation rates in force at the time the above-mentioned temporary differences
are transferred, making separate calculations for IRES and IRAP.
Taxes paid in advance are recorded when it is considered that there is a reasonable likelihood of their future recovery and the transfer times of their relative benefits are foreseeable. Deferred taxes are entered
only when it cannot be demonstrated that future payment is unlikely.
For the purposes of drawing up this balance sheet, on the above assumptions, deferred and advance
paid taxes have been allocated for all temporary differences between the value of an asset or liability, in
accordance with civil and fiscal criteria
Revenues, income, costs and charges
Revenues and costs are charged to the income statement on an accrual basis, net of returns, discounts,
allowances and premiums, applying the general criteria of prudence.
In particular, we inform you that job orders are booked as revenue based on the contractual price, temporary testing or acceptance of jobs, depending on the agreements made. Services are booked in the
revenues based o their performance.
Dividends
They are booked in the year when they were accrued.
Below is a breakdown of the items set out in the financial statement and the profit and loss account/income statement.
53
ASSETS
B) FIXED ASSETS
B-I) Intangible assets
These items and their amounts are shown in Table 1.
They are detailed as follows:
B I 1) – Plant and improvement costs: they are booked in the Assets, net of amortization calculated as
at Dec. 31, 2008, with the Board of Auditors’ authorization (Art. 2426, par. 5). They refer to the charges
incurred for the share capital increase deliberated on Apr.29, 2005.
B I 2) – Research & Development costs: these are booked net of the amortization allowances determined
over three financial years effective from 2005 and concern R&D costs incurred for a project for the typing and magnetic storage of radiological images (in ASP mode), now totally amortized;
54
B I 3) – Industrial patent and intellectual property rights: they were booked net of annual amortization
allowances and are totally amortized.
B I 4) – Concessions, licences, trademarks and similar rights – they refer:
• to internal and third party costs capitalized for the development and customization of the new integrated computer system of the Company for € 133,855, amortized according to the residual duration
of the contract;
• € 11,289 for treasury software implementation;
• € 34,699 for the purchase of minor software licences;
B I 7) – Other intangible assets: they amount to € 763,000. They comprise:
• € 690,000 of costs incurred for the acquisition of multi-year rights on the management of services
provided on project financing operations in the health sector, which will be amortized over the
concession period starting from the year when the services start to be provided – the year’s increase
reflects an acquisition defined during 2008 on a new project financing transaction;
• € 73,000 of costs incurred for the offices rented in Milan and Montelupo Fiorentino. During 2008,
the amount of € 24,333 was directly amortized. Amortization is determined at constant rates, in
consideration of their future usefulness and duration of rent agreements.
Pre-operating costs incurred for the acquisition of new job orders, amortized as a function of the annual
work progress percentage, were completely amortized during the year for an amount of Euro 2,335.
Conversely, there is no capitalization.
44.256
24.422
19.833
564.537
516
564.020
735.696
161.609
430.000
144.087
B I 3) Industrial patent and intellectual property rights:
Intellectual property rights
Industrial patent rights
B I 4) Grants, licences, trademarks and similar rights:
Trademarks
Software
B I 7) Other:
Outstanding costs job orders in progress
Project Financing management rights
Multi-year costs on leased premises
1.533.729
32.185
32.185
B I 2) Research & Development costs:
Research costs
Total
157.056
157.056
Historical
value
(737.431)
(206.027)
(159.274)
0
(46.753)
(331.608)
(516)
(331.092)
(44.256)
(24.422)
(19.833)
(32.185)
(32185)
(123.355)
(123.355)
Previous years
amortization
0
0
0
0
0
0
0
17669
0
17.669
260.000
0
260.000
0
277.669
0
10.729
0
0
0
232.927
0
232.927
529.669
2335
430.000
97.334
796.296
Year’s
increase
33.700
33.700
Net value
as at
Dec. 31, 2007
Variations in intangible fixed assets
B I 1) Plant and improvement costs:
Cost of plant
Table n° 1
55
(Year’s
decrease)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(114.271)
(26.668)
(2335)
0
(24.333)
(70.752)
0
(70.752)
0
0
0
0
0
(16.850)
(16.850)
Year’s
amortization
959.693
763.000
0
690.000
73.000
179.843
0
179.843
0
0
0
0
0
16.850
16.850
Net value
as at
Dec. 31, 2008
Amortization calculated for the year was based on the following rates:
BI1
Plant and improvement costs
20,00%
BI2
R&D costs
33,33%
BI3
Industrial patent rights
20,00%
BI4
Licences (ERP software system in ASP mode)
12,50%
BI4
Software
20,00%
BI4
Trademarks
10,00%
BI7
Multi-year costs on leased premises
16,66%
B-II) Tangible assets
They can be summarised as follows:
Gross amount of fixed assets
3.344.139
(Ordinary depreciation fund)
(2.799.676)
Net fixed assets
56
544.463
In 2008, net of divestments, an aggregate amount of Euro 45,789 was invested prevalently in building
yards recently opened in foreign countries. There was no change in the corporate policy, which continued, as in the last few years, to favour the use of leasing or hiring solutions for consistent financial
correlation or to use global support services.
As regards equipment and machinery used as support to production activities, we should consider that
the Centro Attrezzature e Mezzi (Equipment and Means Centre) has been activated and operating for
the management of all the machinery available in the Gruppo Consorzio Etruria, which also optimises
the use and choice of investments.
Tables # 2 a, b, and c enclosed show the details of tangible assets and their relevant provisions.
Table no 2/a.
Variations in tangible assets
Value as at
Dec. 31, 2007
Year’s
increase
(Year’s
decrease)
Value as at
Dec. 31, 2008
B II 1) Land and buildings:
458.210
634
0
458.844
- Non-industrial buildings
458.210
634
0
458.844
B II 2) Plant and machinery:
2.017.174
32.958
(12.386)
2.037.746
- Generic plant and machinery
782.598
10.946
0
793.544
- Specific plant and machinery
179.576
8.208
(9.217)
178.568
- Transport vehicles
125.440
252
0
125.692
- Assets with a moderate unit cost
100.170
0
0
100.170
- Miscellaneous minor equipment
829.390
13.552
(3.169)
839.773
B II 4) Other goods:
822.966
24.583
0
847.549
- Furniture and office machines
389.476
12.683
0
402.159
- Electronic office machines
433.490
11.900
0
445.390
3.298.350
58.175
(12.386)
3.344.139
Total
Table no 2/b.
Variation in depreciation funds
B II 1) Land and buildings:
- Non-industrial buildings
B II 2) Plant and machinery:
Value as at
Dec. 31, 2007
Year’s
utilization
2008
Depreciation
allowance
Value as at
Dec. 31, 2008
329.803
0
41.035
329.803
0
41.035
370.838
1.721.614
(4.746)
97.818
1.814.686
370.838
- Generic plant and machinery
641.121
0
43.932
685.053
- Specific plant and machinery
77.775
(2.764)
20.376
95.386
- Transport vehicles
102.359
0
7.991
110.350
- Assets with a moderate unit cost
99.468
0
176
99.643
- Miscellaneous minor equipment
800.892
(1.982)
25.343
824.254
B II 4) Other goods:
535.375
0
78.778
614.152
- Furniture and office machines
176.667
0
40.098
216.764
- Electronic office machines
358.709
0
38.680
397.388
2.586.792
(4746)
217.631
2.799.676
Total
57
Table no 2/c.
Variation in tangible fixed assets.
Historical cost
as at
Dec. 31, 2008
B II 1) Land and buildings:
- Non-industrial buildings
458.844
Total provisions as at
Dec. 31, 2008
Net value as at
Dec. 31, 2008
370.838
88.006
458.844
370.838
88.006
2.037.746
1.814.686
223.060
- Generic plant and machinery
793.544
685.053
108.491
- Specific plant and machinery
178.568
95.386
83.182
- Transport vehicles
125.692
110.350
15.342
- Assets with a moderate unit cost
100.170
99.643
527
- Miscellaneous minor equipment
839.773
824.254
15.519
B II 4) Other goods:
847.549
614.152
233.397
- Furniture and office machines
402.159
216.764
185.395
B II 2) Plant and machinery:
- Electronic office machines
Total
445.390
397.388
48.002
3.344.139
2.799.676
544.463
The year’s amortization, posted in the Income Statement, was calculated considering the utilization,
destination and economic-technical duration of the assets, based on the criterion of the residual possibility of utilization, which we have deemed to be appropriately represented by the rates shown below,
unchanged compared to the previous year.
Assets with a reduced unit cost were posted in their respective categories.
B II 1
Buildings (non-industrial buildings)
12,50%
B II 2
Generic plant
10,00%
B II 2
Specific plant
15,00%
B II 2
Transport vehicles
20,00%
B II 2
Vehicles
25,00%
B II 2
Miscellaneous minor equipment
40,00%
B II 4
Furniture and office machines
12,00%
B II 4
Electric and electronic office machines
20,00%
Incidence of depreciation in respect of the historical cost.
EEC Code
58
Description
Depreciation %
2008
Depreciation %
2007
B II 1
Land and buildings
80,82%
71,98%
B II 2
Plant, machinery and equipment
89,05%
85,35%
B II 4
Other assets
72,46%
65,05%
The percentage incidence of the depreciation fund on the gross value of depreciable assets varied due to:
a) calculation of ordinary depreciation
b) investments in durable goods made during the year
c) decreases during the year
The Company booked financial leasings by debiting the individual rental amounts to the Income Statement, in compliance with the accounting principle consistent with the current applicable legislative
interpretation (net worth method). The method prescribed by International Accounting Principle no. 17
to account for finance leases would have entailed entering in the balance sheet the leased goods, interest on the financed capital, depreciation of the leased asset in relation to the residual possibility of use
of the specific asset, and the residual debt.
The effects of this recalculation would lead to an increase in the net worth for Euro 745,333 (511,298
after taxation) and to a lower operating result for Euro 46,008 (67,067 after taxation).
We enclose Table 3, as required by Art. 2427, par. 22, of C.C.
Summary of the information to be provided with a note to the financial
statement, as per point 22 of art. 2427 of the italian civil code
Amounts in €
a) Contracts in progress
Financially leased assets at the end of the previous year, net of
total depreciation for Euro
Dec. 31, 2008
1.829.434
1.270.521
Assets purchased with a financial lease during the year
0
Financially leased assets redeemed during the year
(190.508)
Year’s depreciation allowances
328.223
Value adjustments/write-backs of financially leased assets
Financially leased assets existing at year-end, net of total depreciation for
Euro
0
1.310.703 A)
1.598.744
b) Redeemed assets
Greater global value of redeemed assets, determined according to the financial
method, with respect to their net book value at year-end
c) Liabilities
Implicit liabilities for financial leasing operations at the end of the previous
year
of which Euro due beyond the period
of which, due from 1 to 5 years
of which, due beyond 5 years
190.508 B)
1.014.714
54.296
960.418
0
Implicit liabilities arisen during the year
0
Reduction for reimbursement of capital shares and redeemed during the year
Implicit liabilities for financial leasing operations at year-end
of which Euro due beyond the period
of which, due from 1 to 5 years
of which, due beyond 5 years
259.996
754.718 C)
13.790
740.928
0
d) global gross effect at year-end (A + B – C)
Writing-off of deferred large initial instalment (maxicanone)
Shareholders’ Equity variation (D – E)
e) Net tax effect (TAX RATE: 31.4%)
f) Effect on Shareholders’ Equity at year-end
59
746.493
1.160
745.333 D)
31,40%
(234.034) E)
511.298 F)
Profit and Loss Account
Writing-off of rents paid for financial leasing operations
307.515
Booking of financial charges from financial leasing operations
(46.560)
Booking of depreciation allowances
Divestment of redeemed assets
(328.223)
0
Effect on the result before tax
(67.057)
Booking of the net tax effect
21.059
Effect on the year’s result
46.008
B-III) Financial assets
The aggregate amount for this item is Euro 13,231,730, with an increase of Euro 4,039,309 compared to
Dec. 31, 2007. The change shown is the consequence of acquisitions made during the year and also of
capital subscriptions and granting of loans to support the development plans of associated companies.
They are detailed as follows:
Shareholdings (Item B III 1)
They amount to Euro 8,183,161 as at Dec. 31, 2008. The year’s variations – € 1,225,603 – are attributable to:
• Il Padiglione Scarl (€ 9,800 increase). Incorporated in 2008 as a SPV (in Italian “ATI”) with “Consorzio Etruria” and “COOS Marche”, after signing a agreement for the awarding of the design, development and management of the project “Il Padiglione” (health care residence, lodgings and service
centre). This consortium company entered the agreement pursuant to Art. 96 of DPR 554/1999 and
became one of its implementing parties by full right.
