ANNUAL REPORT 2006

The consolidated financial statements for the year ended 31 December 2006 are accompanied by this Directors’ Report that has been prepared by the Board of Directors which is composed of the following five members:
Dott. Franco Nobili Chairman of the Board of Directors, Dott. Ing. Luca Sassi Vice-President and General Manager, Dott. Ing. Aldo Buttini General Manager, Geom. Maurizio Fratoni Director, Rag. Bruno Melardi Director
The extraordinary meeting of the Board of Directors that was held on 19th March 2007 appointed Dott Franco Nobili as Chairmain of the Board of Directors. He is now bestowed with the honour as well as the duty to continue in the role covered for many years with authority and rigour by the late Dott Luigi Rocca, the previous chairman of the Board who passed away at the beginning of the year. The current Board of Directors will remain in office until the approval of these financial statements.
The most important events that have occurred during the year are described below.
The 2006 consolidated financial statements closed with a positive balance, net of taxes, totalling 11.1 millions of Euro (6.4 millions of Euro in 2005) against a consolidated production of 673 millions of Euro (521 millions of Euro in 2005).
The “EBITDA” is equal to 55.7 millions of Euro (35.3 millions of Euro in 2005) and the net financial position shows a negative balance totalling 73.7 millions of Euro (negative balance of 56.7 millions of Euro in 2005); against the net financial position indicated above there is a VAT credit owing to the Group amounting to 36.2 millions of Euro that impacts on the financial balance for the same amount.
Net equity totals 257 millions of Euro (246 millions of Euro in 2005).
Industrial production, although in the presence of a positive development of production volumes compared with prior year, has shown a net negative difference as opposed to the expectations that was mainly determined by the non-commencement of important contracts, by delays in production in connection with the Catania-Syracuse contract and by the lack of production deriving from the abnormal progress of the contracts relating to the Milan-Bologna portion of the high speed railway.