ANNUAL REPORT 2006

As regards the investment held in “Garboli”, there is currently a residual public purchase offer in accordance with art 108 of legislative decree nr. 58/98, with n° 125,213 shares of Garboli SpA, corresponding to 0.513% of the share capital, representative of the total shares in circulation, not owned by your company. The result of the increase in share capital deliberated by the subsidiary Garboli during 2006 was not in fact sufficient to achieve the reinstatement of the minimum retail stake required in order to maintain listing on the stock exchange.
Subsequent to what is prescribed by Consob, your company has therefore commenced the OPA mentioned above and it is expected that you will avail yourselves of the entitlement provided for by article 111 of TUF – the so-called “squeeze-out” – since you already possess a share which is greater than the 98% limit. The period of adhesion to the public offering ended on 25th May 2007, with settlement of the shares scheduled for the 30th May 2007. Borsa Italiana will provide for delisting of the shares of Garboli as of 31st May 2007.
As well as having undertaken certain judicial initiatives against certain members of the previous management, your company has adhered to the impeachment of the 2004 financial statements initiated by Consob against the former Garboli Conicos SpA Impresa Generale Costruzioni (today Garboli SpA) and its administrators and legal representatives, with the aim of obtaining the cancellation of the above mentioned 2004 financial statements from the High Court of Milan, thereby sustaining the non-compliance of the regulations that discipline the preparation of financial statements.
The contents of the sentence will be the basis of the consequential further judicial initiatives that the company can adopt against physical and juridical persons, considered to be responsible for the damages sustained subsequent to the false representations of the economical and financial situations of Garboli Conicos SpA Impresa Generale Costruzioni (today Garboli SpA) listed on the stock exchange and acquired by your company in June 2005. Subsequent to these proceedings, your company expects to obtain at least a partial recovery subsequent to the damages sustained and that have involved significant capital injections. However, subsequent to the important re-capitalization process the subsidiary can now be considered as being definitively normalised.