• Polo Sanitario Sardegna Centrale Società di progetto S.p.A. (increase of Euro 48,000). Incorporated
in 2008 with the controlling partner “Cofathec Servizi Spa”, who owns the majority of its shares, it
is the SPV owner of the concession contract signed with “Azienda Sanitaria di Nuoro” (the Nuoro
60
Health Care Entity) concerning the design and management of restoration and completion works for
some hospital units in the province of Nuoro. The concession has a term of 27.5 years, 25 of which
for management – for further details, see Management Report.
• Consortile Magazzini Prato Scarl (increase of € 5,000), This is the consortium company incorporated together with “I.T.C. Scarl” and “Coop Cellini Scarl” after being awarded the contract for the
development of a No-Food warehouse and annexed technological systems on account of “Coop
Italia”.
• Empoli Salute S.p.a. (increase of € 1,137,275): Incorporated in 2008, this entity is the owner of the
concession for the design, development and management of the completion, reconversion, and restoration of two existing buildings located within the Empoli hospital area, to be used for health care
and commercial activities. The concession has a term of 24 years, 21.5 of which for management
– for further details, see Management Report.
• Consorzio Cooperativo Finanziario per lo Sviluppo (€ 528 increase): this increase is the result of the
meeting’s resolution made on May 30, 2008 concerning both the distribution of free shares and the
allocation of dividends carrying them as a share increase.
• Consorzio Cooperative Costruzioni CCC Società Cooperativa (increase of € 25,000): The subscription of the share of this consortium is particularly significant from a commercial point of view. See
the Management’s Report for further details.
The higher value of the stake held in Etruria Investimenti S.p.A. compared to the net worth share reflects
not only the worth of the equity, but also future developments connected with the subsidiary’s activity,
as well as with Group strategies.
Finally, we inform the reader that the subsidiary “Sof S.p.A.”, during the meeting held on May 8, 2008,
made a resolution to launch a free capital increase from Euro 351.000 ad euro 1.000.000 by transferring
the available reserves resulting from the balance sheet as at Dec. 31, 2007 to the capital. This capital
increase was necessary to support the new activities of the company.
As to the other stakes, whose book value exceeds the respective net worth amount, we point out that this
capital gain reflects the benefits expected from the business conducted by each individual holding.
The stake held in “Aghito Srl”, registered on Dec. 31, 2008, was sold on Apr. 1, 2009. Its transfer price
coincided with the face value of the shares.
Information regarding the net equity of subsidiary companies as appearing in the last available balance
sheet in our possession is set out in the attached Table #4.
Receivables (B III 2)
B III 2 a) Receivables from Subsidiaries, € 1,831,700 regarding non-interest-bearing loans to Inso
Themeliodomi for € 76,000; H.B.T. Scarl for € 55,000; Inso Malta Ltd. for € 100,700; and an interest-bearing loan to SOF S.p.A. for € 1,600,000. The year’s variation is connected to both the last loan
granted (to support the financial commitment required after the purchase by “SOF”, by “Arcoservizi”, of
“Seneca Srl”) and the partial reimbursement of € 120,000 by “H.B.T. Scarl”.
B III 2 b) Receivables from Associated Companies: € 2,471,837 for interest-bearing loans to “Aghito
S.r.l.” for € 285,947 (which was reimbursed on Apr. 1, 2009, when the shares were sold); “Esserresse
S.r.l.” for € 60,000; “M.M.H. S.p.A.” for € 300,000; “Osimo Salute S.p.A.” for € 706,400; and non-interest bearing loans to “Consorzio Ospedale di Osimo” for € 48,565 (reimbursed during the year for €
26,490); “Vimercate Salute S.p.A.” for € 720,000; “Ergon Scarl” for € 19;800; and “Osimo Salute S.p.A.”
for € 331,125. The year’s variation is related both to the granting of the loan to “Vimercate Salute S.p.A.”
made in compliance with the capitalization agreement connected with the long-term loan within the
framework of the project financing transactions controlled by the company, and to the reimbursement
made by “Consorzio Ospedale di Osimo”.
B III 2 d) Receivables from others: € 745,032, mainly consisting in security deposits on rent agreements,
utilities and real estate rent agreements. The year’s variation prevalently concerned the security deposit
paid to back rent contracts for year equipment at the Martinique’s branch.
61
Firenze
Roma
Padova
Lecce
Sovicille
Osimo (An)
Firenze
Osimo (An)
Montelupo F.no (Fi)
Milano
Milano
Firenze
Nuoro
Firenze
Firenze
Pisa
Coriano (Rn)
Napoli
Montelupo F.no
Firenze
Reggio Emilia
Bologna
Associated Companies
Ergon S.c.a.r.l.
Consorzio RI.TE.D. (in liquidazione)
Aghito S.r.l.
Esserresse S.r.l.
M.M.H. Mobile Modular Hospitals Spa
Consorzio Ospedale di Osimo
Società consortile Ospedale Empoli A.r.l. Ospem S.r.l.
Osimo Salute Spa
Mediat Scarl
Vimercate Salute Spa
Vimercate Salute Costruzione Scarl
S.ene.ca. Società Energia Careggi Srl
Polo Sanitario Sardegna Centrale Società di progetto Spa
Consortile Magazzini Prato Scarl
Empoli Salute Spa
Total for Associated Companies
Other companies
Nodalis S.p.A. (in liquidazione)
Consorzio Syntek S.c.a.r.l. (in liquidazione)
Consorzio Edinca
Etruria Investimenti S.p.A.
Consorzio Toscana Salute
Consorzio Cooperativo Finanziario per lo Sviluppo Scrl
Consorzio Cooperative Costruzioni Società Cooperativa
Total for Other Companies
31.036.464
10.000
20.953
90.000
70.330
120.000
20.000
10.000
750.000
10.000
5.500.000
10.000
4.757.452
200.000
10.000
3.449.424
15.028.159
10.329
10.200
500.000
20.000
10.000
1.165
50.000
10.000
32.472
1.000.000
10.000
10.000
10.000
1.674.166
(2)
0
(2)
102.775
(2)
25.740
(1) 7.000.000
(1)
25.000
(2) 17.612.888
(2) 6.270.061
(1)
(2)
(1)
(2)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(4)
(1)
(3)
(1)
(1)
(1)
(1)
(1)
(1)
(2)
(1)
(1)
(1)
(1)
(1)
(1)
Share
owned
%
0
4.865
636
104.052
0
2.529.559
2.342.158
4.981.270
742.500
(688)
(133.084)
779
(33.485)
0
0
(52.358)
0
(211.506)
0
(58.396)
0
0
0
253.762
12,000%
4,000%
1,000%
13,000%
10,300%
0,107%
0,400%
33,000%
33,330%
50,000%
39,880%
50,000%
35,625%
27,000%
44,150%
50,000%
40,000%
42,000%
24,400%
24,000%
50,000%
32,970%
0 99,000%
0 99,000%
(14.195) 51,000%
0 75,000%
0 80,000%
25.293 99,800%
63.522 100,000%
0 51,000%
212.696 100,000%
535.277 60,000%
0 90,000%
0 80,000%
0 98,000%
822.593
Capital or Last balance
Consortium sheet result
fund
0
128.224
44.947
7.709.254
25.000
45.453.578
94.836.956
148.197.959
752.500
3.321
93.705
103.868
122.229
20.000
10.000
574.282
10.000
5.153.712
10.000
4.644.888
200.000
10.000
3.449.424
15.157.929
10.579
10.329
362.468
20.000
10.000
27.042
216.285
10.000
261.004
1.546.844
10.000
10.000
10.000
2.504.551
Net Worth
corresponding to
the last balance
sheet
List of shares comprising fixed assets
1.225.603
0
0
0
0
0
528
25.000
25.528
0
0
0
0
0
0
0
0
0
0
0
0
48.000
5.000
1.137.275
1.190.275
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3.300
4.191
45.000
28.050
60.000
7.125
2.700
331.125
5.000
2.200.000
4.200
1.162.775
48.000
5.000
1.137.275
5.043.741
0 8.183.161
0
0
0
4.111
0
256
0 1.308.361
0
2.575
0
11.267
0
25.000
0 1.351.570
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13.684
0
10.226
0
255.000
0
15.000
0
8.000
0
1.231
0
60.000
0
5.100
0
32.493
0 1.360.316
0
9.000
0
8.000
0
9.800
0 1.787.850
Key: 1) Available Balance Sheet as at Dec. 31, 2008; 2) Available Balance Sheet as at Dec. 31, 2007 3) Closing of first balanche sheet as at Dec. 31, 2009; 4) Balance Sheet as at Dec. 31, 2008 not yet available
6.957.558
0
0
5.129
4.111
449
256
1.002.203 1.308.361
2.575
2.575
48.635
10.739
379.348
0
1.438.340 1.326.042
248.325
3.300
1.107
4.191
46.853
45.000
41.423
28.050
61.115
60.000
7.125
7.125
2.700
2.700
253.546 331.125
5.000
5.000
2.061.485 2.200.000
4.200
4.200
1.133.353 1.162.775
48.000
0
5.000
0
1.137.275
0
5.056.505 3.583.466
0
0
0
0
0
0
0
0
0
0
0
0
9.800
9.800
Value as at Acquisitions Transfers & (Write-downs) Value as at
Dec. 31,
&
Dismissals
Write-ups
Dec. 31,
2007 Subscriptions
2008
10.473
13.684
10.226
10.226
184.859 255.000
15.000
15.000
8.000
8.000
26.988
1.231
216.285
60.000
5.100
5.100
261.004
32.493
928.106 1.360.316
9.000
9.000
8.000
8.000
9.800
0
1.692.841 1.778.050
Net worth share
corresponding to
the % owned
Total shares
Firenze
Firenze
Firenze
Firenze
Genova
Malta
Dublino
Montelupo F.no (Fi)
Tirana
Firenze
Firenze
Firenze
Montelupo F.no (Fi)
Subsidiaries
Consorzio Inso-Verdot
Palagiustizia S.c.a.r.l.
R.S.A.Sant’Antonino Fiesole S.p.a.
Consorzio Inso-Themeliodomi S.c.a.r.l.
H.B.T. S.c.a.r.l.
Inso Malta Ltd
ICI Inso Contracting International Ltd
Cisanello 2005 Scarl
Inso Albania Ltd
S.o.f. S.p.A.
Novoli Scarl
Annunziata Scarl
Il Padiglione Scarl
Total for Subsidiaries
Table n. 4
62
C) CURRENT ASSETS
C-I) Inventories
Dec. 31, 2008
Dec. 31, 2007
Variation
479.802.673
411.768.436
68.034.237
479.802.673
411.768.436
68.034.237
1.186.040
1.736.018
(549.978)
1.186.040
1.736.018
(549.978)
1.311.724
0
1.311.724
C I 3) Work in progress on order:
Work in progress on order
C I 4)
Finished products and goods for re-sale:
On-site materials, finished products, contracted work
C I 5) Payments on account:
advance payments to Suppliers
Total
1.311.724
0
1.311.724
482.300.437
413.504.454
68.795.983
Work in progress on order (C I 3)
This figure refers to the progressive state of production of job orders at 31.12.08 gross of amounts provisionally invoiced to clients, against contracts still in existence and not formally completed at year-end.
The net variation shown as compared to the previous year regards both the year’s production and the
testing and/or final acceptance of job orders for a total amount of € 66,418,995.
The quantification of inventories also takes into account the accrual of contract increases being currently formalised (claims, price revisions, change surveys, etc.) for an amount of € 17,180,241 for additional considerations (see Valuation Criteria) whose recognition is being pursued in and out of court.
During the year, new entries were added for a net value of € 7,460,904 and € 7,215,663 were defined
by means of specific transactions or additional works for an equal booking value as at Dec. 31, 2007.
In this regard, based on technical-legal considerations, we think there is a reasonable certainty of recognition of the booked amounts.
As regards the reclassification of claims posted in the accounts receivable from customers, see comments to the “Receivables from Customers” item.
Therefore, we point out that the equity as at Dec. 31, 2008 includes total claims for € 28,815,235, of
which € 17,180,241 are posted among job orders in progress and € 11,634,994 among receivables from
customers.
Finished products and goods (item C I 4)
They refer to materials stored in the yard waiting to be installed.
