ANNUAL REPORT 2007

In particular it should be noted that the delays undergone compared with the work schedules in connection with the SA-RC contracts, due to factors that do not depend on the responsibilities of the General Contractor, have generated significant extra costs that will lead to negative margins.
For consistency in the application of the accounting principles always adopted by your company, no items were booked in the assets relating to future sums recognized subsequent to claims lodged. The positive result before taxes has benefitted from litigations solved relating to prior contracts, supported by arbitration awards or executive sentences. The tax burden for the year has benefitted from the variation of the tax rates that has impacted on the deferred tax provision accrued in the balance sheet.
Below are a series of comments relating to the expectations connected to the most important works in your company's portfolio.
The preparatory works relating to the commencement of the Brescia-Milan railway are progressing in accordance with the chrono-programme; the final project work is about to be completed subsequent to an agreement reached with great difficulty between representatives of the territory on the one hand and representatives of the railways on the other. The BBM consortium, in which your company holds a 50% share, will be the "construction partner" of the concessionary, and will directly execute approximately 70% of the works, on the basis of a General Contractor contract, the essential conditions of which are being updated currently, in order to make the prior term sheet coherent with the new convention.
The project relating to the new "D" line of the Rome sub-way has recorded in the period, the preparation of the preliminary project, through intense coordination work between the granting company and the designated promoter. The negotiated procedures are expected to commence this year, in accordance with the time schedule.
The final project work activities are about to be concluded in the Anas A3 Sarc Altilia Falerna lot of the Salerno Reggio Calabria motorway that your company will execute as general contractor. The contract programme has been substantially respected and the product presented that was submitted to a preliminary examination by Anas, has obtained final approvai which has enabled the delivery of the works. The actual commencement of the works on site is stili conditioned by the carrying out of further archeological investigations requested by the superintendence.