Payments on account (item C I 5)
They refer to advanced payments made to suppliers for supply or work contracts
63
C-II) Accounts receivables
64
Dec. 31, 2008
Dec. 31, 2007
Variation
C II 1) Receivables from clients:
Clients
Invoices to be issued
(credit notes to be issued)
Total gross amount due from clients
40.625.646
20.544.293
(188)
61.169.751
50.151.095
18.308.351
(212.783)
68.246.663
(9.525.449)
2.235.942
212.595
(7.076.912)
(reserve for doubtful receivables)
(reserve for interest on arrears)
Total net amount due from clients
(1.563.109)
(3.332.411)
56.274.231
(630.425)
(2.970.411)
64.645.827
(932.684)
(362.000)
(8.371.596)
C II 2) Subsidiaries:
Trade receivables
Financial credits
Invoices to be issued
Total receivables from subsidiaries
9.375.947
710.253
4.041.651
14.127.851
8.451.259
489.322
5.215.503
14.156.084
924.688
220.931
(1.173.852)
(28.233)
C II 3) Associated companies:
Trade receivables
Financial credits
Invoices to be issued
(credit notes to be issued)
Total receivables from associated companies
3.699.400
705.375
11.516.709
0
15.921.484
10.907.054
0
7.030.114
(1.758)
17.935.410
(7.207.654)
705.375
4.486.595
1.758
(2.013.926)
2.688.159
207.018
2.895.177
1.707.895
512.301
2.220.196
980.264
(305.283)
674.981
0
12.329
453
4.312
2.401.009
86.388
180.589
0
1.851.714
20.299
3.808.755
86.388
(180.589)
12.329
(1.851.261)
(15.987)
(1.407.746)
0
1.969.930
0
1.333.073
43.611
636.857
(43.611)
Total taxes receivable
4.474.421
7.324.429
(2.850.008)
C II 4-ter) Taxes paid in advance:
Credit for taxes paid in advance
Total taxes paid in advance
1.240.997
1.240.997
557.023
557.023
683.974
683.974
7.085
965.421
972.506
6.331
1.191.408
1.197.739
754
(225.987)
(225.233)
95.906.667
108.036.708
(12.130.041)
C II 4) Parent companies:
Trade receivables
Invoices to be issued
Total receivables from parent companies
C II 4-bis) Tax credits::
receivables from Italian Treasury:
Credit IRES
Credit IRAP
credit IRPEG/IRES waiting for reimbursement
receivable from Revenue for advanced severance pay
credit VAT
VAT equalization
Receivables from foreign Treasury:
Greek Treasury:
Income taxes paid on account (3% Favè payment on account)
VAT (Favè for fpa ?)
C II 5) Other receivables:
Treasury withholding tax on interest receivable
Others
Total receivables from others
Total
We are now going to comment on the individual items and changes shown as compared to Dec. 31, 2007.
Receivables from clients (item C II 1)
In spite of the revenue increase after the completion of important contracts at year-end, the “Receivables
from clients” item was significantly decreased. During the second half of the year, in spite of the negative international economic scenario, proceeds were considerably increased, this contributing to a global
reduction of the net financial position at year end. If we consider that proceeds for Euro 3,014,400,
although ordered by our customers over the first few days of December, were credited to us in January,
therefore are not included in the situation as at Dec. 31, 2008, the global situation would benefit from
another improvement for that amount.
For clarity purposes, we point out that this item includes earmarking for invoices to be issued for €
11,341,838 and invoices issued for € 293,156 regarding claims that had been previously posted as “Job
orders in progress”, with an increase of € 702,122 (€ 10,639,716) as compared to as a consequence of
definitions for € 684,000; new posts for completed works for € 1,684,122 and estimate revisions for €
298,000. In this regard, we would like to highlight that, in most positions, the legal proceedings aimed
at recovering the amounts recorded in the balance sheet were initiated a long time ago. However, it is
very difficult to establish the date of settlement of pending cases (especially for cases related to works
carried out in Greece). As regards Greek posts, some cases have been discussed during the year considered, for about 500,000 euro at the Court of First Instance of Athens. Although we are still waiting
for the final judgement to be issued, the outcome seems to have been satisfying for the Company. The
judgement (which is an acknowledgement) should be received in the course of the year and then it will
become enforceable.
For the presumable cost of legal action, a specific provision has already been allocated and is described
in detail in the “Provision for risks and liabilities” item of the Liabilities
Trade receivables posted among current assets have been posted net of both their provision for bad debt
and provision for interest on arrears for an amount of € 4,895,520.
The reserve for bad debts was determined by analyzing the specific posts by adopting a cautious appraisal criterion with the purpose of adjusting the value of receivables with their presumable collection
value. During the year, the Directors set aside a provision of € 835,610 with the purpose of adjusting the
value of receivables to the presumable collection value, also in consideration of the difficult national
and international financial and economic situation.
As regards detailed transactions, the other items refer to a specific reclassification of a provision set aside
during the previous year and allocated as a risk provision. The reclassification entailed the charging back
to the income statement of taxes paid in advance (IRAP) previously assessed on that item.
For receivables of a contentious nature the same criteria adopted for previous years was applied, since
they are still considered collectable, not having been subjected to forfeiture, prescription or similar
limitations.
The provision for interest on arrears has been posted as a contra-entry to invoices to be issued and essentially concerns judicial positions related to the ongoing dispute on the claims accrued for works developed in Greece, which are also concerned by the year’s integration. The total provision set aside is €
65
3,120,000, an amount determined based on specific estimates of the individual posts considered in the
dispute, which will become due upon settlement of the same. The provision wholly covers receivables
for interest on arrears entered in the balance sheet for which collection is unlikely.
The following charts show variations in the doubtful receivables reserve and the reserve for interest on
arrears.
Balance as at
Dec. 31, 2007
Reserve for doubtful
receivables (bad debt)
630.425
Balance as at
Dec. 31, 2007
Reserve for interest on arrears
Year’s
provision
(Utilizations) Other
transactions
835.610
Year’s
provision
2.970.411
(2.926)
Balance as at
Dec. 31, 2008
100.000
(Utilizations) Other
transactions
362.000
0
1.563.109
Balance as at
Dec. 31, 2008
0
3.332.411
Receivables from subsidiaries (Item C II 2)
On the whole, no substantial variation occurred for this item, although specific receivables followed
66
regular commercial trends during the year.
They mainly refer to receivables from Special Purpose Vehicles or Consortium Companies that entrusted
INSO with the execution of works. The most significant posts refer to receivables from “Consorzio Inso
Verdot” (charge-back of proceeds from the development and management contract for a haematological
centre in Athens); from the consortium company “Cisanello 2005” for the works carried out by INSO
for the development of the Cisanello E.R. ward; from “Novoli Scarl” for the execution of the works for
the second lot of the Court (Palazzo di Giustizia) of Florence; from “Sof S.p.A.” for the transfer of commercial rights for a project financing transaction, whose payment terms are correlated to the term of the
concession for the delivery of services and related management.
Minor posts refer to receivables from “R.S.A. S.p.A.” for the design and restoration of the former Sant’Antonino hospital in Fiesole; from “Padiglione Scarl” for the design of an “RSA” (health-care residence) in
the municipality of Urbino; and from “INSO Albania Shpk” for management services.
Financial receivables refer to Sof S.p.A., Inso Malta Ltd, I.C.I. Ltd and Inso Albania Shpk dividends.
By way of information, we point out that the net receivables/payables balance with the parent company
is an amount of receivables for € 2,221,008.
Receivables from associated companies (Item C II 3)
The decrease reflects a number of factors, all related to normal commercial fluctuations regarding individual contract trends. These credits are detailed below:
• invoices issued and to be issued for the development of the Vimercate hospital both to Vimercate
Salute S.p.A., the SPV that is also the owner of the concession, and to Vimercate Salute Scarl for
design and yard assistance services;
• invoices to be issued to Società Consortile Ospedale di Empoli A.r.l. (Ospem) for works for the construction of the new hospital of Empoli;
• provision of services related to the design of the Osimo hospital in favour of Osimo Salute S.p.A.;
• provision of services to the Mediat consortium for the construction of the Antinori wine cellars of
Cortona, and reversal of revenues for the development of the Bargino wine cellar;
• providing of services for the design and development of a co-generation plant serving the Hospital
of Careggi in favour of “S.ENE.CA S.r.l.”;
• minor amounts in favour of other associated companies.
By way of information, we point out that the net receivables/payables balance with associated companies is a payable amount of € 7,047,865.
Financial receivables refer to “Ergon Scarl”’s dividend, and are connected to the activity carried out by
“Ergon Project Ltd” (a subsidiary of “Ergon Scarl”) as the owner of a contract for the development of a
shopping centre in Malta.
Receivables from parent companies (Item C II 4)
These refer to trade receivables due from controlling company Consorzio Etruria Scarl.
By way of information, we point out that the net receivables/payables balance with the parent company
is an amount of receivables for € 120,109.
Tax credits (item C II 4-bis)
Receivables from the Italian Revenue authorities were substantially decreased during the year. The decrease is connected to two main factors:
• IRPEG/IRES credit waiting for reimbursement; in the course of 2008, the long procedure was concluded to obtain the reimbursement of the credit (including interests on arrears) accrued on the 1999
income statement and in previous years, which led to receive € 1,896,040 after about 10 years from
the due date.
• Value Added Tax (VAT) credit: this item is substantially decreased compared to 2007, with the introduction of the legislation regulating accounting reversals in the building industry and with the
increase of foreign activities. The residual credit of € 2,401,009, based on the features of the activity
planned by the Company, is essentially expected to be zeroed in 2009.
The other two factors worthwhile noticing concerning this item regard the following
• receivables from the Greek Inland Revenue, consisting of foreign income tax advance payments accrued over the last few years, exceeding the period’s fiscal load – the year’s increase is due to further
payments on account made in accordance with the turnover. We are still waiting for the reimbursement of the amount accrued during 2002 of about € 298,000.
• offset VAT: related to a VAT amount assessed on cars to receive as reimbursement after a request
submitted pursuant to DL (Leg. Decree) 258/2006.
Taxes paid in advance (item C II 4-ter)
These have been assessed in compliance with provisions in force and in accordance with Accounting
Principle # 25 O.I.C. and account for the temporary difference receivable regarding negative income
components, whose deductibility is put off to future years. The difference from 2007 concerns the net
effect of both the year’s increases and utilizations, and of the legislation regarding the non deductibility
of interest due introduced by the 2008 Finance Act, which involved the recognition of taxes paid in
67
advance on the share of interest due that could not be deducted during the year, but which is expected
to be recovered over the next 3 yearss based on the multi-year plan.
Receivables from others (Item C II 5)
other receivables: this item mainly consists of:
- advance payments to Suppliers for Euro 416,120;
- receivables for dividends from subsidiaries (Etruria Investimenti S.p.a.) for € 312,000;
- receivables from employees for € 62,163;
- other minor items.
The table below sets out receivables posted in current assets, broken down by type, with an indication
of those falling due after the following year.
Receivables broken down by type and due dates
Dec. 31, 2008
Dec. 31, 2007
Amounts
receivable
within
one year
Amounts
receivable
beyond
one year
Total
Amounts
r e c e i va b l e
within
one year
Amounts
receivable
beyond
one year
From clients
44.622.575
11.651.656
56.274.231
53.696.293
10.949.534
64.645.827
From subsidiaries
11.958.375
2.169.476
14.127.851
12.416.084
1.740.000
14.156.084
From associated
companies
15.921.484
0
15.921.484
17.935.410
0
17.935.410
From controlling
companies
2.895.177
0
2.895.177
2.220.196
0
2.220.196
Credit taxes
2.802.637
1.671.784
4.474.421
6.289.502
1.034.927
7.324.429
133.025
1.107.972
1.240.997
52.421
504.602
557.023
68
Total
Receivables
Taxes paid in advance
From others
Total
972.506
0
972.506
1.197.739
0
1.197.739
79.305.779
16.600.888
95.906.667
93.807.645
14.229.063
108.036.708
Since the corporate activity is characterised by foreign job orders, the table below lists receivables
grouped by geographical area.
Accounts receivable from Italian consortium entities established to control foreign job orders were classified based on the origin of the relevant Customer. Receivables from customers having their place of
business in non-EU countries regard the Syrian and Uruguayan Ministry of Health within the framework
of a contract for the supply of medical equipment financed by the Italian Cooperation.
Italy
Receivables
From clients
From associated companies
From subsidiaries
From controlling companies
Credit taxes
Taxes paid in advance
From others
Total
Greece
Malta
France
Other EU
Countr
27.948.184 19.394.467 1.483.181 1.433.330
11.815.787 2.312.064
0
0
15.921.484
0
0
0
2.895.177
0
0
0
2.504.491 1.969.930
0
0
1.240.997
0
0
0
972.506
0
0
0
63.298.626 23.676.461 1.483.181 1.433.330
Non EU
Countr
Total
24.284 5.990.785 56.274.231
0
0 14.127.851
0
0 15.921.484
0
0 2.895.177
0
0 4.474.421
0
0 1.240.997
0
0
972.506
24.284 5.990.785 95.906.667
C-III) Financial assets not included among fixed assets
Dec. 31, 2008
Dec. 31, 2007
Variation
C III 6) Other securities
2.220
2.220
0
Total
2.220
2.220
0
Other securities (item C III 6)
These are shares existing in the portfolio.
69
C-IV) Liquid assets
Dec. 31, 2008
Dec. 31, 2007
Variation
C IV 1) Bank and post office accounts
C IV 3) Cash and cash equivalents
19.315.151
33.048
5.000.152
20.619
14.314.999
12.429
Total
19.348.199
5.020.771
14.327.428
The increased liquidity existing in current accounts as compared to 2007 is due to the high amounts
received from customers over the last period of the year after intensified credit collection activities.
It essentially refers to temporary cash on hand held in current accounts, as well as to cash on hand held
in current accounts held as guarantee against suretyships issued on our account. The item is analyzed in
detail in the financial statement enclosed.
Cash on hand at 31.12.08 represents total liquid assets at work sites and headquarters.
D) ACCRUED INCOME AND PREPAID EXPENSES
In compliance with art. 2427 C.C., accrued income and prepaid expenses are detailed below:
Dec. 31, 2008
Dec. 31, 2007
Variation
0
0
3351
3351
(3351)
(3351)
Prepaid expenses:
Rents paid in advance
Guarantee and insurance premiums
Leasing contract rentals
Hire fees
Interest payable
Administrative consulting services
Bank commissions/fees
Prepaid expenses for renewal of forward exchange operation
Other prepaid expenses
Total prepaid expenses
8229
676.427
19.267
4512
85.256
0
9945
0
30.280
833.916
7591
253.671
37.810
26.319
0
2913
117.725
200.179
2.230
648.437
638
422.756
(18.543)
(21.806)
85.256
(2913)
(107.780)
(200.179)
28.050
185.479
Total
833.916
651.789
182.127
Accrued income:
interest receivable
Total accrued income
LIABILITIES
70
A) SHAREHOLDERS’ EQUITY
Shareholders’ Equity amounts to € 19,510,419 and shows an increase of € 901,453 compared to December 31st, 2007.
The details of this item as at Dec. 31, 2007 and Dec. 31, 2008 are shown in the enclosed Tables 5/a and 5/b.
More specifically, net equity items relate to the following:
Share capital (Item A I)
The share capital as at December 31st, 2008 is € 15,000,000, unchanged compared to the previous
business year.
The share capital consists of 15,000,000 ordinary shares with a face value of 1 Euro each. The shares are
registered and carry equal voting rights. The following shares were held at Dec. 31, 2008:
Consorzio Etruria Soc. Coop. A.r.l.
Sici Sviluppo Imprese Centro Italia S.G.R. S.p.A.
Cassa di Risparmio di S. Miniato S.p.A.
Consorzio Toscano Cooperative già Consorzio Toscano Costruzioni
Selp S.p.A.
No Of ordinary Total value
shares
9.000.000
3.000.000
1.800.000
600.000
600.000
9.000.000
3.000.000
1.800.000
600.000
600.000
%
60%
20%
12%
4%
4%
15.000.000 15.000.000 100%
Legal reserve (Item A IV)
An increase of Euro 63,000 was recorded following the resolution passed at the meeting held on June
20, 2008.
Profit carried forward from previous years (Item A VIII)
An increase of Euro 1,188,241 was recorded following the meeting resolution of June 20, 2008.
Profit for the year (Item A IX)
The year 2008 was closed with a profit of Euro 901,453.
The total amount of the Shareholders’ Equity, which is included in the “tax suspension” program due to
costs deducted only in the income statement under Art. 109, paragraph 4, of TUIR (Consolidated Act on
Income Taxation), is Euro 0.
Pursuant to Art. 2427, paragraph 7, of the Italian Civil Code, we enclose hereto Table #6 summarising
the details of the Shareholders’ Equity items, with specification of their origin, possibility of utilization
and distributability, as well as of their utilizations made in previous periods.
71
Sporting Centre in Biella, Italy
0
Other
reserves
(capital
increase
reserve)
0
0
0
Other
reserves
(capital
increase
reserve)
0
0
0 325.000
0
0
0
3.283.966
901.453
2.095.725 1.251.241 18.608.966
1.188.241 (1.251.241)
0
Profit (loss) Year’s result
Total
of previous
Shareholders’
years
Equity
901.453 19.510.419
Treasury
stock
1.251.241
0
15.000.000
0
Statutory
reserves
2.095.725
Values at 31.12.08
Legal
reserve
0 262.000
63.000
Revaluation
reserve
0
901.453
Share
premium
reserve
Equity variations as at Dec. 31, 2007 (art. 2427, no. 4, Civil Code)
0
0
Share
Capital
0
Values at 31.12.07
15.000.000
Allocation of profit for year ended
31.12.07
(Resolution of ord. shareholders
meeting of 20.06.08)
- Operating result at 31.12.08
Table 5 /b.
0 262.000
1.041.714 1.110.011 17.357.725
1.054.011 (1.110.011)
0
Profit (loss) Year’s result
Total
of previous
Shareholders’
years
Equity
1.251.241 18.608.966
Treasury
stock
1.251.241
15.000.000
0
Statutory
reserves
0
Legal
reserve
0 206.000
56.000
Revaluation
reserve
Values at 31.12.07
Share
premium
reserve
Equity variations as at Dec. 31, 2006 (art. 2427 no. 4 Civil Code)
0
Share
Capital
Values at 31.12.06
15.000.000
Allocation of profit for year ended
31.12.06
(Resolution of ord. shareholders
meeting of 11.05.07)
- Operating result at 31.12.07
Table 5 /a.
72
19.510.419
2008 Shareholders’ Equity
(or Net Worth)
3.283.966
901.453
ABC
ABC
6.160.419
0
6.160.419
325.000
1.650.000
S.E. share used
to cover
non-accounting
deductions
B
A
Possibility of
utilization
Key: A: for capital increase; B: for loss coverage; C: for distribution to Shareholders
S.E. share used to cover non-accounting deductions
S.E. restriction, Art. 109, paragraph 4
TUIR
Residual distributable amount
325.000
0
0
3.283.966
901.453
15.000.000
Legal Reserve
Reserve for capital increase
Share premium reserve
Previous years’ profits
Operating result
Share Capital
Amount
to cover losses
Allocation of 2004 profits from capital increase reserve (900,000 from profits) and from sharee premium reserve (750,000 capital reserve)
NOTES
900.000 aumento capitale sociale
for other
reasons
Summary of last three
business years’ utilizations
Analysis of Shareholders’ Equity from the availability and distributability viewpoint (under Art. 2427, n. 7 bis)
Nature/Description
Table no. 6
73
B) PROVISIONS FOR RISKS AND CHARGES
Balance as at
Dec. 31, 2007
Tax provisions
Provision for deferred taxes
Fund for tax penalties
Year’s allocation
(Utilizations)
Other
Balance as at
transactions Dec. 31, 2008
35.602
35.602
101.646
101.646
(30.061)
(30.061)
0
0
107.187
107.187
Other provisions
Provision for future litigation risks
Provision for personnel related liabilities
Provision for risks on derivative contracts
Provision for risks on the
completion of job orders
1.372.027
122.862
0
354.986
0
100.000
256.922
400.000
(56.250)
(86.694)
0
(354.986)
(100.000)
(2.862)
0
0
1.215.777
133.306
256.922
400.000
Total other provisions
1.849.875
756.922
(497.930)
(102.862)
2.006.005
Total
1.885.477
858.568
(527.991)
(102.862)
2.113.192
Provision for deferred taxes, for € 107,187. Deferred taxes are calculated based on the applicable tax
rates in force at the time when the above-mentioned temporary differences are transferred, making
separate calculations for IRES and IRAP. In compliance with the requirements of the 2008 Finance Act,
the Company eliminated the deferred items generated by the provisions set aside in compliance with the
74
applicable tax legislation (“EC” page of the “Unico” tax statement form), and the equity and economic
effects of that event have already been recorded in 2007.
Provision for future risks of litigation, for € 1,215,777, of which:
- Euro 400,000, created in 2007 and regarding the estimate of the potential charge related to the
conclusion, in June 2007, of the general fiscal assessment of 2004. In October 2008, an assessment
notice was received specifying greater IRES and IRAP tax amounts for Euro 353,797 and a highest
VAT amount for Euro 67,824, plus related interests and penalties. In November 2008, the Company filed a “istanza di accertamento con adesione” petition to request for the cancellation of the
amounts assessed. The “assessment with adhesion” procedure had no outcome, so we filed a claim,
as permitted by the legislation, to the Tax Commission of the Province of Florence. At present, we
believe that the provision set aside is sufficient to face the potential charge derived from the settlement of the dispute.
- Euro 815,777, regarding higher charges resulting from the ongoing litigation for pending and potential legal action, including Euro 244,036 booked after the settlement of the transaction with our
former sole partner Nuovo Pignone, and Euro 489,980 referred to the potential residual charge due
to the legal action undertaken against a Greek customer for the settlement of our request of higher
charges and changes.
The uses of the provision are due to legal expenses previously allocated. The other transactions refer to
a better allocation of a provision set aside in 2007, which in 2008 converged into the reserve for bad
debt, as already pointed out in the “Receivables from customers” section.
Provision for personnel related liabilities: this provision was used for Euro 86,694 to cover bonuses paid
to staff during 2008 referring to 2007, and replenished up to Euro 100,000 based on an estimate of bo-
nuses contractually due for the year 2008. The other transactions refer to write-offs of surplus regarding
employees no longer working for the Company.
Provision for derivative risks: as illustrated more in detail in the “Financial income and charges” section, we created a special provision, in compliance with IAS 19, for potential losses from derivatives
not fulfilling the hedging requirements for accounting purposes. The amount posted is equivalent to the
negative fair value (mark to market) as of Dec. 31, 2008 of the derivative instruments existing as at that
date.
Provision for risks on the completion of job orders: the amount is set aside for risks concerning all
job orders on the whole. The existing provision at the end of the previous year was entirely used
in 2008 to breast the higher costs recorded on completion of various job orders. The criterion used
for replenishment is based on the average utilizations made compared to work in progress over
the last three accounting periods. The ratio is therefore applied to work in progress at year end to
determine the amount of the provision necessary to face future risks. The fund has been adjusted
accordingly.
C) EMPLOYEE TERMINATION INDEMNITY
Managers, employees and workers
Balance as at
Dec. 31, 2007
75
Year’s allocation (Utilizations)
1.171.383
361.896
(133.252)
Other
transactions
(333.356)
Balance as at
Dec. 31, 2008
1.066.471
The provision, whose amount was booked gross of the advance payment made pursuant to Law 662/96,
corresponds to the Company’s commitment towards its employees for its legal obligations as at Dec. 31,
2008, in compliance with respective labour contracts and wages applied.
Since Jan. 1, 2007, with the severance pay reform, these provisions have been used for the funds selected by the employees or for the specific INPS fund.
The utilizations refer to terminated employment contracts and payments made in advance during the
year, while the other transactions refer to transfers made into social security provisions.
D) ACCOUNTS PAYABLE
Dec. 31, 2008 Dec. 31, 2007
D 4) Due to banks:
Current account overdraft, advances against credits or contracts
Funding for imports
Medium and long-term loans
Total due to banks
D 6) Payments on account:
Payments on account – clients
Total payments on account
76
23.927.363
427.397
25.869.514
50.224.275
Variation 19.702.867 4.224.496
0
427.397
32.645.266 (6.775.752)
52.348.133 (2.123.858)
441.717.603 370.451.912 71.265.691
441.717.603 370.451.912 71.265.691
D 7) Due to suppliers:
Suppliers
Suppliers – invoices to be received
(Credit notes to be received)
Total due to suppliers
42.930.212
12.330.557
(187.150)
55.073.619
36.178.918
10.559.793
(303.884)
46.434.827
8) Due to Subsidiaries
Trade payables
Other debts
(Credit notes to be received)
Total payables to subsidiaries
4.690.546
173.279
7.043.018
11.906.843
4.758.160
(67.614)
191.429
(18.150)
8.903.342 (1.860.324)
13.852.931 (1.946.088)
D 10) Associated companies:
Trade payables
Other debts
Invoices to be received
Total payables to associated companies
7.929.667
6.399.606
8.640.076
22.969.349
10.699.360 (2.769.693)
4.377.513 2.022.093
8.909.876
(269.800)
23.986.749 (1.017.400)
D 11) Due to parent companies:
Trade payables
Invoices to be received
Total payables to holdings
D 12) Tax debts:
Due to Italian revenue authorities
IRES
IRAP
Lieu tax pursuant to Art. 48 of Law 244/07
IRPEF surtax
employees IRPEF withholdings
self-employed partners IRPEF withholdings
Deferred VAT
Employees severance pay substitute tax
Due to Foreign Treasury
Greek Treasury:
Favè Fpa
Foreign withholding tax on income (Greece)
French Treasury:
Inland Revenue VAT
Malta Treasury:
Malta VAT report
Total taxes payable
D 13) Amounts due to welfare and social security institutions:
Inps and social security agencies
Amounts due to INPS for Termination Indemnity Treasury
Welfare agencies for vacation entitlement charges
Foreign social security agencies
Total payables to welfare and social security institutions
D 14) Other debts:
Payable to employees
Payable to employees for deferred remuneration
Other debts
Total other payables
Total
6.751.294
1.770.764
116.734
8.638.792
1.681.248
1.093.820
2.775.068
926.432
1.110.064
2.036.496
754.816
(16.244)
738.572
149.092
0
332.851
.435
202.312
107.828
1.161.080
14.217
0
12.187
458.477
1600
178.679
52.334
450.563
11.183
149.092
(12.187)
(125.626)
(165)
23.633
55.494
710.517
3.034
750.058
25.947
0
14.076
750.058
11.871
64.156
0
64.156
185.237
2.994.212
264.686
2.397.278 (2.212.041)
3.576.377
(582.165)
217.222
201.072
714.084
86.973
31.104
194.445
306.026
769.138
177.713
181.694
22.777
(104.954)
(55.054)
301.870
871.518
259.242
1.432.630
265.552
782.441
869.664
1.917.657
36.318
89.077
(610.422)
(485.027)
589.807.683 515.374.220 74.433.463
Your attention is drawn in particular to the following items in the balance sheet, which are set out in
detail in the above chart.
Due to banks (Item D 4)
These amounts reflect overdrawn current accounts, loans granted by credit institutions or factoring
companies.
As at Dec. 31, 2008, short-term net borrowing amounted to Euro 21,769,000, reflecting flows expressed
in the financial statement enclosed hereto (Table no. 7). This item could not benefit from the loan reimbursement reduction permitted by the use of the cash on hand only due to the different technical
operating timing.
The global change shown reflects the typical job order cash flow trends.
Medium and long-term items (payables due beyond the subsequent year, identified by nature) are reduced as compared to the previous year; the Company is working to define new ones.
A list of debts secured by collateral on corporate assets recorded in the accounts as at Dec. 31, 2008 is
provided below:
- real estate mortgage loan for Euro 764,420, which has been apportioned and completely taken by
the purchasers based on notarial deeds of sale; if the interested bank had completed the internal
administration procedure, the net financial position would have been already adjusted for the same
amount at year-end.
Payments on account (Item D 6)
This item comprises the amounts of non-final invoices issued to clients for job order progress and advance payments (Euro 11,559,736) for the job orders in progress as at Dec. 31, 2008. The year’s movements (net increase of Euro 71,265,691) are characterized not only by the increase in advance payments
for Euro 823,624, but also by advance payments booked against invoices issued and similar reasons for
Euro 135,241,627, and revenue balances for Euro 64,799,561 for testing and/or final acceptance processes completed during the period.
Due to suppliers (Item D 7)
This item covers residual payables to suppliers for sales of goods and provision of services both for invoices received and to be received. The increase in this value is due to both an increase in production
and to a better management of debt.
Payables to suppliers expressed in a currency different from the Euro have been entered as required by
Art. 2427, par. 6, C.C.
Due to subsidiary companies (Item D 9)
The variation from the previous period is given by the normal fluctuation of job orders in progress managed by means of Consortia and Consortium cooperation groups, and by the incorporation of new entities for the management of specific job orders (Novoli Scarl, Il Padiglione Scarl).
These refer to amounts due to Palagiustizia Scarl, Consorzio Inso Verdot, Cisanello 2005 Scarl, Consorzio Inso Themeliodomi Scarl, H.B.T. Scarl, Novoli Scarl, Il Padiglione Scarl, Mediat Scarl and Annun-
77
ziata Scarl for the charge back of consortium costs onto the Holding, towards Inso Malta Ltd for services
rendered in connection with the Malta job order and towards I.C.I. Ltd and SOF for services rendered.
The other payables refer to tenths still due on the subscribed capital of R.S.A. S. Antonino S.p.A., Novoli
Scarl, Il Padiglione Scarl and Annunziata Scarl.
As indicated under the item “Receivables from Subsidiaries”, the value of payables, net of receivables,
equals receivables for Euro 2,221,008.
Due to associated companies (Item D 10)
These are substantially in line with 2007, with the value shown being the result of two factors. The first
is linked to the activities for the development of the Vimercate Hospital (through “Vimercate Salute Costruzioni Scarl”), while the second is due to the interest-bearing loan granted by “Ergon Scarl” for Euro
0.5 million. (A further amount of Euro 1.5 million was granted in 2008.
Trade payables recorded in connection with the consortium company “Società Consortile Ospedale di
Empoli a.r.l.”, “Ergon Scarl”, “Consorzio Ospedale di Osimo”, “Mediat Scarl”, the consortium company
“Consortile Magazzini Prato Scarl” and “Vimercate Salute Costruzione Scarl” refer to the reversal of
consortium costs, while trade payable to “Aghito S.r.l.” refer to supplies and those payable to “Esserresse
S.r.l.” to the provision of services.
The other accounts payable essentially refer to the interest-bearing loan granted by “Ergon Scarl” (Euro
78
5.5 mln) and to tenths still due on the capital subscribed in some special purpose vehicles for the difference.
As reported earlier under the item “Receivables from associated companies”, the value of payables, net
of receivables, equals payables for Euro 7,047,865.
Due to parent companies (Item D 11)
This amount has not significantly changed compared to 2007 and refers to the residual amount payable
for invoices received and to be received for services provided.
As indicated under the item “Receivables from parent companies”, the value of payables, net of receivables, equals receivables for Euro 120,109.
Due taxes (Item D 12)
The following is a break-down of this item:
- IRES: it reflects the 2008 taxes due, net of the advance payments made;
- Deferred VAT: this represents the amount due for Valued Added Tax on invoices issued to public bodies for which the VAT debt is deferred. This amount is set against the VAT credit recorded under item
“Tax credits”.
- Withholding taxes on income from self-employed and employed work: these refer to the amount
withheld and to be paid in January 2008.
- Malta VAT report: this item reflects the amount due for the period liquidation for the VAT position in
the Malta territory;
- Lieu tax pursuant to Art. 48 of Law 244/07: it is the tax due for the remittance of book values as
per “EC” page of the Unico income statement model. In fact, art. 48 of Law 244/2007 (Finance Act
2008) allows for a realignment of statutory and fiscal values created after recording provisions exclusively set aside in compliance with tax legislation.
Due to welfare and social security agencies (Item D 13)
In essence, these are payables to welfare and social security agencies which have accrued for employees’ labour contracts and refer both to current and deferred remuneration (accrued vacation entitlements, paid leave, summer bonuses, etc.). The amount also includes the termination indemnity accrued
and to be allocated in the specific provision established pursuant to the termination indemnity reform.
On the whole, there is no significant change as compared to the previous corporate period.
Other payables (Item D 14)
This item includes payables accrued for employees’ labour contracts for current remuneration (Euro
190,705 for wages and salaries to be paid in January 2009) and deferred remuneration (Euro 871,518
for accrued holiday, leaves, summer bonuses, etc.) and reimbursement of expenses.
“Other payables” also include:
• advance payments made on a facilitated building integrated plan pursuant to Law 179/92 for Euro
168,016 concerning the subsidy granted by the Regional Administration of Tuscany for flats to be
compulsorily rented, which can be refunded after the 30th year;
• employee reimbursements for travelling expenses Euro 78,080.
Money collected from customers on account of third parties (principals) were reimbursed in the period
under the framework of the execution of agreements managed with SPVs and consortia. The variation
shown is mainly due to this factor.
The following table illustrates payables broken down by type, highlighting the amounts due beyond the
subsequent period.
The only debt due over 5 years is the debt described above for advance payments made on a facilitated
building integrated plan with compulsory rental of the flats.
New National Hospital of Saint Lucia, ceremony for laying the first brick
79
Payables broken down by type and due date
Payables due
within one
year
Payables:
To banks
Payments on account
To suppliers
To Subsidiaries
To Associated Companies
To Parent Companies
Taxes due
To welfare and social
security institutions
to Others
Total
80
Dec. 31, 2008
Payables
due
beyond one
year
41.117.275
441.717.603
55.073.619
11.906.843
22.969.349
2.775.068
2.994.212
714.084
1.264.614
580.532.667
Dec. 31, 2007
Payables due Payables
within one
due
year
beyond one
year
Total
Total
9.107.000 50.224.275 27.658.671 24.689.462 52.348.133
0 441.717.603 370.451.912
0 370.451.912
0 55.073.619 46.434.827
0 46.434.827
0 11.906.843 13.852.931
0 13.852.931
0 22.969.349 23.986.749
0 23.986.749
0
2.775.068
2.036.496
0
2.036.496
0
2.994.212
3.576.377
0
3.576.377
0
714.084
769.138
0
769.138
168.016
1.432.630
1.749.641
168.016
1.917.657
9.275.016 589.807.683 490.516.742 24.857.478 515.374.220
Since the corporate activity is characterised by foreign job orders, the table below lists payables grouped
by geographical area.
Accounts payable from Italian consortium entities established to control foreign job orders were classified based on the origin of the relevant Customer.
Italy
Greece
Malta
France Other EU
Countr
Payables:
To banks
50.224.275
0
0
0
0
Payments on account
303.187.515 57.378.039 69.049.038 12.103.011
0
To suppliers
40.509.291 8.858.475
766.489 2.807.639 1.360.448
To Subsidiaries
10.007.620 1.338.240
210.093
0 350.890
To Associated Companies 22.969.349
0
0
0
0
To Parent Companies
2.775.068
0
0
0
0
Taxes due
1.968.814
776.005
185.237
64.156
0
To welf. and social
513.012
104.188
0
96.884
0
security inst.
to Others
1.315.770
76.453
0
40.407
0
Total
433.470.714 68.531.400 70.210.857 15.112.097 1.711.338
Non-UE
Countr
Total
0 50.224.275
0 441.717.603
771.277 55.073.619
0 11.906.843
0 22.969.349
0
2.775.068
0
2.994.212
0
714.084
0
1.432.630
771.277 589.807.683
E) ACCRUED EXPENSES AND DEFERRED INCOME
In compliance with art. 2427, par. 7, C.C., accrued liabilities and deferred income are detailed below:
Dec. 31, 2008 Dec. 31, 2007
Accrued expenses:
Interest payable
Guarantee costs
exchange rate hedging for adjustment of debts at year end exchange rate
Leasing rentals
Insurance
Other accrued liabilities
Total accrued expenses
539.449
84.800
0
5311
0
0
629.560
630.448
0
68.452
4345
1205
33.042
737.491
(90.998)
84.800
(68.452)
966
(1205)
(33.042)
(107.931)
0
0
0
0
76.578
56.492
5610
138.680
(76.578)
(56.492)
(5610)
(138.680)
629.560
876.171
(246.611)
Deferred income:
prepaid expense for renewal of forward exchange operation
interest receivable
financial revenues from exchange rate hedging operation
Total deferred income
Total
Variation
81
MEMORANDUM ACCOUNTS
Dec. 31, 2008
Dec. 31, 2007
Variation
89.107.662
10.205.262
9.003.780
1.831.813
30.321.999
52.791.517
193.262.033
81.430.837
3.731.614
3.379.767
843.941
20.974.076
31.424.646
141.784.881
7.676.825
6.473.648
5.624.013
987.872
9.347.923
21.366.871
51.477.152
Commitments
Leased goods
Insurance policies
currency forward purchase contracts
Other debts
Total Commitments
890.446
520.072
489.272
7.999.590
9.899.380
1.203.664
564.247
2.110.998
8.561.298
12.440.207
(313.218)
(44.175)
(1.621.726)
(561.708)
(2.540.827)
Others
real estate mortgage
Securities as collateral
Total others
2.900.000
2.200.000
5.100.000
2.900.000
2.200.000
5.100.000
0
0
0
208.261.413
159.325.088
48.936.325
Guarantees furnished
Performance bonds
Discharge of lien hold back bonds
Bid bonds
import documentary credits
Other guarantees
direct suretyships issued in favour of third parties
Total Guarantees given
Total Memorandum Accounts
The guarantees and commitments undertaken by the Company as at Dec. 31, 2008 are detailed below:
Guarantees given: the increasing change in guarantees given is mainly due to the presence of good
performance bonds issued for the Ergon consortium (classified as third party) and to the development of
commercial initiatives through SPVs and/or instrumental entities that require the issuing of direct surety
bonds and/or co-obligations. The company has been counter-guaranteed on co-obligations for Euro
9,609,660 with personal guarantees of partners for specific operations.
For greater clarity, we give an indication of guarantees currently in effect, net of counter-guarantees
which generate a duplication. Counter-guarantees (as, for example, in the case of guarantees issued by
Greek banks in favour of Inso, which are subject to the issue of a guarantee by an Italian bank, and also
in the case of insurance counter-guarantees for guarantees that existed before the entry of toda’s Holding, still endorsed by the company’s former sole shareholder, Nuovo Pignone), if added to guarantees
in effect, without further specification, would alter the Memorandum Accounts by duplicating and even
triplicating significant amounts. For the sake of completeness, we point out that, as at Dec. 31 2008,
counter-guarantees existed for Euro 5,127,121 against Euro 6,840,683 as at Dec. 31, 2007.
In compliance with the provisions set forth by art. 2427 of the Civil Code, the guarantees issued in favour of subsidiaries amount to Euro 1,878,601 for “Consorzio Inso Spa, Verdot S.a, and Euro 1,291,142
for Palagiustizia Scarl.
Direct surety bonds issued in favour of third parties for Euro 31,424,646 concern guarantees issued to
the benefit of credit institutions in the interest of Palagiustizia Scarl, Mediat Scarl, Ergon scarl, Ergon
Projects Ltd (SPV controlled by Consorzio Ergon), and Nodavia (subsidiary of Ergon Scarl).
82
We specify that the “Guarantees given” item includes bank guaranties for Euro 46,496,425.
Import documentary credits refer to letters of credit issued to suppliers prevalently for foreign job orders.
Commitments:
• Leasing – this item is reduced, due to premiums paid during the year.
• Insurance policies: they reflect the instalments still due for CAR and subsequent policies.
• Currency forward purchase and sales commitments: they refer to commitments on exchange swap
operations (currency swaps), considerably decreased after the conclusion of contracts during the
year.
• Other commitments refer to forward commitments on IRS and CAP transactions, as well as safe
custody securities for contractual commitments (Euro 250,000).
Others:
• Real estate mortgage: they refer to the Massarosa real estate operation. The sales contracts of this
transaction were finalized with the purchasers taking the loan upon themselves. To date, the credit
institution has not completed the necessary transfers.
• Securities as collateral: the Company established a pledge on the shares of Vimercate Salute S.p.A.,
as required by the capitalization contract of the long-term loan obtained within the framework of the
related project financing operation.
The Company has a call option for the purchase of the remaining 40% of S.o.f. S.p.A. shares. This right
shall be exercised starting from the date of approval of the 2009 financial statement and shall expire on
June 30, 2011.
PROFIT AND LOSS ACCOUNT
A) VALUE OF PRODUCTION
Dec. 31, 2008 Dec. 31, 2007
Variation
A 1) Income from sales and services:
Income from services and completed job orders
Other revenues
Total revenues from sales and services
71.442.225
2.161.978
73.604.203
128.495.247
2.440.920
130.936.167
(57.053.022)
(278.942)
(57.331.964)
A 3) Variation in job orders in progress:
Contracted work
Total variation in job orders in progress
68.034.238
68.034.238
(14.247.948)
(14.247.948)
82.282.186
82.282.186
A 5) Other revenue and income:
Ordinary contingent assets
Ordinary capital gains
Sundry revenues and income
Total other revenue and income
1.142.661
0
9.498.682
10.641.343
1.141
19.729
11.642.089
11.662.959
1.141.520
(19.729)
(2.143.407)
(1.021.616)
152.279.784
128.351.178
23.928.606
Total Value of Production
2008 revenues consist in the items shown above, which reflect the testing of some important jobs that
allowed for the final booking in the revenues of the contract value previously shown in connection with
works in progress in the “Changes in job orders in progress” item.
The aggregate value reaches 152 million euro, with a 18.64% percentage increase compared to the
previous year.
The aggregate amount of this item was determined by adding consortium reversals and SPV member
fees to the ordinary assets. This operation, while complying with Italian Civil Code provisions, amplified
the real value of the Company’s production and was superimposed to the amount of works assigned to
Inso by the Consortia and SPVs, with the effect of duplicating the values booked in the Income Statement.
This duplication, for the year considered, was Euro 15,063,392, net of this effect the real production was
Euro 137,216,392 as against Euro 115,072,686 in 2007. For clarity purposes, we deem it appropriate to
summarise the value of production (revenue accounts) below, net of said effect.
A 1) Revenues from sales and services
A 3) Variation in job orders in progress
A 4) Increases for internal work capitalised on fixed assets
A 5) Other revenues and income
Total adjusted value of production
Balance sheet data
Effect
Value
73.604.203
68.034.238
0
10.641.343
152.279.784
9.025.169
0
0
6.038.223
15.063.392
64.579.034
68.034.238
0
4.603.120
137.216.392
Operations have prevalently been carried out in Italy, France (Martinique), the Republic of Malta,
Greece, Syria and Uruguay.
For more in-depth analysis of this category of operations and of the geographical area involved, please
see the Management’s Report.
83
Income from sales and services (A 1)
This heading covers:
• proceeds from transfer of assets (sale of electromedical equipment and system components);
• provision of services characterized by periodicity (e.g.: maintenance of hospital equipment);
• income from completed job orders pertaining to multi-annual jobs previously included in job orders
in progress;
• Income from design services;
• other minor less significant income.
Some jobs were concluded during the year considered, for an aggregate value of Euro 66,418,995,
against Euro 121,761,032 in the previous year; the change shown is totally explained by this factor.
Changes in job orders in progress (Item A 3)
These reflect the share of works carried out during the year considered, for multi-year job orders still
ongoing as at 31.12.08.
Job orders for Euro 66,418,995 were completed in 2008. The variation from the previous year is explained by the lower incidence of tests. In any case, some important job orders (including the supply
of medical equipment to the Mater Dei Hospital and the first lot of the Court of Florence) are almost
completed, but are not considered as totally completed only because testing is being conducted.
84
Other revenue and income (Item A 5)
The remaining values, net of the duplication effect mentioned above, wre determined by:
• contingent assets (prevalently deriving from the refund of expenses incurred for a legal proceeding
guaranteed by the former partner Nuovo Pignone);
• personnel commanded to group companies???;
• other revenues mainly refer to hiring of equipment, re-debiting of staff benefits, miscellaneous services, cost chargeback, etc.
B) COSTS OF PRODUCTION
As already indicated in the comments to the production value item, the production costs amount is affected by the “duplication effect” of the values connected with Temporary Associations of Companies
(or SPVs), Consortia and Consortium entities. This amount is Euro 15,063,392.
The variation shown is in line with the year’s production increase.
Production costs are summarized below:
B-6) Raw, ancillary and consumable goods
Dec. 31, 2008 Dec. 31, 2007
Purchase of goods
Purchase of ancillary goods
Purchase of raw materials
Purchase of consumable goods
Purchase of equipment
Purchase of fuel and lubricants
(Suppliers’ allowances and discounts)
Total
1.837.350
42.751
20.105.490
516.809
15.979.295
185.203
(101)
38.666.797
1.946.626
30.832
9.581.925
349.214
12.735.143
133.528
(1788)
24.775.480
Variation
(109.276)
11.919
10.523.565
167.595
3.244.152
51.675
1687
13.891.317
The change shown in individual items is the result of the normal fluctuation due to the different nature
of the activities developed during the year.
In particular, the increase in the purchase of medical equipment refers to the Syria, Uruguay, and Greece
contracts, while the increase in the purchase of raw materials is linked to the specific work phases of
some contracts and to the increased value of production.
B-7) Costs for services
This item covers costs incurred for the following operating services.
85
Dec. 31, 2008 Dec. 31, 2007
Technical consultancy and assistance
Other consultancies
Developments and work by third parties
Reversal of consortium costs
Directors and Auditors Emoluments
Utilities
Insurance
Travel expenses
Transport and handling
Maintenance
Banking services
Factoring contract services and commissions
Cost of management staff, temporary work and other staff-related
services
Project-related employment
Entertainment expenses
Miscellaneous certification expenses
Advertising, propaganda and sponsorships
Surveillance and concierge services
Cleaning service
Other external services
Other
Total
Variation
3.707.381
2.237.272
24.323.323
39.918.568
177.349
682.459
985.215
1.503.878
373.481
85.725
330.889
5.243
1.023.220
2.851.982
1.055.157
18.288.965
39.197.966
183.843
605.863
2.532.097
1.351.747
1.204.878
78.820
281.628
40.606
1.194.033
855.399
1.182.115
6.034.358
720.602
(6.494)
76.596
(1.546.882)
152.131
(831.397)
6.905
49.261
(35.363)
(170.813)
576.616
75.939
74.529
128.322
307.751
139.406
15.698.983
121.196
92.476.745
586.542
104.148
73.363
145.731
190.220
184.861
18.016.983
250.294
88.419.727
(9926)
(28.209)
1.166
(17.409)
117.531
(45.455)
(2.318.000)
(129.098)
4.057.018
The increase of costs is mostly due to the ongoing subcontract and supply work (development and sundry works by third parties and other outsourced professional work). Insurance costs are decreased and
go back to near-average levels (2007 values included significant insurance policies, typical of France,
which had been underwritten for the Martinique job order).
Consortium costs charged back are maintained at 2007 levels, in consideration of the importance of
projects managed through corporate tools.
Services costs include emoluments to Auditors, amounting to Euro 37,949, and Directors for Euro
139,401.
B-8) Leases and rentals
Dec. 31, 2008 Dec. 31, 2007
Office rentals
Housing rentals
Miscellaneous rentals
Hire service
Software fees and licences
Leasing rentals
Total
496.785
327.917
6160
1.929.120
170.773
309.105
3.239.860
462.747
325.960
5920
1.589.990
175.348
419.579
2.979.544
Variation
34.038
1957
240
339.130
(4.575)
(110.474)
260.316
Globally in line with 2007:
The variation shown in rents is due to the different nature of yard work.
86
B-9) Labour costs
B 9 a)
B 9 b)
B 9 c)
B 9 e)
Total
Wages and salaries
Social contributions
Severance pay
Other costs
Dec. 31, 2008
Dec. 31, 2007
Variation
7.042.180
2.616.165
361.903
37.699
10.057.947
6.240.400
2.292.131
350.444
116.308
8.999.283
801.780
324.034
11.459
(78.609)
1.058.664
These include gross wages and salaries paid to employees, social security contributions, accruals for
severance indemnity/employee termination indemnity pay, as well as vacation entitlements, paid leave
and related contributions accrued but not paid as at Dec. 31, 2008.
The total amount of wages paid highlights the skills of the staff hired in the headquarters, the staff seconded to the different branches and staff employed by the same branches.
By way of information, the total cost (also including displaced staff costs for the wage portion paid on
site) for the Athens head-office is Euro 1,425,883 (for wages, salaries and contributions, etc.) against
Euro 993,539 of the previous period, while the costs incurred for the Fort de France (Martinique) entity
amounts to Euro 859,058 (for wages, salaries and contributions, etc.) against Euro 1,088,527 of the
previous period.
INAIL contributions have been set aside on an accrual basis.
The variation shown in the Personnel Cost item is mostly related to the new personnel hired in the Greek
branch, as well as to the newly hired employees and workers. On the whole, the total average value
for 2008 is increased by 26 units as compared to 2007, with 9 units in Greece and 17 in Italy. See the
Management’s Report for further details.
Italy
31-12-08
Greece
31-12-08
Martinique
31-12-08
Total
31-12-08
11
17
72
28
128
0
0
19
22
41
0
4
2
0
6
11
21
93
50
175
Executives
Senior managers
Office workers
Factory workers
Total
The period’s average work force was made up as follows:
Dec. 31, 2008 Dec. 31, 2007
Depreciation:
B 10 a) Depreciation of intangible fixed assets
B 10 b) Depreciation of tangible fixed assets
Total Depreciation
114.271
217.631
331.902
196.392
256.111
452.503
Variation
(82.121)
(38.480)
(120.601)
B 10 d) Write-down of receivables included in current assets and
liquid assets:
Provision for doubtful receivables reserve
Total write-down of receivables in current assets
Total
87
835.611
835.611
0
0
835.611
835.611
1.167.513
452.503
715.010
B-10) Amortization and depreciation
Amortization and depreciation were dealt with in detail in the Statement of Assets and Liabilities, to
which we refer the reader.
Dec. 31, 2008
Dec. 31, 2007
Variation
B 11) Variations in inventories of raw, ancillary and consumable
goods
Variations in raw materials inventories
Opening stock
1.736.018
(Closing stock)
0
1.736.018
(1.186.040)
(1.736.018)
549.978
Total variaz.rimanenze materie prime
549.978
(1.736.018)
2.285.996
Total
549.978
(1.736.018)
2.285.996
B-11) Variations in inventories of raw, ancillary, consumable materials and goods for resale
The final stock refers to materials stored in the yard waiting to be used.
B-12) Provision for risks
B 12) Provision for risks:
Provision set aside for future risks
Provision for company result bonus
Provision for contractual risks
Total
Dec. 31, 2008
Dec. 31, 2007
Variation
0
100.000
400.000
500.000
500.000
120.000
0
620.000
(500.000)
(20.000)
400.000
(120.000)
A sum was set aside during the year based on an estimate of the result bonus to be given to employees
based on a trade union agreement.
As regards the provision for contractual risks, see item “Provision for risks and liabilities” in the Liabilities.
B-14) Sundry operating expenses
Below is a detailed break-down of the items under this heading:
Dec. 31, 2008 Dec. 31, 2007
88
Consortium fees
Contributions to trade unions and trade associations
Bank and insurance guarantee charges
Taxes other than income tax
Ordinary contingent liabilities
Capital losses
Losses on receivables
Other
Total
846
533.500
1.032.967
75.493
12
7.002
0
77.293
1.727.113
3.865
122.004
756.036
88.430
73.900
30.175
52.934
192.312
1.319.656
Variation
(3.019)
411.496
276.931
(12.937)
(73.888)
(23.173)
(52.934)
(115.019)
407.457
The changes shown essentially concern the following main factors:
• although partly mitigated by chargebacks to shareholders and/or Italian or foreign associated companies, charges for bank and insurance surety bonds have increased, in line with the increasing costs
for commercial initiatives;
• contributions to trade unions and industry associations essentially refer to supplemental social security fees paid for professional institutions as required by the Greek legislation proportionally to
the invoiced amounts of the contract prices. The increase is a consequence of the statutory revision
conducted, which increased the percentages applied.
C) FINANCIAL INCOME AND EXPENSES
Financial income and charges as at Dec. 31, 2008 amounted to net charges for Euro 2,119,606, with an
increase of Euro 1,278,157 compared to the same period of the previous year. Actually, if we exclude
the income from shareholdings and the provision for risks from derivative contracts, net charges amount
to Euro 3,170,045 against Euro 1,604,056 for the previous year.
The increase in financial charges as compared to 2007 is due to the constant interest rates applied
throughout 2008 to a net financial indebtedness that fluctuated between 40 and 60 million Euro for two
thirds of the year and to a lower amount of interest receivable accrued.
As regards the financial instruments shown in the table below, we should point out that the currency forward
purchase operations, the Interest Rate Swaps and the Cap contract, although initiated with the goal of hedging
the company from the interest rate risk, on one side, and from the exchange rate risks on the other, did not fulfil
the criteria established by the applicable accounting principles for hedging instruments. As a consequence, the
negative fair value recorded at the underlying posts (*) was set aside in a special provision for risks.
Contract type
Swap
Total
Cap
Total
Interest rate swap (IRS)
Interest rate swap (IRS)
Interest rate swap (IRS)
Interest rate swap (IRS)
Total
(*)
(*)
(*)
Currency
USD
Notional capital
680.920
680.920
Mark to market
9368
9368
Euro
250.000
250.000
3.000.000
1.039.590
1.500.000
2.000.000
7.539.590
9
9
(121.770)
3.826
(63.084)
(72.068)
(253.096)
Euro
Euro
Euro
Euro
89
C-15) Income from shareholdings
Dec. 31, 2008 Dec. 31, 2007
From Subsidiaries:
Dividends
From Associated companies:
Dividends
From other companies:
Dividends
Total
Variation
601.986
450.175
151.811
705.375
0
705.375
0
1.307.361
312.432
762.607
(312.432)
544.754
As the number of Special Purpose Vehicles has increased, dividends have also increased over
time.
Specifically, the associated companies’ figure regards the 2008 dividends of Inso Albania Shpk for
Euro 212,695 (SPV incorporated for the development of the Tirana hospital), Inso Malta Ltd (which
takes care for the services for the Malta job orders) for Euro 25,242 related to the year 2008, Sof S.p.A.
for Euro 300,000 (year 2008), and I.C.I. Ltd (year 2007) for Euro 63,522, and other minors for Euro
526.
Dividends from other associated companies regard Ergon Scarl for Euro 705,375.
C-16) Other financial income
Dec. 31, 2008 Dec. 31, 2007
C 16 d) Sundry income:
Interest receivable on ordinary current accounts
Interest receivable on tax credit
interest receivable from customers
Interest receivable from subsidiaries
Interest receivable from associated companies
Interest receivable from controlling company
Interest receivable on arrears
Provision for write-down of interest receivable on arrears
Sundry financial discounts and interest receivable
Total Sundry Income
Total
Variation
27.365
0
94.527
30.911
351.439
0
427.875
(362.000)
103.523
673.640
25.862
38.745
294.805
0
745.469
172.768
306.185
(197.000)
26.788
1.413.622
1503
(38.745)
(200.278)
30.911
(394.030)
(172.768)
121.690
(165.000)
76.735
(739.982)
673.640
1.413.622
(739.982)
We point out that interests receivable from customers, both interests on arrears and sundry interests,
concern transactions defined or in course of definition. The change shown as compared to the previous
period is due to:
• extraordinary factors that over 2007 had led to the finalisation of an important transaction with a
90
customer for the recognition of interest on arrears receivable, as well as to the definition of interests
with the consortium entity “Vimercate Salute Costruzioni” for the start-up of the yard;
• absence of interests towards the parent company due to the progressive decrease in the exposure.
The interests on arrears allocated to this item are a contra-entry to the respective provision set aside for
the share of interests whose collection is not certain. This provision has been appropriately commented
upon in the Assets section.
C-17) Interest and other financial expenses
Dec. 31, 2008 Dec. 31, 2007
Interest payable on ordinary current accounts
Interest payable on bank loans
Interest payable on loans and financing
Interest payable on exports
Interest payable on exports
Interest payable on arrears and deferments
Interest payable to associated companies
Interest payable to parent companies
Sundry interest and charges
Provision for risks on derivative contracts
Total
25.207
740.597
2.516.314
18.723
3661
131.671
243.049
0
146.994
256.922
4.083.138
23.844
612.196
2.225.118
0
10.090
1.265
74.992
51.819
68.547
0
3.067.872
Variation
1.363
128.401
291.196
18.723
(6429)
130.406
168.057
(51.819)
78.447
256.922
1.015.266
As pointed out in the part concerning risk provisions, the Company acknowledged the provision for
risks related to derivative contracts not fulfilling hedging requirements, whose amount was determined
in accordance with the fair value as at Dec. 31, 2008, as shown in the table above.
C17-bis) Exchange gains and losses
Profits on exchange rates
Losses on exchange rates
Total
Dec. 31, 2008
387.578
(405.047)
(17.469)
Dec. 31, 2007
62.711
(12.517)
50.194
Variation
324.867
(392.530)
(67.663)
Profits and losses on exchange rates regard both operations carried out and the year-end realignment of
currency positions not covered for foreign exchange risk.
This item also includes the differentials accrued on currency swap transactions not fulfilling hedging
requirements.
E) EXTRAORDINARY INCOME AND CHARGES
They amount to net charges for Euro 43,847.
E-20) Income
Contingent assets
Total
Dec. 31, 2008
Dec. 31, 2007
Variation
563.511
563.511
426.583
426.583
136.928
136.928
The balance of contingent assets mainly reflects the allocation of invoices to be received for previous years,
that have become available during the period considered, and also transactions with suppliers on past debt.
E-21) Charges
Dec. 31, 2008 Dec. 31, 2007
Contingent liabilities
Damage compensation and penalties
Penalties and fines
Total
484.588
111.122
11.648
607.358
495.277
4.119
12.140
511.536
Variation
(10.689)
107.003
(492)
95.822
Contingent liabilities essentially arise from costs accrued in previous years regarding invoices received
after year closing and/or insufficient allocations for invoices to be received, as well as from revisions of
previous accounting entries.
91
22) TAXES
Dec. 31, 2008
Dec. 31, 2007
Variation
925.563
469.994
45.757
0
71.585
(683.974)
828.925
799.424
475.523
9.218
458.477
(1.590.511)
191.229
343.360
126.139
(5.529)
36.539
(458.477)
1.662.096
(875.203)
485.565
IRES
IRAP
Foreign source income tax
Lieu tax pursuant to Art. 48 of Law 244/07
Deferred taxes
Taxes paid in advance
Total
They are determined by referring to both the applicable tax rates. They include:
• year’s IRES and IRAP;
• foreign income taxes related to taxes withheld for Albania’s tax authorities;
• deferred taxes assessed based on temporary fiscal differences;
• taxes paid in advance assessed on temporary differences;
Annexes 8 and 9 show the reconcilement between the balance sheet tax burden and the theoretical tax
burden, as required by the accounting principle #25, as well as a prospectus with an analysis of prepaid
92
and deferred taxes.
Pursuant to Art. 2497 bis of the Civil Code, we hereby declare that the Company is managed and coordinated by “Cooperativa Consorzio Etruria A.R.L.” located in Via Sammontana 15, Montelupo F.no (FI).
The Company is required to prepare consolidated financial statements. Summary information concerning the last approved financial statements (2007) is provided in Table 10.
For an appropriate and complete comprehension of the financial standing of “Consorzio Etruria Scrl” as
at December 31, 2007, as well as of the economic result obtained by the company at year-end, please
see the balance sheet and the related auditors’ report, which are fully available as required by the applicable legislation.
These financial statements have been prepared in compliance with legal requirements.
Table no. 7
Cash Flows (Values in thousand Euro)
Dec. 31, 2007
Dec. 31, 2008
(15.281)
(22.638)
1.251
452
(112)
(1.093)
498
(24.052)
1.804
21.375
486
111
901
332
(105)
228
1.356
14.501
2.470
5.290
(428)
23.189
C. CASH FLOW FROM (FOR) INVESTMENT ASSETS
(Investiments) Disinvestiments in net fixed assets:
- intangible
- tangible
- financial
Total C
(452)
(229)
(2.954)
(3.635)
(278)
(50)
(6.410)
(3.738)
D. CASH FLOW FROM (FOR) FINANCIAL ASSETS
Medium/long-term receivables from banks within the subsequent year
Share capital increase
Profit allocation/utilization and reserves
Total D
(3.833)
0
0
(3.833)
(15.582)
0
0
(15.582)
E. CASH FLOW FOR THE YEAR (B+C+D)
(7.357)
862
F. CLOSING (A+E)
(FINAL SHORT-TERM NET FINANCIAL INDEBTEDNESS) (A+E)
(22.638)
(21.769)
Cash and receivables from banks
Short-term payables to banks
TOTAL CASH ON HAND
5.021
(27.659)
(22.638)
19.348
(41.117)
(21.769)
A. OPENING
(INITIAL SHORT-TERM NET FINANCIAL INDEBTEDNESS)
B. FLOW FROM ACTIVITIES
Operating profit
Amortization
Net variation in the severance pay fund
Other net variations
Year’s operating profit before variations in the current assets
(Increase) Decrease of current assets credits
(Increase) Decrease in inventories
(Increase) Decrease in receivables from suppliers and other debts
(Increase) Decrease in other items of the current assets
Total B
93
18
251
(90)
(309)
(3)
(16)
(26)
Reversal of temporary differences from previous years
Dividends
Inso Albania dividends
Use of provision for company result bonus
Use of provision for future risks
Use of taxed provision for doubtful receivable
Previous years’ subscription fees
50% tangible assets depreciation
Previous years’ entertainment expenses
Total current, deferred and foreign taxes
Foreign source income tax
Total deferred taxes
Temporary differences taxable in subsequent years
Temporary differences deductible in subsequent years
Reversal of temporary differences from previous years
Total
369
(2.935)
175
(2.391)
(5,26)
46,77%
(5,92%)
27,50%
%
926
926
450
(616)
102
(809)
91
(616)
53,51%
53,51%
26,01%
(208) (12,00%)
(91)
809
(102)
476
IRES (corporate tax)
Taxable
Tax
base
3.366
Total
Total current taxes
1.636
(755)
(175)
Total temporary and permanent differences
797
(1.552)
100
476
400
6
86
1.832
35
Temporary differences deductible in subsequent years
Provision for company result bonus
Provision for doubtful receivables reserve
Provision for future risks of litigation
50% first year depreciation of tangible assets
Interest payable on arrears
Non-deductible interest payable
Trade association fees
Differences that will not be reversed in subsequent years
Other non-deductible costs
Other non-taxed revenues
(369)
(65)
(304)
Temporary differences taxable in subsequent years
Dividends
Interest receivable on arrears
2.935
1.730
IRES (corporate tax)
Taxable base
Tax
12.050
(397)
(261)
(536)
400
0
470
470
(15)
(10)
(20)
17
0
485
3,78%
3,78%
(0,12)
(0,08%)
(0,16%)
0,13%
0,00%
3,90%
0
(400)
536
136
3
0
(17)
20
3
YEAR 2008
Irap (regional tax on production activities)
Taxable
Tax
base
1.966
(2.227)
(123)
(309)
(16)
(62)
(26)
400
-
-
12.447
YEAR 2008
Irap (regional tax on production activities)
Taxable base
Tax
%
Reconciliation between balance sheet tax burden and theoretical tax burden, as per accounting principle no. 25
Result before tax (IRAP net taxable base for Greece production value)
Theoretical tax burden
Description
Table no. 8
829
46
(612)
102
(826)
111
(612)
Total
1.396
1.396
434
(218)
(111)
826
(102)
%
57,28%
57,28%
25,88%
(12,08)
(5,42%)
46,90%
(5,92%)
31,40%
Totals
961
Tax
539
16
3
26
62
309
90
33
31,40%
27,50%
31,40%
3,90%
31,40%
31,40%
3,90
476
86
1.832
6
35
2.935
1
8
2
5
142
72
289
38
251
616
2.796
2.182
(5.594)
27,50%
10,00%
33,00%
33,00%
4,25%
36
10
26
204
924
94
(1.222)
269
18
251
-
27,50%
10,00%
-
27,50%
27,50%
27,50%
27,50%
27,50%
-
31,40%
27,50%
-
65
304
369
5
26
31
27,50%
27,50%
-
2008 increases
Taxable Tax rate
base
400
100
-
18
85
103
Tax (c)
826
10
131
24
504
2
-
127
28
-
2008 increases
Taxable Tax rate Tax (c)
base
97
28
1
Deferred taxes as at Dec. 31, 2007 2008 Tax Settlements
Taxable Tax rate Tax (a)
Taxable Tax rate Tax (b)
base
base
557
5
128
19
19
-
347
39
-
2008 Tax Settlements
Taxable Tax rate Tax (b)
base
31,40%
27,50%
27,50%
27,50%
31,40%
27,50%
-
31,40%
27,50%
-
1.241
11
258
24
504
11
19
-
377
37
-
389
85
304
-
27,50%
27,50%
4-
108
23
85
(-
Imposte differite al 31/12/08
Taxable Tax rate Tax
base
(a-b+c)
4.326
35
938
86
1.832
34
68
-
1.200
133
-
Imposte anticipate al 31/12/08
Taxable Tax rate
Tax
base
(a-b+c)
(1) The deferred IRAP tax due on provisions set aside for work in progress risk was determined by taking into account the production share that can presumably be completed abroad.
No amount was credited or debited to the Shareholders’ Equity.
No item was excluded from the determination of deferred taxes receivable and payable
Net economic impact
Total
Dividends
Inso Albania dividends
Interest receivable on arrears
Tax bad debt provision
Tax provision for work in progress risk
Tax provision for work in progress risk (1)
(“EC” Unico form page remittance)
Description of temporary differences
(684)
31,40%
16
Net economic impact
27,50%
31,40%
31,40%
-
465
60
62
-
1.835
31,40%
31,40%
-
1.109
123
-
Prepaid taxes as at Dec. 31, 2007
Taxable Tax rate Tax (a)
base
Total
Provisions for future risks
Provision for employee liabilities
Provision for employee liabilities –
IRAP reversal for changes in legislation
Reserve for bad debt
Interest payable on arrears
Non-deductible interest payable
Entertainment expenses
50% depreciation tangible assets first year
50% depreciation IRAP reversal for changes
in legislation on first year’s tangible assets
Membership fees
Description of temporary differences
(amounts in EuroK)
Table no. 9
Description of the temporary differences that entailed the booking of deferred taxes receivables and payable (Art. 2427, point 14, Civil Code)
95
Allegato n. 10
Summarized data from the last approved balance sheet of “Consorzio Etruria A.R.L.”
STATEMENT OF ASSETS AND LIABILITIES
31-Dic-07
ASSETS
A) Subscribed capital, unpaid
472.940
B) Fixed assets, with separated indication of leased assets
111.110.396
C) Current Assets
652.652.408
D) Accrued income and prepaid expenses
TOTAL ASSETS
3.846.356
768.082.100
LIABILITIES
96
A) Shareholders’ equity
Share Capital
Reserves
Profit/(Loss) of the financial year
34.497.095
11.352.648
19.332.216
3.812.231
B) Provision for liabilities and charges
1.873.375
C) Provision for personnel severance pay
3.572.681
D) Payables
E) Accrued Liabilities and deferred Income
TOTAL LIABILITIES
728.115.221
23.728
768.082.100
PROFIT AND LOSS ACCOUNT
A) Value of Production
199.630.360
B) Cost of production
187.265.186
C) Financial income and charges
(1.066.866)
D) Value adjustments to financial assets
(7.571.899)
E) Extraordinary income and charges
1.230.637
Income tax for the year
1.144.815
Profit/(Loss) of the financial year
3.812.231
BOARD OF AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS AT DECEMBER 31, 2008
97
Dear Shareholders,
considering that the accounting control function in our Company is carried out, pursuant to Art. 2409 ter
of the Italian Civil Code, by PricewaterhouseCoopers S.p.A., we issue this report to provide our opinion
on the Company’s operations and behaviour.
The financial statements for the year ended December 31, 2008, drawn up by the Directors in accordance with the law and regularly submitted by them to the Board of Auditors together with the relevant
tables, the detailed schedules attached and the Management’s Report, show profits for € 901,453 and
can be summarised as follows:
Statement of assets and liabilities
98
Assets
€
613.127.325
Liabilities
€
613.127.325
- of which Shareholders’ equity
€
19.510.419
Share capital
€
15.000.000
Legal reserve
€
325.00
Other reserve
€
3.283.966
Profit/(Loss) for the year
€
901.453
Accounts payable and other liabilities
€
593.616.906
Memorandum
€
208.261.413
Difference between production value and costs
€
3.893.831
Financial income and charges
€
(2.119.606)
Value adjustments to financial assets
€
Extraordinary income and charges
€
(43.847)
Income tax for the year
€
(828.925)
Profit/(Loss) for the year
€
901.453
Profit and Loss Account
Dear Shareholders,
during the financial year closed on Dec. 31, 2008 we have audited the company in accordance with
the law based on the principles recommended by the National Boards of Bookkeepers and Registered
Accountants.
In particular, we have observed that the Auditors carried out their supervision work in compliance
with Art. 2409-bis of the Italian Civil Code and in due consideration of the lawfulness control tasks
assigned to the Board of Auditors by the reform of the Civil Code. Namely, we have audited the
Company’s compliance with the legislation and Corporate Bylaws by completing the following
steps:
We reviewed the corporate organisation and layout, and audited that it had an appropriate structure, a
suitable corporate purpose, and adequate procedures in place to ensure compliance with the provisions
set forth by special laws concerning business operations; For example, we:
- reviewed the appropriateness of the administration and accounting system in place, as well as the
reliability of this system to truly and correctly represent management events by obtaining information from the managers of the different business units;
- reviewed the accounting Auditors’ activities based on the records made available by them upon our
request;
- reviewed the maintenance of a financial balance, with particular reference to the evolution of tax
credits, indebtedness to banks and suppliers, and the use of credit lines and inter-group financial
relationships;
- reviewed the correct keeping of books and corporate records, as well as the relevant formalities;
- reviewed the fulfilment of tax and social security requirements, deadlines and corresponding payments;
- reviewed relationships with associated companies and with the holding.
In connection with all the items listed above, we have received information from the Directors regarding
the activities carried out and the most significant economic, financial and equity operations carried out
by the Company.
The surveillance activity described has been carried out by attending 5 Board meetings, 16 Board of
Directors’ meetings and 1 Shareholders’ Meeting.
During our auditing activity, there was no evidence that the Company carried out any operation that
may be defined as non-compliant with the law or bylaws, clearly ill-advised or reckless, with a potential
conflict of interest, in contrast with the Meeting’s resolutions or such as to damage the integrity of the
Company’s assets.
We did not find evidence of any atypical or unusual operation carried out with associated parties, third
parties or intra-group companies, which may have affected significantly the economic, equity or financial standing of the Company.
Furthermore, we acknowledge that no reports have been received pursuant to Article 2408 of the I.C.C.
or were filed by third parties.
Although an Auditing Company has been entrusted with the necessary auditing tasks, the Board conducted its own surveillance on the general approach used in the Financial Statements and on its compliance with the applicable standards and regulations as regards their preparation and organisation, which
was found to be compliant with the applicable principles.
We also point out that:
- the valuation criteria adopted are compliant with the provision set forth by Article 2426 of the I.C.C.
and were not changed compared to the previous accounting year;
- the items shown in the Statement of Assets and Liabilities and in the Income Statement are those
required by Articles 2424, 2424 bis, 2425, and 2425 bis of the I.C.C.;
- as far as we know, the Directors prepared the Financial Statements without departing from the requirements set forth by Art. 2423 of the I.C.C.;
- the accounting principles adopted in preparing the Financial Statements are compliant with the type
of activity and operations carried out by the Company;
- no events have become known to the Board of Auditors during its auditing activities that were not
reflected in the items of the Statement of Assets and Liabilities and Income Statement;
99
- the Management’s Report contains all the statutory information required by Article 2428 I.C.C.;
- the Notes to the Financial Statements provide all the additional information required concerning the
figures shown in the Statement of Assets and Liabilities and Income Statement in compliance with
the valuation criteria adopted pursuant to Art. 2427 I.C.C.
We point out that the Auditors, for the activity carried out until now, did not find any reason to deny the
report requested pursuant to Art. 2409-ter I.C.C.
Finally, the Board of Auditors expressed a positive opinion on the consistency of the Management’s Report prepared by the Directors and submitted together with the balance sheet draft.
Dear Shareholders, based on the audits carried out by us and on those carried out by the independent
Auditor, we invite you to approve the Financial Statements and the appropriation of profits as proposed
by the Board of Directors in the Management’s Report.
Montelupo Fiorentino – April 9, 2009
The Board of Internal Auditors
Romano Mosconi
Antonio Bertani
Nazareno Speca
100
New Law Court Building of Florence, Italy
AUDITOR’S REPORT
101
102
103
104
Inso SpA
Share Capital 15.000.000 i.v.
R.E.A. n. 261093
Fiscal code, vat no. and Chamber of Commerce of Florence n. 01226390480
Registered Office:
Florence, Viale G. Mazzini 35
Headquarters:
Via Sammontana, 11
50056 Montelupo Fiorentino (Florence, Italy)
Ph. 0039 0571 54541
Fax 0039 0571 5454782
www.inso.it - [email protected]
Agencies:
Via Filzi 25/A
20124 Milan, Italy
Centro Direzionale Isola G/1- Scala D - int. 29
80143 Naples, Italy
copyright 2009: Inso SpA
Printed on June 2009
by Industrie Grafiche Pacini Editore S.p.A.
Via A. Gherardesca 56121 • Ospedaletto • Pisa, Italy